Many businesses find it difficult to enter the Chinese market. Even a number of Western digital giants, such as Google, Amazon, eBay and Uber, have been confounded by the world’s largest digital market, according to a report by the Harvard Business Review.
HBR adds that executives from these firms thought they suffered from a lack of strategic determination and patience but expert observers have pointed to the failure of these firms to adapt to the Chinese ecosystem, noting that they needed to improve their understanding of the Chinese business environment.
If it is difficult for the giants, it could be even more difficult for the small and medium enterprises (SMEs) that have smaller economies of scale.
As the world’s most populous country, ranking No 2 in the world in terms of economic growth, according to the International Monetary Fund (IMF), China remains an attractive market for business owners.
Its economic value of more than US$24 trillion (gross domestic product at purchasing power parity as at 2019) presents significant opportunities for foreign companies and start-ups, says Jeremy Mah, founder and CEO of fintech company NeuXP.
NeuXP, an integrated digital banking platform, aims to transform the user experience in the fields of digital banking and business tools, especially for non-residents, says Mah. Its services will be rolled out in other regions such as Europe, the Middle East and the US in future phases.
“Although foreign business ventures have been an important driver of the Chinese economy, non-Chinese companies have found it difficult to thrive there,” Mah notes.
Business owners looking to expand to China face various issues and challenges that, if left unaddressed, may adversely affect the growth of the business, “proving to be detrimental to SMEs and start-ups”, adds Mah.
This includes the language barrier, cultural differences as well as the lack of a local network.
“The process of looking for different vendors to maintain many aspects of their business is tedious. There is also the lengthy process of setting up the company, which can result in unnecessary delays. Unfamiliarity with local policies or regulations can also [be a hindrance],” he explains. [email protected], a business initiative from NeuXP, plans to help with this problem. “Our main aim is to be the best digital companion for non-residents globally, not just in the digital banking space but also in the area of business expansion,” says Mah.
NeuXP’s core service, a digital banking platform that will be launched in the third quarter of 2021, is more than just a banking app, claims Mah. “It provides an integrated banking ecosystem to ensure an easy experience for non-residents, while solving their banking concerns abroad.”
Usually, the conventional method can be “challenging and lengthy”, so some firms will partner with third-party agents, making them vulnerable to risks in terms of credibility and reliability, he explains.
The platform automates the processes of setting up and scaling a business, helping with incorporation, registration and licensing.
“Removing the need for a middleman, users will have access to multiple local languages and get a holistic view of their businesses and their respective industries,” says Mah. This ensures that they remain compliant with local regulations and gain direct access to local digital services that manage their back-end processes, he adds.
How SMEs can utilise the digital companion
“Every step of the business journey in China is taken care of with a few simple clicks, from incorporation to accounting, banking, bookkeeping and legal requirements. Business owners are able to save at least a few weeks or even months of their time, and they will also have access to these services at minimal cost, saving them thousands,” he adds.
The idea of a business automation tool for Asean businesses looking to expand to China came about after the company saw how challenging it was for SME owners to market their products in Nanning, China, Mah explains.
“We had a business partner who was in the business of selling ladies’ accessories using locally produced materials. Though there is a demand for her products and good potential for her business to grow in Nanning, she did not have the confidence to expand her business there owing to the many restrictions and challenges.
“She is one of the first users of our business automation tool to venture into opening a branch there. The tool provided ease and convenience in managing her business digitally, despite the limitations of the pandemic,” says Mah.
The service also provides access to local platforms such as WeChat and Baidu, so business owners can reach out to their audience in China, like any local business.
“We are also planning a feature to connect businesses with potential investors. This will be a value-added service to open doors for investment and funding opportunities to bring their companies to greater heights,” Mah says.
In addition, Mah aims to be a “game changer” by educating the business owners through the platform on the benefits and incentives provided by the local government for foreign businesses. This, he hopes, will motivate more companies to expand to China.
In late January this year, NeuXP’s partner in China signed a memorandum of understanding (MoU) with Cloudbae, currently the only provider that integrates smart city applications across China.
Cloudbae is a data industry company established with a mixed ownership approach, with shareholder companies such as Guangxi Group Co, Nanning Rail Transit Group and Alibaba Cloud’s DT Dreams.
“Today, our services connect our users with 47 government departments, integrating information resources using government, industry and business data to offer more than 100 services to our existing user base.
“Our partnership with [email protected] allows us to offer one-stop enterprise services to companies, with Malaysian start-ups and SMEs the first to benefit. My team and I are looking forward to seeing more international businesses blooming in Nanning,” says Jobb Zhou, president of Cloudbae.