How to succeed in business with China during the
The era of COVID-19, such an unknown situation until now, does not seem to disappear soon. A business venture has recently become complex affair. It requires prolonged isolation in the countries of destination and origin, careful and intensive preparations,
a government invitation (PU). The multitude of tests required to fly do not contribute to the process – as a result, our reality has evolved.
The ability to promote new businesses or supervise existing businesses abroad requires creativity, composure, and flexible thinking.
In this article, we intend to show a potential means of business success during this period in the most populous country in the world – Great China
The Chinese government requires that all arrivals in the country respect a minimum of 3 weeks isolation.
This is assuming that you have been able to obtain official government approval that your presence is desirable and vital – a complex and rare event in itself!
You have done it – now try to find a direct flight to the country – keep in mind that the last flights are postponed one after the other without any warning.
So, it is no longer possible to attend international conferences and hold potential meetings. Virtual meetings are very practical, but in many cases, it is difficult to establish a relationship and real trust between the parties in a business deal, especially as the Chinese are not used to these platforms.
So here are some rules that will help you build a business, even in today’s complex times:
First and foremost
Download WeChat, the world’s leading communication platform with over 1 billion users. It is in fact a combination of WhatsApp + Facebook + Apple pay + Mail + Instagram. Communication throughout China is done through this platform, so those who don’t have it don’t exist.
Culture and consciousness
It is common knowledge that Chinese culture is polarized from that of the West. It is not just a question of saying that there are gaps, but of having to deal with them.
Take the measure of the differences and barriers. Failure to make a genuine effort to understand Chinese culture will lead not only to “culture shock”, but inevitably to commercial failure.
This rule carries double weight when it comes to online discussions. Physical exposure to culture allows us to identify ways of thinking and attitudes.
There are companies that were very successful in China at the beginning but failed to manage and oversee their success afterwards. The main reason for this is the management of cultural gaps. Awareness of the gaps helps to manage them. Even if you are making progress in the business, never forget that the parties think differently, and integrate this.
With 34 provinces, 332 major provincial cities, approximately 2,864 provincial towns, government involvement, and influence deeply embedded in Chinese society, one of the basic requirements for success is an acquaintance with the key people and the knowledge of relevant laws.
Crucial preliminary question: Do you want to buy in China or sell to the Chinese?
Are you buying from China? In this case, you can rely on the experience and quality of the supplier, although it is strongly advised to ensure that inspections, payments and deliveries are in order. The need for a local partner is necessary but not dramatic.
Are you selling in such a large country? A local partner is essential to represent your interests – reliable, professional and with the right network. Anything else is a failure. It is a complex, huge market, inaccessible in an informative way to Western entities.
It is true that it is difficult to find such a partner, but apparently you are not the first to talk to Chinese in your field. Try to find your local “fighter” as a Chinese entity/company in Israel or abroad. Consult the consulates and follow the success of their trade representations. Establish a deep relationship, and from there the bridge to China will be much shorter.
Back to the culture and the assumption that you are in the process
The meaning of the word “maybe” in Chinese is “no”, if a Chinese person says “yes” then it can mean “maybe”, but if he says “no” – then he is not Chinese.
Chinese culture is characterized by refined and indirect speech, which makes it difficult to get a definitive or clear answer.
Words should not be perceived as negative or offensive. Therefore, to preserve the dignity of their interlocutors and not to offend them in public, the Chinese will prefer to use other words, except in specific cases of direct confrontation.
This behavior sometimes makes it difficult to know whether the “yes” you receive is really a “yes” or whether it is simply an acknowledgement that the other party has heard you (“Hum”).
The solution in this case is to talk to or get the answers through Western-related entities. This will greatly improve understanding between the parties. Do not assume that they will do things exactly as you do when marketing the product or signing the agreement. Cultural and governmental differences will lead to differences in behavior and perception.
Everything is personal, doing business with friends
Before you can do business in China, you must prove that you are a good person, honest, sociable, cooperative, and friendly. Unlike Western culture, which guides the signing of an agreement (talking business), Chinese business culture guides a relationship and continues over time. Only an entity that has been tested and proven trustworthy will prosper. The same goes for an honest yes or no answer, the better the relationship, the more honest the answer.
The direct consequence of this issue is time. Patience plays an important role in success with Chinese entities. The parties must know and trust each other before transferring any money. Rushing will lead to suspicion and failure. Physical distance makes the situation complex. The solution is to create credibility through an entity that knows both parties, another option is to contact a local Israeli/Western entity and create a relationship with them to increase trust between the parties. It is necessary to maintain it even after the transaction.
Market of price
The Chinese are extremely sensitive to the price of a product. The product may be unique, revolutionary, innovative, etc., but if the price is borderline in relation to the market, there will be no deal. It is true that this can be said in any agreement with any entity in the world, but here it is a much more central issue, which will be on the negotiation table on the first day and the last day as well.
Do your homework and try as much as possible to adapt to the local market. Western companies’ pricing is often based on the US and Europe, so make a real effort to adapt it to the Chinese market, take this into account from day one by considering the size of the market you can potentially reach.
Ultimately, the multiplicity of subcultures in China requires a great deal of adjustment, flexibility, and preparation, tailored to the regions in which you choose to operate. It requires an ability to adapt immediately to the local Chinese situation, and of course patience. The corona period is complex for business development, transactions take longer, and the other party thinks twice before each transaction
That’s how it is in a crisis. The solution is to bridge the knowledge between the parties as much as possible, be it cultural or personal. The global world is changing platforms and with this change comes the need for a good infrastructure to create transactions – otherwise it will end in failure.