The amount of foreign investors is saturating the China market each year. Walking down the streets in Beijing, one can see a whole array of stores displaying a multitude of global products. The obvious scene of foreign or global companies entering into the China market indicates the saturation of foreign investment in China. Over the years, China has attracted the most amount of foreign investors compared to any other countries.
As foreign investors enter into China, the domestic industry has been benefiting as well. While working with the foreign companies, the domestic companies have increased in their technology and marketing tactics. Thus, the China market will be more competitive each year as the domestic industry increases their brand equity and the increase of foreign giants entering into China.
Therefore, do not assume that entering the China market would be easy as the Chinese companies nowadays are no longer low-cost competition. The consumers in China are increasing their market demands in company. Furthermore, the Chinese have very strong national pride, thus to gain more market share in China, foreign products must not seem too foreign to the Chinese. Hence, foreign investors who plan to enter the China market need to consider how to market their products to the Chinese. The fastest and most efficient way to find out how the locals feel towards a certain product would be to find a local party for help. A local party would be able to communicate to the locals and would have a better understanding of the Chinese culture.
In addition, the Chinese government is not easy to communicate with. Due to the bureaucratic style of the Chinese government, many foreign companies are always confused with the way administrative procedures are carried out here in China. Hence, to minimize any delays with the government, it would be best for a local party to handle the paperwork. This is because first of all, the locals would be very familiar with the procedures and if they have a good relationship with the higher authorities, things will be settled even faster.
Very often, foreign companies may have problems looking for suitable Chinese partners as they do not have the necessary network here in China. Furthermore, if foreign investors do not understand this culture, conflicts tend to arise when different decision making tools are used compared to the Chinese. Hence,
foreign companies would need to have a good grasp of the China culture before entering into the Chinese market.