{"id":16364,"date":"2025-07-11T13:42:33","date_gmt":"2025-07-11T13:42:33","guid":{"rendered":"https:\/\/focus.cbbc.org\/?p=16364"},"modified":"2025-07-14T15:58:12","modified_gmt":"2025-07-14T15:58:12","slug":"part-1-what-to-do-before-engaging-a-chinese-distributor","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/part-1-what-to-do-before-engaging-a-chinese-distributor\/","title":{"rendered":"Part 1: What to do before engaging a Chinese distributor"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Making sure you have the right distributor before you enter the market is essential to ensure your brand\u2019s IP is protected and you won&#8217;t come unstuck further down the line. In the first of this two-part series, we explain what to do in advance of finding a Chinese partner<\/h2>\n\n\n\n<p>It\u2019s no secret that the Chinese market offers immense opportunities for international brands. But engaging a distributor without thorough preparation can leave businesses exposed, misrepresented, or worse, locked out of their own success. Two experts, Zarina Kanji, Managing Director UK &amp; Europe at <a href=\"https:\/\/wpic.co\/\">WPIC<\/a>, and Kristina Koehler-Coluccia, Head of Business Advisory at <a href=\"https:\/\/www.woodburnglobal.com\/\">Woodburn Accountants &amp; Advisors<\/a>, offer a clear-eyed look at the key steps British companies must take before signing anything.<\/p>\n\n\n\n<p>The first lesson: do your homework. \u201cDue diligence is everything,\u201d says Kanji. \u201cAsk for case studies from the distributor of companies they have worked with before and speak to them about their experience with that distributor. Ask partners within the network for their insights. It\u2019s a relatively small community, so introductions are possible. Speak to other brands about their experience\u2014but be discerning. Some may have had a bad story, but that might be down to getting the price wrong, or targeting the wrong market.\u201d<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><a href=\"https:\/\/www.cbbc.org\/services\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" width=\"4680\" height=\"786\" src=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway.png\" alt=\"launchpad gateway\" class=\"wp-image-7246\" srcset=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway.png 4680w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway-300x50.png 300w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway-1024x172.png 1024w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway-768x129.png 768w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway-1536x258.png 1536w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway-2048x344.png 2048w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway-1920x322.png 1920w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway-1170x197.png 1170w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-gateway-585x98.png 585w\" sizes=\"(max-width: 4680px) 100vw, 4680px\" \/><\/a><\/figure>\n<\/div>\n\n\n<p>She recommends using networks like the <a href=\"https:\/\/focus.cbbc.org\/\">China-Britain Business Council <\/a>(CBBC) and the Department for Business and Trade (DBT) to get introductions and independent perspectives. But due diligence isn\u2019t just about reputation, it&#8217;s also about understanding what\u2019s actually being offered.<\/p>\n\n\n\n<p>\u201cGovernance is important,\u201d she says. \u201cYou need to know the breadth of services on offer. Is it an end-to-end service? Are they only running social campaigns, or are they also providing logistics, data reporting, and customer service? Some brands charge less, but do a lot less. You have to understand what\u2019s required of you as the brand.\u201d<\/p>\n\n\n\n<p>For example, larger partners like WPIC may put 10 to 15 people on a single brand account. But smaller partners often require brands to provide considerable input, time and resources of their own. If your internal team can\u2019t handle the load, the relationship may suffer.<\/p>\n\n\n\n<div class=\"wp-block-data443-irp-shortcode irp-shortcode\"><div style=\"clear:both; margin-top:2em; margin-bottom:2em;\"><a href=\"https:\/\/focus.cbbc.org\/how-to-choose-the-best-distributor-for-your-business-in-china\/\" target=\"_self\" rel=\"dofollow\" class=\"u3fcb096884223c616995571c7d01c0e8\"><style> .u3fcb096884223c616995571c7d01c0e8 { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #E74C3C!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .u3fcb096884223c616995571c7d01c0e8:active, .u3fcb096884223c616995571c7d01c0e8:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .u3fcb096884223c616995571c7d01c0e8 { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .u3fcb096884223c616995571c7d01c0e8 .ctaText { font-weight:bold; color:#E74C3C; text-decoration:none; font-size: 16px; } .u3fcb096884223c616995571c7d01c0e8 .postTitle { color:#000000; text-decoration: underline!important; font-size: 16px; } .u3fcb096884223c616995571c7d01c0e8:hover .postTitle { text-decoration: underline!important; } <\/style><div style=\"padding-left:1em; padding-right:1em;\"><span class=\"ctaText\">Read Also<\/span>&nbsp; <span class=\"postTitle\">How to choose the best distributor for your business in China<\/span><\/div><\/a><\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Know your value&#8230;and your size<\/strong><\/h2>\n\n\n\n<p>A common mistake, Kanji warns, is choosing a distributor that\u2019s either too big or too small. \u201cIf your brand is under \u00a310 million in annual turnover, don\u2019t go for a giant partner like Baozun. You\u2019ll be competing with Nike or Lululemon and you simply won\u2019t get the attention.\u201d<\/p>\n\n\n\n<p>Instead, she advises finding partners at a comparable size. \u201cYou want someone who sees value in your business and is incentivised to make it grow, not just to hit quotas.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Own your store. Protect your IP.<\/strong><\/h2>\n\n\n\n<p>Perhaps the most critical red flag is giving away too much control, too early. \u201cMake sure you own your store in China,\u201d says Kanji. \u201cThe worst-case scenario is handing ownership of your Tmall or JD store to the distributor. Once they have that, they have the upper hand. That\u2019s where the most costly and complex challenges come from.\u201d<\/p>\n\n\n\n<p>Koehler-Coluccia agrees emphatically. \u201cThere must be a clause in the distribution agreement that clearly states: all collateral belongs to the brand,\u201d she says. \u201cThat includes the Tmall and JD stores, the inventory, all the digital assets. And if the contract ends, there must be a clean transfer of those assets back to the brand.\u201d<\/p>\n\n\n\n<p>In practice, she adds, this means spelling everything out in the contract\u2014including an itemised list of what the distributor is setting up, and who owns what. Too often, British companies rely on UK lawyers for contracts that will be enforced in China. \u201cDon\u2019t do that,\u201d she says. \u201cHire a Chinese law firm. You\u2019re playing by Chinese rules\u2014use someone who knows the game.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Plan your exit before you start<\/strong><\/h2>\n\n\n\n<p>One of Koehler-Coluccia\u2019s most repeated mantras is simple: have an exit strategy. \u201cThere needs to be a section in the contract that says: if this doesn\u2019t work, here\u2019s how we unwind it. That includes transferring stores, assets, remaining stock. Don\u2019t wait until things go wrong to figure that out.\u201d It\u2019s also worth accounting for the possibility that the distributor might lose money on the venture. \u201cIf they spend on marketing or logistics and don\u2019t see ROI, what happens? That needs to be agreed up front\u2014whether that\u2019s clawback clauses or refund triggers.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Understand the costs\u2026and how to get paid<\/strong><\/h2>\n\n\n\n<p>The Chinese e-commerce ecosystem is expensive and complex. Brands must factor in multiple layers of fees: platform deposits (for Tmall, JD, etc.), annual platform charges, partner fees, and campaign costs. All of these need to be fully itemised from the beginning.<\/p>\n\n\n\n<p>\u201cGet a full breakdown,\u201d says Kanji. \u201cYou need to know what the fees are, what frequency they\u2019re paid, and what happens if something goes wrong. Budgeting without this knowledge is asking for trouble.\u201d<\/p>\n\n\n\n<p>Remittance is another challenge. How will profits be repatriated? What\u2019s the process for converting RMB back into pounds? These issues need to be clarified up front, with support from tax and legal advisors familiar with Chinese rules.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Stay involved from day one<\/strong><\/h2>\n\n\n\n<p>For companies that assume the distributor will handle everything, both experts sound a stark warning. \u201cToo many brands just want to delegate,\u201d says Koehler-Coluccia. \u201cThey don\u2019t have the internal capacity, so they assume they can just hand it off and watch the money roll in. That\u2019s a fantasy.&#8221; Instead, she stresses the need for active involvement: \u201cSet KPIs. Have monthly meetings. Monitor performance. If targets aren\u2019t being hit, have that conversation early.\u201d<\/p>\n\n\n\n<p>It\u2019s not uncommon, she says, for companies to ignore the setup process, then try to take control later, only to find the distributor has more leverage than expected.<\/p>\n\n\n\n<p>\u201cThey\u2019ll say: we put in the capital, the resources, the attention. And now you want to terminate us? If you\u2019re not willing to pay attention from day one, what do you expect?\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Choose partners with platform access and influence<\/strong><\/h2>\n\n\n\n<p>Relationships still matter in China, particularly when it comes to access and visibility. \u201cAsk how long they\u2019ve been in business, and how well integrated they are with platforms like Alibaba, Douyin, Xiaohongshu (RED),\u201d says Kanji. \u201cAt WPIC, we have longstanding partnerships, so we get early access to marketing campaigns or new tools. That gives our clients first-mover advantage. Some agencies don\u2019t have those connections., they can\u2019t pull favours, they can\u2019t get you in early.\u201d That kind of platform integration can be the difference between a flagship campaign and being lost in the crowd.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Eyes wide open<\/strong><\/h2>\n\n\n\n<p>Ultimately, both Kanji and Koehler-Coluccia stress the same thing: be realistic. China is not a plug-and-play market. It takes time, investment, clarity, and ongoing engagement. British brands that treat their Chinese distributor as a plug-in growth engine are almost always disappointed. But with the right preparation, the right legal safeguards, and a partner aligned to your scale and ambition, the rewards can be substantial. As Koehler-Coluccia puts it, \u201cYou can\u2019t just hand it off and hope. This is your brand. Protect it.\u201d<\/p>\n\n\n\n<p><em><a href=\"https:\/\/focus.cbbc.org\/part-2-what-to-do-if-your-relationship-with-a-chinese-distributor-goes-wrong\/\">Read Part 2 here: What to do if your relationship with a Chinese distributor goes wrong<\/a><\/em><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><a href=\"https:\/\/www.cbbc.org\/membership\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" width=\"4680\" height=\"786\" src=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1.png\" alt=\"\" class=\"wp-image-7248\" srcset=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1.png 4680w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1-300x50.png 300w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1-1024x172.png 1024w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1-768x129.png 768w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1-1536x258.png 1536w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1-2048x344.png 2048w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1-1920x322.png 1920w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1-1170x197.png 1170w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-membership1-585x98.png 585w\" sizes=\"(max-width: 4680px) 100vw, 4680px\" \/><\/a><\/figure>\n<\/div>\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Making sure you have the right distributor before you enter the market is essential to ensure your brand\u2019s IP is protected and you won&#8217;t come unstuck further down the line. In the first of this two-part series, we explain what to do in advance of finding a Chinese partner It\u2019s no secret that the Chinese market offers immense opportunities for international brands. But engaging a distributor without thorough preparation can&hellip;<\/p>\n","protected":false},"author":11,"featured_media":16369,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[128],"tags":[2433,135,2427,181],"class_list":["post-16364","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-services","tag-distributor","tag-law","tag-paywall","tag-retail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Part 1: What to do before engaging a Chinese distributor - Focus - China Britain Business Council<\/title>\n<meta name=\"description\" content=\"Making sure you have the right distributor is essential to ensure your brand\u2019s IP is protected and you won&#039;t come unstuck\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/focus.cbbc.org\/part-1-what-to-do-before-engaging-a-chinese-distributor\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Part 1: What to do before engaging a Chinese distributor - 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