Published On: Tue, Jun 20th, 2017

A Quick Guide for Startups: How to Gain a Unique Advantage in the Chinese Market

Government prioritizing innovation and giving incentives to companies that invest in new technologies for the Chinese market. Startups can now get funding

 

 

By Jun Peng (China)

It’s an opportunity a lot of startups can’t ignore. With the government prioritizing innovation and giving incentives to companies that invest in technological advancements, it’s easier for startups who prepare well to get funding, while their competitors all compete for Western money.

But what do you need to know to get started?

What Every Startup Needs to Know Before Entering the Chinese Market

You can’t hack your way into the Chinese market. Here’s how to avoid common mistakes many startups make:

  1. Understand the Differences Between China and Other Markets

Many startups believe they can make it on their own in China, just as they did elsewhere in the world. But China is very different from Western countries in a variety of aspects, including business culture and ethics, consumer behavior, pricing models, competition, government involvement and tech.

  1. It’s Never too Early to Get into the Chinese Market

Many startups prefer to prioritize the American and European markets before looking into a Chinese expansion, but that could be a fatal mistake.

Since the Chinese market is so big, and since it develops so quickly, startups that wait to enter the market could find themselves with strong Chinese competitors both in China itself and in other markets. That’s because the Chinese make an effort to recognize market trends and localize them to their market. If you want in, you’ve got to beat them to the finish line.

  1. Yes, You Need to Make the Trip to China

Some startups believe they can make it in the Chinese market without doing the groundwork in the country itself, but startups that show up on the ground stand a better chance to succeed.

Buy plane tickets for key people in your team, and send them out networking at industry events and prospective partners’ offices. You need to build relationships face to face and talk directly to relevant companies and individuals that will support your next step in China.

But it doesn’t stop there because you can’t run your China expansion from across the world. Instead, it’s critical that you create your own team in China and study the market from the ground before signing contracts with local partners.

  1. How to Overcome Local Conflicts that Could Jeopardize Your Brand

Some startups look for a local partner or distributor, unaware of the fact that local partners might have conflicting agendas that could jeopardize their brand positioning in China.

Others do come to China, meet prospects from big companies, but don’t have the tools, skills and enough understanding of what it takes to develop business in China.

That’s why it’s critical to learn from the experience of other Western companies, to form an initial peer support network, and to learn methods and strategies that work in China from people who have already succeeded. An effective way to do it is to join training programs like the China Boot Camp, a 5-day intensive program by many content contributors with experience in China.

Among others, such programs help startups understand the professional and managerial considerations, plus emerge with a valuable toolbox, which lets them enter China lean and with maximum flexibility.

Jun Peng is the Head of China Marketing at PTL Group China. A professional marketer who worked in China and Europe, she has solid experience serving Israeli and international companies operating in China, including many startups.

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