The relaxed Chinese attitude towards intellectual property and strong local competition, which distributes products for free, are among reasons often listed as being responsible for failed attempts at market entry into China.
However, it is possible to earn money in the Chinese market as a software company. To succeed in China you need:
- Basic Chinese language skills. China’s roughly 10 million English speakers may seem like an impressive number, but it only makes up around 0.7% of the country’s population.
- Understanding Chinese culture is also an absolute prerequisite. Perseverance and respect are part of the Chinese way of doing business which dates back to Confucius.
- Products and solutions should be tailored to Chinese needs.
Furthermore, an already established network, in Chinese “guanxi”, ensures you can reach out to the right contact person and get a deal done in a short amount of time. Trust replaces expensive legal iterations. In addition to these basic requirements, you need a team on site. This team should be responsive and have intercultural competence. This setup will enable:
- Short and fast decision-making processes, which allow a company to make use of the momentum of short-term opportunities. The team must be able to react quickly to any given situation, as the time frame of a project may already be closing again after a few days.
- Long-established models will not necessarily be successful in China. The sales team must think “out-of-the-box”. This allows them to develop new projects in close cooperation with the Chinese partners and/or customers.
- “Forcing” your existing processes, even if they have a track-record of success in North America or Europe, will not be a guarantee for success in China. A flexible approach to licensing and business models is the key to meet the requirements of the Chinese partner and/or customer.
This approach will pave the way for success in China. You cannot, however, expect miracles to happen overnight. You will most likely have to accept setbacks and learn from your mistakes – neither Rome nor Beijing were built in a day.