“Everything is possible in China, but nothing is easy.”
As a result of China’s rise, there is a myth perceived by most of foreign entrepreneurs that:“Everything is possible in China, but nothing is easy.” According to the article on Forbes—— To Succeed In China, Start By Busting This Myth written by Michael C.Wenderoth released on Apr 20, 2018, this fortune cookie wisdom does western executives a huge disservice since there are not silver bullets to do business in China and the success of Apple is unduplicated. However, the good news is that understanding a few key principles can lead to a surprisingly robust ability to navigate the China market.
Here are 8 principles given by Michael C. Wenderoth, the professor at IE Business School and Senior Advisor with InterChina Consulting and translated by Zhao Yusheng, editor of Global Times.
Dig deeper and segment
Get base rates on growth, profitability, and “success” in specific sectors. A robust study of failure of Chinese firms would not only be insightful, but surely reveal that failures are shockingly higher than most believe.
Know where interests coincide or clash with the government’s
What is the role of the national, provincial or local government in the sector? Everything is possible in China, but not many executives would willingly play a hand when they have very little odds at winning. The Made in China 2025 Directiveis the single most useful way to understand where the Chinese government’s interests lie.
Court multiple sources of advice, at the same time
Whether entering the market, scaling or turning around a losing operation, court more than one consultant, at the same time. China is vast, and no consultant or distributor has experience everywhere, so drawing from the wisdom of the crowd can be more effective than putting all eggs in one basket.
Spend more time in China to get texture
The failure of top level Western executives to walk the streets and visit customers in China is usually the first sign things will go wrong. Market visits highlight risks related to IP, day to day challenges on the ground, and differences in Chinese consumer behavior and business practice.
Benefitting from China’s rise doesn’t necessarily mean “we must be there” in China.Establishing a joint venture (JV) or wholly-owned venture (WFOE) in China is complex, time consuming and comes with a long tail of cost and maintenance. Western brands can play in China without being in China: Chinese outbound tourism is on the rise, and a chunk of spending from the upper, even middle, class occurs outside China or through cross-border trade.
Observe and learn
In many sectors, from mobile to logistics, China is very competitive, changing rapidly and innovating at a breathtaking pace. Don’t speculate about the future when it can be observe in action. Coping or tweaking a successful business model in China can be a short-cut to winning back in home market.
Be wary of short-term thinking:
Western executives view China in the short-term and their Chinese counterparts know that.
Take a hard stand:
Some Western companies are waking up. Many German companies, while well poised to profit, have threatened to retreat from China, pointing to restrictions on producing locally and sharing technology.
tónɡ pín ɡònɡ zhèn
同 频 共 振 :
①Same frequency of vibration as the natural frequency of the resonating system；
② Develop mutual understanding or trust and agreement between people.
It is hard to find a friend who has similar personality and interest to you.
mù ɡuānɡ duǎn qiǎn
目 光 短 浅 : short-sighted
This short-sighted policy led to fatal results.
Souce: Global Times
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