This is me in Shanghai with ESG’ers Kim Wang and Hedy Wang (no relation, of course). I was down to suit pants and a Red Sox tee-shirt. You’ll note I represent fat Americans perfectly. I’m also tall.
I’m just a metaphorical pig. This was more literal. Just driving down the streets of one of the largest cities on the planet with pigs.
Do you know that for all the exuberance around China as the fastest growing economy on the planet for a while now, it remains an IT market that most still don’t understand?
For example, the IT business in China is grossly price sensitive. Many companies have decided that “its just the way it is”, so they feel it’s important to play and therefore sell things for 90% off normal street pricing. It’s crazy. The smartest companies doing business in China are Chinese – the U.S. tech companies simply don’t “get it” so they try to capture share at all costs. Unfortunately, those tech companies have cost structures that guarantee failure with such a model. If someone tells you they are “kicking butt” in China, short their stock.
I don’t blame the Chinese for this. They come from a culture and economic lineage that makes it understandable. I blame foreign manufacturers for “accepting” this as reasonable. Value is mono-directional in China. Unless manufacturers are able to hold the line and extract value for their IP, what’s the point? Is winning a deal really a win if you lose piles of money every time?
I chalk most of this up to ignorance, and laziness. It’s too easy to say “that’s just the way it is” instead of doing your job and selling the value. The Chinese buyer is not stupid, quite the opposite. However, is some sales person is going to be lazy why shouldn’t they take the easy way out?
Entry, sustenance, and success in any tech market in China will only happen if the appropriate partnerships are in place. China remains a very “connected” marketplace – it very much is all about who you know and who you don’t. You could have the best thing since sliced bread but unless you are dealing with SI based X, you aren’t going to succeed. The fact that SI X is run by the cousin of the minister of Y should be a tip. You can’t change politics, you can only hope to understand them. If you don’t – which most don’t – you will flounder aimlessly.
Leave your western legal system ideas at the border. The Chinese do what the Chinese want to do, regardless of your forms or contracts. The Chinese will frustrate “logical” westerners in negotiations for sport. You think you have won when the contract is signed, but that is only the beginning. You have no recourse. Having said that, the Chinese are all about mutual “winning”. If you lose, they lose – so they are not foolish. They understand the balance required, but they don’t do things the way westerners do. There are many books one should read on negotiating with the Chinese before even attempting to get a deal done.
Every male in China over the age of 13 smokes, everywhere.
The country is really, really big. Really big. Silly big. The great wall is almost 3,000 miles long I think, and it covers 1/3rd of the country.
This is Lily, who just turned 6. She’s my favorite Chinese takeout!
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I almost forgot – completely true story – When getting ready for the Chinese Olympics, the government used Google’s translator to create English street signs. I can’t remember where I was, but yes, I saw the most awesome sign ever on a highway – it said “404 – Not Found”!!!! Swear to god it’s true.
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