Currently, China is the popular girl or guy in high school everyone talks about and/or wants to date with. This attention shows massively in the broad interest shown by foreign companies in the China International Import Expo (CIIE). This first expo dedicated to import into China attracted many more foreign companies compared to availability.
The interest of foreign companies in the CIIE shows the general interest in doing business with China. Besides setting up entities in China, foreign SME’s and corporates around the world are looking for solid business partners in China. A much-heard sentence motivating people to do business in China is: “If I sell one pen to 1% of the Chinese consumers, I will be rich”. Although not wrong, the motivation for doing business in China should be based on different criteria.
Assuming the decision to enter the Chinese market is right and your decision to work through a partnership is the best way forward, that’s when the hard part starts. In order to sell goods or services in China through a solid partnership, finding a business partner is the next step. A challenging process, but by following the next eight important steps, finding business partners in China could prove to be very successful:
1. Consider all your options
Finding business partners in China is one strategy, however there are many other strategic frameworks you could consider. Besides a business partner, there are other ways into the Chinese market. If you are convinced about working with business partners in China, then consider the next step.
2. Determine your “ideal” partner
In order to understand what the right business partner is, describing the requirements needed for a futile cooperation is important. The sector of the potential partner, the company structure, the size of the partner and more.
3. Consider the market demands
Sometimes the “ideal partner” does not exist. One of many reasons causing the partner not to exist could be due to the rules and regulations in China. Or the market segment looked into simply has no business partners with the set requirements. Understanding the market demands will help in finding more potential partners faster.
4. Research potential partners
After understanding your own desires, combined with the demands of the market, looking for a partner is possible. Finding potential partners is harder compared to partners in the West. The simple example of Google being prohibited in China, shows how different finding business partners in China is. To find the partners, one should turn to Chinese online and offline channels. We have assisted many of our clients with finding partners based on their requirements and the potential of the market.
5. Select partners with highest potential
After researching and finding potential partners, selecting the most promising options is very important. By focusing the attention on a couple, you will be able to focus the attention on a few of the most promising potential partners. This simple but effective step will save a lot of valuable time.
6. Gauge initial interest from their side
Before you fly to China and meet with all the potential partners, understanding if they are interested in collaborating with you is important. Perhaps they consider you as a rival, or they are understaffed to give attention to your product or service. To understand the possible interest from the potential business partner in China, the potential partners should be contacted. By having a Chinese person contact them at the right level, you will get an answer explaining their interest in your company. It will save a lot of time invested in business partners which are not interested in your company.
7. Build a relationship
A crucial next phase includes visiting the potential business partner in China. giving enough time to each of the potential business is imperative. Not just a 2-hour meeting, but time for lunches and dinners. Understanding the habits during meetings in China is crucial to find business partners in China.
8. Conduct an initial background check
Building a relationship is a time costly step. During that crucial step, background checks can save a lot of time and wasted energy. In China requesting the business license of your potential partner is completely normal . Checking the partner using the information provided by the business license, is a very efficient tool. We provide business partner checks to our clients in order to make sure there are no prominent legal or financial issues with the business partner.
Even when you take these eight steps to find business partners in China, building a solid partnership is still challenging. Finding a partnership is only the first of many difficult steps in maintaining a partnership with a Chinese company. A solid partnership in China requires investments of time and money to make sure the strategy for the partnership stays on track.
Falling in love with the most popular girl or guy in class is easy. However, if the popular one is the right partner in life is another question entirely. This applies for China as a country to do business with, but also for the business partners you consider in the country. Making sure you find a solid partnership fitting to your needs is key. We assist many of our clients with finding and maintaining the right business partners in China.
