Strategy Research and Consulting in China

In the late 1980s, China started to emerge as a fast-growing economy, with a high growth rate. After 3 decades, it has become the second-largest economy in the world.

Today, China has emerged as a global economic powerhouse, and as companies seek to tap into the immense potential of this market, effective strategy research and consulting in China become increasingly important to navigate the unique challenges and opportunities in this dynamic business landscape.

Thus, strategy research and consulting in China are key to gaining insights into market dynamics, consumer behavior, competitive landscapes, and regulatory environments. It enables businesses to make informed decisions, mitigate risks, and capitalize on opportunities in the Chinese market.

China since the 1980s

The market of China is a complex market with rapid economic development and change, a large population, diverse tastes and different experiences. Rapid economic development has impacted purchasing tastes and social behavior. Its economy is diversifying too, with so many sectors flourishing with complete expertise.

Until the 1980s, the poverty level in China was too high and there were no developed economic sectors. The country had an unskilled and cheap labor force in abundance. In 1978, the decision to make foreign investment open in China was taken and there were major reforms made in the infrastructure for the next few years to encourage foreign investors. At the same time, the agricultural sector of China was established at a fast rate.

In the 1980s, foreign companies started setting up their manufacturing facilities in China due to inexpensive labor costs. More and more companies began to move their facilities to China with time and the economy started to flourish. An increase in income led to educational reforms and the workforce became more skilled. This led China to move from the production of simple items to sophisticated ones, including electronics and automobiles.

Changes in the Economy Require Strategy Research

China turned out to be a fast learner and used every available opportunity to hone its labor force. By 2005, there was a shortage of labor recorded and the workforce stated to have better opportunities to select employment with high wages. This led to foreign companies moving their manufacturing facilities from China to other countries with cheaper labor costs.

The government of China also supported the development in order to expand its internal economic systems. With the foreign manufacturers moving out, China established its own manufacturing systems. Today, China is the largest exporter of manufactured consumer goods and rice in the world and the second largest importer of raw materials. The two major sectors of the country remain agriculture and manufacturing, employing more than 60% of its workforce.

The importance of strategy research and consulting in China

Strategy research and consulting in China are of vital importance as it helps businesses navigate the complex and rapidly changing Chinese market. 

However, the unique characteristics of the Chinese market can also pose challenges for companies looking to expand or maintain a competitive edge. That’s why strategy research and consulting in China assist businesses in understanding the market dynamics, consumer behavior, and emerging trends, as well as identifying opportunities for growth. These services provide valuable insights that help companies make informed decisions about their market entry, product development, and overall business strategy. 

In addition, the Chinese regulatory environment is known for its complexity and frequent changes. And strategy research and consulting in China keep companies updated, ensuring that they remain compliant and avoid potential pitfalls. 

Furthermore, China’s rapid technological advancements and digital transformation have led to a highly competitive environment for businesses. Therefore, strategy research and consulting in China enable companies to stay ahead of the curve by identifying emerging technologies, assessing their potential impact on the market, and adapting their strategies accordingly. This forward-looking approach is essential for businesses that want to thrive in the rapidly evolving Chinese market.

Key focus areas for strategy research and consulting in China

Developing an effective market entry strategy is key for businesses looking to enter the Chinese market or expand their presence within it. Strategy research and consulting in China empower companies to identify the most suitable entry modes such as joint ventures, partnerships, franchising, or wholly-owned subsidiaries while considering factors like market size, competition, regulations and potential barriers to entry.

Additionally, understanding the competitive landscape is essential for businesses – and strategy research and consulting in China can provide insights into the strengths and weaknesses of competitors, enabling companies to develop strategies that differentiate their offerings, capitalize on competitors’ weaknesses, and identify market gaps and opportunities.

Strategy research and consulting in China can also help companies segment their target audience based on factors such as demographics, geographic location, income levels, and preferences, allowing them to tailor their marketing efforts and product offerings to better serve the needs of different customer groups.

It can optimize supply chain management and distribution networks, identify potential bottlenecks, improve supplier relationships, and develop strategies to reduce costs and improve efficiency.

Chinese Companies Going Abroad

In recent years, China is expanding its globalization strategy under which it is moving its business presence to a more global level. Reforms are being made to encourage Chinese FDI (Foreign Direct Investment) in other countries in order to improve the brand recognition of Chinese manufacturers.

China is increasingly focusing on resource-rich countries in Africa, Latin America as well as developed markets in Europe and North America.  Chinese companies are increasingly investing abroad, as the Chinese economy develops into a dynamic economy.

As China expands, new opportunities and challenges are arising for foreign and Chinese companies in seeking growth.  Business managers are increasingly looking to Market Research in China to help provide insight into a variety of topics such as profitability, maturing markets, unmet needs, acquisition opportunities, innovation, competitive insight, customer insight, regulatory affairs and beyond.

Emerging trends in strategy research and consulting in China

• Digital and data-driven research: The importance of digital channels, such as e-commerce, social media, and mobile apps, is growing, leading to a wealth of data available for analysis through digital and data-driven research. To derive actionable insights and make data-driven recommendations, researchers and consultants are increasingly using big data analytics, machine learning, and artificial intelligence (AI).

• Consumer-centric research: Research and consulting services are placing greater emphasis on understanding consumer behavior, preferences, and motivations as Chinese consumers become more sophisticated. Businesses can better customize their products, services, and marketing efforts to meet the changing needs and expectations of the Chinese market with this customer-focused approach.

• Regional focus: Research and consulting in China require a localized approach due to the country’s vast size and regional diversity. To provide more targeted insights and recommendations, researchers are increasingly focusing on regional markets and segments, enabling businesses to adapt their strategies to the unique characteristics of different regions.

• Focus on innovation: Businesses need to constantly innovate and adapt due to the rapid pace of change in China’s economy and increasing competition in the market, making it important to focus on innovation. Clients are being assisted by research and consulting services to develop growth strategies, identify new market opportunities, and foster a culture of innovation within their organizations.

• Integration of online and offline research: The convergence of online and offline research methodologies has become increasingly important in China due to the growing significance of digital channels. To provide comprehensive insights into the market, consultants are using an increasing combination of traditional and digital research methods, including surveys, interviews, social media analysis, and e-commerce data.

Future trends and opportunities in strategy research and consulting in China

The landscape of strategy research and consulting will adapt to new challenges and opportunities as China evolves and grows. To succeed in this rapidly evolving market, businesses should be aware of the emerging trends and opportunities that shape the future of strategy development in China. These include:

• Strategy research and consulting are being increasingly influenced by advanced technologies such as AI and big data. Businesses can use these tools to analyze large amounts of data, gain deeper insights, and make more informed decisions. For companies seeking to gain a competitive advantage in China’s rapidly changing market, it will be essential to adopt these technologies.

• Chinese consumers are increasingly seeking sustainable and ethically sourced products as environmental and social concerns gain more importance globally. To meet the growing demand and stand out from competitors, companies operating in China will have to integrate sustainability and CSR into their business strategies.

• The surge in demand for high-quality domestic brands is a result of China’s growing middle class and increased consumer sophistication. Local players should be considered by foreign businesses as they look to capture market share, and they should think about collaborating with them or competing against them.

• For businesses seeking to maintain their competitive edge in the intensifying Chinese market, it will be increasingly crucial to attract and retain top talent. To attract and retain the best talent, companies must invest in talent development and establish a positive work environment.

Over SIS Internationaal

SIS International biedt kwantitatief, kwalitatief en strategisch onderzoek. Wij leveren data, tools, strategieën, rapporten en inzichten voor besluitvorming. Wij voeren interviews, enquêtes, focusgroepen en vele andere marktonderzoeksmethoden en -benaderingen uit. Neem contact met ons op voor uw volgende marktonderzoeksproject.