So many people run businesses where they’re importing from China using a site like Alibaba, and sell it locally or on an Amazon store.
There are many opportunities for great profits. But don’t go in with your eyes closed.
There are some things you need to learn before you can successfully do business with a Chinese supplier. I reached out to 21 experts on doing business in China. Here are the tips that they suggest you learn before you start.
I hope you find these helpful.
1) Cultural familiarity
Create cultural familiarity when selling a new concept or product: The company should collaborate with the local experts to explore a new market, leverage network of the local expert to gain the trust of local customers or businesses. Local experts are keyholders who provide in-depth insights about the market, the industry and the customers.
Businesses should acknowledge that the importance of culture to succeed in the market. To successfully enter the market, companies need to deeply understand and effectively utilize “guanxi” (relationship) culture. For example, Bordeaux wine successfully entered Chinese market thanks to the use of “guanxi”. – Danni Lin, CEO of Great Wine INC
2) Don’t be arrogant
Don’t be arrogant. Fortunately, we started in China during our Series A, so very early on in our existence. We didn’t have the “Ayla way.” We were just trying to figure out what works. We also had a founder with deep experience working in China. We saw lots of foreign companies stumble in China because we felt they didn’t listen to the local Chinese and figure out how to achieve their goals in a way that would also work in China.
– David Friedman Co-Founder of Ayla Networks
3) Bring your sense of humour
China can be an infuriating place to do business. But you won’t get bored. Especially when you venture out of the top tier cities you will encounter bizarre situations and fascinating people with viewpoints you hadn’t imagined. Whether it’s quirky conversations that leave you scratching your head, being flash-mobbed by a staring crowd or finding yourself in a recreation of a French chateau, China will leave an indelible mark if you allow yourself to see the funny side.
– Henry Clough, Founder of Asian Absolute
4) Not a single homogenous country
Do not look at China as a single homogenous country. Preferences, styles and circumstances are vastly different per region.
In Guangdong province for example it reaches 86 degrees while Northern provinces never go above 68 degrees. Aside from climate there are also differences in language, religion and even internet connection.
There is no one marketing strategy to rule them all.
Each strategy must take into consideration regional differences.
– Hong Sang Ouk, Founder of TK101 Global
5) Learn Chinese Digital Etiquette
You must learn about QR code scanning and WeChat. In modern China, over 50% of Chinese use QR scans since the advent of WeChat. Upon meeting someone, you should bring forth your phone, pull up WeChat, and ask to scan the other person’s QR code.
The unknown etiquette is that if you are the guest or underling, you should scan your host or superior’s WeChat, and they will subsequently offer their QR code to you. It is very important to note that the higher-ups’ WeChat QR is to be scanned; they do not do the scanning, themselves. In terms of digital communication, you’ll easily be pulled into three dozen groups on WeChat with 10, 15, 20, people in them. So don’t email your files — avoid email as much as you can.
Use WeChat, because your communications can be better documented. In China, WeChat history is legally documented information, and it’s actually more complementary for doing business. E-mail often seems cold, too formal, and frequently bounces when sent between the U.S. and China.
There are three predominant benefits in using WeChat over traditional e-mail:
1) you can share as many files back and forth as you want, and it can be casual, but also formal when necessary.
2) you can control the number of users, just like e-mail, by inviting people into groups
3), if you’re typing English or another foreign language, WeChat has a native translation function, so you can see comments flying back and forth in Chinese but still be a part of the conversation. With WeChat, you don’t have to use Google translate or Baidu translate; you can translate natively, in-stream, within your conversation thread.
– Humphrey Ho, Managing Director at Hylink Digital
6) Provide more details
Always provide more details so there are no questions.
– Igal Dahan
7) No down time
You need to have a huge amount of energy. China, as a market, is always on. This is because of the sheer magnitude of people and the speed of business. While it sounds like an exaggeration, there is no down time here. Most business people including myself, are up by 5 or 5:30. Rarely does a day end before 7 or 8 and that’s before cocktails or dinner with clients.- Andrew Kuiler, CEO of The Silk Initiative
8) Expect your China flights to be delayed
Always expect your China flights to be delayed, cancelled or worse, and make preparations to be spending more of your trip at the airport or on the ground. Chinese air space restrictions are known for causing travel woes. It once took one of our team members 13 hours to get from Hong Kong to Beijing, a journey that should only take 3 hours The J.J. Threads team work off of a shared drive and are equipped with charging banks and VPNs to make sure that we can set up a mobile work space no matter what delays pop up.
– Jay Wich, Founder of J.J. Threads
9) Not everyone is who they say they are…
In 2017 I was searching for a new factory capable of building a complex component of our Piggy Pro phone stand. I had toured hundreds of factories over the years and finding the right one can take a lot of time and energy, but the effort is always rewarded.
For this project, we had identified 7 factories near us, and one that was 4.5 hours away. The last factory we met with seemed like a good option, and the idea of skipping the 4-hour drive seemed very tempting.
A few months later I was back in China inspecting our first production at that factory 4.5 hours away, only to be surprised to see the factory owner we had passed up on at the meeting. He was surprised to see me too, as his eyes lit up.
He had misrepresented his capabilities and his role, as much in deceit to me as with the true factory owner he was looking to cheat.
– Jeff Leitman, CEO of Killer Concepts
10) Chinese Intellectual Property (IP):
Intellectual Property (IP): We advise our international clients to register their IP in China even though there may be some cross-border recognition of overseas IP within China. From our observation, the quickest way to remedy IP infringements is to tell the relevant Chinese e-commerce platform (say Taobao) that you own a Chinese IP, furnish the documentary evidence and seek enforcement action against these IP violaters. Typically, IP violaters will be forced by the e-commerce platform to stop sales of their copycat products.
– Julien Gueuning and Christophe Branchu, JU&KE Design Studio
11) No ethics or personal relationships in business
Maintaining a good business relationship is required, but understand there are no ethics or personal relationships in business. They will copy your products if other companies are interested in the same design. If you do not have a patent or unique trademark it will be copied in the US.
Even if you did have a patent it will still be copied. It’s very very rare to find a manufacturer who is loyal to one company because they have to make their profits through lower margins and higher volumes. Try to protect your brand the best you can in the States and try not to spend too much energy and money on protecting overseas, unless you have the spare capitol to do so.
– Lisa Chu, CEO of Black N Bianco
12) Trust the Chinese. Allow them to be innovative
Trust the Chinese. Allow them to be innovative. Do not be captive to stereotypes that Chinese are not creative or trustworthy. To give them opportunities, is good business and you will see innovation. China’s science powers are phenomenal and so are the emerging ecosystems. There are so many areas where China is leading — supercomputing engineering, IT hardware, speech recognition, genomics and many others.
– Professor Tomas Casas
13) Things will be “opaque” if you let them be
Dig in to the details. “Opaque” is a word that China business newbies often use to describe their non-transparent workplaces, but things are only “opaque” if you let them be. One of my first jobs in Shanghai was as a Social and Environmental Ethics (SEE) auditor at factories throughout China.
I learned quickly that if you only check the time cards to see if people are working excessive overtime, or not getting paid the basic minimum wage, you’ll never find the truth. If you perform employee interviews, cross check time cards with QC records, pay stubs, leave reports and accounting documentation you’ll find out who’s working too much and who’s not getting paid enough. If you apply the same due diligence to almost anything you will eventually get to the truth. Doing business in China requires an attention to detail and a willingness to “dig in” that most people don’t have, which is why they fail.
– Ryan McMunn CEO and Founder of BRIC Language
14) No company in China is disconnected from politics
This is a central aspect of doing business in China. The state has a strong influence on the economy. In its five-yearplans, the government issues central aspects for the economy’s development, sets growth targets, and launches reforms on a regular basis. You have to be aware of these conditions, especially as, for example, in Germany the economy operates more independently from the government. In order to work with an impact, you have to align your business and communications strategy with governmental expectations.
– Tilo Bonow, CEO of Piabo PR
15) Learn better negotiation skills
BARGAIN: Learn more negotiation skills before you enter into a business discussion in China. Chinese are all very savvy negotiators.
– YiZhou, founder of YiZhou Studio
16) Expect to meet someone for a three-hour lunch or dinner
Extend the relationship beyond the boardroom. Expect to meet someone for a three-hour lunch or dinner. Business will come and go and many of your contacts/factories will cycle through importance to your current business — but they can and will re-emerge. Having built a strong relationship ensures when you need them again, they’re giving you the required focus and attention. Just because you’re moving on now doesn’t mean you won’t work together again in the future.
– Kevin Reid, Casca
17) Make a local website
A website that is localized in Chinese is also recommended. Also, it is necessary for the site to be optimized for the Chinese search giant, Baidu.
Vaclav Muchna, CEO and Co-founder, Y Soft
18) Create a unique monitoring strategy
The combination of the firewall, a still-in-progress data provider infrastructure, and most people accessing via mobile makes effective monitoring a challenging task for any company. But each company has a unique customer profile.
So once all these common elements are factored into your plan, then consider where your best customers are and make sure your monitoring points are close-by. Your strategy needs to include more than just Bejing or Shanghai (you wouldn’t try to monitor the entire U.S. only from New York or LA, would you?). Does your site have many graphics or video? That will mean services like content delivery networks (CDN) will be needed. Eventually you will find where the potential congestion or trouble spots lie, and be able to prevent them from occuring in the future
– Mehdi Daoudi, CEO of New York-based Catchpoint
19) Always, always get a sample before production
What to look for in your overseas business partnerships— When it comes to products, always always get a sample before production. Even if timelines are tight, you would rather have a late product that is complete and up-to-par than an early disaster that costs you a lot of money. The cost of the sample will always be deducted off the final production bill. This will also prove a factory’s competency. You need that tangible proof when your partners are on the other side of the world.
– Jordan Wendelken, Co-Founder of Havana Trading Company.
20) Communicate your high expectations
I traveled once with a young mathematician business owner who had a sense of confidence and a very rigorous view of the work he did. He spoke plainly, even forcefully, about what he saw as being the correct way to do things. This assertiveness and plain-speech was returned by the business people he was dealing with. Agreements were made quickly and efficiently.
Later, at dinner, everyone had a great time and relaxed as friends, forcefulness no longer needed. I have come to think of it like this: “if it doesn’t seem important to you, why would it be important to anyone else?” Obviously, the point is not to be rude or bullying. However, moving in with great confidence, and stating clearly and assertively what your requirements are, without a lot of joking or dissembling, seems to make everything move smoothly.
– Brad Done, VP of Reliance Foundry
21) They don’t necessarily want to be the West
Chinese folks want to learn about the West, but they don’t necessarily want to be us or move here. When you ask someone “do you understand” and they shake their head, it is most likely being polite rather than acknowledging that they do. Consumers are much younger than in the West, so pay attention to who is buying what. In LA, you would see a woman 40-plus wearing the latest Chanel outfits. In China, it’s a 25 year old woman.
Asian culture is more followed than Western culture. They watch and listen not only to Chinese artists, but also to Korean and Japanese. There is a huge movement toward individualism. Everyone that is young is looking to be their own entity and have a distinct personality.
– Larry Namer, the President/CEO of Metan Global Entertainment Group
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This blog post was originally published here: https://www.buzzfeed.com/eldadshashua/21-tips-to-keep-in-mind-before-you-start-a-busines-3irjs?utm_term=.ljV0oA7pN#.ca28w50GX