As a China business consultant, my job is to help businesses to establish their presence in the Chinese market. In order to implement it, we develop partnerships with Chinese companies as part of the strategy. I can’t stress enough that forming a sound partnership is vital to the clients’ success.
Having worked with over 100 Chinese companies, including multi-million enterprises from China Fortune 500, I gained an insight how much global corporations differ in their business approach. Understanding China business strategy is critical if you are planning to work with these companies, large or small.
My experience prompted me to create this review. I hope the 7 tips below will help you achieve similar success when doing business in China.
7 Proven Strategies for working with large Chinese companies:
- Do you talk the talk?
Many corporations entering the market are initially fazed by the Chinese business culture. They find that their communication style needs to be altered in order to get the message across.
They fail to realize that straightforward and upfront are unfamiliar phrases in the local business language. These companies appreciate doing things their way: by staying polite and not heading straight to the real issues.
It’s a challenging transition to many US businesses, who fail to grasp the goings on in Chinese organizations. The best way to overcome this confusion is by taking a step back and paying attention to the actions. Only these deliver long-lasting results.
- Titles can be misleading
Do you know who are you dealing with? CEO? Operation manager? Or maybe chief buyer? It’s a common issue for companies involved in the talks with China business consultants. Their job titles differ to the ones you are accustomed to. The best approach is to ask at the early stage about each role in the organization.
- Longer decision making process
When dealing with large Chinese companies, be armed with patience. Both private and state-owned companies have to comply with number of guidelines before making a decision. It often includes consulting with 6-12 advisers. This is more common in highly regulated markets. The job of committee is to make sure the deal follows directions of Chinese government agencies. The best approach here is to wait patiently and cooperate with them by providing required documentations.
- Start from the top
Your idea can be ground-breaking, but unless you go straight to the CEO, no one will give it a second glance. It’s a hierarchy game. Win over the leader and others will soon follow suit.
- Confidence or ignorance?
There is a fine line between the two. For many large corporations this line is however non-existent. I have seen booming Chinese companies entering new industries without running a prior research. Confidence? It can only get you that far. Nevertheless, I witnessed famous LED producer expecting to enter the international health care business. The move was based on their subjective opinion, and not on the acquired knowledge of the market. It isn’t difficult to guess the outcome.
If you plan on working with any Chinese company, make sure to run a thorough research of the industry before making any binding decisions.
- Writings on water
You will find that frequent changes of plans are part of China business strategy. These modifications are often dictated by evolving marketplace or variety of regulations. Most of them are out of your control. The only way to go ahead is to identify more than one potential business partner. By developing a few initial strategies you will secure a firm entrance to the new market.
- International corporate language is foreign to Chinese companies
In China business development executives are increasingly seeking new opportunities outside their country. However they are often confused by the international corporate language – much like US companies executing a China market entry. They fail to adapt to new practices.
If you are developing a partnership with a Chinese company in US, make their transition as easy as possible by providing any help and resources they might find useful.
Follow examples of American tourist attractions: in order to appeal to Chinese visitors, they not only employ Chinese speaking staff, but also create a specially designated websites tailored to this type of customer.
Go out of your way to make your Chinese business partner feel welcome and at ease, and the outcome will be beneficial for both sides.
In summary, understanding the culture differences between China and United States is at the core of forming successful relationship. Be patient and open minded to build a harmonious business environment.
Casey W. Xiao-Morris is China Business Consultant at Leverage China, LLC, specializing in capturing China’s market opportunities for American companies. Casey can be reached at cxmorris@LeverageChina.com