{"id":6797,"date":"2021-01-13T07:52:37","date_gmt":"2021-01-13T07:52:37","guid":{"rendered":"https:\/\/focus.cbbc.org\/?p=6797"},"modified":"2025-04-23T09:57:18","modified_gmt":"2025-04-23T09:57:18","slug":"top-10-most-common-mistakes-foreign-businesses-make-in-china","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/top-10-most-common-mistakes-foreign-businesses-make-in-china\/","title":{"rendered":"Top 10 most common mistakes foreign businesses make in China"},"content":{"rendered":"<h2>It is true that opportunities for businesses in China are great. But all too often foreign businesses repeat the same mistakes. Jean Yves Lavoie examines the most common<\/h2>\n<h4><strong>1. Misunderstanding Chinese consumers<\/strong><\/h4>\n<p>Chinese consumers are not the same as consumers in the UK or the West. Their tastes, styles, budgets and requirements are all different and therefore products and services that sell in the UK might not necessarily sell in China. It is therefore absolutely vital to conduct thorough research about Chinese consumer habits and preferences to find out whether your product will work in the China market.<\/p>\n<p>Nevertheless, many brands have had success when localising their products to the local market. From different clothing sizes to targeted milk products to crab flavoured Pringles \u2013 those that understand their consumers will certainly fair better. Also, China&#8217;s appreciation of soft skills, consultancy and services is not yet as financially valued as in the UK, therefore market research, competitor analysis, testing and focus groups are all strongly advised before a full-on launch.<\/p>\n<div style=\"clear:both; margin-top:2em; margin-bottom:2em;\"><a href=\"https:\/\/focus.cbbc.org\/analysis-chinas-14th-five-year-plan\/\" target=\"_self\" rel=\"dofollow\" class=\"ued9ac287e851b1b3783a0c9bede5559d\"><style> .ued9ac287e851b1b3783a0c9bede5559d { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #E74C3C!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .ued9ac287e851b1b3783a0c9bede5559d:active, .ued9ac287e851b1b3783a0c9bede5559d:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .ued9ac287e851b1b3783a0c9bede5559d { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .ued9ac287e851b1b3783a0c9bede5559d .ctaText { font-weight:bold; color:#E74C3C; text-decoration:none; font-size: 16px; } .ued9ac287e851b1b3783a0c9bede5559d .postTitle { color:#000000; text-decoration: underline!important; font-size: 16px; } .ued9ac287e851b1b3783a0c9bede5559d:hover .postTitle { text-decoration: underline!important; } <\/style><div style=\"padding-left:1em; padding-right:1em;\"><span class=\"ctaText\">Read Also<\/span>&nbsp; <span class=\"postTitle\">Analysis: China's 14th Five Year Plan<\/span><\/div><\/a><\/div>\n<h4><strong>2. Underestimating the time involved<\/strong><\/h4>\n<p>Unlike other territories, expanding an existing business into China is not a quick and easy task. The legal, financial and regulatory processes can be complex depending on which sector your company is in. And leaving it all to local staff and partners to manage can be costly in the long term. Allocating appropriate funds, hiring and training local staff and dedicating time for senior staff to get to know the market, the local office and the local staff is essential.<\/p>\n<h4><strong>3. Ignoring KOLs and KOCs<\/strong><\/h4>\n<div id=\"attachment_6870\" style=\"width: 1010px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-6870\" class=\"wp-image-6870 size-full\" src=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1708634920.jpg\" alt=\"\" width=\"1000\" height=\"667\" srcset=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1708634920.jpg 1000w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1708634920-300x200.jpg 300w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1708634920-768x512.jpg 768w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1708634920-585x390.jpg 585w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1708634920-263x175.jpg 263w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><p id=\"caption-attachment-6870\" class=\"wp-caption-text\">Top KOLs can drive brand awareness and sales conversations, but they can also be costly<\/p><\/div>\n<p>Key opinion leaders (<a href=\"https:\/\/focus.cbbc.org\/three-influencers-share-their-secrets\/\" target=\"_blank\" rel=\"noopener noreferrer\">KOLs<\/a>) and key opinion consumers (<a href=\"https:\/\/focus.cbbc.org\/post-covid-trends-in-chinas-consumer-sector\/\" target=\"_blank\" rel=\"noopener noreferrer\">KOCs<\/a>) are the Chinese equivalent of social media influencers and are instrumental in a brand&#8217;s success or failure. While KOLs can be celebrities or other types of influencers paid to promote brands on their social media posts, KOCs are <a href=\"https:\/\/focus.cbbc.org\/how-to-emotionally-engage-with-chinese-consumers\/\" target=\"_blank\" rel=\"noopener noreferrer\">regular consumers,<\/a> albeit with a large social media following, who are trusted for their reviews and brand preferences. Choosing the right KOLs or KOCs to<a href=\"https:\/\/focus.cbbc.org\/how-to-build-credibility-online\/\" target=\"_blank\" rel=\"noopener noreferrer\"> advertise a brand<\/a> can be key for foreign businesses when reaching out to consumers.<\/p>\n<p>\u201cIt\u2019s essential for brands to be very clear about their objectives for their marketing campaign,\u201d says <a href=\"http:\/\/www.cbbc.org\/\">CBBC&#8217;s<\/a> Demi Ping, Director for retail and e-commerce. \u201cTop KOLs can drive brand awareness and sales conversations, but they can be costly; micro-KOLs and KOCs, on the other hand, can be more affordable for SME brands and can generate decent sales.\u201d<\/p>\n<div style=\"clear:both; margin-top:2em; margin-bottom:2em;\"><a href=\"https:\/\/focus.cbbc.org\/why-your-ceo-failed-in-china\/\" target=\"_self\" rel=\"dofollow\" class=\"u758a5256e22226dab716b23c51c24935\"><style> .u758a5256e22226dab716b23c51c24935 { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #E74C3C!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .u758a5256e22226dab716b23c51c24935:active, .u758a5256e22226dab716b23c51c24935:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .u758a5256e22226dab716b23c51c24935 { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .u758a5256e22226dab716b23c51c24935 .ctaText { font-weight:bold; color:#E74C3C; text-decoration:none; font-size: 16px; } .u758a5256e22226dab716b23c51c24935 .postTitle { color:#000000; text-decoration: underline!important; font-size: 16px; } .u758a5256e22226dab716b23c51c24935:hover .postTitle { text-decoration: underline!important; } <\/style><div style=\"padding-left:1em; padding-right:1em;\"><span class=\"ctaText\">Read Also<\/span>&nbsp; <span class=\"postTitle\">Why Your CEO Failed in China<\/span><\/div><\/a><\/div>\n<h4><strong>4. Choosing the wrong partners<\/strong><\/h4>\n<p>When spearheading a first foray into the China market, <a href=\"https:\/\/focus.cbbc.org\/the-dos-and-donts-of-finding-and-managing-a-chinese-distributor\/\" target=\"_blank\" rel=\"noopener noreferrer\">domestic business partners<\/a> can mean boom or bust. A number of businesses have had bad experiences with business partners who did not share the same vision; or worse, partners who own an <a href=\"https:\/\/focus.cbbc.org\/importing-from-china-due-diligence-solid-contracts-and-effective-finance-management\/\" target=\"_blank\" rel=\"noopener noreferrer\">illegitimate<\/a> business. It is thus best not to rush into any partnerships with people or businesses that you do not know and to conduct a proper <a href=\"https:\/\/focus.cbbc.org\/what-is-corporate-intelligence\/\" target=\"_blank\" rel=\"noopener noreferrer\">background<\/a> check.<\/p>\n<h4><strong>5. Misunderstanding the business culture\u00a0<\/strong><\/h4>\n<div id=\"attachment_6869\" style=\"width: 1010px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-6869\" class=\"wp-image-6869 size-full\" src=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_257315416.jpg\" alt=\"\" width=\"1000\" height=\"667\" srcset=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_257315416.jpg 1000w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_257315416-300x200.jpg 300w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_257315416-768x512.jpg 768w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_257315416-585x390.jpg 585w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_257315416-263x175.jpg 263w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><p id=\"caption-attachment-6869\" class=\"wp-caption-text\">D&amp;G&#8217;s cultural mistakes cost have them dearly in China<\/p><\/div>\n<p>Although business in China is conducted much in the same way as it is in the West, there are a few important subtleties that can make a difference. Preparing appropriate gifts, knowing the holidays and the bonus structure is important, as is understanding the concept of \u2018giving face\u2019. Giving face is all about preserving a good image for your team, your counterparts, your partners or your host, and learning about ways to \u2018give face\u2019 \u2013 as well as avoiding things that can make you or others \u2018lose face\u2019 \u2013 is vital when conducting business in China.<\/p>\n<p>Likewise, many businesses have also missed the mark in some of their advertising and branding and <a href=\"https:\/\/focus.cbbc.org\/crisis-management-in-china\/\" target=\"_blank\" rel=\"noopener noreferrer\">fallen foul of their consumers<\/a>, sometimes even causing their China <a href=\"https:\/\/focus.cbbc.org\/twitter-storm-in-a-china-teacup\/\" target=\"_blank\" rel=\"noopener noreferrer\">operations to close<\/a>.<\/p>\n<h4><strong>6. Ignoring lower-tier cities<\/strong><\/h4>\n<div id=\"attachment_6871\" style=\"width: 1010px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-6871\" class=\"size-full wp-image-6871\" src=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1127236406.jpg\" alt=\"Yiwu fair\" width=\"1000\" height=\"750\" srcset=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1127236406.jpg 1000w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1127236406-300x225.jpg 300w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1127236406-768x576.jpg 768w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_1127236406-585x439.jpg 585w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><p id=\"caption-attachment-6871\" class=\"wp-caption-text\">The third-tier city of Yiwu holds one of China&#8217;s largest trade fairs<\/p><\/div>\n<p>China is the size of a continent and just as companies wouldn&#8217;t treat Europe as one territory, nor should China be treated as such. First-tier cities such as Beijing and Shanghai might be household names but they are just one part of a much larger market. Many of China\u2019s smaller cities have huge populations in the tens of millions, and <a href=\"https:\/\/focus.cbbc.org\/brandz-report-2020\/\" target=\"_blank\" rel=\"noopener noreferrer\">many domestic brands<\/a> have done very well by specifically targeting third- and <a href=\"https:\/\/focus.cbbc.org\/online-and-offline-shopping\/\" target=\"_blank\" rel=\"noopener noreferrer\">fourth-tier<\/a> cities.<\/p>\n<h4><strong>7. Not securing your IP<\/strong><\/h4>\n<p>It may seem self-evident, but having<a href=\"https:\/\/focus.cbbc.org\/how-to-protect-your-ip-in-china\/\" target=\"_blank\" rel=\"noopener noreferrer\"> IP protection<\/a> from your home country does not extend that protection to other countries; IP rights are limited in scope, duration and geographical extent, and foreign businesses often make the mistake of misunderstanding their IP rights in China. Since China uses a \u2018first-to-file\u2019 system for patents and trademark protection applications, it is thus highly advised to <a href=\"https:\/\/focus.cbbc.org\/how-to-protect-your-ip-in-china\/\" target=\"_blank\" rel=\"noopener noreferrer\">obtain IP protection<\/a> for your business in China <a href=\"https:\/\/focus.cbbc.org\/how-to-get-your-ip-protected-in-time-for-brexit\/\" target=\"_blank\" rel=\"noopener noreferrer\">as soon as possible<\/a>.<\/p>\n<p>\u201cBefore expanding any business in China, it is essential to obtain the necessary rights to ensure that you maintain a competitive advantage in this market,\u201d says Yuan Yuan, director of business environment at the CBBC. \u201cLegislation for IP protection in China has made leaps and bounds in recent years, and the current system now rivals other IP protection systems anywhere else globally. Registration of your IP rights is the first line of defence.\u201d<\/p>\n<h4><strong>8. Not getting to grips with China&#8217;s local digital landscape<\/strong><\/h4>\n<div id=\"attachment_6873\" style=\"width: 1010px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" aria-describedby=\"caption-attachment-6873\" class=\"size-full wp-image-6873\" src=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_556973536.jpg\" alt=\"\" width=\"1000\" height=\"667\" srcset=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_556973536.jpg 1000w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_556973536-300x200.jpg 300w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_556973536-768x512.jpg 768w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_556973536-585x390.jpg 585w, https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/01\/shutterstock_556973536-263x175.jpg 263w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><p id=\"caption-attachment-6873\" class=\"wp-caption-text\">China&#8217;s online platforms are completely different from those elsewhere<\/p><\/div>\n<p>Navigating the complex <a href=\"https:\/\/focus.cbbc.org\/the-chinese-e-commerce-landscape\/\" target=\"_blank\" rel=\"noopener noreferrer\">digital landscape<\/a> in China, and capitalising on its innovative sites and <a href=\"https:\/\/focus.cbbc.org\/chinas-main-e-commerce-platforms\/\" target=\"_blank\" rel=\"noopener noreferrer\">platforms<\/a>, can be a real challenge for businesses as many do not get properly acquainted with its unique characteristics. Facebook, Paypal, Uber and other foreign websites are restricted; instead, China has WeChat, Alipay, Didi and other domestic platforms that cater to Chinese consumers. Foreign businesses would do well to establish themselves on these platforms and ensure they comply with domestic <a href=\"https:\/\/focus.cbbc.org\/what-are-the-new-regulations-for-livestreaming-in-china\/\" target=\"_blank\" rel=\"noopener noreferrer\">internet regulations<\/a>, as failure to do so could lead to losing a platform, or worse \u2014 getting locked out of the market.<\/p>\n<div style=\"clear:both; margin-top:2em; margin-bottom:2em;\"><a href=\"https:\/\/focus.cbbc.org\/five-retail-trends-learnt-from-2020\/\" target=\"_self\" rel=\"dofollow\" class=\"u2be09bbfe00f344d07e4a9c5d0b19a36\"><style> .u2be09bbfe00f344d07e4a9c5d0b19a36 { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #E74C3C!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .u2be09bbfe00f344d07e4a9c5d0b19a36:active, .u2be09bbfe00f344d07e4a9c5d0b19a36:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .u2be09bbfe00f344d07e4a9c5d0b19a36 { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .u2be09bbfe00f344d07e4a9c5d0b19a36 .ctaText { font-weight:bold; color:#E74C3C; text-decoration:none; font-size: 16px; } .u2be09bbfe00f344d07e4a9c5d0b19a36 .postTitle { color:#000000; text-decoration: underline!important; font-size: 16px; } .u2be09bbfe00f344d07e4a9c5d0b19a36:hover .postTitle { text-decoration: underline!important; } <\/style><div style=\"padding-left:1em; padding-right:1em;\"><span class=\"ctaText\">Read Also<\/span>&nbsp; <span class=\"postTitle\">Five retail trends to learn from in 2020<\/span><\/div><\/a><\/div>\n<h4><strong>9. Missing frequently changing regulations\u00a0<\/strong><\/h4>\n<p style=\"text-align: left;\">While there are negative lists for market entry and foreign investments \u2013 meaning that listed areas and sectors are <a href=\"https:\/\/focus.cbbc.org\/financial-reforms-gain-momentum\/\" target=\"_blank\" rel=\"noopener noreferrer\">not open for access<\/a> and investment \u2013 <a href=\"https:\/\/focus.cbbc.org\/new-cross-border-laws-extended\/\" target=\"_blank\" rel=\"noopener noreferrer\">cross-border e-commerce<\/a> (CBEC) in China uses a positive list, meaning that only items included on the list can be eligible to sell through CBEC. These lists are updated frequently, and so foreign businesses are strongly advised to stay abreast of the newest changes.<\/p>\n<h4><strong>10. Getting the legal jurisdiction wrong<\/strong><\/h4>\n<p>Many businesses may want to handle contracts and <a href=\"https:\/\/focus.cbbc.org\/china-business-guide-part-3-the-legal-system\/\" target=\"_blank\" rel=\"noopener noreferrer\">legal agreements <\/a>under their home country\u2019s laws or under the laws of the Hong Kong SAR, but in most cases, this cannot be done when doing business in China. Businesses often do not adequately prepare the legal side of business, and it is important for them to use the <a href=\"https:\/\/focus.cbbc.org\/importing-from-china-due-diligence-solid-contracts-and-effective-finance-management\/\" target=\"_blank\" rel=\"noopener noreferrer\">proper legal jurisdiction<\/a> and abide by the jurisdictions\u2019 laws and regulations.<\/p>\n<p><em>In order to mitigate risks, consider using <a href=\"http:\/\/www.cbbc.org\/services\/chinagateway\/\">China Gateway,<\/a> the CBBC\u2019s market advisory service, to help demystify the process of doing business in China, as well as CBBC\u2019s <a href=\"http:\/\/www.cbbc.org\/services\/launchpad\/\" target=\"_blank\" rel=\"noopener noreferrer\">Launchpad service<\/a>, which provides simple, low-risk, legal means to enter the China market.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>It is true that opportunities for businesses in China are great. But all too often foreign businesses repeat the same mistakes. Jean Yves Lavoie examines the most common 1. Misunderstanding Chinese consumers Chinese consumers are not the same as consumers in the UK or the West. Their tastes, styles, budgets and requirements are all different and therefore products and services that sell in the UK might not necessarily sell in&hellip;<\/p>\n","protected":false},"author":4,"featured_media":6874,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[290,128],"tags":[398,179,135,2427],"class_list":["post-6797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-editors-pick","category-services","tag-export","tag-hr","tag-law","tag-paywall"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Top 10 most common mistakes foreign businesses make in China - Focus - China Britain Business Council<\/title>\n<meta name=\"description\" content=\"It&#039;s no secret China is the market to be in right now, but how can your business avoid the key mistakes foreign businesses make in China?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/focus.cbbc.org\/top-10-most-common-mistakes-foreign-businesses-make-in-china\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Top 10 most common mistakes foreign businesses make in China - 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