How To Enter The Chinese Market?

When it comes to expanding your business abroad in search of more productive markets than the stagnant local economy, China is often cited as one of the most desirable destinations to place your products and services.

The Chinese Dream

Despite the slowdowns of recent years, China has an economy that still boasts enviable numbers with a Pre-Pandemic annual GDP growth rate of over 6%. China's middle class is continually expanding, as is their purchasing power and spending attitude contribute to a very responsive and fertile market.

Despite this promising outlook, many entrepreneurs who have entered this market have not achieved the desired results or have failed to create a space for themselves. This has led some entrepreneurs to mistrust the Chinese market, considering it overestimated compared to its real potential.

Is it really worth investing in China? What is needed to do business in China? and what should be avoided? Let's try to answer these questions by making an objective assessment of this market.

Doing Business in China

China represents an excellent opportunity for foreign companies, but it is not an easy market to manage. On the other hand, however, the catchment area is so large that conquering even a small portion of this market, even less than 1%, can generate significant returns on investment.

To conquer a slice of the Chinese market, however, it is necessary to know the dynamics of this beautiful country. In China, bargaining techniques, the perception of the product, the mechanics that influence purchasing decisions and other factors that contribute to the success of a business follow rules that are unique to this market, and that must be respected.

Talking to entrepreneurs who have been disappointed by the Chinese market, one thing seems to unite the majority of them. It is a completely wrong approach to this market.

There is still too widespread a belief that what has produced results in other geographical areas can simply be replicated in China and achieve the same results. In reality, regardless of the experience gained in other markets, in China, you have to be willing to completely reshape your marketing strategy and adapt it to local needs. In order to succeed in this, you need to invest time and effort in learning how to operate in this market.

To overcome these problems, many entrepreneurs decide to rely on local distributors. While this may seem like a good option and may even produce some results, it is generally not the ideal approach to succeeding in China for many reasons, which we will discuss below.

Factors Contributing to Chinese Market Success

Many variables contribute to the success of a business in China. The following are just a few of the key factors in doing business in China effectively, productively and creating a niche for yourself in this market.

To meet many of these requirements, it is strongly recommended to have a local presence (from your same country preferably), as a distributor will not care about these aspects.

Cultivate Relationships

In order to enter the market in China, you need to establish strong relationships with local players. Building this kind of relationship in China takes a long time, sometimes years. Even if contact is made with a distributor, building a relationship with the distributor is essential to ensure that they consider the product seriously. For a foreign company, this means travelling to China periodically and therefore involves an investment in terms of time and money even before starting to sell in this market. Relationships are cultivated much more effectively and at a lower cost if you have your own local agent.

Knowledge of Local Culture

This is particularly important to conduct effective business negotiations, understand how to present your brand to the public and plan a marketing strategy. A western approach to negotiation can easily lead to misunderstandings and missed results. Knowing Chinese culture is also necessary to determine whether you need to change your product's packaging, colours, and presentation to make it appealing to local consumers. Again, an on-site agent is in the best position to circumvent these obstacles.

Branding

Having a quality product is not enough to sell in China. Chinese consumers rarely choose a product for its features but rather for its popularity and its impact on the buyer's image. For this reason, it is essential to invest in branding to give your brand visibility and recognition. This includes attending trade fairs, organising events, creating targeted marketing campaigns and other activities that increase brand popularity. Distributors don't do this, and it is essential to have a local representative who does it extensively.

Needless to say that the first step is to start rebranding everything in Chinese, and for that, you need a serious partner at your side. Someone like us at Hero Translate who can rebrand your website and all your products in Chinese.

Local Social Network Presence

The Chinese are among the biggest web users for both information and shopping. WeChat, the most popular local social network, is considered a way of life and many of their daily activities are carried out through this application. Having an online presence using local tools is very important for branding, marketing and customer loyalty.

Having your own trusted translation agency is the best solution for optimising your presence in China and gaining a market share. The advantage is to have one or more people constantly focused on branding and promotion activities.

How to Establish a Local Presence in China

In addition to opening a company in China, which is recommended for companies already operating in the Chinese market on a permanent basis, there are several ways to establish a presence in the country.

For example, it is possible to open a representative office or a sales office that takes care of all operations in the country. This solution, however, requires a fairly substantial investment on the part of the foreign company, both in terms of time and money needed for the establishment and may not be the most suitable solution for those who want to test the potential of the Chinese market.

A solution that allows you to start operating in China very quickly, with low costs and limited risk, is to use a PEO organisation to recruit and hire qualified personnel in China. PEOs are responsible for recruiting local staff who meet the required characteristics and presenting a shortlist of candidates to the foreign company.

Once the company has chosen a candidate, he/she is hired by the PEO organisation through the job placement formula. In this way, the foreign company can use qualified personnel without opening its own entity in China and without having to deal with the complicated bureaucratic and fiscal practices whose responsibility remains entirely with PEO. This solution allows to become operational in a few days, requires a limited investment, and the company can be released from the contract at any time.

Conclusion

Entering a new market like China is a process that will take you some time. It will not be easy, but it will be a lot easier with the right partners at your side. We at Hero Translate can be your winning partner for what it concerns being recognised as germans, with a perfect localisation of everything related to this beautiful country.

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