A friend of mine with one of China’s leading online retailers just sent me an article listing out food and beverage companies that are using JD.com to market and sell their product in China. For more on JD.com, check out this week’s New York Times story on it. The article my friend sent me is entitled, China: JD.com expands imported food program.
Our China lawyers have long advocated a “distributorship-type” model as a lower cost and oftentimes better alternative for foreign companies looking to sell their products into China The following posts (going all the way back in 2010) detail why a distributor/reseller model can be a better way to “get into” China than via a WFOE or a Joint Venture and explain the ins and outs of such a model in China:
- Getting Your Product Into China Via Distributorship. A Legal Piece Of Cake.
- That’s Hot: China Distribution Contracts
- Exclusivity In China Distribution Agreements
- How To Sell Your China Manufactured Product Within China Without A WFOE
- Your China Distributor. Because What Happens In China Doesn’t Stay in China.
It makes particular sense for food companies to sell their food and beverage products into China through distributors and resellers. China’s food safety regulations, import laws and food and beverage distribution systems can be immensely complex, and someone like JD.com is likely going to be better able to navigate these things in China than you are.
But it takes more than just saying “yes” to a company like JD.com to succeed with selling your food or beverage products into China. Even if you end up using an established China food or beverage distributor for your products, you should, at minimum, do the following:
- Make sure that your agreement with your distributor/reseller protects your reputation in China and elsewhere.
- Make sure that your agreement does not lock you in with your distributor or reseller if sales are poor.
- Make sure to protect your intellectual property (particularly your trademarks) from both your distributor/reseller and from China and elsewhere.
For many American food and beverage companies, relationships with companies like JD.com make perfect sense, so long as they are done right.