Rofer Yu is CVEN’s Asian Business Development Director. She was born in Yunnan, South West China and for the past 12 years has worked in Australia helping Aussie businesses work through the challenges of doing business across cultures. In this post she shares some of her insights on foreigners and Aussies alike.
It is absolutely crucial to understand the business practices in the market where you are hoping to do business. You are either going to be run around in circles with people politely encouraging your success or left talking to an answering machine because no one wants to engage with you.
The best thing you can do is to try to understand what’s going on in the mind of your buyer.
As an example, consider the USA. They speak the same language as us (well close to it) but the way they conduct business negotiations is very different. Perhaps it’s the population, their ability to excel at marketing, or maybe to be noticed in the USA, you really have to standout because everything there is big.
So getting their attention is a significant challenge.
An American business partner once explained the issue with Aussies: Every day people pitch him ideas. He listens to the stats and the forecasts and whatever the numbers are, he’ll discount it by at least 60%. The problem with the Aussies, he says, is that they are too understated. When they tender a more reasonable forecast (possibly even achievable), he’s so used to discounting what people tell him, the Aussie proposal just isn’t very interesting.
“International business culture goes far deeper than how to hand over your business card.”
In direct contrast to the USA, China is very willing to take the time and learn who and what you are about and don’t really care about the detail (at the start). This concept might be explained by the fact that many Chinese business people don’t want to miss an opportunity. You can place a call to a distributor and advise them that you are in the market and within 30 mins you can have secured a meeting. Try doing that in Australia or the USA.
The cultural contrast in China is that you shouldn’t get too excited about this initial meeting. At this stage your host is still learning about you, your company and what it is you do. Be prepared for many polite replies and their encouragement of future business – but, a word of warning, you’re not there yet.
Westerners can often get frustrated due to the lack of preparation Chinese buyers have taken before they meet with you. Westerners are extremely detailed, whereas early meetings with a Chinese buyer are simply about discovery. They want to understand if they can build a relationship with you. It’s possibly why trade shows in China can leave Aussies so frustrated. Your standing there with your pricing, terms and shipping schedules and you want to talk details with someone: To negotiate and haggle. If you think you can leave 2 hours after the trade show ends and email your long list of contacts after you get home, the outcome won’t be the same.
Aussies should remember that in Chinese culture, business is done on relationships and an invitation to dinner, a show or a tour of the region can indicate your customer’s interest to discover more about you (and therefore your business). In China, business relationships are very much intertwined with personal time so enjoy the hospitality immersion and remember, you never stop working.
About Rofer Yu
Ms Yu has been fundamental in confirming millions of dollars in export trade deals for our Australian clients. If you are struggling to secure commitment or some of the above scenarios sound a little too familiar, make contact. She’s definitely not scary and might help to open or at least, clarify that export pathway.