How to do business in China
An introduction in how to do business in China through leading e-commerce platforms.
Any company looking to grow its sales internationally will either already be in Asia or is giving that market serious attention. With its youth, digital savvy and affinity with mobile technologies, the Asia-Pacific region is proving to be one of the most powerful consumer markets in the world. While the APAC opportunity has been recognized by brands large and small, expansion into China differs profoundly from expansion into other markets. In this first instalment of our three-part series, we discuss the steps brands need to take to enter this booming market successfully.
The Chinese technological landscape, namely the Great Firewall, precludes the use of many popular systems and business tools, including the entire Google suite, Salesforce and popular automation tools such as Marketo and Eloqua. Also, there are numerous complex policies associated with advertising, logistics, shipping, and taxes — to name a few — which many Western businesses find confusing. If you are considering expanding your business into China, here are the first two steps you need to take.
Verify that no one else is using your trademark
In trademark law, China abides by the first-to-file law. What that means is whoever files a trademark with the China Trade Mark Office first gets to sell goods under that trademark. It is inexpensive to file and historically many local merchants have, effectively blocking Western brands from accessing their own markets or worse, banking on a brand’s popularity to pocket a sizable profit. Taobao and similar classified sites may offer these goods, often sold by importers who travel to Western countries and return to China to sell them at a similar price point to the brand itself. This equals lost revenue as well as a diminished ability to control your brand experience for consumers.
If your company is considering expansion into China, perform a comprehensive trademark search to ensure that your company is the first to file. If not, take the steps to pull the control of your brand and your customers back into your hands. While rectifying trademark infringement can be a lengthy and expensive process, our trademark infringement services have eliminated online trademark and IP infringement and allow us to have the pirating site taken down within a week.
Make sure there is a market for your product or service
Many companies learn too late that Chinese consumers do not have the same tastes and interests as Western consumers. Before you undertake expansion into China, verify that your market exists. A product that sells well in North American or European markets, even a flagship product, sometimes barely makes an impression in China. Alternatively, one of your lesser-known products may become your top earner. Perform a market data analysis on competitor sales to gain a sense of the overall revenue availability as well as how much demand there is for a given product. With this, you will gain full clarity on your market entry and growth strategy without spending unnecessary time or money guessing your next move.
Expansion into China is a natural next step for many Western businesses. Make sure you have the information you need to make your expansion seamless and profitable.