The Wu Way » Chinese executives

A case for Mattel apologizing to Chinese manufacturers

Jocelyn — Sun, 23 Sep 2007 02:19:14 +0000

There’s been a great brouhaha in the press over Mattel’s apology to China — particularly over the allegations that Mattel apologized directly to its Chinese manufacturing partners.

It’s not a surprising reaction. This supposedly “Golden” year of the Pig is turning out to be more porcine than prosperous, thanks to the slew of recalls — especially for toys. It hasn’t been great PR for China, as evidenced by this “man-on-the-street” piece with interviews of Clevelanders. Just about everyone in the video has sworn off Chinese products. (Whether they’ll be able to stick to that is another story…)

The subject of embarrassing recalls surfaced over a lunchtime conversation with my brother-in-law’s colleague, Mr. Wu, in China, back in July. My arguments hit the usual suspects — such as the manufacturers’ shirked responsibilities.

Mr. Wu didn’t disagree. But he did make a rather compelling point — what about the US companies? They also have a responsibility for quality assurance. Plus, China is a developing country. While the US has been doing due diligence in business for at least 50 years, if not more, China has only seriously cleaned up its act within the last 10 years or so. Has the US forgotten that it too has a tarnished history of manufacturing substandard and dangerous goods — one that it overcame only through experience and robust law enforcement (two resources that China desperately lacks)?

We easily forget the snake-oil sellers of the 1800′s, or the deplorable conditions of meat-packing workers described in the Jungle or the current muckracking classic Fast Food Nation. We have amnesia about our vulnerable food supply, evidenced by the E. coli Spinach scandal of 2006. Many of China’s mistakes were made here in the US long ago, and some continue to surface every now and then — a reminder that even we, a superpower, can’t always remain in control. Yet it is so easy to push the blame on a developing country — and neglect our true involvement in the making of a scandal.

When US companies manufacture in China, they have a responsibility to ensure quality — just as their manufacturing partner does. Of course, they want to find reliable partners who are less likely to have quality transgressions, and thus require less supervision. Yet, perhaps some US companies turned too much of a blind eye. They clearly didn’t have a handle on what was really going on in their factories. In some respects, they did not provide enough oversight on the ground — something that many of the “rising stars” in the China manufacturing world, trustworthy though they may seem, might require. Compared to their US counterparts, these manufacturers haven’t been in the game that long. They have a hard time keeping a long-term perspective about anything — because their successes have been fast and intense. China’s law enforcement is also notoriously unreliable, which trickles down into the manufacturing environment.

I am not absolving the Chinese manufacturers of their wrongdoing. Breaching contractual agreements — especially when it can endanger the health of the end-user — is just not good business.

But perhaps Mattel does owe their Chinese manufacturers an apology too. If Mattel failed in their supervision, in setting a standard and tenor for their Chinese partners, they hold equal responsibility for the recalls.

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Up in smoke: the role of tobacco in Chinese culture

Jocelyn — Tue, 14 Aug 2007 03:22:13 +0000

As an avid nonsmoker, I was determined to have a smoke-free wedding in China. But my brother-in-law, Hao, had already bought one of the finest Chinese cigarette brands, and everyone in the family — even my mother-in-law — insisted on distributing them at the banquet. How can you ask your guests to refrain when you’re essentially inviting them to light up free smokes?
Tobacco has become so ubiquitous in China that sometimes it seems carbon monoxide will edge out oxygen. And when you see people smoking in places such as hospitals and offices, you’ll begin to wonder yourself.

According to the good folks at Lonely Planet, China has 20 percent of the world’s population — yet they smoulder through 30 percent of the cigarettes in the world. Not surprising, considering how tobacco has quietly singed itself into the table of Chinese culture. Unsightly? Perhaps…but tobacco isn’t going away any time soon.

And it’s not just weddings. Take dining out, for example. When Chinese men sit with their male friends — who often are considered “brothers” — at the table, handing out cigarettes has become a symbolic gesture of friendship and goodwill. To NOT share one’s cigarettes with the other men at the table would be…well…rude.

Note that this is only a custom shared among men. Women who smoke are often thought to be loose with low mores (if any at all, in fact) — this very stigma makes the vast majority of women shy away from the pride and joy of Phillip Morris.
Still, surprisingly, many women do not realize the dangers of secondhand smoke — even to the point of defending their chainsmoking husbands.

I recall an afternoon at a restaurant in Hangzhou, where my husband politely asked the fellow at the table next to us to put out his cigarette. He gladly obliged without question. But it was his wife who continued to probe my husband. Clearly no one had ever clued her in on the whole cancer-tobacco link — even as researchers now have strong evidence that Chinese women married to chain-smoking husbands are in for some trouble.

In the end, our wedding went on — cigarettes and all. And of course, there were the maverick smokers, those people that dared to light up during, say, my dad’s speech. But just as times have changed in the US, so will times change in China.

In the meantime, what’s a nonsmoker to do? Just do what you always do — ask them to put it out. Don’t worry; foreigners get a sort of “reprieve” for odd or out of the ordinary behavior in China. They’ll just think it’s a strange foreigners’ custom…and you’ll score yourself a smoke-free meeting/dinner.

“No commerce, no evil” is no more: how China’s ethical standards affect your business

Jun — Tue, 26 Jun 2007 16:33:28 +0000

There was a Chinese saying: “no commerce, no evil”. Merchants were thought to be unscrupulous, and commerce was historically considered an ignoble industry in China.

This contemptuous attitude towards businessmen no longer exists in current China. Making money is given priority now.

However, problems come up when this priority may be the only consideration for many businessmen in China. Media reports that forced laborers are widespread in Shanxi province, and many of the victims are children. One brand of toothpaste from China contains diethylene glycol that can poison people. Gluten sourced from China was tainted with melamine that killed dozens of cats and dogs in the US.

Many businessmen in China are not well-educated. They are motivated by a single clear goal — making money. They have no idea how their products and business behavior would influence the health and well-being of other people. Many of them are not conscious about business ethics and social responsibility.

In China, due to the overall education level, the general public has limited knowledge about certain products, such as tools that may use harmful chemicals or foods that contain unhealthy ingredients. Many detrimental effects of the products are cumulative and not immediately seen. So monitoring from the public sector to the business sector is not so strong.

The supervision from the government to businesses is also weak. The government officials are not so fervent about the interest of general public. They care about meeting the economic development benchmarks set by their superiors. Those bosses — scrupulous or not — will help them attain the goal. Bosses and local officials are on the same boat. It is very unlikely local officials will trouble the bosses.

The law in China is also under development, which means that many areas of business are not regulated. When the law is underdeveloped, unscrupulous businessmen usually can take advantage of the weaknesses in laws. Even when the law is well-developed, such as in the USA, there are still examples of corporate fraud like Enron.

A better solution is to voluntarily adopt and practice business ethics and moral standards.

When doing business in China, you should assume social responsibility and adopt moral standards, especially when dealing business with Chinese counterparts. Sometimes it may be the only strong oversight available.

A very red summer reading list: books on marketing and business in China

Jocelyn — Fri, 08 Jun 2007 02:37:33 +0000

In the spirit of “summer reading list” frenzy that signals the start of the season, I’m jumping on the bandwagon.

Interested in learning more about business and marketing in China? Here’s a peek into what’s on my list for this summer and beyond.

1. One Billion Customers: Lessons from the Front Lines of Doing Business in China (Wall Street Journal Book). James McGregor’s insider’s view of what doing business in China is REALLY like. What’s interesting about this former Wall Street Journal China Bureau chief is his humble start in the country. He is not a highly degreed academic, but rather a self-made high-school dropout who wandered into China after serving in Vietnam. You wouldn’t know it from reading his book. I especially appreciate his approach, using real-life examples and then providing commentary on how it might be applicable to anyone pursuing the China market.

2. The Search for Modern China. To understand the business dynamics in China, you’ve got to know the history. Try Jonathan Spence’s look at modern Chinese history, which takes a wholly un-Eurocentric point of view and does so in refreshingly unpretentious language. If you’ve never delved much into Chinese history, this is a terrific introduction.

3. China and the Global Economy: National Champions, Industrial Policy and the Big Business Revolution. Economy — it’s the reason we’re all drawn to China. Find out the story behind China’s economic powerhouse in this book. Given Nolan’s role in the WTO negotiations with China — he was one of just four world experts invited to consult — he’s clearly worth listening to.

4. Wild Grass: Three Stories of Change in Modern China. We often understand China from a big picture perspective; now it’s time to get a little more personal, with help from former Wall Street Journal China bureau chief Ian Johnson. Johnson tells the tale of three individuals who represent China’s “average Wang” — a self-educated lawyer fighting against local government corruption, Beijing homeowners facing home destruction by the behemoth real estate companies, and Falun Gong practitioners.

5. China’s Global Reach: Markets, Multinationals, and Globalization (Revised and Updated Edition). What’s behind the bureaucracy in China? Go behind the great iron curtain with Zhibin Gu. He’ll also reveal a number of secrets along the way to doing business in China, with real-life examples from global multinationals.

Five ways to tarnish your company’s image in China

Jocelyn — Sat, 12 May 2007 19:20:02 +0000

1. Open a store at the Great Wall.

We could learn a lot from Starbucks on this front. Their store in the Forbidden City has generated enough negative PR to warrant high-level government discussions on closing it for good. Why? Because the move was perceived as an imperialistic invasion into one of China’s most sacred and beloved cultural icons. With China’s recent history of foreign marauders coming in and setting up shop there — without the blessing of average Chinese — the reaction is not surprising.

So if a Chinese official gives you the green light to open up at the Great Wall — or any other iconic cultural location in China — think twice.

2. Fudge your Chinese translations.

Chinese translation is sadly undervalued in the business world. Companies pay hundreds of thousands of dollars for branding, marketing, design and PR — but some expect to get their marketing materials and corporate identity translated on the cheap by a Chinese student. What’s the harm? A lot. Let’s say you do get a Chinese student to do your translations. If that person has little experience in the business world of your country, they may end up using the wrong terminology. Jean Jameson, a professional translator in the UK, underlines the potential risk in her article “Prevention is cheaper than cure“. Here’s an example:

A textile design company went to Shanghai for a major exhibition several months ago, and engaged a Chinese student to translate its marketing brochure. At the exhibition confused visitors pointed out that the brochure did not make sense – the Chinese student had translated ‘rug’ for ‘cushion’!

It could get even more embarrassing if it’s your tagline, company name or your actual name — these are the core of your company’s image.

Remember, your marketing materials and corporate identity are communicating for you when you’re not around, like a Chinese sales rep in print. Will yours be wearing sleek Armani or plaid polyester? The choice is yours.

3. Confuse Japan and China.

China has a love-hate relationship with Japan. They love the economic benefit of Japan’s investments and export purchases from the Mainland. But most average Chinese still hate the island nation. Some of the sweetest, most gentle Chinese people have surprised me with their poisonous diatribes on Japan. It’s not shocking when you consider that the Japanese occupation from the late 1920s to the 1940s was akin to the Holocaust for Chinese.

Yet Westerners continue to conveniently lump together all East Asian cultures. As far as some are concerned, if they look the same, the culture is the same.

This is complicated by popular culture, where Asians even take on roles outside of their respective cultures — sometimes, with volatile results. For example, the recent movie version of Memoirs of a Geisha intermingled Chinese and Japanese screen stars, and had cast mainly Chinese actresses as the leading geisha in the film. Anyone following the news also knows the film was banned in China. The primary backlash stemmed from — what else? — its portrayal of Chinese women as high-class prostitutes, a bitter reminder of the Chinese “comfort women” enslaved during the Japanese occupation.
So, take note: samurai, geisha, teppanyaki, sake, kimonos, manga. None of these are Chinese. And they may be to your conversation what the A-bomb was to Hiroshima.
4. All work and no play.

Remember the Shining and what happened to Jack? All work and no play also makes you a very dull, very undesirable partner to the Chinese.

Here in the US, we’re used to separating business from pleasure. We like to “get down to business,” so to speak. And when the meeting’s done, we shake hands and leave the office.

In China, the meeting is just the beginning. Chinese business partners invite you to elaborate teas, banquets, karaoke parties and even weekend trips to Hong Kong. You get chauffered around in the utmost luxury. All on your Chinese partners’ tabs.

After a few rounds of this, you’re just about ready to put on the breaks the next time you hear an invitation to chifan (eat dinner).

I’ve got news for you. When it comes to doing business in China, all of the above is just par for the course. Some of the most important headway between you and your prospective partner will probably happen while you’re crooning “Edelweiss” (a perennial favorite) together in a karaoke bar.

There’s another reason you shouldn’t miss the socializing. It just might suggest you’re not interested.
In China, people put a premium on the relationship. They want to know you and build trust. That kind of connection only happens beyond the office. I’ve heard from many execs that, by spending more leisure time with their Chinese partners, they experienced major breakthroughs in their business relationships.

5. Ignore superstition.

Superstition in China runs stronger than the Yangzi River. Even Chairman Mao’s Cultural Revolution, his almost deranged assault on traditional Chinese culture and history, couldn’t stamp out superstition…though it tried.

Examples of it abound in modern Chinese culture.

Consider the upcoming Beijing Olympics in 2008. Now, the number eight is one of the most treasured numbers in China because it sounds similar to the character for making money. China already got lucky hosting the event in ’08. So guess when the Olympics will begin? August — the eighth month of the year — on the eighth day of the month at exactly 8pm.

After the seven-day Labor Day and National Day holidays, work always resumes on the eighth of the month.

The Chinese national flag is in red and gold, the two most traditionally auspicious colors in Chinese culture.

But the question remains — how could superstition derail your business?
Picture this: your prospective Chinese partner invites you to his daughter’s wedding. It’s a great opportunity to get to know him better through social interaction following the advice above. You’ve heard that giving money is pretty standard, so you take out the nicest white envelope from your suitcase and put in the equivalent of $50 — 400 RMB.

Congratulations, you’ve just communicated your death wish for the new couple. White envelopes are only reserved for funerals, and the number four sounds a lot like the character for “death”.

Of course, this is an extreme example. Not all superstition snafus will hurt your reputation. For example, it’s unlikely that Chinese will turn the other way just because you didn’t use auspicious colors or characters in your corporate identity. But just imagine if you did. Chances are your counterparts in China will be impressed that you knew enough to go the extra mile.

Why fight superstition? Go with the flow — and watch your business reap the benefits.

The Wu Way

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Book Review: Mr. China by Tim Clissold

Jocelyn — Sun, 22 Apr 2007 22:57:45 +0000

Mr. China: A Memoir is a book for all of us who have ever longed to “crack” the China market and Chinese culture — and come out as the ultimate “Old China Hand”. “But in the end, it’s an illusion” states the author Tim Clissold of this pursuit. He should know — he’s gotten about as deep as you can go in China, from a meager Mandarin student in Beijing to a respected investment advisor hobnobbing with high-ranking Beijing officials, traveling from the chilly Northeast to the desert of Western China and all points in between. It’s been a wild and humbling ride for him, and Clissold tells all — at least the most salient points — in this striking memoir that holds lessons for anyone keen on the China market.

Clissold gets the China bug when he first travels to Hong Kong as a young man. What others describe as utter chaos becomes instead a fascinating challenge and paradigm of living:

I’d go into a restaurant and they’d tell me that there was no rice or I’d go to a bar and they’d pretend to be out of beer. I even found a restaurant in Xi’an that closed for lunch. But after a while, I learned to probe and question, cajole and persuade — and never to give in! So I barged into kitchens in restaurants to find something to eat and went upstairs in hotels in search of an empty room….Even going to buy vegetables was a challenge but I sensed a rapport with the people I met; it was almost as if they enjoyed the game of wits and they often gave me a laugh or a smile once they finally gave in. I never felt any malice from them; it was more like a bad habit that no one seemed able to break.

Clissold was, in essence, spellbound by the country, as most aspiring “Old China Hands” usually are. So much so that he found himself bored with his stomping grounds of London. In a desperate attempt to re-engage with China, he tries to persuade his managers to set up an investment office there, but ends up being all but written off as a nutcase. There was only one thing for him to do: quit his job and go to China to study Mandarin.

As the saying goes, be careful what you ask for. Just after the Tiananmen Square massacre, China warns against “spiritual pollution” making those few brave foreign souls on Chinese campuses — such as Clissold — largely ignored by the student population. Clissold’s foray into a life of Mandarin study is also short on creature comforts, from monotonous meals of cabbage and rice to a grubby winter existence of few hot showers, little heat and just-washed jeans that freeze instantly.

After a year of studying, shrinking finances force him to find work. As luck would have it, his former employer in London — Arthur Andersen — is hiring: they need someone to help investors find worthwhile projects in China. And so begins Clissold’s journey into the unchartered territory of financing the new economy.

He assembles a team to help him along the way: Pat and Ai Jian. Pat is a larger-than-life career banker who made a name in investment in Hong Kong and sees opportunity knocking in the great frontier of China. Ai Jian is an “ex-Red Guard and forced-peasant-turned-bureaucrat” relegated to a desk job at a hotel after getting into some trouble at Tiananmen, but he’s hungry to make a difference and has the contacts to prove it.

Working through Ai Jian’s contacts and beyond, the team travels across China, from the rivers of Sichuan to the frozen oil fields of the Northeast border with Russia, in search of investment opportunities, and discovers a hidden and sometimes perplexing world. There are mountaintop military factories looking to transition to civilian goods with unexplained colossal explosions in the background, and elaborate drunken banquets with high-ranking government officials where animal genitalia is a delicacy.

After over three months of traveling to visit factories across China — and days that “ended at one or two in the morning in the upstairs room of some awful karaoke bar with cracked mirrors and faded Christmas-tree decorations Scotch-taped to the walls” — then it was a matter of getting the investors on board. Pat introduced a number of interested Wall Street money managers to the team and, following several tense meetings in China, they eventually agreed to a deal: $158 million to be invested in manufacturing plants throughout China as joint ventures. Contracts were signed and money was wired to their chosen partners in China.

This is where the fun begins — not for Clissold, but for us — when every imaginable thing that can go wrong does. The businesses start falling behind budget, and closer investigation reveals more problems than the team bargained for. Millions of dollars disappear overnight, unaccounted for (in one case secretly laundered to unknown offshore locations). New unauthorized factories spring up, some as direct competition to the joint venture, and others manufacturing products that investors didn’t approve. Reckless managers infest the factories, threatening complete shutdowns or utter chaos, and resist any extermination attempts. And then there are the grossly unqualified products, such as where a beer factory churns out a bottle with brown liquid inside and the words “soy sauce” scratched out on an old label.

But it isn’t the situations that make this book fascinating — it’s how Clissold and his team responds. In doing so, Clissold ends up making every mistake imaginable and, from our retrospective viewpoint, the results are quite often nothing short of hilarious. It all comes down to assumptions:

Wall Street’s theory of “private equity investment,” investing in private companies like we had done in China, was based on two principles. First, that the system of law and other controls are reasonably effective in dissuading business managers from helping themselves to the cash, and second, that a management team will work hard over long periods for clear incentives. Under these conditions, the theory goes, the management team can be left reasonably free to run the business and report to a board of directors that sets budgets and reviews progress. We had applied this model in China — and it was obviously not working.

His egregious mistakes become lessons for the rest of us as he and his team scramble to bring order back to their nascent investment projects. Clissold battles with bankers, the legal system, the anticorruption bureau (which famously asks for a car and money before providing assistance), complicated personalities, misplaced employee loyalty, and hidden assets. If we pay close attention (after wiping our eyes from laughing so hard) we’ll be the wiser next time we set foot in China.

Even while we have a good time at his expense, Clissold teaches us a wealth of knowledge about China. Clissold has a passion for Chinese culture — a passion so deep that, at the nadir of his misadventures in China (just as he is about to turn his back on the Middle Kingdom) it beckons him once again to this rich country. He graciously shares cultural anecdotes, a primer on the beauty of the Chinese language and delightful insights into what makes China so fascinating for outsiders. With Clissold as your guide, you come to peel back the layers of this country, seeing beyond the grueling banquets and puzzling bureaucracy, and are left with a sense of respect and admiration for a country that we can only hope to understand and appreciate, not conquer.

Full disclosure: yes, the links in this article are affiliate links to Amazon — but I’d still be linking to this book even if I wasn’t an affiliate because it’s a terrific read. </em></p>

On managing the departure of a valued Chinese employee — Part I

Jocelyn — Fri, 30 Mar 2007 19:16:47 +0000

Our guest article this week comes from Gary Baney, CEO of Boundless Flight. Managing Chinese hires is an important part of a corporation’s reputation and impression in China. Gary shares somes of his practical and valuable insights on this topic.

Here’s Gary:
—————————————————————————————————

One of the reasons many companies have hesitated to hire Chinese national employees is their fear that they might one day suddenly up and leave, returning to their homeland, never to be heard from again. As I hope to show in this short series of articles, this fear should not drive hiring practices. I have always believed that the best course of action is to always hire the best person available for the job and work through the details and lifestyle issues to the benefit of all.

When Xiaodong Yang announced to our software development company that he was returning to China in August, 2005 to once again be near his family, we could have taken the news as very negative. He had been my student at the Weatherhead School of Management, was one of our first four employees, had successfully headed up major projects for us with Goodyear, Penske Logistics, M.G. Maher, and others. He had invented our Blended Offshore Software Development Methodology and had exercised it with 100% success for more than a year. He had become a leader, a friend, a confidant, and he had FINALLY achieved a consistent proficiency at the English language!

We could have taken it badly indeed but instead, we chose to accept his personal needs as our own and dedicated ourselves to making the transition beneficial to all. This was quite a commitment for a firm that was then under $3M in annual revenue with fewer than 20 employees. Xiaodongâ€™s departure to his homeland was going to be a significant loss but we were committed to retaining him as an employee and doing everything we could to see him prosper with our company in China at the same pace he had grown here.

Our first challenge was to team Xiaodong up with another highly trusted and valued leader in the company so he would have an unbroken chain of connectivity to the company during his transition. Dave Brumbaugh, another of my former students, was selected to head up this effort. He worked closely with Xiaodong on several projects in the six months before his departure and spent a lot of recreational time with him to make sure the quality of communication was as high as possible.

This initiative has had a significant dividend as the two of them are still valued technicians for the company and staunch friends. They have jointly managed over fifteen high-profile software development projects for companies such as Chapura Software, Thompson Engineering and American Greetings. The initiatives managed by the two of them represented over 15% of our companyâ€™s total profits…and Xiaodong is STILL batting 1.000 as he has not had a single offshore development initiative fail using his model!

Our second challenge was to give him a proper leadership role in the company. Our goal was to design a position that would simultaneously provide him with the level of influence he is worthy of and provide the company with clear, unencumbered access to him so that influence would flow freely.

In the next article, we will detail how we accomplished, and are still accomplishing, this goal.

—
Gary Baney
CEO
Boundless Flight, Inc

Get out the Ginseng and Maotai: giving gifts during Chinese New Year

Jocelyn — Sat, 23 Dec 2006 20:10:26 +0000

Ginseng. Vitamin supplements. Top-shelf liquor. Fancy snack foods. These might be a few of the things gracing my shopping list as gifts for Chinese New Year.

Ginseng a gift?

You bet. Ginseng, one of many treasured remedies in Chinese medicine, is a welcome gift for more senior folks. As are any number of nutritional and vitamin supplements. It’s an important distinction…never give these products to a younger audience, with perhaps the exception of vitamins or remedies for beautification. I remember I tried gifting Ginseng to the parents of a friend who clearly didn’t see themselves in the “Ginseng generation”…later on they ended up surreptitiously re-gifting it to their older relatives.

If you ever get the opportunity to visit a Chinese supermarket, go to the aisle selling these medicinals. The packaging is often a work of art in and of itself — and as this article attests to, at times over the top.

Why are these items so prized as gifts? I believe it is a modern reminder of the rich culture of Chinese traditional medicine, where certain remedies were nearly as prized as precious jewelry and metals.

Besides the tried-and-true products such as Ginseng and Spirulina, there is also a host of proprietary Chinese nutritional supplements. One of the most beloved of these is Qing Chun Bao, a capsule that offers the age-old yet somewhat dodgy promise of youthful vitality. I can’t speak to the efficacy of it, though if the preponderance of advertising for this product in China is any measure, people are clearly buying it.

Then there’s also the fast-growing market for Western vitamin brands. Because these are foreign (thus having a certain cache) and sometimes priced out of the reach of average consumers, they are hot Chinese New Year gifts. I’ll never forget how one of my neighbors in Hangzhou bragged about how people gifted her a slew of Amway vitamins. Amway was the first to make their mark in this category, but now recent newcomers such as Nuskin are grabbing market share.

Now for a nice shot of…er at…alcohol. During Chinese New Year, I think the advertising was almost half and half on nutritional products and alcohol. Nianye fan — the most important meal of the year that falls on the eve of Chinese New Year — always includes a fine wine or liquor. Top-shelf brands such as Wuliangchun, Jiannanchun or Maotai are prized nearly as much as the traditional Chinese remedies — and it shows in the pricing. Men especially will feel flattered to receive a “famous brand” of wine or liquor, since they tend to be the ones imbibing at the table.

Cigarettes also need a plug here. While cigarettes aren’t special to Chinese New Year, they often go hand-in-hand with alcohol. If you’re going to give the gift of cigarettes choose a well-respected brand such as Marlboro or 555. Anything else might be social suicide.

Snacks shouldn’t be overlooked…things such as pastries, cookies and nutritious biscuits. Seniors love them during the Chinese New Year holiday, and they work for just about everyone else.

So, you’re marketing your product in China for Chinese New Year. Make sure you don’t forget the packaging, something I alluded to above. Packaging matters. We’re talking about a country here where face is extremely important. Good packaging helps to preserve and perhaps lend face to individuals. Most of the nutritional supplements, liquors and wines, and some snacks have special packaging just for the holidays, including a special bag to match the item.

Also think about how to make your packaging design more auspicious — in color, symbolism and name. Chinese people quite often make choices based on the inherent or implied good fortune. This isn’t going to, say, save your product from utter failure. But it gives your audience one less reason to walk away.

Even if you’re not selling the traditional Chinese New Year gifts, you can still get in on the season. How might your product fit into the holiday — or evoke a sense of the holiday? Advertisers do it all the time during the Christmas season, and the same could be done with Chinese New Year. Consider cross-promotion with a traditional Chinese New Year gift that fits with your company’s mission or product.

If you’re doing business in China, keep up your relationships with a well-chosen gift for Chinese New Year. Here are my short recommendations:

Male Chinese executives/husbands of Chinese executives: top-shelf liquor, wine or cigarettes
Female Chinese executives/wives of Chinese executives: nutritional supplements for beautification such as Qing Chun Bao, or vitamins from a foreign company such as Amway or Nuskin.

Marketing to execs and bosses in China’s hinterlands: don’t let the scenery fool you

Jocelyn — Wed, 18 Oct 2006 03:36:19 +0000

Recently I ran across a company that went to the inner provinces of China…they were hoping to sell a B2B concept to executives and managers in their field.

The sight was disconcerting to them: an infrastructure that appeared underdeveloped compared to the US; austere buildings and facilities.

So they made an assumption — maybe these people will feel intimidated by technology, such as computers and powerpoints. Maybe we’re better off stripping all of the technological “bells and whistles” out of the sales presentation, and instead just keep it simple.

Yet, those dusty desks and concrete block offices sometimes belie the true reality.

We’re talking about a country here where 442 million people own a mobile phone (Chinese) — more than the entire US population. While that’s only about one-third of China’s population (over 1.3 billion people in total), it’s still nothing to sneeze about. Computer usage isn’t that much farther behind, with over 100 million users. Plus, China’s 2005 statistics point to a more telling story: computer usage increases with salary (Chinese).
What does this mean? Well, next time you’re visiting General Manager Wang’s office and you find his housekeeping not up to snuff, don’t assume he’s still living in the technological stone age. Chances are — like most of the general managers I met — he owns at least one car and sports a top-of-the-line notebook computer. He has not only heard of Microsoft…MS Office is probably part of his daily routine.