How to Choose a Business Partner in China
China, the economic and technological leader, is also one of the countries with the most lucrative businesses. A businessman seeking to expand his business globally is sure to get good support if he decides to start with China. However, doing business in China is quite different from doing business in Europe or the United States. This, perhaps, is owing to the traditions and customs which are unlike any other in the world.
Similarly, searching for a business partner in China also requires a different approach. A local partner who is aware of the ins and outs of the business practices in China will be helpful in making this task possible, but he needs to have ample knowledge of the legal processes and rules in China. On top of that, a businessperson or any Chinese corporation based on a good contact of the state will surely be helpful.
In a study carried out by Australian companies, it was observed that using video conferencing or Skype instead of telephone calls has aided them in building up trust with Chinese business partners and contacts. However, like all business partnerships, trust and reliance need to be built up before finalizing anything as these are essential ingredients of a successful business venture.
Chinese businesspersons are becoming progressively more confident and self-reliant with the passage of time. Most of them feel that they don’t require any foreign partnership, especially when it comes to dealing with the fast-growing local market. Those who performed well during the last Asian business crisis can be chiefly demanding with regards to negotiations. For global industries, these modifications can mean that the Chinese establishments generally are much more reluctant to enter a partnership or are interested in higher value and higher-priced deals. The locals are reluctant as well, for giving up large share and majority control of upcoming profits when they have a feeling that their private business product or offerings are equally good, if not better than those of their external investors.
Following are the top eight things that person should focus on choosing a business partner in China;
Derive a Marketing Strategy:
Before looking for a business partner in China, businesspersons should set up an operative and confident marketing strategy. It is suggested to search for a business partner, but many companies have decided to work independently on their own in China. It’s a good initiative, but it is quite a time taking. Meanwhile, you may also need assistance from professional Chinese Translation Services.
Review Chinese Business Opportunity:
For ensuring the reliability of a probable Chinese business partner, it is important to operate a business review of it. For instance, a press journalist who collects speeches from consumers, previous workers, and every probable entity that is connected with the company will be helpful in developing the correct picture, thus avoiding any case of fabricated legal filings and financials.
Understand the Market:
Doing market research earlier will assist a person in defining the additional value that can be provided and the scope of the opportunity. Awareness regarding the market and its capability will become the base for determining one’s requirement, specifically while looking for a business partner in China.
Search for an Innovative Solution:
Purchasing a firm in an identical field may become a very difficult task sometimes, owing to the very small size of the market or of the opportunity in China. Going for neighboring markets or complementary goods, making a list of fresh options for one’s market strategy in China will most of the time aid him in finding innovative solutions in searching for a business partner.
Filter to find a partner:
After creating a list of potential firms, it is very essential to efficiently filter against the particular criteria in order to discover a suitable company: A company that has an appreciable market share, brand strength, partner interest, local contracts, distribution capabilities, etc. Such a partner will not only help in making business possible in China, but it would also open ways for other companies to join the competition.
Target the Chinese Consumer:
While following the intended marketing policy, it would be really wise to focus on the low priority groups or commodity players, if an interested person is looking for a cheaper source or is in search of marketing heads and niche players. In short, a businessman should concentrate on the point where he is interested in hitting the Chinese market. Once again, it will be regarding recognizing the chief requirements that will open the doors for any businessman searching for a business partner in China.
Assess your Company Size:
A perfect partner in China is an enterprise that is of the same size as the interested firm. Larger companies will out-leverage other companies, but minor firms may not have a network large enough to get things done in China. This is the reason you should properly assess the size of your firm as well as the size of the target firm in the Chinese market.
Secure a Chinese lawyer:
Before entering the Chinese market don’t ever forget to retain a Chinese lawyer. Without a doubt your business partner will aid you, but as the rules and paperwork are everything one must be careful and try to keep things transparent. After successfully discovering a perfect business partner in China, it’s suggested to a businessperson to go deeply into his primary interests, motives, and decisions; for creating an effective and long-term partnership.
Do your Homework:
This is also one of the most important steps after entering the Chinese market. To ensure a business partnership is set up successfully, a businessman needs to do the proper homework—recruiting and hiring local Chinese people who understand the Chinese customers and are willing to work for the company. Other than that, proper project management and customer care also need to be in place so that a businessman can make it big in a lucrative market like China.
The Last Word
Setting up a business partnership in China is easier than it seems, simply because the basic rules are the same everywhere. To step into any market, it is first imperative to search and set up an appropriate target. An on-ground team with professional advisors and agents will definitely help to make the whole process faster. Combined with that, ample knowledge of the Chinese business culture and etiquettes are the keys to making sure a business is set up successfully in China.