{"id":1128,"date":"2021-04-28T01:29:00","date_gmt":"2021-04-28T01:29:00","guid":{"rendered":"https:\/\/marketingtochina.com\/?p=1128"},"modified":"2023-01-31T21:08:31","modified_gmt":"2023-01-31T21:08:31","slug":"top-10-rules-for-doing-business-in-china","status":"publish","type":"post","link":"https:\/\/marketingtochina.com\/top-10-rules-for-doing-business-in-china\/","title":{"rendered":"Top 10 rules for doing business in China"},"content":{"rendered":"\n

From a Western point of view, doing business in China is not an easy task. As one of the fastest-growing countries in the world, China is in constant evolution. Every day, big companies and smaller PME all around the world are trying to seize the opportunity of doing business in China. However, the Chinese market is tough and very competitive. Not only you will have to be innovative in order to distinguish yourself from your competitors, but also from Chinese companies that are more inclined to attract Chinese consumers.<\/p>\n\n\n\n

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Introduction<\/strong>: Foreign companies in China<\/h2>\n\n\n\n

In 1978, as Chinese President Deng Xiaoping focused on economic development, it multiplied by four the country\u2019s output by 2000. Starting in the 1990s, China increased its participation in global organizations and assumed a prominent position in global political and economic activities. Since the introduction of the economic reforms in 1978, China has become the world\u2019s manufacturing hub. Now, the Chinese economy has experienced astonishing growth in the last few decades that catapulted the country to become the world’s second-largest economy.<\/p>\n\n\n\n

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In 2018, the number of newly established foreign-invested enterprises in China reached 60 thousand. From 2010 to 2016, the number of annual registrations of foreign companies was relatively stable, varying between 23 thousand and 28 thousand. The preliminary figures from 2019 suggested that the registration number decreased to the level of 2017 again.<\/p>\n\n\n\n

Economic cooperation with Chinese businesses should be a basic strategy for every company trying to gain a position in international markets. Presently China is, after the United States, the second-best location for foreign investment for many companies from around the world. It is an important and creative environment for a wide spectrum of business sectors. It should be noted though that for a foreign entrepreneur, China is still a new market, requiring greater knowledge and understanding. Constantly changing legal regulations and new developing business practices, as well as social pressure, are primarily associated with large disparities in terms of income between different groups and regions. Cultural differences are also not without significance.<\/p>\n\n\n\n

1\/ To do Business in China and adapt to the Chinese Market<\/h2>\n\n\n\n

One of the biggest misconceptions in companies is hopping into the Chinese market thinking there is no need for adaptation when transitioning their marketing plan from the Western market to the Chinese market. In truth, none of the techniques used in the past will be applicable to the China market. When targeting a new market, it is best to spend time in that area to get a full understanding of what people want. <\/p>\n\n\n\n

You can do as much reading and online searches as you want but nothing will compare to experiencing the place in person. Many brands think lessons learned in the Western scene can be carried through to Chinese marketing, but that is not the case. The two markets have separate needs. The key to success is testing as early as possible with the least amount of financial resources and being quick to adapt to your learning.<\/p>\n\n\n\n

Get to know your Chinese consumers<\/h3>\n\n\n\n

Chinese users come with all kinds of complexity, including their demographics, preferences, and cultural backgrounds. Online shopping for them is more of a social experience, rather than a mission-driven thing as in the West. They tend to collect information from multiple sources and compare their options thoroughly before making purchase decisions, and they are willing to share their shopping experience and advice as well. Leveraging their online social circle will help you to reach more potential consumers.<\/p>\n\n\n\n

The example of KFC (\u80af\u5fb7\u57fa)<\/h3>\n\n\n\n

The key to KFC\u2019s success in China has been its aggressive catering to Chinese tastes, with menu items that you will never find anywhere else in the world.<\/p>\n\n\n

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(KFC dishes you will only find in China)<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n
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With this strategy, the brand is tapping into the traffic to firstly register members to its loyalty app, and also to sell gift cards and coupons \u2013 described as their way to \u201cbuild a new O2O (online-to-offline) model<\/i>\u201d \u2013 using digital techniques to drive store visits. And the results were \u201cbeyond\u2026.expectations<\/i>\u201d.<\/p>\n\n\n\n

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(\u00a9 KFC\u2019s App)<\/em><\/figcaption><\/figure>\n\n\n\n
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KFC in China usually adapts its advertising campaigns to match the Chinese customers\u2019 tastes. And, in order to maximize their digital distribution channels, KFC China has opened a digital store on TMall \u2013 the Chinese eCommerce marketplace operated by Alibaba, which is the world\u2019s 9th most visited website. To put it simply, KFC was able to attract Chinese consumers thanks to their digitalization, but also because they were able to adapt their brand to the Chinese market.<\/p>\n\n\n\n

Read: Guide to Content Localization for China<\/a><\/strong><\/p>\n\n\n\n

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2\/ Define a clear strategy before entering the Chinese market<\/h2>\n\n\n\n

Understanding the Chinese market<\/h3>\n\n\n\n

So, in order to enter a large and complex market like the Chinese on<\/a>e, you will need a deep understanding of its business landscape, consumers, marketing channels, and culture, which are different from the West and have been changing rapidly over the years. You should operate in environments that are suitable to your needs, and your brand must be flexible for the Chinese market.<\/p>\n\n\n\n

Moreover, focusing on China\u2019s Tier 1 cities may not be the right step in successful marketing. Other companies have already made an impact there and competition is only tougher. Focusing on smaller cities can be a smart move because there is less competition but still a couple of million people in the population.<\/p>\n\n\n\n

Before doing business in China, conduct a Market research<\/h3>\n\n\n\n

Entering the Chinese market is no easy task! Make sure to do plenty of research before stepping into the market. Due to the fact that China\u2019s economic growth soared in the last few decades, the competition between companies is tenser than before.<\/p>\n\n\n\n

We highly recommend you do market research based on the following topics:<\/h4>\n\n\n\n