While I was visiting MFG headquarters in Atlanta yesterday, I had the pleasure of sitting down for a few minutes with James Jin, who runs MFG’s Shanghai office (which covers all of Asia at the moment). James, who hosted last year’s webinar on Surviving China’s Rapidly Changing Sourcing Tides is a rare character who not only deeply understands both the North American business world and the Chinese business world, but who also sees what’s needed to bridge them into a more seamless global marketplace, which is something he does on a daily basis through MFG. It was a pleasure to discuss both what he thought were the most critical areas of focus for MFG, and other companies doing business in China, as well as what his biggest challenges were, because it not only highlighted the differences in doing business with China, but also the similarities – which I don’t think enough people spend enough time on.
From James’ perspective, the three most critical aspects that MFG (and other businesses entering or doing business in the Chinese marketplace) needs to focus on are:
- Any international business can’t afford to miss the China market
Low cost country sourcing might be going away, or changing in nature, but China is here to stay as not only a huge supply base, but an economic development opportunity.
- There is a huge buy-side demand, growing larger by the day.
Not only does China have one of the largest emerging middle-classes in the developing world, but they already have one of the largest middle-classes in the world. (Think about it, they have over 1.3 Billion people!) China is not just a large supply-side opportunity, but they are a large sell-side opportunity for any company that can offer the right products at the right prices.
- The key to success is to think globally, but act locally.
Doing business in China requires a balance and an understanding of local culture and geography.
However, James’ answer to my inquiry on the three biggest challenges to doing business in China was even more revealing on what it takes to do business successfully in China than the three most important areas on which you need to focus. In short, the three biggest challenges are:
Despite the cultural and language differences, the reality is that doing business in China is just like doing business with most developed countries. They’re very mature about their approach to business (they understand that business ebbs and flows in a repeated cycle, and that just because they’re getting a lot of business today, that doesn’t mean they’ll be getting a lot tomorrow and that they’re going to have to work to get and keep new business), they have new plants with industry leading technology (in fact, some suppliers have the most modern plants in the world for what they produce due to recent investments to keep up with Western demand), the leaders understand that it’s all about the people (as almost everything but the human equation can be automated these days), but, even with 1.3+ Billion people, it’s a constant struggle to find the right people with the right education and the right skills for the job. Especially when they have to play in a global marketplace.
As for what’s going on with the rest of MFG, you’ll be hearing a lot more from them next quarter, and I’ll have more to discuss at a future time as well, but for now, I need to hit the road again and wonder just what Willie was thinking. (Obviously, he didn’t drive his own tour bus!!!)