How Deep Do You Have to Localize to Crack the Chinese Market?
Localization on a national level is obviously required, but many companies overlook or underestimate the amount of localization that is required between subcultures and regions within the great country. Honestly, there is no such thing as “selling to the Chinese.” That is the same thing as saying “sell to Africa” with its 50+ countries and thousands of dialects. China is perhaps not quite that culturally disperse, but it is close.
The bottom line is that you will be doing some cultural digging if you do want success in China. Let’s take a look at just how far down you may have to go.
Your Money is No Good Here
As any Chinese executive will tell you, simply bringing a whole lot of money into China will get you nowhere. It is much more important to get rid of Western codes of conduct and principles than it is to come with full pockets.
Beijing is especially reactionary when it comes to regulating accelerated growth industries. This means that the private market goes much farther in China than it would in Western societies before it is reined in. Decision cycles are much shorter in China, and the notion of “Chinese speed” comes from the lightning fast processes that local companies tend to cultivate.
The same is true of Western sports and entertainment companies. These companies seem incredibly slow when they move into the Chinese market. For example, the NBA, the NFL and the WWE are looking to bring some sort of entertainment program into China. All of them are experiencing slow down precisely because they are adhering to a Western schedule of business.
The companies mentioned above are also experiencing culture shock when it comes to the viewing audience. In China, more than 70% of people would view a sporting event on a mobile device rather than on a big screen TV in the living room. The NBA seems to be taking the lead in navigating the space, recently announcing a deal with ByteDance for streaming content on Toutiao and Douyin, both very popular streaming Chinese apps.
The WWE is probably the laggard of the three companies mentioned above. According to executives within the company, it took around nine years for the company to fully understand what it took to go full bore in the Chinese market. The WWE is currently partnering with a local company to stream its content and offering a relatively small subscription package that has yet to really break in the country.
One of the quickest ways to get into the Chinese market is to conduct a joint venture. Because Chinese companies move so quickly in high-growth industries, Western companies can quickly be left behind if they are not willing to step up to the plate. Instead of competing directly with companies who already know the local landscape, American companies choose to split profits and learn the landscape.
The gamble is paying off. Many companies are actually sectioning off into their own fulfillment and distribution packages in Beijing. However, the majority of companies that are doing business in China will need a local partner in order to navigate the nuances of the culture and business practices there.
Many companies want to find their way into China because of the huge volume of people in the country. However, very few companies from outside of the Chinese mainland will ever experience a significant percentage of the billion plus consumers in China. The marketplace is so stratified between cities that most outsiders basically consider them different countries.
Between major cities in China, a company may experience huge variances in income, technology, and environment. All of these things have a huge impact on how people respond to companies in the area. The Chinese companies already understand how to navigate between the cities have a huge advantage.
As such, localization into the Chinese subculture that your company is targeting is very important. For instance, the gaming market in China is quite stratified. MMORPG players are a completely different sect from dance gamers, who really don’t do any sort of socializing with RPG and strategy gamers. If a company wants to crack one of those audiences, it is best to leave the other two completely out of the equation.
As one of the most diverse populations under one national banner, the Chinese people offer a great opportunity for the expansion of your business. Take the time to drill down into your preferred section of China, and you will reap great rewards. do not make the mistake of thinking that you can sell the entire Chinese market, and you’ll avoid many of the pitfalls that have stopped many great companies before you.