A new programme aimed at helping small and medium-sized enterprises (SMEs) break into the Chinese market concluded its maiden run last month, with two companies making concrete plans to expand in China.
Called the China Ready Programme and organised by trade agency IE Singapore, the initiative saw a total of six Singapore companies from sectors such as food and beverage, retail and technology spend 12 days in China.
The first run was held in Guangzhou Knowledge City from April 10 to 21 this year. Prior to that, participants went through a three-day preparatory course at the Nanyang Technological University from March 27.
Company executives went through classroom training, market immersion as well as one-to-one consultancy sessions with in-market mentors on China's business culture, strategies and business models.
One participant, House of Seafood chief executive Francis Ng, said he is now keen on ramping up efforts to venture into China.
"I had the chance to interact with many in-house business leaders, from low-ranking to high-ranking ones. Receiving their advice has given me confidence to start my expansion plans," he said.
EXPOSURE TO NEW CULTURES
Going abroad is not about how many experienced staff I dispatch, but rather learning the culture and business ways in another country. It is vital to expose our staff to different countries and train them to manage things differently.
MR KONG MUN CHEW, director of green technology solutions company K-One.
While it can be tough to break into a large market like China, Mr Ng plans to make use of technology to overcome this hurdle. His company will be selling ready-to-eat food products via e-commerce platforms to various inland states in China, overcoming the challenge of physical market accessibility.
"China's e-commerce and logistics industries are advanced. We need to leverage these strengths. I plan to start expanding by selling my products online to various cities," he said. "This allows me to test the market reception before setting up physical outlets.
"Guangzhou will be my first stop, as it is strategically located near the port, allowing easy exportation of my food products," he said.
"Every two months, I will expand my business to a new city. My next focus will be Shanghai, followed by Beijing and Shenzhen."
Another participant, K-One director Kong Mun Chew, said innovation is key to business growth in China.
The firm builds green technology solutions for various sectors, including the airline and waste-management industries. It intends to target airlines and food courts in China.
"We are constructing a wastewater treatment and recycling plant at Taoyuan Airport. Also, we are discussing with the Baiyun airport authorities to incorporate our products in their kitchen, like our eco dishwasher," said Mr Kong.
"In addition, we plan to introduce our water- and manpower-saving dishwasher products to the hawker centre sector in China," he said.
"Going abroad is not about how many experienced staff I dispatch, but rather learning the culture and business ways in another country," he said. "It is vital to expose our staff to different countries and train them to manage things differently."
IE Singapore said local firms often lack specific knowledge and expertise for overseas expansion.
Ms Angeline Chan, the group director of the capability development group at IE Singapore, said SMEs often lack knowledge of China's business culture as well as of the financial and legislative systems there.
Companies have provided feedback that many existing training programmes for expansion in China are either too broad-based or too focused on classroom training, which is why IE Singapore developed this programme, said Ms Chan.
She added that firms must have strong value propositions and clear market entry strategies to survive in China's competitive market.
"As each province and city differs within China, it is vital for companies to identify their focus area, engage them directly and localise their offerings. This will help them build a track record and scale up more quickly across China," she said.
The programme's next run will be held next month in collaboration with Suzhou Industrial Park.
Correction note: In our earlier story, we said participants went through a three-day preparatory course at the National University of Singapore from March 27. This is incorrect. It should be Nanyang Technological University.