It’s all well and good offering your products and services in China, but spending time in the country is essential if you want to gain an insight into its business world, and learn just how different Chinese consumers are to those in the West. As we’ve said on numerous occasions, you cannot cut and paste your UK business model in China - you must understand local cultures and the business landscape in order to be successful.
Following our recent trade visit to China, we’ve put together ten things that you can learn about doing business in the country, and offer food for thought for those who are considering tapping into its market of 1.4 billion potential customers…
It’s important to appease local tastes
When expanding into a new market, it’s important to review your products and services to ensure they're appropriate for local customers. KFC, one of the world’s most established fast food brands, is a popular choice in China, with Chinese-specific menus that have been tailored to local tastes. Indeed, many of the dishes came with rice as a side, and menus included QR codes that were linked to WeChat Pay and AliPay, streamlining the ordering process and helping customers get their food faster. KFC has, effectively, removed the need to order your food at the counter - decide what you want, pay on your smartphone, and your food will be ready to collect in a couple of minutes.
Convenience is key
When travelling first class on the bullet train in China, you’ll find a QR code on your seat, which you can scan to open a WeChat mini-app. This app features a full food and drinks menu, and you can have food delivered to you at each station. You can also see up to date train times, and read through an introduction to the import expo in Shanghai.
Offering convenience is key - consumers don’t have to leave their seats to spend money and get what they need to have a comfortable and relaxed journey. Whatever niche you want to enter, by offering a convenient and stress-free service, you’ll eliminate barriers to sales, keep your customers happy, and sell more of your products and services.
Rental is big business
With its strong infrastructure and public transport links, car ownership in China is lower than in some other developed nations. Indeed, for every 100 households in the country, there are 31 private cars, whereas in the United Kingdom just 20% of people have no access to a car or van. Cities across China offer hundreds of rental bicycles, which can be booked out by downloading an app and scanning a QR code. Changing lifestyles mean many Chinese consumers no longer value cars and are happy to rent a bike when they need one. This opens up unique opportunities for businesses in a range of sectors, not just in transport.
Sales events are important
Sales events or ‘e-commerce festivals’ are big business in China, with companies such as Burger King offering limited time promotions and working with other businesses, like TMall. Across China, we saw advertisements for the upcoming Singles’ Day (11/11) - in fact, it was hard to enter any major commercial district without seeing an advert or two!
As a small business owner looking to promote your products or services in China, it makes sense to piggyback off of these events to maximise sales and find new customers - even more so if you’re selling your products on an e-commerce website like Alibaba.
Businesses capture data with Wi-Fi
Finding new ways to engage with customers and gain access to their number, social media handles or email address is important. Across China, cafes and restaurants offer customers access to free WiFi, but only if you connect to their WeChat mini-app first. From there, you can view menus, order to your table, pay bills and browse the web until your heart’s content, whilst the business can use your data for future marketing activities.
Demand is high for UK brands
Despite struggling in the United Kingdom, House of Fraser has a presence in China, as do many other British brands. We’ve seen time and time again that Chinese consumers value quality British produce, and its middle-class market is willing to pay more for goods that carry a ‘Made in Britain’ or ‘Made in Scotland’ label, as they’re often marketed as premium products. Luxury businesses wanting to expand into the market should face no problem in selling their wares to Chinese consumers, provided they have an effective marketing strategy that utilises Chinese social networks and search engine optimisation.
A cashless society?
Last year, debit card payments became more popular than cash in the United Kingdom for the first time, but it’s China that has paved the way for cashless societies. Citizens in the country spent an incredible 81 trillion yuan (US$12.8 trillion) using their smartphones in 2018, as WeChat Pay and Alipay became increasingly popular payment methods. You can pay a bus fare on WeChat and public services and businesses favour mobile-centric payment methods, encouraging customers to leave their loose change at home.
One thing you’ll notice when you go shopping in China is the vast amount of counterfeit merchandise, with everything from high-end fashion items to technology being faked. As we’ve talked about time and time again, it’s so important to implement an anti-counterfeit strategy when expanding into China, to protect your intellectual property and ensure that fakes and counterfeit goods don’t eat into your bottom line. By working to stamp out fake goods and building a brand so that customers come straight to your official website, you will be able to maximise profitability and protect what’s rightfully yours.
￼￼Food is important
Targeting Chinese consumers as a food and drinks business makes sense. On a recent visit, we sampled a whole host of local and international cuisine, including a meal at a seafood restaurant where you could catch a fish and have it cooked right in front of you.￼ Experience dining is big business in the country, and citizens are happy to spend money on eating out and catching up. If you’re in the FMCG industry, then selling your products to restaurants or convenience stores is a sensible strategy, as consumers love to try new dishes and drinks, especially those that offer a unique or premium experience.
Chinese consumers love novelties, and the Mr Wish vending machine is one example of that. Companies like Tencent Holdings and Walmart have invested US$1.7 billion (S$2.2 billion) into startups like Mr Fresh and Xingbianli, which offer novel vending machine experiences, selling everything from tiny food to kids’ toys. Simply scan a QR code, pay, and receive a gift - it’s good fun! However, remember that Chinese entrepreneurs can source products for a fraction of the cost of what you’d pay in the UK, so whilst this is a growing market, it might not be right for a Scottish entrepreneur looking to make a dent in China. Focus on building quality, long-lasting products rather than disposable fads.
Let Zudu China help
Navigating the Chinese business landscape on your own can be hard work, which is why we recommend working with a company such as Zudu China to market your products, protect your intellectual property and maximise your chances of success in the country.
Contact our Dundee-based marketing experts today on 01382 690080 to find out more about how we can help, and remember to bookmark the Zudu China blog - your one-stop resource for Scottish businesses looking to expand into China and tap into its billions of customers.