Top 10 Challenges Facing Foreign Businesses in China Today - Marketing China PDF

5/7/2020 Top 10 Challenges Facing Foreign Businesses in China today - Marketing China
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TOP 10 CHALLENGES FACING FOREIGN

BUSINESSES IN CHINA TODAY MARKETING
CHINA
Aug 9, 2019 | Business in China
Marketing
China- Smart
Tips for Smart
Business in
China.
Marketing news
and analysis for
CEO,
Entrepreneurs,
and Top
Managers.
We want to be
We have listed top 10 problems of foreign Your Digital
Businesses in China, with solutions. Guide to do
Business in
China
1. Cultural Problem
2. Adaptation and localization of Business Marketing to

China is a
3. Intellectual Property Right (IPR)
website created
4. Logistics Challenge by Gentlemen
5. Build Trust Marketing

Agency
6. Sales & Distribution
designed to
7. Increasingly competitive market provide fresh
insights and a
https://www.marketingtochina.com/top-challenges-facing-businesses-and-marketers-in-china/ 1/17
8. Fake marketing challenge deeper

China with our push noti cations. understanding
9. Lack of maturity and experience of local partners
Noti cations can be turned o anytime from browser of the Chinese
10. The management of settings.
Chinese People market.

China is a
rapidly growing

consumer
market with
CHINA… PARADISE OF HELL FOR
more
FOREIGN BUSINESSES?
companies
throughout the
world looking
for ways to
develop their
marketing,
branding and
communication
that is relevant
to Chinese
consumers.
China’s consumer goods market is massive. It is
expected to overtake the U.S. to become the world’s
The aim of this
largest consumer of goods this year despite a
website is to
slowdown in the economy and retail sales,
inform readers
according to a research report.
about the
market and
Analysts from eMarketer predict China will end this
provide
year with total retail sales of $5,074 trillion,
insightful
exceeding that for the U.S. by more than $100
analysis.
billion.
Marketing to
However, China continues to be a challenging
China would
market to businesses and marketers due to a variety
like to explain
of factors.
Chinese
Business and
In this article, we would discuss top challenges
Marketing to
facing foreign companies generally and marketers,
the rest of the
particularly when doing business in this country.
world. Please
feel free to
China with our push noti cations. comment and
10 Challenges of foreignNoti
Businesses
cations canin
beChina
turned o anytime from browser share our
settings. articles ! To
Powered by Don't Allow Allow Partner with us
it is here
1. CULTURAL CHALLENGE AND
ADAPTATION
GENTLEMEN
You think it is will not happen to you, but
MARKETING
actually, 95% of our clients are facing these AGENCY
problems.
We are a Digital
Marketing
Agency based in
Shanghai. We
are dedicated to
helping our
clients grow in
the Chinese
market by
implementing
the most
e ective digital
China is one of the big emerging markets with
strategy to o er
strong leadership, hardworking and intelligent
return on
people and a habit of self-reliance.
investment. Our
China represents political, traditional and customers
business cultures with their own unique choose us
characteristics and distinctiveness. because of our;
e ciency,
Cultural misunderstandings leading to
pragmatic
miscommunication are one of the biggest
approach and
challenges which foreign companies face in China.
innovative
solutions
Although there is an increasing number of Chinese
adapted to the
people highly pro cient in English, it is uncommon
market. For
to nd someone who understands the subtleties of
more
the language and possesses a strong enough
understanding of both Chinese and western culture information see

to navigate delicate business
China negotiations.
with our push noti cations. :
AGENCY
What started as a settings.
promising prospect for both sides WEBSITE
often breaksPowered
downbydue to misunderstandings.
Don't Allow Allow
To avoid such problems, it is important to have an RECENT

POSTS
international team in place which can bridge
Chinese and western cultural di erences.
China
Health
see also: Market:
Alibaba
Strategi
Sell to Chinese Men … not that simple cally
Positio
how to deal with Chinese Companies ns Itself
as AI
B2B in China, totally di erent Leader
May 6,
2020

Where

and
how to
2. REGULATORY CHALLENGES nd an
artistic
agent
in
China?
Apr 28,
2020
How to
(legally)
sell
CBD in
China?
Apr 27,
2020
The lengthy administrative procedures, especially
with respect to permits, registration, and licensing
remains a constant challenge in China.
Most businesses are required to have a standard

business license, which contains a “scope of
business” that details the activities the rm is
permitted to undertake and is issued by municipal To

Mobile
Administrations of Industry
Chinaand Commerce,
with our push noti cations.
App
together with permits or permissions
Noti from
cations can be other
turned o anytime from browser CEOs:
regulators. settings. how to
Launch,
Powered by Don't Allow Allow Market
Example Health Firms in China your
App in
China
For example, a distributor of medical devices will right
need both a business license with the appropriate now!
Apr 24,
scope of business from the Agency of Industry and
2020
Commerce as well as a permit from the local Food
and Drug Administration.
Where
and
Despite signi cant Chinese government e orts to how to
nd a
streamline bureaucracy and reduce red tape, publishi
foreign companies continue to complain about ng
h
bureaucratic barriers that hinder their plans to
expand in China.
AUTHORS &
TEAM
In addition, a lack of transparency in the regulatory
process and inconsistent & unfair interpretation of
We are a Team
regulations makes it further di cult for foreign
of 75
businesses to compete.
Marketers.
Besides, international marketers also face the unfair

Our Magazine is
market access due to strict testing and standards
written by Benji
requirements for some imported goods, foreign
(British), Olivier
manufacturers, and foreign services providers, while
(French) and
o ering substantial government guidance,
Philip (Chinese)
resources, and regulatory support to Chinese
with additional
industries.
contributions
from our team
In China, rules are changing all the time…
of experts on
the Chinese

market.
We are

passionate
about
marketing in
3. INTELLECTUAL Marketing
PROPERTY RIGHT
to China: Stay up to date on
the aptly named
(IPR) CHALLENGE China with our push noti cations. ‘mysterious
Noti cations can be turned o anytime from browser orient’. We
settings.
come from
Powered by Don't Allow Allow di erent
backgrounds
and have
di erent
cultural views
which make us
the ideal
international
team to develop
China has long been the number one source of your interests in
counterfeit goods marketed across the globe. China.
80% of the world’s counterfeit goods come from

China, and many of the market’s consumers are in
STAY UP TO
China as well. DATE
Foreign rms have long complained that enforcing

All our Update
their intellectual property rights in China is di cult
& Tips about
due to local judicial protectionism, challenges in
Business in
obtaining evidence, small damage awards, and a
China
perceived bias against foreign rms.
Since joining the WTO in 2001, China has

strengthened its legal framework and amended its
laws and regulations regarding IPR, but weak Scan the Qr
enforcement continues to impede the IPR system Code and get
prevalent in China. the best of on
Wechat
As Chinese rms, focusing on global expansion
abroad and high-tech innovation at home,
increasingly demand e ective IP protections from
the government, we can be hopeful that legal
reforms and new enforcement mechanisms would
improve the situation.
4. LOGISTICS CHALLENGE
settings.
Despite the government’s recent progress in

improving the nation’s logistics environment,
shipping goods to consumers in China can be costly
and complicated.
Logistics in China is a highly fragmented industry.

With more than 730,000 registered logistics
operators, according to the Global Supply Chain
Council, coordinating supply chain capacity and
material handling often a ect material ows.
Additionally, large trucks are restricted from some

urban areas during certain times of day, so product
shipments have to be transferred to smaller vehicles
before they can reach consumers. This complicates
distribution and batch shipment optimization.
Besides, most of China’s warehouses, distribution

centers, shipping yards and cargo hubs are
outdated and lack automation while a wide range of
complex and frequently con icting logistics rules
and regulations makes it further challenging for
foreign consumer product companies to get their
products into the mass market in China.
5. SALES & DISTRIBUTION CHALLENGE

settings.
With 1.4B people, there is a customer for any

product in the world. The challenge is nding the
right distribution channels to reach them & knowing
how to manage these channels.
There is still a void between Chinese distributors

and western brands. A lot of brands have been
abused by their distributors. Chinese distributors
have a history of selling copied and fake products,
or just dumped brands when other brands are more
pro table with better margins.
Meanwhile, it is di cult for brands to have a

discussion with Chinese distributors because of the
language and culture barriers.
The expectations from both sides are also usually

di erent: Chinese distributors often want to see
quick and signi cant pro ts when brands want to
set up their Business in the medium-long term.
Therefore, it is advisable that companies ensure

partners are reliable, have the right motivation, can
perform everything speci ed in the contract, and
are allowed by law to ful l the promises in the
contract by checking the reliability of partners via
independent third-party sources. Local partners you
trust can help you access the quality distribution

networks. China with our push noti cations.
Brands should also settings.
invest to develop a strong
relationshipPowered
with distributors
by since “guanxi” or
Don't Allow Allow
relationship is fundamental to business culture in
China.
See also Tmall B2D new solution for distribution
6. INCREASINGLY COMPETITIVE
MARKET
China market is viciously competitive, and
competition is not just from global corporations but
also and increasingly from “national champions”
that China aims to build to compete with foreign
companies.
The rising incomes of Chinese people over the past

years have both increased the size of China’s middle
class as well as their purchasing power.
Moreover, Chinese government also aims to

continue its economic growth through domestic
spending due to US – China trade war.
So more multinational companies come to China

and domestic rivals attempt to take advantage of
that growth in consumer spending.

This intensi es the competition, making
Noti cations it more
can be turned o anytime from browser
settings.to recruit and retain
di cult and costly for brands
its customers.
7. FAKE MARKETING CHALLENGE
Roughly one-third of Weibo’s 337 million users have

shared or liked Chinese pop idol Cai Xukun’s new music
video Wait Wait Wait, but it is almost certainly a bogus
gure.
Fake followers are a fundamental part of Chinese

social media platforms, threatening e-commerce
credibility and eroding trust among consumers.
Chinese consumers trust peer reviews more than

brand advertisements. Before making purchases,
they usually check how well and often the products
were mentioned on social media as well as how
popular and active the brands are. They also check
product reviews on e-retailer platforms.
As buying decisions are in uenced signi cantly by

such social indicators, KOLs or merchants buy fake
accounts or fake reviews to increase their credibility.
These services are cheap, currently around

US$0.003 per account. China with our push noti cations.
Many of the agencies settings.
that buy and deploy bogus
accounts also sell the
Powered by services of low-paid humans
Don't Allow Allow
employed to spend their days liking and forwarding
content.
When Western brands open their Chinese social

media accounts, they may not even be aware of the
practice of fake followers, let alone how much of the
engagement they seem to be getting is from fake
accounts.
This problem not only raises the costs of marketing

in China, makes it harder for brands to measure the
real ROIs but also forces Chinese consumers to be
cautious against branding and marketing in general,
which will hurt brands in the long run.
SMCP “[Chinese consumers] have been

through all sorts of scams, fake companies,
fake products, fake services, etc. They have
reached a point where they don’t trust what
a brand says about itself,”
8. LACK OF MATURITY AND EXPERIENCE

OF LOCAL PARTNERS

settings.
Here are two factors explaining the lack of maturity

and experience of local agencies:
First is the “recent” opening of China to the

capitalist world after years of hardline
communism led by Mao during the Cultural
Revolution.
Before, Chinese media had only a single voice that is

of the state; besides, there were no real
communication.
Once things started to change, communication

agencies have to develop and expand fast in order
to deal with the opening of China to the world.
Secondly, China’s education system pushes

students to learn by heart instead of to think
creatively.
What for? Just because they need a good memory to

be able to memorize thousands of characters that
make up Chinese language.
Therefore, Chinese students have had not many

chances to develop a sense of creativity, which
results in a lack of quality pro les in the world of
communication and marketing.

settings.
Conclusion
Despite numerous challenges, many international

brands have managed to yield admirable
achievements in this market.
The key to success is to keep your brand DNA while

being exible enough to adapt according to China’s
unique business, media and consumer culture.
Having a reliable local partner who not only knows

Chinese market and culture but can also understand
and work well with their foreign clients would be
invaluable to guide you along the way and help you
avoid unnecessary mistakes.
LEARN MORE ABOUT GMA
Marketing to China is an agency specialized in digital

marketing and communication on Chinese social
networks. (O cial Website)

We advise foreign entrepreneurs wishing to enter
settings.
the Chinese market, work on their SEO and e-
reputation.
We accompany them in their search for the local

distributor best suited to their brand.
Thanks to our services, your visibility on the

Chinese market increases signi cantly and the
launch of your brand in China is a success all
along the line.
FEEL FREE TO CONTACT US (EMAIL IS

THE BEST WAY)
1. to know our solution / Pricing (we are a ordable

do not worry 😉 )
2. To receive our case studies
3. to speak to one of our consultant (for free)
4. To get a White book about how to export in China

(free download)

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ABOUT THE AUTHOR
Gentlemen in China
GMA analyze Marketing trends and give
to professionals the best Tips to
succeed in China, with a focus on fast-
moving Digital World. We are a pure
Digital Agency based in Shanghai
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1 COMMENT
peter on May 5, 2020 at 7:47 am
Really good article, and perfect sumup

doing business in China seems really good in 2020,
what do you think Gentlemen?
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5/7/2020 Top 10 Challenges Facing Foreign Businesses in China today - Marketing China

Marketing to China: Stay up to date on

TOP 10 CHALLENGES FACING FOREIGN

2. Adaptation and localization of Business Marketing to

5. Build Trust Marketing

8. Fake marketing challenge deeper

understanding of both Chinese and western culture information see

To avoid such problems, it is important to have an RECENT

Most businesses are required to have a standard

permitted to undertake and is issued by municipal To

Besides, international marketers also face the unfair

80% of the world’s counterfeit goods come from

Foreign rms have long complained that enforcing

Since joining the WTO in 2001, China has

Powered by Don't Allow Allow

Despite the government’s recent progress in

Logistics in China is a highly fragmented industry.

Additionally, large trucks are restricted from some

Besides, most of China’s warehouses, distribution

5. SALES & DISTRIBUTION CHALLENGE

Powered by Don't Allow Allow

With 1.4B people, there is a customer for any

There is still a void between Chinese distributors

Meanwhile, it is di cult for brands to have a

The expectations from both sides are also usually

Therefore, it is advisable that companies ensure

trust can help you access the quality distribution

See also Tmall B2D new solution for distribution

The rising incomes of Chinese people over the past

Moreover, Chinese government also aims to

So more multinational companies come to China

that growth in consumer spending.

7. FAKE MARKETING CHALLENGE

Roughly one-third of Weibo’s 337 million users have

Fake followers are a fundamental part of Chinese

Chinese consumers trust peer reviews more than

As buying decisions are in uenced signi cantly by

These services are cheap, currently around

When Western brands open their Chinese social

This problem not only raises the costs of marketing

SMCP “[Chinese consumers] have been

8. LACK OF MATURITY AND EXPERIENCE

Marketing to China: Stay up to date on

Powered by Don't Allow Allow

Here are two factors explaining the lack of maturity

First is the “recent” opening of China to the

Before, Chinese media had only a single voice that is

Once things started to change, communication

Secondly, China’s education system pushes

What for? Just because they need a good memory to

Therefore, Chinese students have had not many

Powered by Don't Allow Allow

Despite numerous challenges, many international

The key to success is to keep your brand DNA while

Having a reliable local partner who not only knows

LEARN MORE ABOUT GMA

Marketing to China is an agency specialized in digital

networks. (O cial Website)

We accompany them in their search for the local

Thanks to our services, your visibility on the

FEEL FREE TO CONTACT US (EMAIL IS

1. to know our solution / Pricing (we are a ordable

2. To receive our case studies