According to recent reports in Ad Age China, the global recession has turned cash-hungry Western companies into takeover targets for Chinese marketers.  Foreign countries have also become increasingly tempting new markets for a number of Chinese brands.

Chinese companies haven’t been hit by the economic crisis to the same extent as those in many other countries and, thanks to a huge domestic stimulus package, China’s GDP rose 7.9% in the second quarter of 2009 (compared to a year earlier).  Economists are optimistic that the growth will continue, with Credit Suisse, for example, forecasting economic growth of 8% this year and 9% in 2010.

A number of Chinese organizations have been taking advantage of the recession to take over other firms at a bargain price.  What’s more, instead of merely looking overseas for resources and cheaper manufacturing sites, Chinese companies are now looking further afield from more of a marketing (rather that production) perspective – i.e. to build their brands and retail operations.

Computer company Lenovo Group was one of the first privately owned Chinese firms to expand overseas, although its original plans were affected somewhat by the recession.  However, the world’s fourth-largest PC manufacturer is now refocusing its efforts on consumers rather than corporations and, over the summer, opened a ‘concept store’ in Malaysia which allows consumers to test and experience its full product range.

Similarly, Li Ning Co., a well established and respected sportswear and sporting goods company within China, is making efforts to build its brand overseas, recently opening a flagship store in Singapore.  The store, which is dedicated to badminton – very popular in Southeast Asian markets – lets shoppers try out first-hand technology-inspired badminton sportswear and rackets.

Meanwhile Haier Group, China’s largest appliance maker, has bought a stake in a New Zealand competitor in order to get a foothold for its own brand products in the New Zealand and Australian markets.

Chinese companies are a growing presence on the world stage, with 37 appearing in Fortune’s annual ranking of 500 top global companies this year – up from 28 last year and just eight a decade ago.

In an article for the latest issue of China-Britain Business Review, Lord Davies of Abersoch, Minister of State for Trade and Investment, acknowledges that the global downturn has served to highlight the importance of emerging economies, insisting that their continuing development will prevent the world economy from entering a deeper recession this year.

There is no doubt in his mind – nor in that of many experts – that China will be a key driving force in helping the global economy to recover.  China is already the world’s third largest economy, ranks among the fastest growing, and still has massive potential for growth.  China has not and will not be completely immune to the effects of the recession, but in contrast to most countries, whose economies are expected to contract this year, even the most pessimistic projections suggest that China’s growth for 2009 will be over 6%.

From a UK perspective, China is the United Kingdom’s fastest growing major trading partner, with UK-China trade having grown at double-digit rates for the last decade.  In addition, British businesses are now the biggest European investors in China.

Britain and China have already developed excellent trade relations, and both countries and their respective economies will only benefit further from increased ties.

Market research specialists such as B2B International can conduct market entry and market assessment studies across both the UK and China – and indeed the rest of the world – which are tailored specifically to your company’s needs.  A number of organisations – UK Trade & Investment and China-Britain Business Council to name but a few – are also on hand to offer further general advice and information.

For any businesses interested in investing or expanding into China, or simply wishing to get some idea of the potential this vast country has to offer, why not contact one of our offices?

China: +86 (0)10 6515 6642, beijing@b2binternational.com 

UK: +44 (0)161 440 6000, info@b2binternational.com 

USA: +1 914 761 1909, newyork@b2binternational.com 

Two news articles about the Chinese automotive industry have been circulating this past week.  First is the news that in January, China overtook the United States in monthly vehicle sales for the first time, according to figures from the China Association of Automobile Manufacturers.

If the trend continues throughout the rest of 2009, China will become the world’s largest vehicle market, having already overtaken Japan in 2006 to become the second-biggest auto market.

While car sales have slowed in China over recent months, the slowdown has been even greater in America, and car manufacturers are all looking at new ways to encourage sales - new advertising campaigns, sales promotions and pricing discounts, improved customer service and warranties, etc.

On the back of this comes news that China’s largest independent car manufacturer, Chery, which is known for its small cars, is hoping to introduce a Chinese luxury car line.

Still in the early stages, neither the launch date nor the name of the new luxury brand has been announced.

In the past, Chery has been criticized by some for developing more projects than it can manage successfully.  However, its new company philosophy is to concentrate more resources on a smaller number of tasks.

By announcing its intentions to enter a new market, we assume that the company intends to focus considerable efforts on serving this new segment, and we presume that it has carried out a thorough market assessment study to establish that there is an opportunity for its specific new offering.

In the latest issue of Asia Research, Alaric Fairbanks, General Manager of B2B International in Beijing, talks about setting up and running a market research company in China.  Over the next three blog posts, we will serialize his interview:

Tell me about B2B International

As the name implies, we work in b2b markets and are international.  We are a specialist business-to-business market research company, with our group headquarters in the United Kingdom and subsidiaries in New York and, of course, Beijing.  Our focus is exclusively b2b, and although we cover all b2b markets, we have particular strengths in chemicals, pharmaceuticals, engineering, construction and financial services.  In terms of services, our main focus is on full service research, covering market assessment, segmentation, customer satisfaction, new product development, competitor analysis and pricing studies, and our major clients are multi-national firms engaged in b2b markets.  In Asia we also complement our full service work with data collection.

What were the main challenges when you first set up the business?

We set up permanently here in 2006 and in many ways the challenges we faced when setting up in China were similar to those that many foreign-invested businesses in China, including some of our clients, face.  These include recruiting staff, adapting and integrating systems and working styles into the local conditions, and on a practical level finding reliable partners or suppliers, particularly in areas such as IT and financial services.  I regard these as important challenges to deal with, but the primary issue from day one was, and remains, generating business and delivering quality work.

Look out for Part 2 of the interview in our next blog post.

Jason Zhang was a little surprised when the five shirts his friend had bought for him arrived in the mail; he had been expecting to receive long-sleeved shirts and yet found his new garments had short sleeves. Although he thought he had been clear in his request, Jason discovered to his detriment that effective communication is not always as easy as you think…

Last summer, during my visit to Tianjin, I bought a couple of long-sleeved shirts in a department store. These shirts fit me very well and I really love this particular brand. Unfortunately, they’re not available in Beijing, where I live.

A week ago, I rang my friend who lives in Tianjin and asked her to buy five shirts on my behalf. During our conversation, I briefed her in detail on the particular brand name, the size, my favored style and color, and certainly what was an affordable price for me. I thought that was all the information she needed to make the purchase. However, I was wrong as I didn’t communicate to her one of the key pieces of information – long sleeves! In the meantime, she didn’t check this information with me either as she took for granted that short sleeves would fine with me. This is understandable, as Beijing is pretty hot in summer – with daytime temperatures as high as 38 degrees centigrade. Most people on the street have short-sleeved shirts, but my preference is long sleeves.

This is a real example to illustrate the importance of effective communication in our life and our workplace. Basically, in the workplace, at any given time, we all have to communicate in some way with our internal or external clients. As an effective communicator, you can bring real concrete benefits to your work and your organization. At the very least, you avoid having to do things twice, as you get it right in the first instance.  

In our capacity as professional consultants, perfect communication – both internal and external – is a crucial factor in building our sustainable competitive strengths, like efficiency, productivity, and a comfortable working environment.

As a business-to-business market research agency, our typical clients are marketing and business development professionals from national and international organizations. They come to us for help in making difficult and expensive decisions. At every point in the process, these clients’ expectations for effective communications from their suppliers are very high.

You would agree with me that the foundation to effective communications is precise information via an appropriate medium at the right time. At each contact point with clients in our work, effective communications are vitally important, from taking enquires, RFQ/RFP (request for quote/proposal), briefing, commissioning meeting, project design, through to the final reporting. It is our company’s normal practice to deliver an interim presentation, to ensure all the parties involved in the project have the same level of understanding of the exact project deliverables. 

Within the marketing research and consulting business sector, to ensure client liaison in an effective and efficient way, your essentials skills are listening, plus market insight, to understand a client’s particular business and needs.

In any communication, trying to use easy-to-understand expressions rather than special terminology or abbreviations, is a good idea. Let me give you an example. Last year, we conducted a market assessment study for a leading American industrial valve maker, to help them penetrate Asia’s pharmaceutical markets. For this market entry study, we used PEST (Political, Economic, Social and Technological) analysis to review the attractiveness of the opportunity and the barriers to entry to each individual market in Asia. When our project team leader and myself co-delivered the final presentation to the Client, we kept talking about PEST and IPR (Intelligence Property Right) issues in China. When we approached the end of presentation in the Q&A session, one of the audience asked the question, “What do you mean by PEST and IPR?” I then realized we should have clarified the abbreviations we had used.

It is quite normal in all walks of life and in all ways of communication to expect the audience to have the same level knowledge as we do. However, on many occasions, this is not the case. This is the reason why our project team always has detailed briefings, commissioning meetings and interim presentations with our Client. With these efforts, we can ensure both sides have the same level of knowledge and expectation from the marketing research and consulting project.

The other day, I got an email enquiry forwarded by our New York office. There were merely two sentences in the email: “We’re from Brazil looking to acquire a Chinese company. What is the cost and time frame for you to research this target company?”

How do you find the communication of this email enquiry? If you were sending out an enquiry for this sort of buying and acquisition study, what information do you think you need to provide to your agency?