Once thought to be impenetrable – China is now making entry to its market easier
Business Leader recently spoke to Scott Haughton, from digital investment platform, Envestors, about the increasing opportunities for UK companies to enter the Chinese market. Is now the time for you to start your expansion plans?
As the world’s second-largest economy, China is a market many businesses covet, yet there is a widespread belief that the Chinese market is difficult to enter. True, cultural attitudes and government roadblocks are significant challenges, but China offers great opportunities in a variety of sectors, particularly cleantech, biotech and medtech.
Biotech company ANCON Technologies, views China as both a rollout market and an invaluable partner in completing their research on how biomarkers can be used to detect COVID and a number of other diseases. They have created artificial intelligence and machine learning application technologies that have the capability to identify the patterns of volatile organic compounds (VOCs): they can detect trace amounts of compounds such as explosives, narcotics or other chemicals. There are three aspects of its technology applications: air-pollution detection, anti-terrorism and more recently COVID fast testing.
“There are many VOCs in your breath so each of your health conditions has a signature or a combination of VOCs, which we call biomarkers. Our research shows there are over 400 diseases that already have their own unique biomarkers,” explains Bing Tian, Director of Far East Development for ANCON Technologies.
Currently their ground-breaking AI and machine learning is part of a system to screen and diagnose COVID-19 through a non-invasive breath test. ANCON’s journey to this point started a few years ago.
In 2017, ANCON joined the Envestors’ China programme, which included participation in exploratory road trips in China and inclusion in several technology competitions in the biggest cities in China.
The same year, ANCON took part in the Envestors One Belt, One Roadshow, putting them in front of crucial strategic investors. These included listed corporates, leading venture capital firms and government backed technology transfer investment organisations. ANCON won the China-UK Innovation and Entrepreneurship Competition, held in Chengdu, an event that brought 3,000 projects and 70,000 participants in front of 450 experts.
The Envestors-ANCON collaboration has been going strong since then. In 2020, ANCON was a semifinalist in the Global Internet Competition “Straight to Wuzhen.” The World Internet Conference is hosted annually by the Cyberspace Administration of China and Zhejiang Provincial People’s Government.
Taking part in the 2020 contest has opened a lot of doors for the company. They’ve been able to meet potential partners and secure introductions to local players.
“I think that this competition is really exciting. The biggest help you can get from participating in competitions in China is getting the right introductions. Whatever your product is, you’ll get a chance to be introduced to local experts to help you set up in China,” says Bing Tian.
“Before COVID-19, our main target was lung cancer. When the pandemic hit, the first thing we did was try to get a biomarker profile of this new disease. That requires, first of all, that we collect as much data as possible and then have our AI build up the profile as quickly as possible. China’s always your first target because it has the biggest population and, as the health care system in China is getting better and better, it’s getting easier to track specific patients’ data,“ Bing Tian says.
Transparency of government procedure is one of the main concerns for companies looking to expand to China. However, the country is aiming to attract foreign startups through a number of government-funded programs. Municipalities like Shanghai and Guangzhou are competing with each other to create opportunities for foreign companies, and Bing Tian says, “What I see is really just the amount of opportunities there. And you can see how the local government is willing to get foreign tech companies like us involved. They’re offering grants, funds and tax relief.”
Achieving success in China is no easy endeavour, but the potential rewards for UK companies accepting the challenge are huge, particularly if they deal in technology that will be of benefit to the advancement of China. These companies should be seeking a partner with experience in successfully securing strategic Chinese investment and M&A partners.
Exposure to strategic partners has already secured ANCON a local distribution partner in China. Due to the need for rollout in a large market, the partnership could be vital to the company’s work on COVID detection. They are just one example of how, with the right assistance, it is possible to scale China’s Great Wall of opportunity.