What it takes for a foreign business to break into China
Source: BBC World Business – Business Daily Broadcast
Ting Zhang, CEO of China Business Solutions was invited to be on an exclusive panel of experts at the BBC Broadcasting House to discuss the ever changing landscape of ‘Doing Business in China’.
As the world’s second largest economy and soon to overtake the United States, China remains the country that businesses, both small and large, would like crack. Over recent years high profile trade missions and even Royal visits have been designed to pave the way for British companies. With a rapidly growing middle class, where consumption is now overtaking investment as the main driver of economic growth, China remains a contradiction – a golden opportunity and successful endeavours for businesses on the one hand and disasters on the other, where foreign companies have got it terribly wrong in China. So as China’s economic growth slows and continues to move from a manufacturing based economy to a consumer driven economy, how then do British business walk the right path of success.
In this recorded live broadcast, many useful issues were addressed from the slow down of the Chinese economy, to regulations, IP, corruption and the value of a contract. Ting Zhang addressed many of these issues in particular a key point that ‘of knowing the right way to build a relationship in China, because in China, doing business in based on trust’.
Market entry advice was discussed and although ecommerce is an exciting route to enter the Chinese market, careful planning and advice is important to avoid the pitfalls. Understanding the channels of entry with ecommerce and social media platforms ideally should entail having some in-house experience, with insight knowledge and practise of using China’s ecommerce. It is complex and requires a well planned social media strategy.
Ting indicated that China Business Solutions when working with many British SME’s, the first task is to explore with the company if there is a market for them. She said “one cannot assume that anything will sell in China, so finding the right market and right partner is essential”. More recently in the creative industry, with online gaming, identifying and finding the right partner has been key to the success of a British gaming company.
As China continues to move from a manufacturing to services to a more consumer power economy, there are many prospects for British business. Understanding the culture, avoiding mis-communication and getting good advice is essential. Although GDP is lower than before at 7%, this brings with it stability and quality offerings with heritage and good customer service will do well.