Different, Difficult, and Unique
China is Different
Even as China enters her third decade of economic modernization,
market intelligence (which Westerners take for granted in developed
countries) is still not widely available here. China continues to
lack a viable database for centralized company information analogous
to "Hoovers.com."(an online database providing business information
on 12 million companies). While limited secondary information may be
available, its accuracy tends to be questionable, depending on the
reliability of the market intelligence provider. This is due to two
(i) Local firms often collect information without a systematic
approach or a rigorous cross-verification process. Such deficiencies
impair the objectivity of a market analysis.
(ii) Official data provided by the Chinese government agencies may be
less reliable due to an inconsistent data gathering methodology.
China is Difficult
Western companies investing in China have had a mixed experience in
the Chinese market. While this experience has proven highly
profitable to some companies, it has also proven otherwise for many.
The typical reasons for market failure in China include the
(i) Rushing into the market before obtaining reliable market
information to support the investment decision. Some companies have
simply followed this trend of market entry without a clear
(ii) Relying on secondary information, which is outdated and of
questionable quality. Given the rapid business and regulatory changes
in China, timely market intelligence is extremely important for sound
China is Unique
The Chinese market has some unique characteristics:
Extreme fragmentation. For example, the auto component industry and
the pharmaceutical industry contain thousands of manufacturers.
Rapid consolidation and restructuring of state-owned enterprises.
Being the number one investment destination for foreign direct
investments year after year.
Complexity due to over investment in certain industries. With the
substantial new investments, for example, China has already seen over
capacity in the steel industry.
A unique business culture that emphasizes on "face-to-face"
interaction. This implies identifying the right local partners, which
in turn, requires an extensive and expensive on-the-ground networking
with potential candidates and sifting through skewed or altered
information provided by candidates, until professional assistance can
Diverse language and dialects, country size, and regional cultural
disparities, which make it even more daunting to obtain first-hand
knowledge of this market.
How Frost & Sullivan Helps Clients in China
Since 1998, Frost & Sullivan has been helping the world's
multinationals to enter and succeed in the Chinese market.
Today, nearly 100 Frost & Sullivan analysts are dedicated exclusively
to the Chinese market. Our integrated China team consisting of local
professionals applies Frost & Sullivan's rigorous and proven
methodology and leverage a rich business and source network across
China. Thus, Frost & Sullivan is uniquely able to provide the highest
quality of Chinese market research and unbiased growth advice to its
here to e-mail us for more information on our growth consulting services in China