In developing your business plan for next year, we discussed how new markets may be the key to growth in these difficult times. Specifically, we discussed the emerging markets of Brazil, India and China as fertile ground for introducing new technology. Last week I began to discuss how we entered the market in China as an example.
I told how we received an e-mail from a company in Nanjing that wanted to sell one of our key products in the Chinese market. As with a number of companies, in 2000 we had no representative in this fast-growing market. We did have an English-speaking representative in Taiwan, however, that had some sales on the mainland. Our first inclination was to let this rep take over managing the possible account in Nanjing on a commission basis. So I arranged a trip to China where I would meet him in Nanjing. He set up the visit with the principals of the new prospect and acted as my interpreter since neither of the two principals were very good in English.
During that first meeting, I was very impressed at how much knowledge they had about our company and the specific products they wanted to sell. The Internet and our website were the key to their knowledge. China, I found out, has the largest number of users of the Internet in the world. They had very detailed knowledge of the market they wanted to sell into since they were already selling other equipment into this market. We reached a contract agreement quite easily. They had an importer and a shipping company they worked with out of Shanghai, which at that time was the nearest port of entry. They would handle all the details on duties and fees. All we had to do was load their order in a 40-foot container and call the shipper. It couldn’t get any easier.
Sales took off immediately after my return. However, trouble soon came about between our Taiwan rep and this new mainland company as you might expect given the political climate. They wanted to deal with us directly. As it turned out, they could communicate very well with us in English via e-mail. It was in the spoken language where they had difficulty. This I found to be quite common in China today as all schools teach a mandatory class in English, but the students don’t get a great deal of verbal practice.
We dropped the Taiwan rep, who became very angry about the loss since it was developing very rapidly into a profitable arrangement for both of us.
Next week we’ll continue the story of how our new relationship developed.
Business Planning - China
By Jack Marino