This post is part of our ongoing series on Doing Business in China. You can find the introduction to this series here . This piece is written by D2D Principal, Jay Goldberg
I have been waiting a very long time to write this piece. Many years ago, I worked for a large, global consumer products company in China. I was the only foreigner in an office of 200+ employees. Not only was this a great way to learn Chinese, but it also offered many unexpected insights. For some reason, the powers that be decided I was the designated tour guide for visiting foreigners. So I learned a lot about how Westerners viewed China.
This took place in the 1990’s, when China was in very early days of development, and everything was changing quickly. Our business was growing 40%+ a year, the kind of growth that amazed people at headquarters, who were more accustomed to 5% growth. So every few months I hosted a group of visiting executives. When people from the C-Suite visited, we organized massive, coordinated campaigns (a story for another day), but much more common was the army of Vice Presidents – Marketing, Communications, Quality, Public Relations, Big Customers, etc. I had these visitors to myself. Dozens over the years.
And everyone single one of them said the exact same thing to me after a day or two – “Wow, China is not what I expected.” My day job was Marketing and Sales, so pretty quickly I realized that this comment was an important customer insight.
When I pushed them to expand on their surprise, it turned out they all, every one of them, had one of three flavors of pre-conceived expectations. They were expecting: a) peasants in conical hats working rice paddies alongside water buffalo; b) a sea of Mao-jacket wearing, Red Book-waving conformity; or c) a heavy-handed, conspicuous police and military presence on every corner. Needless to say, China is none of those things.
Even then, China already had a burgeoning consumer economy. The visual diversity was as striking as you would expect in a country of a billion people. Since then, this has of course become much more pronounced.
I raise this subject now because as we extend our discussion of how to enter China, we find these old themes die hard. We know that many people before they arrive for the first time, still carry with them those tired old notions of what China looks like, and it interferes with their business sense. Many people on their first visit to China, have to enter into negotiations with prospective Joint Venture (JV), and they enter those negotiations carrying a lot of that baggage with them. They may be ensconced in a 5-Star hotel conference room, with linen table clothes and crystal chandeliers; negotiating opposite Harvard MBA and MIT PhDs. But in the back of their heads they are convinced that this is a façade, and that outside there is a ‘real China’, and somehow that imaginary land carries weight in the room.
I am not leveling accusations against anyone or any company. This is just human nature. However, for our purposes here, it is important to cast all that aside if you want to achieve your business goals in China. Recognize that there is a lot you do not know about China. That is a pretty good place to start thinking about entering the market.