The right Channels for the right clients, sure but how do we get to distribute our products?
Being able to find the right distribution channels and selling your products the right way at the right place requires to create a good network of distributors while understanding how local distributors think and act. This therefore requires two things.
- First a marketing study done well in line with the products you want to sell in China.
- Second a good understanding of the world of distribution in China.
Here are some keys to get there
Risk of neglect, lack of involvement
Chinese distributors are businessmen first and foremost, they always try to get a good ratio between advantage over the effort made . This means that for a Chinese distributor to decide to take care of you, you must facilitate his work as much as possible:
Your product must have:
- Accurate positioning
- Quality Product
- Good packaging
- Pre-existing brand or for which the reputation is well built
Ideally we also need your product is already known clients you would like to target , and is really new to the Chinese market. For example, a simple shampoo, unknown to the Chinese customers, for supermarkets may not attract the interest of Chinese distributors.
Sure this seems like a lot but on the other hand he will spend a considerable amount of time and money to import your merchandise to China and try to sell it. Unless your brand is renown both in China and in the western world he is actually taking a risk in investing in you. This is something Chinese in business are a bit frisky about.
No interest whatsoever in branding
Marketing and everything revolving around it is not something to which the Chinese are very familiar with. Their area of expertise revolves more around cost reduction, finances and how to save money. That, you can be sure they are very good at it
A brand among others
If your product is not properly positioned relative to Chinese customers with little to no clear message it will be all the more difficult to break because for Chinese distributors your brand will be a brand among the many others sold in China . The first person you have to convince to try to change the situation is the entrepreneur himself.
Lack of communication and feed-back
Many newcoming companies in China, unaware of the cultural differences, will hit a wall while doing business with Chinese. Although, to some extent, China is becoming more Westernized, It’s still China we’re talking about .
It is essential to know the methods of Chinese communication:
- Accept and understand the cultural differences to be able to communicate well .
When it comes to getting returns on sales and problems that could arise you should ask. Indeed, Chinese will never take the initiative to say that something went wrong. This kind of thing is a problem when for example you just set up your product and want to find out if it will sell well or not using your current strategy. This is fundamental to adapt and to increase your chances of success. Pay attention to the reaction of the person you have in front of you because silence is probably the only sign that your distributor does not have the answers to your questions or that something went wrong.
This lack of communication often requires you to ask for feedback on the operations and be pushy about it.
If you do not take this kind of action you may very well end up with products positioned very differently from what you wanted.
Risk of parallel business
In a partnership with Chinese distributors, especially when it comes to specialized shops in the cities of second and third period the threats of counterfeiting are great. Why? If your Chinese partner believes he has been ripped off, he will try to compensate, often by copying your products and sell them on the black market.
Risk demotivating if the sales do not meet the objectives fixed
As in many cases the Chinese distributors are focused on the short term and do not or hardly give a second chance to a product that has sold poorly. Tackling such a problem may well be a difficult one to tackle if you try to solve it at the last minute.
A good relationship with your distributor may help you here :
Good relationships are everything in China if you have a good relationship with a partner he may be more enclined to give you some leeway or a second chance…
Distributors like to make money fast even if it kills your brand reputation
The Chinese have little interest in the plans for the long term. They prefer to focus on actions in the short term , even if it costs you the reputation of your brand and thus the possibility of a better development of your brand to better sales in the longer term.So you must pay attention to how the distribution strategy is followed to avoid such problems.
As you can see these problems are mostly caused by cultural differences. Once again, here you not only need to understand your market but your distribution channels.
- Doing so will spare you a lot of headache.
- Do not forget, you can talk your way through many problems if you understand how Chinese people think.
To go further
- More information about distributors and the Chinese market here and there
- More information about distribution here