명확한 결승선 없는 운영하는 운동 장애물

Martijn Hovinga의, CEO BilltoBill - 중국에 있는 지불 해결책

아무거나는 수 있어는가 세계에서 급성장과 잠재적으로 가장 큰 시장에 있는 성공 달성 보다는 더 쉬운가? 승차에 관하여 그것은 다만 이지 않는다 년 당 총 국내 생산에서 대략 10%의 지속적인 성장에서 경제 조수 그리고 공유하기?

중국에 있는 외국인 회사는 저것이 성공한다 보다는 수시로 실패해 경향이 있다. 나의 경험에서 성공에 주요 장애는 거만 그리고 무지이다. eBay와 Google와 같은 이 기사 그리고 극단적으로 성공하는 회사의 저자를 포함하여 실제로 각 외국인은, 중국에 있는 합작을 시작할 때 둘 다의 유죄 이다.

중국에서 온라인으로 판매하는 BilltoBill, 지불 서비스 업체 돕는 항공 및 다른 상인의 CEO로, 나는 어떤을의 처음부터 중국에 있는 사업 건설에 있는 나의 개인 경험 관련시키는 것을 바란다.

2004년 10월에 있는 BilltoBill를 결합하기 전에, 나는 세계적인 은행에 잘생기게 판매된 회사를 떠났다. 나의 경험은 신용 카드 이외에 각 시장에 있는 각종 현지 지불 방법에 관하여 다수 지리학에서, 운영해 상인의 교육에 있었다. 2개의 방문이, 나 이해한 후에 차변의 매우 많은 수 보다는 오히려 중국에 있는 전자 상거래는 약간 달랐다는 것을 문제점에 신용 카드가 있었기 때문에. 그러나 나는 중국에서 온라인으로 판매하기 위하여 그들 원조에 관하여 주요한 상인과의 나의 접촉에 접근하는 시작하기 위하여 기다릴 수 없었다. I felt China was just another geographical market with some local idiosyncrasies. Nothing could be further from the truth! Let me share with you some of my experiences so far.

My first learning experience
One of my first meetings was with an international computer company predominantly selling direct, i.e. through the internet and call centers. Great was my disappointment when I learned that they already signed up with a local Chinese company during the first week after I joined BilltoBill. They however showed their kindness and gave me the opportunity to visit their operations and meet their local people in China which I did a couple of weeks later together with my contact person from Singapore. After my presentation about BilltoBill, the benefits of our services and the efficiency of our team, I did not manage to establish the rapport with the local staff that I had expected to. On returning to Singapore, I learned a valuable lesson: China means ‘Middle Kingdom’, i.e. the epicenter of the earth. It is not appreciated if a foreigner comes in to hold a monologue about the virtues of his foreign product. First of all, I should have brought a Chinese colleague to reinforce the relationship, or even better, I should have delegated it to him altogether. Secondly, by focusing on our product only, I did not pay respect to their recent choice for an established, although somewhat bureaucratic, local online payment provider. Thirdly, their local provider was big compared to BilltoBill in terms of number of staff and number of customers. Finally, I missed out on the opportunity to find out about the extra requirements that their selected provider couldn’t meet and that we could possibly satisfy. I am still very grateful for my Singaporean contact person giving me the frank and direct feedback about my approach. He acknowledged that even himself as a Mandarin speaker was continuously learning about how to do business and work with colleagues in China.

The illusion of a Westerner managing a Chinese team remotely
I visited our office and team in Shanghai China a couple of times during this initial period. To me, they all seemed to be happy to have a new boss who had a reputation of being successful in developing new markets. I even spent one-on-one time with each employee to get to know them and to learn about their capabilities and ambitions which was a totally new phenomenon to them. With most, of them I could hardly communicate directly because of their lack of understanding of the English language. Even with the use of a colleague as an interpreter who was higher in the hierarchy, the information I gathered was quite minimal to say the least. After these sessions I was left with the uncomfortable feeling that it was not clear to me what role each of them exactly played and what their real contribution was to the company. In my previous employment I was used to focusing on the external part of the business, i.e. working with prospects and developing the market, and was not keen to becoming involved in dealing with internal issues on an operational level. I successfully recruited a Chief Operations Officer who was born and raised in China and had working experience in both China and the West, who joined BilltoBill two weeks after this experience.

Who is who?
After instructing my sales team in China what type of customers we were looking for, one of my colleagues managed to arrange a meeting with a travel agent having its stronghold in the southern Guangdong province near Hong Kong. They were considered offering their travel packages also online. After that meeting we were supposed to meet an entertainment company in Shenzhen, even closer to Hong Kong. My colleague missed the airplane to Guangzhou, because at check in they could not reconcile his name in Chinese characters on the ticket with his name alphabetically spelled in his passport. He had to go back and pick up his Chinese identity card. After arrival I was picked up by a cheerful lady who was delighted to practice her English with this funny foreigner in a suit. I explained that my colleague would arrive with the next airplane and I was offered tea. After a while her ‘boss’, a young man in his early thirties came in and greeted me. Other than introducing himself we could not start a basic conversation. Hence I pointed at the recent growth and success of Ctrip (together with eLong by far the leading online travel agencies in China) and suggested they should act quickly in order not to miss this opportunity. Finally my colleague arrived and we got another quarter of an hour of his time. They never came back to us despite the ferocious efforts of my colleagues to follow up. A couple of months later I read on the internet that this company was involved in the start-up of a low cost airline in China together with other local and foreign partners. The name of the CEO was mentioned in the article but he was referred to with his title of ‘Chief Economist’. My COO, Yang Lei, managed to get an appointment with the CEO. Together we met him and his team in Guangzhou. He did not know the guy we met 2 months earlier. The CEO came across as a person with vision and courage. His CFO though was only interested in the lowest price. We submitted a proposal which was rejected and today they still don’t have an online transactional presence.

A single office for all of China?
After focusing initially on companies in the vibrant city of Shanghai where our local office is established, we ventured out to meet prospects in other cities such as Beijing, Guangzhou (see before), Chengdu. I was amazed to learn about new Chinese competitors each having a regional stronghold based on their local relationships. It became clear that we had to establish an office in Beijing for local merchants to internally justify their decision to do business with BilltoBill.

No better way than the Western way!
Two years ago a joint venture (JV) was established between a Chinese government owned company and a Western based travel company. The objective was to build a new online travel company in China that could take on and catch up with the obvious leaders in the industry, i.e. Ctrip and eLong. An experienced and ambitious Westerner was parachuted to become managing director of the JV. Under his supervision, an elitist membership program was developed that applied strict conditions for joining. The rationale behind the idea was that something hard to get must be precious and once obtained would generate loyal and big spending customers. At the same time Ctrip and eLong launched their massive FREE membership card campaign. It was impossible to step out of a terminal in any major city without being approached to accept a membership card. It was free and contained a list of hotels and an attractive sample price. Moreover it provided local access numbers in major cities and even a toll free number to make reservations via their call centers. The goal to catch up with the leaders was not achieved.

Bureaucratic organizations
More recently we arranged for an incumbent airline in China with international routes to visit an Asian based low-cost carrier. The purpose of the visit was for the Chinese company to learn how the low-cost airline processed international credit cards. The Chinese sent a team of 10 people from technical and financial departments only.. The low-cost airlines operations department was smaller than the number of people sent to the meeting by the Chinese airline. With one fixed employee and a part-timer, the low-cost carrier could manage the whole payment process including the handling of charge backs. The Chinese simply didn’t understand, or more likely if they did, were not interested to decimate their own finance department. . What drove the Chinese company was not process efficiency or time to market. Especially in government influenced companies, personal incentives to take risks and demonstrate entrepreneurship are still lacking: people tend to protect the jobs of themselves and their colleagues and stick with their existing relationships. And remember: you should not negotiate about the fur with the wolf, but with the hunter!

Balance between being gullible and giving trust
A Westerner, without education in the Chinese culture and unable to communicate in the native language, cannot do business in China without the support of a senior level Chinese colleague. The challenge is to find a Chinese born and raised sparring partner (not an American Chinese or Singaporean) whom you can fully trust and who understands what you set out to achieve. Preferably this person has his local contacts in China as access points to a wider network of people. You have to rely on him to hire and fire staff, to deal with local Chinese institutions such as banks, taxation bureau and approach key local customers. This person must have the seniority and authority to be accepted by your local staff. A good example of the importance of trust in China is a low-cost airline starting up in China. The Western manager asked us whether we knew someone who could bring them into contact with some local airport authorities. We knew someone who we had worked with before, with a reputation in the industry, and arranged for the manager to meet the airport authorities. He even took the time and effort to travel with the manager to meet them. His introduction was so good that the airport authorities together with a senior representative of the city were waiting for the Western manager at the airport. The manager thanked our contact for his services but did not bother to offer paying him for the expenses of traveling or treating him for a decent meal. Obviously, this was the last time our contact rendered services to this company.

Any competition?
With the entry of new local players and some big international companies, such as PayPal China, we found ourselves in an industry with a lot of competition. Some ‘spoiled’ the market by selling below cost price with the hopes of gaining market share and dreams of striking it rich eventually by going public on Nasdaq. Where the price is the only differentiator between most of the players, we have learned that it is fundamental to differentiate ourselves in other areas. We have done so by focusing exclusively on quality merchants who value personal service and the flexibility to include additional features into our product by adding more payment methods than anybody else in the industry; We used ‘guanxi’ into our advantage: we were the only company proactively selling to decision making units with international companies outside of China; We lowered our cost base to a level similar to our Chinese peers by centralizing most our operations in China under Chinese management.

A summary of our initial mistakes:
• Treating China as a single transparent market;
• Assuming that the online payment processing industry in China works in the same way as elsewhere;
• Underestimating the number and specific strengths of local competitors;
• Assuming a transparent regulatory framework with a level playing field;
• Assuming the superiority of our own product developed in the West;
• Decision making units, especially in government type organizations are hard to distinguish;
• ‘Lean and mean ‘ is not necessarily impressive towards Chinese companies;
• ‘Fast is slow and slow is fast’, i.e. pressing for the deal can be counter-productive, whereas investing in the relationship with the right people will most likely deliver the results over time: ‘Rome wasn’t built in a day’. I guess the big multinationals that have operated in China for decades, like General Electric, Motorola, Siemens, Sony, Philips or Budweiser, have gone through similar learning experiences at a time when the differences were even bigger. However it is part of human nature to be opportunistic and be blinded by the potential of this vast market. Not surprisingly, Microsoft, Google, Ebay and BilltoBill had to find out the hard way.By assuming a humble attitude and unlearning what we held for the truth, we opened up to seeing the real opportunities in China. Overcoming many hurdles, not the least my own initial ignorance and arrogance, BilltoBill has made a lot of progress.We have attracted quality international customers including Cathay Pacific/Dragonair, Singapore Airlines, Agoda and local merchants like Lenovo China, CTS Huangshan Travel and many event ticketing companies such as China Ticket Online and Emma Entertainment (organizing the Rolling Stones concert amongst others).We have streamlined our internal organization and build a motivated and capable team. They even discovered a tremendous business opportunity for the much larger business to business market! Our relentless efforts to actively contribute at industry specific conferences and winning prestigious awards like Best Payment Gateway Award from CAAC News (The news agency of the General Administration of Civil Aviation of China ) and the Best Payment Gateway for the Airline and Travel Industry Award have made the BilltoBill name synonymous with online payment processing in China in the international e-commerce scene. We are now starting to reap the rewards.We haven’t crossed the finish line yet but are getting better in running the race.
Good luck with YOUR business in China!

Martijn Hovinga
CEO BilltoBill

(BilltoBill is part of Oriel Communications listed in Australia as ASX: OCO)
Date: 20th March 2007