B2B Marketing in China – Why is this Important?

The subject of how to market and sell to companies based in China is one that is discussed interminably by overseas corporations seeking to benefit from the vast potential of the country. It’s easy to see that the opinions voiced by businesspeople claiming to know the secrets of success to that country diverge wildly. Some overstate the exceptional nature of the business norms and the people to such a degree that selling in China seems unlikely, while others say that marketing and selling there is “just like home.”

China is the world’s second-largest economy, but that seems destined to change within the next few years as the Asian country positions itself to take over the US, which is the world’s largest economy. It is sure to continue on its path as a global growth machine, and understanding how to enter this enormous and intricate market has become critical to countries in the B2B domain.

Marketing Trends in China

Here are some of the most prominent B2B marketing trends in China:

  • WeChat dominates social media, and the software is critical to business users
  • Use of mobile devices continues to increase
  • Newsfeed advertisements are growing in China

Twitter, Facebook, YouTube, Wikipedia, and similar platforms are inaccessible to numerous Chinese netizens. This insularity has led to the rise, and eventual explosion of Chinese social networks such as the previously mentioned WeChat, and QQ IM, which experts hail as THE Chinese instant messaging service. Their YouTube equivalents are YouKu, Tudou, and PPTV. They have several blog hosting services, including Sinablog, Blogbus, and 36kr. Baidu and Tencent provide services similar to Google.

E-commerce in China

China is the world’s largest e-commerce market, and this trend is projected to increase even further. Domestic platforms such as Alibaba’s Taobao, TMall, and JD.com rule the e-commerce space in China. US enterprises aiming to sell merchandise on China’s e-commerce platforms can opt to create a strong presence in the country, or they can use cross-border e-commerce to sell products directly from overseas.

Three-quarters of the B2C market goes to only two platforms – JD.com and TMall – while TaoBao has near complete control of the C2C market with 95 percent market share. Using the local platforms remains the most effective method to sell directly to Chinese online consumers because none of the overseas e-commerce players were successful in acquiring any significant market share.

Understanding Chinese Bureaucratic Decision-Making

The Chinese government is actively offering help in the forms of relaxed regulations and subsidies to foreign and local firms to push growth and domestic innovation in their priority sectors. The industries that have government support are energy conservation and environmental protection, new energies, new materials such as rare earths, biotechnology and medical devices, high-end equipment manufacturing, new IT technologies, and clean energy vehicles.

Pitfalls of Doing B2B Business in China

One of the biggest pitfalls to doing B2B business in China is targeting the country as one big unified market. It’s often better to start small, select target markets prudently, and then adjust as needed. Another pitfall is using a global “one-size-fits-all” strategy.  Companies would do better to understand their customers and develop a China-specific plan.

Marketing is usually not as widely valued in Chinese corporations as it is in companies from Western markets. Salesmanship and salespeople, in contrast, are highly regarded in China. Business agents can build rapport, show respect, and impress potential customers by learning to speak beginner’s Chinese.

No business analysis of China is complete without the mention of guanxi, the Chinese custom of drawing on personal networks, where business interactions can transform into friendships and vice versa.  Businesspeople also tend to take a longterm and relationship-oriented perspective when making large business transactions.

B2B marketing in China is different from that in the West.  Entering the Chinese B2B market is not easy, but the challenges are not insurmountable. Companies can successfully market their products and services in China once they better understand the local culture, emphasize business relationships, understand customer needs, and have the longterm perspective in mind.