Getting to China: The power of partnerships

This is the fourth article in a 5-part series on how you can be successful in China. It’s based on the 5Ps of Global Marketing Strategy Framework, first introduced in The China Factor. In the previous articles we covered how you can redefine Product, Price, Promotion to develop your China strategy. It’s now time to examine the Partnerships P, which is the original ‘Place’ P redefined.

When selling to China, or to many other emerging countries, for that matter, going through partners is often essential to doing business.

There are numerous considerations when engaging a partner to do business in China.

1. Partnerships are key and so is your involvement

It’s important to set expectations here. Ensure your customer is ok going through a partner or channel distributor that is representing you, rather than expecting to be face-to-face with you for every business transaction. In some industries that sell high-end equipment or solutions, the customer is buying ‘you’ – your brand, your expertise and your guarantee. Customers may be understanding about the partnership process. But they also may have expectations that you will show up to represent the product or solution you’re offering at key points in the process. Customers want to know that you’re backing the product that they signed up for.

2. Consider partnering with your customer, if the business model allows for it

This is particularly convenient when your product or solution involves a revenue-generation service. Partnering with your customer demonstrates you’re there for the long run and that you care about their success. It also shows you’re willing to share the potential risk of your customer who’s selecting your unique solution. Chinese businesses are good at forming these customer partnerships. It’s been a key success factor in the global expansion of Chinese firms. Partnering with local economies and companies has helped their customers succeed and enabled them to build trust with clients around the world.

3. Joint ventures enable market access, but you need to consider IP protection

Partnerships in the form of joint ventures (JVs) can be tricky and require careful consideration. JVs are an opportunity for your partner to learn more about your particular technology or solution. If the agreement is written in a way that allows them to have access or rights to your product or intellectual property, this could pose a competitive threat to you. Take your time crafting a joint venture agreement. Have it reviewed and press to explore other options if you’re not comfortable with the parameters. Access to the Chinese market can be an exciting opportunity. But don’t let your enthusiasm overtake your prudence: Make sure you, your business and your intellectual property are protected in the long run.

Fair trade, market access and amicable partnerships are not always easy endeavors, given the different goals and challenges of each party and the competitive spirit to succeed ‘first’ or more. Canadian companies can push themselves to succeed in this market, by learning from each other’s experience. This will help us do things differently to achieve future growth and economic success in this high-potential market. 

There’s a lot to consider when doing business in China. If you’d like to take a deeper dive into putting your own 5P’s strategy together, sign up for a Demystify China workshop or Global Marketing Strategy Workshop to work through it in real-time.