Many businesses are seeking to enter the dynamic Chinese market. No wonder – for manufacturers of consumer products, it’s predicted that by 2020, mainstream consumers will account for 51% of the population. That’s around 400 million people. For b2b businesses, China offers untold opportunity – alongside a perception that it is tricky to negotiate, fraught with risk and beset with cultural pitfalls.
At the recent NW Insider Business Breakfast on doing trade with China, an insightful panel gave some great information on the topic, captured here:
Building trust and true friendship opens the doors to business in China. For companies setting up an operation in the country, it’s vital to take time to research, spend time on the ground, and to find trusted partners to work with. Once the operation is established, keep close to the activity, and continue to build relationships and demonstrate commitment. In China, business doesn’t stop at 6pm. Entertainment and dining is seen as a natural continuation of the working day, and many deals are struck over the dinner table. Research by B2B International discovered that while the French and Americans were keen to go out with their Chinese associates, the British are frequently thought to be rude when they finish a meeting and disappear back to the hotel, refusing offers of evening entertainment.
On internet and web presence
Your web presence needs to be in Chinese and hosted in China. If you try to run your Chinese website from Western servers, censorship will at best slow it down and at worst make it unusable. For your site to run, the country’s strict regulations and legal requirements on websites and hosting must be met. The capabilities of web servers in China are quite different from what is expected in the West, so be prepared for more frequent outages.
On logos, literature and IP
There’s long been a perception that design and intellectual property is at risk of being copied by Chinese companies. The panel reported that this practice is on the wane, but more importantly, companies can thoroughly protect themselves before entering China. Prepare in advance by registering logos, literature and intellectual property with Chinese authorities. It’s a time consuming process but local authorities in China are very willing to help, and by taking this step companies are well protected if copycat products do appear.
On the pace of business
Business in China is not for those expecting a quick return. But once you’ve stayed the course and built trust and relationships, deals can be struck remarkably quickly. So if the deal you’re discussing means you need to have people and resources in place, be ready to implement that rapidly. On the other hand, day-to-day business administration generally takes longer and requires more staff than in a Western business.
Negotiation on the cost of a project can continue right up until the ink is signed on the contract – and even then the scope can change while the work is in progress. However, Chinese businesses pay well and quickly.
Above all, when in China, expect the unexpected. For an insightful hour, thanks to:
Mike Taylor, deputy chief executive, Liverpool Vision
Nicholas Wainwright, managing director, Boodles
Matthew Harrison, director, B2B International
Tianyi Gu, senior architect, BDP
Richard Unwin, director, Backbone IT and Ashton Lord
Rupert Cornford, features editor, NW Insider
Looking to trade in the Asia-Pacific region? Get in touch to find out how we can help. Or, share your business experiences below.