Beijing's Bars Offer China Business Lesson. Sometimes A Martini . . . .
Interesting post over at Beijing Boyce regarding a sudden change in ownership at Beijing's Shooters bar:
Announced unexpectedly on 11th November the ownership of Shooters has changed. Just over one year after setting up the business from scratch and turning the spot around from a struggling Russian / Dumpling restaurant into what we know and love today, the proficient Caojian and Ajian have parted ways with the landlord. The landlord, a silent partner and investor in the business, believes he can run things as successfully without the support and experience of the ever popular barmen! All is not lost as Caojian and Ajian have learned a lesson or two and hope to open another bar soon, although the place and name are still to be decided.
Beijing Boyce goes on to call these bartenders "among the most efficient around" and predicts they will be "back in action soon."
Now I really do not give a damn about Beijing's bar scene (when I am there I just go where Beijing Boyce takes me anyway), but this article is really quite indicative of what foreign businesses face in China. But first a logical construct:
1. Chinese companies tend not to be good with service.
2. Chinese companies tend not to recognize the importance of good service.
3. Chinese companies tend to undervalue the role of good service in business generation.
4. That which people tend not to value as important also tends to be thought easily replaceable.
Now of course I am generalizing here, but seeing as how I have seen example after example of the above in my firm's China legal practice, I am confident this as a reality of China business life. I usually see this at play when a Chinese company (usually a manufacturer) starts to think it no longer needs my North American client (usually a product designer with a strong North American distribution network and brand name). The Chinese manufacturer fails to understand that selling a product in the United States requires more than simply manufacturing it in China and putting it in containers. It fails to realize distribution and marketing take both time and skill and are key to North American sales.
I am at this very moment dealing with this situation for an American company. Yesterday, we had a long conversation about his case, during which I analogized my client's Chinese manufacturer to American doctors. The Chinese manufacturer has come to assume that because he has made so much money manufacturing the product (almost exclusively for my client), he must know exactly what he is doing and his knowledge must extend to North American distribution and marketing. My analogy to American doctors is based on their always seeming to be victims of high level financial scams, usually based on the doctors' mistaken belief that their knowledge of surgery or anesthesiology has to translate into something as "simple" as business as well.
Or maybe sometimes a Martini is just a Martini.
http://www.chinalawblog.com/cgi-bin/mt/mt-t.cgi/2259
Beijing's Bars Offer China Business Lesson. Sometimes A Martini . . . .:
Comments
"...usually based on the doctors' mistaken belief that their knowledge of surgery or anesthesiology has to translate into something as 'simple' as business as well."
Professionals in all disciplines tend to have difficulty recognizing where their expertise ends, although I think it more common among doctors (especially psychologists). I just addressed that issue in my own blog. BTW, lawyers aren't immune to that, either :), although I have noticed that you tend to do a pretty good job in that regard.
Posted by: instructor | November 19, 2007 7:23 AM
instructor,
You are right that all professionals have this tendency. I guess I just see it more often in doctors because when they "move over" their payback tends to require a lawyer.
Posted by: China Law Blog | November 19, 2007 9:52 AM
So, how does having a Western lawyer then prevent a Western company from getting the shaft by its Chinese partner?
Posted by: Paul M | November 19, 2007 5:30 PM
Paul M,
The role of the lawyer is limited. Lawyers can only do so much. What we do is draft up the right contracts (in Chinese, usually) so that the Chinese partner will at least think twice about giving "the shaft" and so that if the Chinese partner does give the shaft, the Western company has as much good recourse as possible. I think of we lawyers as 1/3 of a three part stool. One, choosing the right partner, two, properly documenting the transaction, and three, proper and constant monitoring. Weakness in any of the three will often lead to problems.
Posted by: China Law Blog | November 19, 2007 6:14 PM
Dan,
Thanks for the plug - I am going to give you a better pub crawl next time you are in the Jing.
As you can imagine, Shooters is just one in a long line of bars that have gone through this issue.
Case in point: my all-time favorite bar, First Cafe, had two great bartenders. Underpaid and underappreciated by the owners, they were a big hit with the patrons and that brought in a lot of business. I suggested on many occasions to the owners to better pay the two bartenders or lose them.
You can guess what happened: - they lost them The two bartenders made a deal with the landlord next door and turned a spot that had been a failure into a quick success. (First Cafe was chai'd about a year later and none of the owners' subsequent bars have lasted.)
The landlord appreciated this turn of luck, right? No, within a year, the two bartenders and the landlord had a falling out and the landlord took over the business with a "how hard can it be to run this place" attitude. Within months, the place was dead. (It was finally taken over about six months ago by another group who've turned the place into another success - let's see the landlord's reaction this time around).
The two bartenders then joined with a foreign partner and opened what many consider to be one of the best, if not the best, cocktail bar in town - Q Bar. It's been open for more than a year and doing very well.
This all happened in about a year. A lot of lost opportunities for the owners / landlord that didn't appreciate the value of the two bartenders and the business they brought in.
Cheers, Boyce
Posted by: boyce | November 19, 2007 10:39 PM
Possibly good luck but the only bar experience I had in Beijing was notable for its good service. Trying to remember the name now. I have the lighter in my suitcase but it might have been Suzie Wong or something.
Posted by: Charles Frith | November 23, 2007 5:23 AM