ESCAPE THE RAT RACE!

In business, there's no "one size fits all"!

This is true everywhere, however it's especially true in a fast paced and hectic market such as China!

You simply cannot rush things in the Middle Kingdom.

In such a fast paced market you must have systems in place.

In other words, you should carry out a proper due diligence. This is a step that it's impossible to avoid if you don't want to waste time and money!

What are the 3 most common mistakes that most companies do when approaching the chinese market?

1. They are not ready, they don't have systems in place;
2. They base their decisions on "hear say" instead than on data backed information;
3. They are too eager and, for this reason, they are not careful enough!

Let's see each point in details:

The importance of having systems in place:

When I talk about the need of having the necessary systems in place, I mean that the company must be ready to face many requests from their partners. Let's say that you are a software developer and your target customer is an industrial machinery manufacturer.

In an ideal situation, you already have a standard solution, maybe divided in different tiers with more or less functions and priced accordingly.

Well, in China is highly unlikely, if not virtually impossible, to sell a standard solution, unless you are worldwide recognized leader (and even in that case...).

You'd better be ready to receive many personalization requests.

What is the reason behind this?

Unless you are already recognized as a leader in the sector also in China, not just in your own Country, your customer would have already cooperated with some competitors of yours who entered the market before you.

They are, therefore, used to some other solutions and, if you want to get your share of the market, you'd need to satisfy their requests, provided that they are not unreasonable.

In the long term you could educate them about the benefits of your solution, but there's no escape to this in the short term.

The importance of data backed decisions:

China is more often than not under the media spotlights.

Because of this media attention, many business owners are pushed to think that they must get their share of the biggest market on Earth.

Did I just say that China is the biggest market on Earth?

This is an example of "hear say": and, for the sake of your company, never ever believe "hear say".

Though is true that China is huge and its market presents endless opportunities, however is also true that so many companies failed miserably in their attempt to get a share.

Here following a few questions that you can ask yourself:

• Is there really a request for my kind of product or service?
• Is this request worthy of the amount of time and money needed to invest?
• Am I ready, or willing to be, to face the pressure on my team?

No matter where you are located, the customs data are always freely available! Study them intensively before making a decision.

The importance of being cautious:

Let's picture an hypothetic scenario.

During your market investigation, you approach or are approached by various dealers.

You exchange some emails, make some video calls and, finally, you take a plane to visit them, either at their office or at a tradeshow.

Each and everyone of these dealers will try very hard to impress you.

Let's say that you are a medical device manufacturer.

Since in China you must obtain the local FDA's approval prior to market entry, they could offer to help you with the registration process, which is time and money consuming, in exchange of discounts or free shipments.

Would you accept such an offer?

I would highly recommend you not to.

The reason is that, if they take charge of the registration process, then they will be owning the license, putting you in a very unpleasant situation should the business relationship deteriorate.

To conclude this episode:

China is very fast paced, hectic and unstable from a regulatory point of view, meaning that rules and regulations might change over time.

There are many aspects to consider before embarking in a business journey to China.

Don't rush, take your time, don't apply western standards, spend some time in understanding the local culture and history.

Escape the rat race!

That's all folks for now!

See you at the next episode!