China is experiencing extraordinary growth of over 6% each year meaning it’s an excellent opportunity for Australian business ventures in the growing market. This isn’t just an exciting time for large corporations as many small Australian businesses have thrived in the Chinese marketplace. This success is partly due to the high trust Chinese consumers place in the ‘made in Australia’ branding which guarantees an assurance of quality. Quality is a highly sought after comfort as Chinese faith in local products is extremely low. While Australia will never be a primary supplier of FMCG to Chinese consumers, it does fill a very sought after niche in the market which is ever expanding. Meanwhile the China-Australia free trade agreement and close geographic proximity give Australian businesses the competitive edge in the Chinese market over foreign competitors.
How to Enter the Chinese Market?
Firstly, a business looking to expand into China must understand the concept of ‘guanxi’ – which refers to the quality of your agent or representative’s contacts, in other words, it’s not what you know it’s who you know. Business introductions are vital in this market environment as Chinese companies will NOT conduct business with unknown contacts.
Trusted relationships in China are particularly important to avoid being scammed and to receive a fair deal for your product. For this you will need someone with established business connections in China who is familiar with the local market. Consultation on your business strategy is also important to make sure you are conforming to extensive government policies surrounding foreign investment.
The products must be properly localised to ensure consumers will be perceptive to purchasing and in some cases may need small alterations. Regional consumer markets in China are highly diverse with different income levels, taste and sophistication, not to mention the different culture and customs. Understanding the nuance in the market is something local connections will help you understand. Business success in one market does not guarantee success in another, for example, McDonalds was a failure in Vietnam.
Once your business has entered the market, local partners are absolutely essential to grow your business. Local partners leverage resources such as sales channels, customer bases and low production costs which are critical as the Chinese market is crowded and competitive, yet ripe for growth. Unfortunately, there is no one stop guide to growing a successful business in China, each business will need a carefully laid out and adaptive strategy to guarantee the best chance of success.
How can Ausmate Help?
Ausmate is an Australian-based multinational company who have extensive ‘guanxi’ (Chinese connections) with the right people and companies. They are dedicated to overseeing Australian business growth into the Chinese market through an extensive local buyer network. They will provide consultation and a package plan to get your business ready for export into the Chinese market.
So if your businesses is looking to expand and grow in one of the most exciting markets in the world today, contact Ausmate now to see how they can make this opportunity possible.