This is a great article by Gabriel Biller, it pretty lengthy but well worth the read time. Click here to see the entire thing.
This article is not a primer on how to do business in China. The reality of doing business in China can be, well, pretty ugly. We will not go into the corruption and other non-niceties of conducting business there in detail. To summarize very briefly, China’s leading political ideology (if there is one) according toJames McGregor, is enriching the country (and usually the political leadership and cadre’s families) in any way possible, without ever disrespecting or challenging the government’s structure, position, and authority.
In China, you pretty much have to play by their rules, show respect, and demonstrate how your objectives are not only good for your business but also good for China as a nation. You shall never criticize the government or proclaim what’s wrong with their politics. For more information on these topics and some of the more interesting anecdotes from the front lines, we highly recommend McGregor’s One Billion Customers: Lessons from the Front Lines of Doing Business in China. McGregor himself also recommends an excellent reference on the nuances and peculiarities of business culture and negotiation in China in Lucian Pye’s work Chinese Negotiating Style.
Take the recent debacle between Google and China over censorship: the audacious Googlers violated the simple rule that you simply don’t ever question their rules. To be sure, China regularly censors sites and content, closes down search, social networking, and other sites, and spied on Google accounts. They may have done some other questionable things, but one must remember that China is not a democracy. In a way, it reminds me of the movie Fight Club, where the “first rule of fight club is you don’t talk about fight club” (that’s also the second rule of fight club, incidentally). In China, the first rule of China is you don’t question the rules of China. The second rule is you don’t disrespect the Communist party or the government. They shall not lose face. I’m trying to avoid taking political positions here, so be it. Google’s exit is, perhaps, Baidu’s gain.
But let us not digress further. Discussing the politics of China is not within our purview at Artefact, so better to leave that to the political pundits, freedom fighters, activists, and global political leadership. We might contend, however, that even by playing within China’s rules of censorship, progress can be slowly made and China’s citizenry can be empowered with technology, information, and the means of assembling and building communities, for they are a clever people with a lot of pent-up creative ingenuity. Revolution and political change is ultimately up to China’s people, not to foreign multinational corporations who want to sell their products and services in China’s markets.
WHO IS THE INTENDED AUDIENCE?
The audience for this article is primarily professionals in product management and development, innovation, R&D, product and product portfolio planners, engineers, and executives who are responsible for designing and creating technology products (hardware, software, services). In particular, those of you people above who feel perhaps a bit less informed about China than you’d like to be.
What this article is intending to convey are some key insights, lessons, or realities you should know about if you intend to develop, design, and market consumer products for China. Among the many considerations you’ll need to make as a business interested in entering or further penetrating the Chinese market(s), learning how to work and communicate well with the right officials and rainmakers, being unbelievably persistent, and understanding the varying and even appalling levels of corruption that may be involved will consume much of your time and energy (and, perhaps, your soul). Your challenges will range from building the right win-win argument, establishing long-term relationships with the right Chinese business people, power brokers, and partners, all the while not defying the rules or causing anyone to lose face. Another significant challenge will be distribution, as getting your product in front of consumers in China is not quite how it works elsewhere in the world.
In the spirit of full disclosure: I myself have never traveled to China, though I was in Hong Kong for 10 days in 2007 and studied some Mandarin and Chinese history in college. In researching and writing this article, I owe a tremendous amount of debt to the market researchers, strategists, cultural translators, user researchers, and Chinese graduate students and other Chinese professionals whom I interviewed for this article (Elaine Ann, Ash Bhoopathy, Ravi Chhatpar, Ian Donahue, Anjali Kelkar, Shuang Li, Lin Lin, Fei Qi, Erin Sanders, Pinxia Ye, and Lisa Yong among them).