Strategies To Overcome The Challe
In our last post, we talked about major challenges that foreign investors face when doing business in China. If you missed it , read it here. In this week’s article, we want to highlight the best strategies to conquer those challenges.
Despite the challenges a lot of foreign investments face, a lot of existing FDIs have overcome the challenges of doing business in China and have had a strong presence in China. Here are some strategies have proven very effective in combating the challenges.
1. Adapting to Chinese culture-
If you want to succeed in China as a business, it is important to set aside your foreign culture and adapt to the local culture instead. First, not being ethnocentric helps foreign investors relate well with Chinese people (partners, distributors, customers, etc). Also, you must at least learn the basic Chinese language to understand basic communication when dealing with Chinese people. Learn some common faux pas that business owners make and take note not to make such mistakes when conducting business.
2. Monitor Chinese laws and regulations and weigh the consequences
Chinese laws and regulations are constantly changing. You may want to consider hiring a local legal representative to interpret some of the laws and regulations in your industry before fully investing in China. Monitor the trends closely and plan for exit if necessary. This way, you don’t get hit by surprise and you get to plan ahead for eventualities.
3. Protect IPs legally and technically
File patents and trademarks early before investing fully in China. Also, take offenders seriously to serve as a warning to future offenders. Launch the product in phases to ensure that your patents are safe from copiers and do the due diligence of local partners and staff before hiring. Some staff are there to learn trade secrets to sell to competitors.
4. Conduct due diligence before partnering with a Chinese businessman
Ensure you run a thorough check before choosing a partner and know what their motivation is. Draw up contracts in both English and Chinese for easy interpretation. Also, make sure the contract explains who is in charge. The general manager should be an expatriate to avoid losing control of the Chinese partner. Conduct due diligence on staff too, to ensure they are loyal to the business and not sent by competitors to learn trade secrets.
5. Choose a business location based on where your target customers are
This makes it easier to get goods to the market. Also, consider access to raw materials and local investment policies before choosing a business location. Get feasibility studies to help you make decisions as to where to situate the business.
6. Automate your supply chain
Know the local logistics laws both in the location where the business is located and the locations where the goods are being transported to. This way, you can plan for adequate logistics requirements and get the necessary permits to ensure your goods are transported easily.
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7. Brand vsisibility
Many consumers are used to online shopping. Make sure your goods are accessible online and offline (in brick and mortal) stores. This way, you can increase product visibility. Invest in local brand marketing tailored to the Chinese market. Don’t use foreign culture in your marketing content and materials. Educate your customers to identify your products from fake ones and also invest in CSR in your local host community. This improves brand reputation.
8. Conduct due diligence before hiring staff
Hire staff that brings something unique on board. This may either be their knowledge of the Chinese market or the expertise they bring to the product. Use local hiring agencies to achieve this to save time, cost and energy in doing this yourself.
CONCLUSION
Going into the Chinese market without having a local team for support and partnership can be very difficult. You need more than just the technical and theoretical knowledge. With China, one must have the territorial knowledge of doing business. Naiyuan Mart comes in handy in supporting African foreigners in doing business in China. We can assist you to overcome the challenges of doing business in China – from finding the best suppliers and paying them, to sourcing for the best products in China. Naiyuan Mart is here to serve you.