3 things you need to know before entering the Chinese market

Sven Verleun
4 min
September 6, 2018
Where in the past entrepreneurs would look to the West when pursuing growth opportunities, nowadays an expansion towards the East has become just as common. Whether you're operating in a B2B or B2C market, with 1.3 billion citizens and an exponentially growing economy, the country offers a legion of possibilities.

However, expanding towards a Western city like New York requires a considerably lower level of adaptiveness than going to China. The latter involves a different distinctive market and culture to which one is forced to adapt. In this blog we will name three things we think you should definitely know before entering the Chinese market.

1. Different culture, different market

The culture shock one experiences upon entering China is in no way comparable to traveling towards the West.

Not only will you experience a totally different culture, one will even find basic Western concepts to be absent. Therefore, localizing your product is crucial to any form of success. For Dashmote, this means fully understanding an alternate digital landscape. For example, China has a variety of their own platforms for Western counterparts such as Facebook and Instagram.

Most famous among these is WeChat, the 'superapp' one cannot ignore. Besides chatting, sharing messages, arranging transport, and payment, the chat function of WeChat is also used in a business context. That is, 24/7. Scanning QR-codes to generate new connections and following up on existing ones is common practice in day-to-day life. In practice, that means the use of email is close to non-existent, and business is being done at a much higher pace. In The Netherlands, you schedule a meeting for the next week, in a few weeks, or even a few months. Compare this to China, where a meeting often is scheduled for today or tomorrow, and one will then understand how differences in speed are being created.

2. Relationships are the key

The common denominator of networking in China is guanxi(关系). This ancient Chinese concept is found to have a general impact on Chinese business. It basically translates to 'relationships', but in the Chinese business world it is also used to describe a network of mutually beneficial relationships that can be utilized for business purposes.

Seems common sense right? In what market are good relationships not important?

Still, there is an extra emphasis on the consequential role of relationships in the Chinese market. In the West, an excellent product sells itself. Is it an excellent product? Does it add value? Sold.

But one is likely to encounter a different set of questions in a Chinese sales meeting. Often people are more interested in you as a person and your team. Who are you? Why are you capable of doing the job? Who are your team members? What is your experience? They profoundly want to get to know you as a person before engaging in any sort of business relationship.

At times, believing and trusting you and your team in doing the job is just as important as the actual product. Do not expect to walk into a first meeting and acquire a new client at the end of it. Lead time is generally longer and the associated process requires more effort. The development of a good relationship is the foundation of this process. Speaking from longtime experience, Boudewijn Poldermans (Senior Partner at CGCB International) described this as: 'In the West, relationships grow out of business. In the East, business grows out of relationships'.

3. Governmental Affairs

This might require some adaptability for Dutch business people, but the Chinese government plays an important role in business. This means that good governmental relationships are extremely important. In most cases, government representatives have the power to make or break your enterprise. Something that is able to work to both your advantage and disadvantage.

Our advice is to not underestimate this aspect and to attentively build your network within the government. You never know when it will benefit you somewhere down the line in terms of subsidies or other advantages.

Even when you think certain information is not relevant to representatives of the government, keep them in the loop on your business. How minor the relevance of doing so might seem, you never know when it might pay back.

Do you want to be part of Dashmote its further expansion into the Chinese market? Check out our latest open position in Shanghai or apply for an internship by sending you resume and letter of motivation to hr@dashmote.com.

China, expansion, Chinese market, relationships, culture

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