8 important lessons we learned helping companies enter the Chinese market

Photo credit: Jimmy Chan

Sebastian is a TIA Star Contributor and publishes high-value content that serves the Asian tech community. Read more from TIA Star Contributors here.

China is the market of fantasy for many. It is one of the largest unified economic spaces, its business is booming, and consumer affluence is on the rise. These are just some of the factors that lure entrepreneurs in.

At the same time, China is often talked about with fear. Language barriers, a lack of transparency, and local competition, amongst other factors, have existed at the peril of many.

MING Labs was founded in Shanghai in 2011, building digital products and businesses and helping companies around the world to enter China. Here are some of our most valuable lessons that could save you from making fatal errors and increase your likelihood of finding success in the country.

1. Localize your product

Many companies reach out to us, wanting to create a local version of their product. Often, they seek to do so by merely translating for the Chinese market. This approach is already flawed. It is based on the assumption that product-market fit persists when entering China and that the only concern is people being able to access it in their language. Most of the time, this is not true.

When entering China, you must assume that you have lost product-market fit and need to rediscover it. Start with a riskiest assumption test (RAT) or an MVP mindset in order to validate what is and is not working.

When entering China, you must assume that you have lost product-market fit and need to rediscover it.

You might find that geographic differences make your product useless. For example, a company producing high-tech fishing equipment can be successful internationally where most lakes are natural, but fail in China, where many lakes are artificial. Similarly, you might find that while you have been successful in your home market, you are too early or too late for China.

When entering a new market that is as different as China, starting with a beginner’s mindset is a must. Being overconfident has cost many companies their entire expansion budget without any success. The secret to success is to test early, test cheap, be open, and adapt.

2. Know your Chinese user

As a design-centric company, the user of a product or service is always the most important reference point for us. The only way to find real product-market fit is to be user-obsessed and understand them as well as possible.

Users in China are very different in many ways from those in other parts of the world. One key difference lies in cultural background, where Easterners are more concerned with collectivism than individualism. This makes all kinds of experiences more inherently social, one example being online shopping.

It is important to discover these differences in the target audience and design products and services that deliver value to this specific context. Starting with user research is often a good first step, followed by prototyping new potential solutions and testing them. Having strong customer support is critical, as Chinese users are often quite vocal about their experiences and expectations.

3. Prepare for technical difficulties

The Great Firewall of China blocks many international services, so there are intricacies that one needs to be aware of.

4. Find a local partner

5. Switch to local platforms and ecosystems

6. Adapt your marketing strategy

7. Hire local

8. Pivot and re-evaluate in shorter cycles