Risks and solutions when entering China’s market
As China is one of the biggest markets in the world, there are many businesses that want to take their shot at expanding to this market. However, it’s not just easy to expand to China – one of the most populated countries in the world. Instead, there are many problems. One of the biggest ones is the protection of the brand.
The West is the pinnacle of civilizations, the home of leading technology that humanity has ever reached. Accordingly, if the business wants to get their hands on some cutting-edge technology or start their career, they should go to the West.
However, if the businesses have already been stable and the owner wants to expand the market in order to gain more profits, the East in general and China, in particular, is the market that they can’t miss.
However, it should be noted that expanding to China carries a lot of risks that the business should be aware of.
The risks of entering the market in China
One of the most easily recognize risks when entering a new market is the lack of foundation to support the expansion.
In IP, it’s a trademark, copyright, patent, industrial design, etc.
Although the business may have already acquired protection in their original country, if they don’t have similar or even above kind of protection in China, they are vulnerable to infringement actions by third parties.
The most notable type of infringement is through trademarks. This is because even if the business is a multi-national company like Meta and Facebook, they will be attacked if they haven’t acquired a trademark registration in China with their brand.
In fact, this happens a lot as once a notable company in the West arises, in the East, the trademark applications consisting of their brand and images would be filed the following days or weeks.
Not just the IP assets but third parties may also choose to register social media accounts, websites, or e-commerce stores with the same name or similar name to the business to take advantage of their brand image, trade in counterfeit products, or even blackmail them if they enter the market.
Accordingly, when entering a new market, it’s best that the business has already made all preparations within 1-2 years before the official announcement of expansion.
Regarding China’s market, however, there are other important notes before expansion. It’s the language of the country.
Chinese is a type of pictographic language, so brand owners and businesses should note that acquiring protection of their brand in English in this country is not enough. They also need to register for the pictographic language version of their brand if they want to fully protect their brand in this country.
Other solutions needed when entering and expanding in China
If the business doesn’t make the expansion themselves but instead, through a partner in China, they should make sure that the contract between the 2 parties should clearly state the ownership of the IP rights because the business will want full ownership of the IPs, not their partners in China as they could use these provisions to ‘backstab’ you someday.
Regarding public relations, businesses need to make sure that any message on behalf of your company or in relation to the cooperation between your company and your partner, must be approved by you first.
This includes public presence, as well as any marketing campaigns issued by the partner.
***Other Articles***
– You could see How To Register Trademark in China here.
– You could visit here to see Procedure of Trademark in China.
– You could visit here to check Required documents of filing trademark in China.
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