James Westwood of the China-Britain Business Council offers advice to firms that may want to export to China for the first time.
Monday 8th February 2016 marks the start of the Chinese Year of the Monkey, which will be celebrated by more than a billion Chinese people.
At the beginning of a new year, we are often looking for new starts, new direction and initiatives. The Year of the Monkey looks set to be a positive one for businesses across the West Midlands region that want to take advantage of the opportunities available in one the world’s fastest growing economies, China.
While the news of a slowdown in China sounds gloomy, many positives remain: the country is still the second largest economy in the world; it is the largest single-country market in the world; and its economy is still growing at a healthy pace, according to recent figures.
And with the West Midlands being the only region in the country that is running a trade surplus with China – and that has been the case for the past three years – it is clear that China needs the goods and services that our businesses excel at.
Over the past few years, the UKTI and China-Britain Business Council have seen an increase in the number of businesses wanting to export their goods, services, technology or brand name to China.
Working alongside UKTI, the team at CBBC helps to demystify China and educate business about the country and how it works.
Here are their top tips and advice for SMEs that are considering entering the China market in the Year of the Monkey and beyond:
1) Have a comprehensive plan.
Taking a step into China is a serious strategic business move with potentially huge rewards. It means ensuring you have a suitably comprehensive business plan that is based on solid research. Of course, the objective is always to enact that plan by conducting real business in the market.
2) Assign the right people to the job.
Once you decide to go for the China market, you need a senior executive to head up operations, whether they are based here in the UK or China.
However, if you aim to have China as a large and significant part of your business development strategy, we strongly advise that you have people on the ground. Do not compromise on your choice of staff here because they are the lynch pin to your success – they must have significant knowledge of how business in China works, a great deal of business acumen, and industry knowledge. Ultimately, you must trust them. If you do not have anyone of the necessary calibre and experience, consider hiring somebody already in China – a task with which CBBC can assist.
3) Hone your offerings for the China market.
China is a unique market that will require you to match your offerings to its needs and tastes. Do not assume that a product or service that works in the west, will work in China. Although you may be lucky to find that and can sell your product or service as it is, it is more likely that some modifications will have to be made to suit the tastes of consumers and the business environment there. The only way you can do this is by conducting research.
If you do not have a big budget, consider asking the opinions of the Chinese student population in the West Midlands. Most universities now have a high number of Chinese students; their feedback as to how your brand, product or service would resonate in their home market will be invaluable. Alternatively, look to recruit Chinese students as interns and charge them with a market research project. UKTI can help with this.
4) Protect your business interests
In our experience, the main reason businesses decide not to enter the China market is due to the perceived risk of their intellectual property.
However, you can protect yourself by being strategically smart and legally protecting your key assets. During your detailed planning process, start by asking yourself which parts of your offering, if copied, will hurt your business interests and which will not. You may well decide that not all of your offering needs protecting.
However, for more valuable parts of your offer, such as a secret sauce – something that would hurt your business if they were copied – take action to legally protect your interests and innovations through copywriting, trademarking and patenting. China’s IP laws broadly reflect those of the UK and other international markets and infringements can be successfully pursued through courts. Before you even take your first business steps in China, have all necessary legal protections in place.
CBBC and UKTI are holding events across the West Midlands in March. The Are you ready for China? series will be held in Birmingham, Solihull and the Black Country, and will include the lessons from a local business that is successfully exporting, plus CBBC and UKTI specialist advisers to help companies start looking seriously at this major export market.
Dates have yet to be finalised but for further information, contact James Westwood: james.westwood@cbbc.org or telephone 0799 9361590.