Top 10 rules for doing business in China
China, the business hub of the world is the dream for many entrepreneur. This market with 10% growth, this billion potential consumers, those 800 million cell phones, the 540 million Internet users and this million of millionaires … offer spectacular opportunities in the world.
However … more than one entrepreneur has failed in this country. Culture, competition, copy, a market that evolves too quickly, these consumers increasingly exacting … all these factors have led to many failures on the part of any enterprise, small, medium and even major.
To do business in China, there are rules. Follow these rules does not guarantee success (it would be too easy) but avoid some errors.
1 / Adapt to China’s market
Companies have to adapt to China’s market and not contrary. Adjust target consumers and market, this rule is valid for all countries of the world and across all sectors. But in China, many companies are struggling to adapt to Chinese market.
They are, in general, the time to understand the market and customer requirements.
2 / To have a coherent strategy
Although easier said than done, it is very difficult for a company that establishes itself as a Chinese market to have a coherent strategy, because the coherent of China is not necessarily the same that of the West.
Study the competition:
China is a country super-competitive. Competitors are probably numerous in your area, so it is important to know what they offer, their strengths and weaknesses and how they are perceived by your potential customers.
Positioning is really difficult for many Western societies, because decision makers are often not immersed in the Chinese society and in the area in which the company addresses.
The price positioning is important, you have to know : “which prices for my products in the Chinese market? “It depends on many factors, including competition, company image and quality of product offered.
Chinese professional buyers willing to pay 30% more for a quality foreign but usually not more.
Consumers, meanwhile, are irrational if they are wealthy and looking for the rest of the population.
3 / Be responsive
China is a country that changes all the time and Chinese people are very reactive. Decisions are made quickly and often this is in contrast to our old Europe.
If a company wants to succeed in the Chinese market, it must react quickly to market and competitive developments.
If you want to be reactive, it is a matter of volition !
4 / Keep control of his company, its distribution
If a company is suffering in China, it will have no problems keeping control of its distribution and its products.
However, if the company is experiencing a rapid success then new problems arise : copy, entry of new competitors low cost and loss of control of part of society.
The Chinese partner may decide to go it alone (eg Danone in China), the sales manager can establish his business and the purchasing manager can with the money of the company to buy a house in Hainan …It happens!
5 / Communicate in Chinese
I know a lot of divergent opinions. Some people think that speaking English needed more respect towards the Chinese. I do not think so.
The Chinese do not often speak English. Having a brochure or a website in English is often a brain-teaser for them, pushing them to do not like your business.
Have a communication in Chinese for Chinese, is very difficult for a Western society. Usually they will use a translator who will do a literal translation, not suitable for Chinese customers.
Develop a slogan, trademark, visuals and a website request to have a local expert that can give advice and make some suggestions.
And believe me it is not given to everyone.
The classic error is: the translation entrusted to the young Chinese student just graduated and freshly employee who will do his best and get a translation sometimes inconsistent.
The western manager does not read Chinese, or not understanding the subtleties validate the draft without any problems. Even the largest companies, however, accustomed to a marketing quality fall for it.
A French company in the automobile brand named Biaozhi, which means close to Biaozi : bitch in Chinese.
Shangxia (Chinese brand of Hermes) means “to have the heart that goes up comes down” “feel dizzy”.
KFC “we do chicken right” 我们 做鸡 是 对 的 also means “we made prostitution! ”
In China, we use different ways to search for information, Baidu is better than Google, and Weibo better than Facebook. For a person immersed, it is instinctive…For a newcomer, it is much less.
6 / Keep employees
“Mostly good, tell me a friend! ”
In China it is difficult to keep his (good) staff!
The market offers many opportunities for growth : large business groups offer better salaries and more responsibilities. On average, a Chinese business stay two years in a company (source: Zhaopin), China is moving and people too.
One factor causing this change is the salary increase of 20% on average in changing society and stagnant if we remain in its current structure.
Consequently, the Chinese know that to evolve you have to change employers.
But keep stability is essential in a society, to capitalize on its experience to improve. an employee will have to train for a while and then will be effective after one year.
It is important for a company to anticipate this and provide for wage increases.
It’s not easy to tell the direction, yet it is a reality, wages in China increase.
7 / The relational
Relationships with employees, suppliers, customers are paramount in China. Chinese people are more sensitive to interpersonal relationships that Europeans generally.
The Guanxis are essential for success in many sectors of the Chinese economy. The concept of service to consumers is very common in Chinese society.
Like any human being on this earth, the factor “sympathy” plays an important role in productivity and loyalty to a company.
8 / Flexibility
The Chinese are very flexible, they accept everything the customer wants or almost. Chinese SMEs are often oriented “customer” and have great flexibility. European companies offer very little flexibility and suffer in the Chinese market.
A hierarchical system where heavy Chinese employees often do not have a place helping to defeat a rigidity that these Chinese buyers, accustomed to meet commercial “local” who bow to their every whim. China “the customer is god”, and he does not like being kept waiting.
9 / Capitalize on your brand
The trust factor is very important in China. A foreign company will have a higher level of trust with local. All Chinese people have already slanged (quality, scams, time, customer service …) by a local company and prefer to secure their purchase with a foreign company.
-A brand is a commitment to quality
-A brand is a trust mark
-A brand is a benchmark
-A brand is also service, after sales service, advice …
Chinese people can copy but branding level, they know they are not yet sure how to go about it! (For now)
10 / Be Patient
The achievement too fast in China is quite impossible. I still do not know of examples of foreign companies that succeed very quickly. All China experts agree on one point, “be patient in China.” In other words, the payback is long, and successful companies now, in 2011, are present for many years: Volkswagen, Louis Vuitton, or Ikea.
Only after several years that these companies were able to adapt and drill.