The Secrets to Finding Small Business Success in China
April 13, 2018
For small businesses in the US that want to go global, China is an excellent starting point, even despite the looming trade war. Whether you want to source your supplies from China, or export your own goods to the vast market, the Asian country has many opportunities for small businesses.
Sourcing Products from China
Sourcing products from China is a sensible decision for US small businesses that need a large quantity of goods for a reasonable price. But finding the right manufacturer is not an easy task, especially if you’re unfamiliar with China.
The easiest and fastest way is by looking online. Global databases like Alibaba and Global Trade aggregate the contact information of many manufacturers in China. Make a shortlist of 10-15 manufacturers and contact each of them.
Decision for US small businesses that need a large quantity of goods for a reasonable price. But finding the right manufacturer is not an easy task, especially if you’re unfamiliar with China
There are several US government bodies that provide global trade assistance for small businesses. You can contact the US Embassy in Beijing or one of the several US consulates in China, as well as Export.gov, an agency helping US small businesses to export their products.
Alternatively, you may ask around among your existing business contacts for recommendations. You can even attend international trade shows that Chinese manufacturers typically visit.
Exporting to China
The Chinese market is vast: reaching 1.4 billion consumers is an immense opportunity for US small businesses. While it’s unlikely that all of them will buy your products, with some work, you can find a suitable niche and target it directly.
Since China is known for manufacturing low-cost items in large quantities, you shouldn’t aim for that market, as it’s already saturated with cheap local products
Do thorough market research. Since China is known for manufacturing low-cost items in large quantities, you shouldn’t aim for that market, as it’s already saturated with cheap local products.
Instead, focus on what makes your business different. Find a unique selling proposition (USP) that appeals to Chinese consumers and build your marketing efforts around it. US quality and know-how are important product features that attract customers in China. Work with these to build demand for your products.
You can find a niche market for your products that’s just the right size for you, and you face less competition from large enterprises as compared to other parts of the world
Compared to the US, the Chinese consumer market is very fragmented across region. This means that large companies using a uniform national approach face unusual difficulties when marketing their products. They meet different regulations and customer behavior in different provinces what works for them in Sichuan may not work at all in Xinjiang.
For small businesses, on the other hand, this fragmentation is a big advantage. You can find a niche market for your products that’s just the right size for you, and you face less competition from large enterprises as compared to other parts of the world.
Research the different regions in China and find out which one is the best starting point for your business.
Business culture differs in China and the US. You need to be aware of this before making contact with potential business partners. But knowing the culture is just as important when you plan your marketing campaign.
Your business will need a different approach to win over Chinese consumers. Make sure you do your research and adapt your campaigns to the market.
If you don’t have a lot of time to read heavy books on business culture, check out our international business guide on China. Besides learning about the culture, you can gain essential practical knowledge about tariffs, exporting and importing, and much more.
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