The Misconceptions of Western Brands Entering China

Top Challenges for Companies Trying to Navigate China Business

We’ve heard the saying, “the great things don’t come easy”. This will resonate with companies who try to establish a presence in China – the largest market in the world.

While China is viewed as a golden egg of opportunity, many Western companies are deterred from entering the market due to unique challenges. Witnessing failures of big corporations in China such as Google, M&S, Tesco and Amazon, discourages further. Sinowei offers services to break down these barriers and de-risk the route to market.

What are some of the key challenges?

Language Barriers

Unlike in Europe where companies are more likely to find common languages to communicate in, most people in China speak Mandarin. Western companies expecting to get anything done without the language or consistent translators will find navigating business almost impossible.
The added danger of not having accurate translation services at hand can result in translated brand names that are interpreted different to what they intend – or worse, could cause offense to Chinese consumers, customs or authorities.

Lack of Deep Understanding of the Market

The perception of China as an unsophisticated market has resulted in many failed strategies which showed little to no adaptation to needs of consumers. The frenzy of trying to enter China’s increasingly consumer-powered economy, created a vacuum of misplaced distribution and marketing of products that lacked functional value for the population.

Chinese Accreditations and Regulator Applications

Foreign companies often complain about China’s lengthy administrative customs system to legally be imported into the country and sold to Chinese consumers. GACC, AQSIQ, CIQ, SAMR, Trademarking, Back Label Registration – all to be approved by Chinese authorities.

Travel Restrictions

The impact of Covid-19 has been felt around the world – but it created even more restraints on those wishing to do business in China. China’s zero-covid policy made it virtually impossible for most people to enter the country without doing at least a week of strict quarantine since 2020.

Building relationships (guanxi) and networking in China is essential for a successful business venture – but the shift to almost entirely virtual communication makes this difficult. While restrictions were eased in January 2023, many companies will struggle to restart these relationships without sufficient time and financial investment.

Additional Challenges for Companies Trying to Enter China

– Currency Exchange
– Brand / IP Protection
– Contrasting Business Structures
– Lack of Offline Touch Points
– Unfamiliarity with China’s unique social media ecosystem
– Ignorance of Chinese Symbolism and Beliefs

Without a physical presence in the country, companies are advised to find a reliable partner for China who understands the language, culture and can help navigate business opportunities.