Goods distribution channels

In China, goods are distributed retail through many different channels such as markets, convenience stores, supermarkets, specialized supermarkets, department stores and mall centers... Small convenience stores and specialized stores are still the most popular retail model in this country. In recent years, large retail models are on the rise with advantages of better supply chains and wider distribution channels.

The scale of the Chinese retail market is increasingly expanding. In 2021, total retail sales of consumer goods in China reached RMB 44,082.3 billion, increased by 12.5% compared to 2020. The main driving forces for China's retail growth are rapid urbanization and an increase in the number of middle-class consumers in this country.

Table - Some retailing types in China

Source: Santandertrade, 2023

In recent years, Chinese consumers have tended to increase online shopping due to its ease and convenience. Therefore, electronic commerce (e-Commerce) is becoming an important tool for businesses in the retail sector to reach their customers. Therefore, many traditional retailers are shifting towards increasing online sales channels, which has led to the number of traditional standalone retail stores decreasing in China.

China is the world's largest e-commerce market. According to eMarketer, China has more than 710 million e-shoppers with total e-commerce retail sales reaching $2.29 trillion in 2021, accounting for nearly half of e-commerce retail sales worldwide. This value is expected to increase to 3.56 trillion USD in 2024.

Alibaba is China's largest e-commerce platform, with more than 500 million people using its shopping app. Tmall - Alibaba's Chinese-language website for B2C online retail is one of the 20 websites with the largest number of visitors in the world and is a platform for local Chinese and international businesses to sell branded goods to consumers in Mainland China, Hong Kong, Macao and Taiwan.

In addition, the Chinese e-commerce market also has a number of other popular platforms such as Suning, Gome, Yihaodian, Dangdang, Amazon.cn, Jmei...

Import channels

Imported goods can enter the Chinese market through a variety of channels depending on the product type, financial considerations as well as other factors such as market size, demand and long-term sales potential of the goods.

The following are some channels for importing foreign goods into China:

• Through commercial presence in China

Foreign companies establish a trade presence in China (foreign invested enterprises, business cooperation contracts, branches, representative offices, etc.) to import, distribute to wholesalers, agents, stores, or directly sell to consumers.

Establishing a commercial presence to import goods into China is considered a direct and effective channel to access China’s market, but it requires more capital investment than other forms, and establishment procedures also requires more time and cost. Therefore, this form is suitable for large companies with high transaction volume and want to develop long-term in the Chinese market.

• Through import partners in China

Import partners can be units that purchase goods for their direct use (large and valuable industrial equipment; raw materials for production; etc.) or specialized import units (professional importers) that import to redistribute in the Chinese market.

China's specialized import units are mainly wholesalers, distributors or intermediaries who import goods for redistribution to stores, supermarkets, other units in need. Goods imported through these professional importers are usually small machinery and equipment, common industrial supplies and consumer goods, etc.

• Through online shopping channels

Foreign suppliers can also sell directly to Chinese buyers through e-commerce channels such as Alibaba, Amazon, etc. This form is becoming increasingly popular in China for purchasing international goods, however, it is only suitable for consumer products.

Source: Center for WTO and International Trade

• Market size of China
• Trade activities of China
• Consumer characteristics in China
• Vietnam's exports to China