3 Things To Consider Before Starting A Business In China

Starting a business is tough. Now, starting a business in China being a foreigner can be tougher but if you prepare yourself you'll save yourself a lot of hustle.

From the language to the culture to the marketing channels, everything works very different here than in the western world and that does not mean is better or worse, is just different, and if you can understand that, you're halfway ahead of the competition.

So before further do let's dig into the 3 things (there are many more) to consider before starting a business in China.

1. Tailoring your product to the Chinese market

It sounds counter-intuitive but trust me, people still think the western products will arrive in China and sell millions. That could be true for some but clearly, you need to do a product testing to see if the market will accept it well and perhaps start to work on the packaging, colors, and things that could make your product more attractive in China. 

Some time ago a brand from Brazil reached out to me to sell their products in China. I really liked the product and I saw potential, however, the brand did not want to invest money on changing the packaging, doing a product test and so on. Obviously, I am not gonna be the one paying for this, so if you are serious about entering with your product in China, you MUST have a budget for market testing and you MUST provide free samples to the agent that will be working on your behalf in China.

2. The marketing channels

I placed this one as the number one because people are still confused on how to market in China. The thing is here FB, IG and YouTube do not work. With that being said, you'll need to use the Chinese way of marketing. WeChat, Weibo, Baidu, Youku, and now LinkedIn is becoming very popular as well. 

WeChat has 1.1B active users and 900M people checking the app daily (font: TechNode) and it's a combination of Facebook and WhatsApp + payment and well, anything else you need, literally. Shopping, renting, air tickets, hotels, food, and the list goes on forever.

It's very important for you to have a clear marketing plan in place and get help from professionals that have been working on the industry for a while because they will know what will work for you. Different products, different marketing channels, different strategies, so look for a consultant with a specific expertise on your niche, so you don't waste your money and time marketing on the wrong platform.

3. Opening a company

You can choose to have a partnership with a foreigner or a Chinese distributor in China or open your own company.

Opening a company in China is not so complicated, but it's becoming harder and harder for foreigners. You can also open it in Hong Kong and operate it from there. But depending on what type of business you have, you may need a Chinese company and not a Hong Kong company. 

Opening a Hong Kong company is very easy and except for the bank account, contrary to many years ago where it used to be very easy to open, now is very hard to open an account in Hong Kong. If you are an entrepreneur and want to create a startup in Hong Kong, you can opt for Neat.hk and have an online banking. It's free to open, you can have a prepaid Mastercard which rocks, and it works very well, but at this point, the neat account can't send money to mainland China, but it was said that soon they will have it available.

In some areas of Shenzhen, for example, the government helps and there are many projects where depending on the nature of your business, you can get a free office for 3 years, which is great if you're just starting. Knowing the right channels will help you save money on starting your business in China.

Companies that need to deal with import in China for food products could have a more complicated process for the opening. The import license can take a longer time to be done and most likely, you'll need a Chinese assistant to help you out with that but also to help you handle taxes and many other things that require a Chinese citizen. Everything you'll find is in Chinese and that can be a little bit frustrating if you can't speak and read Chinese.

Now, there is a platform called CityPlus where I first heard of when the Brisbane delegation was in Shenzhen this year. The platform is run by the Shenzhen Foundation for International Exchange and Cooperation and according to their pitch, they will help foreigner companies to open a company in China all via online and also help them to get certifications and licenses.

I have never used their services, if anybody here has and knows about it, let me know in the comments below. Here is their contact if you would like to place an inquiry: +86 755 23984090, Email: [email protected]

Other popular articles I have published:

>> How China Has Enabled Me To Become An Entrepreneur

>> How To Connect Your WeChat to Your LinkedIn

>> Looking to a create product? Release First, Create Later

>> 4 Ways To Add More Profit Into Your Smaller Orders

Much success,

Daniella Santana??????????