Today on The Negotiation, Todd speaks with Ben Robinson, Merchant Success Manager at Shopify Plus. He shares his experience working with a growing number of large Asia-Pacific brands on the ecommerce platform, with a focus on the Japanese market.

Many of the brands Ben works with today are generally “high-growth, high-volume stores that are looking to increase their presence in different markets.” Ben and his team evaluate each company’s business model and operational capability in order to help them maximize the platform’s features. Two examples of brands who have successfully gone global are Koala Mattress and Allbirds.

To successfully localize products for the Japanese market, Ben says that it all comes down to three factors: trust, presentation, and knowing what is important to the Japanese consumer by region. Regarded as one of the most insular and protective markets globally, consumers generally prefer Japanese-made products and brands. He explains that the three consumer trends unique to Japan today are cost, space-saving, luxury, and eco-friendliness and sustainability. Ben recommends foreign brands to work with local influencers through social media to help grow their level of trust and relatability.

Foreign brands should research the already-established ecommerce ecosystem that is unique to Japan. They must then tailor their marketing, copy, and brand message accordingly, with a focus on describing your product’s features, since the Japanese tend to do extensive research on new brands before making a single purchase. It will also greatly help to tailor your SEO per region by understanding different writing systems and styles. Ben notes that Yahoo is as prevalent in Japan as Google is; so SEO must be optimized for both search engines.

To build brand loyalty using social media, it is important to first understand that the Japanese use social media differently to Westerners. Line is more widely used over Facebook. Twitter and YouTube also have a large presence, and Instagram is slowly catching on as well. It helps to drive consumer interactions post-purchase. After a sale is made, the brand can encourage consumers—even incentivize them—to leave positive reviews or share their experiences either through writing or video. This can go a long way in nurturing loyalty.

Today on The Negotiation, Todd speaks with Ann Lee, author of What the U.S. Can Learn from China (2012) and Will China’s Economy Collapse? (2017). Having risen to fame for predicting the market crash of 2008, today she is a leading authority on international finance and economics.

Ann worked on Wall Street soon after graduating from business school, but made the transition to academia in 2006 once she foresaw the credit crisis. In 2008, she was invited to teach on credit markets and credit derivatives as a visiting professor at Peking University in Beijing. Chinese policymakers quickly caught wind of Ann’s expertise in this area once the market crashed, and she was subsequently approached to help them navigate the financial crisis which followed. She published her first book a few years later, which received worldwide acclaim and instantly gave Ann a global following.

When asked what readers can expect to learn from What the U.S. Can Learn from China, Ann says the message is to “stop demonizing [China]. As wonderful and as powerful as the U.S. is, it does not have a monopoly on good ideas.” She adds that the book is not meant to endorse one country as being better than the other. Rather, it is meant to help readers open their mind to cultural nuances present in the way each country approaches different issues.

Ann was able to predict the global financial crisis thanks to her experience working on Wall Street. To her, the biggest problem was that there was too much power in the hands of the federal reserve, big banks, and other prominent financial institutions of the time. In other words, innovation was nowhere near as important as money. China, on the other hand, approached finance as a tool for nation-building, similar to the attitude displayed by the Founding Fathers of the United States.

“Doing business in China is like doing business anywhere else.” The important thing is to do your due diligence before making any sort of investment or negotiating with a local business. China is actually ranked as one of the most open countries to do business with. Hypercompetitiveness is the only factor that Ann highlights—there is a lot of ambition in the country. At the same time, there are fewer regulations in China than there are in many Western countries. Ann goes as far as saying that “it is almost too capitalistic in China.”

Ann also touches on the attention-grabbing title of her second book, Will China’s Economy Collapse?. In 2015, many on Wall Street believed that China was on the verge of collapse due to a highly volatile stock market and rapidly shrinking currency reserves.

Today on The Negotiation, Todd speaks with Marian Danko, founder of the tech innovation platform weHustle; and TECOM, a conference for tech entrepreneurs. A native of Ukraine, Marian experienced culture shock upon arriving in China, particularly when it came to the rapid speed that defines the nation’s startup ecosystem.

Speaking on Shanghai’s tech startup landscape, Marian says that “the ceiling is very high and the floor is very low”. That is, while Shanghai can be regarded as “an expensive city”, from an entrepreneur’s perspective, it can actually be a wellspring of highly lucrative investment opportunities compared to Silicon Valley, London, Dubai, or Singapore.

Secondly, if a business owner wishes to put together an international team, the visa process is easier in China versus in the US. This means fewer costs and hurdles to have an international team based in one location.

Asked about the investment landscape in China, Marian notes that a distinction should first be made between local and foreign early-stage startups as each has very different challenges to the other. Foreign companies will not be able to avail of bank loans as easily as local ones, simply because they cannot be trusted to remain in the country after a few years.

With this context in mind, Marian says that venture capitalists are beginning to experience a “capital winter” in the country. He attributes this to the market becoming more mature. In the early days of tech startups in China, investors would actually lose money by banking on every trend that came their way. Having learned the hard way, they are now more savvy to the types of startups that are worth investing in. In other words, today’s investment landscape is defined not by quantity, but by quality.

Next, Marian discusses “mobile-first, mobile-only”. 90% of startups in China create apps and mini-programs. Some startups do not even have websites; instead, their first and primary focus is mobile solutions. He adds that there is also a lot of reliance on WeChat nowadays, adding to this culture of “mobile-first, mobile-only”.

China will lead the way when it comes to VR and AR. A lot of startups today are focused purely on VR and AR solutions. More than one startup is incorporating these technologies into marketing and advertising, and they have already created successful and cost-effective campaigns as a result.

Likewise, a lot of Chinese startups are focusing on AI. Much of that influence can be attributed to the government. This is because, in order to dominate the market, China’s government is pouring funds (i.e. for grants, incubators, etc.) into AI-related ventures, giving startups the opportunity to constantly innovate in this industry.

Today on The Negotiation, Scott Laprise discusses his transition from a career in diagnostic medicine to a financial analyst and researcher for emerging markets specifically within China.

Scott considers Chinese languages the most important to study because of the country’s position as a key player in world business. Additionally, it is not enough to converse in English because the Chinese express themselves in a way that is fundamentally different from how Westerners communicate. Scott, therefore, always seeks to understand the Chinese point-of-view on any given topic before negotiating or simply engaging in conversation with them.

Asked whether China can still be considered a “communist” country, Scott brings context by explaining that, at one point, China (specifically Mao Zedong) sought to partner with Russia, adopting elements of their political philosophy as a result. Today, however, Scott actually thinks of China as the most capitalist country today: While there are semblances of a planned economy, the Chinese themselves are very business-oriented and are masterful negotiators.

Scott also touches on the term guanxi as a cultural aspect that is uniquely Chinese. “The more you know people, the more you can ask things of them, and the more they can ask things of you.” He also notes that time also plays a big role, considering the long-term worldview of China. That is, the longer you have known someone in China, the stronger the reciprocal dynamic present in the relationship.

Scott goes on to talk about the ever-growing consumer culture in China. The speed and bottom-line-oriented nature of the economy mean less customer loyalty and a higher amount of unregulated pollution, but all of it speaks to China’s ability to pivot and become a dominant player in the market with relative ease.

On that note, Scott states that China is not actually innovative but adaptive. The Chinese do not care all that much about patents because they do not focus on novelty. He believes that countries that impose patent laws “are the rich countries that have a lot to lose”. China’s point of view, on the other hand, is to simply “catch up”.

Scott shares his point of view on the complicated situation around the US-China “Phase 1” trade deal, as well as what gives him an edge as a financial analyst. His viewpoints on these subjects are obviously influenced by the fact that Scott is a Westerner who lives locally—boots on the ground—in China, with business experience in both cultures.

Today on The Negotiation, Olivia Plotnick talks about her entry into China as an entrepreneur from the United States. She shares how she was able to grow WeChat accounts at a massive rate in a fast-paced marketplace whose consumer culture is so different from her home country’s. She also explains how brands can capitalize on certain WeChat features, such as Top Stories, the “Wow” function, and WeChat groups.

When asked how companies should look at WeChat in 2020, Olivia recalls how WeChat gradually transitioned from a purely consumer-based social media platform to a brand-building tool. Before, you could only receive messages from friends and family. Now, Nike and Under Armor can reach out to you. Olivia calls this a “sacred space” in that brands can now develop personal relationships with consumers. This is why it is important for brands to put out relevant content, or risk being unfollowed.

In China, there are a large number of social platforms—or what Olivia likes to refer to as “ecosystems”. Olivia prefers to divide these platforms into two different categories. There are eCommerce platforms such as Tmall.com and JD.com, social media platforms such as WeChat, Weibo, and Douyin (the Chinese version of TikTok). Each of these two categories serves a different purpose.

How does WeChat stand out in this sea of platforms? According to Olivia, while Douyin is an “awareness-building platform”, WeChat is more of a “relationship-building platform”. Many brands use WeChat to educate their audience and provide loyalty programs. Ecommerce platforms like Taobao, on the other hand, are where “you push to sell”. Ultimately, you need to be aware of what most people use the platform for and produce content appropriate to user activity.

Today on The Negotiation, Kevin Johannes Wörner discusses his background in venture capital and the startup space in China. The German-born entrepreneur developed an “appetite” for the Chinese market at an early age. He studied at Tongji University before working for some time in Germany as a management consultant. Following this, he founded the business accelerator Properas in Berlin.

It was around this point, however, that he decided it was time he made the move to China. He got in touch with Wei Zhou, founder of XNode, and today Kevin works on the company’s startup acceleration practice. XNode does three things: 1) coworking spaces, 2) corporate innovation, and 3) startup acceleration (with a focus on cross-border acceleration).

One distinguishing feature of XNode’s two-month acceleration program is that the company works closely with governments. It is by building trust with these governments that XNode is able to bring in a steady flow of international startups to work with. Not only does this make working relationships easier, but it also allows XNode to leverage this worldwide network to find even more startups and entrepreneurs to partner with. The ultimate goal that XNode has for each and every one of its startups is a tangible business impact.

When asked about the difference between how Chinese and Western startups scale their businesses, Kevin says that the Chinese practice the Lean Startup methodology, which makes them practical, incredibly fast, and highly responsive to the market. This was the source of much cultural shock during Kevin’s first month working in China, having been so used to the more gradual speed of German business.

If Western companies wish to catch up to China’s speed, Kevin encourages cultural exchange. It is not enough to simply preach speed, pragmatism, or innovation—this will change nothing. Instead, Kevin wishes to have more Western companies and governments working together by “building bridges”. This involves reaching out to those already working in China—which include Westerners such as Todd and Kevin themselves who have developed a deep understanding and appreciation of the market over time.

On the topic of “mobile-first, mobile-only”, Kevin likes to differentiate between B2B and B2C. For B2C startups, it is difficult to create applications for Chinese consumers. Instead, it is better to use existing platforms to do sales and marketing. On the other hand, it is easier for B2B startups to create new mobile solutions simply due to their smaller ecosystems—there is no need to change a consumer culture shared by millions (if not billions) of people.

Today on The Negotiation, Cyril Ebersweiler shares 20 years of business experience working with various brands in China.

Cyril began his career as an eCommerce project manager for Carrefour, launching China’s first online retail platform. From there, he worked with Adidas for four months before making the switch to Air France, where he would work for the next three years. Air France at the time was taking major steps to invest and promote greater relationships in China.

From Air France, Cyril joined TBWA and became heavily involved in the company’s marketing efforts. Initially, Cyril intended to work with TBWA because he wanted to go to the country in the pre-iPhone days when Japan was the leader in mobile technology. Cyril believes that this experience gave him great insight into the future of mobile marketing and eCommerce capabilities. Cyril’s work eventually brought him back to China, in Dalian, where he met investor Sean O’Sullivan. The two worked together with technology startups in China.

When it comes to the difference between American and Chinese entrepreneurs, Cyril says that while the Chinese are incredibly efficient in their workflow, their marketing in other countries could improve. Foreigners looking to invest in China, on the other hand, sometimes have trouble adapting to the local culture.

In 2011, Cyril founded the venture capital corporation HAX in Shenzhen. When asked why he decided for the company to be based in Shenzhen, Cyril says that “just by being [in a specific location], [companies] are automatically augmented by the ecosystem around them.” Since Shenzhen is known as the “Silicon Valley of Hardware”, Cyril intends to tap into local resources—from large brands down to mom-and-pop stores—that would maximize his company’s capabilities. 

For the past 7 months, this show has been all about China and the amazing opportunities that lie in wait for companies willing to put in the work to be successful there. China’s business landscape and culture have been our bread and butter, it’s what this show has been built upon, and because of that, we need to talk about the tragic events that have been happening there over the last month due to the outbreak of the Coronavirus. The past month has been a difficult one for China and those impacted by the Coronavirus. We at The Negotiation and WPIC Marketing + Technologies have been impacted as well, and our hearts go out to our colleagues, friends, and loved ones that are suffering from the impact of this terrible virus. Our prayers go out to all of you and anyone listening who may have a loved one who has contracted the virus and we wish them and everyone a speedy recovery. Our thoughts are with you now and will be with you through every subsequent episode until this tragedy has been put behind us.

That said the show must go on, as they say, so with a heavy heart we’ve asked our helmsman Jacob Cooke, CoFounder, and CEO of WPIC Marketing + Technologies, if he would be kind enough to jump on for a quick discussion about the online and offline commercial landscape due to the Coronavirus outbreak, what the data is showing us given much of the country is shut-in or closed for the time being, and what companies can be doing in the meantime to be prepared for the chapter that follows this one.

Again, to everyone impacted by the Coronavirus outbreak out thoughts and prayers are with you.

Today on The Negotiation, Sarah Kutulakos talks about her experiences working for the Canada China Business Council (CCBC) for twelve years, and how doing business between both countries has changed over the last decade.

Sarah talks about the evolution of the “depth of companies’ activities in China”. She highlights eCommerce as a big game-changer for the consumer market, as well as brands’ bolder attitude as a whole towards the creation of IPs.

Sarah says that if you do not figure out how to compete in China, you will not know how to beat Chinese competitors in your own core markets. It is not that going to China is a must; but if you have a product or service “that aligns with China’s consumption trends or five-year plan,” then it may be worth entering the market. However, she highly recommends tooling and partnering up before even considering an expansion. Those who try to impose their brand in China without the proper partners or support group will fizzle out fast.

The rise of the middle class in China was a key factor in achieving the unmatched speed of its economy today. “The capacity to accomplish is unfathomable,” says Sarah. At the same time, it is much harder to integrate as a foreigner today compared to as recently as 2011 due to changes in technology. “They used to roll out the red carpet for foreigners,” says Todd.

Sarah specifically points to April 2019 as a turning point that gave foreigners “second class status”, when, unless one had a local bank account, they would be unable to use digital payment systems. “We are not the shiny new thing,” concludes Todd. “They know now that they are the shiny new thing.”

Regarding how CCBC has impacted her home market, Sarah says that their incubation function has greatly expanded. The decision to enter China is not a light one, but Sarah is now confident that the team she is working with can help serve as the bridge between the two countries.

Today on The Negotiation, Scott Silverman emphasizes efficiency and localizing new technologies as the two keys to brand success.

When it comes to promoting your product, your service, or even your company, you must influence the perception around the thing you intend to bring exposure to. As to “what’s in the soup”, the most sacrosanct are 1) the product, and 2) the key benefit. The brand must be aware of the sensibilities of its target consumer and market accordingly.

Scott brings up Lenovo’s ThinkPad as an example. Instead of simply translating the copy into Chinese word-for-word, the better approach would be to “calibrate” the benefits to better resonate with the Chinese buyer, which may include the tone and manner of the promotional material. “Content is not key,” says Scott. “Context is key.”

Scott works in multiple markets in Asia. To thrive as a marketer in these countries, especially as a Westerner, he says that you must “be like a comedian: You have to know your audience.” For instance, he likens Hong Kong to Shanghai (and even Germany), wherein they simply want the hard facts listed out, sans an abundance of visual metaphors.

Specifically, they want to know these three things: “What is it? How much does it cost? Why should we care?” In fact, Scott does not like to use the term “Asian market” as they are all different, to the point that he now focuses on marketing to individual cities.

Scott believes that direct response campaigns are the best way to measure consumer insights. These are incredibly valuable in that, for a specific product, a brand may decide on different calls to action or rearranging the list of benefits depending on the city.

Measuring data was “very basic” in the 2000s compared to today’s market. This was partly due to changes in communication—back then we had direct mail; now we have email and social media. This allows for more clarity of consumer realities in real-time. “Almost 100% of what I do now is digital,” says Scott.

The recent “tsunami” of mobile solutions has completely revamped the economy. This led to brands opting for more experiential marketing that is uniquely mobile native. The immediacy of mobile is its defining trait. People became less patient, and the longer it took for them to receive something, the higher their expectations for it. “This is what brought creative and media together. It forced a relationship that before was a little tenuous.”

“In order to succeed in China, you need to be willing to fail many, many times. The speed to fail is the speed to success.”