Once businesses have identified an opportunity in China they must then execute an effective strategy to engage the market, which requires cultural and demographic understanding.
China is one of the great economic growth stories of the past 30 years. Currently undergoing a period of significant change, its economy is shifting away from the traditional investment and export-led model, to a more advanced economy where services and consumption play a much larger role.
Despite volatility following a cut in interest rates and a slight decline in economic growth, China still remains the world’s second largest market; and its economic shift is opening a window of opportunity for Australian businesses.
The Chinese government’s five-year social and economic plan outlines huge growth strategies for the Chinese market, as it seeks to source inbound investment from regions including Australia. The positive impact of this can be felt across a number of industries and services in Australia, including property, agriculture, education, resources and technology.
China’s aspiration to build a service sector-focused economy among its urban and high-consuming population during the next decade will provide significant opportunities for Australian businesses.
For China, encouraging foreign investments and partnerships is the key to achieving and maintaining its five-year plan. It’s a unique country that has significant positives, including urbanisation and investment policies, which support businesses at all stages of growth.
For Australian businesses seeking to capitalise on opportunities, often a fundamental barrier to success is less about identifying the opportunity and more about the ability to execute a plan effectively; they must first qualify the opportunity, and then forge connections.
Before venturing into China, it is crucial that businesses understand both the market they are entering, and their business strategy. Products and selling points that appeal to one demographic can have an entirely different cultural relevance in China, and it is important to understand these differences before making your investment.
Creating links with China will then be essential nurturing opportunities. Every industry and its services are different, and the Australia China Business Council WA is a great place for Australia’s emerging businesses to go to help them identify what possibilities lie ahead for them.
It’s also advisable to have some level of understanding about how the Chinese culture works. By being knowledgeable of the environment, as well as the values of the people in it, businesses will have a greater chance of achieving success.
Finding the perfect partner isn’t always easy, but in a good working relationship, both sides will respect each other for their core expertise, and will focus their energies on jointly developing new products and services for the market. This will usually equal a quicker payoff in the form of faster return on investment and revenues.
Long-term overall success in China depends on having the right partner in place to manage information, being able to digest it, and then the ability to appropriately and effectively implement it.
As we move ahead into 2016 the economical changes happening in China, which are only likely to accelerate, offer huge engagement, growth and immediate opportunities for businesses across Australia.
China has the advantage of being governed by a centralised government with a 10-year fixed term; making it easier for policymakers to stick to their long-term reform and investment plans, even in periods of turmoil and offering a level of stability to foreign investors.
CEO, The Executive Connection