executive visits in China

A Hot Tip about Business Environment in China

Last updated: 29 Feb 2012

When entering the China market, a well-planned, strategic visit by key executives can help companies to get ahead and get a better overview on the opportunities and challenges China has to offer.

sim (selective international management) 王隆(上海)商务咨询有限公司 7/F A Mansion, Unit 706 291 Fumin Road Shanghai 200031, P.R.C. 中国上海市富民路 291 悟锦世纪大楼 7 楼 706 室 Tel 联系电话: +86 (21) 3319 9933 Fax 传真号码: +86 (21) 6170 1389 Ema il 电子邮箱: info@sim.biz web: www.sim.biz 2012/2/27 Executive visits in China When entering the China market, a well-planned, strategic visit by key executives can help companies to get ahead executives can learn through their own experiences, as well as by building up a The China market’s potential is network of contacts and connections. legendary, but not every foreign- They will then have a much stronger invested company will find success platform from which to make the right here. A lack of knowledge, unexpected choices in good time. complications or simple bad luck can force a new business to review their Seeing is Believing strategy or even to close. Such unfortunate experiences can turn out to There is often a wide gap between be very costly for a company, leaving a outsiders’ perceptions of China, and the dent in their finances and their reality. Information about the country’s reputation. They can also inflict serious rapidly evolving business environment damage on their corporate structure, ages quickly, and many accounts are and cause them to miss out on many highly subjective. A close encounter potentially lucrative opportunities. with the opportunities and challenges Businesses which are new to China facing a business here can be very should do their best to avoid these helpful when foreign executives need to pitfalls by getting to grips with the get a handle on what is really going on. realities of the China market as quickly For example, exploring the latest as possible. One way of doing this is to statistics is often an important part of arrange for the company’s key the initial research into a new market. executives to come to China very early But experiencing the number of people on in the set-up process, so that they walking along the streets of a Chinese can really get to grips with the business city such as Shanghai or Beijing and environment. These visits need to be seeing the mass of shoppers on their more than simple business trips – they commercial streets allows an executive have to be well-planned, focused to develop a deeper impression of the learning opportunities. potential sales the company could achieve. An Informed Decision Get Connected Should a company enter the Chinese market, and if so how? Through first The right connections will also help. tier cities, or lower tier cities, in the Valuable insights from other north, or in the south? Which legal professionals with relevant experience structure is the most beneficial, and the can allow the newcomer to get a clearer least risky for the business in China: a picture of their potential partners and WFOE, JV, or Representative Office? suppliers, and their reliability. It could Such decisions will have major also help them to understand clients consequences on the company’s future and customers, and their needs. The activities in and with China. But once right connections are also valuable in the decision has been made and applied China given the great importance of it is very costly to take a step back, and relationship, or guanxi, in local culture there are plenty of competitors ready to and particularly within the business take great advantage if someone else community. Chinese partners and makes a mistake. The ability to make important clients appreciate and place these decisions in an efficient way is great importance on the relationship also vital. While rash decision making is they have with the executives of a never advisable, companies taking too foreign company. The relationship may much time to consider these questions even be considered more important might see their potential market share than the business itself in some cases. diminishing – even if, in the end, they To foster such relationships, it is make wise decisions. Executive visits important that the executives of a are a powerful tool for gaining inside foreign company participate at least knowledge at an early stage, so that once in a face-to-face meeting with sim doc title Page 2/2 their Chinese counterparts, so that they Hidden Potential feel respected, valued and trusted as partners. In addition, as in any culture, These different ways of capitalising on a good relationships allow the key executive’s visit are often development of sustainable and trusted undervalued. A company that learns to partnerships which are always essential make full use of the opportunity to factors for a successful business deepen their leaders’ knowledge and venture not only in China, but all over strengthen the decision making process the world. will feel the benefits. A Late Visit About the Author: Executive visits are not only useful for Aurélie Diller is head of marketing and companies seeking to launch a new branding at sim (selective international business in or with China; they are also management), a Shanghai-based, Swiss extremely helpful for those who have consulting company. sim is specialised already established their business here. in providing sustainable management The company could increase its visibility solutions for foreign companies entering through the key executives’ the Chinese market, and a strong participation in conferences and other platform in Europe for Chinese activities. The executives themselves investors. also gain the chance to receive insights into the success of their products and services in China direct from local clients and partners. Existing and potential clients, partners and suppliers can also indirectly provide feedback on the competitors’ strengths and weaknesses, offering the executives an opportunity to get a deeper look into the current market.
Posted: 26 February 2012, last updated 29 February 2012

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