China is the world’s most populous country, with over 1.4 billion people as of 2023. Known for its long history, rich culture, and rapid economic growth, China is a major global power.
With a GDP per capita of approximately $10,500 USD in 2023, China’s economy is one of the largest in the world. It has transformed from a primarily agrarian society to an industrial powerhouse. Manufacturing, particularly electronics and consumer goods, is a key sector. Services and technology are also growing rapidly.
China’s main imports include electrical and other machinery, oil and mineral fuels, optical and medical equipment, and metal ores, supporting its massive manufacturing industry.
CHINESE BUSINESS MARKET: HOW TO DO BUSINESS IN CHINA
In the past decade, Chinese companies have evolved to cater to the demand of the global market. In order to do this, they have rapidly grown in all aspects of business, especially product distribution.
Entrepreneurs that are new to China may find the Chinese market challenging, albeit the vast opportunities waiting for them. If you intend to introduce a brand into China, then what are the methods to successfully penetrate their market? How can you start product distribution with as little blunder as possible?
The competition within the Chinese market is stiff due to the continuous development of their business industry. However, local Chinese businesses are more open to newer and more innovative business strategies which may be introduced by foreign players, making it easier for international businessmen to participate.
GLOBAL MARKETING IN CHINA
The Chinese have a slightly different approach to their marketing practices. Western companies that employ multinational staff have greater awareness about the power of marketing than Chinese local offices that often employ student returnees and expatriates.
Out of the 4 P’s (Product, Price, Place and Promotion) of marketing; most Chinese businesses consider promotion as the only element necessary in marketing. Western entrepreneurs have the edge since they are accustomed to all.
Westerners place more emphasis on pricing and believe in indulging in comparative studies to identify the best pricing strategies for their products. However in China, products that are promoted well tend to sell better. Hence, for a western businessman to succeed in the Chinese market, it would be beneficial for him to develop a local sales team that is proficient in promotional aspects of the business as suited to the Chinese consumer base. Networking and local alliances can be helpful as well.
Over the past 25 years, China has experienced tremendous success in its economic and social reforms, leading to a dramatic improvement in the quality of living for many Chinese, especially in the urban areas.
With demands increasing, the Chinese government started a health reform in 2009, which has EUR 140 billion worth of investments.
For the short-term plan of the healthcare reform, five keys are defined: basic medical insurance system, a national essential drug scheme, a grass root medical service scheme, a basic public health service, and reform of public hospitals. These fields open tremendous opportunities for the Chinese medical industry. China can also be a huge market even for niche products.
CHINA MANUFACTURING INDUSTRY
China’s manufacturing industry has seen remarkable development and its general scale has ranked as one of the world’s best with obvious comparative advantages internationally. Currently, the manufacturing sector plays a significant role in the country’s economic growth and basis for economic transformation.
Over the last 30 years, Chinese economy has undergone a rapid growth. With a GDP of US$5.7 trillion, China overtook Japan as the second largest economy in the world in 2010. The significant growth in the economy is largely due to the contributions from the development of the manufacturing industry.
Equipment manufacturing serves as a significant industry of economic development in many countries. It has also become an integral part of the production chain in most of the key industrial industries in the world. Over the years, equipment manufacturing has morphed into a complex technological industry, demanding highly skilled workforce and an extensive research and development capacity.
Smart Grid investments in China
China has become the world’s consumer of electricity, and it is expected to double its demand for electricity by the next decade and triple by 2035. Today it is poised to become a major consumer of smart grid technology.
Smart grid is an automated, widely distributed energy delivery network with responsive and organic capabilities. The adding monitoring, analysis, control, and communication capabilities of smart grids can greatly reduce the energy consumption.
Smart grid will be an effective approach to the increasing amounts of wind energy and solar energy. China has to figure out how to bring trillions of kWh of power to more than a billion customers, with distance being one of the challenges.
