What does a company need to do to succeed in China?

Over the years the Chinese market has experienced and accelerated growth and its middle class had greatly increased its purchasing power. With the biggest consumer market in the world wanting to buy premium imported products, the government is increasingly encouraging imports. But are foreign companies prepared to sell and succeed in China?


After 2 years helping companies find companies in China, I have heard from Chinese importers that most foreign brands fail to arrive prepared to sell in China. Mostly because they don’t even have clear some of the most basic and at the same time most important things:

  • Pricing strategy
  • Identified target audience
  • A story behind the product


This year we witnessed a company like Carrefour selling most of its shares in the Chinese market. Meanwhile in this same year Costco had to control its excessive customers in its stores during its opening in Shanghai. What is it that defines the failure or success of a strategy in China?


How did Costco succeed in China?

The most important step to understand how to sell in China is to dive deeply and understand the complexity of the market and its consumers, and constantly move at its rapid pace. The agency behind Costco’s success in China explained that the 4 keys to succeed in China.


  1. Knowing who the target audience is. In China, a country of really big dimensions, it is crucial to acknowledge that regions, age groups, interests, values and tastes change significantly even within the same city.


  1. Message: Creating a message that will be appealing for this target audience so that it will engage them. Once figuring out the message it will be all about generating appealing and sustainable content. This is crucial for the strategy to succeed in China.


  1. Channels: Finding the right channel to communicate with the target audience. Especially in China where there are very specific social media for almost any consumer group, and they can even vary from region to region.


  1. Product: Finding the right product mix and understanding if the product will need any kind of adaptation. One given product can have a very different use in China. For example, in the west people use jams as a fruit spread for bread, but in China they use it to add flavor to tea. So even the flavor that could be appealing for them could change. Understanding how the audience will consume the product will be the core of the strategy.


Costo understood all this very well, and they were able to communicate in the right channels, about the right products, with the right message, to the selected target audience. This explains partly the success of their recent opening of store in Shanghai. And this is something that companies should invest time on before jumping into the market without being prepared. This will greatly define if a company can succeed in China.

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