Doing Business in China: Market Entry, GTM Strategy & Growth Potential

The population of China is 1,412,914,089, and is growing at the rate of -0.22%. The GDP per capita, which represents the potential spending power of the people, is $31,596, measured on a purchasing power parity (PPP) basis to allow comparison with other countries.

66.82% of China’s population lives in urban areas. 62.73% of the population is of working age (15-59). 91.8% of the population has internet access and 97% has 5G mobile coverage. These factors are important for digital-first businesses to keep in mind.

The Accuracast International Growth Index ranks China #44 overall for market attractiveness. The country’s rank changed -2 places, representing a fall from last year’s position.

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How Digitally Mature is the Market in China

The digital search demand score for China is 57.03.

China has around 1.3 billion internet users and represents one of the world’s largest digital markets. However, its search ecosystem is fundamentally different from Western markets, with Baidu and platform-based search playing a major role alongside social commerce.

Brands therefore need to build visibility across Chinese search, social and ecommerce platforms rather than relying on a traditional Google-led SEO strategy, with Mandarin localisation essential.

Go-To-Market Strategy Considerations for China

The purchasing power score for China is 62.47, and the country scores 63.27 for digital readiness.

The scale of China’s digital audience is its biggest advantage, with internet penetration around 92% and more than 1.8 billion mobile connections. However, purchasing power and consumer behaviour vary significantly between regions, cities and demographics. This makes audience segmentation particularly important, with major urban centres potentially offering very different opportunities from lower-tier cities.

Financial & payment infrastructure

In terms of financial infrastructure, China scores 13.8.

China has one of the world’s most developed mobile payment ecosystems, with Alipay and WeChat Pay integrated into everyday ecommerce, social media and offline retail.

Consumers are accustomed to fast, mobile-first transactions, meaning international brands need to support local digital wallets rather than relying primarily on international cards. Payment integration should be treated as a core part of localisation rather than an optional add-on.

Regulatory & business setup friction

From a business expansion point of view, China scores 31.45 for regulatory complexity and legal restrictions. This is reverse-scored, meaning the higher the score, the easier it is to navigate local regulation.

China has a significantly more complex digital regulatory environment than most European markets, covering data protection, cybersecurity, content regulation and cross-border data transfers. Many major Western platforms are also blocked or restricted, meaning businesses cannot simply transfer their existing Google, Instagram, Facebook or TikTok strategies into the market. Local regulatory and platform expertise is therefore essential.

The score of 25.67 indicates the costs and friction associated with setting up a business presence in China.

China is a higher-friction market, with entry requirements varying considerably by sector. Foreign businesses may face additional requirements around investment structures, licensing, tax, data and local operations. Cross-border ecommerce or working with an established local partner can provide a lower-risk way to test demand before investing in a full local operation.

China market attractiveness change

Compared to last year, the overall International Growth Index score for China has changed 1.4 points, causing the country to go -2 places from 2025, dropping to rank #44 in 2026.

China’s defining advantage is scale. Around 1.28 billion social media user identities were recorded in October 2025, equivalent to 90.3% of the population. However, the market is already highly digitally mature, meaning future growth is increasingly about winning market share and building brand preference rather than relying on first-time digital adoption.

Most Popular Social Media Platforms in China:

1. WeChat
2. Douyin
3. Kuaishou
4. Weibo
5. Xiaohongshu (aka RED, RedNote or Little Red Book)
6. QQ
7. Bilibili
8. Baidu Tieba
9. Zhihu
10. Xigua Video

The primary language in China is Standard Mandarin, known as Putonghua. This is the official language of China, with over 1.1 billion speakers. Any business hoping to break into China should consider this for marketing and social media purposes.

English is spoken by less than 10% of the population. Communicating in Chinese is important to establish trust and credibility with domestic consumers and business partners, but English is used in international business.

Advertising to the local market via platforms like Baidu and WeChat requires account qualification, which can involve liaising with specialist providers. China’s language law requires standard Chinese character use in advertising, and foreign languages alone cannot be used in sponsored content – ads may be disapproved by platform editorial policy enforcers if they’re written in English or other foreign languages only.

What Are the Risks of Expanding into China

While new market expansion can be exciting, it is important to also consider the risks when entering a market like China.

The biggest risk is treating China like another international market. Its regulatory environment, digital platforms, consumer expectations and competitive landscape are fundamentally different from Western markets. Domestic competition is also intense, meaning brands need strong localisation, local expertise and a clear reason for consumers to choose them over established Chinese alternatives.

How Does China Compare to Other Top Markets?