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Tips for doing business in China

China is now the world’s second-largest consumer market in the world, making it an attractive option for both new and expanding businesses. Beyond its massive population, increasing urbanization, and capital availability, western brands have proven to be popular in China.

But as appealing as it may be, starting a new business or expanding an existing operation into a foreign market can be daunting. There are language barriers, unfamiliar legal systems and a number of other obstacles that could prove challenging. To help ease the transition, we’ve compiled a list of helpful tips for doing business in China:

Understand your market

Starting a new business or expanding into China means you’ll be working with a completely different market than you’re accustomed to. From demographics and consumer preferences to messaging and beyond, there are a variety of factors you’ll need to consider:

Demographics.

Pricing.

Consumer preferences.

Messaging.

Buyer journeys.

Industry trends.

Like any major business decision, it’s essential that you do your due diligence on each aspect of the market before moving forward. There are a number of ways you can do this:

Analyze your competitors.

Visit local markets.

Speak with industry authorities.

Survey your market.

Use commercial sources.

Understand rules and regulations

Legal systems vary greatly from country to country, and China is no exception. If you are new to doing business in China, you may be unfamiliar with various laws, rules, regulations and politics that could directly affect your operation. You may run into issues with:

  • Taxes
  • Imports and exports
  • Product development
  • Manufacturing and distribution
  • Funding/investments
  • Sales and marketing
  • Intellectual property

In order to ensure a smooth transition and avoid compliance issues or other hiccups, it’s important to understand and abide by China’s procedures. This can be difficult on your own, which is why it can be extremely helpful to hire or partner with someone who has experience doing business in China.

Embrace cultural differences

Between etiquette, attitude, communication, and behavior, culture can have a significant impact on international business. If your business primarily operates domestically, you may not be aware of the differences in culture when entering a new country or market. This is especially true for North American businesses that are looking to do business in China, as there is a large divide (both literal and figurative) that must be embraced. Here are a few key cultural differences to be aware of:

  • Be formal
  • Don’t be late
  • Enter the room in order
  • Follow a structure
  • Respect the lunar calendar
  • Anticipate language differences
  • Make plenty of high-quality printed materials
  • Be modest
  • Make small talk

Collaborate with local partners

Starting a business is no easy task, but many business owners have access to support from local governments, professional networks and other connections. But outside of their home countries, international businesses may find it more difficult to find suppliers, secure funding and enter new markets on their own. 

Local partners can help bridge the gap for both new and expanding international businesses. They can provide access to resources that may otherwise be difficult to obtain and help to establish your operation before you even set foot in China. Here are a few of the many ways they can help:

  • Register your business, trademarks, etc.
  • Provide translations
  • Navigate the legal system
  • Integrate into local networks
  • Adapt your strategy to the Chinese market
  • Negotiate with manufacturers and suppliers
  • Settle legal disputes

Bottom line

China is full of business opportunities and there are a number of ways businesses can get involved, but entering a new market, especially one that is halfway around the world, is no easy task. It’s important to do your research and create a strategy like you would for any other business opportunity, but having an experienced partner is invaluable. Trustiics connects you with legal professionals that specialize in doing business in China, helping you ease the transition into the Chinese market.

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