March 9, 2014

5 Helpful Tips for Launching a Business in China.

Image of Sanlitun

Over the past decade, China has become the rising star for its economic growth and technological development, so it’s no wonder why many foreigners look to launch and expand their businesses in this Eastern goldmine. However, establishing a business in this diverse country is not as easy as it seems. Verve International offers the following 5 helpful tips to those who are looking to enter or launch business in China.

Tip 1 – Research, Research, Research

If you want to have a successful business in China, make sure you know what and whom you are dealing with. Knowing your market and your consumer is very important; it will ease the process of setting up your business. Having done all the necessary research will take the jitters away and will help you prepare for the unexpected. Doing the research is well worth the time when your business becomes a billion-dollar enterprise in the land of the Dragons.

Tip 2 – Seek advice

The Chinese legal system is very different from the western world. What Westerners consider as legal illegal may not always be the case in China. With that said, it is important to seek legal advice from local lawyers who know the ins and outs of Chinese law. Such legal advice generally includes: how to develop and set up your business, the overall structure of your company and employee contracts. Legally-speaking, it is a rigorous and time-consuming process, so we suggest you do it 5 months in advance, before launching your business in China.
Seeking financial advice is just as important. Anything that has to do with bank statements, internet banking, auditing and government taxes must be considered carefully. As with the legal side of things, it is a strict process and generally takes about 5 months to start. And it doesn’t stop there. We advise business owners to continue to seek financial advice. Business owners can either go it alone, or hire an external consultant on this matter.

Tip 3 – Know your market

According to research, Chinese consumers favour and have a higher tolerance for, local brands. However, they still perceive foreign brands as role models. Over the years, brand awareness has been rising in China, but brand loyalty is still low. As you can see in the graph below, Chinese consumers choose different devices when conducting activities.

Graph of Consumer Loyalty in China

Chinese customers will have three to five brand choices when it comes to products, so they will not stay loyal to one brand. Therefore, it is important to have a business in which you don’t have that many competitors- because the more competitors you have, the harder it is to become the one and only brand for Chinese people. Our advice is to choose your brand wisely, make your service unique and exclusive so customers will only come to you for your services and products.

Tip 4 – Be adaptable

Many international brands such as Starbucks and KFC have seen success after their openings in China. Why? Because they know how to be flexible and they don’t limit themselves to their classic products: products that work in North America and Europe. They understand the importance of adaptability and “sinifying” their products; being able to adapt to local Chinese preferences, being able to create something that Chinese people will like.
For example, Starbucks started serving green-tea lattes to a tea-loving nation so they can get hooked on their coffee outlets. KFC started making meals with rice, vegetables and chicken to attract the Chinese clientele.

Chicken picture

Tip 5 – Hire the right people!

What is a successful business without a team of hardworking, efficient and goal-oriented people? Having a diverse team is good because each team member brings a different set of skills and experiences to the table. Especially hiring a local resident who is familiar with the Chinese culture, market and who can help you break the language barrier. Building a strong team will definitely help your business achieve success.
Launching a business in China takes time, money and resources; but following the aforementioned tips, will help you succeed, save you energy and save you money.

Verve International specializes in Brand Consultancy; helping overseas companies launch their businesses in China. Our local experts bring a wealth of knowledge and experience that will make your launch in China enjoyable and stress-free.
For more information please visit: or call (+86) 21 – 6447-0121
Written by: Lindsey Lu