The risks of having an agent in China

If you asked me (and it happens often) what is the most important thing for an SME to succeed in the Chinese market, I’d have no hesitation in answering:

finding a competent and reliable local partner—someone who, besides managing their own interests, also looks out for the interests of your company.

For most SMEs, this means finding one or more distributors or importers.

How to do that was explained in issue no. 4 of this newsletter, which focused on how to find the right distributors in China.

However, sometimes companies ask me to help them find an agent in China, to represent the company and identify and develop distributors on their behalf.

While this option is very common in Europe and other markets, it’s a risky and difficult route in China.

Unless your company operates in a sector where Chinese law requires the appointment of an agent to import (like pharmaceuticals or aerospace), I strongly advise against using this channel.

The agent role in China is not regulated as it is in Italy or Europe, which means it’s very easy to encounter unprofessional or even fraudulent “agents.”

In fact, these “agents” will often approach you—especially if you attend a trade fair in China or, increasingly, contact you through social media.

To a Chinese agent, representing a foreign brand adds prestige in the eyes of their clients—but they rarely invest in developing it in China.

If your product isn’t already well-known and appreciated, their only goal will be to use your brand to gain short-term benefits for their own business.

This brings three major risks for your company:

1. Poor or zero sales results –as agents may use your products as bait, quoting inflated prices only to push customers toward their own, more profitable Chinese products.
2. Wasted resources –agents often demand a fixed fee (not just commissions), arguing—rightly—that foreign products are harder to sell and need more time and promotion.
3. Brand protection risks –they promote your brand poorly, and in worst-case scenarios, if you’re not properly protected, they could even “steal” it.

In conclusion, relying on an agent in China is not a good idea.

If you must or choose to go that route—maybe while preparing to establish a direct presence—keep in mind the risks mentioned and take adequate precautions.

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