Italian manufacturing company Atlas Filtri produces a range of products for the water sector in countries all over the world, including China. The company maintains an office in Shanghai with a local team that speaks both Mandarin and English. International Area manager, Edoardo Masiero, shared with Aquatech Online some of the lessons the company has learned from operating in the country.
What are the main considerations for a company looking to enter the China market?
China is the world's largest market for water tech companies. As such, it offers a vast customer base with diverse demographics and preferences.
Urbanization and rising incomes have contributed to a growing middle class, creating new opportunities for businesses.
The Chinese market is highly competitive, with both domestic and international players. Knowing your competitors and differentiating your offerings is key to success.
This will involve thorough market research into consumer preferences, market trends, and competitors.
As Masiero states: "Start slowly."
What did Atlas Filtri find challenging and most rewarding?
"We are still trying to find the 'right' way to business in China. The most difficult part is to find trusted partners."
One of the keys to succeeding in China is building strong relationships with local partners and stakeholders to help you navigate cultural nuances and regulations effectively. For example, Atlas Filtri partners with local trusted distributors and wholesalers that recognise the quality of "Made in Italy" as a value added point.
The most rewarding aspect is success, and to be successful you need to be flexible and adaptable.
As Chinese consumer needs change, you will need to adapt your products, marketing and business strategies.
"We are learning the hard way, since there is not a special receipt to success."
What would you have done differently when first entering the Chinese market?
The need to go slowly is something that many who have entered the China market repeat.
Masiero told Aquatech Online that the company would make a longer analysis of the competitors already operating in the market and the needs of potential customers.
He also advises that, although having a local partner is important, choosing one should also involve going slowly and making a thorough assessment of compatibility, both in terms of the market knowledge and skillsets on offer, but also in project expectations.
Guanxi and the importance of trust
Western companies might be familiar with the term, 'it's not what you know, it's who you know'. The nature of relationships in business is extremely important and it is no different in China.
Building relationships and trust takes time. In China, this is commonly referred to as guanxi. In business terms, this can mean networks or connections that open doors for new business and facilitate business deals But it can also refer to trust within business relationships. The greater the guanxi, the better positioned you are to generate business.
As such it is important to understand cultural norms to help you build better relationships, and to be transparent with your business offer.
Click here for more information on Atlas Filtri.
