This blog post is dedicated to a topic that is very misunderstood – entry to the China beauty market.
The common misconception is that if you are a cruelty free brand then you can not enter into China at all.
This is wrong.
There are other ways to access the Chinese consumer that do not involve any animal testing – I will go through them below. I really hope this clears up some of the confusion.
When is animal testing required by law?
If you go through Chinese product registration then this process involves animal testing. It is also long and costly. But this is only necessary for products shipped into China and sold in a physical retailer offline like department stores, chain stores etc.
This will hopefully change – Cruelty free international has been talking to the Chinese government about different ways to test the products and there have been some experts who are hopefully that the policy will change soon. Here is a recent opinion piece.
When is animal testing NOT required by law?
There are several scenarios that legally do not involve animal testing. Let’s start from the best known:
1. Manufacturing in China
If your product is manufactured in mainland China then the authorities do not require animal testing in order to sell the product. You are exempt.
This also works if you send semi finished goods into the market and just assemble in China – so there are ways to use this area to avoid animal testing.
2. Cross border e-commerce (CBEC)
Cross border e-commerce is literally the sale of goods from outside of China to an end consumer in China. It started as an official channel in 2014 and has grown into a $220bn business and is set to continue to grow double digits for the foreseeable future.
In 2017 67% of Chinese consumers who made a purchase online also made a cross border e commerce transaction – that is a good penetration! And it is growing too.
Here is a concrete example of what this means: a Chinese consumer in Shanghai buys a product on your website and you ship it from the UK directly to that consumer’s home in Shanghai – there is no registration requirement meaning no animal testing.
There are whole market places set up only for the sale of cross border goods – Tmall the largest e commerce platform in China has a dedicated platform called Tmall global that is purely for sale of cross border e-commerce goods. But there are many more and choosing one will depend on your objectives, size of brand, category etc.
I will another post with more details on cross border e-commerce.
3. Daigou – shopping agents
Daigou literally means “buying on behalf of” and in its original form it was Chinese people living or travelling overseas who bought goods on behalf of friends and family back home.
This has exploded into an industry that is absolutely enormous – official estimates of size are difficult as it is largely unregulated and untaxed.
Daigou are very well-established in Australia and New Zealand and they also existing in most western markets.
Daigou have been selling products that are unavailable in China for a long time – sourcing anything their networks want. With the changes in the E-commerce law this will change the way daigous operate as the government is cracking down and wanting to push this sort of commerce onto official cross border channels that are regulated – reduce the number of fakes and increase taxes.
I will do a post dedicated to daigou.
I am hoping that this clears up any questions you had on animal testing when accessing the China market.
Do let me know your comments below – I would love to hear from you. And if you want to discuss options for entry into the China market in more detail then please don’t hesitate to get in touch here.