The Chinese market is one of the most appealing for brands looking to expand into new territories.
But thats not necessarily true, and we know many examples of a brand that failed to do so.
So lets dive into whats the right way to approach the opportunities the Chinese market has to offer.
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They think the following way: Hell, we entered the USA, Brazil, and Japan.
We know how distribution works, how advertising works, how to build relationships.
We will enter major local retail chains just like we entered Walmart, Carrefour, and others.
In China, things are different.
Beware retail
In China, retail chains are overloaded with demand from all kinds of suppliers.
This means you will pay a lot, and youll get a wildly unpredictable result.
Put simply, the market is saturated, and youre new here.
Even if youre large enough, you will be working through distributors with no control over your sales.
Online marketplaces have infinite shelf space.
Anyone with a bit of reason can put a product there.
So the first question is to assess whether youre ready to go online as your market entry strategy.
If so, your team needs to understand how the ecommerce market works in China.
Unlike ordinary retail, its pretty much unique regarding customer behaviors, habits, and the local ecosystem.
They are the media, and they control consumer trends.
You might think that itd be hard to top Amazon in terms of web link power.
Unlike Amazon, Chinese ecommerce platforms help businesses grow.
That allows anyone to adjust their product offering and adjust their listings for improved results.
And most importantly, the ROI on the amount of money and efforts invested is significantly higher.
Online sales are comparable in volume to offline in China, and for some products, even more significant.
Finding the right partner is a big part of your success.
There are several agencies whose entire job is to help you find the right contractors.
But you cant just outsource these responsibilities straight away.
Nobody knows your product better than you, and nobody will do that job for you.
Some of the companies that tried to enter China and failed believe there was something wrong with their brand.
The problem is neither in legal questions nor logistics.
Its about your competencies, experience, and psychology.
Or, even better, at the ones that failed and rebuilt their operations.
Now Ainar is a CEO of longevity startup Longevica.
