The Negotiation

After diving into some of Rob’s background in China and learning about some of the products he’s moved into China, he discusses the regulatory environment around health products and how going an ecommerce route can help avoid rigorous registration and regularity requirements. We then ask Rob to talk about overcoming other struggles he’s faced outside of the regulatory environment (like fulfilling an order for 10 containers of pig feet for Chinese New Year) and why it’s important to be ready to back up your products’ claims before being asked to do so.Rob then talks about the buying cycle in China, which he honestly admits is an anomaly could be based on any number of things that are hard to predict. He recommends paying attention to the local holidays in the country and taking clues from social media phenomena. When asked to talk about where brands typically go first, he points to the usual suspects of large metropolitan areas but suggests brands avoid the noise and expense of the typical cities like Shanghai or Guangzhou and look for smaller market entry points where it would be easier to penetrate. Rob then talks about the value of leveraging one of the 18 free trade zones in China to take advantage of lower import taxes to keep costs down, and to research the different zones designed to benefit different industries and products. He also advises not to expect any of the free trade zones to act the same or have the same rules.Rob has tremendous experience working with Chinese distributors and talks about what a brand can expect when dealing with distributors. He points to a tendency of Chinese distributors to try and lock down country-wide exclusivity, and advises that you approach each province as if they were an independent country, and to move through China province by province as most have the population of a European country. 

We started off the show with Alex talking about what Kawo is (the Hootsuite of China), how social media enables brands to help customers make buying decisions, and why in China social media management agencies are so much more prevalent there than in the west. One of the more interesting facets behind the dependence on agencies is due to the lack of a social media management talent pool in China as it has been slow to develop as a course of study in post-secondary education.I then ask Alex to give us a detailed map of the social media landscape in China, and he walks us through the likes of Weibo, WeChat, tiktok, and xiaolongxu (little red book). He also explains more about what these fantastic and light-weight “mini-program” are, how they are used and shared, and why companies should consider creating a “mini-program” instead of a native app.We then moved on to discuss enterprise accounts on WeChat. One of the more interesting points made by Alex in this section was to point out that WeChat has made a concerted effort over the years to put its users first, both in UI/UX design and in data protection, forcing companies to have to work hard to gain their attention. Companies cannot insert their content into a user's news feed, only the user can share it there, and the company can only know that it was shared but cannot collect data or information from it.Our last section of conversation was dedicated to the trends in social media usage for brands looking towards 2020. Alex says brands are going to have to raise their game and really focus on the quality of their content as there is more and more noise being made and it is becoming harder to be heard above it.

The show kicked off with a quick background on how Elliott came to be in China and why he’s now splitting time between Beijing and Bangkok. Drawing on insights gained from his own podcast The China Tech Investor we then talk about some of the trends he’s seeing in China and how some of them can be attributed to the economic slowdown China has been experiencing, as well as a shift to enterprise as one of the few remaining low-hanging fruits a company can go after.We then talk about why so many Chinese companies list on US stock exchanges and why they are still the preferred choice for companies to go IPO and the sandbox for investors to play in. I ask Elliott to name an area that he would still be confident in investing into and he explains why health care would be his number one choice (hint: it has something to do with the fact that no macro events can impact aging).We also spent a bit of time discussing what the similarities and differences are between Chinese and Western companies, and which industries differ more than others in a comparison (hint 2: it’s not as much as you’d think), before delving into what foreign brands can do to reduce friction and enhance opportunities to partner with Chinese companies.

We started off our show with Stephen with an interesting discussion about working in China and adapting to the internet environment there which, as many of you know, can be difficult and slow at times. As Stephen points out, however, the number of digital platforms and services to make your life easier typically far outweigh and disadvantages from a more monitored and thus slow internet environment.Stephen then talks about his work at Campaign Coach China where he trains CEOs and CMOs on how to build brand and creative strategies. He points to the complexity in the market these days that is driving a need for a reboot of the timeless strategic planning tools and concepts in order to move past using the “borrowed interest” of celebrities and other influencers.We then discuss the tremendous ‘closing of the cache gap’ between foreign and local Chinese brands (except at the very top). Foreign brands shouldn’t rely on a lift by being foreign because in most product verticals the playing field has leveled. We end the show talking about what the next 5 years might hold for brands and Stephen’s take is that the struggle ahead will be brand building in the eCommerce age. It’s crowded, and the opportunities to show customers the ‘face’ of the brand are few and far between. That was one of the luxuries of offline and retail; you were able to really show off your personality and give an experience, but that is rapidly fading away.

We start off talking about Charles’ favorite Chinese company, Nongfu, a bottled-water producer who has, in Charles’ opinion as a branding expert himself, accomplished some incredible branding traction to the point of being able to charge in the neighborhood of $40 USD for a bottle of water. Not only is their marketing creative, but also their packaging, down to their unique bottle design. I then ask Charles to talk about the importance of being unique as a success factor in China.Charles then takes us through his fun “How I ended up in China” story which entails studying finance in Beijing which then led to starting up an Italian Vodka company, and how its success was predicated on being able to build the brand and sell the story. Charle’s then points to the limits of the industry as one of the difficulties in scaling his business, eventually coming to the conclusion that their company could not be the one that could lead the expansion of the Vodka market in China necessary to take his company to the next level. All this led Charles into his current arena and love of brand building in China.We then talk about Charles’ efforts to help popularize the sport of hockey in China which leads to a broader discussion around how big companies and brands can typically miss the mark when brand-building in China. He talks about his experience with large Western brands that bring an arrogance, although well-deserved in some cases, towards replicating the marketing that has been successful in the West that should easily and as effectively be deployed through Asia. Charles also gives some great advice around blending history with pop culture or current events and fads. He suggests doing your homework around the long and deep cultural beliefs that are rooted in all Chinese citizens and trying to navigate that while weaving in what popular in today’s local society.

We start out this podcast asking AP about his transition through the CCBC organization and why they’ve needed to scale so rapidly lately in both services and locations in China and across Canada. He describes some of the events they’ve drawn up and pulled off as some of their biggest accomplishments and why they are so important to their members to gain further footing in China.AP then speaks about the reciprocal sentiments that Canadian and Chinese companies have towards each other and why despite seemingly cool at times it’s more a product of the political sentiment more than it is the business temperature which still remains very warm.  He delivers a great example of this through the story of how a leading manufacturer of electric motors in Canada had to wait 18 months for orders to start coming in again during China’s change in leadership back in 2013. AP also talks about the one word that describes China’s recent jump forward, describing it as a leap in sophistication. And not just in transactional sophistication but also consumer behaviour sophistication in how they research and make buying decisions, not just relying on influencer marketing. We wrapped up the podcast by discussion some predictions on what the future trends are for China, including the Made In China 2025 and the rise in China-made electrical components that will strengthen their positioning in such areas as supply chain as well as the way software will be written that we’ll all need to know and understand.And as we always do with each guest, Andre-Phillipe gives his number one piece of advice for foreign brands moving into the Chinese market.

Today on The Negotiation, we talk with Jacob Cooke, co-founder of WPIC Marketing and Technologies. Jacob gives some expert advice for companies who are preparing for China’s Singles Day, also known as 11.11. Singles Day began several years ago as a marketing ploy from Alibaba Group who planned to make a purely commercial shopping holiday for the widest possible demographic, with an emphasis on big-ticket deals. 11.11 has since taken off and demonstrates a growth average of 30-40% year after year. For brands seeking a new growth strategy, it is imperative to prepare well for this popular shopping holiday.Jacob goes into how companies can qualify for Singles Day. Needless to say, these brands have to have a proven track record of being able to deliver efficiently. Internal decisions should begin as early as August. Aspiring qualifiers should discuss which products to sell, discount strategies, and projections based on how much inventory to have by a set date. Companies must submit their proposal by the end of August and lock their stock so that other platforms will not be able to distribute their selected products. The final step is to conduct a presale that will last until 11.11 itself.Jacob also recommends new brands to specifically emphasize discounts in their first couple of years around Singles Day for the sole purpose of getting as much exposure as possible. In the succeeding years, they should gradually return to standard pricing, which may result in fewer sales but, at the same time, higher margins.The e-commerce landscape in China today has changed—and continues to change—the retail (and even wholesale) game. Listen in as Jacob lays out his best practices that any scaling company, whether already in China or seeking to enter the market, should apply to take full advantage of Singles Day.

Today on The Negotiation, we talk with Michael Zakkour, Vice President of Asia and Digital International for Tompkins International, a global consulting firm focused on digital commerce, retail, and consumer products, and also the author of "New Retail: Born in China, Going Global.” Today we discuss why it's so important to deeply understand China's culture, history, philosophy, and language especially with regards to your target market and what new retail is, and why China is leading the global charge.Michael was a part of the Web 1.0 movement in the mid-90s. After the dot com bubble burst in 2000, he flew to China and became the first foreigner to work for particular a Chinese leather garment manufacturing company. The culture shock he experienced during his time as an employee in the Middle Kingdom led to his foundational belief that “in China, anything is possible but nothing is easy”. And that overcoming challenges of any sort as a foreigner requires adaptation or, in Michael’s words, “cultural dexterity”.Four core pillars make up what Michael believes is the key to business success in China: culture, philosophy, language, and history. He says that by understanding the cultural context of the individual and collective Chinese consumer through these four factors, you may achieve a predictable brand or corporate success.Michael proposes additional need-to-knows when it comes to maximizing your brand and corporate identity in China. From the “6 Ds” of understanding your consumer to the difference between e-commerce, digital commerce, and New Retail, our guest unleashes a masterclass into thriving as an entrepreneur in the fast-paced, ever-evolving world of Chinese commerce.

Philip discusses the value of gathering data to create lookalike audiences in order to predict consumer interests and buying habits, and in the process eliminate wasteful manufacturing costs. He gives the example of the American bag brand coach, which at one time collected data from WeChat users in order to see what consumers liked and shared with friends. With that knowledge, Coach was able to build individual profiles from all of their followers, which were then consolidated and provided actionable insights for the company. This lookalike audience strategy is being used by more than 65% of Chinese brands today, and their targeting technologies continue to evolve by the day.            While acknowledging that this practice of collecting consumer data is generally frowned upon in North America, then says that the Chinese market, by comparison, cares little about it. He uses this as a segway to explain that many foreign companies make the mistake of imposing their cultural norms onto whatever market they establish themselves in. Doing this is counterproductive, and makes the adoption of the foreign brand less likely. Even well-known brands are not immune to making mistakes. In fact, among the worst offenders were Versace, Dolce & Gabbana, and Proctor & Gamble, who all at one point made inaccurate and/or offensive statements about China in their promotional material. The Chinese market, according to Philip, will not hesitate to viciously criticize a brand, and many have already been pulled out of the market due to bad decision-making.            Developing trends in the Chinese market include the online ad spend and e-commerce, the latter of which is slowly taking over as the country’s primary marketing channel. Philip notes that in China, the speed of doing business is seven times quicker than in the West. Being agile and nimble is the key to growth today. Combine that with consistent social listening (in order to create lookalike audiences) to make sure your business stays on the cutting edge.

Jacob and Joseph talk us through the beginnings of WPIC and how operations are handled between their original office in Vancouver and their current head office in Beijing. They discuss how company branding changes as the dynamic between the target market and the business itself evolves. In this case, WPIC started out as an SEO service by the Cooke brothers and evolved to become a full-service technology and marketing organization.Brands are looking to China to “move the growth needle”, according to Joseph. More companies today seek partnership opportunities that allow for more direct sales of products and services in order to preserve as much margin as possible. Considering how large the Chinese market is, there is still a lot of untapped opportunity in the country.The Cooke brothers also address fears of Chinese companies “copying” or creating “fakes” of a company’s products. Joseph says that, while this issue dissuades many from entering the Chinese market, “some people look at it as a compliment and an indicator that there's clearly demand [if it’s] worth doing the faking.” He says the solution can be broken down into two steps: creating visibility and taking action. With WPIC’s data-gathering software, Discripto, for example, Jacob and Joseph can pinpoint every single case of copyright infringement and, from there, take the necessary steps to get rid of blatant duplication and fakers.