Every businessman is doing business in China, or planning to do,
because “it’s the right place to go”.
read these rules…
Don’t be fooled by “It’s easy to make money in China.”
You need to overcome the barriers of languages, cultures, and communication.
Nothing is Easy, don’t be too optimistic.
Get a full picture before you really start.
A smart way to do this is to hire a China Business Coach.
Things working in western countries often don’t work in China.
Study and research before you make any business decisions in China.
I compiled a series of Guides on Doing business in China and you can check them out.
Involving an Expert when necessary in your strategic planning phase will save you a lot of time and cost.
China is not a well balanced market.
95% of startups fail for choosing the wrong niche market in China.
Make the China Market Research BEFORE you get started!
Don not invest on businesses in which you do not have any advantages.
Not sure how to find a perfect and profitable niche?
Many companies are struggling to adapt to the Chinese market.
But, this is the essential step to be successful.
Localize your products and services, localize your website, localize your team.
Keep an eye on your target customers, understand their our decision making process, and listen to what they are saying about the future, about the business, about the industry, about your competitors, about you,
Test and improve all the time.
A foreign company will have a higher level of trust if only you build up a brand.
Chinese businessmen can copy your ideas but a good branding is something they cannot copy, for now.
Signing a contract is only the beginning of negotiations in China.
Be prepared for possible changes in the terms.
Before you find a truly reliable partner in China, keeping multiple partners for your daily business activities brings you a lot of benefits.
You can keep the overall costs down and test different approaches.
When your business is going really well.
New competitors may be your Chinese partner, your sales director, other employees or your distributors.
You sourcing manager, purchasing manager pays much more than average and gets huge commissions from the suppliers.
We witnessed many stories like this.
So, take some actions before it happens.
Business relationships are built formally after the Chinese get to know you.
Doing business in China is based heavily on personal relationships, which is called Guanxi.
If you are not a friend, you are basically not a trusted business partner.
Many western businessmen are easy to make mistakes since they don’t know Chinese business etiquettes.
Taking two bottle of French wine to the meeting in the office hour is a typical story to read.
Relationships with employees, suppliers, customers are crucial for survival in China. Chinese people are more sensitive to interpersonal relationships than Westerns are.
China’s economy is developing fast, and Chinese people are changing fast too.
Laws and regulations involving import duties, foreign company registrations, worker labor rates, and corporate tax structures tends to change every year.
Market conditions change even faster.
Decisions shall be made quickly in this market.
Move quickly, but do not rush.
Long-term commitment in China will help you win friends.
It takes time for
Too many short-term speculators wanted to make a overnight fortune in China failed and earned a bad reputation.
When you hear this:
“You Don’t Understand China”
You should understand this is when your Chinese people (maybe your Chinese partner, Chinese customers, distributors, employees, etc) express their disagreement.
Be patient and give the chance to listen to their opinions.
“Basically no problem” in Chinese (没问题 Mei Wenti) means BIG problem.
This might be the most annoying fact for most foreign businessmen trying to understand Chinese people.
Chinese people avoid saying a clear “NO”.
The answer “YES” is not necessarily and indication of agreement or confirmation.
Don’t be pushy to get a confirmation.
They need time to make decisions.
Try to figure out the reason behind the hesitance and try to find alternative solution.
Doing business in China is daunting and full of challenges.
Many Western entrepreneurs rely on their guts decisions and later will realize it’s a wrong way to do so in the China market.
Respect the market and learn quickly from market experts.
As a China market entry strategy expert, I always started a discovery contract with my western clients to fully understand their true needs and answer all the questions in the preliminary pilot research.
For every important decision, I will go through a comprehensive analysis with data support, all the possibilities, together with a contingency plan.
Western business owners will experience challenges not only in the strategic planning, but also in the implementation of the action plans. The western executives appointed to be in charge of the China market are normally experienced international businessmen, but not the China expert in the beginning. A successful cooperation always relies on the understanding between the external experts and the client from top to bottom.
Learning Rules for Doing business in China will help you stay away from common errors, and increase the chance of survival and success in China.
Please leave your comments if you have any question.
Let's Start from a Discovery Contract, What is it?