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29 May 2008

International Economy

Challenges in China’s Construction Material and Home-Decoration Retail Markets (Business Brief No.2180)

Construction and home-decoration businesses in China are now facing several challenges, including intense competition and problems related to imitation, copyright violations, an income gap between urban and rural people, as well as inflation. Therefore, entrepreneurs new to the market and eager to make inroads into China must not overlook the above negative factors. Despite some business risks, there are also opportunities within the Chinese construction and home-decoration markets, which are expected to thrive in line with the robust Chinese economy and demand there. As a result, Thai home decoration, construction and interior design businesses should see bright prospects in China.
The Association of Construction and Interior Decoration of China has projected that the Chinese construction and interior design markets will reach Yuan 2 billion by 2010. Therefore, this should provide a good opportunity for Thai household product manufacturing businesses to enter the Chinese market. However, such Thai entrepreneurs will find it very difficult to establish businesses without the following keys to the success:
- Foster good relationships with relevant state agencies in China for long-term business success; they also need to build upon good customer relations.
- Conduct research studies on appropriate sites for their businesses locally before investing in China. Besides this, entrepreneurs must understand China's fragmented market characteristics as that would be useful in devising marketing strategies to meet the diverse demand, behavior, tastes and needs of customers in each region of China.
- Map out appropriate marketing and public relations activities and business strategies for the products and services they intend to penetrate the Chinese market.
- Create brand awareness and develop corporate social responsibility (CSR) guidelines because the benefits of these factors within local communities will help sustain their business over the long-term.
- Study appropriate and reliable distribution channels to prevent possible copyright violations because successful products will face the problem of imitation and infringement of proprietary design rights. The entrepreneurs have to innovate and technologically develop their products and services continuously, and be sure to register their brand name as well as patent for any proprietary designs before entering the Chinese market.

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International Economy