Around 200 delegates attended the China-Britain Business Council’s 6th annual SME China Forum on October 31st at Heathrow. Previous SME Forums have been held in Bristol, Manchester, Birmingham, Nottingham and Glasgow.
The Forum was opened by CBBC’s chief executive, Matthew Rous, Ms Bao Ling, Minister Counsellor of the Commercial Section, Chinese Embassy in the UK and Ross Baker, Chief Commercial Officer, Heathrow Airport.
The four sessions and 22 speakers on the day covered:
- Runway to China – strategies and tactics for a soft landing in China
- The Chinese Consumer – a new wave of consumers for UK products
- Innovation and Tech Partnerships – China moving up the value chain
- Digital China – the e-commerce powerhouse
We have gathered the day into 6 takeaways that are key to any UK SME considering entering or expanding in the China market.
- Prepare well – China is an exciting market full of opportunities for UK companies across many sectors. But it comes with its own challenges. Talk to peers; engage advisors; do your research. CBBC’s market research ‘was the best £2,000 I ever spent’ said Rahin Kidy from Cofresh Snack Foods. Due diligence and extensive preparation will help you avoid many issues further down the road.
- Protect your company – Sign contracts at all stages, understand the local regulations, and register your IP, even if you are still in the planning phase of going to China. The old adage that China business is built on relationships might still have resonance but don’t be naïve and think that correct business practices have no place. As China’s business environment continues to adhere to global norms, these legal protections are more and more important.
- Stay true to your company’s brand and identity – There was plenty of discussion around whether a company needs to localise its product or service. ‘You remember the quality long after you forget the price’ said Ed Salt of Delamere Dairy. Understand your China USP and what makes you successful in the Chinese market, but stay true to your brand and company identity. You are unlikely to be able to compete on price with local companies, so be clear on what differentiates you. ‘There is a lot of good will for UK companies selling in to China’ added Roger Kemp of Focus SB.
- Be prepared to scale – Starting off in China may be slow and arduous but when it takes off it can soar! Make sure you have thought through how you will supply and service the market. One speaker saw their orders increase from one container a month to 100 a month in just six months. And it may happen outside of typical markets as Pingpong’s Jimmy Robinson said, ‘58% of digital consumers are outside tier 1 cities’.
- Build a network – 'A quality partner can transform your business’ said Nick Aston of WorldFirst; a point that was consistently reiterated throughout the day. There are many ways to approach the market. Some companies had used Hong Kong as a spring board. Others were using cross border e-commerce, but a clear message is that you’ve ‘got to have someone on the other side’. Be patient in choosing a local partner and extremely careful when signing exclusive licensing or distribution deals.
- China is not just a copycat – In many areas, particularly certain areas of tech, China is already a world leader, and in others it will be soon. As CBBC’s Nathalie Cachet-Gaujard said, ‘21% of the US$2 trillion spent on R&D globally is spent in China’. The challenges for companies with valuable tech is how to engage in meaningful partnerships without ‘giving away the crown jewels’.
The day also included opportunities for networking and discussion, as well as 1-1 sessions with CBBC’s advisors and China experts from the supporting companies. It was fitting that this year the Forum took place at Heathrow, just a stone’s throw from the Golden Mile on the Great West Road. It was here, between the two world wars, that so many British business pioneers built their companies into international household names. CBBC hopes that discussions on the day will help a new generation of innovating entrepreneurs along the same path.
CBBC would like to thank the sponsors of the event, without whom this event would not have been possible. They are: Heathrow Airport, Santander, Unipart Logistics, WorldFirst, Hangzhou City, Woodburn Accountants & Advisors, Pingpong Digital, Sovereign Group and Incopro.
To view images of the 6th SME China Forum - please click here