China Superpower 2:
The importance of having data at your fingertips through research
Once you have acquired your first superpower, which is educating yourself on the market opportunities in China that will benefit your business, it is time to move on to the next superpower: research.
If you want your business to succeed in China, you will need a significant amount of research at your disposal, readably available. This will help you make decisions swiftly and effectively in a market that is constantly growing and changing.
Knowledge is power. You must have a knowledge base on doing business in China and the appropriate data to guide your company in the best direction.
There is a variety of research that you can do to have data at your fingertips. From market segmentation, to product testing, pricing, competitor benchmarking, and brand awareness, you can gather the necessary information to help you establish and grow your business.
The correct research will allow you to evaluate whether there is a potential market for your company in China. It is critical to keep updating your information, since things can change fast in such competitive and aggressive market.
Do not underestimate the power of research. Benchmarking against your competitors will give you a good idea of your place in the market. Are they improving their service or products? Are they changing their pricing? Are they increasing their fees? Are there things you can improve?
One of the most common reasons business owners use benchmarking is to see how their business compares to their competitors. You probably already know your own business inside and out, but do you understand the unique processes of other businesses in your industry?
By taking the time to better understand other businesses and how they operate their companies, you can see where your business may be lacking in certain areas. In addition, knowing exactly how your competitors are performing can give you the opportunity to outdo them and make your business an industry leader.
Benchmarking can be applied against any process, approach, function, or product in business. The process primarily focuses on measures like quality, time, cost, effectiveness, and the satisfaction of customers to distinguish where there are problems.
It is important to understand that benchmarking is not a quick tool for success. Instead, it is an ongoing process that can be continually relied upon by business owners to identify possible performance issues. Benchmarking should not be a one-time exercise, but rather an integral component of your business’ plan to close the performance gap and maintain practices that will help the business grow and thrive.
Doing adequate research and making it a priority to implement changes into your business to achieve growth is just the first step. You will also need to find ways to measure your progress to ensure that you remain on track with your plan.
Benchmarking can be a useful tool for tracking the progress of your company’s goals and objectives. A benchmark is not merely a ranking but shows the gap in performance that many businesses face. With benchmarking, you can watch this gap gradually closing as your business becomes closer to reaching its goals.
It is imperative to keep up-to-date with the Chinese market, a dynamic environment which can be unpredictable, especially to the eyes of a western company.
First and foremost, market research is about limiting your risks. The fast pace nature of the Chinese market coupled with its fragmented structure means up-to-date information is pressing to find.
However, you need to be aware that data analysis is often conducted by inexperienced researches who don’t have a framework or a real understanding of how to conduct market research. Make sure you verify your sources.
China is hugely diverse. The habits of consumers in Chengdu, in the south, are very different than those of consumers in Beijing, in the north. Conducting a few focus groups in Beijing will not give you an all-encompassing conclusion as to the way Chinese consumers act all over China.
The better you understand the dynamics driving your Chinese market, the better your business strategy will be. When it comes to new market entry, one of the first objectives should be a clear understanding of your real market potential in China.
If you have been doing business in China for a longer period of time, evaluating the size and nature of your market will also be essential when setting more tactical issues such as business turnover, value proposition adaptation or financing round.
Understanding the size of the market in China is a crucial requirement for companies.
Market research in China will help you to answer such questions as:
- What are the profile types of my key consumer segments in China?
- What demographics and social categories should I focus on?
- What geographical areas will be most relevant for my product or service?
- How can I best reach them?
- How do they like to consume and what are their buying criteria?
Integrating China’s distribution network for international brands has its own set of challenges. The boom of e-commerce and generally speaking, internet channels, has created a significant shift in the traditional structures of distribution of goods and services.
The proper research will help you understand these new dynamics, which is crucial to your strategy in China. Having the necessary data at your fingertips will empower you and your business. These are some of the things you can do:
Thorough research on the channels available in China,
A comprehensive benchmark of both local and international competition best practices,
A consumer research to examine how sales networks can match your target needs and expectations and
Feasibility research for each selected channel (needed resources, daily management, regulation)
It is crucial to set up a long-term monitoring plan to anticipate future industry changes. You should track, monitor and analyze what is happening in your market, from competition’s marketing operations to rising consumer trends and sales volume evolution.
Once you start monitoring the market and doing research on a regular basis, you can create a database. This will allow you to better forecast the future impact of your operation on the market or to anticipate market trends and competitors’ actions.
Market research tools in China will then give you valuable input for the full scope of your decisions from strategy design to day-to-day operational planning.
There are many local service companies that can do this type of research and assist you in identifying the data points that will be the most useful for your business.
To learn more about Superpower 2, complete our online inquiry form here below.
DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.