Technology has been undoubtedly booming over the last few years – this has been no different in the Chinese market. China has had more than $110bn worth of tech M&A deals in the past 2 years.
The Chinese economy is the second largest in the world – it’s no surprise tech giants like Google, Facebook & Amazon have been relentlessly trying to break into the market.
If you’re able to crack the Chinese code, the potential is huge.
A quick google shows a dozen of articles about the ‘secret sauce’ to winning in the Chinese market… So what are the top advice in the market?
- Understand & adapt the business to cultural differences
- Understand that China is not a ‘single’ market but is made up of multiple ranging segments
- Utilise a local partner
Having grown up in China most of my life, I can tell you that to integrate your business into the Chinese market, ‘understanding & adapting to the culture’ is not even skimming the surface. Most of the ‘advice’ online focus on the tactical aspects of entry into China & neglects the local mindset needed to get under the skin of. Although the tactical advice is worth keeping in mind, it certainly doesn’t address the real reasons why tech giants like Uber have fallen short.
So what does it ACTUALLY take?
To win in China, there are two different routes a firm can take – either you become one of them, or you become so inspiring that they want to be you.
Becoming one of them
Understanding the local culture is not enough. You must flex your business proposition however needed in order to win over the Chinese audience. The locals have deep-rooted habits, attitude and mindset that are fundamentally impossible to change or influence, so don’t even bother.
The Chinese are very stubborn & don’t like to be told what to do. They would rather miss out on the best idea & technology in the world than have to adapt to it, so make it as easy as possible for them to say yes.
Uber wasn’t able to win over the local audience because of their lack of integration to Alipay/WeChat pay. If they had recognised early enough that forcing their Chinese customers to use their credit card in order to ride with Uber, a behaviour that’s completely outside of their norm, then perhaps they would not have lost the battle against Didi Chuxing.
Stop thinking you’re a foreign company trying to enter the Chinese market – become a Chinese company with a foundation of your core technology.
Setting your own standard
If you’re thinking of directly competing against an existing brand, forget it. The Chinese will almost always choose to work with a familiar home brand. The only Western firms that have been able to win over the Chinese’s heart are those who have created a brand that is inspirational & created a ‘tribe’ that has made the mass community desperate to be a part of. Look at Burberry & Apple – Apple has built a brand where having an iPhone convey a certain stature. It shows you’re part of a ‘clique’, this means people are willing to queue throughout the night or pay almost double for a new iPhone in the black market if it means they can get their hands on one fast enough.
Local firms will always have home-field advantage. Don’t compete with them, set your own standard & create something so inspiring that it instigates a following.
Of course, there are other factors like regulations and Guanxi (relationship/contacts) that are important to keep in mind. But at its core, to win in the Chinese market, these are the two routes to success.
