Transcript: In market insights China
There are four audio pieces in the Jeremy Sargent's 'In market insights to China' series. Read the individual audio transcriptions by clicking below.
Preparing for market entry
I think everyone knows China is not the easiest of market places.
I think a lot of people know that the China market is kind of big and very fragmented, whether geographically or sector wise or channel wise.
But I think the main message that to me seems often not to really get through, is how much time and effort and energy and how hands on you have to be.
I think setting up systems and business plans and strategies is one part of it; so, a very solid sort of business plan well thought out and well researched.
Verify everything you see and hear, particularly if you’re not familiar with the market. Don’t believe everything first time around. You have to really do your own detective work; overturn every stone kind of thing. I’m not saying within realistic limits, especially if you’re a small company, but just getting an understanding of how much time, sweat and energy it's going to take to get anywhere in China. How you have to be very patient. How it's very often a kind of brick by brick; two steps forward and one step backwards approach.
I guess to some extent I’m saying that we were, but I think in China it's a bit bewildering in just the scale and size and there’s the language issue culturally.
For lots of reasons you land in China and you don’t necessarily see the full picture very quickly.
So, I think that’s one consistent issue.
Finding good people is critical. That’s been a perennial issue for years and years and years for foreign companies; finding the right people to help you in your China endeavours.
If you look at just about any ease of doing business survey this always comes out at the top or near the top. How do you find the right people? How do you keep people engaged? It takes a lot of time and energy.
I’m generalising massively here.
But I think that’s the consistent message I hear from clients, friends and even myself running my own businesses, there are great people in China but it takes a lot of time and energy and effort.
Things are expensive here
One thing I think that does surprise people, is how expensive China is. It’s not cheap. You can get some things cheaply, but overall; and if you wanna pay for like, equal quality, it’s not cheap. And the costs are going up very quickly. We see that in our business. Things like, say; even something simple like, logistics, delivery; in the old days, you could phone somebody and a van would come and pick up your boxes and deliver them across town, and it was all very cheap. Not anymore.
Costs are high, if you want construction work, home renovation work, decent good quality food; it’s not cheap. A lot of that stuff’s imported. To be honest, I come here, I look around the supermarkets; like, wow, this is cheap. Feels cheap.
The metamorphosis of China
I think what’s changing now is the rapid growth of, for want of a better word, a sort of middle class consumer class in China; that’s what you feel and see all the time.
So, western style consumerism whether it's through what you see in the shops, online that’s a big change. The extent to which the internet has been embraced in China - I mean you’ve probably read the numbers of people online, the number of people internet shopping E-commerce, blogging using Apps. The sophistication level of that is pretty astounding; generations ahead of most places from what I can see.
Misconceptions about cultureThey’re very practical; people in China are very practical and many have been overseas. A lot, a huge number of people speak English.They’re pretty open minded; it's not a conservative country. People have this idea that China is uber conservative; it's not at all, it really isn’t. Especially mainland China.I think the sort of overseas China, Hong Kong, overseas Chinese communities in different parts of the world are much more conservative than mainland China.Mainland China has kind of started with a clean slate. Everything is geared up to economic development, improvement of living standards, raising the quality of life, building infrastructure and building a stronger country. This really goes to the heart of Chinese government.