Eight tips for cracking the Chinese market – Part 1

With a population of over 1.3 billion people, China has become one of the largest and most lucrative consumer markets in the world. This, coupled with the fact Australian products are in high demand from Chinese consumers, makes China an attractive country to do business with.

However, numerous local and international brands still fail to crack the market. Take Uber for example, in 2016 the rideshare giant tried penetrating the Chinese market and failed miserably. Why? Due to its disregard for China’s rideshare regulations and a lack of understanding of the existing rideshare market.

When doing business with China and targeting Chinese consumers, it is essential to understand not only China’s business culture, but what drives its people towards Australian made products and services.

Here are the first half of eight great tips for doing business with China to achieve the best market penetration.

  1. Build trust

Trust is the cornerstone of conducting business in China. While China is going through enormous social and economic change, their business values are still very traditional.

When doing business in China, it is important for Australian businesses to first build rapport and credibility. Chinese business culture is more about building long-term relationships than quickly signing contractual agreements.

  1. Be Patient

Patience is a virtue. Like any long-lasting relationship, building trust can take a great deal of time. Expecting to be an overnight success in China is unrealistic. If the Chinese see you are genuine and not out to take advantage of them commercially, then they are more likely to be open to doing business with you.

Take for example, Coca Cola. It took Coca Cola almost 40 years to establish trust and credibility in the Chinese market. In 1979, it was only selling 20,000 cases to China, but today China has become Coca-Cola’s third largest market in the world, after the U.S. and Mexico.

  1. Turn local Australian Chinese people into your biggest fans

There is nothing more powerful than word of mouth advertising.  For the Chinese, this is especially true when sourcing overseas products. Thanks to social media and instant messaging platforms like WeChat, overseas brands have gained more visibility in mainland China as consumers are now able to interact with these brands in real time.

Therefore, Australian-based Chinese consumers play a vital role in influencing their family and friends back home in mainland China about a brand’s credibility. Depending on their local Chinese counterpart’s experiences, that product’s entry into the Chinese market can either scale at an unprecedented rate, or fail to enter the market completely. For this reason, it is very important to appeal to local Chinese consumers who can then influence your consumers in China.

  1. Get market validation through local press

Equally as important as having local Chinese Australians vouch for your product, is establishing a presence in local Chinese press.

Chinese people believe foreign brands, particularly Australian ones, play an important role in improving their quality of life. By having your product not only talked about by friends and relatives, but also covered in local Chinese-Australian newspapers, can really propel your brand’s credibility within the Chinese market.

At E2 Media, we have used this strategy for many Australian businesses that wish to penetrate the Chinese market. For example, one of our clients, Nutrition Care, which has a 40-year legacy in Australia, has successfully cracked the Chinese market which is now its largest market globally.

Next month we’ll look at four more key strategies in getting into the Chinese market.

Sophia Zhao, CEO, E2 Media

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