The Asian markets present a golden opportunity for businesses looking to expand. This area has a tremendous number of people who represent an avenue for new customer acquisition in addition to having a significant amount of technological advancement in recent decades. With these points in mind, a myriad of businesses are looking to expand their base by opening up branches in China; however, there are several obstacles and misconceptions that business executives and leaders should remember before laying the groundwork for this expansion process.
Failure to Plan Far Enough in Advance
One of the most common mistakes that companies make when opening branches in China is not planning far enough into the future. While most people have heard about a five-year plan, any plan for opening a branch in China should spend decades. The country’s government has a detailed plan in place (called the 13th five-year plan) that spells out its moves over the next few years with everything from global regulations to military investments. The plan has dozens of points that every business leader should review. Reviewing this plan will be important for positioning the business properly to take advantage of the changes that the government is making at the economic level.
Not Spending Enough Time on the Ground
While China is a long plane flight away from the United States, it is important to spend time on the ground in China. This is important for business leaders to get a feel for the local mentality and to make important connections in China. Finding the right partners is only possible by spending time getting to know people and is vital for long-term success despite the short-term investment required in terms of both time and dollars. Make friends in China, it will pay off in the long-run.
Failure to Make the Correct Product Relationships
It is also vital to try and pair the business up with the correct partner products and services. Think about what kind of ancillary products your business might be able to partner with that can give it access to an already-established customer base. For example, if a company is selling technology products, it could be helpful to partner with certain stores or business that already sell similar devices. This could be a way to quickly acquire new customers in large amounts, establishing a foundation for years to come.
These are only a few of the common misconceptions and obstacles that people might run into while expanding in China; however, knowledge of these obstacles should allow company leadership to efficiently plan for any hurdles that might come up. Anyone with questions should consider contacting an experienced legal professional for advice.