Market Entry Barriers for an International European B2B Company Targeting the Chinese Market

Abstract

Problem Definition – China’s rapid economic growth over the past four decades has propelled it to upper-middle-income status and second-largest economy globally. With its massive population and significant Gross Domestic Product (GDP), China presents immense opportunities for export-oriented European companies, making it a key market despite its complexities. Entering the Chinese market presents an excellent growth opportunity for internationally oriented European Business-to-Business (B2B) companies, particularly in sectors like power generation, oil and gas, and chemicals. However, understanding the specific entry barriers in the Chinese market from a European perspective, especially with regard to cultural differences, is crucial for successful market entry. Goal – The goal of this master thesis is to derive recommended actions for an international European B2B company targeting the Chinese market by investigating existing Chinese market entry barriers, their role in the marketing concept, and how these barriers can be overcome. The objective is to derive managerial implications by pinpointing success factors and best practices for entering the Chinese market. Methodology – Expert interviews were chosen as the research method to answer the three research questions. As part of the qualitative-empirical research, semi-structured interviews with eleven experts were conducted in the period from March 21 until April 14, 2024. The respondents were selected for their expertise in the Chinese market and, in most cases, their role in marketing/sales. The interview transcripts were analyzed by applying Mayring’s structuring qualitative content analysis and using the computer-assisted qualitative data analysis software MAXQDA Analytics Pro 24. Findings and Implications – This master thesis provides guidance for managers to incorporate best practices into their China strategy, based on existing market entry barriers and their role in the marketing concept. Despite challenges and its complexity, the Chinese market presents significant opportunities for European B2B businesses, especially in hydropower and the petrochemical industry which is currently in a national sustainability transformation. This underscores the need for timely action to establish a presence in the Chinese market. Besides considering government regulations and cultural barriers, particularly adopting a localized approach is crucial for successful market entry, emphasizing the importance of involving local expertise as well as building relationships and trust. European B2B companies must prioritize culturally appropriate and accurately translated marketing materials (including text, symbols, and colors) to address cultural and language barriers in China. It is essential to effectively bridge differences through cultural education, language courses, and relationship-building. While a joint venture partner facilitates market entry, establishing a local production facility in China is vital for long-term success. Finally, not only high product quality but also speed and agility are crucial to survive in the Chinese market.

Date of Award	2024
Original language	English
Supervisor	Peter Hutterer (Supervisor)