I do not like to make “general” statements in this book, but there are two which I would like to try now. The first: Just about everything that my former colleague sales director, my sales manager and my two distributors have told me about the road to success in China was not true. The other: Many of the rules which can be found in guidebooks for businessmen in China, either are of no use or incomplete, not always, not everywhere (or only rarely) true and sometimes even totally incorrect.
Conversely, though, I would like to warn against generalising my observations and conclusions, especially those made in this chapter on business and professional occurrences. Each individual will be exposed in his or her environment to a different situation, and even if there are similar situations – everyone has to respond in a way best fitting him- or herself, the opposite, employees, customers, suppliers and partners. Ready-made rules do not help, everyone must analyse for themselves, think about and decide how to move forward.
Anyway I’m not a fan of standard schemes, I prefer test several options at once, even conflicting ones, varying them if necessary at full speed. That’s part of my scientific and research-based approach, I do not do it in the market any differently. (And football is just so: The one has lost who plays by standard rules, knowing only one variety and responding at new situations with old stuff.)
Against the wishes of almost everybody I have therefore deliberately set up three distribution channels in China (virtually trying out which route was the most successful one, or perhaps we even needed all three of them?): a trading company registered in HongKong for customers who are largely controlled from there or invested from HongKong or Western funds, a Taiwanese trading company for mainland China customers, headquartered in Taiwan; and with both distributors I’ve insisted that we sell directly as well, once we have identified the potential customers ourselves, but I promised that we would not go snatching off their customers.
Also, I’ve made sure that, as long as it comes to technical things, I (and later our engineers) may visit the customers at any time alone, without distributor manager, without notice, so as to talk to them directly in any way, without mediation by their staff. Pricing and logistical matters, I would not negotiate as a supplier to the customers. All technical aspects, I would always report, but vice versa expect complete reports.
So I have reduced the dependency on the distributors and earned us a stronger position in the confusing Chinese market. But that was not the key to our success, only a formal boundary condition. And we were successful, though only after some very painfully difficult years. We could get our way with our new technology, have put out numerous competitors from small and large companies from abroad and from inland China and, in most cases, only compete with one single global player.
With all the major users of our processes and almost all the medium ones, either our competitor or we ourselves are present with one or more process lines, in some we are both present and run the competition on the spot.
One thing is critical to our success against the (initially) many and big competitors, and it is crucial for sharing today this (important) special market with the only remaining competitor in the field, although the company of our competitor is disproportionately larger:
TRUST.
This sounds perfectly normal, and it is. In most cases worldwide (sustainable)
transactions are made only if the parties rely on each other. Trust must be established between the companies, between the supplier and the customer, but above all between the people involved. The top managers should learn to know each other, as the sellers and buyers, technicians and technical management.
The customer – that is, the top and the middle management, but also engineers and technicians who are directly operating the systems and our chemical processes – must develop the confidence that the delivered processes are stable and reliable, and meeting the requirements demanded by the customer’s customer.
A large company, already established, will make it easier: their sellers and after-sales servicemen may just claim: “Listen, mate, we’re supplying already all over the world, we’re delivering to you already processes X, Y and Z, your U.S.-based customer, Intel, has already released our process, too, therefore you can really RELY on that all is well.”
We couldn’t say that in the early days. Our breakthrough in Korea was a milestone, but which Chinese customer is impressed by the fact that the Korean company O, P or Q has already installed the process? None.
There, in Korea, and now here, in China, I had the advantage, though, that I am both chief inventor, chief engineer and chief manager. I can argue and decide binding contracts both in technical and in business matters. This has helped us enormously in China, but was also not yet sufficient.
Now you can read everywhere that “the” Chinese culture should be taken into account – but which one? From no book about China (at least from any that I know of) you may learn that in the Chinese private companies there are working mainland, HongKong and Taiwan Chinese, that each of them have a different cultural background, and how the differences in cultural mixtures that can be casually found in any company are to be considered. I believe that the authors of these various books have seen a lot in China and gathered all kinds of valuable experience, but they may have gained no experience in technical (and high-tech) marketing and sales to Chinese companies in China.