Removing a barrier to growth

Jinwei Hao of IM-Asia explains how differences in the development of China’s industrial market have forced effective b2b industrial marketing to re-think its approach. The Chinese market is harder to access than those Western companies are used to dealing with, but this should no longer prove to be as much of a deterrent as it […]

Jinwei Hao of IM-Asia explains how differences in the development of China’s industrial market have forced effective b2b industrial marketing to re-think its approach.

The Chinese market is harder to access than those Western companies are used to dealing with, but this should no longer prove to be as much of a deterrent as it has done in the past. Particularly when lower cost and more efficient marketing and communication channels into the Chinese market are opening up.

Accessing the whole Chinese market in the past has proved difficult due to the obvious language barrier, but also simply the geographical distance and poor physical infrastructure between centres of development. The latter does restrict how new products are researched and purchased in China. The lack of paper published media aiming at the industrial market has exacerbated the problem and left Western industrial companies to rely upon costly and time consuming trade shows to find new customers. They also rely heavily on distribution partners to promote sales within local geographic areas. There are other options now, companies need to look at channels such as the internet that can be used as a continuous communication method without the incumbent cost.

Western industrial products and services can be sold into China successfully as long as they are marketed effectively. The founding of IM-Asia is a clear demonstration of this requirement, as it was driven by market demand. IM-Asia was set up in 2005 to provide a gateway for western companies to market industrial products and services into China via the internet and through what there is in terms of business publishing.

There are currently two clear customer profiles; the first being companies that have not yet fully committed to the Chinese market and require some basic market feedback before pursuing sales and distribution operations. The second is typically made up of larger companies that may already have sales and distribution in China but need to educate and stimulate demand. The larger companies may also operate export driven manufacturing plants in China, but need help in turning some of that production towards the accelerating domestic market.

Why target the internet? By June 30th 2005, the number of Internet users exceeded 103 million, up 9 million (9.6%) when compared to January 2005. The year-on-year growth is a staggering 18.4%. In addition to the increasing popularity of the Internet, recent surveys also show that Internet users who have broadband access have overtaken dial-up users. Over 53 million users in China now have broadband access, enabling them to access media rich content more quickly and frequently. Because of the ‘always on’ nature of the broadband access, people in China are less restricted when searching for information and making contacts via the Internet. The profile of internet users is also significant, over 14% of all internet access is from the manufacturing sector alone.

Using existing press release material in any language, IM-Asia translates into Chinese and publishes the information, removing the language barrier to promotion in China. Enquiries generated by the published material are formatted and emailed directly to the customer anywhere in the world. The service is being used to find end users, generate demand and find distribution partners.

According to industry figures, one in two air conditioning units are made in China, as are one in three TV sets. China’s 1.3 billion people and rapidly accelerating industrial economy represent significant export opportunities, and its too large a market for European companies to ignore, regardless of their size.

China may be an export driven economy at the moment, but domestic demand is catching up and high technology solutions are in demand. Any company that can produce better quality products more quickly, more efficiently and more profitably will happily buy in technology to achieve this. Those companies that are not making their products available to the Chinese market could potentially be damaging their own future development because their competitors will not be so reticent.

For example, as China’s automotive industry is undergoing restructuring and is implementing new technology, there are substantial opportunities for European companies in terms of both component supply and manufacturing technology. Some key areas include machining, tooling, power transmission, manufacturing process and automation, as well as computer aided design software and other R&D development technology.

The living standard in China is also improving in line with the fast economic growth. With the approach of 2008 Olympics, health care, medical and pharmaceutical markets are hotting up. As the pharmaceutical market in China continues to evolve, drug regulations will become clearer, distribution systems more efficient, the country’s medical needs more advanced.

China’s expanding manufacturing sector has played a big part in the growth of the Chinese economy, however it also put on a massive strain on Chine’s energy supply. It has been said that the power shortage may be a main limiting factor to the growth of Chinese economy. Manufacturing businesses in China are actively seeking new equipment and technology to cut down power consumption and improve energy utilisation, which experienced European companies will be able to tap into with ease.

In addition to providing direct enquiries IM-Asia can conduct fast and effective market research into target industry sectors and implement a sustained campaign of promotion directly at that market sector. Customers can judge the potential market in rough terms and receive summary information about the status of that sector, allowing them to move into China from a more informed standpoint without the time and cost of ‘official’ market intelligence data. The IM-Asia team consists of industrial marketing experts with engineering sales backgrounds, a dual language, web expertise with programming skills, dual language administration and professional technical translating abilities.

More detail on marketing to China can be found on the IM-Asia website here