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I have spent more than 25 years in China trade and Asian sales and marketing generally, and am based in Kuala Lumpur where I have been for 7 years now. I've set up a number of American and European companies out here, and have had great success at doing it, so I know that what I have to say will be of interest to anyone who has an interest in entering the Asian market. I focus on the day-to-day aspects of running a foreign office from a Stateside or European location, how to handle business meetings, establish distribution channels, deal with "entertainment" and the inescapable phenomenon of the bribe. This report is a compliation of 20 years of first hand experience. |
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I began selling to China in 1984, mostly computer systems and accessories, after twelve years of working in various international capacities from defense to banking. That business expanded to include complete production lines for the manufacture of roofing material, plastic and rubber extrusion equipment, medical equipment, electronics for factory automation, machines to weave stockings, pharmaceuticals, complete (second hand) steel mills, construction equipment, high voltage power cables, copper drawing equipment, earth moving machinery . . . the list is endless. In order to accomplish all of this, I had to travel to remote towns and villages (where the factories, and hence the customers, are usually located), stay in hovels that were impersonating hotels, and eat a wide variety of wildlife I had never seen on a plate before.
This was before the days of the laptop computer and the cell phone. Business was conducted by telex and sometimes by fax. Quotations and contracts were written on cranky portable electric typewriters, and you were lucky if you could find an electrical outlet that matched your power cord. Often, there would be three or four different outlet designs in a single room . . . none of them matching. So, one had to make do by cutting off the plug and doing the wiring oneself. This meant that you were working eighteen hours a day, minimum, because the quotes and contracts had to be ready by 7 the next morning for another round of meetings and negotiations, not to mention new business that was coming in all the time for equipment you never heard of but had to sell anyway.
A Lucractive Market
Under these circumstances, in freezing cold in the winter and stifling heat in the summer, my small three-person company managed to gross US$ 4 to US$ 5 million a year, in some cases signing the largest contracts in the history of the provinces we visited. That was in 1985 dollars. What was the secret?
Hard work, mostly. I worked holidays, weekends, evenings, for months. I stayed behind in Beijing during Christmas, 1986 and signed a large contract on Christmas Day with the Water Power Department simply because the competition had gone home for the holidays and I was the only one left. That contract was worth US$ 1.2 million. |
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Connections are also extremely important. If you don’t have any, get some. What the computer hackers call "social engineering " is a way of life in China. Although anti-corruption movements have been active in stamping out bribery, kickbacks, payoffs of all kinds, it is still important for your customer to know you, and to trust you. New customers buy from people, not companies. While everyone feels basically secure in buying IBM or Xerox products and cannot be criticized by their peers or their employers for making that decision, going out on a limb and buying an unknown brand means that your client is exposed; if anything goes wrong - especially in China - your client can wind up fired . . . or worse. Knowing that you are there to support him with quality goods and a high level of service ("hand holding") goes a long way towards easing his concerns.
Since then, I have traveled the entire world, setting up offices in Europe, Asia and Latin America and establishing distribution channels in more than forty countries.
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