In China, November 11th marks Singles Day. It’s a day where online shopping is at its peak in China, with e-commerce stores raking in the biggest numbers.
In 2015, Alibaba, the wholesale e-commerce giant, saw sales worth of RMD 91.2bn. This number itself may not seem surprising, but it was a 60% increase from last year
The growth of China’s e-commerce industry has been an exponential one, to say the least. China is the biggest online retailer in the world with its annual revenue in retail e-commerce set to exceed $1 trillion this year
. This figure accounts for more than 40% of global revenue.
In 2015, China sanctioned
foreign companies to fully own their e-commerce businesses when working in China. With this move, China opened their e-commerce market to an unprecedented huge amount of foreign investment.
The Growing Middle-Class…
Millions of Chinese households migrate into the middle-class bracket each year, due to rapid urbanization and better-paying jobs. According to the Pew Research Center
, mainland China middle class saw an influx of 203 million in just a decade’s time after 2001.
This staggering growth rate of China’s middle class will see their spending double by 2030
. As a result, the GDP consumption of middle class will increase from 38 to 50%.
The benefits of online shopping are many. For instance, you can shop from the convenience of your home and access a greater range of products and foreign brands, just to name a few. But what makes the Chinese online retail so lucrative?
The answer is simple; they offer great prices and even greater discounts. In China, the middle class and upper-middle class make up the bulk of online consumers. Moreover, the demand for foreign products is ever growing.
Foreign investors that are quick enough to get involved will realize the full potential of e-commerce in the Chinese market. But there’s one thing you need to do before setting up an e-commerce business in China.
Foreign companies looking to start an online business in China need to start by registering a trading WFOE. Also known as FICE, short for Foreign Invested Commercial Enterprise, it’s a requirement for foreigners seeking e-commerce opportunities in China.
What Do You Need For A WFOE or FICE?
You need to have a capital of at least RMB 100k to ensure your business runs smoothly and doesn’t run out of money before it starts making a profit. However, this is a recommendation, not a requirement.
The Chinese government recently lifted regulations regarding minimum required capital so foreign businesses don't need to have a specific amount before starting an e-commerce business in China.
: Foreign businesses also need to register a virtual office with an actual office address. For this step, you’ll need local guidance. We offer registered office address
in all the major cities such as Shanghai, Guangzhou, and Shenzhen.
: Business owners will also need to declare 3% of their sales as a tax.
Once the FICE registration process completes, businesses are free to establish online stores in China and sell their products.
To find out more about how we can help you set up an online store in China, call us now at +86-020-2917-9715 or reach us online