8 Tips for First-Time African Agri-Business Exporters Headed for China
Tips for African Agri-businesses and farmers on how to export to China
It’s no secret that China can be a lucrative export destination for African farmers and growers, however, entry into the Chinese market can be complicated. Here are 8 tips to establish seamless Africa-China trade.
Don’t be put off by China’s trade complexity
China is now the second-largest destination country for African agricultural exports, however, the process of exporting agricultural products from Africa to China is more complicated than selling to a domestic market or exporting to many other countries. Don’t let this complexity deter you. With the right partner, penetrating the Chinese market can be a lucrative opportunity for businesses that are able to meet all the necessary requirements.
Download the eBook Exporting to China: How to Get Your African Agri-Business Export-Ready to learn about how Standard Bank’s dedicated Africa-China Trade Solution, staffed by a Mandarin-English speaking team, delivers a seamless end-to-end service for exporters.
Work with trusted and vetted buyers
How do you find suitable buyers in a foreign country like China where there is a significant language barrier? For starters, exporters would need to not only locate potential trading partners but also determine their credibility and trustworthiness.
Standard Bank is helping importers and exporters solve these challenges. When you sign up on our Trade Club platform not only can you access thousands of pages of reliable country- and sector-level trade data, you can also be matched to over 17,000 pre-vetted buyers and sellers located in over 60 countries across the globe.
Make sure your website appeals to Chinese buyers
Your website is a powerful calling card that can either turn visitors on or off, so make sure you put your best digital foot forward by presenting your business and its products professionally.
Your About Us page should outline the nature of your business and list any accreditations and awards that validate the quality of your products or services. International buyers will also be interested in seeing photos of your set-up and reading about any current or previous export activities.
Importantly, your site should also have an auto-translation function to appeal to Chinese browsers and when targeting Chinese visitors, always remember to test your domain web address to make sure it's accessible in China.
Join China’s social media powerhouse
With an estimated 1,2 billion users, WeChat is an instant messaging, social media, and mobile payment app and it’s China’s platform of choice to establish business relationships and store contacts.
For exporters doing business in China, WeChat is an indispensable tool to establish an online presence, launch marketing campaigns, and use the app’s built-in translation tool to communicate with contacts. Also, don’t forget to add your WeChat details to the Contact page on your website.
Adapt your product for the local market
While younger urban consumers are increasingly familiar with English, most Chinese nationals do not speak the language proficiently, that’s why when appealing to mass audiences it’s essential to translate your brand name and logo to Mandarin.
Direct translations, however, are not always the answer. The search engine Bing for example, has not been very successful in China. One reason for this may be due to the similarity of the name ‘Bing’ to the Chinese pronunciation of ‘sick’ (bìng 病). That’s why it’s a good idea to adapt your brand and product names to words that are ‘Chinese-friendly’.
Also bear in mind, what works in your home country may not land well in China, so it’s important to establish a unique sales strategy for selling to Chinese markets and to tailor your product and its packaging for the customer. Also, consider testing additional sales channels (such as Chinese eCommerce platforms) and developing marketing campaigns and materials that resonate with your new audiences.
Download the eBook Exporting to China: How to Get Your African Agri-Business Export-Readyto find out how Standard Bank’s extensive partner network provides access to Chinese marketing and packaging experts and assistance with setting up local distribution channels for B2B sales.
Re-risk financial trade transactions with Letters of Credit
Exporters want to be paid upfront upon shipment, while importers want to only pay when they receive goods. Neither position is ideal for the other party, so what’s the solution? Letters of Credit (LCs) are a means of providing security and reducing risk for both buyers and sellers.
Generally issued by the importer’s bank, an LC guarantees the seller will be paid once the conditions of the letter of credit have been met. For importers, LCs ensure payment is only made once the supplier has provided evidence that goods have been shipped according to the terms of the agreement.
For exporters, an LC acts as an assurance of payment in the event of the buyer not paying for goods. If this occurs, the financial institution pays the exporter for outstanding costs. An LC also protects against legal risks since the exporter is guaranteed payment on the condition that stipulated delivery conditions have been met. Exporters can also pledge an LC as collateral against working capital loans for the resources needed to fulfil the order. Before the funds of the LC are issued, the issuing bank will normally act on behalf of its client (the importer) to confirm that all requirements have been met.
Use Bank Guarantees to reassure foreign buyers
When selling to foreign buyers, they may request guarantees before doing business with you. A Bank Guarantee, such as those issued by Standard Bank, serves as an assurance for a certain percentage of the contract value. As the exporter, once you fulfil your contract, your Bank Guarantee will expire and the bank will return your collateral. If you fail to fulfil your contract, however, the bank will pay the agreed-upon amount to your buyer, the importer.
The Bank Guarantee may also protect you as the seller if the customer is unable to pay you. The bank would then pay you the amount specified in the letter of guarantee.
Avoid multiple currency changes
Renminbi is the official currency of China, but the US Dollar is the official reserve currency of the world. Typically, when trade takes place between foreign countries such as Uganda and China, for example, it’s not unusual for the buyer to have to change currencies from Renminbi to US Dollars, and then from US Dollars to Ugandan Shillings to pay for goods.
These multiple currency changes result in additional unnecessary costs as well as the potential loss of currency value in each transaction.
To remove the cost and hassle involved with multiple forex transactions, work with a financial services provider such as Standard Bank, that can process direct forex trades from Renminbi to Ugandan Shillings for example, and vice-versa.
GET FREE ACCESS TO TRADE RESOURCES
- For more insights on successful trading, download the eBook Exporting to China: How to Get Your African Agri-Business Export-Ready and get tips on how to de-risk exporting and take full advantage of Chinese market opportunities.
- Launched in 2022 and updated bi-annually, the Standard Bank Africa Trade Barometer is one of the most comprehensive research reports on the state of trade on the African continent as experienced on the ground by real African businesses. Click here to download the latest report.
- Sign up for free on the Trade Club platform to connect with over 17,000 pre-vetted buyers and sellers located in over 60 countries across the globe and gain access to our dedicated China Trade Club section for detailed information on statistical info, an economic and political overview, the business environment, buying and selling in China, investing, and operating a business.