Small US businesses get into exporting with expert advice

Updated: 2012-08-24 11:00

By Yu Wei in New York (China Daily)

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Small US businesses get into exporting with expert advice

Frank Lavin was a US diplomat and Commerce Department official before he founded Export Now. Provided to China Daily

Cracking the gigantic market across the Pacific may be getting easier for smaller US companies, thanks to a former diplomat.

With help from Export Now, a company that aims to help small and medium-size businesses gain access to China's consumer market, Michigan-based McKeon Products Inc is taking the earplugs it manufactures in Michigan to one of the world's fastest-growing markets.

"Although we have been approached by other Chinese clients to sell directly to their businesses, some of which have their own websites, this is the first time we have partnered with an American company selling directly to Tmall.com," Jennifer True, director of international sales director at McKeon. The company is one of the first to take part in Export Now.

Tmall.com is China's biggest e-commerce marketplace, serving 370 million consumers. It ranked No 1 among Chinese business-to-consumer retail websites with gross merchandise volume of 30 billion yuan (about $5 billion) - the total value of all good sold through the platform - in 2010, according to the site.

"Over the years, consumers in China have been contacting me by e-mail asking how they can purchase McKeon's products," True said. "What the company hasn't been able to do is properly handle the expected growth in the market with our products in the Chinese language and ship small orders quickly at a competitive price directly to local consumers."

The idea for Export Now arose in December 2010 after months of talks with Alibaba Group, China's biggest e-commerce provider, through Tmall.com and Taobao, another online shopping site.

"Tmall.com shares a common objective with Export Now, which is to enable a more-rewarding trade experience through e-commerce and provide access to a wider selection of high-quality and authentic products, be they domestic or international," Alibaba spokeswoman Florence Shih said.

A surge in demand for US brands through Tmall.com, she said, reflects Chinese consumers' increasingly sophisticated demand for high-quality goods and services.

While the site already hosts famous US brands such as Coca-Cola, Nike, the Gap and Levi Strauss, it's still not easily accessible to small and medium-size foreign companies.

President Barack Obama's two-year-old National Export Initiative was intended to assist small and medium-size US companies by boosting sources of credit and financing for sales abroad. In 2010, less than 1 percent of the 29 million small and midsize businesses in the United States were exporting, according to the US International Trade Commission.

"Tmall.com could be difficult for small and medium-size US companies to deal with, due to barriers such as language, customs regulations and foreign-currency regulations, as they enter a new market like China," said Frank Lavin, Export Now's founder CEO and a former US ambassador to Singapore and undersecretary of commerce for international trade.

"Compared to large companies that can afford to have managers fly to Shanghai, set up distribution networks, and solve legal and customs issues, smaller companies tend to have less experience in international issues as well as in the way of resources," he explained.

Export Now helps companies clear those barriers with a "one stop" approach -handling logistics between its distribution center in California and its Shanghai warehouse, from which domestic orders are fulfilled. A team in Shanghai translates the description of the company's products into Chinese and remits sales proceeds from yuan into dollars.

Export Now works directly with the Chinese customs agency to ensure compliance with rules and that the US-originated goods are delivered to consumers as quickly and cheaply as possible.

"The main benefits small and medium-size companies receive from Export Now is to gain access to the Chinese consumer as easily as they can reach their domestic consumers, with minimal cost and minimal expenditure of management time," Lavin said.

Currently 14 US companies are partnered with Export Now, including Sun-Maid Growers of California, a cooperative of raisin and dried-fruit producers that has been selling for several to the Chinese market, mainly in supermarkets.

Tomo Naito, Sun-Maid director of international sales, said that partnering with Export Now proved an effective way to respond to Chinese consumers' online-buying habits. He wouldn't disclose details of the cooperative's sales on Tmall.com.

Lavin told China Daily that aggregate sales of the company's clients on Tmall.com "have been growing nicely" so far in 2012.

"Within a month or two, we can get one more US company into the market. We expect that number to grow nicely through the rest of this year," he said.

yuwei12@chinadailyusa.com

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