Like many companies in the first half of 2020, ADG China has gone through a period of adjustment in the face of the pandemic. Our great team in Beijing has worked tirelessly over the past seven months, starting with the shutdown in China and through the waves of disruption globally, which has led to severe travel restrictions for foreign business visitors to China, among other hurdles.
While these new restrictions have made doing business in China even more complex, our clients have seen continued demand from Chinese partners and markets. Our Western technology clients in enterprise software, connected devices, and consumer solutions are all actively engaging in China.
Although they currently can’t jump on a plane and meet with potential partners and prospects, we are facilitating virtual meetings between our clients and key Chinese decision makers multiple times per week, in addition to our daily contact throughout our partner and service provider ecosystem. (To handle the shift in operations, we’ve purchased three additional video conferencing systems and tripled our broadband capacity in our Beijing office).
Some of the tech sectors that we’ve been helping our Western clients to grow during 2020 include SaaS, data analytics, smartphones, IoT, AI/ML, and life sciences/bioinformatics, among others. Our deep, long-standing connections within each of these industries (as well as many others) has allowed us to continue working at full capacity throughout the year. So whether we’re doing China market validation, business development, building/running operations, or any of the other multiple services we provide, we have been able to both adjust and continue to drive our clients’ business.
Despite pandemic, global companies should look at China closely
For many reasons, we believe that the second half of 2020 is a smart time to begin exploring or committing to the China market. We suggest that tech companies currently weighing their China exploration/entry/expansion strategy for the remainder of 2020, even with the pandemic ongoing, should at a high level consider these and other factors:
- China’s economy may end up growing at a rate of up to 3% this year (even including the 6.8% drop in the first quarter), while many other countries (including the US) are forecast to have negative growth for the year
- While consumer spending is expected to continue to be slow, Internet and app usage has climbed, especially for users over 40 years old
- Chinese enterprises are likely to use this time to improve their technical infrastructure and accelerate digital transformation, including remote work applications
- Travel restrictions are not a barrier if Western companies have a partner that is firmly on the ground in China already
- Many tech sectors have risen to the challenge of fighting COVID-19, with SaaS, AI, life sciences and big data applications used in both private and government entities, and these sectors are expected to continue to see strong growth (the SCMP video below, released this week)
- China’s largest tech companies are still actively expanding globally, and engaging with the China market now gives Western companies a leg up towards providing their tech solutions worldwide to those mega-companies
- Even if a specific market in China is slow right now from a sales prospective, this is a great time to validate the market / establish channels and/or take care of the hundreds of operational tasks that are required to establish a China presence
So, whether the impetus is to sell to one of the only growing markets of 2020, or to take advantage of a relatively “slow year” (for China at least) to explore and validate the opportunity China affords, Western tech companies should be thinking hard about China right now.