The Chinese Men's Cosmetic Market: Guangzhou, Hong Kong and ...

Surprisingly, the 8 female students who did the survey expressed that they do not
believe men who wear cosmetic products are un-masculine, which is different from the
past perspective of women. Another interesting aspect of the primary research indicated
that women who are married or in a relationship state that their partners would make
them proud if they put in the effort to look their best around their peers.
Market Entry Strategies
12
China
There are several factors that need to be considered when entering China’s
market. First is an assessment of the demand for the products and how it will be
perceived in this culture. With an increase in the usage of cosmetics, the demand for
these products is large. Just because the current demand stands high, this does not mean
that it will remain consistent over the years. It is important to also determine whether or
not there will be a future demand. Lastly, a company needs to assess their own
commitment to this market, before pursuing any business ventures within China. All of
these factors assist in determining an entry strategy (Gross).
Common trends for market entry in China include exporting directly to mainland,
establishing a distributer in Hong Kong, setting up a joint venture, or establishing a
wholly foreign owned enterprise. Exporting to Hong Kong and then distributing to China
is a more simple strategy to implement. A well-established distributer would have
connections within the mainland and would be familiar with the market. This strategy
ensures sales of the products, but may require costs paid to the distributer. To
compensate for these extra costs, businesses tend to increase the price for the end-user
(Lee).
Trading directly to China may include contacting a foreign trading corporation,
dealing with industrial trading companies, finding a more exclusive independent trading
company, selling directly to the end-user, or using a domestic Chinese distributor.
Foreign trading corporations are large organizations in China that are available to assist
new entrants to the market. They provide information that will assist with strategies used
to sell products. However, these corporations typically lack knowledge on specific
industries. Their focus is more on market analysis. Industrial trading companies make
up for this lack of knowledge, but they tend to focus on market trends in specific
geographical regions. Independent trading companies have a higher cost, but are of more
assistance. Dealing with one of these independent companies would be similar to hiring
on a specialized staff to create an entry strategy. The last method would include selling
directly to the end-user. This is the most costly approach as it requires a labor force to
direct sales in China (Gross). Exporting goods directly requires a substantial amount of
registration and knowledge of business practices and regulations, and is therefore not
recommended for beginners in the exporting game to China. Using a distributor in China
is recommended. The distributor will have knowledge of China’s laws and regulations
and access to market information (Lee).
The option to establish a joint venture or wholly foreign owned enterprise is even
more complex. The exact type of legal entity depends on the size and structure of the