Challenges and Opportunities for starting China ecommerce Online store

It is no secret why China e-commerce is important for international merchants in terms of wide market reach, high consumer purchasing power and strong internet penetration.

Best place to start China e-commerce : Wechat Mini program

There were 450 Million DAU on Wechat Mini Programs in 2021. It is growing in double digits and creating a lot of untapped opportunities for international brands to start Online ecommerce stores with immediate access to stickiness and mass discovery through Social capability of Wechat as the largest social network in China.

Over the past two year, the number of mini-programs by International merchants grew by 3X over resulting in 10X volume growth in online commerce transactions.

15x growth in live streaming E-commerce business

Reference- https://www.youtube.com/watch?v=mfj8XF9sd3s

There are many challenges in terms of Market research, Product demand and competition, Branding and Marketing expertise etc. Assuming the company has done this homework well, next steps are mainly legal processes and practises which companies should be fully aware of before they start.

Company Registration
Having the specific business licence
Trademark registration

How to register as business entity -

There are two main routes - Either register as Wholly Foreign Owned Entity (WFOE) Or through intermediary sitting in China who acts as Employer of Record (EOR)

What are the key licences to obtain as E-commerce entity -

ICP Beian (ICP备案) - To host a website in China

ICP Commercial - To Accept online payments as E-commerce vendor through Online shop

These licences mainly allow you to host your website in China and to follow the local laws that all data should remain within China. But these Licences are more easily issued to domestic companies than foreign companies due to legal complexities and documentation requirements. Best approach is that a foregign company gets into a local partnership agreement with a domestic company to use their ICP licence. This allows you to fully control your risks and business decisions freely and domestic partners only act as operators for your Ecommerce store.

There are legal companies in China who can support you on this and you can get in touch with us to understand all possibilities to streamline your decision making.

Once you get the Business Registration and have appropriate Legal Licences through a domestic partner, the next step is mainly to protect your branding trademark rights.

Trademark registration -

There is a very good chance that your brand or logo gets copied and get sold on Online marketplaces. If you get your trademark register, this gives as additional protection to file Online IP complaints to stop counterfeit products to be sold under your name.

There are other Licences which you can apply mainly -

Organisation Code

Tax Certificate

Social Security registration

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