China Law Blog

Interesting interview with China consultant, Kent Kedl, in Upsize Magazine, with some good information, succinctly put. The article is entitled, "‘Get dragged’ into China, advises Technomic Asia founder," and it focuses on Kedl's advice for small and mid-sized companies getting into China:

His No. 1 piece of advice: “Get dragged kicking and screaming to China,” he says. “If there’s another way to grow your company, do it now.” Due diligence on your specific market is important, he says, citing companies that were attracted simply by huge population numbers. “They went in thinking 1.3 billion is a market. It’s not. It’s a population.“Small to mid-sized companies have one shot at this. Companies can damage themselves.”

Kent is so right. I have worked with big companies that do everything wrong in going into a new country and lose tens of millions of dollars in the process, yet for them, that is no big deal. And I have worked with smaller companies that do one thing wrong in going into a new country and that causes them to lose their entire business, not just their new foreign operation. Put another way, small companies have far less room for error.

No. 2: Recognize there are different ways to go global. “When companies say you have to be ‘in’ China, it depends what the definition of ‘in’ is.” For example, he says, one of his clients put one person in the country with a cell phone. Two years later they had generated a couple of million dollars in revenue and could build from there. Kedl has co-written a book called “The China Ready Company,” about assessing whether you’re ready to enter China. The same principles apply to other countries, he says. “There’s a lot of ways to get in there,” he says. For example, a company might have an old technology sitting on the shelf that is obsolete here but not necessarily there.

So true again. My firm actually has a couple clients that make technology products in China for sale within China that are too out of date to sell in the West. These products are better than what the Chinese are making and cost far less than the latest technology. China keeps these companies in business.

No. 3: Don’t latch onto one particular tool and call it a business strategy. “I had one client say, ‘We want to do a joint venture in China.’ That’s like my saying, ‘Where are you going on vacation?’ and you say, ‘I’m driving a Buick.’ Do the thinking on the front end

So very true, and what a great example.