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Taking your business to China: Going Global 101

John Jung, CEO, CTT Inc.

Thinking about two-way international trade and investment is a crucial component of any international business strategy. Like any relationship, investments of mutual benefit prove more effective and result in greater compatibility and long term success. As we build the global brand of Waterloo Region through attention to two-way international trade and investment, we always offer the opportunity to take local organizations abroad to expose them to opportunities to expand internationally. This is what we refer to as Canada Direct Investment Abroad (CDIA for short). Through this, we validate our community as a vibrant region and open the door to attract fresh ideas, resources and talent to aid in our ability to attract Foreign Direct Investment (FDI).
As barriers to international trade and investment continue to deteriorate through major technological advances in transportation and communications, Canadian companies are increasingly considering active participation in the global economy. CTT’s is here to facilitate this two-way connection.
Foreign markets, however, can be filled with pitfalls and obstacles to success. Check out these tips to consider when thinking about expansion into the Chinese market:

 TIP 1: Research your market

Check out CTT’s website and other sources that have information on your industry sector and the potential geographies where your product or services might be relevant. Other resources include:

  • Canada’s Department of Foreign Affairs and International Trade’s consular services abroad (DFAIT). Their website is a fountain of knowledge and offers small and medium-sized businesses great advice.
  • The article Canada in a Global Economy is a good introduction to global business expansion.
  • China-related resources help lay out the breadth of federal services, from export development to locating Canadian trade offices across China.
  • Business Etiquette in China resources offer priceless insight into how to build relationships.
  • Agencies such as Export Development Canada (EDC) can be helpful in providing export insurance and financing but also marketing intelligence and access to governments and agencies.
  • CTT corporate partner Mentor Works can guide you through the process to receive government funding for global expansion initiatives.

 TIP 2: Research your market.

If you are fortunate to participate in a business mission led by a mayor from Waterloo Region, you will be able to take advantage of opportunities that you would not be able to access alone. Mayors in foreign countries are revered and attract the highest levels of representation to meetings.

You can join the next CTT Mission to China with Cambridge Mayor Doug Craig on April 12-14 in Hong Kong and/or April 14- 20 in Mainland China (Chengdu, Chongqing and Shanghai). And when you go, listen, learn and experience all that the mission has to offer. Take advantage of your global status – being Canadian is a competitive advantage. We are not only nice people, but we have been existing ties with a multicultural and diverse community that equips us with an innate understanding of how to deal with our foreign counterparts. In our communications and actions we have promoted that we are a tolerant and accepting nation with a diverse and multicultural workforce – and this offers us global advantages. These missions not only help you obtain contacts but also to build new friendships with those who are keen to develop deep and lasting relationships.

 TIP 3: Understand China’s Business Culture

When traveling abroad you are bombarded by new and exciting things all around you, stimulating your senses and sometimes overwhelming you with information. But not to worry, with every visit you retain an enormous amount of insight into how to do business in China. It begins with learning about their culture and their business culture. You will absorb an immense knowledge of Chinese business norms. Among many other things, you will learn about its regulatory environment, customer behaviours and import/export practices. As you grow to understand this highly competitive marketplace, you will also realise that you will need to take more than just one trip. It takes several visits to build international business relationships.Make sure you leave your North American tradition lens home! You cannot make assumptions about what you see, how things are done or how to do business. Expect the unexpected and enjoy the pleasure of discovering new people and dramatically different business environments and opportunities. It will eventually translate into big benefits for your organization, and for you – both professionally and personally.

 TIP 4: Translate your collateral materials into Mandarin

This is especially important in second-tier cities where English, even at senior levels is not often practiced. Consider a one page brief description of who you are, what you offer and what you are looking to achieve. Consider a two sided business card, with one side in Mandarin and the other in English and bring lots of them. CTT recommends a minimum of 300 cards. Yes, you will meet and shake at least that many hands along the way! Often, there may be one-on-one meetings and group sessions where a translator will be necessary. Sometimes, you will have no choice about who the translator will be; but if you are hiring one for a longer visit, seek out a veteran translator capable of being able to not only translate the language but to capture and explain the relevance of the discussion. Your collateral material can also help to bridge this gap. CTT prepares delegates brochures that provide introduction to and context of various delegates visits to the area in the Mandarin language. CTT also has the benefit of the CTT-WLU (full name?) office in Chongqing where exceptional and experienced staff are able to ensure that the communication is always first rate.

 TIP 5: Develop a China Strategy

You can use a trip, such as a CTT business mission, to develop and test your China business strategy. With a huge and growing middle class, competitive opportunities to sell and service this affluent population are growing quickly. It is also important to develop strategies for attracting investment and talent from China as people and companies are increasingly going global.

 TIP 6: Protect your Intellectual Property

If you have intellectual property, you will definitely need to have an IP strategy and the legal safeguards in place to protect your trademarks and patents. For instance, if you are promoting a brand or a specific piece of IP, make sure you have control of it, even to the point of checking your online presence and never give it over to a distributor without the ability to get it back. CTT has partners in the legal profession, many of whom have traveled with CTT abroad and others who have offices in China. They are all very experienced in these areas and would be pleased to assist you.

 TIP 7: Choose your International Partners Carefully

Your partners and international team members represent you abroad; your values, strengths, culture and expectations. They are your bridge and brand ambassadors. They help you to extend your trust among Chinese stakeholder, which if broken can be disastrous and take time to repair. Building a tight bond between your head office and your international team is important. You will need to connect with them often to ensure they have the tools and training to properly represent you and your products as well as provide them opportunity to provide feedback. This will be a critical part of the evolution from visiting to doing business in China.

 TIP 8: Consider Where, When and How you will Enter the Market

After your experience on a CTT business mission and consulting with your international strategy and team, you need to think about how you will enter the market and who will represent you. Will you employ an agent or distributor, engage in direct sales, distribute on an exclusive or non-exclusive basis and will you jump directly into a specific market and city like Chongqing or Shanghai or enter through an intermediary located in Hong Kong, Singapore or Taiwan? This is where strategic and legal advice is critical, but you should also seek opportunities to speak to those who have been in this position before. Exclusive relationships tend to make you entirely dependent on a specific distributor. Is their market intelligence the best you can find? Are they the right fit? Are you able to change partners? How and where are disputes settled? Are there penalties to change or get out of deals? What does the legislation say and is it right for your business needs? Can you hire and fire as you may need? Can you get your money out if and when you want and are you able to establish an entity that is legally recognized globally? CTT has a network of companies that have entered foreign markets in different ways who may be willing to share their experiences with you, as well as business partners who can help you make strategic and legal decisions.

 TIP 9: Learn and Explore Before Signing Deals

Explore and learn as much as you can on these missions before you sign any deals. Early mistakes can permanently damage your business. Build a toolkit of knowledge and bring along as much advice as you can from all the people you will come in contact with through CTT’s mission participants and CTT’s business partners back home. There is a great deal of professional support available to you through CTT’s international committees, sponsors and supporters. Don’t be shy to ask and remember that CTT is there to help you in your efforts abroad and that when you join a mission you become part of the team working to attract business, talent and capital to the Waterloo Region.

 TIP 10: Build your Business Partnership Abroad but also with your CTT Mission Delegation

Whether it is a large exploratory mission or a tighter and focused business mission with specific goals, you will be able to leverage and benefit from the relationships that you develop and foster among the delegation members. Remember to take lots of photos on your mission. You will want to share them with your business colleagues, family and friends when you are back. They also speak volumes when you communicate to your clients, suppliers and business contacts about next steps and opportunities abroad. And finally – have fun! It’s an opportunity of a lifetime.

Cambridge Mayor Doug Craig will lead this year’s CTT Business Mission to Hong Kong (April 12-14) and Mainland China (April 14-20). We have several firms and organizations already involved, but there is room for a few more firms to join us. For further information or to join the mission, contact John G. Jung, CTT’s CEO directly by email at john@techtriangle.com .

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