Overview of the year 2018 and perspectives for the year 2019

According to Camille Verchery, CEO of VVR International, “2018 was a very interesting year that saw a lot of projects achieved. On the industrial front, the essential of the VVR International activity focused on the negotiation of strategic partnerships and on the support of the negotiations for the creation, the organization and the wage portage of team which will follow the projects and ensure their development. Concerning the B to C, the key mission of VVR International was helping our clients to understand the complexity of the Chinese market from connecting the distribution channels to the building of the team”.

First, about the industrial B to B, the comeback of the Franco-Chinese partnership combining French equipment and needing of a local industrialization of all or part of the production was observed in 2018. This type of partnership shows difficulties for the small and medium-sized businesses. “The set up and the fast rentability are difficult challenges for the companies. Then it is about organizing the distribution to ensure a successful commercial development”. To enter the Chinese market, the realization of a partnership with distributors mastering the product type and sales network is essential. In many sectors such as the pharmaceutical one, the aeronautics, railway or nuclear where most of the actors are Chinese, the partnership is compulsory. Nevertheless, these actors have a limited capacity of production. The association of the industrial competence of the French companies with the knowledge and the skills in the Chinese market for these actors is a relevant strategy of development that benefits to both parts. Frequently used, those partnerships, often capitalistic, enable a local industrialization of the French companies and contribute to the industrial competence-building of the Chinese actors. “The mission of VVR is here to ensure the building of the business model of partnership, the progress of the negotiation.” It is a matter, on one hand, of preventing the risks of technological pillage that the French compagnies would face. On the other part we have to guarantee to the Chinese partner a sustainable benefit. “After the structuration of the partnership, VVR International plays a central role in the recruitment of the team adapted to the ambitions of the project. It is about recruiting a technical but also Franco-Chinese sales competence that will have to quickly be operational to support the different phases of the project”.

About the B to C, the distribution of agri-food, cosmetics, food supplements, household, interior decoration products in China is one of the main activities of VVR International in 2018. The Chinese distribution network is more complex than in Europe. In fact, its organization isn’t limited by the simple division between the Offline and the Online but is composed of other ramifications. The Online sale is for instance divided into market places with other actors like WeChat. This new landscape highlights alternative models of distribution. “VVR International helps the companies to understand the distribution channels, define a strategy and set up a brand which does not go through internet automatically”. If internet can be seen as the channel to privilege for selling a product quickly and at lower cost, it is not always the most adapted channel in this complex network. Its use can present advantages, but the risk of an ephemeral success leading to a durable loss of credibility can be considerable. “The Online channel should be considered as a complex tool to deal with but not as a solution. Without a structured and marketed Offline, the Online can’t be develop in a sustainable way. Once the development strategy is defined, the different distribution channels determined and organized, VVR International helps companies to choose the suitable actors.” Considering the Chinese distribution network spreading, a global knowledge of its work is impossible, and specialized actors for each chosen distribution channel are needed. The team responsible for supervision is then chosen.

“Moreover, thanks to the development of the Talent Acquisition Services department, we help our clients in the recruitment and the skill improvement of their teams. That is why VVR International has invested in a Labor dispatch license and a portage license. Those tools permit to legally recruit the new employee without the burden of hiring him/her in our client’s Chinese legal entity.”

The VVR International activity in the past year traduces the underlying trend of the Chinese market and highlight its new issues. According to the observed evolutions, the VVR International activity in 2018 was focused on the understanding of the Chinese market mechanisms, the strategic diagnosis and support of the implantation of the small and medium-sized French businesses in China. The partnership made with the Région Nouvelle for the set up of companies in China is part of this. VVR International, and our numerous partners & professionals work together to propose solution and support. By combining the will of French companies development with the reality of the Chinese market, they ensure the achievement of their projects. The activity for the year 2019 will be similar with last year’s. It will be based mostly on the negotiation and the support of the implantation project to produce and sell locally and on the development of distribution projects in China of food industry, luxury, cosmetics, medical products fully made in France. The potential comeback of more capitalistic acquisition partnership, less frequent in 2018, would be observed.