Chinese architecture in The Forbidden City, Beijing, China. Photo by James Chan in 1987.
Tom, one of the first three clients I got when I founded my consulting practice in 1983 called me out of the blue today and said: “I don’t mean to stroke your ego and mine.” I said: “Why?”
Tom was vice president of a scientific information company in 1983 when he hired me to help him enter the Chinese market. In 1994, he joined a manufacturer of industrial products as its global sales vice president. Since he had traveled to China with me before, he was eye-witness to my expertise and character. He persuaded the owner of the industrial manufacturer to hire me.
A consummate marketing executive himself, Tom and I began promoting the company's industrial goods to China. We attended trade shows. We recruited a distributor from my personal network of friends in China. The owner traveled with us to interview the distributor and to visit with potential customers. Business was slow in the beginning. People were skeptical and unenthusiastic. They wouldn't believe the efficacy of our products compared to cheaper, locally-made alternatives. Our prices were high. Shipping and other import costs added an additional 35 percent to our quoted price. Marketing western-made products to the Chinese was an uphill battle.
Business came but it was slow and limited. A few years later, my relationship with the impatient owner soured. One day, the owner insinuated that he had spent more money on me than what he got from the Chinese market. Yet, despite his complaint, he still wanted to continue to engage my consulting service. I came home and wrote him a nice but business-like letter thanking him for lunch but said that I was not able to take on his assignment any longer. A few years later, my client Tom also left the firm.
A few days ago, Tom was tipped off by a staff member of the manufacturing company at a Christmas party. The man told Tom that China is now the company’s key customer worldwide. From a trickle of products during the mid-1990s, the company now ships one to several containers every month to China.
I asked Tom: “What was their lucky break?” Tom's response shocked me. He said: "It's us! We were their lucky break!” He continued: “It took years before word-of-mouth works in China.” If my client says so, I won't argue. Unlike the owner, Tom has never blamed me for giving him bad advice and wasting his firm's money.
China is the proverbial "slow" market. This has been my experience working with more than 100 U.S. firms entering the China market since 1981. The shortest time it took for us to get a new customer was 14 days. But it was a one-time deal. The longest customer took us 18 years to win over. The latter customer not only "pirated" our products, they thought they were technologically better than us. But they finally bought from us repeatedly and the business has been very profitable.
Like a siren song, instant success in China often turns out to be a lure and a snare. The lasting customers are those that are slow and hard to get. We reap what we sow.
Just a few days after I had published this story, our China representative got us a new customer in China. So, the longest time it took to get a new customer is now 33 and not 18 years. If you can build a reputation for your products in China long enough, your history there sells for you.
James Chan, Ph.D., Consultant Asia Marketing and Management (AMM) 2014 Naudain Street