Suzhou is known as The Venice of the East
Top 10 Findings: Creating a Winning Business in China
Published in the News & Observer
http://www.newsobserver.com/2011/09/25/1512399/burts-bees-saw-opportunity-challenges.html
There are compelling reasons for a company to consider offering its products or services in a test market. Well before reaching this stage, however, market research should be conducted on the market opportunity. Ben Liu, President of Plexigen in Cary, which he founded in 1999, was born in Shandong province and came to the U.S. in 1985 and joined the faculty of NCSU in 1992. He shared that in 3 separate instances he invested "a lot of money" in hiring a consultant to conduct market research with customers and potential users to find out if there was a real market opportunity. In a couple of instances, what Plexigen thought could be an opportunity turned out not to be. The upfront research ensured that time was not wasted.
A test market lowers the risk of full-scale entry because it is less capital intensive. Furthermore, it provides important customer feedback about a company’s product or service that can improve a company’s business plan before a larger investment. Location is very important. It is hard to find qualified staff in smaller cities and expats face problems, too. While these issues can be offset by financial incentives, these may not be worthwhile in the end.
Geikie states "you don't launch nationally. We will test in a couple of Tier 1 cities and iterate. Learnings from ecommerce also help."
Remember that China is a huge market and approaches to doing business in different regions can be vastly different. "We've been everywhere from the Mongolian border to Shanghai and areas further south," said Melton. They go where the infrastructure needs take them. "Three Gorges Dam is already in need of repair."
Longistics offers a low risk, turn key program for NC businesses not ready to set up a full blown office in China to test the market. During Governor Perdue’s visit to China in October 2009, Duane Long and wife Pat, also a co-founder, announced a partnership with the Suzhou Logistics Center to open the Suzhou Industrial Park (SIP) International Commodities Exhibition Center, an Integrated Free Trade Zone which allows North Carolina companies to exhibit and send their products there for display without paying import duties.
As economic development thinkers and import/export logisticians who knew that agriculture is the largest industry in NC and that less than 1% of US companies export, the Longs determined that an exhibition opportunity in China needed to be created in order to market Beika [chinese for NC] to China. Their passion and spiritual drive directed them to want to help their friends in China, help NC, and the SIP International Commodities Exhibition Center can help support President Obama's initiative to double US exports in 5 years and leverage the trust China has for western products.
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