Key takeaways
Finding demand in China is usually easy for an established consumer category. The real question is whether that demand supports your price and margins against local alternatives.
Being foreign is no longer an advantage in itself. The advantage has to be specific and valued by Chinese customers.
Before entering China, test four things: price position, value advantage, durability of that advantage, and speed of execution.
For a well-established consumer category, finding evidence of demand in China is usually the easy part. The harder part is working out whether that demand can support your price, your margins and a lasting competitive position.
I have seen this question from both sides: first while helping build and scale a retail business in China, and later while working with companies exploring new markets from Europe. What often strikes me is how quickly the conversation moves from "China looks interesting" to channels, distributors and entry plans. The harder question, whether the company has a competitive position worth taking into China, sometimes comes later than it should.
So if I were in a management meeting discussing China entry, I wouldn't start by asking whether there is a market for our product. I would ask whether, at a price that works for our business and against the alternatives Chinese customers already have, we can build a position that lasts.
Why is being a foreign brand no longer enough in China?
For many years, international consumer brands entered China with a fairly simple advantage. They brought products, technology, design and brand equity that were hard to find locally, and customers were willing to pay for them.
In many categories that gap has narrowed. Chinese brands have become competitive on quality and design, adapt quickly to local preferences and usually price well below imported alternatives. The car industry is an extreme example of how fast an established foreign advantage can erode: foreign and joint-venture brands held just 24.5% of China's car market in June 2026, compared with more than 60% in 2020. Consumer goods operate under very different dynamics, but the strategic lesson is relevant: an advantage that once looked structural can turn out to be temporary.
Being foreign is no longer an advantage in itself. The advantage has to be specific, and it has to be something the Chinese customer values.
Four questions to ask before entering China
1. At the price we need, what are we really competing against?
Suppose your product sells for €99 in Europe. After logistics, import costs, distribution, marketing, after-sales service and the margin your company requires, you work out that it needs to retail in China for around RMB 1,099. You then look at what your target customer would realistically buy instead and find well-reviewed local products at RMB 299, 399 and 499.
At that point, the useful question is no longer whether Chinese consumers will like your product. It's why they would pay RMB 1,099 for it when good alternatives cost half as much. Ask your team to complete one sentence: "For the extra RMB 600, our customer gets…" If they can't finish it convincingly, you've learned something important before spending real money.
2. What exactly is our advantage?
I would be careful with answers like German engineering, European quality or fifty years of heritage. They may well matter, but they don't automatically count as a value proposition in China. The question behind each one is whether the Chinese customer cares enough about that difference to choose you and pay more for you.
Your real advantage might be measurable performance, a proprietary material, better safety, a specialist use case, a stronger service model or a brand identity your customers genuinely relate to. Whatever it is, it has to create value for the customer rather than pride inside the company.
3. How long will that advantage last?
This is the question I think international companies underestimate most. Even if your product is clearly better today, a capable and well-funded Chinese competitor may close the gap. What matters is how long that would take.
Packaging and individual features are usually copied quickly. Deep technical know-how, a difficult manufacturing process, trusted professional relationships or brand meaning built over many years are much harder to replicate. An advantage measured in months gives you a head start. One measured in years can become a strategy.
Even a strong premium position needs constant renewal. Lululemon grew its Mainland China revenue by 29% to $1.75 billion in fiscal 2025, and in the first quarter of fiscal 2026 revenue there was still up 23% at constant currency. One quarter later, comparable sales in Mainland China were down 8% at constant currency. The business is still large and still expanding, but the shift is a useful reminder that a strong position does not stand still.
4. Can our organization move at China's speed?
The last advantage doesn't sit in the product at all. Someone has to notice when the market shifts, and someone has to be able to act on it: adjust the range, change the positioning, switch channels, respond to a new competitor or fix a problem with a distributor.
Local competitors often work with much shorter feedback loops. So the question goes beyond whether you have a good distributor. It's whether you have a structure that can learn and adapt quickly once some of the assumptions in your original China plan turn out to be wrong, which some of them will.
So, can a European consumer brand win in China?
I wouldn't turn these four questions into a scorecard where three positive answers mean "go". They affect each other, and a serious weakness in one can outweigh strengths in the others. I find them more useful for identifying the one assumption most likely to break the business.
A difficult answer doesn't necessarily mean staying out of China. It may mean choosing a different customer segment, adapting the product, changing the channel, working with a local partner, restructuring the economics, or waiting until the competitive picture is more favourable.
BergBlick View: Market demand is not enough to justify China entry. The real test is whether a company's advantage can support its economics, and whether it remains defensible as local competitors respond.
China can be a large market for your category. Chinese consumers may like your product, and you may well generate sales. None of that, on its own, means you have built a sustainable business there.
So before asking how to enter China, I would ask:
What gives us the right to win there?
That answer, more than the size of the market, is where I would start.
Next week: Your product sells for €99 in Europe. What should it actually cost in China?
Sources
Yicai Global, "Foreign, JV Automakers' China Market Share Falls Below 25% for First Time", July 2026
lululemon athletica inc., Form 10-K for fiscal 2025 and Form 10-Q for Q2 fiscal 2026 (SEC filings)
lululemon athletica inc., Q1 fiscal 2026 results, June 2026