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5 steps for successful business in China
Expert Natalia Nyrova on how to build strong and reliable export channels to China
Candidate of Law, Sinologist, LLC "Agency of International Attorneys"
Today, much is said about the large export potential of Russian enterprises, which means foreigners' interest in Russian products (and not raw materials), their competitiveness in foreign markets, the possibility and desirability of wider participation of small and medium-sized Russian businesses in exports, etc.
More modestly, indefinitely, and in the future tense, it is said about concrete achievements. And this is not due to commercial secrets, but largely due to the lack of correct actions and understanding of the “roadmap” of export organization.
The organization of export to China, except for “money and time”, requires a consistent solution of a number of problems. Five main steps:
1. Specify the offer
First, the specification of the product is necessary. It is impossible to offer common product concepts such as: "fish", "forest", "fern", "berries", "wild plants", etc. But concretization immediately raises the question of the degree of processing of export goods, indicating that the exporter has modern technologies that preserve the natural or nutritional value of the goods for the consumer. For example, if a berry, then what, in what form? And in this issue there is a wide field of cooperation between businessmen and research organizations.
At the same time, the question arises of packaging the goods, types of packaging and labeling that correspond to the Chinese market. It should be understood that the sale of goods directly to the consumer requires small forms of packaging for individual use.
Immediately it can be warned that Chinese importers will, as far as their technological capabilities are available, strive to purchase raw materials or semi-finished products, rather than finished Russian products, as they wish to keep the main added value at home. But the consumer market in China is now on the side of Russian products.
2. Protect your intellectual property
Secondly, before you publicly "stick your ears", that is, show your goods on any Chinese marketplace, you should solve the issue of protecting your intellectual property (IP). That is, it is necessary to apply in China for the registration of its trademark, as well as the original names of certain types of products. Otherwise, you can very quickly find out that your names on the territory of the PRC are registered in the name of some local businessman or simply an ordinary citizen. It is necessary to be registered in China, as it is practically impossible to hope for the protective force of the international registration of its IP. Trademark and names should be made in Chinese with additions in Russian and / or English.
IP registration is carried out by Chinese patent attorneys, of which there are quite a few. The deal is relatively inexpensive, but full registration requires 2 of the year. Crucial is the date of the official acceptance by the Chinese state agency of the application for registration. Received such an official notice and can start working in the Chinese market in public.
3. Learn the “subtle” needs of the Chinese consumer
The third step will be your first appearance at any specialized exhibition in China. There are a lot of such exhibitions, and they operate almost all year round.
There may be difficulties with the delivery and registration of product samples. But the quantity is not important here. That "in pockets" you will bring - that also will suffice. It will be enough if you present high-quality stands, brochures, posters, video and photo materials in Chinese, and you can confidently discuss the most complex technological, certification, logistics, legal and other issues in competent Chinese. Because the main task of your first appearance is to understand the needs of the Chinese consumer, take into account his comments to your products, dial the first circle of acquaintances among Chinese importers and traders, identify areas of China that are promising for the realization of your product.
The main task will be to establish relations with the Chinese certification bodies for goods and quality control, as well as commercial companies that help to do this. Certification of Russian goods must be done on its own behalf. In no case can you hand over the solution of this task to the “Chinese friend”, the potential Chinese importer and others. Pay your money and sign the documents yourself. Product certification is not a quick, painstaking matter, but every legitimate Chinese document will be a real and reliable brick in the foundation of your future exports.
4. Remember, now you are a consultant!
Now it's time to start thinking about the geographical location of China where you will post (create) your company, "solving the operational issues of organizing and developing the export flow in China." Why so tricky? Do not be tempted by proposals to create "its trading company" in China. It is unlikely that your company (even a resident of the PRC) will be allowed to independently carry out import activities, that is, to transport goods independently across the border. This will be given to the Chinese. It also makes no sense to create an official representation in the PRC, since it will not be able to obtain the right to engage in commercial activities. We must do it the way Western companies do: they create "technical consulting companies", "engineering companies" and the like. In practice, this is today the most optimal "window".
5. It's time to parade!
Fifth step: “grand departure” to the exhibition. With all the Chinese and Russian certificates, with samples of the goods, with their main "generals", with lawyers and drafts of contracts prepared, "to the light of the spotlight of the local media." Council at this stage - in any case do not create yourself one Chinese friend - the importer. Sign contracts with as many Chinese companies as possible, creating competition between them for your product. Naturally, the Chinese and some of our Sinologists will resist this by instilling in you old theories about special relationships (“guanxi”). Ignore it in the traditional Russian manner!