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The Year of the Tiger – Doing Business in Asia

December 21, 2009 | Jane Toohey

For some of us, one location for our business is more than enough. For others, venturing online, into new suburbs and cities is crucial for maximizing returns on equipment, your brand, your products and potential. But what about expanding your business into Asia? Have you ever been tempted to take on the Dragon or are you happy enough to let your competitors pounce?

It’s an exciting time in Asia and even if you don’t think you’ll ever have a branch of your business or be selling your product there, many of the lessons can be applied to growing your business locally too.

Asia is vast, the population is huge and it’s certainly a lot closer to do business with than Europe or the Americas. But it is close only in distancenot in culture. Never assume that your products or services will match the same needs and wants as they do I Australia.

China and its population of 1.3 billion people is on a massive growth curve and the four Asian Tigers: South Korea, Taiwan, Hong Kong and Singapore have all maintained enviable growth rates over the last decade. This translates to higher household incomes and more purchasing power. For Australian entrepreneurs looking to take their businesses to Asia, expectations are running high.

But wait before you book your flight to Asia, consider the following facts:

• Asia is diverse. Each Asian country has its own unique culture, characteristics, language, customs, traits etc.
• The region is non-homogenous in the variation of  purchasing powers, lifestyle, attitudes, consumption patterns etc.
• In every aspect (economically, politically and culturally), it is different from Australia and the number of languages spoken hugely diverse.
• Marketing goods and services in Asia will always be a continuing challenge, particularly as consumers continue to become more discerning, sophisticated and demanding.
• Doing business in Asia requires patience, investment in time and capital and a good network of contacts.
• ‘Guangxi’ or personal and trust in relationships is an important and overwhelming factor in establishing businesses in China and the rest of the Asian countries. This concept is in fact more complex and goes beyond a two-party relationship which most Westerners find difficult to grasp. Nevertheless, it remains a prerequisite for the business relationship (relationship marketing) as opposed to the transaction approach and international mass marketing.

It is not easy to build a business in Asia. One can’t really tame the almighty Dragon and even multinational companies that are long established and successful in the region are constantly challenged by the ever changing trends and consumer demands. Notwithstanding these countless obstacles, Australia is well placed geographically to exploit numerous opportunities that are there for the taking.

Here are a few things to consider prior to launching into the Dragon’s lair:

• Get expert advice. Australia is a multicultural society and establishing your very own global network or ‘guangxi’ can link you to Asia prior to making the major leap.
• Make an effort to understand the culture of the Asian country you intend to do business with. In Brisbane, the Institute of Modern Languages at the University of Queensland offers customised language tuition for individuals, small groups and corporate as well as cultural briefings.

You will also be able to locate other centres around Australia

• Link up with Austrade and the major banks and financial institutions for advice
• Outsource to an international marketing firm or consult with experts who have solid experience in Asia.
• Attend trade shows with a focus on trade with Asia
• Invest in good and solid research, the internet has revolutionized our access to cross cultural information
• Finally, have an abundance of patience and a realistic approach to measuring your success and ROI

An understanding and appreciation of all these will prepare you for the challenges that await you in Asia and will assist you in adapting marketing strategies and preparing the right marketing mix.  Understanding and addressing the differences in culture between East and West will be invaluable in your attempt to negotiate deals with your potential partners or customers.