Foreign entrepreneurs share their experiences starting up a business in Shanghai

By Wang Han Source:Global Times Published: 2018/9/13 19:03:41

Eastern opportunities

Photo: VCG

Shanghai has always been a city with a strong entrepreneurial atmosphere. In 2017, the entrepreneurship activity rate in the city reached 12 percent, up 0.7 percent from 2016, according to statistics released by Shanghai Municipal Human Resources and Social Security Bureau. Historically, foreigners from all around the world have come to Shanghai to take advantage of China's vast market or start up their own business. In modern times, however, what are the best business opportunities that foreigners see here? What steps must they take to register a company and develop a business in China? And most importantly, what are the mistakes and challenges that other foreigners can avoid in the Chinese market?

A 29-year-old French national named Thibault Genaitay arrived in China around seven years ago. He established his first coding school in Shanghai in 2016; he also opened another branch in Chengdu of Southwest China's Sichuan Province.

During his stay in China, Genaitay has encountered many employees who were designing digital solutions but could not understand IT specifications or requirements. He then saw a big market demand in short-term coding training service.

According to Genaitay, the mission of his coding program is to bring basic technical knowledge and soft skills required in the digital production field. "Attending our training program takes only two months and trainees learn back-end and front-end coding, database-related topics, as well as project management," he added.

Another foreign entrepreneur, Vanessa Ann Narvios from the US, has also been living in Shanghai for around seven years. With previous experience in the hospitality, food and beverage, travel, sports and events industries, she now is a co-founder of a start-up that focuses on female empowerment.

"My business partner and I have been fortunate enough to have met incredible women throughout our lives which helped us grow into the leaders that we are today," she told the Global Times.

"We therefore wanted to provide a platform and a community where women can be inspired to start and grow their businesses and leverage the experiences from other women from around the world."

Getting the party started

Another interviewee, 29-year-old Russian Tatiana Danila, has been in China for over five years. She is a co-founder of a start-up with partners in the marketing and brand activation field.

"I came here for a language course and then I never left. My first job in China was an events company that I gave my life to for around three years," Danila told the Global Times. "Thanks to that company, I found my passion, which was marketing and brand activations."

Another interviewee, Michael Robinson, originally from the US, has been living in China for over five years. He is running his own consulting company in Shanghai, specializing in copy-writing and language services.

"Poor word choice and tones have led to so much easily avoidable misfortune, and I've seen it happen over and over again. From that, I saw a real need for this kind of service, even for native English speakers. But it took me years before I had the confidence to open up my own business," Robinson added.

Once a foreigner has a clear business idea, how do they start up a business in China? "Obtaining the business license, opening a corporate bank account, making sure the tax information is correct, the work visa account... There are many steps, and it is important that each step is done right," Robinson told the Global Times.

As for the company registration process in China, most interviewees said it was easier than they expected, especially with assistance from professional agencies. Genaitay, for example, said China's policies for starting up a foreign-owned company are even friendlier than that in France.

Likewise, Narvios also said the process was far simpler than she expected. "If I had known it was this straightforward, I would have done it sooner. We had an agent to help us through the process," she added.

Once the business framework is established, how do these foreigners promote their brand and attract clients in the Chinese market? Narvios said her team mainly relies on social media to improve brand awareness. "We leverage Instagram, Facebook, LinkedIn and WeChat to reach our target market," she said, adding they are also building their own community online.

Genaitay said his coding school business relies on word-of-mouth, suggesting 80 percent of new applicants are referred by former trainees. He added that his team advocates their programs on a wide range of social media platforms as well as through traditional press.

"We can produce a lot of stories on WeChat, LinkedIn, our blog and syndicated global and local press. These publications are super helpful, because anyone can read our 'how-to' guides and find us for in-depth training," he told the Global Times.

Photo: VCG

Challenges and difficulties

Despite their motivation and determination, most of our foreign interviewees have experienced difficult periods while operating their new businesses in Shanghai.Danila, for example, said the process of creating something from nothing was the hardest part.

"Starting the company without a website, no portfolio, nothing to show and prove to potential clients; only the three of us with a certain set of skills. We're very thankful to our first clients, who trusted us," she said.

She added that another challenge for her has been to maintain a work-life balance while running her independent business. She said she used to perceive work as the most important thing and could not imagine herself not working on weekends.

"But one year ago, I got to the stage when I was literally burnt out, about to pass out in meetings, not being able to handle myself," she said. "It was a very hard month for me. I understood that, entrepreneur or not, you need to know how to balance your life and there are other things that are no-less important: your health and the people around you."

Indeed, it is difficult to start a business, and it is even more difficult to start up a business in a foreign country, where language, legal systems, policies and social environments are completely alien to foreigners.

Robinson, for example, said that as a foreign entrepreneur in China, he just doesn't know what kind of official support is available for him. "Would I qualify for loans of credit? Where would I be able to post positions for local staff? These are the questions that I'm looking to answer," he told the Global Times.

The 'cockroach spirit'

Being unfamiliar with Chinese society and its market tend to lead to mistakes and failures. So what are some common mistakes that foreign businessmen might make in China?

Genaitay pointed out one common mistake is that many foreign entrepreneurs get too confident about their products and skills; therefore, they don't bother to adapt to local ways of running a business and tend to neglect local demands or regulations. Some even isolate themselves from working with local partners and teams.

Narvios added that those who underestimate the importance of guanxi might find it difficult to do business in China. "Whether it is with your employees, investors or suppliers, success in China is all about the relationships you have with others. Be mindful to keep your relationships genuine and a high priority," she told the Global Times.

From the perspectives of our interviewees, what sorts of foreigners are more likely to operate a business successfully in Shanghai? Danielle told the Global Times that the ones who work hard, constantly improve and who are able to follow and catch up with market trends have higher chances to succeed.

"The Chinese market is competitive, so you need to stand out. The industry is evolving so rapidly that it's important to be able to stay on top of the wave... or at least follow it," she added.

Genaitay added that foreigners with a "cockroach spirit" are more likely to survive in the market. "You can try to catch them, but they will hide fast! You can manage to step on them, but they still don't die!" he laughed.

When asked to describe the main difference between starting up a business in China and in their home country, many said the entrepreneurial environment in China is more tolerant of failure. "It is okay here to fail in a business idea and move on. Everyone will forget; everyone will encourage you toward your next endeavor," Genaitay said.

Similar positive opinions were echoed by Narvios. She also felt that the Chinese social environment is more open toward entrepreneurship and experimentation.

"In the US, people are often quite nervous to leave their comfort zone and take a risk. I think that's partly due to the business environment, which is not as favorable in the US. There are a lot of red-tape and legal issues there that need to be considered before starting out," she told the Global Times.

"Thus, I believe that this prohibits people from just getting out there and trying to make a new business idea happen. Everyone is always thinking about the 'What if?' versus in China it's much more like, 'Why not?'"


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