What are The Main Challenges Faced by UK Businesses in China?

Entrepreneurialism is well and truly a virtue in this day and age, when the business landscape in the UK is the friendliest to start-ups it has ever been. But, despite the major victories won by small businesses in recent years, the domestic landscape is becoming more hostile.

Rolls Royce

photo credit: charlie0111 / Pixabay

Rising inflation, and consequently, rising overheads, have made it nigh-impossible for certain businesses to turn a profit. Meanwhile, our changing relationship with the Eurozone has led to increased red tape and higher import costs. As such, expanding internationally means something different to today’s growing business.

Indeed, businesses are more often looking farther afield to grow their footprint, as trade deals are struck with non-EU countries. China is one of the most promising countries to expand into, being a growing economy with a great deal of capital available. But China is not without its pitfalls. What are some of the leading issues facing a business attempting to expand into China?

Culture

Firstly, and perhaps most impactfully of all, it is important to understand the role of culture in expansion and growth. For a number of reasons, a country’s culture can be instrumental in the success or failure of international expansion. With regard to UK expansion into China, there are sympathetic expat communities stippling the nation – but not enough to justify any form of resting on laurels.

Indeed, the wider cultural standards of China can run counter to the naïve businessperson’s attempts to properly establish themselves. Language barriers alone can spell doom for attempted physical expansions, while the hiring of staff to further your business’ mission can be difficult in and of itself.

Market Penetration

While culture might be a central cause for numerous different challenges to international expansion, one of the key effects from that cause might relate to market penetration – and resulting financial difficulties emerging from failure to properly penetrate regional markets. As a business taking a real risk in expanding internationally, there is a large burden to shoulder in the potential for fundamental failure.

Understanding the state of the market into which you are trying to enter is essential to building a meaningful market presence there, with culture a crucial constituent part. Without the right approach to marketing and consumer research, your efforts to penetrate the market and establish a presence could quite simply fall flat.

Visa Logistics

Essential expansion strategy aside, there are also logistical issues that businesses need to contend with in order to expand properly. Even businesses with the capital to open and staff a regional branch from scratch need to install an experienced and sympathetic figure to oversee the expansion, necessitating investment in human logistics – or the securing of visas.

Securing visas for staff is not a guarantee, though. Entry to China is notoriously difficult to obtain, and remains so even for business owners with a proven track record. Even if you can pass the smell test amongst target demographics in China, this might be the hurdle at which your business falls. Obtaining a work visa is not necessarily a lottery, but certainly not something upon which every entrepreneur can bank.

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