Newcomers Need to Be Cautious in Entering the Chinese Market

Marlon Mai November 19, 2013 2 mins read

In an ailing global economy, the great market potential in China still remains attractive to many foreign companies as an investment opportunity, including some multinational companies that have already established their business in the Europe and the United States.

They also look for good management talents as their primary resource to help them enter the market. To attract talents, employers normally tend to build up a wonderful vision. For example you might have the chance to get promoted, or be in charge of a bigger market or create your own team in the future. But have you considered the risks lying beneath these visions?

1. Vague organization and allocation, with one person multitasking, messy workflow and low efficiency.

2. The decision-maker is the general manager or a business leader based overseas. Individuals have less say in the decision-making process and may face a complicated reporting network.

3. Can the company acquire enough financial and human resources and technical support from its overseas headquarters? Generally speaking, it is hard for this type of companies to grant middle managers the chance to lead a team, although many claim they are able to offer such opportunities within two years.

4. If you have no team but merely a title, this means you have to explore a new market on your own. If the brand of the new company is less known in the domestic market, it will be very difficult to push forward. Benefits and awards promised by the employer will be cancelled due to your mediocre performance.

5. When the company has been in the market for several years but has not expanded its business yet, it is clear enough that the company’s position and policies in China remains controversial among the decision-makers sitting in the overseas headquarters. The attractive-looking perspective may end up as a victim of high-level disagreements between executives.

Of course, opportunities and risks are like two sides of the same coin. When you face several options, you need to carefully analyze the potential risks and issues underlying each of them.

Marlon Mai's picture
Managing Director | Finance & Accounting, IT, Sales & Marketing Recruitment
mmai@morganmckinley.com