China have been a formidable field for innovation and is seen as the lands of opportunities by business owner and investor. This market has indeed an incredible potential with the growth of its middle class. However, China has its own practices, its own codes and it won’t be easy to succeed. Here is our guide to set you up for success in the middle kingdom.

“In china nothing is easy but nothing is impossible.”

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The administration behind launching your business in china:

The first step into launching in china is the administrative, because of always changing regulation it can  be quite a hassle. Before even starting the processing, you’ll have to answers 3 important questions:

 

Is my sector  open to foreign businesses in China?

China is usually pretty open to foreign business, market like imported food, organic food, cosmetics, fashion, baby-care, health care services & product, traveling, energy and environment..etc;  are in constant growth.

If there is many opportunity you should research about your market history and development in China. Who are your competitors, is the competition level high. It is possible that your products is rather new to the Chinese market. In this case, we suggest you to first ask yourself if your products/service appealing to the Chinese consumers as well as studying  the trends of to determine your success rate.

 

Structure of my business to settle in china

4 Options are available to you to set up your business, here is a short introduction to them:

  • The Joint venture, you operate your business with a local partner.
  • The Representative Office which is strictly regulated and can only be used for communication purpose as no revenue can be generate from it.
  • WFOE (Wholly Foreign Owned Enterprise). It gives you full sovereignty on your company but it takes time and resources to set up.
  • Umbrella company, it will take of back office of your company and you won’t have to worry about creating a structure in China.

This 4 options come at different prices and will impact your financial status when arriving in China so think it through, read about it and decide which of them is the most suitable to your business model, resources and goals you want to achieve in China.

 

Finance & tax

Answering the previous questions is crucial for your budgeting. How much should go in the setting all the back office of your business in china and how much should go in your marketing effort just two mentioned 2. Being able to funds your business until your Chinese venture can  sustain by itself is a key point of your success, but you are not learning anything here. Knows that some country offers some aids to invest in China, we suggest you to have a look at your country government website.

The Taxations system in China is a whole topic in itself and a rather complicated one and there is several types of taxes. The transaction are strictly controlled by the government. The standard corporate income taxes rate for instance is 25% but can be lower to 15% for industries encouraged by the Chinese government

 

How to have a successful business in China:

Launching a company in an unknown country can be overwhelming, not only the administration can be obscure but the business mores and habits are from another world.

 

Local partner

It would be foolish to believe that you won’t need a guide to make your way into China. China has a long and complex history and the business landscape is intrinsically link to it. A local, that grow up in this socio-cultural environment have a deep knowledge of the business culture in China. Though, having a local partner won’t necessarily make it easy or flawless it will certainly help you avoid finding yourself in delicate situation.

Not mastering the local language can be a huge barrier especially if you intent to grow your connections. In china, having the good connections or “Guanxi” is extremely important and can impact your business from finding partnership to finding retailers or even an office local.

 

Adapt your knowledge to the market

Now, you are a business owner and are not clueless about how to run a company. Your knowledge is valuable and instead of throwing it by the windows you should adapt it to the subtlety of the market.

For instance, Chinese companies tends to be focus on the hierarchy, giving little to no trust to their employees encouraging young talents to move from one company to another simply looking for a better package. Offers your trust to your employees, teach them and give them responsibilities, in others terms a reason work with you.

With new generation of worker thirsty for knowledge and governmental measures to fight against corruption, the way of making business in china is evolving, it is your time to bring your own touch on this model.

 

Complete Digital Marketing Strategy

It should be clear by now that china has its own culture and business model and that company wanting to succeed in the middle kingdom  has to adapt on every fronts including its online marketing strategy. China is super connected and your presence online is non negotiable.

 

Chinese website

Chinese consumers are more educated than ever and are looking for quality in foreign brand. The country is well known for its counterfeit poor quality products and the locals are all well aware of this issue. They took the habits of researching for information online before purchasing anything. In this optic, it is important for you to create a website in Chinese hosted in China or Singapore as it will help you ranking on baidu.. It needs to be interactive and informative.

 

 

Seo/ Sem / retargeting

A website is a good start but if no one can find you it is useless. Work on Baidu SEO and SEM to get traffic, the easiest it is to find you the better it is. Rank on your industry  Keywords. Here is some point to keep in mind when working on your SEO strategy:

  • Chinese language & local hosted website – Baidu’s crawling and indexation of non-Chinese language sites is poor.
  • Chinese Language Focused search engine = Very accurate treatment of research request
  • Little tolerance to duplicate content
  • Crawling is frequent
  • Use Chinese based website for back linking
  • Image results technology not efficient – Effort on Image optimization
  • Regular new content leads to better ranking
  • Domain name ancient matters

Your SEO effort should be combined to SEM campaigns, they get you results much faster and are stable. To start creating you will have to register with a company account, provide legal documents and pay down an entry fee.

Baidu ads are difficult to distinguish from organic results but locals are fine with it compare to their more suspicious western counterparts.

Google ads are sophisticated and the more optimized your campaigns are the better the results are and the lowest the spendings are. If baidu is looking forwards to a similar model the current situation is simple, the most often, the higher the bit the higher the chance of ranking are.

Retargeting  campaigns should not be forgotten and retargeting tool on the Chinese internet have become more sophisticated over the years. They have become so good that approximately 40% of visitors are reached through retargeting.  Do not let your initial traffic forget about you!

 

Communication/E-reputation: Social Media&forum, Kols

E-reputation is define as the following: how is seen a brand or personality by internet users. It can be challenging for new brands create a reputation online. Why? If your brand is not known, internet user won’t have any interest in you. However there is tools and practices for you to get peoples talking about you online.

branding china

  • Wechat: With almost 1 billions users wechat allows you to have an official page for your brand that can be used as a communication tool. Share quality content with shareable potential.
  • Social Media and forums: As for western market you have to be on social media to promote your brand culture and your products/services. Forum are a great way to integrate community and to generate dialogue with your audience.
  • Kols.: Chinese internet user tends to trust them more than officials sources. Key opinion leaders have a great influence and can help growing your reputation and getting people’s interest for you.

 

 

E-commerce

The last point we would like to talk about today is mainly for company interested in selling products in China. China e-commerce is extremely well developed. There are 3 e-commerce platforms we would like to introduce you quickly.

  • T-Mall – Operated by Alibaba and well trusted by the public. Fees are pretty high, count a minimum of $15 000 to register. Dominate the market with almost 60% of the shares.
  • JD.Com- Great fulfillment service also well truster by the public and with a focus on technology. Fees are similar to T-mall.
  • Wechat with it wechat store. Many brands are turning to wechat for reasons such as lower fees but also less competition. You have to put a lot of effort on branding to get traffic.

 

 

Despite the appearances there is nothing easy in launching your business to China. As every market it has it subtleties and demanding customers that won’t buy anything just because it comes from the west. You brand needs to build a reputation that will appeals Chinese consumers which will take time and efforts but thankfully China super-connected population offers you a lot of channels to achieve it.

Need advice on launching your company in China? We can help you, we are a marketing agency helping foreign company to set foot in China.