Posts Tagged ‘global business’

China’s Super ConsumersWith the rapid rise of China’s economy has come a new class of “super consumers” who are ready to assert themselves the way American consumers have over the last century. Already there are more than 500 million online shoppers in China and some 1.5 million millionaires in a country of over 1.2 billion people. This huge population—four times the size of the United States—presents an enormous opportunity for foreign companies, but the long history of China and a language and culture so different from those in Western nations present many pitfalls as well. As Savio Chan and Michael Zakkour explain in China’s Super Consumers, newcomers to the market must take the time to understand Chinese history and culture and the special challenges of doing business in China.

The authors provide the following tips on doing business in China:

  • Companies that want to succeed in China need to understand its historical culture. Group harmony matters more than individual liberty. Networks of trusted family and friends are so important that Chinese spend a good deal of energy maintaining these networks. Relationships are more complex and agreements more contingent than in the West. Even the language favors nuance and ambiguity over directness.
  • In the last decade, the Chinese consumer has been on a meteoric rise with rapid urbanization and growing disposable incomes. This new wealth, together with the sheer size of the country, has made the Chinese consumer a global force. In addition to the mainland Chinese market, there is a huge demand for the products, services, and experiences Chinese overseas travelers want to buy.
  • Retail channels, supply chains, and marketing in China differ somewhat from those in the West, even when they appear outwardly similar. However, China’s distribution infrastructure does not yet match that in the West. Retail channels tend to be single brand and can be expensive to sustain. Therefore, e-commerce is highly attractive and a low-risk path to entry. For luxury goods, Chinese buyers expect to see flagship stores.
  • China is not really a single market–it is an amalgamation of markets that are defined both geographically and by customer type. Businesses must understand the need to customize their offerings and approaches to serving each of these markets differently.

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In China Versus the West, Ivan Tselichtchev describes the Western economic crisis that occurred parallel to unyielding Chinese growth and how this created a global power shift. He explains the genesis of China’s stronghold. It refuses to accelerate the appreciation of its currency, it actively invests in Third World countries to gain access to natural resources and garner political clout, and its national resources companies now compete globally. China is also emerging as a technological innovation and R&D center, and has used its financial strength to acquire many Western companies. China’s economic strength allows it to shape global markets to its advantage. The West requires a comprehensive China policy that increases exports, enhances competitiveness in a global market with China-imposed rules, counterbalances China’s influence in Third World countries, and retaliates against China’s unequal conditions for competition.

To download three free summaries, please visit our site.

Related book summaries in the BBS library: The Coming China Wars, Doing Business in China, China’s Megatrends

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Over the past few years, China has transformed itself into a powerful, consumer-oriented culture, and many Western companies have flocked to China to take advantage of this new marketplace. However, entrepreneurs from the United States and Western countries often fail to realize that transacting business in China is a far cry from making deals at home. Ted Plafker, a Beijing correspondent for The Economist, leverages his extensive experience in Chinese culture and entrepreneurship to offer a primer for newcomers who are planning to expand their business into China. According to his book, Doing Business in China, “As many foreign companies have already proven, success in China is possible, but only for those with the patience, persistence, and resources to see it through.”

For a free trial of EBSCO Business Book Summaries click here.

Related book summaries in the BBS library: The Coming China Wars, Getting China and India Right, Superfusion

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