Q2 2015 Insight

CPT-Keys to Success in China

 

Reprinted text of article published in Global Ventures: Summer Issue 2015 written by Jonathan Hemlin.

Curiosity, politeness and toughness are the keys to success for Saskatchewan exporters looking to enter China, it all comes down to the letters CPT: Curiosity, Politeness and Tough­ness. “When you’re going after a market like China, you have to be intellectually guard­ed, and you have to be polite because you’re a visitor,” said expert John Gruetzner, who recently gave a presentation in Saskatoon to STEP members on exporting to China. “You also have to be tough, persistent and not give in to all the demands China makes; they’re a tough customer. My standard is don’t get mad, get what you want.”

 

When it comes to business relations with China, Gruetzner has a very particular set of skills he has acquired over a very long career: market entry and sales develop­ment, investment advisory, capital raising and corporate government engagement strategies.

 

Gruetzner is the founder of Intercedent, a company founded in 1991 that has partic­ipated actively in the economic transforma­tion which has taken place in China. Before founding Intercedent, Gruetzner served as the head of the Canada China Trade Council in Beijing. Gruetzner, who received a B.A. in Political Science from the University of To­ronto and studied Mandarin Chinese at the University of Nankai in Tianjin, has lived and worked in China for over 28 years. In that time, he has developed a large net­work of commercial and political contacts.

 

He said the first step for a Saskatchewan company looking to strike a business deal in China is preparation. “You have to define what you perceive as success in the market and then resource behind that in terms of capital and human resources. Ask yourself a critical question: ‘Who is going to buy this and why?’” Gru­etzner said. “A lot of times people have been selling in their core markets – within their province or North America, for ex­ample – and they stop asking that because their customers know them. Most of us are set up to explain why the client should buy from their company instead of the competi­tor. The more critical question you’ll face when you’re selling internationally is, ‘Why am I buying this in the first place? What will this product do for me?’”

 

Once the company has done its research, Gruetzner said the next step is to identify a targeted approach. “You should develop a getting into China strategy – including your profitability and first sales – but you want to bring the fo­cus down to a smaller number of custom­ers and limited number of locations be­cause you don’t want to run around the country chasing every opportunity,” he said. “You can look at springboard markets like Hong Kong, Taiwan and Singapore. Test your products and your value-added proposition and make some money when you’re going after China. China is a long-term market because it’s the world’s larg­est economy. It’s complimentary between what Saskatchewan has to offer in terms of natural resources, agricultural capacity, and technology for China’s short-term and long-term needs.”

 

Once contact has been established in China, Gruetzner explains that the focus will eventually shift to client engagement. “It takes time to get into a market like China,” he said. “Ultimately, sooner rather than later, you have to retain the same level of engagement that your home customers and market require. They’re seeking the same level of service, same level of inven­tory and same level of speed, or response. Decide what the potential of your business is and your ability to support that business in China.

 

“You can go from your own investment to a partnership with a Chinese or foreign company, or a co-operative relationship with an agent or distributor. You have to look at what you’re doing, what you’d like to be doing, and come up with the right structural approach

 

Reprinted article published in Global Ventures: Summer Issue 2015.

 

Welcome to Global Ventures - a quarterly business publication produced by Saskatchewan Trade and Export Partnership (STEP). 

 

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