China
market is indeed a growing pool of investments, trade and production. Many
have termed China as the world’s factory where lots and companies around the
world are entering into China to further expand their
business. As China continues to progress in recent years, many foreign
companies in China are benefiting as well. Today, China has attracted the
most number of foreign investors compared
to other developing countries.
China is a good opportunity
for companies to embark on if they want to expand their business
in Asia and the world
around. However, SMEs (small and medium enterprises) may be worried that
they do not have the required or enough resources to enter into China
market. However, it
is not just about having
the capital but applying the correct approach when doing business in China.
China
market is a complicated field by which only those who are familiar with the
Chinese culture would be able to move around in the market. Many may not
realize that China is a country whereby the Chinese are deal with business
according to their social and cultural values.
The Chinese have been
passing down a set of values since history and the Chinese companies have
been carrying out their business and trade according to those values and
beliefs. Thus it takes more than just being able to speak the language.
To survive in the China
market, one must have good relationships in the market. The Chinese uses the
term, “guan xi” to refer to any kind of relationships; personally or
bureaucratically. Chinese companies tend to want to work with people whom
they are familiar with as they would be able to develop a trust between
them.
Furthermore with “guan xi”,
newly established companies would know the knitty gritty paperwork and
having a good relationship with the government officials would reduce any
unnecessary procedures and delays.
However, a number of
foreign companies do not a good network in China and thus they are
unable to find relevant or
reliable business partners in China market and meet a lot bureaucratic
problems as they are unfamiliar with the laws of China.
The Chinese consumers have
a very strong national pride and they like to be associated with
their nationality and
country. Hence, the Chinese consumers are very supportive of their local
products. Hence, foreign investors sometimes have a hard time trying to
market their products
to the Chinese consumers
because their products may seem too unfamiliar and foreign.
Foreign companies need to
familiarize themselves with the China market laws and culture
before entering it. The
China laws may be frustrating as they seem to be very complicated. However,
if foreign companies are familiar with the Chinese culture, they will be
able to understand the Chinese laws better. Interacting with the locals
would also allow a deeper understanding of the Chinese culture. Hence, a lot
of foreign companies would undertake a
local company as a partner
to help them with the registration process and negotiation with the Chinese.
In addition, most of the
foreigners are not exposed to the Chinese culture, thus they do not
know what are the
preferences and needs of the Chinese consumers. Carrying out a consumer
research may not be very useful as the information collected may not truly
reflect the true responses as the Chinese may not be comfortable giving out
information to foreign researches. Hence, very often, foreign companies
engage a local research company to carry out market analysis research as the
data collected may be more reliable.
