The BRIC (Brazil, Russia, India and China) nations pose something of a quandary to business owners today. Whilst these growing economies are invariably touted as a real opportunity for British business, they also pose serious linguistic, geographical and cultural barriers to successful trading.
I think that the opportunities presented by these countries, outweigh these concerns providing you are able to give them time to mature. Within my own industry, publishing, this is especially true – the Chinese publishing industry is growing into one of largest in the world, and Brazil and India are tipped to see the biggest growth in eBook sales. My company is the largest provider of technology and business development services to the publishing industry, and we have sought to increase our international business by opening offices in Brazil and India, and a joint venture in China. In this article, I will detail some of the tips and insights I have learnt along the way, so far….
1. Do your homework
A commitment to some serious research is key to success in the BRIC nations. Each of the BRIC nations is specialised in different ways, and you must target a market that will work best for you. I saw the exploding higher education rates in Brazil and India and their sustained commitment to educational policy and realised that growth, especially within the academic publishing sector, would continue for quite some time, whilst China is ever more interested in its education and, following its economic growth, its assimilation into global cultural exchange.
Moving beyond the developmental stage of a project is somehow the most challenging, and research only seemed to get us so far. It is immensely difficult to get to a real understanding unless you get your hands dirty and start trading so that you get the experience first-hand. I attended conferences, spoke to publishers and consultants, quizzed contacts, and probed colleagues – all to confirm whether there was a gap in the markets that we could serve, but in the end, it was not until we started operating that the real pluses and minuses, opportunities and difficulties began to really make sense.
2. Make the Business Work
Whilst I have enjoyed a level of international experience prior to Ingenta, setting up offices and partnerships around the world from scratch was a new undertaking. In Brazil and India we extensively recruited local skills and expertise, and work hard to retain those employees. In China, we were focusing on software sales, and chose to set up a joint venture. I knew we had to find the right local business partner and, we were very fortunate to meet Helen Sun, a Chinese academic and publishing professional looking to undertake a new challenge. Helen’s breadth of knowledge of the national and international publishing community, unrivalled contacts and knowledge of publishing in China, not to mention an understanding of the technological side of publishing, made her a brilliant partner.
Wherever possible, engage with local business people and entrepreneurs – their local knowledge is invaluable.
3. Understand the culture
Brazil, India, China and Russia have a different business psychology to the familiar Western models. No CEO can immediately be aware of all the cultural intricacies inherent in a country’s way of doing business, but one must go in with an open mind and an awareness of difference – or a business will stumble before it has even started.
Working in India comes with something of an advantage, as English is the business language. Combined with an inherited sense of British business practices, working culture and a shared legal heritage, there is certainly a sense that less can be lost in translation.
The main thing to note about Brazil is that its government has been quick to invest in its industries, and in publishing this has created centralised consortia for content dissemination. Brazil is a fun, risk-taking nation and it knows its own worth; it’s a competitive marketplace and Brits coming in should expect to have to work hard for opportunities.
Another key point, and this is especially true in the publishing world, is that in dealing with the Chinese, you deal by proxy with the Chinese government. Taking on-board government sensitivities is intrinsic to making any venture work and why no venture can realistically work there without a Chinese business partner to guide you through the process. Of course this can also be extremely positive, as it means that the government will provide investment funds to those enterprises that work towards fulfilling their five year plans and targets.
4. Ease the path
Westerners are used to outsourcing, and putting their faith in outsider organisations. If I could give one tip to businesses looking to the BRICs it would that this is not the case in developing countries. Selling software to these nations, and offering system provision, BRIC businesses are tentative, nervous perhaps that foreign investment and products will go as quickly as they arrive. My tips to businesses wishing to expand would be to tread carefully, and leave any notions of Western superiority behind– you go to do business with a foreign nation this must work with their models and expectations, and you may require more patience than you are used to in order to get across the model you prefer to work with.
My recommendation would be to abandon any preconceived ideas of how a cross-continental partnership should work, and put in the time and effort to shore up your understanding of the working culture.
5. Play the long game
Expanding into the BRICs has been an incredibly positive experience and one that I would encourage other CEOs to pursue, should the opportunity arise. Being open to the differences between cultures and open to the way businesses evolve over time is a key factor in this success.
Expect to respond to surroundings and pursue opportunities as they present themselves. A successful partnership with a rapidly growing nation, with anyone, requires flexibility, endurance, and extensive relationship building. This takes patience, but if you are able to play the long game, and see a market for your company then the BRICs pose opportunities that are worth the investment of time and resources to get the strategy right. Furthermore, Latin American countries such as Ecuador, Columbia, Mexico and Argentina each present really exciting opportunities in their own way, and companies should definitely look into these markets more closely.
By putting my faith in research, attention to detail and excellent business partnerships and colleagues, Ingenta’s foreign ventures are flourishing. We’ve surpassed our financial targets and look forward to the future, and I hope to see more Brits joining us to grab a slice of the action.
This article first appeared in Economic Voice.