Robert Collins

Article / Updated 03-26-2016

You can break down business-to-business (B2B) selling in China into the broad categories of products and services. The large product categories of B2B sales in China are Product components Raw materials Capital equipment (such as factory machines and telecom equipment) On the service side, businesses are commonly selling other businesses the following: Consulting Software/IT outsourcing Financial services Businesses' purchasing decisions are more complex than consumers'. If you're selling to state-owned enterprises (SOEs), you have to sell at multiple layers of the same organization. That's because SOEs have a number of people involved in making purchasing decisions. Therefore, building good and trusting relationships with these key people is important. Private companies' purchasing decisions are generally all made by one person — the owner. Don't waste time pitching to middle-level employees. Employees usually have little empowerment in Chinese companies. In open, competitive industries (such as garment industries), companies are used to and are reasonably receptive to cold-calling. However, in certain industries dominated by large companies that the government highly regulates and protects (such as oil production), you need introductions to get in the door because they operate in a more "members-only" type of environment. Here are some tips for courting B2B sales: When selling to businesses, have a nice, glossy brochure. Fortunately, you can print them in China for a good deal less than in the West. Chinese companies are open to speaking with your existing customers for references. If possible, make that step easy for them and bring them around to meet some of your customers. The Chinese are beginning to enjoy traveling. Organizing business/leisure conferences for large customers can be effective, and this method is becoming more common.

Article / Updated 03-26-2016

If you travel to China, for business or pleasure, you need to understand how Chinese money works so you can exchange currency and go about your business without fear of being conned or scammed. And you will need to exchange currency because, for now, cash is king in China. You can find ATMs in all the big cities. Credit cards aren't widely used or accepted except at businesses catering to foreigners. China's currency is called the renminbi (RMB), meaning "the people's money." Its basic unit is called the yuan. Some people also refer to the yuan as kuai. Here are the main denominations of China's currency: 100 RMB note (currently red — older versions are purple) 50 RMB note (green-blue) 20 RMB note (brown) 10 RMB note (blue) 5 RMB note (brown) 2 RMB note (green) 1 RMB note (purple brown) and coin Other smaller bills and coins, called jiao and fen, are also in circulation. You should convert your personal foreign currency into China's local currency. You can do so at a bank in China, at the airport, or at your hotel. Generally, you get a better deal at the bank. Look carefully at the rates and fees to make sure you're getting a fair deal. Prices and exchange rates vary. To find up-to-date exchange rates between Chinese yuan and your home currency, go to finance.yahoo.com/currency. If you expect to exchange currency at the end of your trip, save your exchange receipts. If you don't have the receipts, you can't convert the money back into your original foreign currency.

Article / Updated 03-26-2016

To do business successfully in China, or anywhere for that matter, you must remember one of the first rules of marketing: Know thy customer. The demographics of the consumer class in China aren't like they are in the West, and you need a good grasp on who your customers are and what they want if you want to compete with Chinese businesses. Unlike in the West, most of the money in China belongs to people who are younger than 45. Because of the Cultural Revolution in the 1960s and '70s, people older than 45 generally aren't well educated, live in government subsidized housing, and have spent the bulk of their careers in state-owned enterprises. The younger generation is better educated and is more likely to work in private firms, including foreign-invested enterprises. Chinese consumers show important regional differences in their buying habits. You may very well need different approaches in different regions. Many factors determine how people will react to your offering, but here are some tendencies that may hold true: Northern Chinese aren't quite as price sensitive as other Chinese. They're more likely to pay for convenience instead of shopping around to compare prices. Chinese people in the central coastal areas tend to shop around and try to play stores off one another for a better price. They usually go for the best deal. Southern Chinese (particularly Guangdong province) are used to getting good products at low prices. They've had access to factory overruns at deep discounts for many years. You also have to be aware of lifestyle differences among consumers, so do a lot of research on your particular targets in each market you want to sell into. Shanghai, for instance, is generally more avant garde and Western-friendly than Beijing. But contrary to what you may think based on the two cities' reputations, young Shanghainese tend to be closer to their parents and lead more stable lifestyles. Beijing's 18- to 35-year-olds are more attuned to the rest of the world — particularly to pop culture — than are the youth in Shanghai or any other Chinese city. Beijing's youth are also less traditional than in any other part of China, which may explain why Beijing is the center of China's rock and pop scenes. In China, you do consumer research the same way you do it in the West. The advantage for foreign companies is that most Chinese companies don't bother (or don't know how) to do consumer research. For Chinese companies, just throwing ideas on the shelves and seeing whether they sell is usually cheaper and faster. If you're going to compete with Chinese offerings, market research can give you an edge. In China, doing intercept interviews is usually more effective than doing focus groups because when the Chinese do focus groups, they tend to be a little embarrassed about speaking in front of each other.