By Matthew Harrison, Director of B2B International China

The question of how to market and sell to companies based in China is one that is debated endlessly by foreign companies seeking to profit from the huge potential of the country. Views expressed by businesspeople claiming to know the secret of success in China vary wildly, from those (generally newcomers) who say that marketing and selling in China is ‘just like home’ through to those (usually those with at least a couple of years’ experience in China) who exaggerate the unique nature of Chinese business and Chinese people to such an extent that selling in China sounds like an impossibility. The reality is that these two positions are both equally crass and incorrect – there is no reason why a Western company with a flexible, patient and ‘listening’ approach to marketing and sales should not succeed in the Chinese market.

This paper is based on a survey of Chinese business opinion in the two key cities of Beijing and Shanghai. Our aim is to dispel some of the myths propagated about Chinese business, and explore the reasons behind both successful and unsuccessful marketing and sales approaches in China. We do not seek to provide definitive ‘one size fits all’ answers to companies looking to establish or increase their presence in China; rather to put forward some general guidelines for companies from outside China to bear in mind.

Chinese Attitudes Towards Marketing And Sales

It is worth mentioning straight away that the principle of ‘marketing’ in business-to-business markets is less widely recognised in China than in more mature markets. Commonly, marketing is viewed as a service department for the sales department, its role sometimes seen as little more than taking care of the company logo and brochures. In short, marketing is defined by many in Chinese businesses as consisting of only the ‘promotion’ element of the 4 Ps. ‘Product’ is the job of engineers, ‘price’ the job of salesforces and ‘place’ the job of senior management. At worst, marketing departments are derided as ‘Spending departments’, their apparently superficial output seen as a poor substitute for the relationships that are so important in a Chinese business environment.

Figure 1 - The 4Ps of Marketing

In contrast to some Western markets, the salesperson and more broadly the principle of selling are widely respected in China. Two issues perhaps lie at the core of this fact – firstly the entrepreneurial spirit of the Chinese people, and secondly the importance placed on relationships in business decision making. A good salesman must be adept at forging not only relationships, but also friendships with potential customers. This makes a good salesman respected almost by definition, and also implies a long sales process, with all of the on-the-ground presence, learning and patience that this involves.

How Do Chinese Companies Want To Be Targeted?

Before considering how well or otherwise Western companies are targeting potential Chinese customers, it is worth assessing Chinese companies’ preferred means of being targeted by potential suppliers. As in any market, the answer to this question is that a wide range of marketing and sales techniques can work, and that usually a combination of different methods is necessary. Nevertheless, it is informative to look at the general view of the Chinese business community (see Figure 2 below).

Figure 2 - Communicating With Chinese Clients

Conferences and exhibitions
In many Western markets, conferences and exhibitions are derided as a waste of time and money; in Asia and particularly China, nothing could be further from the truth. Whatever the business and whoever the target audience may be, attendance at exhibitions, conferences and similar events is likely to be essential for any company wishing to achieve substantial or sustained success in China.

Such events are an excellent way of making initial contact, and can also be a good means of moving a potential sales relationship forward relatively quickly. They are a means of gaining trust, and are an opportunity for the target market to compare local and international offerings, establishing the supplier as ‘open’. The events are an opportunity for potential customers to ask questions, and have the advantage of establishing the face-to-face contact on which Chinese buyers place so much value. And of critical importance, they help persuade buyers that companies are committed to the local market, by virtue of the fact that they have physically devoted the time and expense to be there.

All big cities have conference and exhibition centres (Beijing has three, for example) and details of their events can be found simply by contacting the centres directly or looking at their websites. Increasingly, the larger exhibitions and venues publish their programmes in English. A good option for Western companies is the ‘Events Eye’ website, which gives details of Chinese exhibitions across industries and cities, and can be found on www.eventseye.com/fairs/event_l41.html (see Figure 3 below).

Figure 3 - www.eventseye.com (China section)

The size and scale of many Chinese trade fairs is staggering; for example the Canton Trade Fair in Guangzhou takes place twice a year and boasts over 5,000 exhibitors (see www.cantonfair.org.cn).

Email
Email is obviously important in any market as a means of communication, and its importance continues to increase in China as online bandwidth and affordability improve, and as Chinese business becomes more international. The role of email in the sales process is particularly important at the introduction stage – Chinese buyers tend to react positively to a well-structured, personalised email as a prelude to a more detailed face-to-face discussion. Such an email should be accompanied by a soft copy brochure that gives general information on the supplier’s offering. As discussed below, however, it is usually essential to make a call to the target company before sending company details through – ‘cold’, non-personalised messages are extremely unlikely to be taken seriously.

Websites
Clear company websites that convey a company’s ability to deal with Chinese customers are an excellent way of generating interest from Chinese businesses. It is worth noting here that the number of Chinese people currently learning English is greater than the number of people worldwide for whom English is a first language, and that the level of English amongst senior decision makers in Chinese companies is good, and improving dramatically. Nevertheless, small, quick and low-cost actions such as translating company websites – or even just part of the website – will improve Chinese search engine rankings and make the company’s serious intentions clear.

Other than communication in Chinese, an excellent way of differentiating from much local competition is simply to have a well structured, navigable and informative website, which above all should make absolutely clear what your offering is. It will be seen later in this paper that Chinese buyers – at the same time as using the Internet more than ever to find suppliers – are extremely critical of the standard of many Chinese companies’ websites, seeing them as badly designed, lacking in information and generally unprofessional. An informative homepage is therefore an unmet need that Western companies are well placed to meet.

Face-to-face meetings in the workplace
Face-to-face meetings in the workplace are an essential step towards making a sale in most business markets. Only when a face-to-face appointment is secured can it be assumed that the enquiry is a serious one. Chinese businesses vary in terms of where they want such a meeting to take place – sometimes they like to visit the supplier’s offices (if they have a local presence of course) to assess the size and nature of their operations. But frequently a visit to the potential client is necessary, particularly in service markets where there is little ‘operation’ to look at. Generally speaking, obtaining an invitation to visit a potential client’s premises can be viewed as more ‘promising’ than having an invitation to visit your own premises accepted. A visit to a potential client would tend to take place at a more advanced stage of negotiations, when the company has decided the supplier set-up is satisfactory in broad terms.

A willingness to try to speak at least basic Chinese is an excellent way of impressing and showing respect to a potential customer. However, English is increasingly spoken at high levels within Chinese businesses, and where this is not the case interpreters are routinely used. The ability to speak Chinese to a high level, whilst ideal, is not necessary.

Phone calls
Making phone calls to Chinese companies is an effective way of making an initial introduction, and above all in identifying the person within the target company who is most likely to be able to help. So, it is recommended to call a target company before sending an email, for example, in order to ensure that company documentation is being sent to the right person, and that someone in the target company is waiting for the information. And of course it is perfectly acceptable for general ongoing conversation to take place over the telephone; albeit linguistic challenges often make email more viable (many Chinese people find it more difficult to speak English over the telephone than to read it).

Whilst the telephone is a valued means of communication during the sales process, its limitations should be recognised. In summary, it should be used for introductory and relatively low level discussions, such as arranging meetings or clarifying points from a meeting. It is extremely unlikely that negotiations will be conducted or sales made over the phone, unless the contract is particularly small or there is already an established relationship with the customer. To put it succinctly, cold-calling campaigns are very effective at establishing contacts and beginning a relationship, but utterly ineffective when it comes to negotiating or closing sales.

Sending details by post
Whilst the postal service in China is relatively efficient, the growth in email and Internet use is such that it is increasingly acceptable, maybe even expected, for company literature and other details to be sent electronically. Hard copy brochures and presentations are used widely, but these tend to be presented during one-to-one meetings.

Where literature is being sent on a wider scale (the main example being a direct marketing campaign) then the postal service is perfectly acceptable. Indeed for non-personalised or mass communications, hard copy is usually more effective (assuming that good contact details have been obtained), as ‘junk’ emails are routinely deleted. Many businesses state that receiving good-quality company literature through the post is such a rare occurrence, that companies who succeed at doing it well do make an impact. Western-style campaigns in particular tend to have impact, especially if the materials are bilingual. As with websites and other media, a successful campaign can depend on appearing both ‘Western’ (usually synonymous with good quality) and ‘Chinese’ (knowledgeable about China, and willing to adapt to Chinese requirements).

Networking
‘Networking’ and ‘relationships’ (or ‘guanxi’, often used as its rough Chinese translation) are terms that are widely used to describe ‘the way deals are done in China’. There is probably no area of doing business that is less understood by Westerners, and as a Westerner it would be wrong for the writer of this paper to try to offer a full explanation of exactly what guanxi entails. What is clear, however, is that there is a tendency (particularly amongst Western consultants offering market entry services to Western companies) to build the idea of ‘guanxi’ into something so large and mystical that Chinese markets become seen as mysterious, impenetrable universes that no outsider can ever hope to understand.

It is perfectly true that relationships are important when doing business in China, probably to a greater degree than in Western countries. It is also true that networking (particularly when this involves speaking to someone following a recommendation) can lead to relationships and in turn business. However, Chinese businesses – like businesses anywhere else – require products that meet their needs and suppliers that they can trust. What Western companies sometimes have difficulty coming to terms with is the way in which this trust is gained, and the time it often takes to convince the customer that yours is the product or service that meets their needs. The overriding piece of advice for Western companies would be to understand the importance of establishing relationships when targeting Chinese companies, and to be prepared for the patience that enables this. However, networking and marketing should be seen as mutually complementary in China – one does not invalidate the other. Chinese companies are perfectly open to hearing about suppliers and solutions that can improve their businesses.

In conclusion, therefore, a wide-ranging marketing and sales approach is required in China, with different activities complementing each other, and working at different times in different ways. The table below summarises the main means of communication with Chinese companies, and the benefits and drawbacks of each.

Figure 4 – Marketing And Sales Communications In China – Summary Of What To Use, And When

Matthew Harrison, Director of B2B International and B2B International China. B2B International is a business-to-business agency headquartered in Manchester, UK.  The company has a subsidiary office – B2B International China – in Beijing and an American office in New York.

This is the first part of the B2B international article Marketing and Selling to Chinese Businesses, next week we will publish the second part. Here you can find the full article.