Early on in our journey of bootstrapping Investorist, it became apparent that having a presence in China would be crucial to our success. But when we first established our software platform there several years ago, I learnt the hard way that doing business in China is very different to doing business in a Western country like Australia, and we made a quite a few mistakes.
With the benefit of three years’ experience and hindsight, here are my tips for any business wanting to take the same path.
1. Meet face to face
Culturally, the Chinese much prefer to meet the people they do business with face to face. While they will actively do their research and make enquires online, when it comes to making important decisions and signing agreements, nothing beats meeting in person.
Another thing, the Chinese will rarely agree to a deal or sign a contract in the office or at the negotiating table. Chinese people like to really get to know you in a social setting as well, preferably over a shared meal. We call this phenomenon ‘O2O’ or “Online-to-Offline”, and it is the reason deals have been closed at our China Connection events, which match property sellers and buyers for one-on-one meetings.
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2. Speak their language
While English is mostly spoken in the larger Chinese cites like Shanghai (the biggest city in the world with 25 million people, more than Australia’s entire population) Beijing, Shenzhen and Guangzhou, many people only speak Mandarin, Cantonese or local dialects. Make sure you have someone on staff who speaks the local language or hire a translator to make sure everything is clearly understood between all parties.
3. Be a subject expert
Many businesspeople in China like to be assured that you are an expert in your field, and that you and your team can make that expertise available to your Chinese partners. As an example, in the off-the-plan property industry, the developer is expected to be the ‘subject expert’ on the project they are building, the city it’s located in, the economics of the area, suburb growth and yields, current bank lending policies, government regulations relating to foreign ownership and immigration visas, and more.
When you offer to give seminars, attend trade shows or train Chinese sales teams on your product or service, it goes a very long way in boosting your appeal and credibility as a partner they want to do business with.
4. Send senior people
Chinese businesspeople value the seniority of the personnel they deal with. Making sure a senior management representative of your company is available is important, especially when dealing with the most senior staff of the Chinese company or supplier you wish to do business with. Much like in Western culture, it sends the message that you take the deal and the relationship seriously, as you have invested in sending your top people to meet with them in their country.
5. Invest in following up and training
It doesn’t stop once you have made the initial pitch or demonstration, or signed a memorandum of understanding to do business. The more you can help your Chinese business partners to educate their customers and train their staff on your product or service, the more successful you will be. This ties in with being a subject expert, meeting face-to-face and sending over senior people to China.
6. Embrace WeChat
WeChat is the main form of digital/social communication in China, and most Chinese people, especially the Gen Ys and millennials, live on this social media platform. A thorough understanding of WeChat is essential when doing business in China. In the lead up to events, we utilise WeChat extensively to communicate project specifics directly to the property professionals most interested in learning about them.
Having surpassed 700 million active monthly users early in 2016, China’s smash hit chat app is also a payment platform. WeChatPay can be used to transfer money between WeChat users (peer-to-peer) and make payments online and with participating offline retailers, and many younger Chinese now forgo carrying cash entirely, relying on this app for all their day-to-day payment needs.
7. Host your website in China, and in Mandarin
China has ‘the great firewall’ that restricts access to most websites, and there is no guarantee your site will operate in China if it is hosted elsewhere. With Facebook and Google and most other major websites banned in China, you need to fully understand the local digital landscape if your business has any reliance on a website, uses this as a payment platform or even relies on Google Maps. You can’t rely on the way your website operates in Australia, and certainly don’t expect your website to be visible to Chinese if you have not set it up correctly and complied with China’s strict government regulations.
But with 1.357 billion increasingly affluent potential customers for your product, get it right in China and the sky’s the limit.
Jon Ellis is the founder and chief executive of Investorist.