How to Sell to Chinese Consumers: three tips
Wed 19 July 2017 - 9:47 amExport | Growth | Import | Export | Small Business
Last year, one of my colleagues built two semi-detached houses, wanting to sell one. His question to me was: How do I sell it to a Chinese buyer? There’s an implied understanding in that question that Chinese buyers will pay a premium to acquire a property.
Besides possible higher premiums, the other reason to target Chinese consumers is that it can help your business expand to a larger market (i.e. selling a larger quantity at the same price). One excellent example of this is baby formula. By targeting the Chinese, Australian diary companies have achieved great international success. Based on a 2011 report by PricewaterhouseCoopers for the Australian dairy industry, Chinese import growth has been significant; milk imports increased from 600,000 tonnes in 2006 to 1,000,000 tonnes in 2010. This figure has drastically risen again in the past few years due to the FTA between China and Australia signed in 2015, along with the 2016 milestone change from the one-child policy to two-child policy in China. (Prior to the Australian FTA, New Zealand was the biggest exporter to China for dairy products).
Think about the nature of the product or service you offer – will you be able to sell it to the Chinese for a higher premium? Or will you be able to sell it into the large Chinese market? If you think there is an opportunity for your product or service, here’s 3 things to consider before you do:
Tip 1 – Ask a “real” Chinese
There’s no universal approach in marketing. You should do some research first to understand why the Chinese consumer might be interested in the product or service you offer. The first step then is to identify the right group of Chinese to ask.
You might have a best mate from high school by the name of Lau whose parents were originally from China. Lau might speak some simple Cantonese, but he most likely can’t read written Chinese. He probably doesn’t know much more about the Chinese consumer than you do. So, although he’s your best mate, don’t rely on him for the best advice on Chinese consumers.
The Chinese consumers everyone is trying to target today are mostly Mandarin speakers from mainland China. They use simplified Chinese (whereas Hong Kong and Taiwan instead use Traditional Chinese). Mainland Chinese have had quite unique experiences growing up. To get a valid opinion on how to promote your product service to the Chinese consumer, you need to ask someone who is from that cultural background. And it’s easy to find one in Australia today, especially in Sydney and Melbourne.
Tip 2 – Don’t rely on Google Translate
I can’t remember how many times I have seen advertisements in Chinese, designed to target a Chinese consumer that actually drive them away instead. My guess was that the material was translated to Chinese using Google Translate and was never proofread by a Chinese speaker. It’s ridiculous how things like that can happen when we have hundreds of thousands of native Chinese speakers living in Australia.
And it’s not just the small business sector (who might not have the budget for professional translators) that I’m talking about. A major private health fund recently had a Chinese poster with a message about why Chinese people should choose them. Even though I think it was created by a professional, I struggled to understand the message. As someone with higher education both in Australia and China, it’s fairly safe to say that that if I don’t get it, most Chinese consumers in Australia won’t get it either.
Decent doesn’t mean expensive or fancy. Your material just needs to be clearly written in simplified Chinese so your target audience can understand it without confusion.
Tip 3 – Find your Chinese strategic partner
When I came to study in Australia, I applied to three universities in Sydney through an education agent. I then received offers from all three of them. My agent had highly recommended one of them to me, saying it was the best university in Australia. It was years later when I found out from a friend working in the education agent industry that that university pays the highest commission to agents for student recruitment. And not surprisingly this university has done very well acquiring international students from China over the last decade. This is an example of how the Australian higher education industry benefits from the right strategic partner for the Chinese market.
You can always find someone to partner with to penetrate the Chinese market. This is of particular importance if you wish to sell your product inside China because the regulatory framework is quite different there. Unlike in Australia where you can register a company and get ready for trading in 3 days, it takes 29 days to set up a company in China (which is a big improvement from the 48 days in 2003 per a Worldbank report). Then, depending on the industry, it might be a massive investment to get all the permits to start selling. Partnering with a local Chinese company can save you plenty of administration trouble.
For smaller businesses with easy-to-ship products, your best shot is to get the Chinese shopping agents (called daigou) to recommend them on Weibo (Chinese version of Twitter) or WeChat (Chinese combination of Facebook + Whatsapp). Give them a reasonable profit margin and they will look after everything for you including logistics and customer service. Unlike traditional supermarkets and resellers, they take stock at their own cost and risk. Their recommendations to their family and friends in China are ‘word of mouth’ advertisements, which are more cost effective than any paid advertising in China.
About the author
Barry Li is the author of The New Chinese: How they are changing Australia (Wiley $29.95), which provides a guide on the history, culture, and mindset of Chinese migrants in Australia, and of the new China. For more information visit www.theNewChinese.com