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Know Your Product's Value before Attempting Export Sales to China

Guest post by: Chris Wingo

Article Overview: Export selling is not a "slam-dunk" proposition and most products from abroad cannot compete in China. Before spending to much time and money on selling your product in China, there are a few things you should consider and do to ensure you have a chance at success. Herein, we touch on the most important ones.

Know Your Product's Value before Attempting Export Sales to China

I Can Make a Fortune Don't make assumptions about selling in China based on your western business experience since this is sure to lead to failure. Especially avoid China "Population Mathematics" (i.e. if I could just sell one pencil to each of China's 1.3 billon people ... I'd make a fortune!). Before doing anything, carefully assess how, actually "if", your product fits in the Chinese market. This is no easy task for a "China novice" and it's best to seek out expert support.

Key Points of Post

• Selling in China is no easy game; even if you have a compelling proposition at home, it may have little value in China.
• If you are new to China, seek expert advice but choose your expert carefully.
• Yes, Chinese will always complain about price as part of their negotiation strategy; price accordingly.
• If there is a locally produced alternative to your product, even if not identical, you'll have a very tough go especially from price pressure.
• Chinese will copy any good idea they can, so prepare yourself and take preemptive action if possible.

Seek the Right Expert Guidance

As you look for your "China expert," be careful since most have zero experience with actually selling in China; successfully selling in China is tricky, sometimes even a little dirty ("zang" in Chinese). Unless your expert has been selling or running sales teams in China for a respectable length of time, he/she can't possibly know what they're talking about. So, "China Novice" practice diligence in seeking help.

Can Your Product Really Compete?

As for products, Chinese like the latest technology but at the same time are culturally price-sensitive. If your product is anything but truly unique, you'll have a tough time competing in China. High-value premium priced offerings can have their place. This is especially true for certain B2B engineered products though nothing is a slam-dunk. It behooves everyone to assess the following before spending too much money on misguided sales efforts:

• Confirm your product or service truly offers performance advantages or something special for Chinese customers. Do not assume anything based on your experience in other countries since Chinese buy and don't buy for reasons westerners often do not understand. Even if your value offsets a higher price, Chinese customers may still decline your offering. Suffice it to say your product's value must be real to the Chinese and, regardless of how compelling the value seems to you, it's going to be a tough sell.

• This is a big one: as best as you can, confirm your product has no comparable Chinese-manufactured alternatives. You'll be amazed at what the Chinese are capable of manufacturing (i.e. just about everything). If they are producing anything close to your product, it's bound to be 50% or more lower in price and the obvious first choice of most Chinese buyers. Sometimes even though your product may not stand a chance, the buyer will play you along simply to support a decision to purchase from a preferred vendor. For anything more than a one-shot deal, your product should not be too easily duplicated. The Chinese are masters of reverse engineering and capable of manufacturing and even selling below your cost. The best rule to follow is "if it can be copied it will be copied." The bigger the market and lower the entry barriers, the faster this will happen. Products with high proprietary content, bundled specialized services and/or high capital investment requirements have the greatest chance for sustainable sales success.

Do You Homework or Die

In summary, selling in China is not easy. Most foreign products.... "gut check estimate - 80%" ... have no chance of competing in China. To compete, a product must have value to the Chinese buyer plus the backing of a strong sales effort. If you want success, you must be committed to playing hard lest Chinese competitors play you into the ground. Do your homework and don't take anything for granted.

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Article Tags: china, export sales, selling in china, time and money



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