sim update September 2019

September 27th, 2019

AWARD WINNING! SIM TO BECOME ADVISORY FIRM OF THE YEAR!

We are extremely happy to announce that sim / Michael Lehmann have been awarded ADVISORY FIRM OF THE YEAR 2019 by Global Advisory Experts. It is an honour and a very pleasant surprise that we received this award, a title earned and shared by the efforts of the entire team, thank you!

Global Advisory Experts (GAE) is one of the world’s leading online resources for locating specialist advisers for the services required by businesses, investors and individuals around the world. The GAE awards have been running since 2010 and have helped many winners to further enhance their exposure to potential clients and to reaffirm their position as a market leader in their field.

sim has been active in China since 2006 and is – in the highly dynamic market place Shanghai – ever since constantly evolving in all aspects, in number of mandates, service offer, number of employees, office space, customer base and professional network.

We were informed that over the first six months of 2019, GAE has conducted its extensive nomination and research process for our 10th Annual Awards. The shortlisted candidates were judged on client testimonials, key transactions, rankings, overall reputation, publication contributions, speaking engagements and the performance and standing of teams and individual advisory experts.

GAE informed sim in July that they have been chosen as the winner in the category of:

Company Formation Advisory Firm of the Year in China – 2019

During the recommendations stage GAE received over 50,000 responses from business directors, finance professionals, independent advisory firms, high net-worth individuals, advisory associations and visitors to the GAE website and LinkedIn users all over the world. These recommendations were combined with GAE’s own independent research in order to create a shortlist for each award category.

sim has accepted this award with gratitude, and as a testimonial of a continuous commitment to its professional and fiduciary service attitude, always striving for even higher customer satisfaction.

We thank our customers, partners and advisors, friends and families to support and enable us winning this award and already look forward to an equally successful 2020!

Your sim / ADVISORY FIRM OF THE YEAR 2019 team

SIM ACCOUNTING, TAX ADVISORY AND COMPLIANCE SERVICES FOR SATIS INTERNATIONAL TRADING

SATIS International Trading, a young and dynamic trading company under Swiss management, assists brands to trade products into the Chinese market and/or source products for their market from China.

SATIS operates from the economic heart of Asia, the breathtaking City of Shanghai. Established in 2011, the company is expanding swiftly by supporting European brands along with the ongoing trend of outsourced trade services, controlling quality of the local manufacturing and by assisting brands finding and establishing the right distribution channels. (see also part 3 of this update)

As fiduciary service provider for SATIS, sim did initially set up the base of the company, implemented necessary modification of business scope stated in business license, and manages the annual inspections.

Over these past years of successful operations, the services provided by sim include amongst others:

accounting and compliance services
financial reporting
invoice issuing
salary management
tax advisory service including planning scheme and implementation, tax compliance and declaration.

This year, SATIS has developed exporting business of various types, among which are stainless steel products. sim has devoted quite some time in helping SATIS to obtain export tax rebate on behalf of their customer. Thanks to our professional financial and taxation team, we were able to provide guidance and planning for SATIS in data preparation of the tax rebating, and in improving the efficiency of the operations as such.

It goes without saying, that such tax refunds, which are depending on the trade volume, can have a significant impact on viability and certainly also the profitability of each transaction.

MOBILE SHOPPING! HOW A NATION HAS QUICKLY CHANGED ITS HABITS

A population on internet – mobile!

According to the 44^th Statistical Report on the Development of Internet in China released by China Internet Network Information Center (CNNIC) on August 30, the penetration rate of Internet users in China has exceeded 60% by the first half of 2019.

According to the report, as of June 2019, the scale of Chinese Internet users has reached 854 million, an increase of 25.98 million compared with the end of 2018, the penetration rate of Internet reached 61.2%, an increase of 1.6 percentage points compared with the end of 2018. More interestingly, the scale of Chinese mobile internet users has reached 847 million which brings the proportion of Internet users using mobile phones to staggering 99.1%.

“This growth reflects the enormous impact of speeding-up and fee-reducing, that promotes the development of Chinese mobile Internet market,” said Zeng Yu, director of China Internet Network Information Center, “Compared to five years ago, the average downloading speed of mobile broadband has increased by about six times, and the fee level of mobile Internet traffic has dropped by more than 90%. The average monthly mobile traffic of Chinese users is 7.2 GB, which is 1.2 times the global average. ”

Along with the figures’ demonstrating the development of the usage of mobile Internet in China, the trend comes, with more online retailers and platforms aiming to share this cake of mobile online shopping of continuous expansion. The widespread availability of smartphones gives rise to the popularity of mobile shopping apps, which enables consumers to gain access to goods of daily needs whenever and wherever the Internet is possible, and in a macroscopic manners of speaking, further drives the growth of China m-commerce.

More and more shopping apps

In parallel, online mobile shopping apps in China have become the most popular way for users to access online shopping. According to research from China Internet Watch, over 80% of Chinese online sales were generated from mobile apps, which is expected to maintain a steady growth in the next 5 years.

Figure 1: China online retail market: Mobile vs PC

Data source: China Internet Watch Analysis Apr. 2018

The China e-commerce market continues to see tremendous growth, but it’s impossible not to notice that the growth is gradually slowing down. With more and more competition entering the market, the landscape still sees consistent innovation, new marketing strategies have been adopted into use by various online shopping apps, here come only two samples:

Pinduoduo: Where Group Buying and Social Commerce meet (Average monthly users: 283.27 million[1])

After its launch in 2015, Pinduoduo has been focusing its primary feature, group-buying, which means to reduce the purchasing price by inviting others to purchase together, the more consumers invited, the cheaper the price goes. In order to hold on to the consumer flow, the platform launches flash sales and limited time offers to shorten the customers’ decision making process and encourages impulsive purchasing behavior. This unique business model has ensured Pinduoduo to become the 2^nd most popular China online shopping app (Following taobao of alibaba), however, it should be noticed that the consumers on this platform stay to seek for “good deals”, so it might not be an ideal platform for premium goods.

[1] Data source: dragonsocial

XiaoHongShu – Content-driven Ecommerce Platform

Launched in 2013, it is positioned as a social ecommerce app. By January 2019, it has gained over 250 million registered users. With a focus on beauty and fashion, it acts as a platform for people to post and share shopping tips, product reviews and lifestyle stories. With the aim of authentic information sharing, the platform has successfully developed into a trusted source of advice and recommendations for its users. Noticing users’ demand for buying foreign goods, XiaoHongShu launched its own cross-border ecommerce platform, the “RED store” in 2014. It connects Chinese consumers with global brands by enabling users to buy overseas products directly through the app. By building a community of user-generated content, it has created a shopping cycle on the platform for users, which allows them to:

Read guides/product reviews from other users
Make a purchase through the app
Publish product reviews about the product
Communicate with other users about shopping experiences

In addition, to maximize the power of content marketing, XiaoHongShu invites famous celebrities and KOLs to open their own accounts and to share beauty insights to other users.

With this operational mode, comes also the problem of monitoring the contents and its sheer volume. This summer, it was accused of facilitating the sales of restricted, forbidden and fake products and being too exposed under the commercialized content environment, causing the inflow of fake or malicious posts and reviews.

Shopping : not a life-style anymore, but still No.1 occupation

Thanks to the tremendous number of shoppers in China, the country keeps setting records for global retailing and has become a must-win market for retailers and online businesses alike. While having a strong understanding of the various China shopping apps is important, it’s also very important to understand the latest trends, of how consumer would react on different marketing solutions, their changes on purchasing habits of different aims and demands, and also, the changes of regulations and laws that cause effects on strategies setting.

Hence, a clear yet agile strategy on the entire Chinese e-/m-commerce ecosystem is vital to the success of Brands in this country.

Contact us for more information on m-commerce in China and stay tuned, next time we will share with you insights on “New Retail in China”.

AND THEN THERE WAS BORACAY!

On May 30^th, the entire team moored on Boracay, Philippines to start a 4-day retreat. In the beautiful Mövenpick Resort, we were warmly welcomed by Swiss General Manager André Brulhart and his team.

The first day comes always with a bit of time lagging, so the team spent most of the time adjusting at the hotel, enjoyed some time in the pool, chasing the boss with water-guns and gazing at the splendid view along the shore.

Over the coming three days however, we enjoyed a rich and diverse program including beach volley, professional training on attitude and communication, Sunset Sailing at white beach, “Game of running men” (in which the finance team excelled thanks to almost the same methods applied as in the TV series with a similar name!), case studies on innovation processes, BBQ’s and so on…

It was spectacular and for all the rest: “what happened on Boracay, stays on Boracay ;D”

Enjoy some snapshots!

For more exciting events, please stay tuned for the following posts!