01 Jul Recommendations for SMEs: Sell to the China giant

In the first four months of the year, ten out of every hundred pesos of total trade (exports plus imports) that Mexico carried out with the world, were exchanged with the Chinese market, according to reports from Banco de México (Banxico).

Between January and April, the commercial exchange of Mexico with the Asian giant amounted to 31,445 million dollars, a number that represented 10.3 percent of all Mexican trade in that period.

Although this amount is the highest since there are records for a similar period, there is a large gap between what Mexico sells to China compared to what it buys from it.

The value of Mexican purchases from China increased to 25 thousand 462 million dollars, while national sales to the Chinese market were located at 2.982 million dollars, he assures (Usla, 2021).

In this way, it can be analyzed that China sells almost 10 times more to Mexico compared to what the Mexican market offers to the Chinese dragon.

To reduce this great gap, it’s necessary that more and more small and medium-sized companies are encouraged to export to this market, says Pablo Aguirre, who acts as an intercultural mediator applied to the development of business with China, during a conference with the China – Mexico study center  (Cechimex).

(Aguirre, 2021) assures that in large Chinese cities there are more and more spaces dedicated to imported products, in addition to stores focused on handling this type of merchandise, there is interest and a strong market in China.

However, the difference from the US market, China is “another world”, since it is necessary to be ready to try to commercialize a product.

In the first instance, the specialist (Aguirre, 2021) stressed that it should be investigated if there is interest and potential market for the specific product that you want to sell. Which can be known in 3 different ways: It may be that the interested party (located in China) comes looking for a particular product; We can draw on existing market studies that have been prepared by government or private entities, and the last option is for us to carry out our own research or hire specialists in market studies and market intelligence. (Aguirre, 2021)

Another important aspect to consider by Mexican SMEs is to be clear if the product is a commodity or a finished product, since there must be certain protocols signed between both governments so that the products can enter China.

Currently, products such as Persian lemon, pork, avocado, banana, sorghum, table grape, tobacco, blackberry, blueberry and raspberry, already comply with signed protocols, which makes them attractive to sell in China.

In addition to them, it should be taken into account that Chinese consumers are very meticulous when buying a product: In the case of packaging, the bright colors attract their attention, and that the price is not too low, since they associate it with poor quality, says Aguirre.

In conclusion, you have to have the ‘six P’s: an interesting product, perseverance, patience, a measurable purpose or objective, passion for your product and enough financial power to position it. (Aguirre, 2021)

References

Usla, H. (14 de Junio de 2021). ¿Eres Pyme y le quieres vender al gigante China? Aquí unas recomendaciones. El Financiero, pág. 2021.