Importing From China: 8 Ways an Import Partner Adds Value
By Sithembile Dlamini, Head of Africa-China Banking at Standard Bank
Navigating the complex world of Chinese imports? Let us connect you with the experts. Our strategic partnerships offer unparalleled support and risk mitigation.
International trade presents significant opportunities and challenges. To navigate this complex landscape successfully, businesses require reliable partners who can mitigate risks and facilitate smooth transactions.
Through our trade offering and strategic partnerships with China’s largest bank, the Industrial and Commercial Bank of China (ICBC), and our Chinese trade partner, Guomao, we provide our African clients with unparalleled import and export solutions.
I find it particularly gratifying to see the impact that these trade solutions have on our clients’ businesses, minimising their exposure to financial and operational risks and helping them expand their businesses and grow their revenues in meaningful ways.
Guomao has been our trusted on-the-ground import partner since 2019. During a recent visit by its representatives to South Africa, selected Standard Bank clients from Gauteng, KwaZulu-Natal and the Western Cape were introduced to their extensive capabilities.
For businesses interested in expanding their importing activities in China, here’s a look at the value a trusted import partner like Guomao delivers:
1. Diversifying Your Supply Chain
Recent global events have highlighted the critical importance of supply chain diversification. From the global pandemic to geopolitical tensions and natural disasters, disruptions have become increasingly frequent and unpredictable. The blockage of the Suez Canal by the Ever Given container ship in 2021 and the ongoing challenges posed by low rainfall affecting the Panama Canal's operations are stark reminders of the fragility of traditional trade routes.
African businesses, traditionally sourcing goods from regions like Europe or the Middle East, can mitigate these risks by expanding their supply chains to include China.
By partnering with a credible import partner like Guomao, you can access a wide range of Chinese suppliers, reducing your dependence on any single entity and enhancing your business's resilience.
2. Vetting Suppliers
Entering into a new supplier agreement with unfamiliar parties can be risky, and a language barrier adds further complexity.
Many importers rely solely on surface-level checks such as company age, online reviews and level of responsiveness, but this approach often overlooks crucial details.
A trusted import partner like Guomao goes beyond superficial checks by verifying the supplier's authenticity (to ensure you’re dealing directly with the manufacturer and not a middleman), conducting site inspections, and assessing product quality.
In addition, Guomao provides our clients with access to a pre-vetted network of thousands of reputable suppliers, saving you time and effort in the supplier search process.
3. Making Payments and Using Trade Finance Tools
For many African businesses, importing from China for the first time can be daunting, especially when faced with the typical requirement for 100% upfront payment. Our import partner alleviates this pressure by negotiating an initial 30% deposit payment on your behalf, freeing up your working capital for day-to-day operations.
To manage the remaining balance, you can leverage Standard Bank’s trade finance tools, such as Letters of Credit (a financial guarantee issued by a bank to ensure payment to a seller for goods once the order has been delivered according to agreed specifications).
Chinese manufacturers do not commonly accept Letters of Credit, preferring cash payments. However, Guomao accepts Letters of Credit for qualifying clients issued by Standard Bank, providing you with a secure payment option. This unique arrangement allows you the flexibility to manage your cash flow effectively while mitigating risks associated with international trade.
As a Standard Bank business customer, you can take advantage of this exclusive partnership to gain a competitive advantage in Africa-China trade.
4. Ensuring Compliance with International Standards
To successfully bring goods into South Africa, importers must adhere to stringent quality standards set by the International Organization for Standardisation (ISO). Non-compliance can lead to costly delays or even the seizure of your goods by customs.
Obtaining the correct certifications can be challenging – and unfortunately, not all suppliers meet these requirements.
Guomao understands the intricacies of ISO compliance and can verify that your chosen Chinese supplier meets these essential standards. This not only safeguards your investment but also ensures your products align with South African regulations for smooth customs clearance.
5. Quality Control Guarantees
While platforms like Alibaba.com feature thousands of Chinese suppliers and make it easy for importers to order product samples online, relying solely on samples and Internet reviews for quality control is risky.
Even if the initial sample meets your expectations, there's no guarantee the bulk order will be the same. This is especially true when dealing with complex or technical products.
A trusted import partner in China reduces this risk by conducting a physical inspection of your shipment before it leaves. Guomao guarantees that the quality and quantity match your order specifications and takes steps to resolve any issues.
6. Customising Products to Your Exact Needs
A trusted import partner can also be invaluable regarding product customisation. Guomao, for example, can work closely with suppliers on your behalf, leveraging their in-house design and engineering teams to bring your vision to life. This applies to both simple and complex product modifications.
Our Africa-China Trade Solutions team witnessed the power of customisation first-hand during a recent visit to China. A business owner required a yoga mat with specific properties – a memory foam-like material and a unique fastening mechanism. Guomao successfully collaborated with the supplier to create this tailored product.
On a more complex level, one of our clients, a gearbox manufacturer, needed a custom mould produced in China. This was crucial for their gearbox production. The intricate technical specifications demanded extensive collaboration between the client's and supplier's engineers. Guomao facilitated the entire process, including technical assessments and organising a trip to China for our client to personally meet with the supplier’s engineers.
7. After-Sales Support
After-sales support is a critical aspect of importing, especially when it comes to complex machinery and equipment. Smaller businesses often lack the internal capacity to install and operate new systems, making reliable support essential.
Guomao provides comprehensive after-sales support, including deploying engineers to oversee installation and ensure optimal operation. They work closely with manufacturers to guarantee quality and conduct thorough evaluations to assess equipment performance.
This hands-on approach has proven beneficial to a number of our African clients. For instance, Guomao established a macadamia nut processing plant in Tanzania, installed a solar-powered desalination plant in Mozambique, and set up a mask manufacturing factory in Botswana. In each case, their engineers provided on-site support and conducted follow-up assessments to verify the success of the projects.
8. Seamless Travel Arrangements
Face-to-face meetings can be important for building strong, long-term relationships with Chinese manufacturers. However, navigating business in China can be challenging, especially for those unfamiliar with the language and culture – and finding English-speaking assistance outside of major international hotels can also be difficult.
A reliable importing partner can greatly reduce these obstacles by helping to navigate the language barrier and making comprehensive travel arrangements to visit factories that are often in remote locations. For a fee, Guomao ensures a smooth journey from the initial planning to on-the-ground support.
For example, Guomao recently assisted one of our clients, a textile manufacturer seeking a Chinese supplier, by providing a complete travel package, including visa assistance, flights, accommodation, and transportation. They also arranged supplier meetings and provided a personal escort to facilitate communication.
More information
For more information on how we can assist your business with our unrivalled Africa-China trade solutions, visit our website at www.standardbank.co.za/southafrica/business/products-and-services/business-solutions/trade-suite/africa-china-trade or email us at [email protected]