Do you want to sell your premium product or service to the Chinese consumer?
This is the hottest topic in Australia, New Zealand and other developed countries. The tide has turned and China is no longer just a place to get products manufactured, China is a country with a burgeoning middle-upper class demographic.
What does that mean for you and your business? There are estimates of 300 to 350 million Chinese middle-to-upper class consumers, and that number predicted to DOUBLE by 2030. That is near enough to the entire population of the United States of America, all having middle or upper-class status, right now. This means that the entire 350 million Chinese referenced have disposable incomes.
You should consider this question carefully.
The obvious challenges are there, language and culture difference. This is a big part of becoming China ready but you do not need to learn Mandarin or come to do a homestay in China to get the culture before you can sell your product or service to the Chinese consumer.
So what do you need to do to become ‘China Ready’? What is the big deal about being China Ready? Surely, it’s just business you are asking yourself. You have been running your business successfully in Australia for 25 years and you want to tap into the Chinese market, what is the big fuss, you are thinking.
In fact, you are right, it is just business. However, ask yourself this; Is business done the same way across the globe? In China, there are differences in how things are done, the expectations of the Chinese. Becoming China Ready means that you need to adjust your business model to suit the Chinese consumer and Chinese entities you will engage. So what are some of these differences?
This means understanding your target consumer. The locations in China you want to target. The Chinese are not all the same, there are dozens of ethnic minority groups across China, which are distinct from one another. Whilst there is the national language of Mandarin (Standard Chinese or known in China as Putonghua), these minority groups have their own languages.
As a foreign brand in China, it’s most likely you will brand and market yourself using the national language. However when you dig deeper into regional areas, where you may seek to explore opportunities to sell in second, third or fourth tier cities you may need to consider the target audience, and what their expectations are when looking at foreign products. For example, who is the decision maker or primary carer in a Cantonese family when it comes to the purchase of products for the infant child in the family? The answer may surprise you, but it will also tell you the answers to who and how you are marketing.
Launching your brand, product or service in China can be straightforward if you have done your due diligence. Just like any target audience, whether it is in your own home country or another country, you have to take the time to understand that target market. That is really the basis for being ‘China Ready’.
There are some core areas to consider performing your due diligence around.
- Target cities and provinces for the launch of your brand, product or service
- Testing or pilot programs
- Market research
- Product packaging language
- Brand and Intellectual Property protection
- Product or Service compliance requirements (customs and quarantine)
- Shipping and Logistics requirements
- Commercial (or other) operational requirements
- Legal and Accounting and Tax requirements
- Marketing and Promotional activities and requirements
- IT infrastructure requirements. (China has some specifics here depending on how you set up your China selling model)
- Contracts and or partnerships or agreements with third parties
- Distributor partnerships, agreements and requirements
- Budgets for all of the above
There is a lot to consider, and some of you reading this are perhaps smaller businesses with smaller budgets or no specific budget at all. I am not writing this to tell you that you cannot or should not launch your brand and product or service in China.
You should also consider the softer, grey areas.
- Cultural customs
- Language differences and expectations
- Unwritten rules
You cannot easily do your due diligence on these things. These are the things that we have learnt through our on-the-ground daily living experiences. These are some of the things that can make or break relationships in China. If you manage your business from afar, you likely cannot learn nor implement the best practices here, but we do this on your behalf.
One of the beautiful things about China is that it is a country where there are many ways to achieve the same result. China and the Chinese have an incredibly pro-active and practical way of getting-things-done.
The bottom line is there are millions of Chinese consumers wanting to buy premium foreign products and services, right now. Approximately 350 million of them.
To become China Ready.
You need details on where, when and how you will launch in China. The list above gives you some high-level topics to consider. Some of these topics involve various specialists at different stages of your launch and operations in China. However it’s also not rocket science, it’s about doing your due diligence and talking to the people who understand these areas of doing business in China.
We work with businesses owners and senior management to perform due diligence on-the-ground in China. We work with you to develop the plan that your business needs to approve/justify a project or scope of work on-the-ground in China so that you have confidence that the money you will inevitably spend to launch and operate in China, is effective.
If you are thinking about how to launch into the China market, or you are already operating in China and need operational assistance, we work with businesses to get the answers you need to move forward with confidence.