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Expanding into China?
Here’s some practical advice

 
 
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Colin Tan is the Director of Operations at the Newcastle office of TusPark Holdings, a Chinese tech investor that also builds science parks — through which it helps startups enter the Chinese market. Here he shares pitfalls to avoid and practical advice for UK startups.

What advice do you have for startups entering the Chinese market?

Localise your products, understand local tastes and if you're a B2B company, know what the supply chain is like in China. A broad understanding of the opportunities is not good enough. You need to zoom in to know what is required—and this will vary from city to city. Understand the local terrain, and by terrain, I mean government, legal, intellectual property. Don’t assume that expansion to China is the same as expansion into other geographies, where sometimes you only need to consider one or two factors such as demand or competition. China must be approached multilaterally — and email doesn't always work, so get on WeChat now.
 

What's the best way to find a local partner?

It never hurts to start with a Google search, but you should contact support associations like the Department of International Trade. They also produce events, and it can be worth contacting the teams behind those individually. Innovate UK, the UK's innovation agency, and their Catapult network, also run trade missions. Finding a commercial partner of the right size, and the right person within the business can be very important in China: otherwise, there’s a risk that you get lost, especially if it's a large company. Remember, Chinese companies have many divisions, especially the ones with a national reach, so it’s best to zoom in and find the right links even before getting to work.

How do you choose a location?

Generally, you want to be based near your partner. This is because SMEs and startups will find it useful to tap into their local resources and network. Another reason is that local governments will usually be able to give you some startup grants and support. Consider areas that are known for expertise in the sector you're interested in, for example, Yangtze River Delta is quite good for the life sciences, Wuhan is well known for electronics, and Shenzhen for manufacturing and digital.
 

Do you have any advice on language and overcoming language barriers?

Before you set off translate your key presentation, brochures, and your basic marketing materials. Make a speculative deck that explains what you would like to achieve with certain partners. The more prepared you are before you leave the UK, the better. Maybe hire a Chinese intern – there are many Chinese students in the UK, a record level this year.  Find someone that knows the local terrain, speaks the local language and who is a good fit for your company. The best part of marketing is it can be done remotely. Start now.

What about intellectual property rights?

This is one of the first things to do — get your product registered before you expand. Registering IP is also a good way of making your presence known in China. When speaking with even potential partners, try to speak as generally as possible. You must protect ‘know-how’ at all times. These are your trade secrets. Most importantly, don’t assume that you’re protected in China. Get a Chinese IP consultancy or lawyer to take a good look at your portfolio and highlight any issues you’re likely to face.
 

Anything else you’d like to add?

China can be both fast and slow at the same time. So, execution speed is very important. You've got to be what we call ‘patiently impatient,’ meaning, you keep on prodding, keep moving a process onwards, but do so politely, getting back to them every week or few weeks. The power of your prodding is often based on the power of your introducer. And keep multitasking – as I said earlier, your expansion into China is going to require a multi-lateral approach.

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Published: Friday 26 November



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