What business lessons can you pick up from this image?

To understand and do business with China it’s extremely important to understand the lessons learned from the World Expo in Shanghai.

Here’s a quick glance at some of the lessons you should try to lookout for when visiting the Expo:

1. From the architecture, one can get an understanding of Chinese mentality. The China Pavilion architecture, aptly placed in the key place of the park, shows the mentality of “Middle Kingdom” with it’s centrally pointing tops, as if it were a backwards pyramid which rested solely on the heart of China. The giant building is an homage to traditional Chinese architecture with a “modern” twist. Read about the architect’s vision here: http://www.expo2010.cn/expo/expo_english/documents/em/node2326/userobject1ai49145.html
2. With torrents and torrents of people lining up outside each pavilion waiting to get in and get tickets it’s easy to recognize the differences between the way different countries operate their pavilion.  Obviously, the Chinese one is a major attraction to all Chinese and foreigners, so expect packed crowds. Notice the differences in service from each country.
3. With regards to the shows. It’s easy to see what Chinese people find interesting is definitely different from what the foreigners might find interesting. In fact, Chinese people are so used to seeing masterful performances by Chinese acrobats, or blazing speed demonstrations of Kung Fu by professionals raised to train to perfection from as young as 8 or 9, that certain kinds of demonstrations leave Chinese feeling quite unimpressed. Yet, ironically enough, the easiest steps in a Salsa dance show, or a Tango demonstration, will leave Chinese people breathless. Observe the differences and keep them in mind next time you want to impress your Chinese business partners.
4. Notice the positioning of the buildings. A lot of thought has gone into the exact locations of each of the pavilions. This can help understand the love of face and of giving face that Chinese people practice.

Anyways, there are countless more lessons to be learned. Which ones did you learn from the Expo?

It decided to leave a lot of it’s R&D facilities, as well as mobile and a few other of it’s holdings in the maindland, and the google.cn, although shut down, is now being redirected to it’s Hong Kong servers at google.hk. Allowing Google to still serve Chinese people with uncensored results from within China.

I have to say this was an interesting move and kind of the best option left for Google, after cornering itself with the announcements of pulling out and uncensoring. This will allow it to operate within China, and abide by the unique laws in Hong Kong which allow it to stop censoring it’s results.

It’s not all Green on the other side of China, however. Google now potentially faces being blocked from within the mainland and it’s search results not being available, as well as it faces challenges in transfer speed across the mainland.

To read more about Google’s Official Announcement, check out http://googleblog.blogspot.com/2010/03/new-approach-to-china-update.html

“Google had a strong fourth quarter, with 17% year over year revenue growth,” said Eric Schmidt, CEO of Google. “Given that the global economy is still in the early days of recovery, this was an extraordinary end to the year. Our performance in 2009 underscored the strength of our management team, the resilience of our business model and the pace of innovation within our product and engineering teams, which continued unabated throughout the downturn. As we enter 2010, we remain hugely optimistic about the internet and are continuing to invest heavily in technological innovation for the benefit not only of our users and customers, but also the wider web.”

http://investor.google.com/releases/2009Q4_google_earnings.html

ON CHINA:
Eric mentioned that the China issue has been covered well in the press, so he just summarized 3 separate facts
1. The Cyber attack on google which probably eminated from China, but whose true origins are unknown. He did assure that Google has made changes to prevent attacks.

2. Discovered monitoring of human rights activists.

3. The made a decision for these and other reasons, to no longer willing to apply censorship rules in China. As of today business of China is unchanged. They continue to follow the laws, but within a short time, they will make changes there.
Eric Schmidt assured that they do wish to remain in China, that they like Chinese people and their employees there, but that they want to do business on different terms. He reassured that they are quite committed on staying there.

The gist of the story, if you still haven’t heard of it, basically, they recently suffered cyber attacks from super high-tech hackers, on top of the recent conflicts they’ve been having with Chinese writers with Google Books, not to mention June’s 2009 incident where Google was shut down for a couple of hours due to “porn” being shown through Google results.

Anyways, now Google seems to be completely fed up and willing to walk away from their China operations, which have been rumored to generate around $300 million dollars in revenue in 2009 http://www.nytimes.com/2010/01/15/world/asia/15google.html

Others argue that even though Google’s market share is so low, only around 30 some percent, the Chinese Internet market is huge and growing amazingly fast, so future profits would be too big for Google to leave behind. Google has commented that this isn’t a PR campaign, nor are they considering pulling out because of profits being low or not having enough market share,  but they claim that they are actually doing it because they no longer want to continue censoring their results.

Ultimately, in the west, Google is mistakenly seen as a hero for standing up to a country whose Government and culture we understand very little about and due to that often fear, and show a lot of disrespect towards. Which sets the way very nicely for Google in the future with their plans of “world domination.” All jokes aside, what’s interesting is the show of differences and similarities between both Chinese and American culture.

I’ve read countless of comments praising Google for not willing to follow Chinese law, or for no longer willing to cooperate with what they think to be an “evil” government. On the other side, I’ve heard from Chinese people who feel that they don’t need Google, nor any westerner who thinks himself so righteous and all-mighty to quickly criticize the Chinese way of life and the Chinese government. Keep in mind that western studies held in China have determined the government’s approval rating to be around 70-75%. Some other Chinese think they can do fine and well on their own without a foreign company trying to dictate them how they should do things.

Whether or not Google leaves remains to be seen. What’s a bit scary is the technology that was developed to pull off hacking into Google, Yahoo, and other large corporations. McCafee released a statement in their blog make sure you read up on it, because this truly marks the beginning of a new kind of war looming around if we don’t change our behavior and all start working together as a global community.

So what will it mean for China and the world if Google does leave?

Ultimately, the Chinese government won’t mind much. They will let Google go, but they will try to create new policies to make sure other Multi-national companies do not feel afraid of doing business there. This might pave way for new policies protecting technology companies, since right now China has a huge initiative to encourage technology developments, technological schools, such as the countless software colleges now recruiting foreign talents, etc,  they will make sure that investment is safe.

 Furthermore, the Chinese government will probably crack down on these free-for-all proxies that have been a flock of illegal activity to show the world that they are moving forward to responsible development and show the world they would be a suitable country for leadership. Hackers will just end up using Proxies on other countries in the world where policying of the Internet isn’t as strict, and we will continue to battle cyber-espionage, and cyber-wars for years to come.

I’m pretty sure that business will go on as usual. Critics of China will continue to criticize instead of learning to understand the culture better, and China will continue it’s economic trends.

As for the gaps left behind by Google, Baidu will probably increase their share up to 70%, the rest of the people whom had been won over from Baidu to Google will find alterior means of search, which will lead the way to Bing gaining a larger share, probably around 5-10% by 2011.

I expect a larger number of Chinese will learn how to access resources outside of China, or what they call “jumping the [Great] fire-wall,” so they can get unfiltered results from Google.com, and the internet. But I don’t think that will create any instability from within China.

-Edit – 1/16/2010

Inside Story with a word from Google Inc.

Iphone in China can succeed. Here's how...

So Iphone entered China early September. And thus far, no more than a few thousand sales have been registered. Where did Apple go wrong?

The problem isn’t due to the Iphone’s popularity, as there is a huge demand for Iphone’s in China. One can see black-market Iphones all over the place, which sell for anywhere from 4000 RMB to 6000RMB (about $600 to $875 dollars).  It also isn’t the fact that there aren’t enough cell phone users. A China news agency report printed early May 2009 showed that after introduction of 3G technology, mobile users grew to a total of 670 million people. That’s almost twice the population of the U.S.. Also, it isn’t that people don’t want a new phone since they already have one, most people I met there change their phones on a frequent basis. So, shouldn’t Iphone be making a huge blast in China?

A recent Forbes article by Shaun Rein on why Apple is Failing in China outlines some interesting  points. Here are some of my observations and commentary to his article:

1. Apple entered the market assuming China is the same as the U.S.
   • Anyone who’s been in China knows how easy it is to get a pre-paid phone number and keep that as long as one wishes. Iphone is making Chinese consumers lock in to an expensive phone plan without realizing that model, although it works for the U.S., has never been popular in China. Chinese like to change phone numbers quickly and easily, although most don’t. And imiting their “options” isn’t going to win over any new customers, considering they can get a black market iphone for around the same price that doesn’t do that.
2. Apple didn’t understand consumer spending
   • Chinese usually prefer to buy cheaper plans, although they will go all out on getting a phone. They prefer texting over calls, etc. So by having them lock into expensive call plans, they are turning off customers. No pun intended.
3. Apple didn’t understand the competitive marketplace and partnered up incorrectly
   • Partnering up with a telecom (Unicom) that sells to a least wealthy consumer and has lower number registered users was a mistake.
   • Most people believe this company to have worst signal, and most people don’t want to change carriers, let alone change phone numbers.
4. Apple took too long to enter China
   • If you are not in China quickly, then the black market for your products will start becoming the main market and it’ll be harder to get back in when u decide to.

So what can Apple do? They are locked into a contract with Unicom, but have to make the best of it.

• Spend time doing more market research to understand what people want out of a phone.
• Find a way to address needs, such as: being able to keep existing phone numbers, working with Unicom to change the people’s perceptions of their service (ie providing better coverage, affordability, etc)
• Reach out to other businesses and educating them on the power of developing great apps.
• Chinese people don’t want “convenience” through the internet, as much as Americans. They are more interested in developing connections, playing games, and keeping informed, learning English, etc etc . So Apple should develop free apps that work as English dictionaries, news feeds, as well as reviews of restaurants, entertainment, and others. (those would attract the cosmopolitan crowds at least)

The lesson here is find good partners, do your due diligence, and plenty of market research, or partner up with people who understand the market.

Well in the past few years he’s transformed himself into a total underground Hip Hop Artist. He’s actually completed a ton of songs, and will finally get his album out on stores.

Anyways, check out his stuff here http://xennightz.com/enigma_review_kit/ he’s giving out the album for free for halloween.

Speaking of halloween… what will I be doing this halloween? Yup, that’s right. I will be working on my fashion site, trying to recruit several writers to boost our SEO, of which it’s been going great. We already rank on page 1 for our main keyword and have number 1 rankings for several other profit-bringing keywords. Things are great and getting better. Anyways, I will also be setting up several more blogs for our business, as well as trying to get bloggers to write about us .

Finally, plans are on the way to start a new business. Which will be a small business consulting, where I will help small business owners rank highly for google and yahoo and other search engines so that they may be easily found when their clients are trying to look for their products. Gonna be great!

I recently had the great pleasure of catching up with current U.S. wushu champion Alfred Hsing and finding out his motivations in wushu, and the keys to his wushu success. This motivated a series of martial arts tips on how to succeed in life in his blog. The success lessons he learned in wushu and business can be applied to any endeavor so make sure you read up on them. Below I have reorganized the information slightly and created an acronym to easily remember the points. Here you will find just a quick summary, but get to his blog to read the full article:

Success in Wushu can be Summarized with the acronym WUSHU:

1) W for Work – Be consistent and work smarter/harder than the rest.

2) U is for Undeterred and Unchanging Focus – when you are working, give it your undivided attention and focus on the work at hand by eliminating distractions. Also, focus on one goal at a time, and don’t move on until you have completed the goal at hand.

3) S is for Sleep and Recovery – Get rest and have time for just fun- You will come back much more refreshed and more effective.

4) H is for Heroes – Surround yourself with people who are getting the results you want and learn from them. Surround yourself with the Heroes, be they Zhao Qingjian, Wu Di, or Bill Gates, Peter Drucker, Jack Welch, Kotter, Brad Fallon, etc.

5) U is for Unique and Undisturbed Environment – Immerse yourself in the appropriate environment – Don’t make your workplace the same as your “rest” place. Make sure you have a place where you can just focus on work, a workplace that is only used for work, and where you can concentrate solely on work.

Anyways, check out his great article on some great stories on how this lead to him becoming number 1 spot on the U.S. wushu team.

What do businesses need to understand about the Shanghai Expo and the opportunities it will open in the market?

The next 2-5 years will see a dramatic growth in a few areas. Here’s actually my take on this.

I just attended an expo in Beijing promoting the Shanghai Expo 2010. ???????There are two major observations and some conclusions that I can draw from the information information given there.

1) Japan, apparently known for having won the award for best pavilion several times, will probably win the award this year. Their pavilion is 80% focused on Green Technology. Their winning will be due to Japanese engineering as well as the world’s attention on Green Technology. This will draw the attention of China and the desire to step up it’s Green Tech efforts even further. Currently the stimulus plan allocated a large sum of money on this sector, except I’ve heard that it’s not easy for Foreign Companies to get direct access to that money other than with partnerships with Chinese companies. Who knows what will happen afterwards though.

2) Japan winning, as well as the world focusing so much on Green Technology will further focus China’s eyes on encouraging innovation. China, known for wanting to learn from other countries and “copy” their style, will be further convinced that in order for innovation to start coming out of China certain laws and enforcement will need to be in place. This will increase the desire for the Gov’t to protect intellectual property rights.

Out of these two results, I think we will be seeing a huge increase in Green Techs focusing on efficiency as well as alternate sources of fuel, and China trying to lead the efforts in innovation in these aspects. Based on the fact that the Gov’t here has been pushing a lot in certain “experimental” hubs to promote development of technology, I think all these things will lead to creating a “goal” for China to become the world’s innovator. How likely they are to achieve that goal is another issue altogether, but the fact that it will become a goal will reveal a lot about where China will be headed.

What does this mean to business in China? Basically, If I were to bet my future on any market in China, I’d start learning either of the following:

either a) Ecommerce and Internet, which has a correlation with intellectual property rights as well as the push from the gov’t to promote the tech sector.

or b) Green Technology.

I’m pretty confident that the pattern that China is taking will lead to these results, and my advice to all those interested in China right now is to start looking for ways in on any of these fields and get first mover’s advantage.

What do you guys think will be the effect of the Expo?

From the 1980s on, this policy marked a new generation of Chinese who were often referred to as “Little Emperors.” Most youth tended to be the only child with several grandparents and parents often fighting for their attention. Thus many of these youth developed an attitude that they were the center of the world. There are several other problems this policy created, as well as some other solutions. However, one thing is certain, starting from the 80s generation (referred to in Chinese as the 80? ba – ling- ho) the youth in China have developed a completely new attitude towards life.

Some of the obvious attitudes are a need for self-expression, individuality, patriotism, as well as westernization – ie. love of basketball, soccer, F1, Tennis, etc etc. In Beijing and Shanghai this also means a higher English ability than even their Chinese teachers. (In 2nd tier cities, the English level is still fairly low, but with an influx of “foreign experts” give it time before the overall English level as a nation becomes highly proficient).

Some other attitudes and believes can be seen on this report: China Youth Trends and Business Implications, which separates major groups of Youth into categories. Some of the observations are obvious, and some speak of only a small minority of groups (Check them out since I will not re-state the opinions of their findings). Of particular interest to businesses are the following views which I disagree with or add comments to:

1. Social Participation:
   • Pertains to big events, such as the Sichuan Earthquake, or the Olympics. But it’s still rare to see much social involvement besides posting on blogs or forwarding “chain letters” amongst the majority of youth. Community service is all but non-existent in the way we know it in the west. Charity is still seen as “suspicious.” Probably due to the idea that “people who do favors for you, will surely want something in return.”
2. Searching for meaning:
   • Chinese youth, are often confused about the world and sometimes feel “lost.” Having grown up their whole life listening to their teachers and taught to memorize and not encouraged much to develop critical thinking skills (Seen not only in adults and mid-managers, but also in the youth) means that those businesses that can create a vision in the youth, and can appeal to their philosophical searches will attract more and more business.
3. Action:
   • Chinese youth are taking more and more action, that is true. If by action we mean posting on forums, and boards, and talking about things on QQ (chinese ICQ) or MSN, then yes, Chinese youth are more action than “talk.” However, those that take real “action” is still a small minority of the Chinese.
   • What this means to your business? You need to show the youth the action they talk about. Your companies actions should include those topics which the youth flock about on the blogs, forums, etc. So investing on a web 2.0 specialist is a good idea to work with your branding and PR team.
4. Identity:
   • Chinese youth are searching for their unique voices, talents, etc. The 90s generation is moving away from the “Brand names” shopping binge of the 80s generation towards a more “unique-centered” idea which showcases their individuality.
   • What this means for your business: Encourage individuality not in your products, but in the uniqueness it will create for them.
5. Pride in Chinese Identity:
   • While, the Chinese are very proud of their country, I would not go as far to say that young people have started to be more interested in traditional culture. In fact, more and more youth are becoming more and more westernized. It is a small minority of those who practice Chinese Martial arts, enjoy Chinese Opera, or enjoy any of the other cultural traditional aspects that China provides. What we’re seeing here in China is more and more youth-oriented westernization while resonating the words “we love china.”

One thing is certain:

1. Expression of one’s opinions and the use of the Internet is becoming more and more prevalent, which is a good thing for businesses, so long as they are willing to make the connections with them. Whenever a scandal props up, or a political view, Chinese youth are known to mobilize and post on forums, blogs, etc. Samples can be seen of the time a CNN spokesperson insulted government officials in China and it ignited an online war against CNN. More and more youth use blogs, Instant Messaging as daily communications, most are on MSN or QQ (Chinese ICQ) during work, or at their dorms. So viral campaigns with strong messages get across quite rapidly
2. What this means:
   1) Stay away from political arguments and disagreements.
   2) Feed into their “patriotism” much the way Adidas did during their promotional campaign for the Olympics, showing 1.3 billion people standing behind every athlete
   3) Encourage social media activities, such as blog postings, reward with incentives by creating a community.
   4) Communicate social action and the ways you are empowering Green Energy, Youth, etc
   5) Branding  and Marketing Campaigns should focus on the gains of the individual in terms of self-respect. Gaining admiration by fellow youths, creating a “unique” experience for each customer, customization of products to fit each customer’s needs, etc etc.

Below you may find slides from the presentation from China Youthology Consulting.

China Youth Trends And Biz Implications

View more Microsoft Word documents from chinayouthology.

But besides these what does it take to be succesful at doing Business in China? Many people who have been doing business in China for a short-while might think it involves Heavy Drinking of White Spirit Wine (aka Bai Jiu, aka, white petrol), and spending countless nights at KTVs with new prospects.

While, it is true that is one of the most direct ways to build a “relationship” with new clients, westerners make the mistake of thinking “we’ll drink with them tonight, and tomorrow we’ll sign the deal.” I see this kind of mentality over and over, in every deal and every consultation I give.

In this website, I will try to illustrate to those interested in China the proper way of doing business. You will learn what works, what doesn’t, what has already been tried and why did it succeed/fail, and what hasn’t been tried yet.

My goal is that I will be able to help as many of you as possible, and hopefully, when you have taken my advice and gotten some level of success, but aren’t sure where to turn to next, you will come to me for further help.

So suscribe to the RSS, and keep up to date with all the latest findings.

Straight from Beijing, this is MarcP Goodman.