Insight: Want to Sell More in China?

Above: Traffic police platform at TianAnMen Square, the center point of Beijing and China.


Insight: Want to Sell More in China
WHO EATS THE CRAB FIRST

I met a born-in-Beijing businessman, he told me the secret why foreign companies often are so slow in reaching scale business in China.

West is plan driven but Chinese
customers are situation driven.
-- a Chinese businessman

I reminded him about China's 11th Five-Year plan (2006-2010), under which China is now developing. "I know, but I am talking about business practices, not about state planning", he replied.

My Beijing friend is a true industry veteran in China's telecom, mobile and broadband networks. What else did he tell me?

ABOUT PRODUCT
"Foreign companies come into China markets with fancy products which have all kinds of features. They need to understand, that China is still in quantity era, in market expansion phase, and not in quality era, yet."

"High-end flagship products can prove your ability and differentiate you from the Chinese competitors. But volume products for all China should be cheap and simple, and modified for China if needed. There may be some markets for your high-end products, but the scale business needs cheap and simple products which can satisfy the market need."

China National Flag

Goose-walk is shown when National Flag is raised at sunrise, and taken down at sundown. People from around China come to see TianAnMen flag show. Seen it a few times: silent and respectful workout.

ABOUT LEADERSHIP SYSTEM
"Key leaders, they are buyers in state organizations, will be changed every three years. Three years is "short term" in China. In three years the next leader will come and make his investments for renewal and expansion. Nobody will ask about payback of previous there years investments made by previous leader-boyer. No ROI will be calculated."

"Number of subscribers is measured, but not the quality of audio or video transport. No Chinese management person has got fired because of network or signal quality. For Chinese management, it is critical that there is no major service cuts, and that no wrong content gets in/out via their network. Network expansion is seen as an achievement."

"Every management person is easily measured by increased subscriber numbers, instead of increased quality."

ABOUT INVESTMENTS
"The key in Chinese investments is the speed and quick implementation. Investment rotations follow each other with short intervals, enabling the start and quick expansion with basic features and facilities. It accumulates money for the second round of upgrades."

"People, the buyers, talk about fancy issues, but they purchase based on their wallet and practical needs. What really matters is quick deployment and quantity deployment."

ABOUT FRAME AGREEMENTS
"In China we don't do frame agreements because competition is hard and prices may drop."

Mao Zedong Memorial Hall

There are four major statues around Mao Zedong Memorial Hall. Every week thousands visitors want to see Mao Zedong inside the mausoleum.

EXAMPLES
"Take example of old XiaoLingTong network and its handsets (= mobile phones/network based on PHS technology, 80 million subscribers). They were illegal but cheap and became popular. They were the answer to the market need. Another example is Evian water, some consumers want it but most are satisfied with tap water."

PLAY SAFE - and LOOSE
"I know one Chinese who tried many years to get small modifications for a western product for market fit. Where are your numbers, guarantees for the sale, asked foreigner sales director who wanted to play safe. Foreigner didn't understand, that no customer in China can give such guarantees since they are afraid to be judged as "bribed" if they do so. Finally, a Chinese vendor made product fit and caught that large, countrywide opportunity."

SCALE
"In China, you need right product definition, competitive price, and right time to the market. Then you will have your chance to grow in scale. It's important that you can convince your customer to be the first to eat the crab as testing, and no-one wants to."

AFTER EATING THE CRAB
"With good Guanxi, relations and with good working model, either products or solutions, you can easily multiply your business to cover all China."

For my Beijing businessman friend this procedure in China seems to be very clear, simple, almost easy! He gets results.


BeijingMan aka Kippo

List of all BeijingMan Postings

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TianAnMen Square, Beijing
PICTURE STORY - Tourists and Goose Walk

For pictures in this post I used Canon 20D body with EF-S 10-22mm zoom and EF 70-200mm F2.8 L IS USM zoom. Click to enlarge.

Above-1: Traffic police platform at TianAnMen Square. Building behind is Mao Zedong Memorial Hall.

Above-2: Part of TianAnMen Square. Rostroom building with Mao's picture. Between Rostoom and TianAnMen Square there is Beijing's main avenue, 38 kilometers straight east-west line called ChangAn.

Above-3: Rostroom building has seen a lot of historical events. Here Mao Zedong announced the birth of P.R.China on October 1st 1949. The original microphone is now kept at new Capital Museum, not far from Rostroom.

Corridoor under Mao's picture goes through Rostroom building and leads into Forbidden City, towards emperor's ruling place.

Above-4: A guard in front of Rostroom building at TianAnMen Square.

Above-5: Visitor at TianAnMen Square.

Above-6: Visitors at TianAnMen Square.

Above-7: Visitors at TianAnMen Square.

Above-8: Visitors at TianAnMen Square.

Above-9: Group of visitors at TianAnMen Square.

Above-10: National Flag Guards at TianAnMen Square.

Above-11: Mao Zedong's picture at Rostroom building. The parades march ChangAn Avenue from East to West. The Chinese leaders watch parades from Rostroom balcony.

Above-12: East part of the balcony in Rostroom building at TianAnMen.

Above-13: Western part of the balcony in Rostroom building at TianAnMen. Balcony is open for visitors, good view over TianAnMen Square.

Above-14: Rostroom and Forbidden City are surrounded by water channels. Here you see part of a massive water-show system.

Above-15: Detail of a door in Rostroom building.

Above-16: Every day alot of tourists pass through Rostroom building.

Above-17: One bridge in front of Rostroom was closed. Guards in front of Mao's picture at Rostroom building.

Above-18: Guard on a bridge in front of Rostroom building.

Above-19: Kind of flower at TianAnMen Square.

Above-20: Tourists at ChangAn Avenue, TianAnMen Square.

Above-21: Tourists at ChangAn Avenue, TianAnMen Square.

Above-22: A tourist at ChangAn Avenue coming towards TianAnMen Square.

Above-23: A tourist at ChangAn Avenue coming towards TianAnMen Square.

Above-24: Tourists at ChangAn Avenue leaving TianAnMen Square.

Above-25: Tourists at ChangAn Avenue leaving TianAnMen Square.

Above-26: Found something special here!
Question: What are these metal plates? This is not exactly a complete IQ test, but click the pic and think!

Above-27: The biggest parade in Beijing that I have seen had 170.000 persons. It was October 1st 1999, China's 50th birthday. The biggest marching square was 8888 persons. Parades are carefully trained performances. Hours before the marching starts, troops get into their positions.

Answer: During parades these metal plates, several hundreds if not thousands of them, are lifted, tents are put around them and temporary toilets become ready for service! Infrastructure is ready.

Above-28: "NanChiZi" gate, or "South Pond" gate, east of TianAnMen. Look at that shape!
NanChiZi hutong area used to be part of imperial palace, which is just beside. Web-sites tell that during Ming Dynasty (1368-1644) there were government offices, and during the following Qing Dynasty, it was an imperial storage area. During last few years many hutongs there have been put down to give space for new old-style buildings.


Above-29: Another TianAnMen - NanChiZi experience.

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© BeijingMan aka Kippo 2008, 2009, 2010