Mastering Competitive Intelligence in China

All Posts

By Ran Boldor & Maya Horin

Many companies research their competitive landscape and its active players – a practice known as competitive intelligence (CI). But when it comes to China, many companies doing business in China, give up on researching their competitors and partners, thinking that relevant information either will not be available or will be unreliable. This misconception makes sense if you take into account the censorship and constant monitoring employed by Chinese authorities online, the relative separation of Chinese social media platforms from the rest of the world, and of course the language barrier.

But from a CI research standpoint, there is no greater misconception about China, because so much can be learned on a Chinese enterprise online. The Chinese web is enormous, and available content is nearly infinite. Moreover, the government invests many resources to make corporate data publicly available, with a clear aim to enhance research efforts and to enable healthier trade processes.

Conducting CI research online has been of great value during the last two years, when COVID-19 restrictions presented a challenge to western enterprises operating in or planning to enter the Chinese market. The strict “Zero Covid” policy makes it impossible to conduct face-to-face meetings with Chinese peers, and prevents western businesses from checking offices, factories, and local operations in person.

In an attempt to help entities that are interested in improving their CI skills regarding Chinese enterprises, below are 10 rules of thumb worth implementing to avoid missing out on valuable information.

1. Do NOT Search in English

Most of the Chinese web is based on the Chinese language. A Chinese business communicates better in Chinese than in English. Knowing this simple and well-known fact can sometimes greatly improve search results. If a Chinese company has a website with both Chinese and English versions – the Chinese version will naturally tend to be more updated and comprehensive. This is relevant also to company’s online PR channels. In addition, a Chinese company’s WeChat account will probably be more active than its Facebook page. Similarly, searching for content in English using the Baidu search engine is futile.

2. Learn the Lingo

When searching for information regarding a Chinese company, it is crucial to study up on the business terminology used by the company. Industry jargon, the name of the company in Chinese, names of executives, brands and products – each of these expressions may serve to expand search efforts and improve retrieved results.

3. There is Always Relevant Information Online

When it comes to Competitive Intelligence, the Chinese web enjoys a constant stream of online interest about almost anything. The fact that there are 1.4 billion people in China has practical implications on the scope of content created and shared online regarding any industry, market or field of interest.

In the beginning of 2020, for example, when the country was still under general lockdown due to COVID restrictions, it was possible to rummage through Chinese forums dedicated to truck drivers (there are nearly 20 million of those in China), in an attempt to make sense of the status of roads and logistics during COVID.

Besides information shared by Chinese netizens, authorities have been giving attention to the standardization of industrial knowledge, in the shape of local and national level professional associations, which promote the accessibility of information regarding various industries and segments.

4. Search Engine Limitations

As of mid-2022, Baidu dominates approx. 84% of the search engine market. In stark contrast, Google stands on a mere 2.5%. Basically, what this means is that Baidu offers better coverage in searching Chinese media and main Chinese digital platforms.

However, it does not mean that Baidu is the “Chinese Google”. When it comes to technical-syntactical capabilities, Google overpowers Baidu even while searching in Chinese, as it enables to search for specific words and phrases in Chinese within websites and documents – a high resolution yet unmatched by Baidu.

Therefore, if you wish to find updated news content in Chinese – use Baidu. But if you wish to search for Excel or PDF files that are accidentally available online – use Google.

5. Troves of Data on Company Registry

In the last several years, private high-tech companies have invested efforts in establishing efficient China corporate data aggregators. These online databases make company registries in other countries pale in comparison. On a global level, these platforms are unprecedented in their ease-of-use and information robustness. Besides details on the company and its executives – which are already very generous compared to most jurisdictions – Chinese corporate DBs have other layers of information, including:

Affiliated entities: Subsidiaries and sister companies, as well as partially related companies, for instance through one of the shareholders or a joint phone number. It is also fairly easy to trace governmental involvement in the company or its affiliates.
Change log – highly useful in understanding company strategic processes, as well as uncovering fraud.
Export/import/manufacturing/operation permits, registered intellectual property, obtained quality standards and certificates.
Legal records, enforcement procedures and administrative fines, high consumption limitations, tax and customs violations, and environmental pollution.

Based on the information available on Chinese company registries, we can build a strong knowledge infrastructure pertaining to our target company.

Below is an example of a company change log. The table shows a string of changes recorded on a certain day in March 2020, including a change of address; addition of medical protection equipment production to the business scope; change of Legal Representative; changes in ownership structure; and increasing registered capital tenfold. The many changes helped raise a red flag and uncover fraudulent activity of this supplier during the frenzy for medical equipment after the eruption of Covid-19 in China.

Taken from the Qichacha corporate data aggregator. Some of the details were redacted to hide the identity of the fraudulent supplier.

6. Map Out Company Media Outlets

This is a necessary step in every company profiling effort. Besides examining the company’s website (in Chinese & English), it is always worth searching for the company’s presence on WeChat, Weibo and major eCommerce platforms (see 8 below). Also check if the company has any subdomains and independent online stores, as well as possible presence on LinkedIn and other western social media platforms.

Whatever you do, always take the information that a company reports on itself with a pinch of salt. Naturally, any company would prefer to avoid public embarrassment and maintain a positive image, and therefore it is crucial to cross-reference company PR materials with other sources outside the organization, including competitors, clients, consumers, research bodies and authorities.

7. WeChat is King

More than any other social media platform, WeChat provides a window into the day-to-day operations of a vast number of Chinese businesses. A company’s WeChat presence is usually manifested in the Public Accounts – a layer of publicly available content searchable via PC or mobile. Typical content uploaded to these accounts includes annual conferences and work reports, official visits and achieved milestones, such as establishing a new plant, offices, or product lines.

In WeChat too, it is necessary to search beyond the company’s own publications for more sources reporting on its activity, such as accounts representing governmental agencies or professional associations at local/provincial/national levels, industry-specific magazines and enthusiast bloggers.

The example below shows a post uploaded to the WeChat account of the Jiangyin City Court, detailing the identities of 30 wanted individuals with bounties on their heads. These records – including images, affiliated companies, and bounty sums – are not available on company registries but are easily accessible and searchable on WeChat accounts of this court and others across China.

8. Check eCommerce Platforms

Many companies maintain a digital presence on major eCommerce platforms such as JD, Taobao or 1688. Locating virtual stores helps gather more information on the company’s product line, product prices and sales volume, but also about various strategic aspects such as mapping out activity in China, lists of partners and distributors, marketing campaign characteristics, insurance terms and repair services.

Another type of valuable information found in eStores are customer reviews on the company’s products and services. Leaving reviews is a widespread phenomenon among Chinese consumers, and it is enabled only to users who have completed a purchase, which bestows a level of credibility. Browsing negative reviews is useful for understanding the product’s quality status.

In many cases, reviewing eStore content may assist in tracing counterfeit products and IP theft. Content on these websites is updated frequently, and therefore the company might be more prone to making mistakes and providing incriminating proof.

The example below was taken from an eStore of a certain confectionery supplier on Alibaba’s B2B platform 1688. The producer uploaded a sugar paper product claimed to be made in China. A closer look at the label shown in the images provided by the supplier showed a high resemblance to the label of a competing imported product available in the market, as well as a name of a non-existing producer, therefore suggesting that the product is either a close counterfeit or the very same imported product with a fake label.

9. Search for Gov Records

It is worth checking if a company appears in publications issued by various governmental agencies. For example, a company’s name might be found on nationwide lists of enterprises pre-IPO in China’s smaller stock exchange boards; in provincial lists of selected high-tech companies; or on county-level tax record lists.

Enterprises are required to provide some form of reporting to the various agencies in charge of certain industrial aspects. Pesticide producers, for example, must issue licenses for their products. Records of these licenses can be accessed from a national online database created and managed by the by the Ministry of Agriculture (MoA). The same goes for food products, telecom equipment, medical devices, online games, etc.

Taken from the MoA Licensed Pesticide Database, which enables searching by producers, product types, chemicals and preparation methods. The search in the example below shows that 93 herbicide products will expire by year’s end. The expiration of major novel products may create new opportunities for players in the market.

Another great governmental source are Environmental Impact Assessment reports (EIA). All manufacturing companies are required to undergo EIA, whose findings are documented in reports that can be hundreds of pages long. These reports can often be accessed online, and offer a rare glimpse into the insides of private companies since their inception, including detailed accounts of production lines and other assets.

Blueprints of an auto parts factory in Ningbo, found in an EIA Report online

EIA Report – Flowchart of full production cycle in a vitamin factory in Zhejiang

10. Monitor Frequently

You can compile a fairly detailed picture of a Chinese company through a one-time effort to gather competitive intelligence online, but the resulting picture will chronicle the company’s activities up to that point in time and no further. In order to remain updated, it is crucial to keep monitoring sources and records found earlier during the initial run. Ongoing monitoring will help you increase your understanding with every new bit of information found. Remember: sometimes, the missing piece to achieve a breakthrough is merely a few weeks away from being published.

This is less relevant for quick check-ups for KYC purposes or due-diligence of possible partners, but it is very valuable while monitoring the activity and strategy of existing competitors and partners.

Combine Online and Offline

Any bit of information found online, no matter how exclusive and detailed, will always present only a part of the whole picture. It is, therefore, necessary to corroborate and cross-reference online findings with knowledge gathered from other sources of information, such as conferences, contacts with peers, and accumulated internal knowledge available within your organization. Only by combining information from all sources, will you be able to place your findings in the right context and assemble the bigger picture.

Happy hunting!

The authors are analysts at Boldor Webint Solutions, who specializes in online investigations and market research on the Chinese web.