Question: I have an idea that I would like to try and sell in China. I am a small business -- one man, one computer, one office. Do you think there is a chance for a one-man operation to succeed in the China market?
-- R.B., Fairport, N.Y.
Answer: China's 2001 entry into the World Trade Organization and its economic boom of recent years have made it somewhat easier for small U.S. enterprises to break into the market. But there are still many stumbling blocks that pose big, costly risks for businesses -- especially for a one-person operation with little or no experience dealing in China.
The regulations required for foreign businesses setting up an operation in China have been relaxed, yet many U.S. entrepreneurs still encounter ample red tape and inconsistent messages.
And there are many competitive hurdles once you're in business. China's consumers love big brands, so small companies often don't have the financial resources necessary to market themselves well enough to compete, says Siva Yam, president of the U.S.-China Chamber of Commerce, a Chicago-based organization that helps businesses navigate China.
What's more, intellectual-property rights are tremendously difficult to enforce unless you have proprietary technology, Mr. Yam says. Rivals in China are quick to produce knockoffs of any potentially lucrative product they see.
You'll probably need to spend a lot of time on the ground in China, building relationships and getting to know the market. The best strategy for a very small business is to find a joint-venture partner, a Chinese company with ties in the market.
"You need somebody who knows the market and can get through all the regulatory hurdles and have the resources to tap into the local market," Mr. Yam says. But you need to do enough due diligence to make sure you're finding a trustworthy partner with a good reputation who can promote your product, he adds.
Another possibility: Hook up with a large U.S. company with whom you could try to license your product. That way you don't have to worry about navigating China on your own.
There are numerous China business and legal consultants both in the U.S. and in China that sell their services to U.S. entrepreneurs.
