October 28, 2014
While many realize that India is the second largest English speaking country and China’s eCommerce is taking off due to the recent IPO of Alibaba, making the most of these opportunities requires awareness of cultural differences. Use these tips to sell abroad, find a manufacturer, or develop an emerging market.
China is in the news, but Statista’s new Emerging Markets to Lead Tech Sector Growth shows India is the No. 1 growth market for technology devices. India could be an easier market to tap or location to manufacture.
Compared to the United States with only 4.43 percent of the world’s population, China is first with 19 percent and India not far behind at 17.5 percent. Should your business expand to target China or India or both? Read on to find out how.
India has the advantage over China because business in India is conducted primarily in English. Most Indians speak both official languages Hindi and English. China is also focusing on teaching English, but the Wall Street Journal reported the Chinese were struggling to learn English. Bloomberg declared Mandarin the second most useful business language behind English.
Standard Mandarin is the official language of China, but it is not the only language. Mandarin is native to the northeast China while Cantonese is still spoken in everyday life in Guangzhou, Hong Kong, and Macao. Communist authorities are demanding that television and other media use Mandarin exclusively.
While some believe all Chinese speak Mandarin, estimates are that only 30 percent in Cantonese speaking areas are fluent in Mandarin. Approximately 1 billion speak Mandarin while 66 million speak Cantonese. (Note that there are other dialects besides the primary Cantonese.) Some estimate 33 million Chinese cannot communicate in Mandarin.
Even if you are interacting with others who can speak English, it can be beneficial to provide them the capability to translate your discussions into their native language. ClickMeeting provides this type of instant translation and can display both English and Standard Chinese (Mandarin) or Hindi simultaneously.
Manufacturing in China versus India
China had the edge in manufacturing in spite of the language obstacle, but India is competing fiercely for manufacturing business. Both governments are offering tax incentives to increase market share. Shark Tank’s Lori Greiner on the No. 1 Mistake to Avoid When Manufacturing Your Product Overseas: “Bear in mind that when you manufacture overseas, you trade lower cost for higher risk, because you won’t be able to keep as close an eye on the production process.”
Greiner’s interviews and how-to guide Invent It, Sell It, Bank It provide additional guidance. Failure to choose a manufacturing facility wisely can lead to financial and legal issues. If you can’t visit the factories in person, hire a professional factory audit company to do it for you.
China’s president has pledged to invest $20 billion in India and to give more market access to products from India. Both countries are working to increase development and trade through the Bangladesh China India Myanmar Economic Corridor (BCIM economic corridor).
International eCommerce Merges with Social Media
Amazon China has struggled to compete with JD or JingDong Mall and TMall. Alibaba is not the only international eCommerce platform to reach audiences abroad. China has multiple social networks enabling users to buy within the network. The Chinese WhatsApp WeChat allows merchants to open stores in chat, reaching 400 million-plus users.
Weibo, often referred to as the Chinese Twitter, offers storefronts featuring major brands including Mercedes-Benz and Nike. Mercedes is reported to have sold 666 Smartcars in eight hours on Weibo. The Chinese mobile phone brand Xiaomi sold 50,000 Mi2 phones in less than a day.
Don’t forget mobile commerce (mCommerce). According to Mobiforge, China already has 1,246.3 million users which is only 33.2 percent of their population, leaving growth potential of twice existing usage. India had only 893.3 million users (3.4 percent of its population) which explains why its tech growth rate is stronger than China. 2014 sales projects are one billion mobile phones — with half or 500k going to China and India.
Target Different Search Engines
While Google has a monopoly in most of the world, it is not the dominant search engine in one of the two largest markets, China. In China, Baidu is the leader. Wired reports The ‘Chinese Google’ Is Making Big Bucks Using AI to Target Ads. If you want to reach Chinese searchers, you need to use Baidu.
To rank in China, your site must be in translated into Mandarin. You need Internet Content Provider (ICP) registration. And the site must be hosted on a server located in China. (Many SEOs advise always hosting your site in the language and country you are targeting for best ranking.)
In India, Google dominates. According to StatCounter.com global stats, Google controlled 95.16 percent of desktop, tablet and console searches in India between October 2013 and September 2014. India is an easier market to reach due to the large percentage of native English speakers. India is the world’s second largest English speaking country.
What is appropriate in one country may offend or be ‘business as usual’ in another. Before launching communications with anyone in a new country, carefully study the cultural differences and etiquette. Kwintessential.co.uk provides useful business etiquette guides by country. Governments including The Canadian Trade Commissioner Service publish additional guides as do sites such as BusinessOutreach.com.
It is essential to know how business is conducted in other countries prior to what will be to many surprising cultural differences. Success requires being prepared in advance, and there is no shortage of information available online to guide you.
Related video: https://www.youtube.com/watch?v=UBzxsCh64xA