Know where your product fits in
“Selling into China can be easy or quite difficult. For example, China imports a lot of food products, so if you’re selling food, the process is pretty straightforward. But for other products—cosmetics, for example—the hurdles to get your product ‘China certified’ are higher. Whatever it is you’re selling, it’s essential that you know who you are dealing with. You have to know you can trust the Chinese agent, buyer or distributor you’re working with. It’s a more timely process than we are used to here, and it takes a lot more relationship building and often a face-to-face meeting. The wait is definitely worth it. For many companies, China is by far the most profitable export market.”
Nick Muessig, president, ExportToChina.com, Hong Kong
Play the long game
“You have to go into it with a pretty patient, open mind. Because China is growing so quickly, a lot of people go into it and expect to multiply their sales in a short time period. It doesn’t happen that way. China isn’t one nation, either. It’s a collection of markets. Every state or region is like a country of its own, with different cultures and preferences. When we first started selling into China, instead of shipping our product over to sell to the whole country, we started selling to one city—granted, a city with a population the size of Canada—Beijing. Once we had some success with Beijing, we decided to try Shanghai. As things grow, we’ll start moving into other markets.”
Stuart Lowther, founder and president, Life Science Nutritionals, Burlington, Ont.
Understand the needs of Chinese customers
“We sell to different markets around the world, and I’d say Chinese customers can be uniquely demanding. They are used to getting their own way. If you don’t ship your product when it’s supposed to go out, even if it’s through no fault of your own—there could be a strike at a port in Vancouver, or the freight trains may not show up in time—don’t expect them to give a crap. You’ll have to discount in order for them to take your product. I find it really, really helps to enlist salespeople who know China. You should have a former Chinese national selling for you. Don’t even try to enter the market if the person dealing with your customers doesn’t speak fluent Mandarin or Cantonese. Even with these people working for you, you have to educate yourself. You should do your research into the culture and what you can say, what you can do. It is important, and it pays off.”
Chris Chivilo, president and CEO, W.A. Grain & Pulse Solutions, Innisfail, Alta.
Recruit local talent
“The quickest and easiest way to sell into China is to find a local agent to sell for you. Obviously, you leave some money on the table doing that, but it means Chinese clients are dealing with a Chinese company straight out of the gate—and a lot of Chinese customers prefer that. The Canadian Trade Commissioner Service is a great resource in helping you find trustworthy agents. Most Canadian companies underestimate the complexity and the time it takes to set up operations in China. That’s because it’s pretty easy to set out a shingle in Canada. But it takes six to 12 months to set up properly in China. And it’s important to do it correctly. It’s very dangerous to try to skirt requirements and fly under the radar in China. If you get caught, you will be shut down. Again, it’s worth finding someone who can hold your hand through the process, because it’s complex, time-consuming and very difficult to navigate on your own.”
Tom Gardner, Canadian country manager, Radius, Toronto
Adapt to change
“Under the current leadership, things are changing very, very fast. The way you did business a few years ago is not the way you’ll do business now. They’re bringing in more regulations. It’ll be better for business now, because they’ll take regulations much more seriously. It won’t just be up to the whim of any one official.”
James McGregor, chairman, APCO Worldwide, Beijing
MORE ABOUT CHINA:
- Shanghai’s stock market is now open to foreigners. Should you buy in?
- Trading in renminbi is only the start of expanded Canada-China trade
- The real opportunities in China today are found farther inland
- Why Canadian businesses should pay their Chinese partners in yuan