8 tips for doing business in China
China presents a massive opportunity for British entrepreneurs setting up a business—but where do you start? Here are some tips from experts in Chinese trade on how to succeed when doing business in China.
1. Dig under the surface
“You have to look beyond the newspaper headlines,” says David Martin of the China-Britain Business Council. “With a country of 1.4 billion people, a single figure for GDP is almost meaningless.”
China is diverse—its regions, cities and sectors all function differently. As a result, it’s better to drill down into areas of focus. The media sector in Beijing isn’t necessarily going to be in the same shape as the retail sector in Hangzhou. To succeed, you’ll need to gather detailed, specific intelligence about the market segment relevant to your business, such as local customer preferences, competitive landscapes, supply chains and regulatory environments.
A good way to begin your intelligence-gathering is with organisations such as the Department for Business & Trade, individual Chambers of Commerce here in the UK, or David’s own organisation.
But while online research is useful, you’ll want to schedule a visit to the country too. Being on the ground allows you to meet potential partners, customers and industry experts. You’ll gain a deeper understanding of the local culture, business etiquette and consumer preferences. These in-person insights will help refine your business strategy and avoid missing local nuances.
2. Then, go for it
“Do not let any negatives you may have heard put you off at first base,” says Shaun Pulfrey, whose grooming product, the Tangle Teezer, was turned down by investors on the Dragon’s Den in 2007 but is now on sale in 80 countries. Language barriers and government influences are often cited as challenges to doing business in China.
“China is the most exciting consumer market that we are working in. By the end of 2017, it [was] our biggest global market, and it has also helped make us more dynamic as a business—sharper, agile and more focused.” Going to China could help you become more competitive everywhere else.
3. Partner up
“No matter how much research you do or how many times you visit, you will not understand China’s market like the Chinese,” says Pulfrey, who admits that his company’s grasp of local consumer behaviour was limited when Tangle Teezer first entered the Chinese market.
But, warns David Martin, it’s not as simple as just finding a local contact. The key is to establish a relationship where payment or compensation is linked to the success of the venture. This might involve structuring their compensation or incentives around actual business outcomes, so they’re fully committed to your success.
And, he adds: “Don’t believe the unlikely. Because of the scale of the opportunity, it can be tempting but show the kind of acumen you would when dealing with people at home.” You should apply the same scrutiny and due diligence that you would in your home market.
4. Be patient
“Deals go at different speeds,” says Martin, “so be prepared for the ebb and flow. The decision-making process is different, the hierarchy is different.” The concept of ‘face’ – as in saving it, and not losing it – is integral to business in China, too.
“Haggling is important,” says Michael Greene, vice president of product strategy at digital advertising management firm AudienceScience. “Chinese people like to feel that they have done something important for their company and are going back with a good deal.” It’s often useful to draft in senior figures to move deals along or rubber-stamp them at the end.
- Open up to 20 local currency accounts, with local sort codes, account numbers and IBANs
- Collect secure payments from 130+ marketplaces, overseas buyers and payment processing gateways
- Pay suppliers, partners and staff in 40 currencies without hidden fees
- Pay and get paid easily with local bank details on your invoices
- Lock in conversion rates to manage your currency risk
5. And be prepared to re-assess
Just because a business is successful in one market doesn’t mean that it’ll work in China. “Uber is dominant elsewhere,” says AudienceScience’s Michael Greene, “but in China it struggled against a larger rival, DiDi.”
For some companies, this will mean tweaking a product slightly. For example, some Jaguar Land Rover models sold in China have a longer wheelbase and larger back seats, as says Martin, “In China, the people who buy those cars are likely to have a driver.” This means you need to be flexible and prepared to make adjustments to maximise your business.
6. Pin your colours to the mast
“We make much more of our Britishness in China than anywhere else in the world,” says Pulfrey. “Take every marketing opportunity to stress you have a British brand, are made in Great Britain, or have British heritage. To the Chinese, ‘Made in Great Britain’ means design, quality, cool, expertise and trust. It opens doors, it gives you a competitive advantage and it supports a premium proposition.”
7. Beware the ‘Great Firewall of China’
The Chinese government’s method of censoring the internet and preventing sites such as Facebook and X from operating, means that social media—which is so crucial to consumers’ buying decisions—works very differently. But it has other consequences too, says Greene. “It can even prevent innocuous e-mail attachments from opening.” The ‘Great Firewall’ fundamentally alters the way businesses must operate online in China, from marketing strategies to basic communication tools.
Being a technology-dependent business, AudienceScience worked with a specialist company to make sure it had the servers and other infrastructure and systems in place to deal with the constraints.
Instead of relying on global platforms, you might need to adapt to local alternatives like WeChat, Weibo and Douyin (the Chinese version of TikTok) to engage your audience effectively. Local agency help would be necessary here if you don’t have the skills in-house.
In short, success in China requires more than just adjusting your social media strategy; it involves reshaping your digital infrastructure to align with the country’s regulatory environment.
8. Think local
Doing business half-way across the world might be daunting. However, don’t forget, says Pulfrey, there are 90,000 Chinese students in the UK—often young, bright, ambitious and, crucially, well versed in WeChat and Weibo. Martin notes that football club Aston Villa took on a Chinese intern, locally-based in the West Midlands, to look after its social media for the Far East, with great results. And, he adds, for other companies, there’s every chance that a person who starts off as an intern could one day prove to be a very useful contact if they ever decide to head home. With China, it’s a long game.
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