When East Meets West on the Global Economic Stage

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20/07/2017

When the Pet Shop Boys sang about East End boys and West End girls in the 1980s, the band were referring of course to the opposite ends of London. Not just geographically poles apart but also culturally, and the likelihood of cross-pollination of the two seemed pretty low. Fast-forward to 2017 into the modern business world and we are well beyond the era where global rules for business were developed in the West and simply exported to the East

China is becoming ever more attractive as a market. In a recent survey of global senior executives across 19 industries which was jointly conducted by the Hay Group and Economist Intelligence Unit, over 80 per cent stated that they expected to be doing business in China within three years. Many organisations look to China and Asia for new markets for their products and services; seeking to forge new supplier relationships or to acquire new manufacturing capability. Conversely, many Asian businesses seek new markets in the UK, Europe and North America, and with a burgeoning tourist industry and population migration patterns, there are also significant opportunities to serve Chinese and Asian consumers who are working, visiting or settling in the West.

Why local knowledge counts to bridge east and west.

West is not best. China’s most recent five-year economic development plan aims to boost consumerism and new retail models are in development. But you need to think carefully about how to localise your offerings. Western goods appeal to the Chinese, but sell much better when they conform to local tastes. Study those who have been successful. Make time and effort to get into the mindset of your Chinese consumer –  mass market Chinese consumers spend time to save money, not money to save time. Crucially important purchasing psychology.

Quantity vs Quality.  You might think China has a lot of people but the right one is hard to find. Annual wage increases of around 10 per cent have been commonplace in East China. At the upper end of the labour market, increases of 20 per cent are more common. If you are setting up base in the country, think twice about your new business location and satisfy yourself that the skilled workers you’ll need will be happy to move their families there.

WhatsApp vs WeChat. WeChat (known as Weixin in China) is the dominant instant messaging platform there. This year, more than 494 million people in China are expected to use the app at least once a month. Aside from sending messages and posting, users can order food, transfer money and book airline tickets. “WeChat is by far the most advanced mobile messaging app worldwide in terms of its functionality and the services it offers users and businesses,” said Cathy Boyle, eMarketer’s principal analyst of mobile. “Where the app falls short is in its global reach. However, for businesses interested in marketing products and services in China—and increasingly to Chinese people living or travelling abroad—WeChat is the best messaging app to use.” Not WhatsApp.