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September 19th, 2007 by Business China Editor
1.3 billion customers – a myth or a reality
By Tsering Kyinzom
1.3 billion customers. This is the magic number that captures the imagination of every company in the world with something to sell in China. Many would be tempted to think that even if they grab as little as 1 percent of the market share, they still have 10 million customers. Well, that’s a simple mathematical calculation and it remains just that. The trick lies in understanding China’s billion-plus population, what they buy, their spending power and what determines their purchasing pattern. In order words, the mind and the wallet of the Chinese consumer.
China is going through an unprecedented economic boom and people’s pockets are getting deeper with many ready to embrace new lifestyle concepts and habits. What was until recently unavailable, forbidden or unaffordable is now available and affordable. At the same time, this is a China with many sub-Chinas – the city and the countryside, farmers and businessmen, young and old. Out of 1.3 billion people, only about 400 million live in urban areas. And income distribution is extremely uneven. Read the rest of “Selling in the world's largest consumer market” or post a comment
September 18th, 2007 by Business China Editor
By the China-Britain Business Council
China is, for many people, alien and difficult. The language, the culture, the distance all make it seem very strange. Many people have also heard tell that the country is an extremely difficult place in which to do business. They (mistakenly) think that it is Communist.
The first response to this is that you should never make generalisations about China or leap to conclusions. Sometimes it is difficult; more often than not it is as easy to get along in China as it is anywhere else. At CBBC we tend to the view that China is actually far more interesting than anywhere else. Invest time and effort and you will be rewarded many times over. And, yes, it is perfectly possible to make money, too.
The most important thing is to prepare. Read up on the country. Seek advice from those who know - especially the China-Britain Business Council. Ask others who have been there before. Spend time in conducting market research. In short, do everything you would normally do when approaching any ‘foreign’ country. Read the rest of “Business & Culture” or post a comment
September 17th, 2007 by Business China Editor
By Adam Lane
This is a major problem that society is still trying to overcome -and a tremendous problem in China. A typical example is that when a building company builds an apartment complex in China it wants to build the complex that it can make the most profit on, through selling the apartments or offices in it. It has an incentive to source cheap materials, if this does not effect the value of the house -or it might want to source energy inefficient materials, because there is no incentive for it to use energy efficient materials. Why? Because the person who buys the units will be the one who will be paying the energy costs!
A possible solution to this is PSS -Product Service Systems, which sounds complicated, but is really just the idea of not selling someone a product that, once sold, no longer is related to the seller; but instead, selling a service which includes that product plus extra services. The seller can make more money on an ongoing basis from the extra services related to the product and, as will be attached to the product for longer will have an incentive to ensure its performance is, well in this case, environmentally friendly, as this will affect its service revenue/contract. It also means that the seller can easily retrieve the product afterwards and re-use it in some way; and the seller is motivated to do this, and can easily do this. Read the rest of “The owner is not the user” or post a comment
September 13th, 2007 by Business China Editor
By Richard Brubaker
Recently I have been spending a lot of time on the responsibility companies have when they outsource to ensure the integrity of their supply chain by investing in a solid quality control process, and recently this resulted in an editorial writer from the Wall Street Journal sent me an email as for my comments on the following:
"Most, if not all, coverage I’ve seen has focused on the role regulators in Beijing and Washington need to play to clean things up. But I suspect that’s missing the big role for the private sector."
"After all, don’t a lot of western companies sourcing in China have a major financial incentive to enforce quality standards independent of regulators? They have to defend their brand reputations in the eyes of consumers back home, don’t they?" Read the rest of “Assess Your Risk, Plan, and THEN Outsource to China” or post a comment
September 12th, 2007 by China Business Success Stories
By Antonio Fonduca
One of the most ordinary mistakes that Westerners tend to make in interacting with the Chinese is to not prepare enough ahead of time. This is a fatal mistake, as thorough preparation is key. In the very own words of Sun Tzu:
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”
It is quite basic really, yet so easy to neglect. To succeed in your business relations with the Chinese it is paramount to learn the ancient cultural forces and traditions that have affected the Chinese mind for thousands of years, and still does today. In fact, there is an emergent need, in general, for a developed understanding of intercultural interactions in today’s dynamic world. We require tools to reduce cultural gaps and to enhance our understanding toward each other. Read the rest of “Understanding China” or post a comment
