Many international companies find that the Chinese research reagent market seems to be quite different than that in US or Europe. In the first years of entry to the market, it is quite difficult to analyze the potential, customer behavior and effective strategy for growth. Usually, it is easier to boost the sales with the help of one or two distributors in a typical western market. However, almost all international companies find it impossible to do the same in China.
The difficulty/difference is not just because the Chinese market is significant. Indeed, this dilemma is more the result of its complexity. Currently, there are more than 10, 000 distributors in the market which have local resources. Most research labs purchase reagents on their own instead of using a shared purchasing system. As a result, national distributors rely extensively on local distributors to cover the majority of the national market instead of only using their own sales teams to do it.
Distribution in China
For the long term development in the Chinese market, it is quite important to understand the differences and take actions accordingly. The first step in the market is to choose your distributor combination wisely. The most important cities for your distributors to cover are definitely Beijing, Shanghai in the Biological research sector. According to the data published on Biomart.cn, the Biological institute ranking shows that there are 3 institutes from Shanghai and 4 from Beijing in the top 10 Biological research institutes. As you can see in the ranking diagram below, the top 1 – CAS (Chinese Academy of Sciences) is much bigger than all the others because it has many institutes around the country.
Another dilemma for international companies is that it is quite difficult to understand or manage the Chinese distributors’ marketing and promotion activities for your brand. This problem is mostly because you don’t have local staff / offices in China. Without close cooperation & supervision, local distributors won’t invest much to promote new brands and, thus, this could be seriously impeding your business in China.
Language barriers could also be an obstacle for your sales growth in China. Your main contact in the Chinese distributor company may speak English fluently, their sales team will find it quite difficult to understand your promotional materials in English, not to mention to promote your brands with them.
To work with your distributors closely and offer more hands-on training for them will be very helpful for your business development in China. For the long run, it is also very important to gather market information as much as possible.