Well developed China channels can be a great go-to-market strategy for global technology solutions companies. On a regular basis, we are approached by companies that want to use a China channels strategy to expand into the market. Typically, the conversation, goes something like this:
“We want to find a few key China channels to invest in our business and take the lead on developing the market. We have been very successful with this strategy in [insert country] and want to replicate this in Asia.”
We wanted to touch on some of the reasons why global technology solutions companies need to be clear about what they want, and take a hands-on approach to China channels building.
China channels expect you to do the heavy lifting, at least at first
China channels have been working with Western companies for over 40 years and they know firsthand that the key to success in China is not in their hands, but in how the Western company approaches and invests in the China market. Generally speaking, the largest difference between China channels and other markets is comparatively extra workload that Chinese channels put on Western tech companies.
While Chinese channels will often seem excited when approached, in our experience they will not commit to or follow through on what your company is hoping for when first approaching the market. There are legitimate reasons why they cannot take the role you envision; and you don’t really want them to either, as it often creates more problems than solutions.
Simply put, China channels have different motivations. While they do know the local market, for most solutions they are not equipped to take the lead on building proper messaging and sales strategies.
Trust needs to be built
China channels expect and need you take the lead on driving your business in a new market. Surprisingly, they may even expect you to be equally focused on bringing them deals. They are also evaluating your credibility as a partner, and need to choose partners that show commitment to China.
In the early stages, China channels prefer the process of going after projects to be a collective activity with the provider. Generally, they will start by conservatively reaching out to a select group of internal business development staff, who will then reach out and have discussions with their internal sales teams. Often, they will be reluctant to let providers speak directly to their sales teams – or bring you to customers – until they are familiar with your team personally, understand your products, and have confirmed the value proposition with their sales teams. As trust develops, they will start bringing you more deeply into the process, including joint sales calls with select customers.
Know what you want from your partner
Many companies approach partners with an attitude of: “here is my technology, what can you do for me?” Western executives often walk out of meetings with potential China channels partners disappointed because they felt the partner didn’t grasp their technology or ask the right questions to demonstrate their level of seriousness. The reality is, however, that many resellers or distributors don’t need to learn the ins-and-outs of your product and technology: they see that as your job. What they see as their job is to deliver a product that is “good enough” to get the deal over the finish line. Ultimate success will rely on many more aspects than simply your technology and price.
While potential China channels partners are happy to discuss all the ways in the world that you can cooperate, in an ideal world it is best to be clear on your expectations in advance. Do you expect them to bring you opportunities? Host your infrastructure? Provide technical support? Co-market or independently market your products? The more you can share with them, the better. We recommend using a straw man model or proposal whenever possible so both parties have a clear starting point to discuss what is possible and realistic. Open ended discussions almost never go anywhere useful.