Why there’s a lot of interest in the Chinese market
China’s growing consumer market is attracting companies from all around the world.
With over 1.3 billion people and around 500 million in its middle class, Chinese consumers are playing an important part in the global growth of companies.
It is a market that is hard to ignore. The 500 million middle-class consumers are open to purchasing items that they feel would add value to their lives and this consumer lifestyle is being fed by businesses looking to grow.
Local companies taking advantage
Local Chinese companies have been able to take advantage of the size of China’s market and have birthed several large organizations such as Tencent, Alibaba, Baidu, Ofo, Didi Chuxing, Toutiao, Bitmain, Easy Home, Meizu and so many others.
For example Tencent owns WeChat which is not really a global name. However, WeChat has about 1 billion users and is larger than Whatsapp which is more popular around the world.
In essence, China’s market can account for a significant part of company profits and is an ecosystem on its own.
How Foreign companies are tapping into China’s market
Many large foreign brands are tapping into the Chinese market for growth. Companies like Starbucks, Yum Brands (owners of KFC), Apple, Coach, Nike, Volkswagen, Intel, Samsung, JaguarLandRover and so many others are leveraging china for their global growth.
Less reported though, are stories of small and middle sized foreign companies that have established and grown in China. For example, Naked-Hub, a co-working space founded by a South African, Grant Horsfield was able to grow from one co-working space in Shanghai to over 20 locations within two years. Nakedhub was eventually acquired by American firm, WeWork for a reported sum of $400m.
Starting a business in China
To tap into the China market, you would need to play by China’s rules. Depending on your business model, you will probably need to register a business in China so you can collect payments and remit to your home country.
The things that need to be considered when setting up in China are a bit too long to put into one article.
- You’ll need to decide the type of company you’ll need to set up in China,
- An understanding of the local market for your product or service,
- A decision on the location to set up,
- Identify how to promote and sell your product or service to the target market.
To help non-Chinese individuals, small and medium sized companies, as well as large sized companies looking to set up in China, Afriscaper Research & Consulting recently developed a practical guide for establishing and growing in China, leveraging local knowledge and global standards.
The Guide is available for download and you can see the link to view the summary of the guide.