Although China’s astonishing rate of economic growth over the past 30 years has slowed, there are still plenty of opportunities for companies looking to do business in the world’s most populous country. One businessman with considerable experience of working in China is strategic brand expert Jonathan Geldart. He’s now co-authored a new book that captures the insights of Chinese business leaders and provides a practical guide for Western companies.
There have been many books written about China, but Jonathan’s book, The Thoughts of Chairmen Now, presents a unique view of business in the country through the eyes of some of China’s most prominent corporate leaders and entrepreneurs. These candid interviews offer fascinating insights into the Chinese approach and attitude to business.
We wanted to unpack the complexity of China, dispel some of the myths and help organisations have sustained success there
We wanted to unpack the complexity of China, dispel some of the myths and help organisations have sustained success there, says Jonathan, who wrote the book along with David Roth, Chief Executive Officer of the The Store – WPP.
Open for business
China, he says, is going through a period of rebalancing after decades of phenomenal growth. “It’s no longer about low-cost production, but the market is maturing and opening up further. Brands there are more affordable and consumers are buying western goods. There’s a perception that foreign companies have missed the boat, but that’s not the case at all – China’s wide open for business.”
So what’s stopping more Western companies expanding there? “Fear of the unknown,” he says. “People have a perception that it’s the Wild West, that the laws don’t apply. There are rules, it’s just different and you have to spend time getting to know them.”
In other words, it’s not enough for companies to just carry out standard market research and due diligence; they need to pay as much attention to understanding the country’s culture, history, attitudes and regional differences. “The Chinese are interested in exchange; what you can offer them as much as what they can offer you,” he adds. Western companies such as Unilever and Prada have done well there, but there have also been some high-profile mistakes. Mattel’s flagship Barbie store in Shanghai flopped after commentators said it misjudged cultural attitudes.
So what are some of the things that companies should be aware of when looking to expand into China? Jonathan offers a few general tips:
1. Seek the middle way
The Chinese process of negotiation is to always find the middle way, not a win-lose scenario as in Western economies. They want all parties to feel respected.
2. Expect complexity
While we like clarity and rules, the Chinese are comfortable with ambiguity and a more broad direction.
3. Listen closely
Communication in China is layered and complicated. Words may not only describe an object but also an attitude to that object. For example the character for ‘business’ is made up of the characters for ‘person’ and ‘stop’, implying that people are critical for enterprise.
4. Manage on the fly
While we are used to being well-organised with a clear structure and processes, many Chinese businesses run their organisations with less obvious strategic vision, but have faster reactions to changing market demands.
5. Respect the competition
With a shift from production for export to an economy driven by consumption at home, strong Chinese brands are emerging. When building your brand in China, expect experienced competitors.
There are, of course, many more differences and nuances to consider, but what this new book does is show that China’s more open and less mysterious than one might think. For Western companies looking to get started, Jonathan says there are plenty of UK government trade missions and lots of seminars offering advice. But the main thing is to spend time there and do your homework.
The Thoughts of Chairmen Now: Wisdom from China’s business leaders and entrepreneurs, is out now at thethoughtsofchairmennow.com. An abridged version is available for iPad via the App Store. A hard copy of the book can be purchased from Amazon http://amzn.to/17HqThf.
Jonathan Geldart is the Global Head of Marketing and Communications for Grant Thornton International. He advises the organisation around the world on strategy, brand and business development and has worked in China for many years. In 2011 he became the first non-Chinese lecturer on branding training sessions sponsored by the Chinese government.
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