Ladies and gents, if you think understanding human language is a walk in the park, try explaining that to your computer! Fortunately that’s exactly what Natural Language Processing (NLP) technologies are made for. Let us delve into the advances in NLP and its application in business that makes the task feel less like teaching Shakespeare to a toaster.

What is Natural Language Processing (NLP)?

Natural Language Processing, or NLP, is a branch of artificial intelligence that deals with the interaction between computers and humans through natural language. The ultimate objective of NLP is to read, decipher, understand, and make sense of human language in a valuable way.

A Bit of History

Did you know that despite its recent popularity, NLP has actually been around since the 1950s? It’s like the Betty White of AI technology! Only instead of making you laugh with witty comebacks, it’s busy changing the way businesses operate.

Recent Advances in Natural Language Processing

Transformers

First on our list is not Optimus Prime leading the Autobots, but a revolutionary model in NLP called Transformers. These mighty models have been a great driving force behind the growth of NLP in recent years. They use a mechanism called Attention to better understand the context of words in a sentence and provide astonishing results when it comes to language translation, sentence relationships, and other tasks.

You can read more about Transformers here!

BERT

Another advance that stands out is BERT (Bidirectional Encoder Representations from Transformers). BERT models are pre-trained on a large corpus of text and can then be fine-tuned with just one additional output layer to create state-of-the-art models for a wide range of tasks.

Business Applications of Advanced Natural Language Processing

Now that we’ve covered the recent advances in NLP, let’s look at their applications in the business world.

Enhanced Customer Service with Chatbots

With advanced NLP, businesses can now provide 24/7 customer service through the use of chatbots. These are not your regular, monotonous chatbots which can only reply to fixed commands. With the power of NLP, these bots understand the context of the conversation and provide the appropriate responses. They’re more than just scripts – they’re the customer service rep that never sleeps!

Sentiment Analysis for Improved Product and Services

With NLP, brands can now dig into the massive pool of social media posts, customer reviews, and other online mentions to analyze sentiments and understand consumer behavior and opinions regarding their products and services. It’s like having a business satellite in the digital universe, constantly mining insights to create better customer experiences.

Conclusion

In the intimidating mountain range of AI technologies, Natural Language Processing is definitely a peak worth summiting. With technological advances such as Transformers and BERT, NLP has brought dramatic transformations in business applications. It’s an exciting time to be a part of this vibrant field and watch how NLP continues to shape the future of businesses and redefine customer experiences.

Hands on NLP

For the tech enthusiasts who want to get hands-on, here are some installation instructions:

To install the transformers library on Python, use:

pip install transformers

And for BERT model:

pip install pytorch-pretrained-bert pytorch-nlp

For Mac users, if you face permission issues, try adding a “sudo” before your command, like this:

sudo pip install transformers

Now you’re all set to start your adventure with NLP. Remember, with great power comes great responsibility. Don’t use NLP to teach your computer how to sass. We have enough sass on the internet already!

The cloud and DevOps are the new kids on the block. They might not be what you expect, but together they make a good team. Cloud is known for providing scalable resources and DevOps is known for automation of deployment processes. Together these two technologies will help to implement new software faster than ever before!
The relationship between cloud and DevOps is like that of peanut butter and jelly- it just makes sense! 😂 Imagine your company having all of its resources in one place, such as Amazon Web Services (AWS). Now imagine how much time you would save if there was no need to purchase physical servers or spend hours configuring them individually. This dream becomes reality thanks to our favorite tech couple: Cloud and DevOps 😍

Development teams look for new tools, methods, and approaches for developing and delivering the most advanced technologies every day. For many of today’s most creative innovators, the cloud offers a scalable and adaptable route to success. It provides novel security, automation, and development options. Integrating DevOps into the cloud enables businesses to compete more effectively in a complex and ever-changing industry. Rather than reinventing DevOps, effective cloud integration requires implementing and adopting best engineering practices.

In this article, we’ll look at what DevOps is and how it works, as well as the connection between cloud and DevOps, cloud-based DevOps solutions, and the benefits of cloud-based DevOps solutions.

What is DevOps?

DevOps is a technique that companies use to manage the development and release of software. DevOps is a methodology for rapidly providing services and applications. The development approach combines software development and operations into a unified process emphasizing automation and efficiency.

The goal of DevOps is to have frequent incremental improvements rather than periodic significant releases. This method enables businesses to produce higher-quality software products more smoothly and effectively.

The primary benefits of DevOps in today’s environment are as follows:

• Effective application release automation 
• Infrastructure automation choices
• CI/CD
• Rapid Delivery with Agile frameworks
• Rapid issue resolution

How DevOps works?

Development and operations teams do not divide themselves in the DevOps environment, as they would be in traditional development setups. In specific scenarios, these two teams combine to form a single unit where engineers may work throughout the entire development lifecycle, from development to deployment and operations.

Here, you may acquire a variety of talents unrelated to any particular role. Security mechanisms and quality assurance may become increasingly engaged in the application development lifecycle in some instances. When everyone on a DevOps team focuses on security, the team becomes a DevSecOps solution.

In a DevOps environment, teams use a variety of techniques to automate formerly laborious and slow operations. They use the most advanced technology available to accelerate the development of apps. For example, in DevOps, automating tasks like code deployment and infrastructure provisioning that previously needed assistance from other teams to improve the team’s pace.

What is the relationship between DevOps and Cloud?

Both cloud computing and DevOps have plenty of other advantages in the area of the agile enterprise. Cloud technology enables businesses to access an infinite number of features and solutions at their own pace. There is no limit to the amount of capability that a company may access through the cloud. Cloud technology enables rapid feature upgrades and enhancements in any setting.

Similarly, DevOps fosters an agile workplace for all parties involved. Both systems provide distinct advantages in terms of speed and production. However, when cloud and DevOps combine, their capabilities complement one another, resulting in an even more attractive solution.

The cloud enables centralized deployments and may include built-in DevOps assistance. For instance, if DevOps teams are required to build the components of a solution in a particular manner, the cloud’s sophisticated automation capabilities may help simplify and repeat the process.

Cloud-Based DevOps Tools

Nowadays, you can operate your complete DevOps stack in the cloud through cloud-managed DevOps solutions. We have discussed two of the most popular ones: Azure DevOps and AWS DevOps.

Azure Cloud and DevOps

Microsoft’s integrated DevOps platform is Azure DevOps (previously known as Visual Studio Team System or VSTS). It allows you to manage the whole of your DevOps cycle via a single integrated interface. While Azure DevOps Services is a cloud-based DevOps solution that you may use as a SaaS (Software-as-a-Service) application, Azure DevOps Server is a self-hosted on-premises version of the same product.

Microsoft’s DevOps solution comprises several products, each of which addresses a unique step of your process. Azure Boards enable planning and project management. The Azure Pipeline is a continuous integration and delivery tool. Azure Repos provides cloud-hosted Git repositories, Azure Test Plans is a testing toolkit, and Azure Artifacts enable the creation, management, and deployment of packages.

However, you don’t need to utilize all of the tools included in Azure DevOps Services; you may alternatively subscribe to them separately. If you need more capabilities, the Visual Studio Marketplace has over 1,000 Azure DevOps extensions, including integrations, statistics, visualizations, and crash reporting.

AWS Cloud and DevOps

AWS DevOps is a service offered by Amazon Web Services that consists of a collection of integrated DevOps tools for managing the entire software development lifecycle. While AWS is mainly utilized in the cloud, you can also run all the tools on-premises using AWS Outposts, which enable you to deploy any AWS infrastructure component on your in-house server.

In contrast to Azure DevOps Services, a PaaS (Platform-as-a-Service) solution, AWS is an IaaS (Infrastructure-as-a-Service) solution, which means it is connected to the underlying infrastructure. While packages may be deployed from Azure DevOps Platform to another environment, such as AWS, the opposite is not feasible. You can only deploy to AWS infrastructure through AWS DevOps, such as EC2 (Elastic Compute Cloud) or S3 (Simple Storage Service).

AWS DevOps toolset includes:

• A continuous integration/continuous delivery service called AWS CodePipeline.
• A managed service build tool called AWS CodeBuild.
• A deployment automation tool called AWS CodeDeploy.
• A platform for managing DevOps projects called AWS CodeStar.

In general, AWS DevOps is probably the most refined DevOps platform for existing or prospective Amazon Web Services customers.

Which one to choose between Azure and AWS?

The primary distinction between the Azure and AWS DevOps toolsets is how they integrate with their respective platforms. Both products, for obvious reasons, combine the appearance and feel of their different cloud platform’s user interfaces. AWS DevOps is much simpler to get started with, while the Azure DevOps suite is more integrated across the various Azure DevOps toolsets and has a considerably more extensive set of integrations with the whole Azure Marketplace.

Moreover, upon choosing, it all comes down to what your employer thinks. That is, whatever job you get is of primary importance. If the sole job available targets Azure systems, then focus on completing an Azure DevOps certification. On the other hand, the industry has shifted toward AWS. Many companies and hiring managers prefer individuals with an AWS-based DevOps certification, owing to AWS’s increasing market dominance and various other fundamental options that perform better when AWS systems are used.

Apart from that, it all comes down to your work needs and which one you believe is most advantageous for you since this is the only way to choose between the two and seek a source of DevOps certifications.

Advantages of cloud computing DevOps

Cloud solutions and DevOps complement one another well in an environment designed for agility and adaptability. When DevOps and cloud computing are integrated, they can significantly improve the software development lifecycle. Businesses that use DevOps in the cloud may improve software delivery performance by an average of 81 percent.

The following are the primary advantages of cloud-based DevOps:

Automation options based on the cloud

Automation is a critical component of DevOps efficiency. Numerous cloud platforms provide sophisticated automation capabilities for DevOps operations, such as continuous development and integration. These technologies provide uniformity and efficiency while requiring less human involvement.

Centralized platform

The cloud offers a centralized framework from which businesses can manage all aspects of their production workloads, including testing, deployment, monitoring, and operation. This enables you to keep track of everything in one location. When all of your DevOps information is in one place, it’s simpler to manage compliance and security. This way, you may get even more actionable insights and business information.

Scalable infrastructure

The cloud is the most cost-effective method to guarantee that you can scale up or down any infrastructure required without spending a fortune on equipment. As a result of this scalability, DevOps is a highly effective way to roll out new features, functionality, and possibilities as your company develops. You can mix cloud computing with DevOps agility to provide limitless development possibilities for your organization.

Agile development

The cloud can offer a variety of staging and testing servers, allowing DevOps teams to continue working while waiting for servers to become available. Utilizing DevOps across the cloud environment enables teams to experiment more freely since builds may occur more often. DevOps teams can rapidly provision servers that meet their requirements.

Reliability and stability

Since cloud providers emphasize availability and stability, they can manage and maintain all aspects of the platform. Instead of worrying about these problems, IT firms can concentrate on product development, which results in better product performance, user experience, and speed to market. The key to success, in this case, is selecting a cloud provider capable of delivering the appropriate degree of uptime for your company.

Conclusion

Cloud computing, on its whole, has risen in popularity over the last several years. Businesses of all sizes can discover how a cloud environment enables them to develop at their speed. Just as cloud communications continue to increase in popularity, cloud-based development and application management procedures become more attractive as your team realizes the full advantages of cloud-based DevOps.

Later, you’ll find that you’re using various DevOps techniques to increase the efficiency of your whole workforce. When this occurs, your team’s performance and efficiency are sure to soar.  There are no limits to what your DevOps team and the cloud can achieve with the proper cloud provider guiding and supporting you.

You had a dream… you had an idea… you wanted it to work, and you took the bold step to establish a business. But somehow things got haywire. When the circumstances demand the big decision, it is often heart wrenching to curb your emotions and take that big step.

After all, you have spent your money… you have spent your time… you have shed your tears, your blood, and your sweat to build your dream. By now you have an emotional attachment to your business. You feel shattered… you feel embarrassed… you feel ashamed.

Many thoughts run through your head. You console yourself with the thoughts of closing down for a while to get your act together, and starting again when you have the conducive environment. You find yourself determined to give your idea a second shot; albeit with the lessons you have learnt until now. You think about saving your assets until you are ready for the second stint. You consider the associated cost in holding on to the assets for all that time. And when you find it even more challenging to holding on to assets, it breaks you even more.

You ask yourself questions. What if I keep going for a little bit more before calling it a day? Will I really be able to start again? However, sticking on to the business that is not working is tough. You keep injecting money. You keep struggling with your staff, your clients, your sales, and more importantly, yourself.

Closing down a business is not for the faint hearts.

Really. But the good news is: closing down a business makes you tough and wise; only if you realize, that is.

What You Need When Your Business Fails?

All it is required to stand up again is courage, will and determination. Courage to face the situation and consequences of your decision to start again. Will to succeed in the face of all adversaries. Determination to make your dream come true.

Failure is not the end of the world. Failure is neither the opposite of success. On contrary, failure is the first step towards success.

Take the heart from what Thomas Edison said after his many unsuccessful attempts in making a light bulb:

“I have learned fifty thousand ways it cannot be done and therefore I am fifty thousand times nearer the final successful experiment.”

Thomas Edison

THIS is the mindset that gets you going. THIS is the mindset you need to achieve your dream.

Stop. Relax. And retrospect on what went wrong.

Why a Business Fails?

It is always good to think twice before starting a new business. According to an article published in Forbes, about 90% of startups fail globally. As a result, only one out of ten turns out to be a prosperous and sustainable business.

There could be several reasons why a business fails.

1. Choosing a Wrong Product

The biggest reason for a failed startup is creating a solution that never really had a problem. Fortune mentioned that about 42% of the startups fail because they work on a product that lacks market need.

You may have a great idea. You may consider your idea the best, and you perceive it to be loved by your clients too. But how would you know if your customers will actually like it? In fact, most entrepreneurs are afraid of their idea being rejected. When you are in love with your idea, I know it is difficult to hear any opposite opinions. But these are the opinions that can save you from even bigger heartbreak of seeing your business shutting down.

Unfortunately, most business owners start without proper market research. They go with their instincts, and just hope everyone likes it.

Lack of market research can be catastrophic for any business.

The method of conducting market research can be different for different businesses. Identify your niche, potential customers, and then depending on your business area, conduct your market research. If you are not sure about how you should proceed, check with the experts in your field. You can always find guidance on the internet on carrying out the market research specific to your business.

Whatever you do, do not ignore going through this extremely important process. As tiring or difficult as it may sound, but this is the number one effort that can grow or fail your business. Again, whatever you have to do to get this done, you must do it. Cannot emphasize enough.

2. Lack of Clear Vision

Many entrepreneurs start with the hazy picture of where they want to be, and what exactly they want to achieve. Without a clear vision, your business will be pulled in many different directions. It will be harder to create strategies, steer your business and grow accordingly.

If your business lacks direction, there is a little or no growth, you are having a hard time taking a decision, or you are experiencing costly delays, then your business lacks a long term vision. In this case, you immediately need to take action. You must set goals for your business, create a clear plan, define path, and stick to your vision all the way.

Keep in mind that plans are basically made to give your business a clear direction. Almost no plan goes hundred percent as it was originally planned. Changes to the plans are mandatory. However, those changes should not be at the cost of your vision.

Lacking of clear vision often turns the focus away from quality towards quantity. Many business owners start a business and try to take as much business as possible. In doing so, they become too diverse in their offerings, too often too quickly.

Having a clear vision will help you focus on what works in your business. It will allow you to take out anything that does not contribute towards your business goals. Having a clear vision also helps you in creating a compact marketing strategy. And, with a clear strategy, you can better define your market, your clients, and steps that you must take to achieve success.

3. Leadership’s Inability to Inspire

The leadership’s role is to create strategies, assemble teams, create work culture, provide guidance, and keep an eye on current and emerging business opportunities.

The ability for a leader to make everyone see what he or she is seeing is of vital importance. A leader must be able to transfer his or her vision to the team, so that the team works with the same energy and enthusiasm towards the goal.

Leadership should be able to demonstrate a constancy of character to attain trust, confidence and loyalty. As a business owner, you should be able to communicate your business vision to everyone that is associated with the business. Without having a strong character, it is not possible to pass on your mind and vision to the team.

4. Poor Management

It is the job of management to hire, train and mentor employees. If the employees are unable to get the work done, then the onus of failure falls on the management.

One of the common reasons why a small business fails is the owners’ inability to manage their team and business appropriately. While the owner may have the ability to create and sell a viable product or service, they often lack the qualities of a strong manager, or do not have adequate time to do so. Without a proper management team, there are high chances of mismanaging certain business aspects, such as finances, hiring, sales, marketing, and so on.

Smart business owners delegate the activities they do not perform well to someone who can. Therefore, it is important for the business owner to not only know his or her own abilities well, but also should be able to identify the abilities in his or her staff.

5. Lack of Finances

Another aspect of poor management results in the lack of finances. It is also one of the biggest reasons why a business fails. I will put the “lack of finances” again down to the management failure, because it is ultimately the management’s responsibility to appropriately manage business finances.

The business owners are usually more aware of their day to day expenses. They usually know their fixed and variable overhead expenses, such as salaries, rent, utilities, and so on. However, they are usually not totally aware of how much revenue they are generating through their sales of products or services. This disconnects leads to financial shortfall, which can quickly turn a business into a financial nightmare.

Moreover, the companies that operate in a highly saturated market, often provide their services or products at a far lower prices than their competitors. They do so with an intent to attract new customers. While this strategy is successful in some cases, keeping the prices too low for too long would ultimately result in shutting down the business. On the flip side, higher prices may result in good revenues, but should be backed with better quality, and smart sales and marketing strategies. If prices are not managed properly, the results would be unfavorable.

6. Poor Marketing

Small business owners often fail to prepare for the adequate marketing needs in their early marketing campaigns. Many business owners underestimate marketing requirements, and often miscalculate the capital required, customer reach, and customer conversion ratio projections.

Since marketing is crucial for the business, especially in the early stages, it is necessary to ensure that you have allocated sufficient budget for your marketing needs. Also, realistic projections related to customer reach, and sales conversion ratio is of critical importance for a successful campaign. Without proper consideration and planning, the marketing campaigns are more likely to fail, or eat more budget but still remain ineffective.

7. Failure to Adapt to the Changing Market

Business that do not timely adapt to the latest trends in the field are only just waiting for the failure. Most business changes occur due to increased competition, changed customer preferences or unpredictable economic environment.

As a business owner, you must keep yourself updated with the latest market trends, and how your competitors are adapting to these changes. And therefore, you should also adjust your business accordingly. In fact, more appropriately, you should be able to foresee the market changes in advance, and plan your strategy ahead of time.

The companies that deal with the continuous changes and turn the change into opportunity, will ultimately gain the competitive edge in the market. And the companies that fail to “ride the trend” often go down sooner than later.

We have seen many companies fail because they could not adapt to market change in time. For example, Nokia, who once was the biggest manufacturer of mobile devices, failed miserably because they could not keep pace with changing customer needs. They failed to catch up with Apple’s iPhone, resisted the change, and stubbornly stuck to Symbian OS, rather than adopting the Android OS like everyone else was doing. They could not improve their technology to match with that of Apple’s. So they ultimately ended up being sold to Microsoft.

So Why a Business Fails: Conclusion

Starting a business without a proper plan is a recipe of disaster.

If you fail to plan, you are planning to fail.”

Benjamin Franklin

To tell you the truth, businesses do not fail, but the leaders do. It basically all boils down to the leadership failure. It is ultimately the leadership’s responsibility to guide the business all along, and make the changes as necessary.

Some leaders are too tolerant or resistant to the idea of change. They are also afraid of doing experiments, and are not willing to appreciate a new idea. Then there are some leaders who are obsessed with the idea of perfection. So they press on things that are not necessarily required. Trying to achieve perfection is one of the biggest obstacles in growth.

Some leaders genuinely lack leadership or management skills that are required to run a smooth and successful business. If you happen to be such an aspiring leader, it is always a good idea to work with a business mentor that help you hone your skills to become a successful business owner.

Well, at the end of the day, as a business owner, if your business fails, you are only yourself to blame.

Check out this article to learn about the challenges for expat entrepreneurs in China.

If you are willing to go through the whole purchasing process by yourself, then you may like to know how you can identify a real manufacturing company in China. And once you find an appropriate manufacturer or supplier, you would definitely want to know if they are even a legit company to deal with without legal or logistic issues.

Why Would You Even Consider Hiring a Sourcing Agency at First Place?

For many, finding the required product, choosing the right supplier, and getting through the supplier verification process is sometimes a tedious and a difficult job. You may want to get rid of this tiring effort.

Or, you may not have much time to spare before you would want your store be filled with the desired products.

Or, you may even don’t have much confidence in your skills or findings regarding your specific supplier.

Whether you are a novice importer, or have been importing from China for quite some time, you will find these questions at some point in your business. These issues are very much experienced by novice and seasoned importers alike. Naturally, you would want to ensure the safety of your investment.

In such cases, it sounds appropriate to transfer the burden of end to end sourcing and delivery on the hired shoulders of a sourcing agency. This arrangement will allow you to turn your focus away from dealing with the sellers all by yourself. In doing so, you can spend more time and energies on the selling part of your business and handling local business issues.

Many people are already looking for someone local for help

Most companies or small business owners rely on someone local in China to assist them in sourcing and closing a deal. Throughout my 16 or so years of stay in China, many of my friends have approached me for assisting them in dealing with their supplier. Many people contact me for the same purpose through social media or through references, just because I am here.

If you are dealing with a company for the first time, you would want to make sure they are operating legally. Off course, you would want to save your skin… and money, and do not want to be fooled by some company thousands of miles away.

The local agencies or sourcing companies in China can help you in doing these tasks for you. Off course they charge for their services, but that is an expense sometimes worth making.

How a Local Agency or a Product Sourcing Company Is Helpful for You?

As they say, there is no substitute for experience—and this benefit alone could be worth spending the money.

Think about the following reasons for hiring a product sourcing company.

Sourcing companies know their local market like the back of their hand.

Using their knowledge, they can potentially propose a much better plan for your business for you to use.

A sourcing agency typically have close ties with the local suppliers.

They may have worked with several suppliers and manufacturers in the past. Therefore, they can get a better deal most of the times because of their relationship with them.

They speak the local language.

The largest barrier in dealing with Chinese companies for most foreigners is the inability to speak the local language. When you hire a sourcing agency, the language will not become a barrier in dealing with the suppliers and performing negotiations. You do not want miscommunication in getting through your requirements. The sourcing agency can easily verify supplier’s documents that are typically in the local language.

They probably have heard every question multiple times that you have to ask.

Given their experience with other clients, they are almost always ready to satisfy your requirements and provide appropriate support.

They know the current dynamics of the market that you would probably not know if you are new.

For example, what regions are known for what kind of products, how suppliers can fool overseas buyers, and so on. This is an invaluable knowledge that can save your business from a setback.

They may have other clients who are looking for the same product as you.

If that is the case, then they can place a bigger order, and can get further discount from the supplier.

They know the best methods to negotiate with the companies and manufacturers in China.

They know the practices and customs of the local market. After finding the right manufacturer and knowing the right price, they use the right negotiation techniques to help you get the lower price without compromising on any of your requirements.

They save a lot of your time.

They have the right knowledge and specialized skills in procurement, and therefore can be more efficient in securing a deal.

Sourcing companies usually have a network of agents all over the country.

They can utilize their network and connections to serve your needs.

What Services Do They Usually Provide?

As a matter of fact, a product sourcing agency can provide many different services based on customers’ needs. You can an agency for the whole sourcing process, or only for the selected part of the job.

Consider these agencies as your one stop shop for your business in China.

They generally provide the following services.

Sourcing a product for your business

If you are looking to import products, but have no idea where to start. Or, you do not want to spend your time in researching and verifying the appropriate supplier. You can seek help of a sourcing agency in that case. The sourcing agency would provide you the end to end services, from finding the appropriate supplier, to shipping your products to your destination.

Helping in selecting the appropriate supplier for your products

You can hire a sourcing agency only to find an appropriate supplier for your business. You may want to take it over from there and further deal with the company by yourself.

Auditing factory, vetting and verification of supplier

You may have already found an appropriate supplier for your business, but you are not sure if they work legally in China and can really provide proper services. In such a case, you can hire the services of an agency to perform factory audits and verify the supplier’s credentials.

Evaluating product samples before issuing purchase order

You have already selected a supplier and are satisfied with them. Whether you want to avoid hefty overseas shipping charges on samples for some reason, or having time constraints, you can hire the agency to evaluate the samples for you and provide you a report.

Following up on orders

After you have placed the order, the agency can help you keeping an eye on the schedule. They can keep following up on orders as and when you require them.

Testing and inspecting your products before shipping

You can hire a sourcing agency to test and inspect the produced goods to make sure they are according to your requirements. They usually perform product inspection according to industry standards.

Handling shipping and logistics

The product sourcing agencies usually have relationships with several different freight forwarders. They coordinate with your supplier and freight forwarder, and utilize their contacts to send your shipment using the best way.

Providing other value adding services

Many sourcing agencies provide additional services; such as, private labeling, customizing the product or its label or its packaging, and so on. They also provide drop shipping and fulfillment services directly from Mainland China.

What Would They Usually Charge You for Their Service?

The sourcing agencies have different payment and compensation methods to charge for their services:

Price-based flat rate for buyer

This service fee is typically the percentage of the price of the goods purchased. The agency negotiates the price with the supplier on your behalf, and typically charge you between 1 and 10% of the total price. This method is completely open and transparent to you, and keep you involved in every aspect of the purchase process.

Price markup

The agencies with this method act as independent trading companies. They source the product for you, and provide you a price by adding their own commission on top of the product price. In this case, you would typically not know the actual price and source of the product. However, they make sure that all your requirements are met. They negotiate with the supplier and make all the arrangements according to your needs. That is, they take the complete responsibility of purchasing and exporting the product to your destination as per your requirements.

Purchase commission from supplier

This is the commission in percentage that the agency charges from the manufacturer or supplier. They usually team up with the supplier and act as their selling agent.

Commission from both buyer and supplier

The agencies with this method take commission from both parties. This method allows them to keep the commission low for both supplier and the buyer. For example, if they charge only the buyer or the supplier, they would charge 8% commission of the total amount. But if they charge both parties for their services, they would charge 4% each to earn that same 8% commission.

Charges for miscellaneous services

The agencies would charge a different services charges for other services that they offer. Such as, supplier verification, testing and inspection, and so on. These charges may or may not be based on the value of the product.

So Which Sourcing Agency Should You Partner with?

Are you more concerned about the source of the product? Or, quality and price of the product is more of your issue?

Consider the different services and methods mentioned above. Think about the services you need to hire, and the method that would suit you for the business. And based on that, find a sourcing agency that works with that mode.

A particular point of concern is that that a sourcing agency that charges commission from the supplier may have a biased interest towards the supplier. If an agency is charging a low fee for their services, there is no guarantee that they would not charge the supplier as well. When they do so, they may not work in the best interest of the buyers.

For example, when looking for suppliers, the agency successfully finds a supplier with the perfect match, who fulfills all the requirements. However, the supplier does not agree to the commission terms of the agency. In that case, the agency would let go that supplier in favor of the one who would pay them more commission.

This means, the sourcing agency that you hired to serve your interest, may compromise on some requirements when purchasing. They go ahead with the less qualified supplier. Why? Because that supplier pays them good commission.

That is why an independent agency that serve your interests and fulfill your requirements would always be a better choice. They charge relatively higher commission, but that commission would be much lower than what you would spend on traveling to China and doing the whole process by yourself. And traveling to China in the times of pandemic is not so convenient.

Conclusion

There are times when you need some “boots on the ground” to help you with your business with Chinese companies. You can hire a sourcing agency for that purpose, to help you with the complete purchasing process, or a part of the job. They provide plenty of options and services for you to choose from.

In other words, whatever you would like to do by yourself, if you were in China, they would do all that for you. At the times when you are not being able to travel to China, this indeed is a great help that you may wish you have.

Trading with Chinese manufacturing or trading company can be tricky and sometimes, quite challenging. This is especially true for importers with small and medium sized businesses. For some, it can even turn into a daunting and a draining drill to deal with the suppliers in China.

A Difference Between a Manufacturing and a Trading Company

A manufacturing company typically owns a factory where their specialized workers design and manufacture their own products for customers. This is why, establishing a manufacturing company usually requires large capital investment to start with.

On the other hand, a trading company does not own a factory themselves. Instead, they have relationship with one or more manufacturers, and work more like an agent for those manufacturing companies.

Do You Prefer Importing Directly from a Manufacturer or Through a Trading Company?

Most importers do not care if they work with a manufacturer or a trading company, as long as the price and quality meet their expectations. But there are still many importers who want to work directly with a manufacturer when importing goods from China. Mainly because they think the manufacturers can offer the best prices, which can be true, but not in every case.

Almost every other company on buying platforms, such as Alibaba, Made in China or Global Sources, claim themselves as manufacturer. In reality, they are the trading companies listed as manufacturers. So how can you tell if they are a manufacturing company, or a trading company under the skin of a manufacturer?

There are several ways to make a good guess about the company you are dealing with. Off course, not all methods apply in every scenario, but most of them do work in most cases.

In this article we will discusses the tactics that you can use to distinguish between a manufacturing and a trading company.

So How to Tell if the Supplier is a Manufacturing or a Trading Company?

The only method that works much better than any other tactic is visiting the company personally. (We will cover this a little later in this article.) But this is the privilege that many small business owners find difficult to enjoy. Also, the coronavirus pandemic situation is still unclear globally and traveling to China also has its own difficulties during pandemic. Therefore, investigating the supplier remotely need some deliberations and efforts.

Some of the tactics work better than others, but you can still use them to make your analysis better.

1.      Be straight and just ask them the simple question

There is no harm in asking them if they are a manufacturer or a trading company. Most of the times, you will hear that they are manufacturer, as most of them tell this anyways. But still there are some companies, who would tell you the truth that they are in fact a trading company. You may like to respect them for their honesty, and thank them for not wasting your and their own time.

If they tell you that they are a manufacturing company, then keep going with your tactics.

2.      Pay attention to the lead time and the quality of their response

Pay attention to the conversation with the company’s sales representative. Analyze their communication. The way they communicate with you, can give you some clues about them.

The manufacturing company’s sales representative usually have much better knowledge of the product and the manufacturing processes. On the other hand, the trading company’s sales representative could be specialized in sales, but depends on the actual manufacturer for some technical and low level details. That is why the sales person of a manufacturing company usually responds quickly and with more details than that of a trading company. The trading company may also respond to you quickly, but without enough details that you are looking for. For the detailed reply, they may take time.

Exceptions

The above mentioned analysis based on quick responses may not work in some cases. For example: if you are looking for a generalized or a hot selling product, and you stumble upon a trading company by chance. The sales representative of the trading company may have years of experience in dealing with customers like you. He or she could have heard most of the questions you may have to ask, and therefore could be well prepared with the answers in advance. To push them a little, you can ask more questions of the technical nature unique to their product or your query. If they are a trading company, then it may take some extra time for them to find out the required details for you. This is because they may have to contact the manufacturer for the answers.

On the other hand, there are also chances that the person at the sales desk is new at this manufacturing company or at this role. He or she may not have the complete information readily available that you are looking for. So you may have to get back and forth with them to get enough information about the product.

Therefore, it is recommended not to rely too much on this method.

3.      Judge them by the size of their product catalog

A manufacturing company is usually specialized in one or only several kinds of products. If there are lots of different kinds of products in the company’s catalog, then it is more likely to be a trading company.

A typical trading company starts with one or two products at the beginning. As they build their relationships with other manufacturers with time, they keep adding products to their own catalog. Therefore, it is a good idea to check how long they have been in the business. If they are in business for several years, and have many products in their catalog, then chances are good that they are a trading company.

As several other methods, this method may also not give you the clearer picture about the company’s business nature. A trading company that is relatively new, and having only a few products can be mistaken as a manufacturing company. On the other hand, a trading company active in business for many years, yet might stay content with the few products they are dealing in.

4.      Check their minimum order quantity (MOQ)

Most manufacturing companies have higher MOQs than a trading company. For example, a manufacturer can have an MOQ of, say, 20,000 pieces of electrical bulbs. But, a trading company may be able to provide you 5000 pieces of the same bulb. You may ask them to sell lower quantities to see if they can. Compare the MOQs of your required product from different suppliers. Most of the manufacturers usually have similar MOQs for a product on most buying platforms.

5.      Ask for their ISO 9001:2015 Certification

Usually, if a company holds the ISO 9001 certification, then chances are good that they are a manufacturing company. Still, not every manufacturer holds the ISO 9001 certification, and not any company holding this certification is a manufacturer. Many companies find ISO 9001 certification requirements difficult to fulfill, and therefore and not able to obtain this certification. On the other hand, some trading companies obtain this certification as well. In this case, they usually have solid relationship with manufacturing companies. Therefore, they are usually equally competitive as any other manufacturer, even on price.

However, be aware that it is relatively easy to fake the ISO 9001 certificate because they know that you may require some time and efforts to verify the certificate. Check the following databases to verify the certificate:

• Certification and Accreditation Administration of the People’s Republic of China (CNCA) database
• China National Accreditation Service for Conformity Assessment (CNAS), which is the database of accredited bodies

6.      Check their factory audit report

As one of the checks to classify a company is to ask the company for their factory audit report. If they send you this report, then check the company name on the report. The name on the audit report should match with the one on the business license. If it is so, then they are a manufacturing company.

One thing to note here is that, some companies may have separate names for the office and their factory. If this is a case, then they must have a separate business license for the factory. You should ask them for the factory business license as well, and perform the verification steps. Check for the business scope and other vital information on the license. They would also mention the name of their factory on their website. Basically, they would not want to hide the fact, and provide you all the information you need.

Also, not all manufacturers would necessarily have a factory audit report. So if they are not able to provide you the report, then this does not automatically classify them as a trading company.

7.      Ask for their factory’s pictures

The factory pictures that they send you will give you some idea of their capacity. But don’t take these pictures too seriously, as these pictures can be fake as well. However, when you ask for their factory’s pictures, do not forget to ask for the name block outside the factory, with the factory building in the background. Check and match the characters of the factory name with that on the business license. If they are a legit manufacturer, the name should be same.

8.      Ask for the relevant company documents to see if they are even a legit company

To investigate them further, you should ask for their documents related to their company and business. It is important to know them better for your safety as well. We have covered the list of documents in this article that you should seek before you settle into a contract with your supplier.

9.      Check their business scope on company’s business license

The business scope on the company’s license includes the most important information about the company. In their business scope, look for the characters like 制造 (manufacture)，生产 (produce)，加工 (process) and so on. You will find these words on the manufacturer’s license, but not on that of the trading company.

You can scan the QR-code on the business license to go directly to the relevant webpage of the company in the National Enterprise Credit Information Publicity System (NECIPS) database. It is almost impossible for a company to fudge this information, as the same information is available publicly on government’s official NECIPS database. Therefore, checking their business scope is one of the easiest methods to tell if they are a manufacturer or not.

10.   Visit their factory and see their manufacturing operations

This is by far the most reliable method to tell if your supplier is a manufacturing or a trading company. If you plan to visit China, you must visit your supplier’s factory to see their manufacturing operations. However, if you cannot travel to China by yourself, you can seek someone’s help who is living locally to make this visit instead of you. Another option is to hire a professional sourcing or an auditing firm for this reason. After all, the sourcing agency or the auditing firm will charge you much less than what you would spend on traveling to China by yourself.

If not anything else, then you should at least ask them for their factory address. Ask them how and when you or anyone on your behalf can visit their factory. Tell them that when you visit the factory, you will be checking their manufacturing areas as well. Observe how they respond. A genuine manufacturer should welcome your visit happily, and would be keen in making all the arrangements for you.

Conclusion

There are several different ways you can judge your supplier to know if they are a manufacturing or a trading company. However, no method is foolproof and can give you the 100% guarantee on your judgment. But the visit to the factory personally would provide the most knowledge and the best judgment about the supplier. So if you are not able to visit the factory personally, we recommend doing as many checks as you can to stay safe at your end of the business.

Before 2020 arrived, if anyone wanted to do business with Chinese companies, they would buy an air ticket, and land in China to find an appropriate supplier/manufacturer/source and secure a deal. However, traveling anywhere, and similarly to China these days, is not fun.

Even though the pandemic situation in China is largely under control, and most businesses are back to their normal, but internationally, it is still not so easy to travel right now.

Now when your situation does not allow traveling to China, you have to deal with suppliers without physically meeting them. Therefore, it becomes quite challenging to identify if they are a legit supplier/company/manufacturer for the business or not.

In this article, we will discuss how you can identify a genuine supplier among a million others in China.

So What Choices Do You Have in Choosing a Chinese Supplier?

Many small and medium business owners like to import goods from China. However, they lack in confidence in dealing with the Chinese suppliers and companies. There could be several reasons, including the language barrier, complicated international trading process, scams, or bad quality products.

There are some golden rules that apply to doing business with any Chinese supplier, regardless of the situation worldwide. To avoid being cheated, it is necessary to evaluate the company for their standing before making a deal.

If you are short on time, and have a little bit extra budget at your disposal, it is always recommended to hire a local agency for your help in business with Chinese companies.

However, if you have more time than money, then some hard work and extensive research could potentially do the job just as well.

How Can You Identify a Genuine Chinese Company or Supplier?

There are a number of methods you can use to identify potentially a genuine supplier among the not so trustworthy ones. Beware that no method actually guarantees 100% authenticity on any company’s legal standing or reputation. However, by keeping your sensors on during your conversation with the supplier, and using multiple methods, you can have a good idea if it seems safe enough to go ahead with the supplier for your business or not.

Method 1: Request Your Supplier for Chinese Business License and Other Certificates

There are several certificates that you should be asking for whenever you are engaging with a Chinese company or supplier.

1 – Check Their Business License (营业执照)

Every company in China needs to have a business license issued by the government. This is not a secret document. In fact, the law requires every company to display their business license at a prominent location at their business place. To verify if your supplier is legit, it is a good idea to ask them about their business license. Verifying the business license is usually the first step when doing due diligence on a Chinese supplier. You may often find a company who is reluctant to show their business license upon your request. If this is the case, then probably something is not right.

The business license in China gives you some basic, yet official information about the company. As such, it allows you to check that your supplier is registered and operates legally. Let’s discuss this in a bit detail.

Here it is what a China business license looks like:

The China business license is only issued in Chinese language. You may use the “Google Translator” or the “Baidu Translator” application on your mobile phone to translate the content on the image of the business license to English. Beware that this machine translation may give you good enough information, but may not be accurate. To make sure about the license content, you may make use of a human translation service for more accuracy.

Chinese government usually issues business license in both “Portrait” (vertical) and “Landscape” (horizontal) orientation. However, both copies contain the same information. Different companies may show you license in different orientation.

The business license provides the most important data, which includes:

18-Digit Chinese Business Registration Number:

This unified business registration number provides useful information about the company:

• First digit: Registering authority
• Second digit: Entity type
• Digit 3-8: Registering region
• Digit 9-17: Organization code
• Last digit: Check digit

Official Company Name:

When registering, a company may choose only a Chinese name or both Chinese and English names. Most companies in China are registered with their Chinese names only. They do not officially register an English name. A lot of English company names you may find on buying platforms, such as Alibaba, are using their unofficial names.

Type of entity

Official Address:

This is the registered address of the company, which can be different from their factory address.

Legal Representative:

This is the name of a person who is legally representing the company. This is typically the owner or the co-owner of the company.

Registered Capital:

Depending on the type of a company, the registered capital can be as low as 10,000 CNY or as high as 20 million CNY or above. For example, a small trading company may register for relatively a low capital, but big manufacturing companies may register with large amounts in capital.

Date of Incorporation:

It is generally good to do business with a Chinese supplier who has been in the market for at least 2-3 years.

Expiration Date

Business Scope:

The business scope defined on the business license covers exactly what a company is legally permitted to do. The business scope is typically very specific. Anything not mentioned on the business scope is deemed illegal. For example, it may include “manufacturing and trading of electrical equipment” and “no trade of items subject to license approval”. However, if the company is offering services outside this business scope, then you should obviously see this as a red flag.

QR Code:

You may scan the QR code to see the details of the company on government’s official database: National Enterprise Credit Information Publicity System (NECIPS). Cross check all the details on the database to see if they are same as mentioned on the business license you received from the company.

Verifying business license is a good document to good to start with, but checking other documents can also come in handy.

2 – Bank Account Certificate (开户许可证)

If they have this certificate, it proves that they are a genuine holder of the bank account, and your money actually goes to the company.

However, a company may operate more than one bank account, for example, to handle different currencies or different modes of business. Nevertheless, the take away here is that, always transfer money to company’s back account, and not to any personal accounts.

3 – ISO 9001 Certificate (ISO9001质量管理体系证书)

Requesting for ISO9001 certificate is usually a good measure to ensure that the organization’s quality management system is certified. Cross check the details on the certificate, and also verify the certification authority.

4 – Test Reports (测试报告)

Request for the test reports of the items to confirm that the goods are being produced to the standard you require. Make sure the test reports are of the same items that you are interested in. Check the details of the report to see if the report actually contains the information that you need. Some supplier’s may show you the test reports of other items that you are not looking for.

5 – Purchase Invoice or Proforma Invoice (形式发票)

This is the invoice your supplier should provide you against the products you are buying. Carefully check all the details on the invoice, including product detail, price, name of the company, bank account information, and so on.

6 – Foreign Trade Registration Certificate (对外贸易经营者备案登记表)

This certificate is only required for the companies which are directly engaged in foreign trading. If a company does not possess this certificate, then they are possibly using a trading company to export their goods. If they posses this certificate, then it is good. Otherwise, check and confirm with them if they are using a third party to ship goods outside China.

7 – Customs Registration Certificate (进出口货物收发货人报关注册登记证书)

The Chinese companies who possess this certificate are registered with China Customs to make custom declarations. Not every company who is engaged in foreign trading possess this certificate, as they may use another broker for this process. Nevertheless, it is a good method to understand their capabilities.

Method 2: Ask Your Supplier for Reference

Ask you supplier for their bank’s reference letters to verify their credit worthiness.

You may also ask for their previous or other current customers as a reference, and do not hesitate to contact them. This will give you a great insight on supplier’s track record in producing the required items.

But, here is a catch. Many good manufacturers want to keep their customer list private, except when they work with some big customers that everybody knows. They may refuse, for the fear that their competitors may try to contact the customers and underbid them. So, this also may not be a fruitful method, but it is good if they provide you any reference to vet their claims.

Method 3: Use Search Engines to Find Out Their Reputation in the Market

Use Google, Bing and Baidu search engines to run a quick background check. Open a search engine, and type the company name and their phone number in the search field and hit search. The search results may display some useful information about the company. Such as, any exhibition or a trade show they might have attended recently, or an award that they have received from some reputed organization, and so on.

Now run the search for their negative reputation. Open a search engine, and search for “[company name] + fraud”, “[company name] + scam” and some other similar variations.

Use these helpful tips when performing search:

• Run these search queries with their English name as well as Chinese names (with Chinese characters).
• Use Google Chrome to perform these search queries. The search results may display references to some Chinese websites. The Google Chrome browser usually translates the Chinese websites to English automatically. If the browser does not translate these websites automatically, you can configure it to do so when required.
• If they have provided you some images of their factory or manufacturing unit, use Google Images, Bing Images or Baidu Images to see if anyone else is using these images or not. There are chances they might have provided you images of some other factory that does not belong to them.

Method 4: Request for a Sample

Regardless of what you are buying, it is good to ask for their sample—even if you have to pay for it. When you have the sample in your hands, you can check the quality of the product to see it if fulfills your requirements. You may also know about their service and attitude.

If you have to pay for it, tell them that you want to wire transfer the payment directly into their company’s bank account. If they cannot provide you their account information, then the things are fishy.

Conclusion:

Doing business with Chinese company or a supplier requires due diligence. You should perform a proper check and verification for the companies to know that they are what they claim to be. Check all the details in the documents they provide to you very carefully. They may provide you a different document than what you requested, or the document that does not contain the relevant or complete information.

You would definitely not want to work with a supplier that is non reliable, often provides inferior quality products, or delays shipments. In this article, we introduced some tips that you can use to vet your supplier before making a final decision.

Disclaimer: At Sesame Disk by NiHao Cloud, we welcome a diverse range of options and point-of-views. This post contains useful information for entrepreneurs. However, the following should be noted:
– In general, this article does not include any medical or legal advice. If you require any medical or legal advice, you may consult a relevant doctor or a lawyer specific to your case. International and your local authorities may also have issued some advice which you may follow.
– Some of the points noted in this article may reflect the views of the writer only, and may not necessarily reflect the views of our team and the company.

Most countries are struggling in controlling the spread of coronavirus. However, no country has been able to control its spread better than China. This is a glaring fact, and denying this fact would be lying on its face.

China took the first hit from coronavirus and bore huge losses to economy

Since China was the first country affected by coronavirus, there was no previous data or experience available on how to respond. That was why, China took extreme steps to control the spread. The whole country of 1.46 billion people was locked down for about four months. This was only done in efforts to control the transmission of coronavirus. Those four months included the most important time of the year in China, when families get together for the Chinese New Year, and businesses thrive. In the end, all those restrictions really helped the country in putting the brakes on the spread. And that too in a very short time.

However, the imposed lock down had a great toll on economy. China’s economy contracted 6.8% in the first quarter of 2020. During this time, some 460,000 Chinese firms closed. This is the first ever contraction recorded since the reforms were adapted by the end of Mao’s era in late 1970s. All these losses to businesses and economy, forced China, like every other country, to apply restrictions on entry and exit for travelers. However, despite all these restrictions, a recent outbreak of coronavirus happened in Nanjing city of China on July 20, 2021. This outbreak was of Delta variant, but brought under control within a month. This recent outbreak proved that slightest of oversight could be disastrous for the country. Therefore, China still remains on a high alert in avoiding any new spread of coronavirus.

So Who Can Travel to China?

China closed its borders to nearly all travelers on March 28 last year, when the pandemic started spreading throughout Europe. Travelers with visa issued after March 28 can enter China on those visas.

China eased its restrictions after almost a year in March 2021 for select number of travelers from 23 countries. Starting from March 15th 2021, China is providing facilitation for reunion, work, and business visa applicants. However, all applicants are required to be inoculated with COVID-19 vaccines produced in China and obtain a vaccination certificate.

So, now you can travel to China in one of the three ways:

• If you are holding a valid Chinese residence permits for work, personal matters, and reunion
• If you are holding a diplomatic, service, courtesy, or C visa
• Or you may apply for a new Chinese visa only for work or emergency humanitarian needs. The humanitarian needs could be such as visiting a seriously ill family member, or getting urgent medical treatment. If you already hold a valid old visa, your previous visa will not be cancelled.

How Traveling to China During Coronavirus Global Pandemic is Different than Before

The entry and exit restrictions in China vary by traveler’s location and are based on a number of factors. These factors may include traveler’s nationality, travel history, residency status, and/or vaccination status. These restrictions could also vary between different cities and provinces of China.

Let’s take a look at each of these requirements a bit closely.

Nationality and Travel History

Allowance to enter China depends on the current situation of coronavirus in your country, or the countries you have been to in the recent past. This includes the countries of your layover where you changed your flight to enter China. Chinese authorities may or may not allow entry if you are not flying directly from your country of origin to your destination in China. In most cases, if there is a hitch in your itinerary, the airport staff would communicate the possibilities before boarding. Or, in worst case, the airport staff may even deny you from boarding.

Visa Services and Vaccinations

Various Chinese embassies and consulates have announced an easing of visa restrictions for persons who can prove they have been vaccinated against COVID-19 with a China-produced vaccine. This means, all foreign nationals holding proof of vaccination with a China-produced vaccine, and their family members, may apply for a visa to travel to Mainland China. Also, now they may apply without producing additional documentation such as letters of invitation. Currently, Chinese embassies are only accepting applications for the resumption of work or for other permitted activities, excluding tourism.

COVID-19 Tests

The requirements for negative COVID-19 nucleic acid and IgM serum antibody tests are stringent enough for slightest of causes. If you are not vaccinated, but your IgM serum antibodies level is higher than the set criteria, then this may mean you have recently been infected with novel coronavirus.

The airline staff would require you to present the test certificates when boarding the flight. You must take the The negative nucleic acid and IgM serum antibody tests at the designated labs or institutions within the last 48 hours of departure. Some of my friends informed me that they did receive the negative nucleic acid test, but their IgM serum antibodies were higher than the required criteria, and therefore they were denied traveling.

Health Code

China has introduced a “health code” for foreigners traveling to China. The health code is an effective public health managing measure used in China’s anti-epidemic battle based on technology. This health code records dynamic information about personal health, including normal respiratory symptoms and nucleic acid test results. You may contact your nearest Chinese embassy or consulate for the guidance on how to get this health code for travel.

Flight Booking

For many countries, the flight operations are still restricted. As a result, most international routes are still not operating as they were operating before the pandemic. These restrictions on flights have caused the ticket prices to rise to extreme levels, and out of the reach of many. This price hike and flight schedules have generally made it difficult for most passengers to find their ticket on a flight.

Quarantine

You must undergo testing-on-arrival for COVID-19 and a mandatory quarantine. Some regions in China demand 14 days of quarantine, while others require 21 days. This may take place at a location designated by government (usually a hotel) or at your home. The stay at a hotel would cost you anywhere around 6000 Chinese Yuan (about $928) to 12,000 Chinese Yuan (about $1856), depending on the hotel’s star rating and services.

Things to Consider Before You Travel

• Traveling Cost: Traveling during coronavirus global pandemic is expensive. Your traveling cost may vary depending on the price of your ticket, nucleic acid tests, quarantine requirements and the food cost during quarantine. Also, if you get unlucky to catch coronavirus during travel, the treatment for COVID-19 may also cost you some extra money.
• Travel itinerary: Keep your travel duration as short as possible and avoid layovers, to avoid getting in contact with coronavirus during travel. If you can get on a direct flight from your country of origin to your destination in China, then that should be your best choice.
• COVID-19 SOPs: Keep in mind the general standard operating procedures (SOPs) of wearing masks, maintaining social distancing and frequently applying hand sanitizer or wiping your hands off with alcohol based napkins. You must also follow airport and airline staff’s advice during travel to avoid unnecessary delays.
• Quarantine Requirements: Obtain the latest requirements for quarantine before you plan your trip. It is also good to keep yourself updated with the latest situation before boarding. This will allow you to adjust your plan accordingly, if required.
• Vaccination Certificates and Negative Nucleic Acid Test Reports: These are must to have during travel.

Best Practices

• Always remember to consult the latest official information before making booking decisions.
• Obtain your vaccination certificate and take the negative nucleic acid test 48 hours before your departure.
• It is always good to consult your nearest Chinese embassy or consulate office for local information and requirements regarding boarding and departure.
• You should also check with your airline regarding arrival procedures and quarantine requirements.
• Before you plan your trip, you may also like to talk to your host, friend or some acquaintance in China for the local requirements and practices.

To prepare well for your travel, the more you know, the better it will be.

What to Expect after Completing Your Quarantine for Coronavirus?

After you complete your quarantine period in China, you will be allowed to carry on with your business. If you are an entrepreneur and traveling to China to work on your business, you may like to take a look at our article for the challenges you may face in your business.

As of August 27, 2021, about 56% of the population has already got the vaccine. Life in China is largely back to normal, but things can change fast in China. Regional lock downs are imposed every time there are new outbreaks of the virus.

The government still emphasizes on wearing face masks in public. Traveling in public transportation, including airplanes, trains, subways, taxis or public buses require you to show your QR health code and wear face masks all the time. All the restaurants, shopping malls, parks or other public areas also need to see your health code to allow entry.

In China, different cities have also maintained different restrictions on travel. The government has marked each city as Low Risk, Medium Risk, or High Risk area, depending on the current coronavirus situation. If you plan to travel within China to different cities, you must check with the local authorities regarding the requirements. The requirements may include a COVID test taken with the last 48 hours, vaccination and/or the green QR health code.

The color of the QR health code may change depending on the locations you traveled or people you met within the last 14 days

• Green: If your health code displays in green color, then it means that you are not formerly or currently confirmed or suspected coronavirus case. If you get the green color, it means you are allowed to travel through local transport. You can also enter any public area, business (such as restaurant) or a public building (such as shopping mall).
• Yellow: If your health code displays in yellow color then it indicates that you have been in contact with confirmed COVID-19 patients. It also indicates that you are having fever, cough, sore throat, and/or shortness of breath. If your health code is yellow, then you will have to quarantine as indicated by the health authorities. You will also need to check your temperature at least twice a day, and require to avoid crowded places.
• Red: If your health code displays in red, then you are a certain or presumed coronavirus case. This may also mean that you have been in close contact with confirmed COVID-19 patients, including people who confirm in the health declaration that they have in fact been in unsafe contact with a confirmed coronavirus case within the past 14 days.

Disclaimer

The travel and other policies change quickly, depending on the current situation at large. You must double check with the local Chinese embassy, consulate or China visa center to ensure your trip.

The traveling restrictions and policies only apply to visa processing services offered by Chinese embassies and consulates in select locations. You must double check with your local Chinese embassy or consulate to determine if you are eligible to apply for visa, and information regarding travel requirements, quarantine and so on.

Entrepreneurship in China brings fruits only with proper homework

Entrepreneurship is not just starting a new company or a business. It is a mechanism of recognizing opportunities, taking on new challenges, generating resources, and creating value for your customers. Whenever you take on a new challenge, you have to face a possibility of failure—and entrepreneurship is not different. Entrepreneurship is a name of taking a chance, where your chances of success heavily depend on how good your homework is. Being an expat entrepreneur in China adds new dimensions to this challenge.

COVID-19 is coming under better control in China. According to the accounting firm PwC, investments by private equity and venture capital firms in China’s technology industry are expected to grow strongly this year.

In 2018, the total venture capital surpassed $70 billion, only a stunning 4% of these start-ups successfully reached the D-Round and only 2% went public. More staggeringly, none of these start-ups were founded or co-founded by a foreign entrepreneur.

This article discusses the low-level, but high-impact challenges that most non-native new business owners are likely to face in China.

Proficiency with Local Language

The first and foremost requirement for doing any business in China is overcoming the language barrier between you and everyone you are going to meet and work here. There is no running away from this fact. The main language of communication in China is naturally Mandarin Chinese. English does not work here. You will constantly find yourself itching to be able to communicate with the people around you. The young generation nowadays have much better understanding of English than it was a decade ago. Even then, you will still need the Chinese language to get through your day, any day.

Language barrier keeps you away from the pleasure and satisfaction of success. At times, it gets quite frustrating when you are wanting to communicate with your staff, with someone at the bank, or with a clerk behind the desk at some government office.

If you are stepping into a technology business, then you have high chances of finding the staff that could communicate with you enough using English. However, if your area of business is anything else, such as hospitality (restaurant/eatery/cafe), manufacturing, trading and so on, then your 98% of communication will require at least some level of proficiency in Chinese language. Therefore, gaining language proficiency for the entrepreneurs in China is very important.

Use translation applications for small and quick tasks

There are several translation applications available to translate pictures. These applications can save you from reading Chinese, but talking would still remain a handicap. To translate text and pictures, you can install the online “Baidu Translate” application on your mobile phone. In offline dictionaries, the phone applications named “Pleco Chinese Dictionary” and “Hanping Chinese Dictionary” are among the best.

Documentation, Legal Work, Bureaucratic Hurdles

Getting your business registered and obtaining a business license requires quite a bit of deliberation. It may not require mentioning that you must complete all the legal requirements and procedures before you entertain your first client. Starting operations without completing all the requirements may have some sort of consequences. These consequences may range from simple warning to deportation from the country, depending on the level of violation.

To register your business, you may have to visit several different government offices. You will also need to make frequent visits to some of these or other offices for routine business operations. In many cases, you will need to fill many forms (read: too many). You will also need to follow notices, and talk to the staff to get the things done. The good part of it is that, most of the staff in these offices will help you by going out of their way. In fact, in my personal experience, most of the staff here in these offices are quite welcoming and helping. If you are that lucky, the staff would guide you in your next steps as well, which will make things much easier for you.

Financing

If you are looking to raise finances from inside China, then it can turn out to be quite a challenge. Most entrepreneurs in China are either not eligible to secure loans from banks. Generally speaking, it is easier for a local investor to trust their fellow citizen than to a foreigner. I believe this phenomenon is not unique to China, but lack of understanding of each other’s culture is principally the cause. Some Chinese universities do offer financing programs and incubation centers for young entrepreneurs in China. So if you are a fresh graduate budding out of a Chinese university, you would definitely want to get a shot at your luck.

Hiring Staff

First thing first: It is illegal to hire employees for entrepreneurs in China for a non-registered entity. Make sure you have already completed your company registration process before you hire your first employee.

Hiring and staffing has a cost in China. If you are starting with little funds, it can be challenging to hire employees for your business. Still, it is worthwhile to hire staff through a Professional Employment Organization (PEO) or an employment agency.

Hiring through PEO or an employment agency makes it so much easier and quicker for you to find the required local talent. These agencies usually charge a portion of the hired staff’s salary. Even so, this cost is really worth it in a longer term.

You may also want to attempt hiring the staff directly by yourself. Job vacancies in China are usually propagated through social media applications, HR applications and HR websites. However, these HR applications and websites require an 18-digit Chinese ID card number, and the scan of your business license. Only then they allow you to post an ad on their platform. Moreover, the Chinese ID card number must be of the same person whose name is written on the business license. This regulation makes it impractical for a foreigner to use these hiring resources. Let’s hope these websites and applications will soon allow registration with foreigner’s passport as well. Until that does not happen, I would resort to employment agencies for hiring my staff any time.

Keep into account the mandatory benefits and compensations

In China, employees usually expect certain benefits from the company. Most companies offer year-end bonuses or 13-month salary in a calendar year. In addition, these companies also offer health, housing and other benefits. You must register for the employees Social Security Program with the government. China’s Social Security Program consists of the following 5 mandatory insurance schemes:

• Pension fund
• Medical insurance 
• Industrial injury insurance
• Unemployment insurance
• Maternity insurance
• Housing fund

Different cities and provinces have different policies of employee payroll, taxation, and mandatory benefits and compensations. Moreover, these policies keep on changing. Therefore, you must keep abreast of the latest policies throughout the year.

Sales and Marketing

Chinese buyers are mostly influenced by social approval and recommendations. They have faced many problems with the quality of local products. Due to these problems, those who afford, would prefer a branded product over a non-branded one. In China, branding is everything.A brand name that is well-known indicates the endorsement of its quality, and therefore, its credibility. 

However, quality and reliability are not the only reasons for Chinese buyers to choose a well-known brand item. Generally, Chinese people desire to be seen as exquisite, elegant and higher in status. They choose product based on product’s social acceptance, rather than its personal appeal. Therefore, only those name brand items that carry an exponential amount of value with their name are mostly embraced here. 

Chinese buyers almost entirely rely on recommendations and product reviews. In a report by Forbes, more than 300 million Chinese people report on only moving forward with a purchase after getting consent from their peers on social media.

Focus more on marketing around your brand name and its quality

This buying culture that revolves around brand, social approval and recommendations makes it a challenge for a new start-up to break into the market with new products. When marketing an item in China, you will need to focus more on marketing around the name brand and the quality of that name. Social media marketing in China is of paramount importance to build your brand reputation and awareness among locals. You would definitely want to stay active on local social media applications or hire a staff or a marketing agency to do that on your behalf.

Understanding Local Culture and Etiquette 

Chinese culture differs tremendously in some aspects from other parts of the world. New entrepreneurs in China are usually unaware of most of the local culture and etiquette. Hoping to run a business without the proper understanding of the local culture could be catastrophic for your business. This topic warrants a separate article of its own, but a brief mentioning of local culture and general etiquette would suffice here.

Guanxi (关系) plays a great role in Chinese culture

Guanxi (关系) is your relationship between you and others, and the favors owed between you and them. It is essential to form friendships and alliances with your staff, clients, suppliers and other business owners to get the things done. The Chinese usually make use of gifts, dinners, sports and other social activities to maintain their relationship networks. On the other hand, causing the loss of face can be dangerous in China, as it strains relationships. If you are already good at making relationships, then it is good for your business. Otherwise, you would need to develop this skill in order to bring success to your business.

Meeting culture in China is also a bit different, as it is based on Guanxi

When meeting new people, the Chinese would want to get to know them more as a person, rather than getting down to business immediately. In other parts of the world, business is usually discussed first, and dinners or other social activities follow. However, it is the opposite in China. It is common to gather around a dinner table to eat and drink for hours, before finally talking about business. Sometimes, Chinese people do not even discuss the business in the first couple of meetings. They usually discuss business after developing some sort of comfort with the counterparts.

Communication gap between low and high ranked staff

When working with other companies, you may feel frustrated over a communication gap among their staff. The low ranked staff in China are supposed to maintain a “power distance” from the high ranked staff, and usually do not mingle or talk freely with each other. Also, the Chinese companies usually do not discuss the course of action with their low ranked staff. Here, orders are not debatable, and are expected to be carried out on an “as is” basis. 

Conclusion

If you are an expat in China and aspiring to be a business owner, then learning the Chinese language should be your first step towards greatness.

To become a successful entrepreneur, you must keep more focus on working on your business, and not working in your business.

If you are a young entrepreneur, you would want to find a mentor in business. A good mentor would be the one who understands China, its culture, and Chinese business at large. As an alternative, it may be a good idea to start with a job that matches your business goals. This job can provide you the enough opportunity to learn whatever you will need to become a successful business owner.

If you are already an experienced business owner, and want to break into the Chinese market, then you may want to consider partnering with a local Chinese company. It would also be a good idea to engage with a local lawyer, hiring agency and a financial management agency. These agencies would help you in keeping all your practices always in-line with the current regulations. 

Many entrepreneurs in China are unaware of the intellectual property (IP) legal landscape and why their IP loss happens. We did a summary analysis of the 6 more common mistakes most companies and entrepreneurs in China make. Losing intellectual property would usually result in losing chances of potential growth for entrepreneurs in China.

If you are able to overcome the challenges discussed in this article, then doing business in China could be quite rewarding.