Sourcing Products, Foreign Bank Accounts & More in China

China 6

Just the mention of China can bring up varied reactions from most people. A lot of people may think of China as an over-populated country with huge cities. Others know it as a place where most of their products comes from. Culturally, it’s a bit of an enigma. But to those of us in the eCommerce world, China is incredibly relevant with boundless opportunities for growth in your business.

Recently, I took a trip to China and decided to share my experiences with everyone. While my trip was both for business and personal reasons, I was able to experience a pretty good taste of how China is today and how diverse their culture is. Regardless of whether you are thinking about taking the journey into China for fun or strictly for business, this episode will provide you with lots of useful information that you need to hear before planning your trip.

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The Full Conversation

(With your host Andrew Youderian of eCommerceFuel.com.)

Hey guys, it’s Andrew here and welcome to the eCommerceFuel Podcast. Thank you so much for joining us today on the show. Today, flying solo, and I want to talk about a recent trip to China. If you’re in the eCommerce space, and you probably are, listening to this podcast, China has a ton of relevance for our industry, primarily in terms of sourcing products. I just want to cover it from a travel perspective, from a cultural perspective and from a business perspective to touch on all of those things. We’re going to go ahead and get right into it today.

I headed to China for a couple of reasons, partially for business. I wanted to source some materials for a product that we’re building, a proprietary product. Hopefully, I’ll be able to talk about that a little bit more in future episodes or blog posts. And partially just for fun, for travel and to see family. My sister-in-law is Chinese. My brother was over there, it’s his wife. My brother and I traveled together for the better part of a week and ended up visiting my sister-in-law and her family in Wuhan, in mainland China.

Differences Between Mainland China & Hong Kong

We started out in Hong Kong. Really important, if you don’t know, to realize that Hong Kong and China are very different. Hong Kong is technically part of China, but it’s radically different in terms of its culture, its language, just about everything. Hong Kong was ruled by the British until 1997, when the Chinese took it back over. I think there was a lease agreement. Subsequently, it’s got a ton of Western influence, probably the most Western part of all of China. It’s not really considered the mainland.

When you hear people say mainland China, they’re talking about everything but Hong Kong because Hong Kong, it has way more freedom than mainland China does. There’s no filter on the internet. Hong Kongers, I’m not sure if that’s the right, if they call themselves Hong Kongers, but people from Hong Kong identify as being from Hong Kong, not necessarily from China. There’s actually a little bit of tension, a lot of tension sometimes, between people who live in Hong Kong and mainland China because the mainlanders will, a lot of times, they’ll come over in droves to buy goods and take them back over to mainland China. There are some cultural differences. It is a very different place.

In Hong Kong, we spent a couple days there, opened up a bank account at HSBC in Hong Kong. Obviously, I think this kind of stuff is interesting, so I wanted to touch on it. Why did I do that? Well, a couple different reasons. One, in case something terrifically horrible happens in the Western World in the United States, to have a little bit of money offshore, in a different jurisdiction. I also know it’s been getting harder to get international bank accounts with the crazy U.S. laws and reporting laws. I wanted to have one, more than anything, just for security and to make sure if I really wanted one later on, I had it.

I’ve heard it’s getting harder and harder to get them. I was able to get one. I kind of tried to prep a little bit, so to make sure I had the best chance possible, I brought proof of my address from home. I brought tax returns from my business, showing my income so I could show that to a banker to say I have a real business. I brought a W-9. I brought some bank balances from home to show I had a little bit of money to deposit with them and it worked out. There was like a two or three week waiting period, but a couple weeks later, they emailed me and said the account had been approved. It was a personal account. If you’re thinking about doing that it, is possible. Just try to bring as much documentation as you can to prove that you would be a good customer for them.

The Hong Kong dollar is kind of interesting. It’s pegged to the U.S. dollar, but unlike the U.S. dollar, for every bank note that’s out there, it has some kind of asset, whether a stock certificate or gold, or other currencies backing it. It’s kind of like a gold standard of sorts, but without the gold, which is pretty interesting. A lot of people think it’s a really good alternative to the U.S. dollar. You have all the upside of the U.S. dollars, as the dollar, especially the last six months to a year, the U.S. dollar’s been on a tear. It’s been appreciating a lot against a lot of other currencies. You have the upside of the dollar, but if stuff really hits the fan, and the U.S. dollar starts to tank, they can unpeg it and they have a lot of intrinsic value there, so it’s interesting.

Hong Kong, didn’t do any real business in Hong Kong, apart from that. Toured around a lot, went over to the Kulan, I might be pronouncing that wrong, but the other side of the non-island part of Hong Kong, and went around. Very cool, spent a couple days there. Then we went right across the border to Shenzhen.

Shenzhen, probably a name you’ve heard, is probably the largest electronics manufacturing, or one of, at least, if not the largest, electronics manufacturing hubs in the world. I believe it’s where Apple and Foxconn make a lot of their stuff, iPhones. This is mainland China. When you cross that border, you’re in China legitimately.

Censorship on the Internet Exists

The biggest difference I noticed going across was the internet. You always hear that the internet is filtered, but going across and trying to get on wi-fi and pull up Google or something, you can’t do it. It’s not possible. It’s crazy. If you do go, I recommend getting a Hong Kong based sim card for your phone because, even as you travel throughout mainland China, because it’s Hong Kong based, you’ll have access to unfiltered internet, which is really nice.

In Hong Kong, we met up with Jamin from HighCappin.com. Jamin and his partner, Matt, they do manufacturing management. If you have something you want made, you can talk to them and they can work as a liaison between you and the factories to get a product made for you with less headache.

He was kind enough to be our tour guide for a day. We went to a city about an hour away from Shenzhen to source some fabrics. I’ll say upfront, I probably didn’t need to go strictly. I probably could have done all of this either over the phone or with samples or things, but I really wanted to. I was headed over anyway, and I really wanted to see what was available on the ground in China in terms of selection, in terms of just how everything looked, get my hands on some actual fabric and products.

I’ve got to say, I was blown away by the selection. I mean, it was just mind boggling. We went to just a single fabric shop, and there were hundreds and hundreds of options at that one shop that specialized in a certain type of fabric. In the city there were probably hundreds and hundreds of shops just doing fabric, even a little buckle shop. There was one shop we went to for hardware. They had straps and buckles and webbing and things, really intricate and enormous selection. I asked Jamin at the very end, how many shops are there like that in the city that compete, maybe three or four? He said, there’s dozens and dozens, maybe even close to a hundred.

The incredible selection you have, you know there’s a lot, but you see if firsthand, and it makes you think, “Man, if I can dream it, I can probably source the materials to build it,” which is really cool.

Tips for Sourcing Products

One suggestion I’d have if you’re heading over there to source products, unless you have a really good idea of where to go, is to get a guide. It worked out perfectly for us. We happened to connect with Jamin ahead of time. He knows the fabric space well in China. It worked out fantastically. He took us around. But it would have been really difficult to do on our own. Finding the city isn’t so difficult, but getting from the train station to the right section or area. In mainland China, the places we were at least, not a lot of English around, very few people, if any, speak English, so it can be tricky. That’s why I’d highly recommend, if you can, hire someone ahead of time. If you can find a sourcing company that can help you out, at least in that initial visit, or even if you’re going to use them continually, but having someone who knows the landscape is going to make a world of difference in actually using your time well and not taking forever to find things.

From Shenzhen, we went on and headed on to Wuhan. Shenzhen has a little bit of Western influence, being so close to the Hong Kong border. It’s also a huge manufacturing hub for a lot of goods that get shipped out to the West. I saw a handful of Westerners there. We went to Wuhan, which is a city of about 8 million people much further inland, and no Western influence there, which was kind of crazy.

Going between urban center to urban center in China is wild because you have this enormous contrast. We were on a bullet train that was probably doing 200 miles per hour. I was working on my laptop, tethered to my phone working online. Outside, it’s just like a different century. It’s very rural farming, very poor, almost no technology at all. The contrast between those two is pretty wild.

The Direct Approach

We got to Wuhan. Wuhan is probably one of the best places to observe Chinese culture without a whole lot of Western influence, like I mentioned. The biggest thing I noticed in terms of differences was how the Chinese communicated. It’s a very direct style. It’s, “I want this. Get this. Go here.” Please and thank you just aren’t used, at least the way that we use them in the West. It’s not a. . . People aren’t ruder over there, it’s just their social and language constructs. They just aren’t part of the culture. That’s just the way people communicate. That was interesting, very different from, of course, than the West.

With close family, even, if you use please and thank you, you can actually almost introduce an awkwardness or distance between you and family, at least from the Chinese perspective. As far as I can understand it, your family and close friends assume that you are appreciative of what you are doing for them. Because you’re so close, they just know and you know that you appreciate them. By vocalizing that, you can call into question how close you are.

I don’t think we have that concept in the West, but it’s something that’s very much a part of their culture, and something where, when I went out for a meal with some family friends, I said thank you. I couldn’t help myself. If you were in the West and I did that, they’d say, “Oh, of course. Yes. No problem.” They’d smile and you’d go your separate ways. When I did this with this family who treated us to dinner, it was kind of an awkward moment. They looked at me funny, and we left in a strange moment. You could feel it cause a problem, which was kind of crazy.

The Chinese Government

Another thing was the government. The government in China, of course, especially in the West, gets a bad reputation. A lot of things, probably deservedly so, especially on the human rights issues, but man, there’s a lot of things they can do really quickly and efficiently. Construction gets done amazingly quickly there. There was a Subway that was going up, like a Subway sandwich shop or KFC, or something, that got done in a week and a half that probably would have taken months in the States. The streets are really clean because the government just pays people to pick up litter. The government pays for all of that. We had wi-fi throughout.

You go into the subway in New York City, and this is definitely a first world problem, but you don’t have access to your cell phone when you’re on the subway because you’re underground. The Chinese government sets up wi-fi or cell signal stations all throughout the subway, so it’s uninterrupted, which is amazing.

In talking with the people there, and reading, you get a sense the government is really efficient at achieving its objectives because, of course, it’s not a democracy. There is one party in power, and they’re unopposed. If only you could have a benevolent dictator in the United States, or anywhere, really. If you could guarantee someone who had your best interests at heart and was benevolent, man, I can’t think of a better form of government. I’d vote him into office.

Final Thoughts

Overall, the trip to China, I’ll admit my initial impressions of the mainland were a little bleak when I first got there. The air quality is pretty terrible, especially coming into Wuhan. There’s just an insane number of people. It’s crazy. It’s just like a big city anywhere, but just gobs of people. But by the end of the trip, I’d really come to enjoy a lot of parts of the country. The food was incredible there.

The people, just like anywhere you go, once you get to know them, are extremely kind and great people to be around. The community atmosphere was something that I found that, at least in terms of the city coming out at night, one night we were out walking and I was really surprised at the incredible number of people that came out to fly kites in parks and dance. There’s a lot of public dancing where people will come out and follow a leader and a group of about 50 people will all dance together, in parking lots, in streets, all over the place, in parks. There’s a really communal atmosphere in the evenings.

Of course, the incredible business opportunities are over there. Again, it’s mind boggling how many products and how many varieties of things you can source from China. It’s pretty incredible.

It was a great trip. Of course, I’m home by now. If you’ve got any thoughts on China, I’d love to hear them. I did a full on blog post about it over at eCommerceFuel.com/China. Let me know. I’d love to hear you weigh in and hear your experience with the country.

Thanks for listening to me being solo this week. Next week, I’ll have someone back on with me, so it’s not just a monologue for you. Hope you’re doing well, hope you’re having a great week, and I’ll talk to you soon.

That’s going to do it for this week. If you enjoyed the episode, make sure to check out the eCommerceFuel private forum, a vetted community exclusively for six and seven figure store owners. With over 600 experienced members and thousands of monthly comments, it’s the best place online to connect with and learn from other successful store owners to help you grow your business. To learn more, and apply, visit eCommerceFuel/forum. Thanks so much for listening, and I’m looking forward to seeing you again next Friday.

 

 

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Photo: Andrew Youderian

Post tagged in: Lifestyle & Growth, Podcast, Product Sourcing & Design

1 Comment

  1. Hi Andrew,

    I’m a relatively new Shopify owner trying to make a go of it while also holding down a full-time job and juggling two young kids. I only recently came across your site – what a fabulous resource for new entrepreneurs and I love the convenience of listening during downtime! I’m also a former Canuck now based in Hong Kong so if you’re ever in this neck of the woods again, do drop me a line!!

    Cheers
    Lily

    p.s. The non-HK Island side is called Kowloon, not Kulan!! 😉