Chinese market entry strategy for foreign startups: case study of Russian and Italian companies

Abstract

Startups are the driving force of the world’s economy. One of their main characteristics is internationalization vision and desire to enter main markets. Today China’s startup ecosystem shows outstanding results, that makes it more appealing for foreign startups. However, there is a lack of data, describing the entry process. Therefore, this article examines foreign startups internationalization process to the Chinese market. The aim of this study is to provide assistance for foreign startups with the market entry strategy. The research is based on the qualitative method – comparative case study analysis of Russian and Italian startups, which have experience in China’s startup ecosystem penetration. The comparison is conducted according to theoretical model of five questions by Carneiro and Dib (2007), which implies that born global companies internationalization can be fully described by answering the questions what, why, when, where and how. The results demonstrate that the most crucial part of the entry strategy is make an analysis of startup’s product market fit for the Chinese market. We found out that the most appropriate product is technological one in B2B sector, penetration can be started at the early stage to the second-tier cities in the clusters of startup industry. The entry process requires mediator assistance, and through participation in competitions startup can increase awareness, establish networks, start sales or find a production partner.