Cultural factors affect sales success in China

The Right Business Attitude - Become / Be Culturally Aware

Introduction to Chinese Cultural Awareness

We have witnessed countless conversations, in English nonetheless between, Chinese and foreign managers where each side understood the literal meaning of the words exchanged, but neither had a clue about the others' real meaning. More simply, communication had failed to occur yet both parties were ready to act on an erroneous understanding. This type of misunderstanding between two parties of very different cultural and life contexts is very common in China - for that matter, misperceived "effective communication" even happens with two persons from the same country and culture - which makes it essential to take care to ensure accurate communications when dealing in China.

Until you have learned a great deal about China and, the Chinese language if possible, you are sure to miss key points in your business dealings. "Missing the point" when doing any business is not good, but it's especially true for a Westerner doing business in China. China's culture and business practices are all very different from what you find in the U.S. and other Western countries. Without proper coaching on Chinese thinking, culture and business practices, you'll often be off balance and may not even know it.

Testing Your Chinese Cultural Awareness

Now, you may be thinking I exaggerating the difficulties of doing business in China. After all, we help SMEs do business in China and the more difficult it sounds, well, the better for us. Fair enough, but there may be a lot you don't yet know about China. Maybe? Check your knowledge with following questions keeping in mind they illustrate but three of the many complexities specific to China foreign businesses must contend with.

Question A. What's the major cultural driver of Chinese behavior? 

In my opinion, the answer has to be the concept of "face" or mianzi (mee-n-zuh). Face is one's perception of how others perceive him or her. Unlike our western concept of positive self-image, face dictates that it matters far more what others believe about me (face) - even just what I believe they believe - than what I know to be true about myself. This holds whether what others believe about me is true or not (e.g. "I may be poor but if they think I'm rich, then I got 'face' and all is cool").

Face Example 1: Declining a Chinese boss' dinner invitation, especially in front of his staff, can result in him losing face. In this case, he loses face because the invitee you, regardless of reason or graciousness in declining, apparently does not hold the GM in high enough esteem to forego all to attend his dinner and that's even if secretly he doesn't really want to go to dinner with you. Any form of public rejection is a "punch" to a person's "face" and should be avoided when possible. Though a rain check for dinner is common in places like the US, this is not the case in China.

Face Example 2: On the commercial side of things, Chinese will haggle over five cents on a five dollar purchase of pork to show their negotiation prowess (it gives them face) but when buying an iPhone, Rolex or Gucci bag, full "China price" (US price plus maybe 40% or so) is completely acceptable. Why? Because paying more for and carrying a luxury branded item is for many Chinese a seriously feel-good experience, one that gives them "face" as others are surely thinking "Now there's a rich person!"

Face applies to individuals, society and the country as a whole. If China and Japan were ever to abandon diplomacy during one of their territorial disputes, it would be more for reason of national face than any land at stake. Face is that powerful and must be factored into all dealings in China.

Question B. Which cultural driver poses the biggest risk to foreign businesses in China?

My winner: the concept of "ends before means". The means by which a result is achieved are far less important than the result itself. In simpler terms, winning is more important than how you win. Playing Little League Baseball in California, we were taught, "If you can't win fair and square, it doesn't count as a win". It's different in China where winning is the most important regardless of how fair, square or otherwise.

Now combine "ends before means" with the need for "face," and you have a toxic combination of cultural drivers that puts all American Little Leaguers at a dangerous disadvantage.

An illustrative example: A US-based client requested that we investigate why their strategic partner a Chinese precision lens manufacturer kept delaying shipments critical to their US production operation. Looking closer, we determined the strategic partner was not even a manufacturer but a single guy operating from a private residence - this was in spite of a very impressive website. The real situation? An insider at an actual manufacturer was providing rejected lenses out the back door to our client's "strategic partner" who was then selling them to our client as top quality product. Delays were due to the unpredictable supply of rejected lenses. The "ends" in this case? Money, while the "means" was a zero-cost, unreliable and unethical supply line. To top it off, you can bet this creative entrepreneur's friends thought of him as a "clever guy" which of course gave him "face".

Question C. What do many claim you need to do business China?

The answer is "relationships" or in Chinese, guanxi (gwan-shee). In the west we sometimes say "It's not what you know but who you know" - in no other place is this more true than in China. Despite your level of confidence, one cannot charge into China as a confident (but in reality blundering) foreigner and expect Chinese to trust and engage you in win-win business. Lacking a time-proven relationship network, you'll either never get started or worse be seen as a sitting duck to unscrupulous local businesspeople. Find one or more trustworthy Chinese persons and China-connected westerners who are engaged in your line of work (do vet, vet and vet again) who can help you by leveraging their own networks.

TIP - Team up with a partner or coach, preferably one who has done what you are trying to do, who can teach you the cultural nuances of doing business in China. BUT, thoroughly vet your partner or coach since the wrong one can be as bad or worse than having no partner at all.

Chinese Culture Awareness, It's Important

If you passed the above "test" with flying colors, then good for you, you've undoubtedly been in and learned much about China. On the other hand if you had no idea where I was headed and especially if you are unclear about my examples, then you had better be ultra-cautious with your dealings in China. Study my examples and understand them but then realize I only covered three aspects, important aspects nonetheless but only three, of Chinese culture. In reality, Chinese culture goes much deeper (Read "Differences in Chinese vs. American Thinking"). How deep? You could liken it to an iceberg where what you're able to see is only about 8% of the total, or others will say "China is like an onion, you peel one layer back to see reality only to realize their is yet another layer of reality below that one, and another, and ... ".

Read "Five Reason not to Go-it-Alone in China".

Approach China like a game, one you are out to win. Gather as much intelligence as you can (learn China), develop a sound strategy, remain flexible and most importantly employ a "teammates" or coaches, people who have experience doing what you're trying to do. Never assume anything, be skeptical and question everything, even if only in your own mind.

Wishing you smooth selling in China,

Chris Wingo, Managing Director

China Sage Consultants (Shanghai) Co., Ltd - Turnkey sales and business support services proven to fast-track your business in China and home of China Sales Incubator full-service sales outsourcing program. Since 2003.