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Success Stories

Among the three million European SMEs that are exploring the global market, more and more are succeeding in China. Read their stories below to find out how they have benefited from the services at the EU SME Centre and made their first entry successfully in China. 

Success Stories

Importing Bottles of Health to China

Healthy Imports is an Irish enterprise that specialises in importing and distributing healthy high quality food and beverage products from the EU into mainland China. After successfully establishing a WFOE Company in Dongguan China, the company made sure it was only working with competent and trustworthy sub-distributors and was very careful on how the products were marketed. Its biggest achievement is the successful marketing and distributorship of Rocwell Mineral Water. Many European F&B producers are searching for a reliable and experienced agent in China and the demand for their products in China is high. Healthy Imports managed to take advantage of this high market potential on both sides: the enterprise is expanding with a second office in Shanghai, hiring more employees at the same time.

One of the key factors of Healthy Imports’ success is its good preparation and patience in making the correct decisions that is vital to success in China.

During research, the team often resorted to the EU SME Centre’s Knowledge Centre. When making important decisions on their China strategy, the management enquired with the Centre’s legal experts in order to confirm the information they previously gathered. The detailed and practical replies made them feel more secure and confident in their decisions, Healthy Imports CEO Noel Farrell recalls.

“To succeed is to understand and adapt”, the company’s motto, highlights one of the key factors for its success: The team was conscious of adapting to the local business culture and never stopped learning. Healthy Imports has shown that if there is market potential for your product and you enter the market well prepared, big success and considerable growth are more than possible. 

The EU SME Centre gives SMEs a sense of security. It is great to be able to enquire in one place about diverse questions of interest for an SME in China. The ‘Knowledge Centre’ is the only database that provides all relevant information in one place, from practical advice like dos and don’ts in negotiations to legal information in the law database.

-Noel Farrell, CEO Healthy Imports Ltd

Visit Healthy Imports website

Slovenian Tech Dynamises China's New Energy Vehicle Market

Background

Elaphe Propulsion Technologies Ltd.is a Slovenian company and a global leader in development and production of in-wheel and direct drive propulsion systems for vehicles. In October 2015 Blaz Stefe, today general manager of APG-Elaphe Propulsion Technologies, Co. Ltd, contacted the EU SME Centre in Beijing.  Mr Stefe wanted to understand better several aspects of entering the Chinese market, local legislation, business development and partnering with Chinese companies. 

What We Did

Mr Stefe met at the EU SME Centre in Beijing Ms Hyklova, Legal Advisor, and Mr Jimenez, Business Advisor. He received advice on legal and procedural aspects of creating a Joint Venture (JV), was recommended to pay attention along with his lawyers to some of clauses, location implications for the JV were discussed, while the EU SME Centre also shared information about the New Energy Vehicle (NEV) market opportunities in China, which in 2015 were not that clear as they are today.

Success

The Chinese investor partnered finally with Elaphe and a JV company was established in August 2016, which is today leader in the production of in-wheel motors for passenger and heavy duty vehicles. Operation of production line started in January 2018 in Hangzhou.  

"We appreciate the quality information available at the EU SME Centre, and certainly we will accept the proposal of the EU SME Centre to draft a Case Study so our experience in China can be shared with others for the benefit of EU SMEs."
-Blaz Stefe, General Manager of APG- Elaphe Propulsion Technologies, Co. Ltd.

Visit Elaphe’s Website

Exploiting China’s High-end Anti-pollution Mask Market

Christopher Dobbing, a young entrepreneur from the United Kingdom, launched his anti-pollution mask business in China in 2013. As the Founder and CEO of Cambridge Mask Co, the company targets the high-end anti-pollution mask market. Now selling masks through a number of local hospitals, schools, corporations and retailers around the world, Chris has successfully diversified his distribution channels both online and offline. 

In his preparation to set up a company in China, Chris used the EU SME Centre’s consultation service to understand the company registration process and certifications needed to sell his masks on the China market. The Centre also provided him free temporary office space while he was looking for affordable offices in Beijing.

As to the challenges faced by European SMEs in China, Chris put recruiting and retaining staff as the most pressing one. Instead of having three underperforming staff, Chris suggested SMEs invest more in the most dedicated one.

The EU SME Centre was a valuable resource to help me accelerate my start up business selling anti-pollution face masks in China. Having a professional looking space to hold meetings in central Beijing is great, and the legal advice and information guides have proved to be really useful at this key point in setting up here. I would highly recommend the Centre to any small business looking to get started here.

-Christopher Dobbing, Founder and CEO, Cambridge Mask Co

Visit Cambridge Mask Co

EU SME Centre Supports German SME on Tax Efficiency

Background

KFIV is a commercial agency based in Germany which supplies the German and other European OEM automotive industry with high-quality components from China.

Since 2011 KFIV represented a Chinese manufacturer of automotive wire and cable.  It introduced this company to European customers and established a supplier relationship.

For this service, KFIV received a commission from the Chinese company’s sales to European customers. 

In 2014 the Chinese company informed that they were obliged to withhold a local tax for KFIV in China, at the rate of 15%.  KFIV then communicated and negotiated with the local tax authority in China. 

What We Did

In the process, KFIV sought assistance from the EU SME Centre and received clear advice from the Centre that, since KFIV did not send staff to China for the services provided to the Chinese company, no permanent establishment in China has been constituted according to the bilateral tax treaty between China and Germany. Therefore, the fee KFIV charged for the service provisions in Germany is not subject to enterprise income tax in China.

To learn more about China’s non-resident enterprise tax, read the Centre’s complete guideline here.

Success

With such information, KFIV succeeded in the negotiation with the Chinese tax authorities.

Eventually, the tax rate applied was reduced from 15% to 5%.

Quote by the company on EU SME Centre Services: 

In a China local tax issue we doubted about the statements of the Chinese partners. With the fast and competent advice from the EU SME Centre the issue was clarified, the tax was reduced from 15% to 5%. Considerable 10% savings on the commission income for our company. We greatly appreciated the extraordinary professional performance of the EU SME Centre. We are still very much grateful about your valuable authoritative advice in the tax issue with the China local tax administration.

- Karl Fischer, General Manager, KFIV GmbH

Spanish SME Brings New Functional Ingredient to China

Entering new active ingredients into the food or health industry market can be hard, in particular if the company is trying to export its products abroad. For the case of China, market access regulations can be of great complexities. 
Asking for assistance in these regards, the Spanish company Lipofoods contacted the EU SME Centre. The representative of the enterprise discussed with our experts about the imports of a phytosterols in 2017, a specific functional ingredient with cholesterol lowering effects. Following further consultations, the company managed to master the modalities that need to be followed in order to export its products to China. This understanding affected the positive growth of the company’s exports of calcium to China in 2017, another functional ingredient produced by Lipofoods. 
Recently, Lipotec – the company from whose spin-off started Lipofoods- attended the EU SME Centre’s training “How to Set Up a Cross-Border WeChat Shop”, held in Barcelona.  The company contributed to the discussions of the training by providing their own experience with Chinese market access regulations. They shared with us that a well-known cosmetics firm has just started to sell online in China a cosmetic with some of Lipotec's active ingredients..
“I personally consider the EU SME Centre as a great support for European Companies in order to have a better understanding of the complexity of China, in terms of regulatory, trends, culture, society and business. I really appreciate the great support of the EU SME Centre and especially from Rafel Jimenez Buendia, for his personal and professional help.”

Background

Entering new active ingredients into the food or health industry market can be hard, in particular if the company is trying to export its products abroad. For the case of China, market access regulations can be of great complexity. 

What We Did

Asking for assistance in these regards, the Spanish company Lipofoods contacted the EU SME Centre. The representative of the enterprise discussed with our experts about the imports of a phytosterols in 2017, a specific functional ingredient with cholesterol lowering effects.

Success 

Following further consultations, the company managed to master the modalities that need to be followed in order to export its products to China. This understanding affected the positive growth of the company’s exports of calcium to China in 2017, another functional ingredient produced by Lipofoods. 

 

Recently, Lipotec – the company from whose spin-off started Lipofoods- attended the EU SME Centre’s training “How to Set Up a Cross-Border WeChat Shop”, held in Barcelona.  The company contributed to the discussions of the training by providing their own experience with Chinese market access regulations. They shared with us that a well-known cosmetics firm has just started to sell online in China a cosmetic with some of Lipotec's active ingredients.

I personally consider the EU SME Centre as a great support for European Companies in order to have a better understanding of the complexity of China, in terms of regulatory, trends, culture, society and business. I really appreciate the great support of the EU SME Centre and especially from Rafel Jimenez Buendia, for his personal and professional help.

-Iván Marcos Peláez, Area Sales Manager APAC, lipofoods

 

Visit Lipofoods Website

Adapting Mediterranean Food to China

UR Great is a Greek company specialised in the production and sales of healthy and natural Mediterranean food products. The founder and owner Mikis Pollalis wants his brand to relay the image of a traveler bringing healthy Mediterranean food back from his holiday.

As many others, UR Great took notice of the huge potential the Chinese market offers. They decided to make entering this market their strategic priority and began researching on this topic. At this time, Mikis attended an EU SME Centre presentation in Athens.  He learned there that good preparation is paramount to success in China, thus he started to gather information on the food and beverage market. After researching Chinese tastes, he prepared his team back at home ready to adapt the marketing strategy, especially the products, to suit the Chinese market. 

The EU SME Centre was able to offer different types of help at different stages. The presentation by one of the Centre experts was an eye-opener for the founder of UR Great, since it showed that many different aspects needed to be considered when entering the Chinese market and that preparation was a prerequisite for sustainable success. Mikis says the take-home message from this event was “a company should be ready to enter China and a lot of preparations are required”. 

He continues to use the free services of the Centre and rates them highly. The webinars provided him with reliable and relevant information he immediately incorporated in his strategy and action plan. As a final step, the CEO of UR Great approached the Business Development experts via the Ask-the-Expert feature on the EU SME Centre website. Upon their request, they received a list of potential food importers. 

I believe that the most important help of the EU SME Centre is that it provided a helpful framework for entering the Chinese market. It set from the beginning the correct foundation, by pointing out the important key learning facts regarding business in China and helped us create a roadmap to entering the Chinese market. Moreover, we received valuable knowledge from the experience of the EU SME regarding the pitfalls and problems we should avoid. 

Mikis Pollalis, Founder and CEO of UR Great

 

Visit UR Great website

Pampering Tianjin Expats with French Cuisine

Maia Orgogozo fell in love with Tianjin during her first visit of the city. She then spent more and more time there before eventually moving over from France. She realised some foreigners in Tianjin love the city very much, while some are homesick.  In order to contribute to the happiness of both groups, she decided to make use of her cooking skills and opened a restaurant. 

After almost two years of conducting all necessary registrations and setting up her business, Oh My Gourmet became operational in 2012. With Oh My Gourmet, Maia does not only offer dining at the restaurant, but catering, private dining and cooking lessons as well. Step by step, Maia managed a healthy growth of her business, always focusing on ensuring the top quality of service and food. The business is thriving, being amongst the top five rated restaurants in Tianjin on the website of TripAdvisor. 

This success is based on the very hard work of the French entrepreneur. Maia said: “For an entrepreneur, there are new challenges every day, there is always work to do. You do not really have the time to sleep and can forget your social life in the first year of a new start-up, apart from that concerning work. It is very tough.” The second key factor to Maia’s success is that she rather invested more time in the beginning to ensure that her business is set up properly and compliant with all laws. Maia was not deterred by the long registration process, she feels that: “Those legal procedures take long everywhere in the world, it is just that China gives the idea that there are lots of possibilities for short cuts. This might be the case for locals but certainly not for foreigners.”

To ensure the legal compliance at all time, Maia needed the help of the EU SME Centre. After going through all the relevant guidelines on the Centre’s website, she enquired with the Centre's legal experts. In order to find out the exact scope of Oh My Gourmet’s business license, the Centre’s legal expert launched an enquiry with officials in different cities and in the end secured a definite answer from officials in Tianjin. Maia appreciates the reliable and independent advice from the EU SME Centre and says that it helped her a lot during the initial phase of setting up her business.

When asked about the advice that Maia would like to give other European entrepreneurs in China, she recommends: “The competition in Tianjin as well as in China is very tough. There are new obstacles and challenges to your strategy and original ideas every day, so many things make you doubt. It is easy to lose focus on the original plan. It is of course important to stay flexible, adapt your product and strategy to each situation, but it is very important to stay focused, too. Never lose track of your goals and do not get distracted.” 

Chinese legislation and regulations are often not very clear and the Centre was a great help in assuring me of what is allowed and what not. They conducted a real legal investigation for me; I myself could never have done that because I lack the knowledge and resources.

-Maia Orgogozo, Founder&CEO, Oh My Gourmet 

Shopping the Danish Lifestyle Through a WeChat Shop

Background

In May 2017, Rasmus Gregersen, CEO of Nihao CPH contacted the EU SME Centre to bring its business into the Chinese market. The company runs a Danish lifestyle online media that also offers a wide variety of Scandinavian products for the Chinese consumers in the higher segment and it is rapidly expanding with more brands within kids, health and beauty categories.

After running its online magazine for a couple of years, Mr Gregersen decided to start selling its products in China by opening a WeChat shop.  The online shop would have been a stand-alone shop and the Nihao CEO wanted to operate it via cross-border on Chinese Wechat. 

What We Did

The Centre’s Business Development Advisor Rafael Jimenez researched his case and pointed out that there are lots of complexities in such a scheme. He said: "First, there is to understand the treatment of payments, tax and duties and of the cross-border operations, which might not always be immediate." Additionally, the company also aimed at learning how to outline a strategy that easily migrates later to a bonded warehouse at the Free Trade Zone in Shanghai. 

Success 

Questions and answers did happen, and despite the inherent difficulties about a business-to-consumer trade mode that was largely unknown in China at that time, Nihao CPH put in operation its WeChat shop a few weeks later, in July 2017.

To learn more about Nihao CPH’s experience in China, read the full case study here.

We quickly found out that cross-border e-commerce is not as easy as it sounds. Denmark’s regular post services had little experience with this type of logistics and also figuring out the procedures for taxes involved with cross border e-commerce deserve a fair bit of attention before getting into business. Despite much self-study, NI HAO CPH’s incubator in Denmark owes most of its current knowledge on e-commerce in China to the EU SME Centre’s business development team services and advices.
Rasmus Gregersen, CEO NIHAO CPH
 
-Mr Gregersen – CEO NIHAO CPHOn May 2017 , Rasmus Gregersen  CEO of Nihao CPH contacted the EU SME Centre to bring its business into the Chinese market.  
After running its online magazine for a couple of years, Mr. Gregersen decided to start selling its products in China by opening a WeChat shop. 
The online shop would have been a stand-alone shop and the Nihao CEO wanted to operate it via cross-border on Chinese Wechat. 
The Centre’s Business Development Advisor Rafael Jimenez researched his case and pointed out that 
There are lots of complexities in such a scheme. First, there is to understand the treatment of payments, tax and duties and of the cross-border operations, which might not always be immediate. Additionally, the company also aimed at learning how to outline a strategy that easily migrates later to a bonded warehouse at the Free Trade Zone in Shanghai. 
Questions and answers did happen, and despite the inherent difficulties about a business-to-consumer trade mode that was largely unknown in China at that time, Nihao CPH put in operation its WeChat shop a few weeks later, in July 2017.
To learn more about Nihao CPH’s experience in China, read the full case study here.
“We quickly found out that cross-border e-commerce is not as easy as it sounds. Denmark’s regular post services had little experience with this type of logistics and also figuring out the procedures for taxes involved with cross border e-commerce deserve a fair bit of attention before getting into business. Despite much self-study, NI HAO CPH’s incubator in Denmark owes most of its current knowledge on e-commerce in China to the EU SME Centre’s business development team services and advices”.
-Mr Gregersen – CEO NIHAO CPH

Visit Nihao Cph Website

Tapping into China’s Corporate E-Learning Market

Gothia Logistics AB is a Swedish company that develops online training programmes in logistics, lean production and purchasing in order to help clients increase efficiency and improve productivity. Active in China since 2003, the company has been offering online training courses in both English and Chinese for employees in factories around the Yangtze River Delta region.

With the help of the Centre’s business development team, Gothia Logistics found a list of companies to participate in a research project on the difference in continued education between companies with various cultural backgrounds.

The Centre’s webinar on “How can foreigners establish an office in China?” helped the company acquire essential information on setting up a legal entity in China. Gothia Logistics also received comprehensive advice on employment arrangement forms available for wholly foreign-owned enterprises (WFOEs) in China.  

We used a great deal of services from the EU SME Centre’s website, especially the online enquiry service which allowed us to ask more specific questions on HR & legal issues. In addition, the Centre’s webinars are good sources of more resources. The EU SME Centre has been a great support for us when setting up our business in China. 

 

-Kjell-Åke Rönnberg, CEO, Gothia Logistics AB

Visit Gothia Logistics AB website

Getting the First Container of Beer from the UK to China

Lancaster Brewery is a British company producing and selling a variety of beer products such as ales and ciders, located in the North West of England. 

The company entered the Chinese market in July 2016, successfully reaching the country and clearing the customs in less than a month. It targets Guangdong province to start with but plans to expand business in other first-tier Chinese cities with a focus on Shanghai in the near future.

Lancaster Brewery is currently exporting to China with the assistance of a local Chinese business partner who is handling the process of customs clearance and relabelling in bonded warehouses.  The company has also planned to send an employee to Guangzhou for a period of six months to represent the brand in the market, provide support to the partner and develop a network of distribution channels. 

During their market research process, Lancaster Brewery came across the EU SME Centre’s content online, including the webinar on Alcoholic Drinks Market in China and publications on the Food & Beverage Market in China and Ways to Enter the Chinese Market.  The information helped the company better understand the technicalities of exporting products to China and to clarify the requirements for labelling, customs procedures, and intellectual property protection in China.

The Alcoholic Drinks Market in China webinar, held on May 10th, provided me with crucial data to pitch the China opportunity to our company board and win their approval.

- Giulia Ravasi, International Export Manager at Lancaster Brewery

Lancaster Brewery aims to position its brand in a niche market in China to attract affluent consumers, including expatriates and Chinese who have previously worked or studied abroad and therefore have developed a taste and preference for foreign food products and brands.

As advice for other European businesses interested in the Chinese market, Giulia emphasised on the role of establishing trusted relationships with Chinese business partners, doing market research and willingness to look for help.

“Do your research and look for help. Sometimes SMEs lack the specific knowledge and skills required for such a challenging process, but help is available out there to overcome these obstacles and barriers”, said Giulia. 

Visit Lancaster Brewery’s Website

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