For about four decades, China has grown into an economic giant, shooting up into the second-largest economy. The country is now the largest manufacturing hub, the top recipient of foreign direct investment (FDI), and the World Bank predicts its economy will surpass the United States by 2030. So, if you want to grow your company fast, this is an excellent offshore jurisdiction, but you need to start with a good market entry strategy.
We must say that crafting a good market entry strategy is never easy, especially when getting into a vast jurisdiction like China. Here, the process of registering a company is complex and expensive, the market is diverse, and the target audience very different from the west. The best way to get it right is by working with China consulting and market entry strategy.
What Should a Good Market Entry Strategy Include?
Getting into a new market can feel like stepping into the deep ocean for the first time. Although China is a lucrative market, not having a good strategy can easily result in business failure, losses, and legal battles. So, before making the big step to get into the Chinese market, craft a reliable policy with the following items:
Clear Goals for Going into the New Market
The moment you decide to expand your business into China, it is crucial to set a clear objective. This will be very useful in defining the basics and developing both short and long-term key performance indicators. Things to spell out at this point include:
1. Business aspirations for expansion.
2. Targeted sales levels.
Service/ or product that your company will offer.
1. Targeted market.
2. Budget and available resources.
Market Research for Your Company
When you make the big decision to open your company in China, one of the mistakes that you cannot afford to make is thinking that the market is homogenous. Doing business in China in a specific region is very different compared to others. For example, the urban population in China is very different from the rural ones. So, you need to comprehensively study the market and determine:
1.The market size.
2.The targeted consumer needs
3. Value proposition.
4. Regulatory and certification opportunities and barriers.
The information you gather during market research is crucial in making the big decision on whether the targeted region is worth going into or not.
Determine the Preferred Model of Entry
After understanding the market and crafting specific goals, you need to determine the actual way of jumping into this market. In China, there are a number of investment vehicles that you can use. The most preferred option is a wholly foreign-owned enterprise (WFOE), which allows 100% foreign shareholding. Other options include a joint venture (JV) or a representative office (RO).
Note that each comes with its own pros and cons, and it is important to compare them and determine the best option. For example, a representative office will be an excellent choice if you only want some limited presence to carry out non-profit-based activities. However, a WFOE registered and located in a free trade area will be the perfect option for heavy manufacturing.
Why You Need China Consulting and Market Entry Strategy
The items we have listed above only highlight the most important attributes to include in your market entry strategy. It is never easy, and some companies end up failing by trying to pick strategies that were used back home. The best way to approach this is using China consulting and market entry strategy. Here are some of the benefits of working with experts:
The strategy is drawn by professionals in company formation and marketing in China.
With experts like Fiducia agency, which has been in the Chinese market for years and helped other firms become successful, it is easy to identify what works and what does not.
You will be assisted in navigating through the complex process of company registration in China.
Fiducia will be there to also help with other executive tasks, such as carrying out due diligence, accounting, and filing tax returns.
China consulting and market entry strategy is the best way to get into this lucrative market and increase the chances of success. Fiducia will hold your hands to ensure you do everything correctly for faster growth. Visit them now to talk to their professionals for company registration, market entry and compliance.