Pathways to Market – China
China’s phenomenal growth has generated an increased demand for Australian products and services. A successful entrance into this market could help your company to increase sales, achieve economies of scale and improve profitability.
Entering foreign markets can prove costly in terms of time, money and resources and it is easy to make expensive mistakes. Therefore, thorough preparation is essential. This is especially the case when entering the China export market.
Businesses should examine their export readiness from an external and internal viewpoint by answering the following questions:
Is Your Business Ready?
Product: Have you test marketed in Australia and what have been the results?
Process: Can you scale your business to support expansion?
Promotion: Who can promote your company? (testimonials?)
Customer knowledge: Who are your customers and what do they want?
Perspective: Who are you competing against? Is there a Market for My Business? Is there Demand for Your Product or Service?
Understanding of the current market status and demand will help you position yourproduct or service correctly in the market place.
Who are the major competitors?Identifying the competition is important to determining your sales and pricing strategy.Decide which methods of selling and distribution to use.
How to enter the China Market? Should your business: Sell through a distributor? Establish its own foreign office?Form a joint venture? This is an important consideration because it determines the risks you take and the amount of investment you expose yourself to.
Duties and Regulations Are you aware of: - Import duties on the product; - Other barriers to importing: local taxes, freight costs between Australia and China, foreign market regulations, (i.e. quarantine and labeling standards), Consumer protection rules, Product standards?How do I Avoid the Pitfalls? Due Diligence testing and product sampling is essential in the establishment of a partnership. Leaking of IP occurs more with contract orders and is one of the reasons why when entering the Chinese market you need to link your entry strategy with your long term objectives and choose a partner based on your future goals rather than cost alone. Full commitment to the project is required, both time wise and financially. This is imperative to a successful strategy being developed.
What Support is there for My Business?Government: State, local, Austrade, grants. (Export Market Development Grant, New Exporter Development Grant, Export Finance and Insurance Corporation).
Network: chambers, associations, ExpatConnect, repast, mentorsPartners & market makers: suppliers, distributors, JVs, channel partnersThe opportunities that China offers Australian companies are undoubtedly growing, howevera comprehensive understanding of the market and the development of relationships with key industry and government contacts is critical. While this knowledge and contact network canbe developed in-house, a more time and cost effective way to achieve this is to employassistance from China specialists.
If you have any further enquiries, do not hesitate to contact Vanessa Xing on: 02 92125505 or 0404482539 Or meet her in our BSI Sydney Office: Level 3, 51-57 Holt St, Surry Hills NSW 2010
"The market research report was thorough, well researched and left me with a thoroughunderstanding of the local industry. The road show was informative, but more importantly delivered concrete results. My company is now successfully operating in China with the help of a local partner. It is these results, which I believe differentiate BSI’s services from other companies."
Felix La Spina – CEO Webit Technology (Software Provider)
"I have no hesitation in recommending Vanessa Xing for any company considering entering the China market. Not only can Vanessa undertake and deliver a professional, practical and topical market assessment report through her network of contacts here and in China but she can also assist the company by getting them started in China – key introductions, assisting with contract negotiations and compliance with regulatory and licensing requirement and facilitating on-going communications…"
John Beale - Export Director of Sweet William (Food Manufacturer)
"Vanessa’s contribution in research and forming well-considered contacts and then organising and scheduling meetings in the China market for possible venture partners,has enabled Marvel Glass to set up a partnership in Beijing with confidence.Her on-going association and helpful advise means that if there is any problem associated with our Chinese partners, she is able to rapidly sort things out before mistakes are made. She is also very skilled in piloting one trough the pitfalls of the Chinese establishment, Government red tape and advising on local customs."
Doug Tweed - Founder of Marvel Glass (Engineered Product)
Extracts of 'The Financial Review' Article by Damien Lynch