China is certainly a mouth-watering prospect to the SME business. The engine house of the world with a population of 1.3 billion, China seems to offer an opportunity for everyone and a market for everything.
Within publishing this is especially true, as the Chinese publishing industry is growing into one of largest in the world and certainly has the fastest growth rate. Five years ago, Ingenta started to set its sights on servicing the Chinese publishing industry and last year the vision finally became a reality. So as Beijing Book Fair, China's biggest trade publishing event, gets underway out in China I will detail some of the tips and insights we have learnt along the way.
1. Do your homework
As I said, I’d considered establishing a Chinese presence for the company for a few years, but hadn’t moved beyond the developmental stages. In such an expanse of possibility, I realised, a secure, financially viable opportunity must be identified to justify the investment and guarantee success in this complex market.
During these years we attended conferences, spoke to publishers and consultants, quizzed my Chinese contacts, and probed my most trusted colleagues and advisors – all to confirm there was a marketplace and a gap in the market that we could fill. I immersed myself in the minutiae: I took nothing at face value, delving deep into the mechanics of the publishing market in detail, studying competitors, locations, logistics, revenue forecasts and potential clients in order to ensure I had a proper understanding of what our Chinese business would look like. Even so, the last year has thrown up many new aspects I had not seen and many surprises, mostly positive.
While it seemed like slow progress, it is clear now that these years of research, contact building and time invested in the Chinese market were an indispensable part of creating the right conditions for success.
2. Find the right partner
Something else I learned during this time was that on-the-ground knowledge, contacts and understanding is vital for success. While I have a very international background, I quickly realised that my knowledge did not extend to being able to master business in China. I knew we had to find the right local business partner. We were very fortunate to meet Helen Sun, a Chinese academic and publishing professional with deep knowledge of the national and international publishing community, unrivalled contacts and knowledge of publishing in China and an understanding of the technological side of publishing. She, like all successful partners, brought a combination of local contacts, knowledge and enthusiasm, which we as outsiders couldn’t bring to the table.
3. Appreciate Cultural sensitivities
China has 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 understanding of one’s own vulnerability, a consciousness of difference – or a business will stumble before it has even started.
For example, in contrast to the strict contractual obligations that govern US and UK business cultures, the Chinese have a more liberal attitude. Tactical alliances and gestures of partnership are statements of goodwill, and do not necessarily become defined strategic movements until your business actually starts. It’s a different mind-set, and one that Western CEOs must orient their thinking towards, and another reason why having a local business partner who knows the lay of the land is invaluable.
Another key aspect to remember, and this is especially true in the publishing world, is that in dealing with the Chinese, you are essentially dealing 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.
4. Play the long game
It 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.
A successful partnership with China, with anyone, requires flexibility, endurance, vision and, most of all, relationship building.
I would counsel SMEs considering entering the Chinese market only to do so if they are in for the long haul. It is too complex a market to target to make a quick buck but if you are able to play the long game, and see a market for your company in China then it is worth the investment of time and resources to get the strategy right.
Embracing a wholly new market is a rare and exciting thing, and with China becoming an ever more dominant economic force it is, in my opinion, a wise move for many.