As an entrepreneur, there is no doubt that you envy taking your business to the level of the most successful multinationals out there, such as Apple and Toyota. To succeed like these brands, you need to follow in their steps closely, and one of them is registering your company offshore in a good jurisdiction.
One of the best jurisdictions out there is China because of its amazing political and economic stability. Furthermore, China has a well-established infrastructure such as roads, rail, and industrial parks that makes movement and processing efficient. So, when you make the decision to open a business in China, there is no doubt about the potential. The only thing that you need is a great strategy, and we are going to tell you some of the tested and proven methods that you can use when doing business in China.
Focus on Expanding Your Market Coverage
When most companies, especially from Europe and America, come to the Chinese market, they introduce top-end products targeting the high-end market. Whether it is computers or beer products, targeting only the high-end products is likely to make you miss a huge chunk of the market in China.
A great method of winning a larger market share is by crafting products and services for the middle to low-end niche. This method is working well for many companies, such as Hitachi and Kodak, which had earlier only focused on the high-end market but are now diversifying. You, too, should focus on diversification from the beginning to realize the anticipated growth faster.
Put Your Focus on Keeping Cost of Production Low
If you want to optimize profits, there is no doubt that you should focus on cutting costs. Well, opening your company in China and installing the infrastructure for operations is likely to have cost you a lot of money. As such, you need to be smart in ensuring you keep the cost of production as low as possible while optimizing profits. Here are some methods that you can use to cut the cost of production:
- Think about locating your business in inland towns where the taxes are relatively low compared to coastal cities.
- Use the latest technology, such as automation, for most operations to cut the number of people needed at your plant.
- Consider adopting a lean production model, which involves using the best practices to make production more efficient.
Localize Your Research and Development (R&D)
In the past, many investors viewed China as an importer of the results they got through research and development done elsewhere. However, transferring your R&D to China comes with key benefits, such as meeting the locals. See, if you are working on a new product, the local community will feel part of the process and be the first to buy when the product hits the market. Furthermore, the Chinese administration is very supportive, and this could be a great way to cut R&D-related costs.
When crafting a strategy to help your business grow faster in China, it is prudent to be as meticulous as possible. Particularly, you should focus on adhering to all company-related laws, accounting standards in china, and factor the local Chinese culture. To get it right, we strongly recommend that you bring on board experts. Reach us today to talk to our experts and craft a strategy that will catapult your company to success.