China is a huge market full of opportunities that continually draws new global entrepreneurs and investors. However, as the influx of foreign companies into the Chinese market is increasing and local businesses are stepping up their game, it is becoming difficult to have a significant breakthrough and grow there.
To increase your chances of a breakthrough, it is important to research how to develop your business in China and how to excel in doing it. Indeed, many aspects are different especially in comparison to the United States or Europe.
For many, international trade often leads to speaking in English. However, to do business in China, it is best to know the local language. In China, not everyone speaks English, and while some master it perfectly, local people greatly appreciate foreigners who know how to speak Chinese.
Learning Chinese and understanding the culture are excellent starting points. One of the most common questions entrepreneurs ask when looking to enter the Chinese market is regarding the Chinese name of the company. In this case, working with a local partner with a thorough understanding of the Chinese language and its different dialects can be crucial to choosing the name that will correspond the best with local culture.
2. Without Guanxi, you will not go far
Guanxi is the Chinese translation of the network. In China, everything about business is done via the guanxi. If you know someone who is part of the targeted company, your problem will be solved. If this is not the case, you can expect many complications that can make your life more difficult. When doing business in China, it is important to develop your network – your guanxi – and maintain your relationships within it.
3. The omnipresence of Guanxi
In China, the boundary between private life and professional life is very narrow: important decisions and contract signings usually take place during dinners or trips. To maintain your guanxi, it is important to understand and be sensitive to Chinese culture so that your partner trusts you and you can do business together: invite them to good restaurants, offer them and their families lavish gifts (specialties from your country – they often prefer something from Western countries rather than things they can find in China), and essentially do what you can to strengthen the link between you and your partner.
4. Lying may be considered polite!
Again, understanding Chinese culture is essential if you want to do business in China. However, one fundamentally different aspect that is difficult to understand in Chinese culture is their approach to other people: always be polite and do not impose yourself on the people with whom you do business.
Therefore, the truth is often distorted and distilled, so as to not offend the other and to maintain good overall cohesion. The problem here is that this concept is naturally understood by the Chinese people, but is more difficult to understand for foreigners: traditionally more direct, the Chinese often take the truth as an affront.
“In order not to frighten your guanxi, make sure to soften your words, and remember that lying is sometimes more effective than the hard truth!” explains this expert of Chinese culture based in Beijing.
5. Never lose your Mianzi!
Mianzi is a typical Chinese concept: it literally means “face”, and is used to express the honor and credibility of a person. If you lose face, it is your mianzi that is being affected. In China, this is the most humiliating thing that someone can have happen to them. Losing your mianzi, is as if you were slapped in front of your rival. When communicating in China, you must make sure not to damage the mianzi of your contact, which can only be avoided through a better understanding of Chinese culture and language.
When managing your company, you must always take care of your Chinese employees and ensure that they are not placed in situations where they could lose face! Here you can read more about Economy and Trade in China.
6. Be patient
It is important to take your time when doing business in China: do not be frustrated because things are moving slowly. Indeed, before, during and after the contract is signed, negotiations will change – and this is something necessary for the Chinese. They do this in order to ensure that everything is under control. In addition, communicating orally with your “Guanxi” is equally as important as all written contracts or laws in China. Taking part in several dinners to sign a contract is quite common.
7. Beware of written contracts!
Many important aspects will not be written in the contract and therefore will be made by the person with whom you are doing business: that is why it is essential to always listen and understand what people say during business dinners or trips. Do not be shocked or feel betrayed if your guanxi decides to do something that you have not approved yet.
Here is an interesting article about Negotiations in China.
8. Pay special attention to the needs of people
What will be in your favor when it comes to signing a contract with you rather than your competitor? Of course, it is because he or she is more interested in your proposal rather than your competitor’s. To ensure that he or she decides to commit to you, it is important to read between the lines to define their needs and expectations. Once you know what they want, you are able to offer a proposal that is much more appealing to them than that of your rival, consequently negotiations will be much easier. However, you must make sure you know the rules; hiring a lawyer would be of great help to ensure that everything you undertake corresponds to the law.
9. Outsource your administration
In order to boost your business even more, you can also choose to outsource some of your administration. This is helpful for many different reasons. First of all, it will allow you to eliminate management hassles. Thus, you will be more focused on your relationships towards clients. Second of all, it will help you to save some money. Often times outsourcing can help companies save hugely on administrative and management costs. And finally, you will have more flexibility. Therefore, outsourcing your administration is an excellent idea to develop your company. See our services.
10. Go Digital to boost your visibility
By now, you must also know that Chinese customers have very specialized characteristics: Chinese people are very connected. Therefore, in order to boost your visibility, you have to set up your official WeChat and Weibo account.
When it comes to social networks, these two giants are a « must have ». Then, by having your official accounts on social networks you will boost your visibility, and also get feedback from your customers.
It’s a win-win strategy! You can rely on a Digital agency in China to manage your digital-visibility.
Any questions on how to start your business in China? Contact us!