Everyone knows that the Chinese market holds enormous potential for foreign businesses. However, those who do business there face many risks of mistakes and several obstacles. What’s more, this market is coveted by all exporters. Foreign companies often underestimate costs and investment time, find themselves strangled by unfavorable contract terms, or sign an agreement with a partner who fails to meet its distribution obligations. Let us look at some tips for the exporter to do business in China. Click here to know about china philippines relations.
Always be ready with the project
First, make sure your company is ready to undertake this project. To do business in China requires a lot of time and resources. You need to make sure that your team members and investors are in complete agreement with your plan. The Chinese market requires a long-term commitment. You cannot visit China for a visit and then return to China only the following year if you want to get market information and build your profile. You must be present consistently and continuously by making frequent visits or opening an office.
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Limit the target market
Since China has a huge population, it’s usually not a good idea to target the entire country in your initial efforts. Choose a region or a particular city instead.
You can target a more developed sector to learn more about the country. A good example is Hong Kong, with its sophisticated infrastructure, free port, abundant suppliers and large concentrated population.
Think about your distribution strategy
Consider carefully your distribution strategy and select your potential partners carefully. Many Canadian companies start a business with a Chinese partner without due diligence.
Distribution options include hiring a local representative or a joint venture or partnership with another Canadian company that already exports products to China to build on its sales.