Chinese Market Entries
Chinese markets
Flexibility
Patience
Persistence
Most Emerging markets with a few unique twists
Best way to enter the markets for companies
Exporting to China:
Advantages:
Effective, especially for small and medium size companies can’t make any significant financial investments; they sell to China through local distributor or producer.
Challenges:
Sales person could become more rely on Chinese distributor
Chinese distributor sells multiple products even the competing ones, hard to monitor they like your products more than others
The distributors might switch purchases to a cheaper producers, or someone might start making the same product and take the market from you;
Some companies might be not able to provide long-term commitment after sales.
Licensing and franchising:
Intangible properties, Low investment, seize loyalties, no ownerships, provide supports and advices.
Problems on protecting property rights
Equity joint ventures:
Easier to enter the markets, encouraged by governments
Risks: Chinese companies might end up keeping all the accesses, challenge to find the right partner
Wholly owned subsidiaries (WOFEs)
Highest commitments, high risks, usually high techs, require company had sufficient productivities, easy access to local distribution channels and raw materials.
Factors to consider in a collaborative arrangement
Cultural and Linguistic differences
Quality and Training of local contacts and employees
Political and Economic issues
Experiences of the partner company
关系 Relationships (Good and Bad in the same time)
Tactical steps to take in the early stages of operations
Research the Chinese market thoroughly and learn about the country and its culture
Understand the unique business and regulatory relationships that impact their industry, whether it’s consumer products or mining and forestry
Use the internet to identify and communicate with appropriate trade corporations in China or their own governments embassy in China
3.
Flexibility
Patience
Persistence
Most Emerging markets with a few unique twists
Best way to enter the markets for companies
Exporting to China:
Advantages:
Effective, especially for small and medium size companies can’t make any significant financial investments; they sell to China through local distributor or producer.
Challenges:
Sales person could become more rely on Chinese distributor
Chinese distributor sells multiple products even the competing ones, hard to monitor they like your products more than others
The distributors might switch purchases to a cheaper producers, or someone might start making the same product and take the market from you;
Some companies might be not able to provide long-term commitment after sales.
Licensing and franchising:
Intangible properties, Low investment, seize loyalties, no ownerships, provide supports and advices.
Problems on protecting property rights
Equity joint ventures:
Easier to enter the markets, encouraged by governments
Risks: Chinese companies might end up keeping all the accesses, challenge to find the right partner
Wholly owned subsidiaries (WOFEs)
Highest commitments, high risks, usually high techs, require company had sufficient productivities, easy access to local distribution channels and raw materials.
Factors to consider in a collaborative arrangement
Cultural and Linguistic differences
Quality and Training of local contacts and employees
Political and Economic issues
Experiences of the partner company
关系 Relationships (Good and Bad in the same time)
Tactical steps to take in the early stages of operations
Research the Chinese market thoroughly and learn about the country and its culture
Understand the unique business and regulatory relationships that impact their industry, whether it’s consumer products or mining and forestry
Use the internet to identify and communicate with appropriate trade corporations in China or their own governments embassy in China
3.