For small- and medium-sized Virginia exporters, the typical business model for selling into China is to find a distributor or agent to market and sell their products or services.  There are several good reasons for this approach and it often works very well for the Virginia exporters.  However, the China market is just as dynamic as it is large.  For example, many market segments in China are becoming increasingly competitive as emerging local companies improve quality and increase investment in R&D resulting in new product launches.  This is just one of the trends which put pressure on Virginia exporters to consider making adjustments to their China business model so they continue gaining market share.

One China trend which represents a real opportunity for many U.S. exporters is the growth in Internet usage.  Consider the following: 

• China’s population:  1.33 Billion
• China’s Internet population: 375 million (increase of 17-fold in the last decade)
• Average time spent online by China Internet users: 3.39 hours per day
• China search engine market size: US$ 2 Billion in advertising revenue (2011 estimate)
• Market share of China’s #1 search engine (Baidu.com): 71% 

What these and other related trends indicate is that companies can use online marketing in China to reach targeted market segments across this large country.  This holds true for Virginia exporters selling to commercial and industrial customers and not just those selling consumer products.  Why should a Virginia exporter care?  This online channel provides an opportunity to remotely promote the Virginia brand inside this important market.  Relying exclusively on a local distributor for lead generation or promoting a brand can be risky, especially if the U.S. exporter decides to terminate the relationship at some point.  It also gives the Virginia exporter more control over how their brand is presented to potential customers in China. 

Language issues and localizing online content for viewers in China are indeed challenges for Virginia exporters.  However, there are an increasing number of consulting firms specializing in cost-effective China online marketing services, which can help with creating and measuring results from these efforts. 

Learning how to adjust their business model and communicate with Chinese customers is critical for any Virginia exporter to keep ahead of competitors. 

Questions or comments?  Email Mark Myrick, VEDP Trade Manager, at MMyrick@YesVirginia.org.

Sources:
China Business Review                  www.chinabusinessreview.com
Darwin Marketing                            www.darwinmarketing.com/en

China · exports · international business · international sales strategy · online marketing · Virginia