Intelligent design
How do you sell design to a country with no brand culture?
Thursday, May 27 2010 || Features || BY Mark Revington
New Zealand companies contemplating business with China usually look to make or sell a product. Design company GardyneHolt wants to sell a service. It’s a tough sell in New Zealand where designers are a dime a dozen, but even tougher in China where a brand culture is almost non-existent.
“It’s fair to say the Chinese in general don’t understand design and the intangibles around a brand because the Chinese economy hasn’t matured to the point where added value is clearly identified,” says managing director Michael Holt.
Take the example of Holt’s father-in-law, who is the CEO of China’s third largest brewing company. It makes US$250 million a year without exporting a drop. When Holt suggests the company could do a lot more with its design and brand, his father-in-law has a simple reply. “He just asks why, when they already sell US$250 million worth. It’s a good point.”
But China is a market with enormous potential, says Holt, and Chinese consumers are becoming increasingly brand focused. So how do you go about selling design services in China? Get up there and check the place out, of course. And no, one flying visit won’t do.
“Expats in China say Kiwis come through all the time but aren’t credible until they come back two or three times. I went to Shanghai, and I have to say that Kea [the global network of expat Kiwis] was fantastic in helping me make connections. I hung out there for a few weeks and also made a point of visiting a few second-tier cities.”
One city in particular, Wuxi, offered tax breaks for GardyneHolt to set up there but there weren’t enough clients or good suppliers to make it worthwhile, says Holt.
However, the offer did provide an insight into doing business in China. “People think of China as a big place, but it’s made up of a lot of smaller cities and municipalities with different regions and they all compete against each other.”
Then there is the vexing question of what sort of company structure to set up. Should you open an office, establish a joint venture or set up as a WOFE — a wholly owned foreign enterprise? Each is governed by specific rules, and choices made at the start will continue to have an impact for years. Make sure you understand the implications, says Holt. And make sure you get good advice from someone who knows China and its business culture well. New Zealand Trade and Enterprise is probably your first call for a list of reputable market entry consultants.
And while you are in China, take advantage of Kea’s networks and sector networks to get in touch with prospective clients.
“I found Kea extremely useful for meeting people. If you find yourself sitting in your hotel room in the evenings, then you’re not doing it right. There are always events and activities on through Kea or NZTE or sector events or the Australians or British.” Holt found himself lecturing on brands at a Chinese university through a Dutch gentleman he met at a networking event. In Thailand, where GardyneHolt has opened an office, he plays cricket with the expat community. He designed the cricket club logo. He made contacts.
It’s simple really. Get up there, research the market, learn the local business customs, don’t take anything for granted, and get out there and network.
“If you can’t stand to be in a room full of strangers and get a conversation going, then you shouldn’t be exporting,” says Holt. “All you have to do is put yourself out there.”
