Doing Business in China vs. in the West

I’ve been lucky enough to work at startups and in corporate before I made the move to China to start my own business two and a half years ago. During my time here, I’ve noticed key differences between the way business is done in China vs. in the West. Here are some of my observations:

Speed

Whenever I talk about China, I always talk about how impressed I am with the speed at which things move in business. When I worked in the UK, most things were done systematically and through the proper pre-determined channels and processes which often took smaller tasks longer to do.

In China, trends change so quickly and economic conditions cause the markets to shift more often than in the West. Businesses are used to adapting their processes weekly even daily to accommodate this. I work in wholesale and manufacturing- the main industry in China, so there's always a high turnover of customers, containers and contracts. In any one day, the brief could change 2-3 times meaning there’s often little time for overthinking or over analysing day-to-day business decisions (I've learnt this from my Chinese colleagues). Business and trade moves fast in China so companies move at the same speedy pace to stay competitive.

China’s innate ability to adapt quickly to changing business and economic environments is, in my opinion, one of the keys to their rapid economic growth over the last 30 years.

Willingness to do Business

If there’s one thing we must take away from our colleagues in China is their willingness to strike a deal. Before moving here, I ran a startup and worked for a few so was aware of how important creating deals were in order to advance. Over here, however, contracts, deals and trade are the heartbeat of business life. If the original deal doesn’t work out, the response is always 'no problem' or 'don't worry' followed by an alternative deal hours later.

Therefore following up with contacts quickly and building strong relationships is integral to business success. Follow ups are often done within the hour and you can forget about sending formal follow up emails practiced in the West. Email communication is pretty much non-existent, WeChat and WhatsApp are core to keeping in touch in business. Instant communication leads to instant answers which gets the ball rolling with whatever deal or decision is on the table. A great learning for Western fast-moving businesses in trade, production or commerce.

Willingness to do business extends to corporate institutions too, banks are open 7 days a week and ATMs have cash deposit facilities so you can pay money into your business or personal accounts 24/7.

In China, it's also easy to send and receive money between businesses. The entire country uses Alipay or WeChat pay, anyone from taxi drivers, MacDonalds, factories and suppliers accept it. There's no need for time-consuming bank transfers to pay for your goods (business or personal) or to carry cash or cards. The perceived informality of paying an invoice and sending money via a messaging app is non-existent which makes for an easier and faster flow of trade.

Exposure and Experience

As much as China as a country is censored to Western media (Google, Facebook, Twitter, Snapchat and Instagram are all blocked here), Chinese companies very much so have a global and outward-looking perspective on business, especially when it comes to trade and commerce. Moreover, years of international trade have provided Chinese companies the ability to look beyond their own ideas of what makes good business sense and instead combine their efficiency with best practices they learn from foreign traders.

Consumer habits change by the quarter here, not by the year so China is often far ahead with new technologies and spotting emerging consumer trends globally. Keeping an eye on both national and international consumer behaviours is what allows China to spot the next trend (most recently- fidget spinners), get them into production and onto the market in a matter of weeks.

Culture, Clout and Relationships

Like the West, clout goes a long way in China. When I first moved here I remember a colleague telling me I’d need to have or understand how clout, cash and culture worked in order to survive- they were right. I’ve had many experiences where I’ve quickly been reminded about how important culture is.

In my early days, I gave my business card directly to the owner of a huge international shipping conglomerate, my colleague quickly reminded me that I shouldn't have given it to him directly and needed to give it to his assistant instead as a sign of respect. Once at a work dinner, I sat and chatted for more than an hour before I took my first bite. Afterwards, I realised the entire table was politely waiting for me to eat first before they ate as I was the guest.

Being aware of cultural differences will most times dictate the success of working relationships and will help to build ‘guanxi’ 关系 or trust which is often the first step to doing business in China.

Doing business in China is totally different from Western operandi. Culture matters, 'guanxi' is key, be prepared for lots of promises, quickly changing business environments and a surge in your WeChat/ WhatsApp contacts.