When Chinese and foreign companies blindly enter overseas markets with domestic experience only, they are most likely doomed to fail. When entering a different environment, things have to be handled in a flexible way, and previous experience becomes irrelevant.
Here are some key points:
The choice of the market
Many Chinese companies try to enter the U.S. and EU markets, but these markets are already highly saturated and extremely competitive for most of the products Chinese are offering.
However, there are still lots of regions where economies grow fast and are more open to foreign companies. These regions include:
Russia, Belarus, Ukraine, Kazakhstan, Turkmenistan etc.
The region has a complicated political situation and mostly is resource-oriented. The region is not suitable for tech development, and there is less competition for foreign companies wanting to jump in. Since most people in these regions can speak Russian , local companies reign supreme.
South Africa, Kenya, Ghana etc.
These regions and CIS countries share common features – they both have fewer languages being commonly spoken and faster potential growth rates of consumption.
India, world's second most populous country is highly perceptive of new trends and has a fast economic growth.
Asia pacific countries
Vietnam, Indonesia, Philippines, etc.
Culture and geography in these regions is similar to China's, with large populations, and a great potential for an expanding consumption .
South American countries
Chile, Brazil, Uruguay, Peru, etc.
Stable growth, good incomes
Some of these developing markets may not have much money available now, but the situation can and will change. In the coming years they might become a strategic base for further Chinese expansion.
Market expansion strategy
When a Chinese company enters the international market, they act like they have a long history, but in fact they don't. They take a traditional expansion strategy instead of the modern integrated marketing strategy. This traditional expansion strategy might work for some products with unique competitive advantages, but if the products are just slightly better than the existing products in the market, it is indeed difficult to surpass experienced competitors.
Find out the main issues and do a self-evaluation before entering a market
Are the chosen target customers similar to Chinese customers?
Who are my competitors?
What is my unique advantage? What makes me stand out?
Which potential users can I already take over by offering better services?
Why is it a good period to make other brand users into users of my products instead?
If the competition is hard to avoid, then is the growing number of potential users enough to meet my needs?
Don't imitate the competitors
The competitive advantage is achieved by standing out, not by copying other peoples products or services.
To compete, you must be different instead of being slightly better. If you do not realize this, you don't have any advantage in this market. Maybe it is not a suitable market for your brand.
A western company can rarely compete with Chinese ones in terms of price – Chinese companies will win international consumers by lower prices and better efficacy. However, they are doomed to fail if they try to imitate their international competitors.
If your brand is entering the market for the first time you need to be as close to your customers as possible. That is why social networks are a good place to start.
Many people have asked me which marketing channels are the best, in different situations. My answer is: the one you are the most familiar with. Superficial attention to the customers or marketing strategies without research is never a good thing for a startup.
It's difficult to deal with customers' feedback in foreign market. Language and cultural differences need constant attention in this age of consumer-driven products, and it can be impossible to make a successful product without continuous optimizations based on users' data and what they provide.
Work with KOLs (key opinion leaders)
Instead of using big banner ads on websites with a huge number of visits for your first venture, it's more reliable to spend time defining who your product's real KOLs are. They do not only cooperate more willingly, but also provide you with priceless feedback about your newly entered market. Moreover, journalists often browse these influential KOLs' blogs to get the latest news.