China paradigm interviewed Andrei Prokhorovich, the founder and General Director of Eurasia Development Ltd. Listening to his views on what barriers foreign tech companies in China face when entering China Tech market and to figure out how they can succeed.
Andrei Prokhorovich, experienced entrepreneur in China, recognized Tech strategy consulting specialist
Graduated from Far Eastern State University in Russia, Andrei Prokhorovich has been working in his home country for almost three years before he chose to explore Asian countries and start his own business here. He finally been passionated by China’s rapidly growing economy and also because of his hometown, Vladivostok, which is pretty close to China.
Thus, in 2006, Andrei Prokhorovich moved to China and established the first company in Yantai China, which is now number 20 by GDP in the country.
Eurasia Development Ltd, technology consulting in China
Eurasia Development Limited (ED) provides services in the field of technology transfer in China and strategy consulting since 2012. The company’s industry knowledge and market insights enable their clients to gain and sustain global competitive advantages where national economic borders no longer exist. Eurasia Development Limited (ED) has established connections with local governments and business communities, industrial and high-tech zones, science and innovation parks in major industrial provinces. They help foreign Tech companies in China achieve their global marketing goals and successfully enter the market.
Eurasia Development Limited (ED) has developed rapidly since last 7 years in China. Currently, the company has achieved the maximum $20 million U.S. revenues in the past few years operating. What an amazing number for a seven-year company! So the next question then come out what is the secret of the company operation?
Mostly, Eurasia Development Limited (ED) do not buy technology, the company’s business model is technology consulting in China, and it provides the following services:
– Technology transfer in China
– IP management and Legal support
– Strategy consulting in PRC
– Soft landing
– Investment Opportunities
– Strategic Partnership or Joint Venture
– Location operations and factory setup
– Management Consulting in PRC
– Legal support
– Market Research
– Land acquisition and plant construction
– Quality Control and Management
Gained help from the Chinese government: Free office at Technology Park in China
“ China invests a lot in new technology, in fundamental science, and also in the acquisition of technology. I cooperate with them for many years. This is one of our strategies. We know how to cooperate with these governments and technology parks in China, and these technology parks give perfect conditions if you enter the Chinese market.”
According to Andrei Prokhorovich’s words, knowing how to cooperate with government technology parks in China is a beneficial strategy. If foreign companies can prove that their project is interesting, they can be given offices or free space for three years, like 100 square meters for free by the local government. What else? Sometimes, local governments may cut your income taxes by about 10%. Besides that, the Chinese government also has grant programs to start doing research and development. So foreign tech companies in China have the opportunity to participate in these grant programs. According to the example from Andrei Prokhorovich, his partner just received USD 1 million as a grant.
Sounds amazing? There are lots of grant programs which may be a little bit different from province to province, from grant to grant, from program to program. And, it is also an excellent opportunity for scaling in China if you have a partnership with JD or Alibaba or Baidu, etc.
China’s tech market, a market with many regulations
“We check the market. Then we go further. We’re doing some legal research because some technologies in China are prohibited. I mean not technology – international investments, foreign investments.”
Before entering China Tech market, make sure doing enough research to figure out if it is possible because some of the foreign investments are prohibited in China. It also includes some Tech industries, for instance, mobile telecommunication products or caring for making products.
Besides legal researches, communicating with Chinese experts in technology fields also play a significant role.
“Not just legal research is important; it’s much more important to get feedback from the Chinese experts.”
Is it acceptable? Does the Chinese market need this technology or not? How to scale? All of those questions are inevitable for a foreign tech company in China. Communicating with Chinese experts in technology fields and receiving feedback are an effective way to do China Tech market researching. According to Andrei Prokhorovich, each city has its specialty in terms of technology, like the city of big data, Guiyang; the city of hardware, Shenzhen; AI, mostly in Beijing; and biotechnology, mostly in Shanghai.
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