Best practices of the industrial machine sector
In this article we will see first how the industrial machine sector in China is. Then we will discover how to sell your products and technologies to the buyers, and finally we will see what you have to know in order to convince the Chinese manufacturers.
The industry sector is very developed in Chine: it represents 70% of the country’s GDP. In fact, China produces a big part of the world’s goods and equipment.
Here is a map of the Chinese industrial areas (source)
The Chinese economic model used to be based on a cheap workforce and on very cheap prices. But the economic development of the country is changing these things, and the wages are rising.
The new generation, Chinese people born in the 90’s don’t want to work like their parents, and ask for higher wages. They also refuse to work too hard in bad conditions.
The development of automated machines in China
Most of the big industrials look for better quality. And usually for mass production, better quality means automation.
Most of local manufacturers of industrial machines don’t succeed in producing reliable automated machines.
A majority of Chinese production managers dream of foreign technology, to have a machine that makes the production safer, without breakdowns.
But very few of them make the first step to buy an imported machine. Some reasons for that are that they fear to deal with foreigners, to have languages problems, or because of a lack of knowledge about foreign companies.
Industrial machines represent a huge market in China
Like most people of the sector in China, I know that there is a big market for companies which have an efficient product. China is in an equipping phase, and for now most of the market is taken by German machines which benefit of a very good reputation.
German companies are also structured to export, and make usually a lot of communication: professional shows, Chinese brochures, actions with Chinese partner…
Which solutions are there for industrials in China?
There exist in China, like everywhere else, trade shows specialized for industry. This method used to be very efficient. But these days, there are too many shows, and not so many people go there anymore. These events are then now more useful for branding then really for selling.
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Prospection and “guanxi”
There is a method which is more or less efficient: having a Chinese agent which will do prospection and create guanxi with buyers. This salesman must have experience in the field, and is usually well paid with high commissions.
This kind of operations can be very effective if the sales team is efficient, which is not always the case. The best sales engineers are now usually all agents.
Hiring an agent can be very useful for a company who wants to enter the Chinese market. Every good agent has already relationships, and will find the best customers for you. There are still two problems:
– All the agents are not “good”
– Margins are limited for the company because the agent usually asks for 30% to 70% of the machine’s price.
Agents are also ready to promise everything in order to sell, and there is a risk of dissatisfaction of the customer.
Today 70% of Chinese industrial buyers start their research on internet. Google, but especially Baidu, are the first checked websites to find manufacturers.
Then the buyers contact each manufacturer and ask for quotations and information.
Today internet became a major way to find information for buyers or production managers. They can discuss problems with their colleagues, and ask information about companies and machines directly to the manufacturers.
How to be present online?
– Work on Search Engine Optimization on Baidu and Google, see here.
– Search engine marketing campaigns on Baidu, see our services.
– Work on your e-reputation, with a good website, quality pictures, and specialized press relations.
Example: the CMF Company
Many Chinese companies rely now on internet for their commercial development, and we see many Chinese companies which are more and more investing, like this one
We can help you with your commercial development in China.
After several years of experience in the industrial field, we offer a range of solutions to help you commercially. more information here