Live export opportunities currently available in China from UKTI (UK Trade and Investment) East range from music festivals and children’s theatre, to video games, cashmere clothing, joints for robots and even premium tea for restaurants.
Over the past few years, UKTI East and the China-Britain Business Council (CBBC), which helps UK companies grow and develop their business in China, have seen a record rise in interest from Eastern region based businesses wanting to export their goods or services to China.
One of the reasons for this growth is that China is now better understood, helped by numerous cultural links and trade missions that have helped demystify China and educate businesses about the country and how it works. Having said that, anyone who wants to succeed in China needs to put the work in, says Chris Cotton, Director of the China-Britain Business Council (CBBC). “Our advice is to do your homework. Before anything else, carry out proper, in-depth research on the market for your product or service in China. This includes gaining an appreciation of the cultural niceties of doing business in China as well as visiting the market to see firsthand the opportunities for your company there,” he says.
He also advises cultivating the best contacts and taking time to develop and nurture this network. “With the right product, small or medium sized companies have as much chance of success in China as the big organisations,” he says.
Here are Chris’s tips and advice for SMEs that are considering entering the China market in the Year of the Monkey and beyond:
1. Look Beyond Beijing: China’s first tier cities include Beijing (North), Shanghai (East), Guangzhou and Shenzhen (both South). They are often seen as the natural place to start when breaking into China. However they can be highly saturated and competitive markets for goods and services and are by no means your only option.
China has over 300 cities and well over 100 of these cities have over one million residents. (In comparison, the UK has just two cities with over one million residents). When getting started in China, think about targeting a second or third tier city.
Essex County Council has been developing links with Jiangsu Province over a period of many years.
2. Be Proud of Your Provenance. Chinese consumers often consider foreign goods and services to be of higher quality than domestic equivalents. This is due to many factors, including the high incidence of fake goods in China; scandals such as the 2008 infant formula incident and because of China's traditional role as a manufacturer and not as innovator and designer (although this is changing very quickly). Purchasing foreign brands and services has cachet and makes a statement about the person The UK has a great reputation in China and Chinese consumers have confidence in the quality of British products and enjoy buying into brands with provenance.
3. Covet Chinese Ambassadors: Getting your product or service right for the market sounds like it could involve heavy market research costs, but it doesn’t have to. In the UK we have a Chinese foreign student population of around 100,000 and our local East of England universities have a high number of Chinese students. Seeking their opinions on how your brand, product or service will resonate in China is a way to help you modify, shape and adjust your strategy before taking the leap into China. Foreign students are also tastemakers or early adopters in their home market.
In addition, the East of England is a popular destination with Chinese tourists – and not just to the obvious places, such as Cambridge and Sandringham. The Harry Potter Studio tour at Leavesden Studios, Watford is a growing attraction. These again offer opportunities to test and gather feedback.
One of the most popular holiday activities for Chinese tourists is shopping (for themselves and their friends). If you want to build your brand with Chinese consumers then are you currently stocked in the right places in the UK where they can find you?
4. Set Up Shop Online: The costs of entry into China for small and medium-sized enterprises are high. However, there are ways of breaking into the market without physically ‘setting up shop’. E-commerce is very popular in China and a great place to start. Most sites require sellers to register their business in China, but some – like Tmall Global – specifically cater for foreign companies who do not wish to register in China.
E-commerce and social media go hand in hand in China and are far more integrated than they are in the UK. China has its own domestic social media platforms, which means there is no point marketing on Facebook, Twitter or YouTube in China as they are not accessible. China's social media platforms are often hybrids of several platforms. For instance, WeChat, one of the most popular apps in China, is more than just a social network. It combines instant messaging, video calling, a twitter like service, a newsfeed, a feature for chatting with strangers close by, online payments, taxi ordering and a browser! Online influencers can have as much cachet as mainstream celebrities and all apps are geared towards mobile. The foundation of any marketing strategy in China needs to be driven by social media.
5. Golden Time to Strike: The rate of change and development in China is fast. There is never going to be another time like this, which is why both the British and Chinese governments have described bilateral ties as entering a ‘golden period’. If you don’t start looking into the potential of the China market now, you could be leaving it too late. In a few years time, China will be further along on its path to market maturity and the opportunities that exist now may well be gone. The consumption driven economy also suits this region’s strengths, such as with financial & professional services, healthcare, education, and advanced engineering.
Business opportunities in China can be found at www.exportingisgreat.gov.uk