Mandarin Chinese is the most widely spoken first language in the world

Mandarin is the most common form of Chinese, and is understood by nearly all Chinese people. There are around 1.3 billion speakers of Mandarin in the world, ie more than 17% of the global population. This means Chinese has more native speakers than any other language in the world. The Chinese language is also known to be the oldest written language in the world still in existence – its earliest characters date back at least 3000 years. Mandarin Chinese is the official language of China, Taiwan, and Singapore.

1.3 billion people are native speakers of Chinese.

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Exporting to China – start by choosing a region

China is a very large country in terms of both size and population, with incredibly densely populated cities. There are over 160 Chinese cities with more than 1 million residents. According to the OECD, the largest cities in China are Shanghai, Shenzhen, Guangzhou, Beijing, and Nanjing. When entering the Chinese market, you should first choose the most suitable region for exporting your product. Cities on the east coast of China are generally more economically advanced and have better infrastructure. The most important economic centres in China are the Bohai Gulf together with the North of China, the Yangtze River, and the Pearl River Delta.

Choose your export region!

Export regions in China
Export regions in China

Organising exports to the Chinese market

The economy of China accounts for a total of 18.06% of global GDP. By 2020, China is projected to become the world’s largest luxury goods market. Overcoming the hurdles on the Chinese market, such as the advantage given to local businesses, an unfamiliar culture and the language barrier, can yield remarkable returns when doing business there. This graph depicts the main Chinese imports.

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Entering the Chinese Market: an analysis

Before entering a new market, it is always wise to analyse the environment regarding your product or service. China may not be the most suitable market for your product. In order to assess the suitability of China as an export market for your product or service, we recommend using the model of Porter’s Five Forces. With this analysis framework, you can assess China as an export market in terms of competition, entry barriers, substitute products, and the bargaining power of buyers and suppliers.

How can you use Porter’s Five Forces model to analyse the suitability of China as an export market?

Porter’s model of five competition forces is an excellent tool for analysing a field of activity when entering a new market. Using this model will give you a sound insight into the current profitability of your chosen field of business, as well as in the long term. Long-term profitability is difficult to achieve in fields where one or more competitive forces are strong. In order to use Porter’s model for your business, you must look at each aspect of your area of activity.

Buyer power – do you control your buyers or do they control you?

The bargaining power of buyers, ie the consumers of your product or service, can be assessed by answering the following questions.

  • How many potential consumers are there for your product? If there are many potential buyers, the position of power belongs to you. If there are few buyers, then they have the bargaining power.
  • Is the buyer loyal? Is it easy for them to switch to another product? If you are offering coffee pods, for example, your customer might also need to change their coffee machine in order to switch to another product. However, if your company sells soap, changing to a different product is easy for the buyer. Brand awareness should also be taken into account here – if your product is well-known and loved it is less likely for customers to switch to another brand.
  • Is your product special, high quality and expensive? If your product is unique on the market, then this puts you at a distinct advantage. If, however, there are many similar products, the buyer will base their choice on quality and price.

Availability of substitute products – is your product or service replaceable?

substitute product means a competing product, where “competition” is to be understood in the broader sense of the term. For example, these days, competing products for TVs also include computers, tablets and smartphones. The potential threat to your business of substitute products or services can be assessed by answering the following questions.

  • What is the quality, price and functionality of potential substitute products? If substitute products are better, more affordable or more functional than your product, the threat is real. If not, competing products will not endanger your product or service on the market.
  • How costly is switching to an alternative product? For example, web hosting providers will often move your website to their platform for free – this makes the cost of switching service providers non-existent and the impact of substitute services on your web hosting business stronger.
  • Are the consumers inclined to switch products or services? For example, women are generally less inclined to change hairdressers than men, giving women’s hairdressers more protection from substitute service providers.

Entry barriers – is it easy to get started in this particular business?

Supplier bargaining power – on whom does your business depend?

Here, you should evaluate whether potential competitors would find it easy or difficult replicate your business model.

  • What kind of initial capital do you need to get started? Does starting your business require a large initial investment, special education or offices in a specific location? For example, opening a private clinic requires medical education, medical equipment, clinic rooms, etc, while all you need to start a gardening business is the necessary experience, tools and customers. This means that there are more entry barriers to the private clinic market and fewer entry barriers to the gardening market.
  • Do you need personal relationships or contacts to get started? If success hinges on having a loyal customer base, friends in high places or good contacts, entering the market will be difficult for newcomers, as entry barriers are high.
  • Do market players have patents? If the products already on the market are patented, others will find it difficult to enter the market.

If your business model is heavily reliant on partners performing important work to bring your product or service to life, it is vital that you find answers to the following questions.

  • How many suppliers are available? If you are buying components or services from a supplier with a monopoly, they have a great deal of power over you – they can raise prices or extend delivery times and there is nothing you can do about it. However, if you have many other suppliers from which to choose, you are in a strong position to negotiate the best possible terms.
  • Does the supplier provide a component or service that is central to your main business process? If you need to buy a key component for your product from an external source, then you are at the mercy of your suppliers. To reduce supplier bargaining power, it pays to have key components or services produced within your company.
  • Is switching suppliers costly? If swapping allegiances with suppliers is difficult or costly, the power is in their hands.

What is market competition dependent upon?

Market competition is dependent upon all of the aforementioned factors affecting your industry. Other factors that play a role include the number and diversity of competitors, the complexity of the information field, and barriers to exiting the market. If barriers to exit are high – eg businesses have large expensive factories that no one wants to buy – that means competition is unlikely to decrease even when demand is significantly lower than supply.

Once you have considered these questions and conducted any additional research where necessary regarding your field of business and exporting your product to the Chinese market, you should have a sound overview of your chances to break into this potentially lucrative market.

The figure shows the Porter’s Five Forces model.

Porteri 5 jõu mudel EN

Translation for entering the Chinese market

1. Start with the source text

First, examine your source texts and make sure you are 100% satisfied with them. If necessary, have them reviewed by a copywriter or an editor. Next, select the texts you wish to have translated and send them to our translation agency. We will make sure your translations are flawless and appropriately adapted to the target market. When submitting multiple texts for translation, we can offer a discount on any repeated segments.

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2. Choose an export region

Decide the region of China in which to start your business. Mandarin Chinese has more speakers, but in Hong Kong, which is also an attractive economic area, the official language is Cantonese. Analyse your product as well as the various and diverse regions of China and select the most appropriate.

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3. Consider the deadline

Translating into Chinese generally takes more time than most other languages. We always have our Chinese translations double-checked. You should also bear in mind that text volume decreases significantly when translating into Chinese, as letters are replaced with characters.

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What to keep in mind when ordering Chinese translations

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