Companies anticipating doing business in China need to understand they are facing a difficult challenge. These companies may be competing on another company’s turf.
The track record for American companies doing business in China has not always been good. Uber was not able to compete with a Chinese competitor. Apple has made no headway against four smartphone manufactures in China. And Amazon has little market presence in China. People in China generally prefer to buy from local manufacturers.
For this reason, commentators anticipate Tesla will face difficulties in establishing themselves as a maker of electric cars in China. They will face similar difficulties that American car manufacturers faced when trying to do business in Japan.
Taking on a local brand like Nio Motors
Nio Motors, an automobile manufacturer in China, appears little concerned about Tesla attempting to compete with them. Nio also is hoping to be competitive in sales within the U.S. as well.
Nio’s founder and CEO emphasized the competitiveness of China’s car manufacturing market. He added that most major brands are already doing business in China. “As a global start-up since day one with a US-based research team of 500, we welcome more competition to help us improve.”
But while Tesla will face a number of Chinese competitors, it likely could still be worth its while to do business in China. Even a small market share is significant in the most populous nation in the world.
China’s market can prove difficult to understand. It is important to engage in careful planning before setting up shop in that country. An attorney with an understanding of doing business in China and who represents you without any conflicting loyalties is ideal to go to for advice and assistance.