Welcome to the Getting to China series, designed to help you make a decision about selling to China.
The China question is a big one with a lot of media focus on opportunities in China and with China. This naturally leads to the question: is China a ripe market for you? Discussions around CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) also keep coming up so what impact or opportunities does this pose?
By following the five steps that will be covered in the series, and using the 5Ps of the Global Marketing FrameworkTM, you will be able to build the essential components of a China entry strategy.
Every two weeks, we will introduce you to one of the 5Ps and provide you with guidance on what you need to consider.
First let’s look at why you should sell to, partner with or even compete in this market.
3 reasons why it’s time to get smart on China:
1. China does business differently
- China’s rise, strength and massive market opportunity is indisputable.
- China has been among the world’s fastest growing economies, with real GDP growth averaging 9.5% through 2017, a pace described by the World Bank as “the fastest sustained expansion by a major economy in history.”1
- Doubling its GDP every eight years helped raise 800 million people out of poverty. Result? China is seeking quality goods from the west to address the increasing demands of its rapidly growing middle-class. This is your opportunity.
- Even if you don’t want to do business in China, you need to understand how they conduct business because they’re likely to show up as competitors in other markets. And they’re here in Canada, looking to invest in your companies.
2. Global competitiveness is blowing up
- The world is getting larger and smaller at the same time.
- Western-based companies no longer set global business standards.
- Competitive dynamics have changed. There is more competition, a different kind of competition, they are faster and play by different rules. You need a new playbook.
- The same standard formula you use for product sales cannot be replicated in different markets. You need to adapt and localize your strategy to address varying customer needs, especially in emerging markets.
- You need to become innovative in how you do business.
3. Diversify your markets and beat the trade wars
The trade war chaos is emphasizing the need to diversify your export markets. A recent example is our dependence on the U.S.
- Don’t have all your revenue eggs in one basket. It’s a risky, unreliable approach
- Pursue high-growth emerging markets and expand your revenue sources.
- Check out this article on the top 5 sector opportunities for Canadian businesses in China : agri-foods and consumer goods; automotive; clean technology; infrastructure; oil & gas.
- Consider the competitive dynamics in each market, then customize your positioning and marketing mix accordingly.
A sneak peek at what’s to come in this series
Here’s a sneak peak into what we will be learning and applying together in this 5-article series over the next few weeks. We will be sharing insights and then guiding you in applying it to your particular business as you explore the China opportunity for your own company.
In the 5Ps of Global Marketing Framework, I have evolved and redefined each of the traditional 5Ps of marketing to address emerging market dynamics.
It’s no longer about product but offering Innovative solutions. The price ‘p’ has evolved to value-add because discounting wars are a lose-lose game. The place ‘p’ is now about the importance of partnerships, as well as the risks. The promotion ‘p’ has evolved to customer relationships and cultural IQ. The final and 5th ‘p’ is politics, and the power politics and government collaboration play in influencing business decisions and on your ROI.
By the end of the series you will:
- Develop your cultural IQ by learning more about how China does business in five key areas.
- Gain strategies and tactics you can use to modify your approach by learning about and from China.
- Sketch out a market assessment strategy for doing business in China or for competing with China in another market.
One of the key benefits of this series is that it will help alleviate some of your concerns around risk. We will also help you bridge the gap between the deluge of information about exporting to China and your actual go-to-market execution.