China is now the only functioning major economy in the World, and looks set to be so for some time. This is not the only factor that puts it in the position of being the UK’s best international sales prospect.
The great appreciation of British brands, culture and heritage, the respect for the way business is conducted, and Chinese enthusiasm for Brexit as a precursor to free trade combines with the handicap rival businesses from the US face due to Trump’s hostility to China.
Does this places the UK in pole position for capturing business from the Asian superpower?
The British Disease
“There is one drawback that has consistently handicapped British companies doing business in Chinese markets, and that is a lack of awareness and ability to localise to indigenous culture and business practice,” warns Domenica Di Lieto, CEO of Chinese marketing consultancy, Emerging Communications.
“It is increasingly becoming known as a ‘British disease’ in China due to the shortfall in adaptability compared to businesses from other countries.”
“Misunderstanding Chinese culture leads to underperformance and failure, and has resulted in highly damaging consumer boycotts”
Domenica Di Lieto, Emerging Communications
The most spectacular example is Dolce and Gabanna’s flawed decision to use a Chinese model struggling to eat Italian food with chopsticks as the theme for a promotional video.
“It comprehensively wiped out long term sales in what was by far its biggest market.”
Know Your Market
“Grasping cultural knowledge, or appointing others to do it for you is a significant operational, sales and marketing benefit,” explains Domenica.
“The starting point for localisation is understanding the need to create China-centric capability. Trying to do business in any market requires cultural understanding, and knowledge of business practice and behaviour.
“In China, where ‘face’ or respect is everything, not getting these disciplines right causes insult at personal, corporate and national level”
Domenica Di Lieto, Emerging Communications
“There are only two ways to navigate differences with China,” Domenica suggests. “That is to create a cross cultural team, or appoint a specialist third party to create and oversee strategy and tactics while at the same time training to build management self-sufficiency.”
“Because business operates so differently in China in so many respects, it means training should include board level managers.”
“Lack of awareness when decision making makes companies rudderless, and can cause serious long term damage.”
The Keys to Success
There are four key areas that should be addressed to be successful in China:
- Business relationships and agreements need to be based on personal respect and trust. Both factors have to be earned and maintained through face-to-face contact.
- Business practice and language cannot be successfully overlayed into China through the use of translation as it often can with other countries. It does not work, and it is likely to cause offence at least to some degree because it indicates lack of commitment and respect.
- Personnel have to be managed very differently. For example, because of the tradition of respect for authority it is unlikely junior managers will point out what they see as obvious flawed decision making by anyone senior. This applies particularly to those from the north of the country.
- It is essential to use local specialist companies for key technical and legal needs. Processes like registering brand names have to be correct, or it is possible to permanently lose control of IP.
It is not completely impossible to do business with, and in China without cultural understanding and localisation.
“Companies can be forced to function by applying financial investment, and many do for a long time, but they are usually loss making.”
“Those that perform well are always companies that immerse themselves in Chinese markets through cultural and business localisation,”concludes Domenica. “And there is no substitute.”
To discover how you could strengthen your trading success in China, call Emerging Communications on 020 3011 0088 or visit emergingcomms.com.
