8 tips on … how to enter Chinese distribution market
With China’s quickly expanding economy and population, many companies have set their eyes on how to enter Chinese distribution market. Indeed, since the last decade a wide range of international small and medium sized enterprises has started selling to the wide distribution market that is China, but it’s more difficult than it seems : how to accurately gauge and leverage your aim, how to manage your soon-to-be distribution network in China ?
Enter Chinese distribution market: Identify the demand in China
The first thing you need to do is to conduct a thorough market research on the market you’re aiming for: define the demand for your product in the market along with market trends and prospects in order to determine your chances of success, the possible marketing strategies on Chinese market, as well as the weaknesses of your product compared to the possible competing brands’ in China.
Enter Chinese distribution market: legal requirements and regulations in China
In China more than in other countries, law is severe with foreigners. Make sure foreign companies are allowed to operate in your industry in China, and if they are, you’ll have to make sure you fit the requirements (or acquire any needed certification). Don’t wait until the last minute for these applications as they often take some time.
Enter Chinese distribution market: Target your consumer
Aim for a specific range of customer: is your distribution targeting business, governmental agency, or private consumers? As most Chinese industrial companies are state owned enterprises (the largest ones at least), they’re operating under the control of the government and thus according to specific characteristics which you’ll have to do research on and understand.
Enter Chinese distribution market: Know your rival, know your friend
As part of your market study, you’ll have to identify who the key players and potential distributors are in your industry. Hiring a Chinese consulting company can be of good help as they know how to conduct thorough research in optimal conditions (as they’re immersed into the environment, they’re more likely to operate great focus groups, interviews, store checks etc.)
Enter Chinese distribution market: Now that you’re well informed, plan your strategy!
With all keys in hands, you’re now able to carefully craft your strategy to enter the Chinese distribution market, and develop marketing materials specially adapted to the Chinese market, in order to compete with the main industry players and rivals you’ve previously identified. This means brochures, websites, and goods that are written in Chinese, in a format that’s compatible with Chinese culture. Consult with people familiar with the Chinese business world for precious advice on what’s usually done in order to match with the local preferences.
Enter Chinese distribution market: Hire a team of local vendors
Selling in China can be quite tough, especially since the negotiation process greatly differs from how it’s usually done in the West. In order to achieve sales, it’s best to be prepared and to have a local sales team which will help you understand the Chinese business culture and make key decisions in order to make complete a local business deal.
Enter Chinese distribution market: Time to personally visit potential distributors
Now it’s time to actually make a move: go personally visit potential distributors. Not only will you be able to see them operate and thus assess their qualification, strengths and weaknesses, but you’ll also be able to advertise your company ! Based on what you’ve seen, you’ll have to adjust your business strategy to match with the needs assessed. Of course, don’t forget to check the liability of the agency, and make sure you can trust them.
Enter Chinese distribution market: Manage your relationship
After the sale is complete, it’s best you keep in touch and maintain your relationship with the distributor to establish a long-term affiliation and thus ensure long-term sales. With the team of local staff you’ve hired, make sure you can communicate regularly in both formal and informal ways (maintaining a business oriented relationship in China requires personal time as well) with the distributor, and provide support on technical and marketing issues. Eventually, try to develop your relationship into one of trust that will help you deeply establish your brand into the Chinese distribution market by making a first impactful imprint.
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