Top 10 Rules to Launching a Successful Business in China

Global Perspectives

Top 10 Rules to Launching a Successful Business in China

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China is an attractive market for many businesses for a variety of reasons. It has realized 10 percent growth year after year, has a billion potential customers living within its borders and has millions of internet and cell phone users. 

However, other businesses also know about the advantages of the Chinese market, so it is a very competitive environment. Understanding what you can do to make your expansion into China a success can help you outperform the competition. New Horizons can be your partner to help you complete a successful launch into this promising market.

Here are 10 rules to increase your chances of success in the Chinese market. 

How to Increase Your Chances of Success in China

N.1 Be Ready to Adapt

One common mistake that western businesses make is that they use their same business model and marketing that has worked in the west. They assume that if they had success in another market, why change it?

However, it is important that you do not give into this way of thinking. To succeed, you must be willing to adapt to the Chinese market. The Chinese market will not change for you. Consider your key customer and the market.

Conducting thorough market research can help you obtain in-depth insight into the local market, create awareness of the growth possibilities, save cost by knowing the market before you make your investment, minimize risk factors and understand different cultural aspects and business practices.

N.2 Create a Comprehensive Strategy 

It is important to have a comprehensive strategy if you plan on successfully launching your business in China. Before launching, it is important to thoroughly study the competition.

The Chinese market is very competitive, and there may be many competitors within your field. Try to determine the following about your key competitors:

  • What they offer
  • Their strengths
  • Their weaknesses
  • How customers perceive the competitor 
  • What price they charge for their goods or services

Because key decision makers may not be entrenched in the Chinese society, it can be difficult to position your company. The price that you can charge for your similar product or service depends on a variety of factors, including the level of competition, the quality you offer and the reputation of your business. 

N.3 Establish a Brand

To be successful in China, it is important to establish a brand that resonates with the Chinese market. A foreign company may have difficulty establishing trust with the local market if they are currently loyal to an existing domestic brand.

Having strong customer service and offering a quality product go a long way toward establishing your brand with the Chinese market.

Because counterfeiting is common in China, offering quality will set your business apart. 

N.4 Retain Control of Your Business

To be successful, you will need to keep close control over your business. You may confront various issues as your business expands to China, such as the entry of new competitors or issues with your copyright.

Sometimes business partners may decide to sever their ties with a company and you may need to re-strategize. You may run into problems with distribution. It is important that you have a partner like New Horizons who can help you confront these problems and offer strategic consulting services. 

N.5 React Quickly

China is a country that experiences rapid change. Decisions must be made quickly. The Chinese people react to change quickly, and you need to, also.

Be prepared to react quickly to market changes and competitive developments.

N.6 Use Chinese to Appeal to the Market

Some people are under the misconception that using English gains more respect from the Chinese population. However, this is not typically the case.

Even though many people speak English, most of the Chinese population does not. Refusing to provide content on your company’s website or your marketing materials in Chinese will often alienate the Chinese market and not work to your advantage. 

It is important to communicate effectively with the Chinese market. Here are some ways to do this.

  • Hire professional translators Many companies make the mistake of hiring low-cost translators. These individuals may have recently graduated from college and may speak some English, but their translations may be too literal and may not demonstrate the nuances of language. Instead, hire a professional translator who is familiar with figurative language and can provide a proper translation.
  • Consider the meaning and marketing in China – Some major brands have made mistakes when they emerged in the Chinese market because they failed to understand that their brand name or company slogan translated to something inappropriate or offensive. Review your keywords, brand and messaging with a local expert to ensure that you do not alienate your potential market before you even launch in the country.
  • Develop intellectual property in Chinese – Develop a slogan or trademark in Chinese and register it with the local government. China is a first-to-file jurisdiction, so you must get your intellectual property registered quickly to be able to protect your product.
  • Have an expert review your materials – Have a local expert review and make suggestions regarding your website, print materials, marketing messages and other visuals to determine if the translation is appropriate and translates properly.
  • Use local tools – Use Baidu instead of Google and Weibo instead of Facebook. Local tools will provide more locally relevant results.

N.7 Retain Key Employees

Admittedly, it is difficult to retain a good staff in China. Because employees often find it difficult to receive a promotion and a raise, they may be incentive to work for other employers. The average employee in China stays with a business before moving to other opportunities.

On average, employees in China receive a 20% higher salary when they move to another company, creating an attractive incentive for them to move to another company. 

However, it is important that you be able to retain key employees in your business who are essential to your success. Maintaining consistency in a company is essential so that you can capitalize on the experience of your key members and improve your business.

Additionally, companies often invest substantial resources into employees and their training, so they do not want to have to reinvest into training additional employees. 

New Horizons Global Partners can help you establish a staff through our PEO services. We can provide long-term employment contracts that protect your interests. We can also discuss the benefits and salary increases that are attractive to the local employment pool.

N.8 Maintain Key Relationships

Maintaining key relationships with suppliers, employees and customers is critical to the success of your business. Loyalty and customer service are extremely important in the Chinese society.

Chinese people are more sensitive to interpersonal relationships than people in Western societies. Showing empathy and appreciation for people with whom you have a relationship can help you retain these key relationships. 

N.9 Be Flexible

The Chinese community is very flexible. Businesses are used to making rapid changes to appease their customers. Western societies may be more rigid, so some companies struggle with this factor.

It is important that you be able to adapt to change and make modifications to appease your local market and the whims of your customers.

N.10 Be Patient

Many otherwise successful companies may not immediately realize success in the Chinese market. Even large companies that realized instant success in their home markets may experience a delay in success in China.

It is important to be patient and not abandon your efforts to expand to China just because you have not realized the immediate success you expected.

Companies that are ultimately successful in China may last for many years. However, these companies usually had to take time to establish their roots, adapt as the market changed and wait for the success to come.

Contact New Horizons Global Partners for Help Expanding Your Business to China

A different culture, stiff competition, intellectual property concerns and a constantly evolving market make it challenging for new businesses to be successful in China. However, being aware of common errors and mistakes in thinking will help you realize eventual success.

The experts at New Horizons Global Partners can be your strategic partner while launching your business in China. We provide extensive industry knowledge in various sectors, allowing us to offer you strategic consulting, in-depth market research and other services that are tailored to meet your needs.

We work closely with domestic and foreign businesses to quickly identify your needs and objectives during your expansion plan so that we can optimize your chances for success. We provide our clients with workable solutions to choose the right business structure in China, help you save time, money and frustration while remaining compliant in all relevant matters.

Our clients-first approach has allowed us to set ourselves apart as a significant strategic partner. We are available to consult with you about understanding the Chinese market, how to effectively use Chinese translation to reach your target customer base, how to adapt to changes in the market and other factors that impact your launch.

Contact us today to learn more about how we can make your Chinese expansion a success.

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