China: Marketing mecca or brand graveyard?

Glen Murphy. Photo / Supplied

Those wishing to crack the market will have to re-learn business in the Chinese way, says China brands consultant Glen Murphy.

Part of China's ongoing fascination is that it can be both of the above at the same time. The number of business horror stories is matched only by the number of new companies lining up at China's borders, ready to fling their brands at the opportunity of the 1.3 billion people who've built the world's second largest economy.

The question of what it takes for a foreign brand to succeed in this huge, diverse and rapidly changing market has as many answers as there are different dumpling styles in a Xi'an restaurant.

Some companies have succeeded by starting in the south and building towards the north, others have worked the key cities, big brands have found success through national television advertising and smaller brands have grown big by using word-of-mouth amplified by social media.

The right strategies for a brand will depend on the resources and goals of the brand owner but, no matter how humble your goals, success in China will require urgency and patience, strategy and pragmatism, trust and monitoring, foreign-ness and localisation.

Understanding this apparently contradictory combination of success factors requires a willingness to re-learn business the Chinese way before crossing the border.

Failure to do so can leave businesses feeling dazed and bloodied before they make their first sale.

Work with urgency and be patient. Relationships matter in China; they matter in a way that our diet of American business text-books has made us forget. It's important to get up and running quickly but any early success will be unsustainable without strong local partnerships.

In re-learning business the Chinese way, a good place to start is by re-thinking assumptions about business relationships. In the West we often take our business partners for granted, knowing that we have a contract to fall back on should they fail to meet their commitments. In China the reverse is true, contracts are important but are often impossible to enforce, so your ability to work through setbacks and unexpected barriers will ultimately depend on the quality of your relationships.

Stick to your strategy and be pragmatic.

The China market is full of distractions that can quickly knock you off course. The best protection is to have a clear, realistic and long-term view of what you're doing in China, what resources you're committing and what you expect to achieve. At the same time circumstances can change rapidly so don't put the business on auto-pilot, keep looking at what's happening and be prepared to quickly change how you are doing things.

Trust your people and monitor activity closely.

The quality relationships you've built with your people in China and with your business partners will mean you're comfortable giving them the autonomy to make day-to-day decisions. They'll make those decisions with the best of intentions but you need monitoring systems in place to know what's happening all the time. Your next visit to Shanghai will be too late.

Be foreign and think local.

Building relationships, developing good strategy and monitoring activity require your senior managers to spend time in China. But even if you're there for years, learn the language and drink green tea you'll still be a foreigner and your brands will be seen as foreign brands. Don't fight it but make sure your products and brands are adjusted for China. Chinese consumers appreciate foreign brands so long as they provide real value to their own life and aspirations.

China - contradictory, complex and competitive - nothing can guarantee success but with planning, patience and effort you may at least avoid the horror stories and maybe you will find your marketing mecca.

Glen Murphy is an Auckland-based China brands expert