Cracking China: Stream takes the leap
When businesses think about going international, they’ll often look nearby: France, Germany – maybe even the US if they’re adventurous. But for those looking to take their business to a whole new level, the East holds the key.
Shanghai Pudong
One company to do just that is Stream Communications. But what’s the appeal of China? What has Stream’s CEO Nigel Chadwick learnt? And importantly, what are his top tips for other entrepreneurs looking to break into one of the world’s fastest growing economies?
Stream is a provider of enhanced mobile network services for machine-to-machine communications (“M2M”, also known as the “internet of things” in the telemetry industry). In short, Stream helps machines communicate with one another, making them more efficient.
What better place to bring this technology than one of the world’s powerhouses, China? UK exports to China totalled some £7.7bn last year, and growing fast.
So how did Nigel Chadwick do it?
To start, Chadwick went on a mission to China with the UKTI in order to investigate M2M’s future, and whether China would be a suitable country to target.
The UKTI offers assistance to UK-based businesses entering international markets, actively encouraging foreign investment.
Understanding your market (and the risks involved) is also key.
In China, the success or failure of your business depends a lot on “guanxi”. This is a network of relationships along the lines of “you scratch my back, I’ll scratch yours”, but the relationships don’t just happen overnight – they depend on regular favours.
The Chinese business culture can be very different to traditional Western customs but, says Chadwick, there’s a lot we can learn from them.
“Look for a champion in the most unlikely places and don’t rule people out,” he says. For example, Chadwick himself found a role model in his translator. “She was inquisitive, willing to learn and showed initiative.”
But it isn’t only different business customs you must worry about in China – intellectual property rights can also be a big worry. Although, in recent years, the Chinese government has passed laws governing intellectual property rights, they’re still not actively put into practice.
“Be aware, be savvy and make full use of the law firms in China that specialise in the protection of your ideas,” Chadwick suggests.
For all its faults, he warns that you shouldn’t be turned off by China – view it as a potential springboard into the region, such as to Hong Kong and Singapore.