Top 3 Tips for Foreign Startup Entrepreneurs in Shanghai



If you’re looking to set up your business in the Chinese market, most industry experts would recommend Shanghai as the place to be. And it’s not just because it is China’s biggest city, but because it is also a known global financial hub as well. Shanghai is the face of China’s big but still booming economic and financial power. With its busy ports, transport hubs, population and skyrise modern buildings, it’s not hard to see why.


The good thing about Shanghai is that, it has a rather friendly policy when it comes to foreign businesses. If you’re looking for a joint venture, you need to partner with a Chinese business firm. However, if you’re simply looking to set up a representative office, there’s no need to look for a Chinese business partner. You only need to register the company for at least 2 years to get started, and it doesn’t even require capital. If you have successfully done your paperwork, and is actually on the way to do business in Shanghai, below are top 3 tips to be successful in your venture:

Partner Up with International Brands

Many international brands and dealers have already set up shop in Shanghai, and this makes it easier for startup entrepreneurs to work and introduce themselves in the picture – even if your company is not homegrown in China. Partnering with international names can easily give your company an edge, and it can open up more opportunities for growth and success.

Get Leaders That Have Experienced Working in China

It is not enough to simply partner up with an international name. In order to increase your chances of being successful in Shanghai (or China in general), you need to find at least one founder that has experience working in China for a good amount of time. This is not exactly hard to find though – even in international companies, you’d find that at least one top leader or founder had at some point, worked in China.


Another option is to partner up with a Chinese entrepreneur or founder who also had experience working with a multi-national or international company.


Working with someone who is already familiar with Chinese (or Asian) culture, consumer habits, local industry trends, and even their local policy and politics can help steer your startup towards the right direction and get the right people to work for the company.

Localize Your Brand

This is also the reason why you need someone who is familiar with the China market at your side. You need to have a local name and branding for China alone – to help you connect with the local market. And this should be done right!


If you haven’t heard, AirBnb suffered from a localization hiccup because they got the Chinese translation wrong for their brand name. For the English-speaking world, AirBnb is a place where innkeepers can list their room and boarding services for the benefit of backpackers and travellers who are on a budget.


However, their logo and Chinese name translation (Aibiying) gave the locals an impression that they are offering a sex hotel service. This is because when taken literally, “Aibiying” means “welcome each other with love,” and since AirBnb is a hotel or room and board service, the context becomes more like “love hotel” which is usually used to refer to short-time hotels that are popular among lovers who are simply looking to have some hot action.


It was definitely a marketing blunder. If AirBnb only had someone who knows the Chinese market (and language) pretty well, this should not have happened. Again, this is why you should get an experienced China-based partner. And if you’re launching a localized brand, make sure you did your research and market tests well.


If you’re worried about the costs of setting up an office in the city, you should know that serviced offices in Shanghai are pretty commonplace. This makes it easier and affordable for startups and medium-sized business to establish themselves in the city. A popular name for serviced and co-working spaces in Shanghai is Naked Hub which already has 46 locations across China, Hong Kong and Vietnam alone. Along with WeWork and UrWork, Reuters reported that the amount of co-working spaces in Shanghai and Beijing have increased to 50% just last year (2017). With several growing competitors, startup entrepreneurs will surely find good and affordable office options to settle in Shanghai.