Doing business in China can be difficult, admits Nicolas Chu, CEO and co-founder of digital marketing company Sinorbis – but it’s not impossible.
Australian businesses – especially SMEs – face a number of challenges in breaking into the China market – including language and cultural differences, he says.
But by putting China in the “too hard” basket, they may be missing a once in a lifetime opportunity.
“It’s a different market, it’s a difficult market, but it’s not impossible to crack it.”
Sinorbis was launched late last year to help companies unlock business opportunities in the world’s second largest economy.
With its ever increasing affluence, China’s e-commerce market is forecast to grow by another 50 per cent to reach $A8.6 trillion by 2020.
In an exclusive interview with Dynamic Export Mr Chu, a former senior executive with Expedia and Hotelclub, says Australia is well-positioned to tap into this lucrative market.
“Chinese consumers are increasingly looking internationally for premium goods and services,” he says.
“Brand Australia is known for its authenticity and for pure, organic, healthy products.
“This can be definitely leveraged with Chinese consumers.
“As a major trading partner (imports and exports) Australia is one of the rare western countries that really understands China.”
Mr Chu has identified four key sectors that draw major Chinese interest: foods and health supplements, travel, property and education.
“These are the four main growth areas,” he says.
And the recently signed free trade agreement between the two countries will provide further opportunities.
“Many businesses baulk at doing business in China, but with the right knowledge and local expertise it can be as easy as doing business in Australia,” he said.
“They simply don’t know where to start – and this is where Sinorbis can help.”
Mr Chu and Sinorbis co-founder Allen Qu spent several years doing business in China and fully understand the market and culture.
Now based in Beijing, Mr Qu is one of the pioneers of digital marketing in China.
Over the past decade in his dealings with China Mr Chu learnt three key messages:
- The rapidly rising Chinese middle class has changed the local consumer landscape – there is now a strong demand for Western goods and services
- China’s online e-commerce system has exploded to become as big, if not bigger than the US
- It is very difficult for companies outside China to do business because of language and differences in business culture. Also, China’s online system is completely different. For years the Internet in China has been regulated by the Great Firewall, which has blocked the major Western digital and social platforms from building a Chinese presence.
“This huge online market has become more mature, but it is a really difficult market to try to tap into,” Mr Chu says.
“Many companies will expect to get an immediate return,” he says. But you have to do things differently. It’s a long-term strategy.
“Quite often you see a product that works well here, but it may not work in China.
“You must invest time, money and resources – and you need to continually invest to maintain momentum. But the returns can be great.”
Extensive experience in digital marketing
Mr Chu offers the following advice to Australian businesses looking to grow their business in China:
“Firstly, you must take time to understand the market, then you must adapt your products or services to fit the market. And finally, you must invest.”
Mr Chu, who has had extensive experience in managing online businesses, is responsible for Sinorbis’ strategic directions and global operations.
Allen Qu is an expert in marketing to Chinese digital consumers, having founded Netconcepts, one of the first, and now one of the three largest digital marketing firms in China.
“Allen and I are in a unique position to close the gap that now exists between China and the rest of the world,” Mr Chu says.
“That’s why we decided to establish Sinorbis.”
The name Sinorbis, he explains, is derived from Latin (Sina = China) and (Orbis = World) – linking China to the world.
Sinorbis offers its clients a comprehensive suite of digital, mobile, marketing and e-commerce solutions.
Online reputation management
It also offers custom designed digital marketing strategy plans to target China’s 413 million digital consumers.
Other services include Chinese SEO and SEM social media marketing, content localisation, online reputation management mobile marketing, and web analytics.
Late last year Mr Chu put his highly successful corporate career aside to concentrate on the new venture – such is his confidence in the new business model.
At that time he was president of Hotelclub and Ebookers’ global brands across 30 different markets – two businesses turning over US$2.5 billion a year.
“It’s a big move, but I am confident we can make a difference,” he says.
Sinorbis has already attracted interest from investors in Australia, Hong Kong, Vietnam and Europe, who share Mr Chu’s confidence.
High profile clients
A number of high profile clients from a broad range of global industries have also come on board since the business was launched.
In Australia, Sinorbis has signed with prominent Australian businesses such as REA Group, the University of New South Wales, the University of Technology, Sydney, BridgeClimb, and the University of Tasmania.
The company marked its launch in Sydney earlier this year with the release of a whitepaper exploring trends in Chinese online demand for Australian consumer goods.
The whitepaper – Stoking the Dragon: Unlocking China’s New Generation of Digital Consumers – examines China’s unique online ecosystem, its new generation of consumers, and the main cultural and economic differences.
It is the first of many whitepapers Sinorbis plans to roll out in coming months to help educate Australian exporters.
A second whitepaper: The Rising Dragon – Touring with the Chinese Traveller, was released earlier this month. This paper identifies tourism opportunities for Australian business.
The whitepapers are based on extensive research from Sogou, one of China’s largest search engines, with whom Sinorbis has a strategic and exclusive partnership.
“We get exclusive data from our search engine and it allows us to have a very good understanding of the type of products Chinese consumers are searching for,” says Mr Chu.
Sinorbis is also planning to soon launch a series of breakfast seminars to assist companies and individuals looking to do business in China.
These offerings are designed to further educate the market about China business culture and are an integral part of the company’s marketing strategy.
Sinorbis has offices in Shanghai, Beijing, Colombo and Sydney and clients in most continents.
Its Shanghai office is led by Dandan Cheng, who for several years led the development of key product categories for eBay in China.
“Eventually we hope to expand into other regions, including the US,” Mr Chu says.
Sinorbis is not the first company offering to assist Australian companies break into the China market, so what is its main point of difference?
“We are in a unique position,” says Mr Chu.
“We have a deep understanding and local knowledge of China and local agencies.
“We also have a strategic and exclusive partnership with Sogou, one of China’s largest search engines, and an international network of digital experts and China specialists.
“We help you to build your brand online in China. We ensure your reputation is good enough for Chinese consumers to buy your products and services – this is key in China.
“We don’t do e-commerce, we don’t do presentations and we don’t do logistics.
“Our strength is marketing.”