Doing business in a new country is rarely a straightforward proposition. But consider, for example, the difficulties that two of the world's largest companies - Apple and Amazon - have experienced in their forays into China.
While Apple’s recent woes in China appear to be largely due to an inflexible product strategy, one of Amazon’s big challenges appears, to many observers, to be a lack of local-market expertise and relationships.
These companies are far from alone in their frustrations. The world’s second-largest economy is a siren’s call for many western businesses. But success remains elusive simply because most companies underestimate the cultural differences that they’ll encounter.
At VXI Global Solutions, we have a strong operational footprint in both East and West - so trust me when I say that China is like no other place in the world when it comes to doing business.
What you’ll encounter in China
Taking a one-size-fits-all approach is never wise when trying to replicate success across geographies – but China might be the poster case for the perils of making this mistake. When people think about doing business there, they tend to think they are dealing with one country, for example. But China is far from a homogeneous country - with 56 different ethnicities and a massive 297 living languages within its borders, it should be no surprise that consumer behavior can differ greatly between regions and even cities.
Then there is also the critical issue of Guanxi, which loosely translates as personal connections, relationships or social networks. Guanxi implies trust and mutual obligations between parties, and it operates on all levels - personal, familial, social, business and political. Without good Guanxi, failure is just around the corner for anyone doing business in China.
What you need to succeed
There are challenges in setting up an operational business in China - but setting up one that is successful requires some unique strengths and capabilities. My advice to anyone entering the Chinese market is to seek local knowledge through an experienced local partner that:
- Can guide and help you overcome barriers to entry
- Provide access to important business networks
- Help navigate local regulations
- Help form a deep understanding of the local consumer and culture
And of course, a partner that can ensure you have good Guanxi to increase the chances of your success.
At VXI, our vast global footprint includes a workforce of more than 10,000 in China - and we have been operating in locations throughout the country since 2005. Our experience in the Chinese market has allowed us to assist multinational companies looking to expand their reach into one of the world’s largest global economies and shape their next phases of growth. Proof of our ability to navigate the country’s cultural, policy and operational challenges is evident in accolades that we have received there, such as being named Leading Service Provider at the 2017 China Sourcing Summit.
Contact VXI if you’re looking for a partner with the experience and expertise to help your business grow and succeed in any challenging market – including China.