China Markets – Sequence To Get In

Western companies coming to China habitually follow a pattern like this.

Poor Process

1. Someone says we should sell or procure in China.

2. We have in house discussions and sometimes bring in our ethnically Chinese staff to talk.

3. Someone looks around on line and finds some stuff.

4. Some contacts are made in China with Chinese distributors by email.

5. Information is sent back and forth with those who seem best technically.

6. Sometimes a US style NDA is proposed and signed here.

7. A trip to China is planned including the Great Wall.

8. Agreements are signed letting distributors Rep.  English is often the pre-eminent language in the contract unless they know The China Law Blog.

9. Everyone hopes to get lucky.

10. Something happens (and people call SHI Group).

Think of how it ought to occur, though the process can look different, the sequence is quite important.

Better Process

1.  Someone says we ought to go to China.

2.  Someone is assigned to find out how to register trademarks and other IP in China.  (Others sign up for the China Business Leadership Blog RSS.)

3.  Discussions take place on how China does or does not fit in company strategic vision. (Others contact SHI Group)

4.  A budget is developed to register trademarks and gain undertanding without getting duped.  NNN (like NDA only made for China) agreements are developed in Chinese. Someone finds out how Chinese companies incur legal obligation. Trademarks are registered even if present decision is not to pursue China.  China is a first to file country, and it takes a year to register.

5.  A large or small market study is commissioned.

6.  No information is given to any Chinese organization until Trademark and NNN are done or are in proper process.

7. A trip is planned to clarify who to trust and who to move forward with. (SHI Group is on the list)

8.  A larger budget is developed to get started as starting well saves many costs.

9. Distributors are contacted by in country people (if Market study indicated this is a good channel for this product in China) and all sign NNN before any conversations or information is passed.

10. Agreements are signed to move forward focusing on character and agreement on values foremost, and market ability is the necessary secondary point.

11. No one is trusting luck, and bad luck is already planned for.



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Posted in: China, Decision Making, Leadership, Market Entry

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1 Comment

  1. Charity December 10, 2012

    Yes. You can benefit more from knowing more about China. There are differences sometimes you cannot imagine. A country has her own culture.

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