Chinese Online Property Market Appears Set For Lengthy DownturnComments Off
China’s online property market industry appears set for a prolonged downturn that will last far into 2017 and potentially beyond, according to analysts who say government policies intended to steady the housing sector have depressed sales and have had the expected effect of reducing demand for the online property services.
The projection of an extended downturn in the online property sector follows years of both growth and contraction, and the volatility in the market is one of the reasons that the government is imposing strict rules to avoid a housing market crash. If China were to experience a housing market bubble that burst, it would create significantly greater economic problems affecting more sectors than a narrower decline affecting just the property market.
According to a report released this week by economic analysts Alvin Jiang and Alan Hellawell from Deutsche Bank, the declining Chinese property market “is entering a long winter for at least six months.”
The South China Morning Post notes that the analysts believe that this downturn will last through to end of 2017, which could mean it lasts even longer — potentially into 2018. The analysts say that the decrease in the market can be directly connected to government policies that aim to avoid a housing market crash by imposing strict requirements on several important factors such as managing property prices and limiting transactions. 
In their report, the analysts said, “Both the online property transaction business and the related listing business are suffering from the cold property market. Continuing strict policies have frozen transactions and hurt the desire of property agents to spend,” which has led to major drops in property transactions. For example, the report says that the volume of property transactions in China’s top 10 cities dropped 25 percent in October.
The Chinese Online Property portals
Given the downturn, the analysts decided to downgrade their rating of the online property portal sales SouFun to “sell,” citing “continuing weakness” in the sector as well as the company’s apparent “scaling down” of operations. The analysts also downgrade 58.com — another online property sales portal — to “hold” rather than “buy” for similar reasons, because it “reflect[s] our concern on the continuing weakness in the property segment.”
However, a blog post on Barron’s Asia notes that the analysts’ report appears to be late in coming, because the property market was already experiencing a freeze before the release of the findings. 
“Isn’t Deutsche a bit too late to the game?” asked the blog post, which noted that SouFun had already dropped 60 percent in value and 58.com had experienced a similar 50 percent decrease this year.
The conclusions on the downturn in the market are in contrast to news reports earlier this year which said that SouFun was among several online property companies enjoying a rebound of growth.
For example, Bloomberg Technology reported as recently as March this year that due to a combination of government stimulus funding and a growth in the property market SouFun recovered 25 percent on the Bloomberg China-U.S. Equity Index compared to February this year. 
The Deutsche Bank analysis underscores the unpredictability and volatility of the housing market, and suggests that online property companies might need to rethink their strategies for 2017.
Facebook Attempts To ‘Friend’ China With Censorship ToolComments Off
Facebook, the social networking site that has long been banned in China, is reportedly devising a tool that will automatically censor certain users’ posts and prevent people in some geographic locations from seeing information that could be controversial in China — steps seen as an attempt by the company to get the ban lifted.
Removing the prohibition would be a massive boost to Facebook in terms of millions of potential new users, and the business possibilities such as new advertising. Gaining access to the Chinese internet market would allow the company to compete with such popular domestic social networking sites as Renren, which was one of the earliest such sites, or more recent alternatives that have gained success including WeChat and Weibo. 
The financial incentive alone is seen as the reason why Facebook, under the leadership of Chief Executive Mark Zuckerberg, is said to be developing censorship software, as first reported last month by the New York Times. If Facebook can devise software that helps block features that the Chinese government opposes, it could ultimately convince the government to lift the bar on Facebook operating in the country.
Facebook does not give any comments
Facebook has declined to comment to news organizations about the tool, but several sources from the social networking site told the Times that the tool under secret development would allow a third party to track stories that are proving popular and being shared widely on the site, and block content seen as inappropriate in China. This means that if a Chinese Facebook user were to try and share a controversial story about the country’s government, the third party would already be tracking it and could block others in China from seeing the story. 
Under this approach Facebook could still potentially claim in public to not be suppressing content, because the Times says that the third party — and not Facebook — would conduct the censoring.
Censorship in China
If successful, the censorship tool could help to reverse the ban that the Chinese government put in place back in 2009 following the riots in the Chinese province of Xinjiang. China believed that Facebook helped activists who supported independence from the country for Xinjiang to spread information that exacerbated the riots. It swiftly blocked Facebook in its entirety. Instead, China only allowed social networking sites like Renren to exist, because they complied with all government requirements on content monitoring and filtering. 
Since then, Zuckerberg has taken steps in recent years that are seen as trying to reach a compromise with the Chinese, including visits to the country and giving a speech in Mandarin. However, those efforts have to date not led to any widespread permission for Facebook to operate on the mainland. 
The South China Morning Post reported in September 2013 that some access to the site is possible in the Shanghai free trade zone, but that is a limited market compared to an entire country. 
Therefore, it appears that Facebook realizes it needs to take extra steps to lift the ban that remains in place, and its censorship tool could be one way for it to “friend” the Chinese government.
10 Things to know about the Chinese fashion brandsComments Off
What was the vision of Chinese about fashion 10 years before ? In the eyes of the Chinese luxury and fashion were only a matter of sign of wealth and status. Today, the Chinese have developed a real taste for luxury and fashion. Their vision has completely changed. Here are 10 things you need to know about fashion in China.
1. A new wave of Fashion in China
The new generation of Chinese young people have developed a taste to differentiate themselves from others and they show it in the way they dress. Chinese consumers today are not afraid to express their ideas on fashion. They dress differently, trying to find their own way and buy more in order to differentiate than to have the same as everyone. They want to wear clothes that represent their personality and attitude. This is why luxury brands and fashion designer must be creative and fully fledged collections to attract such Chinese consumers hungry for unique items.
2. The Chinese want to discover foreign brands
Chinese consumers are hungry for new and willing to try new brands. In 2001, when the UNIQLO brand of “fast fashion” Japanese moved to Shanghai, it was the opening a revolution in the minds of Chinese youth and then they wanted to discover even more fashion brands. Thus, brands such as Zara and H & M have brought a wave of fashion in China and then won the heart of Chinese youth. The Chinese prefer foreign brands to Chinese brands because of the designs. The new Chinese middle class no longer consumes only luxury brands such as LV, Gucci, Chanel, but also took into account other lower-end brands but also trend among young people.
3. The influence of Western fashion trends in China
Western trends and celebrities have a certain prestige that attract many Chinese people. They are inspired by celebrities they see in the fashion magazines, Films, Videos. Most foreign brands are taking Western models to promote their brand in China. Tag Heuer the Swiss watch brand ambassador took several celebrities for its campains such as Patrick Dempsey or the British top model Cara Delevingne.
4. The best ways to stay connected on fashion in China
The new generation of young Chinese starts to look for the news about fashion trends. They are looking for various fashion brands through various channels. The Chinese are very connected and use internet to discover a brand. H & M has entered the Chinese mainland in 2009, and the Chinese fashion community then discovered the brand and other foreign brand through internet. There is the phenomenon in China the KOLs, the “Key Opinion Leader” who are people who strongly influence Chinese consumers. Most often these are fashion bloggers who share their ideas about fashion and talk about current trends in fashion in the West to Chinese consumers.
5. Fashion and Luxury worth the money Chinese
Chinese consumers are willing to spend a fortune on luxury goods and fashion. There is a saying “something has value if it is rare.” Indeed, the Chinese love the products from limited edition, which are not always available on the Chinese market, the Chinese will therefore travel abroad in order to acquire these rare products.
6. Good advertising is a must for a fashion brand
Chinese consumers are very sensitive to beautiful adverts for the fashion industry. For a luxury brand or fashion, it is important to be seen in many fashion magazines such as Vogue, Elle, Glamour those will be consulted by the Chinese people. A good brand visibility shows great awareness for the brand that will attract the attention of the Chinese consumer.
7. A Chinese group always focused on the social status
Although the behavior of Chinese consumers for luxury goods has changed, it remains all the same a small group that still buys for social status. A group called “Tuhao” in Chinese which refers to people who spend their money on luxury. These purchases to show social status will give luxury brands an important place in the Chinese market.
8. fashion brands and social networks
Chinese consumers are more than 680 million to be connected to the Internet, especially on social networks. It is first necessary for a luxury brand to be well placed in the list of sites on the Chinese search engine Baidu when the consumer goes to research on the brand. Then, to promote the brand can do that through fashion blogs and fashion-based websites to raise awareness of the Chinese consumer. The most effective tool is the Chinese social networks like Weibo and WeChat to communicate with Chinese consumers. Weibo is the first social network in China to allow users to post information on any and receive feedback from audiences. It is therefore crucial for a fashion brand to create an advertising campaign on Weibo. On WeChat, the communication method differs slightly from Weibo. On WeChat, the user will share the contents of the brand to its family circle, which will give users confidence in the brand and the brand it will be easier to target new consumers.
9. The mini video to promote themselves in China
The videos are the new marketing strategy trend: share content through mini-videos is another way to communicate with your Chinese consumer. With Chinese consumers spend their time on their mobile, an advertising campaign through a video is the best way to captivate the audience.
10. Finding the right agency that will help you establish yourself in China
Another way to increase brand awareness is through a PR agency, or markeitng agency to help your business. The agency can help your brand to establish itself in China, or help improve the visibility of your brand to Chinese consumers.
For More Information :
New trends of Chinese social media: Mini-apps, KOL e-commerce, and live streamingComments Off
The Chinese social media landscape is unique, fragmented, and the most dynamic of the world. It requires a lot of attention to keep informed of the latest innovations that pop up.With the rise of Tencent’s WeChat that gathers Facebook and Whatsapp functions and Weibo, the Chinese equivalent of Twitter, social media in China is booming. At the same time, mobile internet is growing. According to the China Internet Network Information Center (CNNIC), the number of mobile internet users hit 656 million in June 2016, making up 92.5% of the 709.58 million internet users. Among all mobile internet users, 91.7% of them have 3G and 4G networks. This high mobile Internet penetration adds a new dimension to the developmentof social media. Here are three new trends of Chinese social media that brands and companies should take into account for their digital strategy to reach the Chinese consumers.
WeChat Mini-apps: the accelerating decline of mobile apps
The most popular instant messaging app in China, Tencent’s WeChat, is booming at 806 million monthly active users (MAU). According to Kantar’s China Social Media Impact Report (2016 April), WeChat is the most widely used instant messaging or chat app in China, with 75.9% reach among internet users at the end of 2015 (compared to 68.6% in July 2015). In September 2016, WeChat launched a new function called Mini-apps.Mini-apps allow users to use apps directly in WeChat without installing anything. Users simply have to scan a QR code or to search the name to open an app. Apps will be everywhere, ready to use at any time without occupying too much storage memory. This new function is still in private beta, and a large number of WeChat users are looking forward to trying it. Currently, WeChat users open the app 14.5 times and spend 48 minutes per day on average. It is foreseeable that Mini-apps will attract users to use WeChat more frequently and to spend even more time using it. This new function may accelerate the disappearance of mobile apps with a small user group, and contributes towards consolidating social media apps market. According to Gartner, 20% of brands will abandon their mobile APPs by 2019 because APPs are not paying off.
SinaWeibo KOL economy: a new e-commerce real-m
SinaWeibo is the biggest Chinese microblogging website, with 282 million monthly active users. Microblogs allow users to follow famous celebrities and enable the emergence of key opinion leaders (KOLs), who mainly earn money from advertising and cooperation with third parties. However, some fashion KOLs on Weibo successfully created a new e-commerce modelthat quickly pays for itself. These KOLs usually own their fashion shops on Taobao, the biggest e-commerce platform in China. They accumulate a large number of followers on SinaWeibo and bring the traffic to their Taobao stores by a simple link. For instance, the most famous fashion KOL Zhang Dayi has 450 million followers on SinaWeibo. Baidureported that Zhang Dayi’sTaobao shop achieved 300 million RMB sales (44.53 million USD) in 2015. The cost of KOL e-commerce model is much lower than traditional fashion companies. These KOLs are known for their good tastes in clothing, and they succeed in getting a lot of followers with similar fashion style. KOLs post pictures wearing new clothes on SinaWeibo and can receive instant feedback from followers. They can then produce these clothes within seven days and bring new arrival on Taobao shops. Precise targeting and immediate feedback bring high conversion rate for Taobao shops. SinaWeibo platform also helps KOLs to save marketing spending, and just-in-time production limits storage costs.
Live streaming flourishes in China
The live streaming market is booming in China. The current market value of this industry is estimated at 9 billion RMB (1.33 billion USD). Chinese main internet media Sina reported that in 2016, China has at least 200 live streaming platforms on which are connected 325 million active users. More than the half of them are millennials. The huge number of mobile usersbase and high popularity of 3G and 4G mobile networks facilitate the development of the live streaming industry, which grows increasingly attractive. Therefore, even internet giants want a piece of the action: Tencent introduced its live streaming platform in 2010 that focuses on game live. SinaWeibo and Taobao also have developed live streaming functions in their apps to enhance traffic. Live streaming succeeded in grabbing the netizens’ attention. They spend much of their idle time watching live streams, on average 387 thousand hours on SinaWeibo live streaming platform every day. However, SinaWeibo does not offer the fastest live streaming service. Inke was established in May 2015 and became the biggest live streaming app within one year. Users who watch live streams can buy virtual gifts with real money and send these gifts to their favorite hosts. Regarding hosts, beyond advertisement income from third parties, live stream platforms typically share income with hosts. For instance, Inke usually collects 70% and leave 30% of revenues to hosts. Furthermore, Chinese users are also developing payment habits for these platforms. For instance, for the second largest live streaming App YY, the number of monthly paid users has grown 63.7% in three years. Live streaming is now perceived as one of most potential industries in e-commerce. Once these hosts have accumulated a large number of followers on live platforms, it is possible for them to monetize traffic through different ways. They could even think about setting up business models similar to KOL e-commerce ones.
3 great strategies on the Social Medias in ChinaComments Off
Today there is more than 600 million internet users in China, and they all use the social Medias, every time. It’s essential to be present in the social media when doing business in China. Here are three great strategies on the social Medias in China.
1. Using O2O
O2O is a digital marketing strategy that means Online-to-offline. It’s the concept to attract consumers by internet to make them go on te shops. A lot of social Medias use this technic. We find amongt the most active WeChat. IT’s a mobile app which allows its users to send texts messages, vocals messages, photos and videos. It was developed by Tencent in 2011. There is now 468 million users each month. This app is more used than the texts in China. WeChat also allows companies to be in by having a site: like that users can follow this page and be aware of the news of the company. Here we can set up O2O. The company has to describe its products well on the app to allow its followers to know its services. This is a first step which will conduct people in the shops. This strategy is very effective and make themselves known very quickly and by a large number of people, because everything can be shared on a social media and Chinese internet users who like a company will enjoy sharing it with its address book. A lot of companies have already used this strategy. For example, Mont Blanc, pen maker, set up a exposition in Shanghai, and invite all its WeChat followers to come to the exposition. Thereby, all Mont Blanc lovers have been made aware of this event, more quickly than if the company just indicate this event on its websites.
2. Creating Buzz
Creating buzz is a very used technique, either in digital or traditional marketing. This is the key to be known quickly and by a lot of people. Doing buzz is all about creating something special, unique, new, something that will attract consumers’ attention. The objective is primarily to make people talk about you. And where can you make people talk about yourself quickly and by many people in China? On social networks course. And to be truly effective, all social networks have to be used, as we are sure not to forget interested consumers especially on the Chinese Internet. We must distinguish ourselves from other companies in direct competition, socreate something never seen, surprising. Many Chinese users spend their time on social networks to find new content, something that will change the ordinary to be able to show his friends and share it. For this, Weibo is the best social network. This is a microblogging platform extensively used by Chinese people. Founded in 2009 by Sina, a Chinese company, it brings together a community of 500 million users, 50 million monthly. It is the undisputed platform to disseminate the buzz. Like the O2O, this technique is widely used by companies but also people like Wang Sicong who is very active on Weibo and created a buzz by commenting and by speaking in an original way to people. This technique has made its reputation.
3. Having a good content
Of course the edited content has to show a good quality. This includes two things: the content has to be true facts, that is to say, good references , verifiable data, and content in Chinese. As for the true content, make sure that what you put on social networks is verifiable and accurate. Chinese high end consumers like the right information because the Chinese Internet is being widely censored by the government and it is sometimes difficult to get fully complete informations. Then it is necessary that the content is in Chinese. This is essential. Many Chinese citizens speak only Chinese, and do not understand English. In addition, for those who speak other languages, it is always nice to have its mother tongue on a site rather than having to translate everything. Chinese content will also be closer to them rather than if that content appears to have been done for the whole world. Another thing to consider: the photos and videos. It’s more comfortable to watch a video or read a text with photographs rather than having to read just a text. It is important, therefore, to add to its page on social networking videos and pictures (the best would be of course translated in Chinese). People are pretty lazy by nature and are more likely to watch a video rather than read a text. This is very visible for advertising campaigns where photos and videos illustrate this campaign.
Further readings :
Top Digital Marketing Trends in ChinaComments Off
Digital marketing trends in China are very dynamic, changing and shifting
Statistics on digital behaviors in China
Marketing strategies and users’ behaviors and needs naturally have to pair.
Further research found out that:
Popular marketing trends
Making the most of current trends
To do simple
Traditional methods of marketing and advertising are not anymore in vogue right now, that’s a fact.
We notice a strong shift towards connection, engagement, interaction and fun, the new tendency and especially in China.
Marketers mainly look for a conclusive achievement: a greater brand loyalty and product or service sales.
Tips to enter the trends
China’s new phoenomen: get Smartphones at all costsComments Off
4 facts that show that Chinese will do everything to get a smartphone
In Tong’an, a young couple was condemned to 3 years of jail after selling their baby on internet. Being in a bad financial situation, with the money of the exchange they wanted to buy a motorcycle and an IPhone. Indeed, a man did buy the new born for 23 000 yuan, to offer it to his sister.
Since a few years, more and more Chinese sell their organs because of their financial difficulties, in order to buy Apple products such as IPad or IPhone. In 2011, a Chinese man, Zheng, decided to sell one of his kidney to be able to buy an IPad 2. He found an announce on internet offering 2 700 euros for one kidney. The truth is that the hospital where he get his surgery actually rented surgery blocks to a private company which sells organs on the black market.
Following the same idea, a Chinese sperm bank published an announce on Wechat: “Get a free IPhone 6S in exchange for your sperm!”. Indeed, the price offer for a sperm donation equals the price of the IPhone 6S, between 5 000 and 6 000 yuan. This announce actually bring more than 500 000 visitors to that sperm bank.
In a few Chinese cities, special pedestrian ways were created especially for smartphones users, like it is the case in Chongqing. Those pedestrian ways are supposed to avoid accident involving people with literary their heads in their screens.
An investigation was carried by National Geographic concerning those pedestrian ways for connected people, it actually revealed ironically, that most individuals didn’t even noticed this new concept.
China has a strong tradition regarding ancestors and the dead people, with a strong cult of the dead and important funeral ceremonies. The new trend is now to offer IPad and IPhone to be burned during a funeral, to honour the dead.
When Google will come back to China ?Comments Off
Google available in China for over an hour !
Google had its own Easter miracle. For a very short time, Google’s services were available in China for the first time in over three years. South China Morning Post reported that mainland Chinese IP addresses were able to access Google websites from 11:30 PM Sunday, March 27 to 1:15AM the next day. Google has managed to slip through Chinese censorship by introducing a series of new servers in some Asian areas, which took the Chinese authorities quite some time to identify and block.
This was the first time that Google search engine was available in China since it got blocked unexpectedly four years ago, in 2012. This action took place six months after Google announced in a blog post that its search engine was “inconsistent and unreliable” in mainland China.
Google winning it against China?
These hundred and five minutes of Google search engine available in China were the first glimmer of hope of a victory for the Internet search giant in its ongoing battle with China. Google closed its China search engine in 2010 after refusing to censor search results and threatened to leave the whole country a few months before that. The following year, Google said China had hacked its Gmail to stop social revolution of the anti-government group Jasmine Revolution.
In December 2014, the Google Mail service had been totally blocked after users were able to access Gmail messages through third party applications, such as Microsoft Outlook. YouTube, owned by Google, has also been blocked since 2009.
The “Great Firewall” still makes victims !
The overall censorship from Google is part of the “Golden Shield” Project of China, operating for 18 years now and aiming to help the Ministry of Public Security (MPS) to control what Chinese citizens can see online. The blocking of Internet services is known as “the Great Firewall” and claimed many victims other than Google. Indeed, Twitter, Facebook, Instagram and Snapchat are some of the major social networks to not be available in China.
There was no press communication from Google or Chinese officials to the fact that the search engine had been available in China. Having said that, with Google Play Store’s arrival in China which will occur this year, a quick availability could have been a glance at the upcoming future …
It is important to know how to get past this ” Great Firewall”. If you want to launch your website in China, please contact our specialized agents, they will for sure meet your expectations!
Further readings :
When Facebook will come back to China ?Comments Off
Facebook and Mark Zukerberg visiting China
During April 2016, Mark Zuckerberg came to China in order to meet the leader of Alibaba Jack Ma and the Chinese Communist Party (CCP) Chief Liu Yunshan. They talked about the different progress China made on the Internet field and shared their desire to create a better cyberspace. And by a better « cyberspace » Zuckerberg mean a world where Facebook is not blocked by the Chinese government.
Facebook has been blocked since 2009 in China. The CCP thought it could be used for anti-government movement and protests. However during Mark Zuckerberg’s move in China he successgully posted a picture when he was jogging on Facebook. So the « Great firewall » seems to have some breaches apparently.
During his different speechs Mark Zuckerberg talked in Chinese to the audience. For him it was important to learn Chinese because his wife is a Chinese woman. So in order to communicate with his family’s wife he had to learn. That is why he can speak in Chinese, with a certain accent which some Chinese complain about.
Facebook in China, easier to say than doing it
Chinese Digital era !
China, with 660 millions people who are using internet sound like a delicious meal for Mark Zuckerberg, but he might meet some difficulties.
Except the fact that the Chinese Communist Party always has a word to say about the entrance of Facebook on the network of China, something else will not work. There are already application and website which purpose the same service as Facebook and even more in order to feet to the Chinese market.
The most popular one in China with 650 million active users every month is Wechat. At the beginning it was only an instant message text application. But in few years it began stronger and bigger by helping Chinese in their everyday live. In addition of sending messages it is also possible to book tickets, order a taxi, pay the electricity bills of even do shopping. Against this beast which adapted his services to the Chinese market, it is going to be hard to acquire the same size without adaptation to the market.
And even if Facebook developp crazy stuff specially for the Chinese market it will be hard to highly penetrate the market as Wechat did when it started. At the beginning of Wechat, everything had to be built and now it is not anymore the case.
But Wechat is not the only actor in China. Microblogs like Weibo could be mentioned which is similar to Twitter and there are 200 million active users every month on this one.
The different competitors already developed in China represent the first difficulty for Facebook, the government is the second. The fact that Facebook is not authorized in China is a big deal. It is like because Facebook is not dedicated to the Chinese market like Weibo, Wechat and others are. So Facebook is against the regulation which is installed in China, so it is against the Chinese politic.
The goal of the CCP is also to favorise the development of national champions that is why foreign companies meet a wall of difficultier when it is about being in China.
Ubber is an another which had the same difficulties with the state and competitors. His main opponent is Didi Chuxing which is supported by Tencent and Alibaba like two big brothers who taking care of Didi Chuxing.
However Didi Duxing is not dominating the market yet with its seven million rides every day. About Ubber it is more about one million per day in China. The next goal for Ubber is to reach the billion rides per year.
So if Facebook want to engage himself in China’s market it will be important to have cash but to work on the image on the brand and how to acquire the Chinese users who have all they need with Chinese brands already implanted.
Top 10 rules for Doing Business In ChinaComments Off
Doing business in China for Western firms is still hard in 2015.
Difference of Education
This is a primary function of Western business education in China today as much as, or even more, strictly business. I wonder if Western management in China really think one of his main tasks is education. If it does not, it should – because for a Western organization, doing business in China requires that he spend a lot of time educating and developing local talent to work in sophisticated Western business processes – and it requires that Western managers and workers allow themselves to be educated in the flexibility of the Chinese market
A general impression now is that Western governments – for example, the US and European governments – focus on short-term issues: basically ‘fight against fires and of lurching from crisis to crisis with little or no clearly discernible and coherent long-term strategy for how to do, much less resolve, the various crises. Examples include the unrest in the Middle East and North Africa, the tide of refugees arriving in Europe, and the threat of global climate change.
Beware of Chinese companies dynamics
A common cause of losses in China is that foreign companies are so focused on market growth rates that they neglect the basics of competitive analysis. In the beer industry, for example, more than 20 foreign brewers recorded in the mid-1990s, each plan to capture an average of 15 percent of their market segment. In a market lacking clear differentiation, they also found themselves competing with nearly 600 local brewers, many of them subsidized by local governments. Some of these issues should disappear over time, but almost twenty years later, the fundamental situation has changed little. Many industries in China resemble the wine industry, overcapacity, high levels of fragmentation, subsidized local competition, and foreigners are willing to absorb the losses of their “strategic” investments. Learn Chinese is a very good way to understand the way Chinese Things and react explain the founder of Taylor Made School a Chinese training center based in Beijing and Shanghai.
Time has different value in China
Many companies want to get on the ground quickly. In one case, the Director General told his head of strategy for operations in China will within six months. Time pressure like this can create problems later. It tends to result in sloppy planning and analysis. It shifts attention to finding the right partner to find any partner, regardless of adjustment partner. It also weakens your hand in the negotiations. Your Chinese counterpart will be how to use your time constraints against you, and you walk away with a worse deal.
The Chinese government, on the other hand, left the impression that he has a vision very long term, for example, by creating the infrastructure of the Asian Investment Bank (AIIb), take action to calm Volatile stock markets, which begin to fight against pollution, health and food security, and so on. While the asymmetry between Chinese and Western governments – short-term and long-western Chinese term - is obvious, directions of activity seem to be the opposite.
In a series of interviews I conducted, Western leaders indicated that while their companies are looking to make long term investment decisions in China, their experience of their Chinese counterparts are executives and employees looking to make a ” making quick death” source Forbes
Chinese executives also identified the following strengths of the Western business: management, technology, clarity and stability of its processes, a history of technical innovation, standardization systems, R & D, global reach, and strong brands. They also highlighted the following weaknesses: lack of flexibility, high costs, slow decision making, slow responsiveness, rigidity, low business efficiency (as opposed to, it would seem, effective production process) shows a lack of flexible ways and innovative operating
However, Chinese leaders have also identified the following strengths of the Chinese company: flexibility, market knowledge, large market, low costs, aggression, large (and flexible) market Labour (practical and tactical) the business innovation (though not necessarily product innovation), fast, increasingly, a human touch, efficiency, and a general attitude of being willing to learn . The weaknesses of Chinese companies, as Chinese managers see them, include mismanagement, poor technology, short-term vision, poor governance, ineffective systems, a lack of professionalism, poor R&D, a lack of standardization , low brand recognition, and poor quality.
Interpersonal relationship called guanxi !
A common safeguard against opportunism is to build trust with the people who matter to your business. Unlike the West, the creation of personal friendship is a prerequisite to do business. Friendship building takes time, which is another reason to avoid rushing into things. Besides numerous invitations to sporting and other events, a key element of trust is long dinners during which all but business is discussed. In these, alcohol plays an important role. Learn to drink intelligently. Experienced negotiators have alcohol in their glasses of water or wet towels in most good restaurants make available.
Chinese negotiatons are long !
Chinese negotiators sometimes grow beyond what their Western counterparts consider appropriate limits. For example, representatives of a large Western company negotiated the distribution rights for one of their products. Their Chinese counterparts have closed their initial height by threatening to use their political connections to prevent the distribution of their products if they do not get the rights. In another case, China has drunk their Western customers to prevent them from being effective in negotiating the next morning (which the Chinese side, involved a completely different set of people).
Be alert and prepare appropriate measures against. For example, the negotiating teams must learn to drink without getting drunk, include women (because they are not supposed to get drunk), and know that excessive drinking can be delegated to a member of the team.
Understand Chinese society (hierarchical)
The decisions of the Company are generally achieved so top-down, with only the top of the pyramid involved in decision making. Distrust puts limits on the delegation, and at each level surveillance monitoring is high. Middle managers generally have little power to make decisions accordingly, and their main role is to transmit orders from the top and ensuring compliance.
Long term Business
The overall results give a picture of a Western long-term and short-term orientation Chinese to do business in China, with the strengths and weaknesses of Western and Chinese organizations somehow complementary. Even when the two Chinese companies from the West and are considered a force in “innovation”, the nature of this “innovation” is different – Innovation West is considered and technical innovation China is thought to be about adapting flexibly to commercial and conditions.That market is an important consideration which may be underestimated. Everyone believes that their main task is to do business and earn money, but the nature of what they actually do is somewhat different. It seems to me that if the Chinese education system inculcates the qualities basic obedience and discipline in his students and when students enter the work force, practical necessities requires significant ‘on the job training “to adapt the most sophisticated technical processes and management procedures needed in today’s economy. So Western organizations have come to serve as a kind of “graduate school” to develop the knowledge and skills of managers and Chinese workers
Be Flexible and Agressive
While most Western organizations familiar to those who responded to the survey were multinationals of some sort (hence the perception of sophisticated large companies oriented technology ) Chinese organizations come in all sizes and shapes. They ranged from large state enterprises, heaviness, to smaller, high-technology start-ups more agile (hence the perception of poor governance and management, but also flexibility, aggressiveness, and low cost-).
Western Companies need to invest on their Brand
One has the impression that the image of our Chinese leaders of Western companies is something of an aircraft carrier – a large vessel sophisticated technologically innovative, flexible operating processes and systems and extensive global reach – all led by experienced management with a long-term vision. This is a “strategic” image of Western business. Perhaps unsurprisingly, the weaknesses are inversely proportional to the forces – a large aircraft carrier is difficult to maneuver in tactical situations and not to change rapidly adapt and respond to other types of tasks. So things are moving too slowly – decision making, response time, and the pace of tactical innovation – and are too rigid. So with a technical platform very sophisticated, we are stuck with a rigid structure that seems to take some time to adapt. source