"Doing business in China is not a sprint, but a Long March."
Operational challenge
- Countless mid-sized companies with excellent quality products and a solid, partly family-run background are eager to profit from the potential in China, but the hurdles are high:
- Without profound China competence, strong distribution, excellent visibility and target group-oriented communication measures, Western brands in China are failing
- Doing business in China is complex, challenging and costly: High expectations quickly turn into deep disappointment
- The Chinese market is ultracompetitive, dynamic and heterogeneous
- Brands from all over the world compete against each other and against local brands to win the favor of Chinese consumers
- Lack of access, networks and expertise
- Market entry costs with local company foundation and staff are disproportionate to the expected initial revenues
- The later the market entry, the higher the penetration costs
- Chinese brands are gradually conquering world markets and attacking the home markets of Western brands
- The alternative classic export model with local distributors has strong operational and strategic constraints:
- The potentials and success factors in China remain a "black box"
- Geographical distance and time lag hinder professional and permanent steering and control of local partners
- No continuous observation of the market and competition
- Arranged "sight-seeing" during headquarter management visits give a distorted picture of reality
- Numerous local distributors lack a deep understanding of brands, their values & unique selling points; lack of responsibility and awareness of the importance of corporate identity as well as low level of creativity and innovative spirit for brand building
- To win a country with continental dimensions like China, one exclusive distributor for the entire country is never enough. Only a nationwide network of highly performing well connected distributors in the most important cities and sales channels leads to the long-term exploitation of potential and sustainable success