For the past decade, China has enjoyed the economic benefits of serving as a popular sourcing and production location for major high-tech and electronics manufacturers. Now businesses within the industry are seeing the country in a new light and recognizing its potential as a major growth market, as well.
Companies around the world are gearing up to begin selling or further ramp up sales capabilities in China's growing consumer market, and the high-tech industry is feeling a particular sense of urgency to develop this region for new revenue.
Express delivery and logistics play a critical role in the support of trade and transportation of goods between China and the rest of the world. UPS established its presence in China in 1988. Sinotrans, a Chinese transportation company with over 40 years of experience, was the service agent for UPS until 2004. Today we have 88 operating facilities and cover 330 cities throughout the country with 190 weekly flight segments that connect China to the United States, Europe, and across Asia. UPS also has 16 import gateways and 17 export gateways and serves several airports throughout the country, including Beijing Capital International Airport, Guangzhou Baiyun International Airport, and others.
Although China is unfamiliar territory for some companies, this emerging market is ripe with opportunity and can be successfully navigated with some advance preparation and research. Here are some tips on how to successfully establish and maintain a global business in China, as well as information on some unique challenges you may face:
- Identify a business objective. High-tech and electronics companies should evaluate their strengths and resources, know what they can do best, and have a clear vision for what they want to achieve in China before entering the market. China is a vast country with very different regional characteristics, and it's not necessarily the right market for every company.
- Do your research. Research is essential before entering any market, and China is no exception. Economic development and average per-capita income varies by province and by city. Therefore, it is important to gather specific, local information from reliable sources about a broad range of topics, including local business life and government regulations for foreign companies.
- Understand the business environment. To succeed in China, companies should partner closely with local communities and governments. Although there is no set timeframe for building a strong brand in China, it's critical to understand that business in China is based on relationships and trust. Chinese businesses take a long-term view toward business, and business transactions are based upon the parties developing a relationship first.
This scenario extends beyond interactions with individuals in the business community to the government. It's important for a company to demonstrate its operational competence and be recognized by the Chinese government and regulatory authorities as being valuable to the economic and overall development of China.
- Study the market. It's important for foreign enterprises to understand that China is not a homogeneous market. The world's most populous nation is a rich mixture of languages, cultures, and ethnicities. To enhance a brand's chance of success, a company should offer products targeted to specific regions and demographics within China, and then develop an appropriate marketing strategy to support that image. A marketing strategy that works in the other countries might not work in China. A company must maintain enough flexibility to adapt to shifting needs and stay abreast of consumer demands.
- Become a "Student of China." Before attempting to do business in China, company representatives should make an effort to obtain a basic grasp of Chinese history and culture. Although translators are at the ready, it is helpful to learn one or two simple Chinese phrases. Your efforts will go a long way toward breaking the ice during a business meeting.
UPS can help companies with both the process of determining if China is the right market for them, and if so, getting started doing business there to navigate challenges and capture new market opportunities.