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Doing business in China or off-shoring your production there can be a very lucrative idea. However, you have to consider the logistical and cultural factors that will influence your marketing and business strategy. You’ll need to acknowledge all these differences and adjust your way of thinking and doing things to find success in your efforts to reach your goals.
Start Your Endeavours with Long-Term Objectives in Mind
This applies to any business situation. You don’t need to operate in China to prove your potential customers and business partners that you’re here to stay. However, when it comes to China, you have to makes sure that local vendors and customers will become aware of your intention to build a solid business. They may consider you an outsider to start with. It is up to you to prove them wrong, so ensure that you pay close attention to the signals these community members will send you.
One possible strategy for success is to establish business partnerships with companies and individuals who understand your values and your vision, and who are committed to support you in your endeavours. This will help you prove that you aren’t there only to make a quick buck and to boost your profits by cutting the costs. Your business partners and customers should see value in your partnership.
Make sure that you understand China VAT rates.
Acknowledge and Accept the Huge Cultural Differences Such as The Lunar Calendar
Most Europeans are probably aware of the huge cultural differences between Europe and China. You should learn the meanings of different colours for Chinese people. For example, red is always associated to good fortune. Although white may symbolize purity, it is usually associated with death.
All these details can play an important role in developing the adequate brand image and design elements for your presence on the Chinese market.
The Lunar calendar is also a very important thing to consider. Officially, China uses the Gregorian calendar like many other countries. However, most Chinese people still consult the Lunar calendar and make decisions based on whether a specific date is considered “auspicious” or proper for closing business deals or for making important investments.
This means that you should observe these dates and take them into account in your day to day activity. Many Chinese individuals will schedule their business meetings around the Lunar calendar. For instance, they always consider the Chinese New Year celebration as being extremely important. Many of them would take at least a full week of holiday around that date, in order to have a proper celebration with their family.
Respect the Way Chinese View the World
The Chinese economy has opened quite a lot to foreign investment and business cooperation. Nonetheless, Chinese culture still relies on the collective. This heavily reflects in human interactions. You need to accept that Chinese people have lived under communism for so long that they are still under its influence.
As a Western business leader, you should always respect this influence and understand that value may have a different meaning for your Chinese customers and business partners. Many people in China place their familial and societal obligations above their personal achievements. You won’t be able to motivate them as if they were your regular employees, customers or business partners.
Realize That All China Businesses Are Somehow Connected to Politics
Depending on their area of activity, American individuals may start and operate a business without too much interference from authorities. If you operate in one of these unregulated sectors, you won’t have to deal with the government until the time will come to pay your taxes.
As opposed to this situation, in China, governmental agencies are involved in all industries and areas of activity. Furthermore, you have to keep in mind that local bureaucrats can sometimes be more prominent than central authorities. This means that you have to take time to study the political landscape of the area where you intend to unfold your business operations, in order to avoid upsetting some important characters at local level.
Adapt Your Sales Pitch to Resonate with Chinese Values
Successful sales representatives know how to adapt their pitch to speak the language of their audience. They aren’t selling an array of features but rather benefits that will help their clients solve a problem. This concept suits the Chinese market, as well. Make people see value in what you have to offer and they will be happy to buy your products.
To give you one example, a Westerner may find it strange that austerity and saving are two major values in the Chinese culture, while the Chinese market for luxury goods has literally skyrocketed over the past few years. Modern Chinese citizens who can afford to purchase such goods perceive them as part of their new global future and a commitment to choose quality rather than splurges that will haunt them along the way.
Choose Local Business Partners and Learn from Them
If you want to expand to any foreign market, you’ll increase your chances to be successful if you rely on local partners who can help you gain a better understanding of the local culture, value, and systems. This will help you overcome various logistics hurdles, thus making your life a lot easier than if you gad to figure out all these the hard way. Since China is such a different country in terms of values and systems, having someone from the inside to help you navigate your logistics processes will make a major difference. Most Westerners fail to understand Chinese systems, so make sure you get some help from insiders.
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