Foreign entrepreneurs in China
Small is not beautiful
It is hard for small businesses to break into the Chinese market
ENTREPRENEURS do more with less, proclaimed Fiona Woolf this week on a visit to Shanghai. Lady Woolf, the current Lord Mayor of the City of London, was speaking at an academic conference devoted to helping small and medium enterprises (SMEs) flourish in China. These businesses face all of the same obstacles as big firms trying to enter China but have far fewer resources.
Intellectual-property rights are hard and costly to defend. The tangle of red tape involved in tax, compliance, customs clearance, business registration and so on can overwhelm small firms. Alexandra Voss of the German Chamber of Commerce points out that local firms often work overtime and on weekends during negotiations—and that foreign SMEs with staff shortages and little local knowledge can quickly get overwhelmed.
A bigger snag is that getting China right demands a huge amount of attention from the top brass, explains Franklin Yao of Smith Street Solutions, a consulting firm that advises firms keen to enter China. The problem is that the market is enormous, complicated and opaque. It is also hyper-competitive, thanks to a proliferation of both low-cost locals and deep-pocketed multinational companies.
一家为热衷于进入中国市场的公司提供服务的咨询机构Smith Street Solutions，其分析员Franklin Yao解释道，眼前一个更大的阻碍在于，如果要与中国搞好关系，就必须得到国家高层的大量关注。而问题就在于市场是无比巨大的，是复杂的，同时也是不透明的。同时，高度竞争也是市场的特点之一，而这要归功于廉价的本地劳动力和财力雄厚的跨国公司两者之间的共同成长。
For intrepid SMEs still keen to try, help is at hand. All developed countries have trade offices and business chambers devoted to helping smaller firms clear the many hurdles. Consultants are also coming up with new ways to connect these firms to unfamiliar customers.
Deb Weidenhamer runs iPai, a trailblazing foreign auction house in China. Her outfit holds dozens of auctions a year, run simultaneously online and at a trendy site in Shanghai, mostly peddling excess inventories from distributors of fashionable goods. For 15,000, she will add a foreign SME's product to three of her auctions over several weeks and get user feedback. The result, she says, is that her clients learn quickly and easily if and how much Chinese customers will pay for their novel products and what they think of them.
Another encouraging development for smaller firms is the rise of e-commerce in China. Frank Lavin of Export Now, an e-commerce firm, argues that going directly to online sales lets foreign newcomers build a national brand far more quickly and cheaply than through bricks-and-mortar outlets. For 17-20% of a firm's Chinese revenues, he will take care of the regulatory filings, product testing, warehousing and so on required for online sales.
对于小型公司来说，另一个利好因素莫过于中国电子商务的发展。来自电商公司Export Now的Frank Lavin表示，通过网络渠道直接销售，不仅可以使新入境的外国竞争者迅速建立国际品牌形象，并且其花费的代价也大大降低，这两大优势都令传统实体营销策略黯然失色。目前该公司在中国的总收入当中，网络渠道的销售额已经占到了约17%至20%，而为此他会处理好政府监管备案、产品测试、仓储等等的一系列网络销售所需要解决的问题。
Alibaba, a Chinese e-commerce giant that recently went public in America, is explicitly courting foreign SMEs. A recent success story involves sales of imported fresh foods on its Tmall portal. Keith Hu of the Northwest Cherry Growers, which represents American farmers of the fruit, explains that selling to China was made even more difficult as the fruit ripens only during an eight-week period each year. But a clever collaboration with Tmall helped his farmers reach customers even in smaller Chinese cities, boosting sales over fourfold in the past year to over 600 tonnes.
中国电商巨头阿里巴巴（Alibaba，近期在美国上市）已经明确地对外国中小企业抛出了橄榄枝。最近，该公司在旗下“天猫商城”所推广的进口新鲜食品已经成为了成功的典范。Northwest Cherry Growers的Keith Hu，美国果农的代表，对外解释称，以前向中国销售新鲜水果是件非常困难的事，因为每年产出的水果只有八周的成熟期。但现在通过与“天猫商城”的精明协作，美国的果农甚至能够把产品卖给中国偏远城市地区，而这令美国果农去年在华的销售量提升了四倍，超过了600吨的大关。
While it is possible to make it, Mr Yao is blunt about the chances: “If your firm doesn't have at least 100m a year in sales, don't bother trying.” Life is hardly a bowl of cherries for most small entrepreneurs trying to enter the Middle Kingdom.