mBox Blog

Lately it seems like everyone wants to get into the Chinese market, and who can blame them? 21st century China presents some enormous opportunities for export and trading, and businesses of all sizes that step up to the mark could reap some great rewards.

However, while the Chinese have been developing a taste for many western goods and services, they are not a western nation. Their history, political system, culture, values, etiquette, language and society are all different from our own. Trading with China involves knowing a quite a bit about these matters if you want results.

But first, some statistics about China

According to the Australian Department of Foreign Affairs and Trade, China is:

  • Australia’s largest export destination at a value of $100 billion (2013-14).
  • Our largest two-way trading partner in goods and services, valued at almost $160 billion (2013-14).
  • Our second largest source of annual visitor arrivals at almost 760,000 people (2013-14).
  • Investing in Australia. Chinese investment is growing rapidly, with a value of around $32 billion – 14-fold on what it was in 2005.
  • A source of international students. In 2013 there were around 119,000 Chinese students in Australia.
  • A more ‘digital’ market than in the west. According to eMarketer, retail sales using mobile devices are expected to reach almost $334 billion in 2015 – up 85% on 2014 and higher than the US.

Some facts about trading with China

  • Opportunities abound in China for goods and services, including in the aged care, financial services, automotive and biotechnology sectors, and in consumer goods such as cosmetics, designer labels, organic foods, wine, convenience foods, baby products, and more.
  • China has a growing services sector.
  • China’s younger population is fast developing an increased interest in high-end Western products and are willing to pay a higher price for quality.
  • When it comes to B2B, the Chinese prefer to be targeted online and through conferences and exhibitions rather than by phone, mail or through networking. In other words they prefer email, social media and websites to being contacted by phone, letter or fax machine, which is where fax to email can come in.

Tips and ideas for setting up for the Chinese market

Start with plenty of research, such as:

  • Your target market, and how suitable your product or service will be for the Chinese market.
  • How you will manage communications and travel arrangements.
  • The Chinese tax system, transport infrastructure, employment law, regulatory frameworks, quarantine, labelling laws and so on.
  • Recent market trends in China.
  • Discussing your plans with other experienced business owners. The Australia China Business Council (ACBC) might be a good place to start.
  • Development of a market entry strategy. For example you might consider:
    • Marketing outside the main cities in China.
    • Whether to take on an interpreter.
    • If you should employ an agent or distributor in China.
    • How you will develop strategies for ensuring you can deliver on time and provide post-sales service.
  • Chinese etiquette and culture:
    • Relationships (‘guanxi’) are paramount when doing business in China and it’s important to be aware of this and understand how they work.
    • In Chinese culture it’s important to be punctual at meetings, and to be respectful – particularly to elders.
    • When meeting face-to-face it’s appropriate to take along a supply of business cards. It’s a good idea to also learn some basic Mandarin for communication. Hand gestures and body language are also important matters when it comes to communication.

Make sure to get plenty of good advice on:

  • Legal and taxation matters.
  • Contracts and agreements – before signing on any dotted lines.
  • Intellectual property rights.
  • Accounting and financial management.
  • Preparing for possibly tough negotiations with your Chinese customers.
  • The differences in culture and expectation.

Entering the Chinese market has to involve understanding that you will be dealing with a market with a lot of potential, but which is also very different from our own. This guide can be used as a starting point. There are also plenty of government resources, such as Austrade and the Department of Foreign Affairs, which can provide more detailed information on entering the Chinese market.

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