Entering China: Top 5 Takeaways from the CBBC SME China Forum

Fiona Parnell
International Digital Marketing Adviser
28th September 2017

This week, around 250 SMEs from around the country gathered at Bristol City's Ashton Gate Stadium for China Britain Business Council's (CBBC) 5th SME China Forum. The day started with a number of introductory talks, including an interesting and entertaining address by Jin Xu, Minister Counsellor, Commercial Section, Embassy of the PRC (People's Republic of China). This was followed by a morning of presentations and panels from businesses and organisations who are already exporting to and operating in China. 

I work for Business West in the Department for International Trade, helping to advise SMEs on their digital marketing and in particular their international digital routes to market, be it their ecommerce website, the potential of emarketplaces, social media, search engine advertising, amongst the array of other digital opportunities that present businesses today with global opportunities.  So I got to thinking; what knowledge could I take back to my clients. What would be my top 5 China takeaways (no pun intended!)?

Takeaway Number 1

So my first takeaway from the Forum would be; that you are going to need partners. Without a shadow of a doubt. Every company that gave their story said it and I believe them. All of the companies that gave a talk chose to become a member of the CBBC as it gave them unique insight, support and access into the China commercial and cultural environment. They also partnered up with the DIT (Department for International Trade) both in the South West of England and in China. 

Takeaway Number 2

My second takeaway is that you will need to protect your brand BEFORE you enter the Chinese market. It is vital to register any trademarks and copyright before you go to China (you will probably need some help with this - partners again!).  Sean Clarke, Head of Rights and Brand Development at Aardman, gave an insightful talk about this, as they have lots of experience of having to protect their brands in China. His advice was to have a comprehensive Chinese Trademark Policy. Aardman also employ a local power of attorney to represent Aardman in China, and they also have strong brand guidelines that all their commercial partners need to adhere to. 

INTERESTING FACT: They are building 14 cinemas EVERYDAY in China!

 Takeaway Number 3

My third takeaway is to know your market & target personas… Entering any new market, be it Europe, the USA or China always starts with research. There is lots of desk research you can do. You can research your competitors, local and international - what are their market penetrations like in China. You may need some help with this (partners again!). UWE has a fantastic scheme where by local businesses can access the student population to help them with international projects. Alternatively, you can look at translation agencies or freelancers. 

You are going to have to visit China as this will help with market knowledge. DIT and CBBC in association with their partners run trade missions to China. All of the companies that spoke at the conference had visited China before they entered the market and they all visit regularly. It is part of doing business with China. Simon Craddock, CEO of Onsight stated "make friends before you do business in China". It is now that his early efforts (and 8 visits I think he said!) are paying off.

Giles Corbett founder of Ksubaka, tech & data company, presented some primary research they had undertaken for CBBC literally last week in Chinese shopping malls and stores. The research wanted to identify across China why Chinese consumers would buy British products. Over 30,000 surveys were completed and below is a summary of the results:

•Top reasons for choosing a British product: quality, safe, expensive (price is not relevant, interestingly enough)

•51% of respondents said they preferred to buy imported brands

•Top reasons to convince a new Chinese consumer to buy a British drink: friend recommendation, celebrity endorsement (which is really big in China. See below!) and high quality packaging.

Takeaway Number 4

My fourth takeaway for SMEs is to localise (which is much easier when you know your market!). Ian Hunter from WCBS, gave an interesting talk; they sell school management software and started off in the market by targeting International Schools. Now by adapting their product and translating it into Mandarin they have opened up their market enormously. So he recommends taking advice and "don't shoe horn your product into the Chinese way of life. Unless you localise it, it won't be a success".

David Harland, CEO The Eden Group, who currently are in the midst of developing 4 (yes 4!) Eden projects in China, always work with partners so they can be relevant to the local environment (partners again!). Chinese consumers don't want what they have already got. They want things that are new and innovative and so by working with partners Eden can understand and meet this audience demand and yet balance it with their experience and brand values.

INTERESTING FACT: When you advertise a job in China the salary is the take home pay, not the gross pay! Important to know this or you could end up having to overpay your staff!

Takeaway Number 5

My final takeaway (as a digital marketing adviser, it would have to be included somewhere) is to look at the digital opportunities.

There was a great talk on WeChat and the ecommerce opportunities it presents businesses by Adam Knight, Co-Founder of Tong Digital. We learnt that WeChat is a super-app! It has around 938m monthly average users who use it on average for over an hour a day. 40% of Chinese consumers now carry almost no cash because they can buy things using WeChat Pay. They can do almost everything they need to using WeChat - chat, socialise, buy, game and more.  Things to think about again are localising your offering to Chinese consumers. And my one caveat here is that you will need partners to help you, and some money! 

Adam quoted a round figure of around £50k as a budget to set up your WeChat store and start marketing; not small but the ROI could be great for those ready to embrace the Chinese market. (£20k of that budget is for your “KOL” which is influencers to you and I). Becky Li, KOL, has worked for a famous American handbag brand and recently sold 1200 bags in 1 week. She also recently worked for Mini and sold 100 cars in just 5 minutes! 

So to summarise, market entry into China: my key takeaways from yesterday's CBBC SME China Forum are partners, partners, partners. There is plenty of expertise out there. Use this expertise and support to help you:

• Protect your brand

• Understand the market

• Understand your personas in China. 

• Visit China and meet the right contacts

• Set up deals with partner

• Localise your offering

• Look at digital options 


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