The final workshop in the 2008 Business Intelligence Series entitled “China and India: Getting Traction There & What Threats They Pose to NZ Business” took place at the Stamford Plaza on Wednesday 12 November 2008, just days after an event of major positive significance for China and the world economy - the announcement by the Chinese Government of its US$600bn economic stimulus package – and by contrast barely two weeks before the events in Mumbai that would reflect India’s most recent nadir.
Mark Lowndes introduced the speakers and the topics. In doing so, Mark referred to the ever-increasing influence of the BRIC economies on the global economy. It was not without import, commented Lowndes, that just two days before this workshop, the BRIC finance ministers issued an historic first joint communiqué at the G20 meeting in Sao Paulo.
All this set the scene for a very interesting and authoritative session.
The four speakers, Patrick English, John Cochrane, Alister Lawrence and Tony Nowell took turn to share their experiences of doing business in India and China and provided the audience with a wealth of pointers for gaining traction whilst avoiding common pitfalls. Some of the common themes:
Tips for Traction
Preparation and Research: All four speakers discouraged any attempt to do business in these two key countries without significant and focussed preparation and research.
Patience: Developing this theme, the speakers emphasised the importance of patience as a strategy in both countries. On China, John Cochrane spoke of the need for a patient state of preparedness. His experience in establishing his business there was characterised by long periods of wait followed by bouts of frenetic, barely-controlled activity. Alister recounted amusedly the best intentions of most attendees at meetings to try to be on time – traffic and other obstacles often conspire against you in India.
Networking and Contacts: These were clearly identified as crucial to success. Patrick explained the importance of Guanxi or network to Chinese business but gave the propitious warning to be aware of shortcuts based on guanxi or your business goal may never be reached. In what we consider to be of growing importance again in New Zealand, John underlined the importance of the social evening to most business deals in China. It is important to encourage real willingness, nay eagerness, to entertain after the working day in order to get traction in China. In pithy fashion, Tony Nowell recommends in India,
Don’t just tie up with acquaintances, acquaint yourself.
Challenges and Threats
Bureaucracy: Both countries experience the sometimes suffocating effect of red tape.
Finding Your Local Partner: Not surprisingly, the speakers suggested that finding the right local partner and an alignment of your interests with that partner are of central importance to success.
Kiwi Openness: Although commenting about doing business in China, Patrick’s suggestion that our openness is our most endearing feature and yet potentially greatest weakness resonated with most of the audience and may well have more universal application.
Carefully Choose your Market: Understandably given the size of each of China and India, the presenters referred again and again to the pitfall of treating each country as the whole market. Your business strategy should be tailored to a particular geographic market.
The final section of the workshop presented a healthy panel and audience discussion of some pertinent issues. In summary:
Growth Sectors: Tony identified the main growth areas for business in India as the following sectors: Aviation services; logistics, real estate; education; power and energy; nanotechnology; hospitality; healthcare; luxury retail and biofuels. In China, Patrick identified: Aviation; marine services; engineering; food processing; transport; telecommunications and the creative industries.
Stampede Effect: Although increased competition as a result of the stampede effect was identified as an issue in both countries, the sheer scale of business opportunities there far outweigh any disadvantages.
Black Market: Alister commented that the white market is now larger than the grey in India, largely as a result of the importance of India as a conduit for products into the Middle East.
IP: China is signatory to 11 of the relevant international covenants. The panel agreed, however, that it is generally unwise to put designs on the table in China without first seeking adequate protection, which is becoming increasingly available. Tony commented that India is a different proposition and whilst things are improving, enforcement is typically a problem.
The session concluded by the audience showing its appreciation in the usual fashion after Mark Lowndes thanked the panel and all of the participants and sponsors of the 2008 series.
We look forward to the 2009 Business Intelligence Series next winter in the hope that the world economy may have steadied itself and that there will be no further enactment of the tragic scenes in Mumbai that played out in hotels and other municipal centres throughout that great city.
