It’s to no one’s surprise that a lot of businesses and investors are trying to penetrate the Chinese market over the past few years by deploying their China market entry strategies. Indeed, the country has significantly increased the purchasing power of its citizens, and the digitalization of the republic has all but opened the doors to foreign brands. As a matter of fact, eCommerce has got a large chunk of the pie when it comes to retail, and that’s always good news for businesses that don’t have a stable footing just yet inside the mainland and the surrounding territories.
But, this guide is for all businesses that are trying to enter the Chinese market. Large or small, foreign or domestic, popular or unknown brands, you’ll need a ton of advice to make it through a market that’s got a lot of potential, billions of dollars of it, but at the same time, is super competitive.
Here are five China market entry strategies that you can explore.
- Do Your Research and Learn About the Culture and the Market Before Making Any Decisions
- Build a Strong Team of Local Experts To Help You Navigate the Market
- Establish a Presence in Key Cities and Regions
- Create Localized Content That Resonates With Chinese Consumers
- Be Flexible and Respond to Changes Rapidly
1. Do Your Research and Learn About the Culture and the Market Before Making Any Decisions
You cannot be successful in the Chinese market without knowing your consumers. If you do your research, you’d be surprised by the differences you’ll find between the western and the Chinese consumer. Plus, China is a very different country from the United States or Europe in terms of culture and business practices.
China is a huge country with over 1.3 billion people, making it the most populous country in the world. This means that there are many different markets within China, each with its own unique characteristics and opportunities.
The purchasing power and the income of the Chinese people have increased but there’s still a significant divide between them. The middle class is not as large as one would think relative to its population. The lower class and the upper class still make up the bulk of the consumers.
- The lower class is limited to buying mostly their necessities and the upper class is the ones who will purchase products indiscriminate of the price.
- The middle class is very brand conscious but the contradiction here is that they will always look for a bargain if there’s one available. This is mostly because a lot of this demographic wants to project an image of success, especially toward their peers and family. If they aren’t able to find a bargain iPhone, then they’ll probably buy the next cheapest branded and newest phone on the market.
What may be considered necessities in the west are completely different from what the Chinese consider must-haves? This goes to show how culture may affect purchases and if you have solid data about it, then you’re a step in the right direction.
China is still a relatively untapped market for many industries. There is a lot of potential for growth in China, but it’s important to understand which sectors are growing the fastest and what the competition looks like before entering the market.
2. Build a Strong Team of Local Experts To Help You Navigate the Market
It’s always strategic for your business to have a local presence on the mainland. There are many fields you’ll have to navigate from legally protecting your brand in China to distribution and promoting it, dealing with customers, and so on and so forth. You have multiple options when it comes
Hiring mostly locals should give you an automatic group of experts when it comes to navigating the market, but having a significant group of market experts onboard should give you more control of your operations.
In order to be successful, you need someone who understands the cultural nuances and can create a campaign that resonates with Chinese consumers. A good marketing agency will have experience working in China and will know how to reach your target audience. They’ll also have a deep understanding of the Chinese media landscape, so they can select the right channels for your campaign.
If you’re looking to do business in China, it’s essential to have a strong marketing strategy in place. A good marketing agency will have solutions that help you achieve your goals and reach new heights in the Chinese market. Finding the right balance is key, that’s for sure. Just remember that local knowledge is invaluable and will greatly affect your campaigns, websites, social media, SEO, and more.
3. Understand the Many Markets Within China
The Chinese consumer base is incredibly diverse. What appeals to one segment of consumers may not appeal to another. So businesses need to be able to adapt their products and marketing strategies on a dime in order to
Please take note that not all regions and cities in China offer equal opportunities. Naturally, the quality of the resource that you’ll get will be different and significantly better in cities like Beijing and Shanghai since these are Tier One metropolises.
Chongqing, Tianjin, Guangzhou, Shenzhen, Chengdu, Nanjing, and Qingdao are just some of the major cities in China that you can explore.
These cities will give you access to markets and suppliers, relatively lower costs of operations, reliable infrastructure, tax incentives, distributors, and most of all, consumers that have got enough money to spend on your offerings.
Common sense would also suggest that if you have relations abroad or are an international company then these major cities are established gateways to make things easier for your company to operate.
4. Create Localized Content That Resonates With Chinese Consumers
Things may work differently in China but SEO and content are still kings. That’s why you have to make sure that your organization is always up to date with the latest trends.
Taking advantage of social media, your website, blogs, crossposting, and eCommerce platforms will be prudent. Putting up content that resonates with your ideal Chinese clients will be crucial to your success.
After all, what’s the point of having good quality products if you can’t get in front of your target audience, right? Chinese consumers love a good narrative and they seek experiences that add value to their lives or enhance the quality of their lives.
They do love their luxury brands but will not ignore brands that catch their attention with a good narrative, either. Start with short-form video content and always remember that influencer marketing is here to stay.
5. Be Flexible and Respond to Changes Rapidly
China is a rapidly-growing economy, and businesses that want to be successful there need to be prepared for rapid changes. The Chinese market is always evolving, so companies need to be agile and able to adapt quickly in order to stay ahead of the competition.
This is perhaps one of the best pieces of advice that we can give. The market is volatile and what trended yesterday may no longer be hip today. There are a ton of fads in the market at any given time and so it’s your job as a brand to keep up. If you don’t, then you risk losing business and you risk being irrelevant even before you ever had the chance to go big. Know that the consumer’s taste today changes in a heartbeat and that may be something that’s true in and out of China.
Additionally, the Chinese business landscape is constantly changing. Regulations can change overnight, so businesses need to be prepared for anything. They also need to have a diversified portfolio of products and services in order to appeal to the widest range of consumers possible.
To go further on you china market entry strategy
Did you know that in spite of the challenges that the pandemic has brought upon the many industries of the world, the Chinese economy has still managed to grow? Yes, that’s true.
The Status Quo of the Chinese Market
Its GDP growth for 2021 was listed at 8.44% and that just shows you how not only resilient this market is but also the massive purchasing power of its people. It’s second only to the US, and it will be the engine behind the world’s economic growth for the years to come.
So, if a lot of businesses and investors are flocking into the Chinese market today, expect that to still continue for the foreseeable future. It’s a large and complex market and one that B2B companies should especially pay attention to for it is ripe for the taking.
Please know that China’s demographics are rapidly changing, and the income of its people is still increasing, so their spending won’t go down anytime soon. This is why western businesses are so attracted to this side of the globe right now. If you’re relevant in China, then you’re relevant anywhere.
But, we tell you, without some form of assistance or experience, it will be almost impossible to break into this massive market.
Get To Know the Consumers
China’s current population is at 1.4 billion and that gives you a glimpse of its massive potential. At the same time, it tells you how different it could be not only to the western market but to its neighbors, South Korea and Japan.
Know that China does not have a homogenous market. Even though they may look unified in terms of geopolitics, it’s not the same story when it comes to social and economic factors.
China has got a massive market but without localized knowledge, it would be really hard to access it. The Chinese consumer has got a real affinity for must-have items, or what they consider as must-haves, like TVs, mobile devices, and other appliances. Let’s talk strategy.
China Market Entry Strategies: our Conclusion
The Chinese market can be brutal, even if you play your cards right, especially when you’re still trying to break in. That statement may be blunt, but it’s true. You should be near perfect in your execution if you want to make it big, but know that it’s not entirely impossible to do so.
The market may also be very volatile, so as per our advice, be sure to be adaptable and welcome changes as challenges or room for opportunities. Build a solid online reputation, hear the voices of your target audience, learn how to use social media platforms, and most of all, seek help whenever necessary.
If you indeed need assistance in trying to break in into a highly competitive market, then know that you can turn to [firm name]. We will help you navigate the pitfalls of the Chinese market and ensure that you have all the tools necessary to get a stable foothold in the industry.
Why don’t you contact us today and let’s talk strategy? The opportunities are waiting and time is of the essence.
Companies should consider their resources, previous export experience, and long-term business strategy before entering the Chinese market.