Lim says the major players in China’s tech sector are Baidu, Alibaba and Tencent, which are sometimes collectively known as the “BAT companies”.
“Baidu is China’s dominant search engine with 80% market share. Alibaba is China’s dominant ecommerce company that controls 80% of all online Chinese sales and is poised to go public soon,” he says.
“Tencent is China’s dominant gaming company that also owns WeChat (Weixin in China).
“It’s important to recognise that although each company has a speciality in search, ecommerce and gaming; all companies have overlapping products and are intense rivals. The founders of each company are also among China’s richest people.”
However, despite the opportunities, Lim warns China can be a challenging and frustrating place to do business.
“Communication is something that takes time to adjust to in China. Interpreting body language and what is not said, is as important as what is being said,” Lim says.
“Showing or saving face in China is very important in Chinese culture, so when you think something is supposed to happen, there is usually an underlying reason why it isn’t happening.
“That’s why it is advisable to just go there, observe and learn what happens and how people do things. Of course, you should learn Chinese too.”
The other frustration is bureaucratic complexity.
“As a ‘communist’ country with many layers of political bodies, there is an excessive amount of process and paperwork,” Lim says.
“Policy can often change and many government departments are usually not across the new rules and laws, so you can often hear conflicting stories. Although things can be slow, money and connections can usually speed things up.”
Lim says that trust is something we take for granted in Australia.
“Here, most people would often give a stranger the benefit of the doubt. However, in China, due to historical and cultural reasons, people default to not trusting a stranger,” Lim says.
“That’s why Chinese people must always spend a long time to really get to know you before doing business with you. For entrepreneurs, it is also wise to team up with a local Chinese person you can trust, to help you navigate all the very local customs and business practices.
“The bottom line is – don’t assume you understand China without spending sufficient time there. It’s not an easy place to do business.”
Lim also warns entrepreneurs need to be aware of the visa and air pollution situation before they move across.
“To work in China, like anywhere else, you need a work Z visa. This requires a job offer from a sponsoring company. Since late last year, the government has tightened its restrictions so requires more. In Beijing, a non-criminal record must also be presented,” Lim says.
“If you are planning on just checking it out, a business visa is fine. But you should be aware that you are only allowed to stay on the mainland for a short period of usually three months at a time.
He says in the last two years, China’s air pollution problem has become increasingly serious.
“You may find yourself checking the pollution index more than the weather. If you plan to live there, you will have to sacrifice the vast blue and clean skies of Australia,” he warns.
Jason Lim posts on Twitter @jaezenlim. He also writes for Forbes about Tech in China at https://www.forbes.com/sites/jlim.
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
