Be flex­ible like water in fast-mov­ing China mar­ket

Source: The Edge Singapore

Update: Jun 19th, 2026  11:40 AM

What actually occurs on the ground may be very different to what the research is telling you / Photo: Bloomberg

When a busi­ness decides to enter the Chinese mar­ket, it is always backed by extens­ive research and plan­ning that cover the usual met­rics. Before enter­ing the mar­ket, it has decided how to pos­i­tion and price its products.

As the mil­it­ary will tell you, no plan sur­vives first con­tact with the adversary. That’s the same for plans to expand into China. What actu­ally occurs on the ground may be very dif­fer­ent to what the research is telling you. What becomes more import­ant is how you react to the unex­pec­ted, the oppor­tun­it­ies China offers to develop your abil­it­ies and your abil­ity to take a stra­tegic per­spect­ive.

One of the best examples of turn­ing suc­cess into fail­ure came from a busi­ness del­eg­a­tion I had taken to a trade expo in Xi’an. The exhib­it­ors’ busi­ness was in bottled spring water from deep ancient aquifers dat­ing back to the time of the dino­saurs. Dino­saur Water dis­tin­guished the product from the already crowded bottled-water and spring-water space.

The main com­pet­it­ors were European bottled water brands and pop­u­lar homegrown brand, Nongfu Spring. The plan was to pos­i­tion Dino­saur water as a premium for­eign brand, tar­get­ing high-end five­star hotels.

Dino­saur Water was a selling point in the West and in China, but not in the way he expec­ted. In the West, the dino­saur concept was an inter­est­ing twist, but apart from brand­ing, it offered no other bene­fit. In China, the idea of water dates back to the age of the dino­saurs and sug­gests it offered unique health bene­fits. When it was raised, the con­nec­tion was rejec­ted as unim­port­ant.

One per­sist­ent enquiry of genu­ine interest came from the owner of a chain of hotels in tier-two cit­ies. He was look­ing for a for­eign brand to enhance the points of dif­fer­ence between his hotel and his com­pet­it­ors, which stocked either European waters or Nongfu in their room fridges. In the typ­ical fash­ion of Chinese busi­ness speed, the hotel oper­ator was pre­pared to place a sub­stan­tial order imme­di­ately.

The offer was rejec­ted. Dino­saur Water aimed to be a highend brand and would not be sul­lied by being placed in four-star hotels. This con­clu­sion reflec­ted the research, which was lim­ited to high-end hotels rather than the broader, rap­idly expand­ing Chinese hotel industry.

The busi­ness oppor­tun­ity was missed because the Dino­saur Water plan was based on break­ing into

the already sat­ur­ated five-star hotel mar­ket. The busi­ness had its heart set on this mar­ket niche and was not pre­pared to con­sider other oppor­tun­it­ies. It was a nar­row-minded approach based on sound mar­ket research.

Dino­saur Water’s inflex­ible plan­ning meant it went the way of the dino­saurs, dis­ap­pear­ing from the mar­ket. Over the next few years, the four-star chain expan­ded and built five-star prop­er­ties. Square bottles of Fiji water filled the room fridges.

Your export plan­ning for China needs to build in flex­ib­il­ity so it can adjust to take the China offer even if it’s not quite what was in your ori­ginal plan. China’s con­di­tions and oppor­tun­it­ies change quickly. If a door opens in China and you don’t walk through it, the next time you come back, it will likely be sealed shut.

Or, as the Eng­lish say, never look a gift horse in the mouth.

Tech­nical out­look of the Shang­hai mar­ket

The Shang­hai Index gapped below the well-estab­lished sup­port level near 4,025.

The 4,025 level quickly failed as sup­port when the mar­ket fell, dimin­ish­ing its effect­ive­ness as res­ist­ance. The rapid rebound con­firmed this lack of influ­ence.

The rebound rally moved above 4,025 and the short-term down­trend line. The rally moved quickly to the next res­ist­ance level near 4,100.

The 4,100 level is par­tic­u­larly power­ful, as it has fre­quently acted as both sup­port and res­ist­ance for many months. In a very broad sense, the mar­ket has oscil­lated around this level with 3,900 as down­side sup­port and 4,300 as the upper edge of a broad trad­ing band.

The Guppy Mul­tiple Mov­ing Aver­age (GMMA) rela­tion­ships cap­ture chan­ging trend pres­sure. The longterm group remains com­pressed but is mov­ing up. This nar­row com­pres­sion sug­gests that investors have regained con­fid­ence in the mar­ket. The long-term aver­age group indic­ates investors’ beha­viour.

The short-term GMMA group of aver­ages indic­ates how traders are think­ing. The very rapid com­pres­sion cap­tured the rally recov­ery from the low of 3,925. A wider sep­ar­a­tion among these aver­ages is needed to con­firm that traders are fully sup­port­ing a poten­tial trend change. However, the move above the short-term down­trend line provides fur­ther evid­ence that this rally may con­tinue above 4,100.

The short-term GMMA remains well below the lower edge of the longterm GMMA, but an upturn and com­pres­sion could push it rap­idly above the long-term GMMA.

This, and a break above 4,100, sets an upside tar­get near the pre­vi­ous high of 4250 and a longer-term trad­ing band tar­get near 4,300.

Daryl Guppy is an inter­na­tional fin­an­cial tech­nical ana­lysis expert. He has provided weekly Shang­hai Index ana­lysis for main­land Chinese media for two dec­ades. Guppy appears reg­u­larly on CNBC Asia and is known as “The Chart Man”. He is a former national board mem­ber of the Aus­tralia China Busi­ness Coun­cil.