Eight tips for cracking the Chinese market – Part 2

Last month we looked at the four initial steps you need to take to crack the Chinese market, here are the final four strategies that will help you take advantage of the world’s largest customer pool.

  1. Cultural context

Australian businesses need to respect the Chinese view of the world and understand that the Chinese may not hold the same values as the West. Brands need to be considerate of sensitive issues such as animal cruelty, human rights, its environmental state, and China’s territorial borders i.e. Taiwan and Tibet.

In China, business and politics are interconnected. The government influences almost all areas of life. It is therefore crucial to study the political landscape of the area in which you will be operating and learn how to navigate your business within it.

When selling to consumers, Australian businesses need to understand that China has about 56 ethnic groups, which bring with them huge diversity, different dialects, local customs and a significant discrepancy in living standards. Megacities like Beijing, Shanghai, and Guangzhou will have a very different consumer culture to regional areas in China, which can be 20 to 30 years behind. Therefore, aligning your brand’s strategy to enter those different submarkets needs to be adjusted accordingly.

  1. Work with eCommerce platforms

There are a number of eCommerce platforms that brands can leverage off to enter the Chinese Market. The two giant eCommerce players are Alibaba and JD.com, followed by Tmall and a number of other smaller players such as Kaola, VIP.com, YangMaTou and XiaoHongShu .

Before listing on these platforms, it is important to know the differences between how Chinese consumers use them. Alibaba and JD.com are mostly used for home appliances and electronic equipment. Tmall is generally used for buying clothes and cosmetics. Koala is used to predominantly sell Australian brands to Chinese consumers.

  1. Have an offline strategy

While there are many benefits of doing business online, there are equally as many benefits conducting offline business activities. In China, one effective offline marketing strategy is the use of sponsorship.

Event sponsorship provides international companies with a viable alternative to mass media.  It is a particularly effective strategy to help resonate with your target audience as it establishes favourable links between an audience and a sponsor’s brand image.

Another offline strategy is linking up with Chinese business associations and government trade chambers. These organisations have extensive networks and being referred by these organisations holds a lot of clout. Their referrals could assist you in establishing relationships faster and in a less costly manner.

  1. Partner with a local Chinese business

As previously discussed, the barriers to entry in China are quite difficult. That is why having a local Chinese partner can be beneficial to your business and help you tackle these barriers more easily.

Using the example of Uber again, despite being a huge company in its own right, its downfall in cracking the Chinese market came from deciding to enter the market alone. Had it partnered with China’s largest rideshare company, Didi Chuxing, it would have seen more success.

Again, this example shows the lack of understanding Uber had of Chinese culture.  For the Chinese, Uber’s attempt to tap into its market was seen as a Western company trying to take advantage of China’s huge market potential.

In order to succeed in China, businesses need to take a more collective and social approach. Having a local partner will not only assist you with navigating cross-cultural barriers, but shows you are willing to collaborate.

Sophia Zhao, CEO, E2 Media

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