"Invest for the long term" is the message for business entering the China market, as I've witnessed many a botched attempt.
I've been working with Europe-China trade issues since the '80s, when international companies first began to salivate seriously over the idea of a more than a billion new Chinese consumers.
The 80s was a fascinating time of change, Deng Xiaoping was running the country and the doors were opening to foreigners after so many years of inaccessibility and seclusion.
It was also a time of frustration, when flying in China was always a nervous experience because flight announcements were non-existent and nobody knew whether the plane was leaving or not. You just had to sit and wait patiently. Once I had to wait two days for the plane to take off on an internal flight. Planes were flown by pilots from the air force and in the same manner.
The old saying; "Patience is a virtue" is very relevant in today's China as it was then.
Now I'm the CEO of Dublin-based New Tigers Consulting (NTC) and travel very frequently back to China.
The name "New Tigers" came about because at that time Ireland was being called the Celtic Tiger, and China is a tiger economy too so the name seemed to fit.
Four years ago, I set up NTC with my Chinese business partner. NTC advises companies on doing business in China. We conduct market research, provide business development assistance, facilities for representative office services, negotiating, product sourcing and potential partner evaluation and rating.
Our connections as the two founding partners go beyond our tiger imagery. We share a strong background in working within international consulting industries, before we decided to set up our own. I have seen a strong emerging interest from European companies hoping to expand into the China market, cautious about selecting the right business strategy and partners.
My roots in China go back to my student days. I speak fluent Mandarin, after studying at Beijing University and working in trade representation work with international firms in China from 1986 to 1989. I stayed to work with some of the earliest Sino-European joint ventures. I then spent years working in Brussels, throughout Asia and Europe.
My knowledge of the potential for European companies in China is rooted in my local experience in both countries. I think we form part of an ever increasing generation of business people who forged connections in the China-Europe-America University exchange programs that accompanied the market reforms in China.
One of the biggest errors companies make in China is imagining they can simply enter China without taking into account the business conditions. The importance of culture and the need to know what is good and what's bad protocol cannot be under estimated.
One should approach the Chinese Market with a view to building a relationship. Relationships in Asia are part of life. It means business is done through contacts, acquaintances and relatives. This fosters respect for each side and ensures that contacts will proceed harmoniously.
It should be known that Chinese often hesitate to provide information out of concern that someone will use it against them.
For the long term, it's crazy to try to enter the market by direct selling from Ireland. Someone out there will copy your product or improve on it locally. You need a local presence, such as an agent or a rep, to safeguard your interests and investments.
The rep can thus ensure and monitor and maintain a constant presence for your company. Remember any good idea, the Chinese can copy and make it better.
NTC's model of running a business is small and flexible, with a reliance on effective contacts and business intelligence networks.
One of the first questions I ask a client interested in the China market, "are you willing to take a long term outlook on this, are you willing to invest?". China is a long term business opportunity; it's about finding out if there is a market for either buying or selling and thus creating the right business contacts. Vendors, buyers who only focus on immediate profits and near-term opportunities are likely to find themselves disrupted by poor service, foreign and/or Chinese competition as well as possible product defect or poor support from the Chinese. (Brendan Waldron) |
