1.Will China maintain its strong economic growth in the years to come? Some suggest it will until 2050. What do you think?
2.If China will go from 17 million to 200 million middle- and upper-income people by the early 2020s, would the scenario presented by Best Buy not be applicable anymore? Would newly rich Chinese customers engage in this purchasing in the 2020s?
3.With Alibaba’s ownership of the very popular Tmall and Taobao online shopping systems (similar to eBay and Amazon) and its spread across the world, will a Western based online shopping culture ultimately infiltrate China?
The Rise of China's Exports and Economy
China is of the most prominent places to have business and it has attracted almost everyone in other parts of world towards himself due to the business opportunities which china is able to create from last couple of decades and the pace at which the exports are going on is increasing in the graphical representation (Zhao, Frese and Giardini, 2010). The rapid increase in exports to china is due to the low cost production which china is able to maintain it from decades now. It has increased the purchasing power of the individuals living in the china. With the increase in the exports to china there has been substantial growth in the Chinese economic front and they are able to capitalize it from every part of the world. The china government should provide enough opportunities to the business so that they are able to grow (Lin and Liu, 2016).
Yes, China will be able to maintain its strong economic growth in the years to come as many companies are willing to invest in Chinese market as they have the low cost production which helps the business in starting off their business and gain profits almost three times. In addition to that from last couple of decades purchasing power of Chinese has increased drastically. The growth of Chinese is on continuing rise as compared to rest of the world. China has two major companies with them Best Buy and eBay which has boosted Chinese economy at a higher pace due to these companies china has taken over Japan and became the second largest economy in short period of time the only country which is still leading is United states. Due to these companies and others companies have increased their exports to china (Dai et al., 2016). For example in last decade from 2000 to 2011 The United states saw its companies increasing exports to china by 542 percent and in same period/ time frame total exports in china has increased by 80 percent. In last few decades the graph of exports in on increasing trend in China and they are steady as well. The policies and the regulations which china is having for other companies or other nation is favorable which is giving them confidence to the other parts of world to invest and take the opportunity to grow their business and helping in uplifting the economy of the Chinese. The Chinese government need to work hard in creating business opportunities for others to come and invest they have to regularly monitor the policies and regulations and if required they need to modify the same (Zhang et al., 2017). Currently round 85 percent of mainstream Chinese consumers are living in the top 100 wealthiest cities.in next decades to come these advanced and developing cities will have relatively few customers who are lower than the middle-and upper-income brackets by Chinese standards. The expectation is that these consumers will be able to afford a range of developed nations’ products and services, such as flat-screen televisions and overseas travel, making the Chinese customer much more of a target for a wide variety of consumption. The amount of growth which china is able to capitalize is tremendous and the government is doing every possible way to bring more business into their country which is enhancing the business and growth as this thing will likely to continue as the cost at which the product are being produced is very competitive and many other countries are not able to meet the los cost production products easily, if any one of the countries tried to do it they are not able to maintain the consistency which Chinese government is able to. Last in few decades the cost to produce a product is merely increased but the profit margins have grown three times which is boosting up of the business and economic growth of Chinese market (Liu and Feng, 2016).
Investing in the Chinese Market
The scenarios presented by Best Buy will be applicable in the future as well. The companies, who are investing in the Chinese market need to understand its culture, buying habits, know the requirements which consumers are having a demand of etc. Meanwhile government should also focus on the piracy part as Best buy is of the consumer’s electronics which deals with varied range of products and services. The company is investing in research and development for creating new products which at times is copied or pirated in the local market and it is sold which should not be happen as long as business point of concern is there (Wu et al., 2016). Companies need to make awareness about their products and how it stands out from the market as this is the only way by which Chinese consumers or customers will be interested in taking such products. So before setting up of business in china companies need to do the research and development and read the market carefully so that ones the product is launched sales could be achieved as per desired goals. Yes, newly rich Chinese customers engage in the purchasing in the 2020s because the newly rich customers have a variety of products at its display (Green and Liu, 2017). The companies need to understand the need; wants and desire of the consumers and deal with them accordingly as every country has its own differences in adapting to new products so companies need to think wisely before launching of products in any of the countries. They have to study the market carefully and then modify their products as per the consumer requirements. Often combinations of arrogance, naïveté, and cultural misunderstanding have led many well-known brands to fail in Chinese market drastically. The Chinese market is very sensitive in terms of branding of the product of the consumer is satisfied enough with the advertisement then they will be able to purchase the product provide all the questions are resolved on time and existing customers are given preference (Mackintosh et al., 2016).
Yes, all Western-based online shopping culture ultimately infiltrates China. But they have to work really hard in resolving the issues which looks very small as Alibaba ownership of the very popular Tmall and Tabao online shopping systems. Taobao’s is able to create instant messaging system that has been cited as a main reason for its competitive advantage over eBay in China. Basically, customers wanted to be able to identify a sellers’ online status and communicate with them directly and easily-a function not seamlessly incorporated into eBay’s China system. Clearly, instant text messaging is a solvable obstacle in doing business in China. The Chinese market is very sensitive which deals in various products at very low cost for which customers are very keen and interested hence they are very concerned for the issues, concerns they have related to product (Cheung, 2016). They need quick resolution of their queries. Hence the foreign companies need to keep in mind that even a small things matter in the business and it all depends on the consumers which companies are dealing. Moreover, companies which are setting up of their business in China needs to do research and development thoroughly as every market is different from one another. Companies need to know the culture, purchasing habits, consumer needs etc. In addition to it companies should be able to advertise their products in right channel so that consumers do feel the product is worth spending for and they can buy the goods or commodities from a particular company on a regular basis. Companies have to ensure that local needs, demands are fulfilled in correct time frame else customers will not take much in switching from one company to another. With all the above things said government also needs to ensure that their policies are designed in such a manner that companies are able to do the business at growing pattern which in turn helps the Chinese economy at growing pattern as well. Foreign companies will need a support from government in terms of piracy as this is the major obstacle in growth of the foreign companies. All the research and development done by the companies in the product gets off no use when piracy happens for their products. It generates fewer sales which in turns generate less profit (Kwak, Zhang and Yu, 2016).
Understanding Chinese Culture and Buying Habits
From the above we can conclude that China is one of the largest economies in the world and with the rise of exports in china it has increased the economy of the china. China has become the second largest economy by taking over Japan. China is been able to maintain low cost production which is the unique selling point in the Chinese market. All the countries and business are welcomed by the government. The Chinese government has created certain opportunities which are helping in boosting the economy at steady pace. Companies need to do the research and development of the market wisely as it will lead to losses which is not feasible for many companies hence it is very important for the business to do some homework before launching of their products to have a good start. Every country is different from one another likewise every market is hence companies need to modify themselves according to the need and requirement of the consumers or clients to have success in the market.
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