Top 5 elements to consider when entering the Chinese market

I’ve seen many companies looking at their market entry in China as a big challenge, and this regardless of their size or industry… also, here are the top 5 points foreign brands should really consider before entering the Chinese market.

#1. Market Growth

Despite a complicated global economic situation, mostly due to COVID 19 pandemic, China remains one of the only countries to have a continued growth close to a double-digit rate over the last year, with?+8.1% GDP?in 2021.?

Compared to 2020, if looking at the retail sales in 2021, in reached out 44,082 billion yuan with an increase of 12.5%. Online retail sales alone reached out 13,088 billion yuan, with a growth rate of +14.1%.?

Although the overall market evolution is here an important indicator for brands, while taking the decision to enter the Chinese market, it also shows?

us that sales keep evolving positively with a strong trend for online sales.?

#2. Think local

Many companies come to us while considering they have a big success in western countries, so their products should therefore be a hit in China. Some others think that because they may translate some information on their products, it will play the trick and work out as good as in their domestic market. The problem is that such approach is based on assumption that they market-fit would still be the same while entering china, and that their success would then only depend on translation issues. But in most of times, this is not true.?

Foreign brands should really consider the cultural gap, differences in terms of customer behavior and digital eco-system just to quote a few…??The key when entering china would here to be flexible. To put the product at an MVP level and test the market as if starting from scratch – cause that’s literally the case.?

Its therefore preferable to enter China with a step-by-step approach while monitoring your investment, test the water, and optimize your development accordingly. Can first start by publishing content on your brand and products, to gather data and analyze what people think about it… At least, if not willing to burn out all your cash.

#3. Know your audience?

Based on cultural differences, do not expect the same purchasing behavior in China as you may have experienced in Western countries. If we may have a direct purchasing approach more looking alike a specific mission based on a need / want we have, in China the purchasing behavior is more comparable to a social experience. Meaning that Chinese customers are much more reliant on social media, and online recommendation than European or North American.

Also, it will be important to keep in mind that each industry or market segment will have their own specificities. As example, if dealing with food, according to your product taste if its sour or sweet, it might be more suitable to some region or others. If targeting millennials, get to know that they’re very much into custom made products. If dealing with health supplements, people will first look at your product function, then its price and then will be checking about your brand and what people says about it…?

In a nutshell, it will be very important to discover all the specificities of your target audience to not only bring out the most value to your customers, but also to optimize your entry strategy and return on investment.?

#4. Mind the local eco-system

Regardless of the marketplace of your choice, if you decide to operate online or offline, when considering the promotion of your products you’ll have to adapt your brand to the market. Meaning, performing a quick benchmark to determine where your audience used to purchase similar products, where do they get the information they look for, what’s their basic decision process like, and then just basically adapt to the most suitable strategy.?

If you decide to sell your product online for example, you can forget about Amazon which get less than 2% market share over here. And if expecting people to directly purchase products on your website, then you may get prepared for important marketing cost and low sales results…

Instead, it’d be recommended to focus on channels that Chinese people are familiar with such as TMALL, Taobao, JD, Pinduoduo, etc. And you’ll find plenty of companies with the required licenses and expertise to assist you on those platforms.?

#5. Adapt your Marketing Strategy

Imagine a Chinese netizen contacting you. He tells you that his company is super famous in China, and he wants you to distribute his product. I guess without recommendation it’s gonna be complicated, right? Especially if his company is not referenced on Google, and you can’t find any information about it on social media.

Well in China, it’s the same. They do not have access to most of our mainstream media and social network. So, you can already forget about Google, Facebook, Instagram, Youtube, Viadeo, LinkedIn and others.

Your 1 million followers on Instagram won’t of any help…

To get started in China, give them the opportunity to know more about you. And this will go through the following platforms:

Wechat?is like the Chinese Facebook. Everybody uses it in China. A great messenger APP that also gets a “moment” system allowing people to share content (messages, pictures, videos) and personal feedback. Through this app, people use “Wechat groups” to communicate solutions about their problems and therefore recommending brands or products. Not very efficient for direct advertisement but a super tool for community management and building engagement. You can also create your own groups through the APP.

Weibo: The Chinese Twitter. Not only being one of the most popular social media in China, it’s also an excellent platform to develop?KOL strategy?and ads campaign. If you plan to target a large audience and engage with your customers, Weibo will be a perfect tool.

XiaoHongShu, or also called Little Red Book, is similar to Instagram or Pinterest. Most of its users are female from 20 to 40 years old, with a nice purchasing power. Perfect for visuals and interactive content, this platform is a must-do if promoting cosmetics, beauty, healthcare, and F&B products.?

For the last one,?Baidu, it’s simply the #1 search engine in China. A fundamental of your credibility and a requirement for B2B operations and lead generation.?

In term of content, and this regardless of the platform, you can’t do simple copy past from western social media and expect to get results in China. Everything need to be adapted. As your marketing strategy will be a key success factors in your business development, it’s crucial to manage this part with caution.??

In sum, China like any other country where you may expand your business to, will require some basic homework.

If flexibility is required, a deep understanding of both the local eco-system and customer behavior will be key elements of your market entry strategy.?