China online market research: test your food product on Taobao

China online market research: test your food product on Taobao

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Make use of our Yummy mall store on Taobao and our logistics

Do you want to know what the potential of your food products are in the Chinese market? And what adaptations are needed to make your product more popular in demand? Alliance experts helps you in making your product available through one of the best visited online sales platforms in the China market, Taobao, in our Yummy Mall online store.

Get useful feedback while selling online

Taobao asks customers to acknowledge the delivery of the goods. The customers would then also be asked to provide feedback on the product. There is an incentive mechanism in place to do that. Alliance experts will collect all the feedback, group the comments, arrange the translation and provide you with a clear report on how your product is being received and what you could do differently.

The outcomes will give you a head start in negotiations with other distribution channels in China.

Our store management on Taobao

We have set up an online store within Taobao where we can display your product. As our Yummy Mall is one of many stores our efforts won't end here. We support you with promoting the product and by answering consumer's questions through chat, in shifts from morning till late in the evening. This all is essential to make your brand known and get your products sold.

We arrange import and physical distribution within China

You can make your own arrangements to ship your products to Shanghai, at Incoterms 'Delivered At Terminal'. We will arrange the custom's clearance, further transportation to a warehouse, storing the items and sending them to the consumers. The cost for shipping the goods from the warehouse to the consumer are mostly paid by the consumers themselves, just as in other web shops. 

Cost structure

Our cost structure is simple and transparent. You can arrange the transportation to China yourself. We will invoice you for the real costs of custom's clearance, import duties, further transportation, storage and individual packaging of your product, plus a small fee for our handling costs.

Our fee for putting your products online, promoting them and providing you with the feedback is a percentage of the turnover you realise. For small volumes (boxes only) this is 30%, for pallets this is 20%, for containers the fee goes down to 10%. That means we won't charge for any unsold products.

Shipments in boxes less than 50kg are in general exempted from normal customs clearance. This way you can import smaller quantities of goods without paying import duties and VAT. However, in some cases these levies still may be applied.

Local marketing makes the difference

A major cost component is local marketing. To give your products a prominent place Taobao charges around 1000 USD per month. Alliance experts will make the advertisements in Chinese and put them online as part of our sales fee.

Calculation example

Suppose you want to test a new type of sweets on the Chinese market which you sell in two flavours. You sell these in bags of 200 grams and your cost price is around 1 USD. Selling a thousand samples of each of them would be enough for you to get a feel of the market. Suppose we would recommend a sales price of 4 USD, which is 24 RMB.

Your profit will shift with the quantity that you intend to ship. The bigger the quantities, the more cost-efficient your investment in promotion will be. The shipping costs are estimates based on previous experience, the services provider's fees are based on quotations. All amounts are in USD.

This means that in the above example you'll get the chance to test your product for less than a 1000 USD, or in case of bigger quantities, even with a profit. Which is an ideal way of doing your market research. Market research that will consist direct customer feedback!

We will provide you with a monthly report on your sales and the comments collected from consumers. And if your product won't sell that quickly you can always give a discount to sell your products and still collect your feedback. 

Our approach

If you want to use our services, then we have a very practical approach.

  1. Email us with the type of product you want to sell, what quantities, how it is packaged etc. Please attach some clear pictures of the product.
  2. Within a few days you'll receive a cost calculation from us comparable to the one above, including a recommended sales price and a contract for our services.
  3. Once you sign the contract, we'll send you more information about the shipping procedures. We will also send you a first invoice for an instalment to cover all import and warehousing related, plus the Taobao promotion costs. We also need more detailed information on the product (see appendix).
  4. As soon as your goods arrive in Shanghai, we will arrange custom's clearance, put your products online and start the promotion.
  5. During the process we will update you weekly on the quantities sold and any further relevant issues.
  6. As soon as all your products are sold (or you decide to stop the sales), we will send you the evaluation report and transfer the revenue, less our sales fee. In case of a container with products, we will make more frequent transfers.

More information

If you have any questions please contact your local Alliance experts office.

This entry in cases was updated on July 2, 2018 by specialist.