Five questions every business
must ask before entering
the market in China

A decision to enter any new market shouldn’t be taken lightly. That is doubly true when that new market is China. Asking the right questions, and taking the time to answer them honestly, can help to sharpen the focus and provide a solid foundation upon which future success can be built.

01. Why China?

As Simon Sinek says, it’s important to start with ‘Why?’. As much as China undoubtedly presents wonderful opportunities for exporters, it’s also no walk in the park either. There will be points in your journey where you will need to be crystal clear about why it was that you set out in the first place. This clarity will provide fuel for the commitment and resilience that will be required to reap the rewards that are on offer in China for those who stay the course.

02. What is unique about my brand story?

You must be able to share the story of your brand in China and seek to genuinely resonate with your target market. This means knowing your product and understanding your potential customers inside out. As much as the possibilities are enormous in China, the noise from competing brands in the most competitive market on the planet can be almost deafening and cannot be underestimated. 

There is no doubt that technology is providing an unprecedented platform in China. However, the product narrative, and an ability to resonate with consumers, is still at the heart of every success. As a result, now more than ever, brands must be able to cut through the noise and create an authentic story to connect with consumers in order be successful.   

03.  Can my business move at ‘China speed’?

Business in China moves at pace. One business’ hesitation is another’s opportunity. One of the key elements driving the speed of the market in China is the almost universal adoption of mobile payments. This has now delivered brands the ability to reach millions of consumers quickly and directly. This also means consumers can move with an agility almost unimaginable only five years ago. This speed is now permeating every area of the supply chain from purchasing decisions through to promises of delivery within thirty minutes of placing the order.

For most Western businesses, entering the China market will usually mean operating at a much higher tempo than they are used to. Everything from the speed at which decisions are made to the time it takes to turn marketing material around will be tested. Being successful in China therefore means a commitment to being ‘China fit’. 

04. What is your appetite for risk?

Every new market brings with it a certain level of inherent risk and China is no exception. Just like crossing the street or riding a bike, risk cannot be completely removed, but it can be effectively managed. Asking important questions such as, ‘Who am I going to partner with in China?’, ‘What critical advice do I need to underpin success?’, and ‘How do I protect critical information?’ can assist in developing a plan to diminish your exposure to risk.

Operating in China requires a commitment to risk mastery, not risk avoidance. It is essential that you design your business model from the outset to cater for local conditions and the regulatory framework that you will be operating in. Having run and sold a successful start-up in China, I know you can’t spend money on everything. It’s therefore crucial to understand the key elements on which your business plan will succeed or fail. Getting the right advice in these critical areas will be another important plank in building success for your business in China. 

05.  Are you prepared for success? 

This may sound a little like getting ahead of yourself, but it is a crucial question to ask before entering the market in China. In answering this question, you will need to look at three fundamentals. 

a)     What does success look like in China? 
b)    Can we produce and deliver enough to meet demand?
c)     How do we scale our business model at speed in China? 

Generally speaking, brands that win in China, win big. Whilst this will mean different things to different businesses, it is crucial to plan early, and strategically, for success. One of the best ways to damage your brand in China is to be caught out by your success, struggle to supply, and fail to meet demand. Once your brand has lost the trust and confidence of your distribution channels and, more importantly, your once-loyal customers, this is a difficult position to recover from.

Doing business in China is exciting and can be enormously rewarding. Every export-focussed business should at least be thinking about how they can take part in the incredible growth story that is China. In2Asia works with private and listed companies of all sizes to assess, access, and operate successfully in China. Contact us to find out how we can assist your business to set up for success in the most dynamic marketplace in the world.