Robust operational structures are synonymous with successful and profitable businesses in the Chinese market. But how can companies continue in their activity when faced with the need to reduce costs?
Trust in crisis
Apart from the business implications of the coronavirus, there has been a rising issue of a crisis in public trust. Due to the seismic shocks felt in our global economies, governments, managers, employees and clients were all forced to function in the dark. In such an environment, no one knows what’s waiting around the corner. Employers are undecisive whilst employees and clients have no one to rely on.
So what should companies that are already present in the Chinese market do, in order to maintain efficiency in their China activity despite this ceaselessly changing reality? Here are 3 simple methods that we advise to maintain stable business operations in China:
1. Operational audit
This simple tool is beneficial for any kind of company that employs even just a small team in China.
In about a week, an independent and objective third party will inspect the company’s ongoing practices and assess its personnel background and performances. These health checks provide a deep insight into a company’s operational wellbeing. They expose minor and major issues that have become adversely embedded into common practice and that employees unknowingly propagate.
Read more about operational audits in China
In a big and culturally divided country, sales channels must vary. The common distributor channel, convenient as it may be, could actually prove extremely harmful in the long run. Most distributors will be effective and results-driven in the first year only. Later on they might shift their loyalty and seek out new products to promote in their networks and circles.
In order to generate growth dynamics in a passive environment, it’s advisable to work with a local and experienced fulfillment agent. Such agents are able to expand distributors network by partnering up with several successful dealers, rather than just one. Committed to the company, proactive and yet objective in their approach, a fulfillment agent will ensure that brand awareness will remain in the minds of both other distributors and customers.
Read more about fulfillment services in China.
Listen to PTL Group’s founder explaining the importance of local management in China (from a webinar with CBBC in early June)
3. Outsourcing operations
Management in remote control in China is a tough route to navigate. Outsourcing, however, is a more balanced approach. It offers the ability to both delegate responsibilities whilst retaining crucial decision-making power. In short, the more business functions outsourced, the more flexible and lean an operation can be.
The HQ C-level managers would no doubt be lost if they were forced to invest the time required to learn how to manage all the ins and outs of their operations in the Chinese market. Put bluntly, it’s merely throwing time and money down the drain. Hence, cooperation between a dedicated local outsourcing team and their respective HQ managers is a smart means of management, insuring productivity, cost-effectiveness and superior customer service.
Companies that used outsourcing platforms in China during the Corona crisis enjoyed various advantages. While managers were in lockdown abroad, a committed co-service provider executed their decisions on their behalf.
Listen to PTL Group’s founder presenting the idea of outsourcing back-office functions in order to keep your operation in China flexible and lean (from a webinar with CBBC in early June)
One more piece of advice
In order to maintain Chinese employee’s engagement, it’s important to allow them to brand themselves from day one as an employee of your company. Managers should encourage their staff to post on social media about their employer, it serves as an excellent for boosting self-esteem and for introducing your brand to Chinese audiences.
With China serving as a second home market, it’s crucial to plan strategies that pave the way towards a solid business presence. For the past 20 years, we at PTL Group have done precisely that, providing over 250 clients with business support in China. Get in touch to find out more.