International Entrepreneurial Activity
[Section Number]
Executive Summary
The aim of the paper is to select a product or service to import to Canada and mark down the reasons for the selection of the product. The identification of market of the products, economic, financial, and marketing reasons related to the import of that product are also mentioned. For the purpose of this paper, the product selected is footwear from China. The rules and regulation and different duties are also a part of this paper. The regulation outlined in the paper are related to the trade China specifically to provide a better view about the imports of goods and services.
International Entrepreneurial Activities
A high demand for apparel prevails in every market as it is one of the most consumed product and a necessity of people. There are several categories of in apparel out of which footwear is very much appreciated in Canada. From the different categories of apparel, footwear is one of the best performing category. Footwear is selected for import in Canada, and its market will be discussed in the paper. Economic, financial, and marketing are the different aspects through which the goods are discussed in the paper. The issues related to logistics, customs, and transportation, and the governmental and non-governmental regulations of the products are also a part of this paper.
Footwear is selected for importing to Canada because it is one of the most consumed categories of apparel. It increased by 5% in the 2014 and amounts to Canadian dollars 3.3 billion. As these products are highly consumed, therefore, more people are interested in doing the business of importing these goods to Canada.
Market Selection
The market of footwear can be divided into three group, cheap footwear, normal footwear, and high-end fashion footwear. The products that are imported from China to Canada are cheap imports and normal footwear.
Product Selection
The product to import that is footwear is selected because in its one of the most emerging imports of Canada. Two different types of footwear are imported to Canada. These two groups are imported from China because of their high demand in the market.
Economic Reasons
Economically, the footwear imports are increasing in Canada because of their high demand. The people can purchase the Chinese products at lower cost. It is economically beneficial for both the countries, and these imports also help to create new jobs in the Canadian market. In 2014, the total footwear import worth from China was $1.5 billion.
Financial Reasons
The imports of the footwear to Canada are also financially beneficial because it allows the people of Canada to make transactions in the market which is a positive sign in the country. It also depicts that the people are earning and spending more on imported products. It also increases the spending capacity of the people of a country.
Marketing Reasons
It is easier to market the footwear is Canada because the marketing of the products can be done through several platforms. The marketing of the products can be done for free by using the option of social media to market the goods. Advertisement in the newspaper is also helpful to bring awareness to the public. As China is one of the biggest trading partners of Canada, there are no such restrictions in the marketing of the imported goods. The importers also have the option to market their products through TVCs and by campaigning. Out of all, campaigning and use of social media are the most beneficial as it helps in bringing awareness in a large number of people with comparatively low costs.
Issues
There some kinds of issues that are faced by all the businesses. Some of the issues of importing footwear are discussed below.
Logistics
There are no extreme rules for imports of footwear that can create a big issue in the logistics, but there are certainly some regulations that need to be avoided to stop the issues. The biggest issues of logistics are that of labels with misleading claims, as goods with improper labels are not allowed in Canada. In addition to it, documentation of the packaging must be proper according to the value of goods to avoid the issues in logistics. Shipping documentation is also a factor that creates a logistic issue. Bill of Lading is required for transportation of goods, and in the case of air cargo shipment, waybills are required .
Customs
All the goods that are imported into Canada need to be cleared at the port. Some duties are applied on the goods before clearing them (goods) that are based on the value of goods. Duties may vary, depending upon the nation from which the goods are entering the Canadian territory. There are two types of the tariff in Canada that is Most Favored Nation Tariff, and General Preferential Tariff. Goods imported from China lie in the ‘General Preferential Tariff’ category of the duty.
Transportation
There are no such issues faced for the transportation of goods while importing them to Canada. In order to avoid issues in transportation, some documentation is required. It is a general process, followed by at almost all the countries during international trade. The government has not imposed any particular barriers to the transportation of footwear from China to Canada.
Regulations about Product
Every country has its set of rules and regulations that need to be followed at the time of importing goods. The governmental and non-governmental rules are mentioned below.
Government and Non-governmental
A liberal trade regime is maintained in Canada as there are no foreign exchange restrictions. An import license is required for some products. According to Export and Import Permits Act, it is necessary to have an import license for the import and export of the footwear. Canada adopts Harmonised System (HS) of the tariff schedule, and all the goods are subject to goods and services tax (GST) and the customs duty. The value of the goods is a major factor as on its basis some other taxes can also be applied. There are different provincial tax that vary from province to province. In addition to it, some important documentation and consumer protection laws are to be followed during trade with Canada. Furthermore, Canada has the option to invoke China-specific safeguard, to protect domestic producer from market disruption. Such rights can be used when the goods from China are imported in a large quantity .
Conclusion
References
Global Affairs Canada. (2015, December). Importing into Canada. Retrieved from http://www.international.gc.ca/controls-controles/about-a_propos/impor/canada.aspx?lang=eng
HKTDC. (2015, August). Trade Regulations of Canada. Retrieved from http://hong-kong-economy-research.hktdc.com/business-news/article/Small-Business-Resources/Trade-Regulations-of-Canada/sbr/en/1/1X000000/1X006MX9.htm
