After having been involved in over 2,000 venture capital projects within my role at Microsoft Accelerator Beijing, and now managing global market development as the co-founder of a fast-growing Seattle based IoT startup, I have been lucky enough to develop my skills on the frontline in two starkly different business cultures.
Anyone who may doubt the value of navigating different business cultures, need only look to the likes of Arianna Huffington (Greek), Dietrich Mateschitz (Austrian), Elon Musk (South African), and Sergey Brin (Russian) and the successful global enterprises they have built-in business cultures different from their own. While I am not big headed enough to place myself in the same rank as these icons just yet, the cross-cultural experience is a common attribute amongst some of the world’s most innovative and successful business leaders.
While I am not big headed enough to place myself in the same rank as these icons just yet, the cross-cultural experience is a common attribute amongst some of the world’s most innovative and successful business leaders.
Immigrants represent 27.5 percent of the countries’ entrepreneurs but only around 13 percent of the population. Why? Because a knowledge of ‘how things are done elsewhere’ can give a fresh perspective on how things are done in the new country we now call home.
Here are three tips which I have picked up after finding success in both American and Chinese business cultures:
A big part of doing business is making a potential partner, investor or client feel comfortable with you. Business etiquette is starkly different in the US and China and knowing how to communicate and negotiate is extremely important, especially when dealing with raising funding or sales. What may come off as confidence in the US, may also come off as arrogance or disrespect in the same situations in China.
In the US, gaining confidence comes from being polite, but also demonstrating from the second you walk in the door or pick up the phone, that you are the real deal, and that you know your stuff. It is normal for professionals in the US to jump straight into the ‘meat’ of the meeting from the outset; the technology, or the product they are trying to sell.
Meetings are often done over communication tools like WebEx, Skype, or GoToMeeting or via conference calls after the necessary preliminary information has been exchanged via email. The person who you meet with will more often than not be authorized to make a decision, and as such, you can often expect to hear a final answer during the same meeting.
In Asia, the culture of meetings is very different. The emphasis is put on developing personal relationships before deals are made, and jumping too quickly into business negotiations is viewed as being rude. Chinese entrepreneurs prefer face-to-face meetings, and conduct preliminary ‘back and forths’ via popular messaging app Wechat, which is unusual in the US.
Being comfortable managing a range of different communication channels is extremely important when doing business in both the US and Asia. Whilst coordinating meetings via Whatsapp would seem odd in a US setting, it would be very normal in China. Likewise, while having a conference call to finalize a big deal with an American company would be the norm, when dealing with a client in China, you would be expected to send a representative in person.
Marketing your products
A well-planned marketing strategy is crucial to success in every market, but especially in China. Many companies make the mistake of believing that the same marketing campaigns that have been used elsewhere will also translate to the Chinese market, but this is often not the case. In a recent survey, 63 percent of international companies operating in China acknowledged that they needed to alter their product specifically for the Chinese market.
For marketing campaigns in the US, many companies focus on the level of customer service their companies offer, but in China, a high level of service is expected from the outset. Marketing campaigns tend to focus on other factors, namely the personal relationship with the customer, and then the product.
In the US, the emphasis is put on expressing the value of products and services and marketing them as affordable. However in China, where social status is extremely important, consumers are less interested in price, and more interested in the image which buying a brand can portray themselves as a user. In China, consumers are willing to pay more for products, so companies can invest more in production costs.
Whether it be for startups, e-retailers or large global corporates, western businesses who want to break into the Chinese market are learning that this is best done by people who have real first-hand experience in both cultures. Apple recently appointed Isabel Ge Maheas their new leader in China. Ge Mahe was born in Shenyang, Liaoning. She’s fluent in Mandarin and has had a long and successful career negotiating the business and sales landscapes in both the US and China.
Choosing your sales channels
Over the last few decades, China has undergone a massive cultural, social and economic transformation and the difference between city vs. countryside, west vs. east, and coastal vs. inland areas are massive. Those living in inland cities and rural areas live in seemingly different worlds to those living in the cosmopolitan, booming coastal cities. This factor is extremely important when choosing sales channels.
In the US, companies tend to target specific audiences and target consumers (B2B, B2C etc). Whereas, in China, the business ecosystem is so competitive that companies will engage with any customer who is interested, regardless of whether the product was designed for them or not.
Companies who aim to target Chinese consumers, especially B2B clients, also need to be prepared to go the extra mile in customizing their experience to get the sale.
From a product perspective, in the US, what you see is what you get. Clients are expected to install programs or products themselves. In China, however, due to a large amount of competition that exists, companies are expected to take care of everything, whether it be installation, customization, extra features etc. In the US, companies are controlled by strict rules and regulations and wouldn’t dream of customizing a product, in China companies will add copycat functions and bend the rules, to get new contracts.
To sum up, it’s extremely important to be open-minded and willing to adapt to local customs if you want to have a shot at the Chinese market. Businesses need to understand what makes Chinese consumers tick, and what turns them off. The market is so competitive, so companies must be willing to go the extra mile to accommodate local buyers, or they will never hear from them again.
Most importantly, whilst the US market is strictly regulated, many of these rules are overlooked in China. Time is money all over the world, but stop to think for just a second too long in China and the opportunity will have vanished.