Understanding the best method for entering into the Chinese market is the first step for growing your brand to a multinational. Once you have made the big decision to expand your business into China, the focus should shift to how you will enter the market, the strategy for growth, and the target for the next one, five, and ten years. This is never easy because China is a new market with different dynamics from what you are used to at home. The best way out is using China consulting and market entry strategy.
How to Plan for Market Entry in China
For most investors joining the Chinese market, everything might look totally different compared to how things happen in the west. For example, the culture is different, and a lot of weight is given to relationships. Even when it comes to technical things, such as accounting, China is different because the country uses the Chinese Accounting Standards and not the common International Financial Reporting Standards (IFRS). So, here are the main steps that you need to follow:
● Market Review
Although China has a large population of more than 1.4 billion people, the biggest mistake you can make is thinking it is homogenous. Therefore, you need to start by reviewing the market to establish the targeted areas. For example, do you want to target the urban population, rural market, other businesses, institutions, or government departments?
Take your time to gauge the potential of the identified market. It will be a good idea to start the review way before registering your company.
● Register Your Company
This will be an important step because you cannot gain access without having a legally recognized business structure. The most preferred company formation is a wholly foreign-owned enterprise (WFOE) because it allows for 100% foreign ownership. Because the process involves dealing with multiple offices and preparing dozens of documents, it will be good to work with a good firm in China consulting and market entry strategy.
● Analyze Other Business Cases on Market Entrants
Just like you have identified China to be an outstanding market, the chances are that others have already started operations. These companies should act as your case studies, and you should focus on two key components to understand them; their entry and current strategies.
Understanding the competitors’ entry strategies can give you an idea of how to go about with your entry too. However, you should look at their strategies with a target of outdoing them. At this point, a good firm on China consulting and market entry strategy can come in handy to help you understand the strategies that work and those that do not.
● Develop and Implement Your Preferred Market Entry Design
After reviewing the market, selecting the preferred segment, and noting strategies used by competitors, it is time to craft and implement your plan. One of the most preferred plans is direct selling and partnership. For a company that designs and sells services to institutions, schools, or government departments, approaching the targets to forge a mutually beneficial relationship can work very well. However, you need to ensure that your product is superior to others in the market.
As you can see, the process of market entry into the Chinese market is never easy. Because it is so critical to business success, you can ensure that everything is done correctly by working with a good firm for China consulting and market entry strategy. The professionals can hold your hand to ensure your business is compliant with all the regulations, market analysis and crafting strategies for success. They can also help with executive services, such as accounting and payroll management.