Are you planning on doing business in China? Don’t underestimate the task ahead. Entering China is a complex exercise. It requires finesse, insight, and—crucially—feet on the ground. You need solid local business partner in China who can handle all the business details with and for you. These business partner in China help you penetrate the market with your product, across the country. While not easy, it’s definitely doable. And once figured out, it gives you a huge competitive advantage.
But a word of caution: Western companies entering the market with a fantasy of double-digit growth and cheap labor costs will find that this dream is no longer reality. And don’t imagine you can go it alone: It’s critical that you find a trusted local business partner in China.
Here are six main reasons tell you why you should have a business partner in China.
1. Market Size
China is a country of roughly the same size as the USA, with a population more than four times as large. 20 years ago, China’s main growth came from its four major cities—Beijing, Shanghai, Guangzhou and Chengdu. Today, that number has expanded to more than 80 cities. In the past ten years, the main growth has come from tier-2, tier-3 or even tier-4 cities.
2. Local Competition
You aren’t just competing against other Western companies anymore. Over the past few years, Chinese companies have increasingly been claiming top ranking. For example, Xiaomi Group, a Chinese smartphone manufacturer, has claimed the third spot in only five years. Huawei is fifth.
3. International Competition
China has large, experienced system integrators that have expanded their businesses internationally. A business partner in China not only allows you to target markets within China, but also expand your coverage—for example, into other Asian countries, Mexico, and African countries. Large Chinese technology and software providers—such as Neusoft, Huawei and ZTE—started their international businesses years ago.
4. Government Policy
The Chinese market is heavily influenced by state policy. Local business partner in China are more in tune and familiar with government agendas—both explicit and unspoken. A focus on local branded technology has been one of the top government guidelines, in order to promote local Chinese industry. Local business partner in China will be able to help you find workarounds to solve this problem.
5. Local Processes And Requirements
Although China is the second-largest economy in the world, most Chinese customers have different needs to those in mature markets. For instance, many enterprise customers in the USA buy technology and integrate it themselves. But the situation in China is very different. You need local system integrators to help put the solution together, because the buying pattern of Chinese customers is different: They look for a total solution, instead of stand-alone technology.
6. Support And Service
Chinese customers require 7×24 support. And they expect you to talk their local language, not just Putonghua Mandarin—there are something like ten languages in common use across the country’s regions. It will initially be difficult and expensive for you to provide this level of service. Local business partner in China can patch the gap by providing the time coverage and language support.
The Bottom Line
Entering China is about much more than simply localizing a product into Simplified Chinese, using the right terminology, or even having a great marketing program to support it. It’s about partnering, to compete and win on an international basis.
Related reading: 5 Strategies to Find a China Distributor for Your Business.