How to Open Retail Store in China

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You should be aware of China's market environment before starting a business
You should be aware of China's market environment before starting a business (Image: China image by Madiha from Fotolia.com)

Due to China's rapidly developing economy, some may find it a tempting location to start a new business. Like any business, opening a retail store entails a certain amount of risk, and therefore any potential entrepreneur should be aware of China's business environment as well the status of the current market. However, the high demand for foreign products as well as the high prestige of Western labels may equate to a highly profitable business venture.

Conduct thorough research on China's current economic climate. The market potential of your retail store will vary considerably from area to area, and potential competition is fierce. Both the American Chamber of Commerce as well as a private business consultancy may help you research the Chinese market.

Obtain the legal recognition for your business. For a retail shop in China, a joint-foreign equity enterprise is the most common legal type, and establishes a joint venture with a local Chinese person or firm. Therefore it is important to find a business partner whom you can trust.

Register your company with the State Intellectual Property Office. Without the protection of your brand name, it may be legally copied and replicated. Although the counterfeiting of goods in China is still rife, registering your trademark will still give you some legal protection.

Obtain a premise for your business. Chinese cities are typically vast and the most fashionable shopping areas change frequently. By establishing a joint venture, your business partner will be aware of these trends and will save you the need of using the services of a business consultancy.

Market your business in order to gain brand recognition. Consumers in China typically hold established brands in high regard, and therefore advertising is key to a successful business enterprise. If your brand comes from the outside of China, it will be easier to gain brand prestige, so stipulate this fact in your advertising projects.

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