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How to do well in European market for foreign trade enterprises

How to do well in European market for foreign trade enterprises

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  • Time of issue:2020-04-26 13:21
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【Summary】:In the past two years, most of our attention has been focused on Sino US trade relations, which have been ignored. In fact, to some extent, this just reflects that China EU relations are still on a re

How to do well in European market for foreign trade enterprises

【Summary】:In the past two years, most of our attention has been focused on Sino US trade relations, which have been ignored. In fact, to some extent, this just reflects that China EU relations are still on a re

  • Categories:Industry News
  • Author:
  • Origin:
  • Time of issue:2020-04-26 13:21
  • Views:0

In the past two years, most of our attention has been focused on Sino US trade relations, which have been ignored. In fact, to some extent, this just reflects that China EU relations are still on a relatively normal track.

As we all know, the EU is China's largest trading partner and China is the EU's second largest trading partner. I believe that under the current global trade environment, China EU relations will become more important.

It is undeniable that there are some objections between China and the EU in terms of trade, economy, culture, values, etc., but in the long run, the complementarity of trade between China and the EU and the possibility of cooperation between China and the EU are more promising than other bilateral relations of China, because European leaders are more inclusive of China than those of the United States.



When Chinese enterprises enter the European market, they trade in the way of substitute processing in the early stage. Later, they gradually establish their own brand and export household appliances and other brand products to the European market. In recent years, a more obvious trend is that more and more powerful Chinese enterprises are building factories in Europe, setting up R & D centers, or making M & A investment.

Of course, the investment layout of Chinese enterprises in Europe is closely related to the local investment environment and demand.

Compared with northern Europe and Western Europe, Eastern Europe has a weaker economy and lower production and labor costs. At the same time, Eastern European countries also want to introduce foreign investment. Therefore, Chinese enterprises tend to locate their logistics or production bases in Eastern Europe. For example, BYD has set up a bus and electric bus factory in Hungary; TCL has set up a television factory in Poland.

On the contrary, Western European and Nordic countries have strong economic strength and abundant talent reserves. Chinese enterprises take advantage of these advantages to set up more local sales centers, R & D centers, design centers, etc. For example, Dajiang has set up its European headquarters in Germany, and Huawei has set up R & D centers in Germany, France, Belgium, Finland and other countries.

If in the past, Chinese enterprises thought about how to export more products to Europe, then in the future of global competition, Chinese enterprises should consider how to understand local needs, and then use local resources to develop products suitable for Europe and even the world.

To this end, Chinese enterprises can gradually achieve this goal from three levels.

First, establish a local sales team or customer service center. For example, heli forklift trucks were exported to the European market very early. At that time, they set up import and export companies in China, and then found dealers to cooperate in Europe. When dealers asked for goods, heli delivered them.

In this mode, the whole trade chain is long, and the joint forces cannot directly contact with the end customers, and they do not know what products the end customers want, which results in slow trade growth. In order to change this situation, heli later established a sales center for the whole Europe in France, providing integrated services, including pre-sales display, sales, after-sales, spare parts storage, etc.

In this way, we not only have better support for local dealers, but also have a better grasp of the local market demand, and then develop some products suitable for local market demand. However, heli's R & D is mainly in China.



Secondly, a further step is for Chinese enterprises to directly set up R & D centers in Europe, and use local talents and insights into the local market to develop products suitable for the local market. For example, Haier acquired the Italian refrigerator factory as early as 2001, set up design centers in France and the Netherlands, and set up marketing centers in Italy.

Finally, the next step Chinese enterprises can take is to participate in the formulation of local production and technical standards on the basis of understanding local policies and regulations, so that their products are more easily accepted by the local market. For example, Huawei participated in the development of 5g standard in Europe, and Dajiang participated in the development of UAV standard in Europe.

Whether it is to establish a production base, a sales center or a research and development center, Chinese enterprises need to have considerable economic and brand strength. So how can Chinese SMEs participate in the European market?

This has to mention another significant trend in recent years, the rise of cross-border e-commerce. Cross border e-commerce is a new form of trade, which can bring many benefits to SMEs.

First, it can help small and medium-sized enterprises expand their business and digest more production capacity. Secondly, it provides a good opportunity for small and medium-sized enterprises to upgrade their strategies and go to the front of the value chain.

In the past, they had to go through many links, such as traders, distributors, retailers, etc. to reach consumers, and they were often at the bottom of the value chain with low profits. Cross border e-commerce shortens the whole chain, enabling them to reach consumers more directly, understand the needs of consumers, and form the control of the whole value chain from design, production to distribution.

Finally, it can help small and medium-sized enterprises to build their own brand.

For example, Anke innovation (formerly "Haiyi e-commerce") initially relied on cross-border e-commerce channels to sell overseas. In just a few years, it has become an absolute leading brand in developed countries such as Europe, America and Japan, creating a cross-border e-commerce myth. After that, it took advantage of the trend to enter the offline channel, settled in Wal Mart, best buy and other international famous retail chain stores, and gradually formed an online and offline full coverage of three-dimensional marketing network.

If small and medium-sized enterprises want to rely on cross-border e-commerce to realize going to sea, they need to consider several aspects.

First, what kind to do. This is mainly for the traders who used to do cross-border trade. Different overseas markets have different needs for categories. In the European market, the main categories consumers need include mobile phone and electronic product accessories, household products, clothing accessories, beauty accessories, etc.

Second, which cross-border e-commerce channels to go out. Different enterprises can choose appropriate cross-border e-commerce channels according to their own development characteristics.

Third, understand local policies and regulations. Is the local online advertising and publicity in line with the regulations? Does the set return terms meet the requirements? The most important point is that before the EU countries did not impose strict taxes on online sales, but from this year, France and Germany strengthened the collection of value-added tax on e-commerce sales.

Nowadays, the whole logistics supply chain is developing in the direction of digitalization, intelligence and cooperation. In the past, the logistics supply chain has been criticized for one thing: the lack of communication between various links leads to the low efficiency of the whole logistics; the other is that it is impossible to track and do not know the goods on the way.

Now, the introduction of digital technology has opened up the whole logistics chain and made it transparent. We can know where the goods are and which link has a bottleneck. After understanding the situation of each link, we can optimize it by intelligent means, such as intelligent setting of operation rules and plans, and then coordinate resources in all aspects to strengthen the cooperation of each link, so as to improve the efficiency of the whole logistics.



In a word, when Chinese enterprises go to Europe, whether they invest in building factories or engage in goods trade, the first thing is to understand the needs of the local market, and then provide products to meet these needs.

While providing products, Chinese enterprises should also consider cooperating with the most professional logistics providers in order to connect to the European market most quickly and reliably and provide European consumers with high-quality and excellent consumption experience.

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