"Succeed in China. Guaranteed" March 28, 2007 Springtime Greetings and New Beginnings for Business! March has been an eventful month for IGI, kicking off on March 4th with IGI’s “Succeed in China” seminar at the Four Seasons Hotel in Palo Alto. Diana Lu’s seminar presentation on US-China business strategy is illustrated below in the second section of the newsletter. Immediately following the seminar Diana jetted off to China to direct IGI’s China-based projects. Diana’s March trip to China continued to refresh and update her recognition of China as a truly remarkable country. Diana’s observations are outlined below. CHINA BUSINESS UPDATES: Chinese female business leaders are growing in number, they are showing tremendous power and strength and are impacting industry growth throughout China. The wireless business has became more sophisticated and convenient than United States. China’s TV channels and other medias show international news more often than what is seen in the US. Many local Chinese channels as well as CCTV programs have built extremely diversified programs about history, culture, economic debate, art (music, theatrical, movie, comedy, local Opera, etc), sports, education, politics. China has produced increasingly more international savvy annalists debating major event s from every continent. In China I saw more variety and diversity in television programs than I could get in the US and Europe. Beijing and Shenzhen’s hotel services have dramatically improved. Restaurant business has reach a higher level of excellence: there are now more unique styles of restaurants exquisitely decorated with Chinese art crafts and beautifully arranged VIP rooms designed with different characteristics. I was very impressed by their newly updated and convenient hotpot table settings adapted for both Chinese and Western customers. Chinese privatized business groups are also playing more important roles than giant state-owned companies in terms of exportation to western markets, their determination to extend their markets and improve their own brand recognition. However many of these private businesses are still at the stage of passively relying on Wal-mart, K-mart or other foreign retails rather than actively seeking direct routes to tap into western markets so as to avoid sole dependency on Wal-Mart’s massive orders or sudden massive order reduction, which may cause them sudden bankruptcy. Chinese awareness of their own IP and brands is becoming more important in order to seek the new path which would allow them to tap into Western markets independently and enable them to relinquish Wal-Mart’s exploitation. Although Chinese companies still face substantial unknown factors and knowledge about Western markets, their thirst for learning about Western market has given theses fast growing companies new strength to tap into new markets successfully. Therefore, IGI’s international consulting services is vital for them to achieve their immediate and long term goals. “SUCCEED IN CHINA” SEMINAR REPORT Deciphering how to navigate China as a relationship-based society where the human emotional component is paramount to conventional business judgment is a huge challenge to Westerners seeking to expand their market in China. However, relationships offer tremendous value for sustaining your business in the long run and can prove to be a time and money-saving solution as well. Unless you build solid personal and emotional bonds you will not achieve business success in China. Chinese business interactions are indirect, vague, unpredictable and subtle; the Chinese tend to judge intuitively, emotionally and subjectively, not logically. Sudden changes in the business world are very common in China and there are few black and white situations or solutions. “Gray” is always the answer. But don’t worry, “gray” is also the best way for you to figure out the right answer. Due to this unpredictable environment the Chinese are extremely flexible and creative when solving problems, adapting to new trends and tolerating differences. The Chinese are also very pragmatic, focused on short-term needs, tangible benefits and results. Conversely, the West tends to view business in relatively more far-sighted terms. Chinese consumer habits are generally frugal, pragmatic and savings-oriented. But Chinese consumerism is changing… Chinese low-income consumers don’t buy anything unnecessary; they save whatever they have and save for what they need. The Chinese middleclass consumes high quality local brands; they are selective and only purchase foreign goods when there are no other local brands to choose from. The Chinese uppermiddle class prefers high quality foreign brands but still maintain attitudes of “practicality”. Yet the Chinese elite class purchase only famous foreign brands. Money is no object; only status and prestige is their concern. Most Chinese purchase products by cash, few use credit cards because they are adverse to spending money they don’t have. While most Chinese consumers blindly adore foreign brands. Only less than 0.5% of the Chinese population will purchase foreign products at the original full price, particularly for luxury products. Women are major consumers of foreign products. Executive-level professional women prefer vanity novelty products such as top fashion brands to demonstrate their status and prestige. Upper-middle class consumers of foreign brands have a salary ranging from $10k to $40k. Yet presently they will only spend 1% to 2% of their salary annually to purchase original foreign products at full price. Commodity products such as electronic (except cell phones) and entertainment products are not their top choice for paying top dollar. However cosmetics are products of which Chinese prefer foreign brands over local producers. Chinese heavily prefer local food and beverage brands except for foreign alcohol and chocolate, which are mainly used for gifts. Above all, remember: In China, Anything is possible! Anything is negotiable! Twelve Steps of Succeeding in China Market.
Diana Lu is the founder and CEO of Image Global Impact, an international firm that is engaging in cross culture business consulting, and publishing. As a child during China’s Cultural Revolution, Diana struggled against hunger, cold, and fear in a remote coal-mining village. With passion and determination she charted a course that led her to the U.S. and outstanding achievements in her own international enterprise. Her bestselling book, Daughter of the Yellow River, will inspire anyone looking for guidance to business or personal success. Please visit us at: And come read Diana’s blog at: daughteroftheyellowriver.blogspot.com If you are interested in having Diana as a speaker at your event, please contact us at: diana.lu@igimpact.com. SUBSCRIPTION INFO To subscribe: If you would like to receive future issues of this newsletter, let us know at subscribe@igimpact.com. To unsubscribe: If at any time you wish to discontinue, click unsubscribe@igimpact.com. Please be aware that we will always respect your privacy and do not share our mailing list with anyone.
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