China market intelligence gathering – the ups and the downs

“A strategy without intelligence is not a strategy, it’s merely guessing.” Bernhardt, 1997

Since most of the international companies operating in China have this phrase in mind now, requests for B2B market research on China are growing steadily. Some research buyers are in Europe and the US and have never been to China nor do they have intention of ever visiting, others live here and cope daily with all that entails and then there is everyone else in between.

For any business manager, China is an exciting prospect, one that takes most Western managers out of their comfort zones and into a world that is non-English speaking and somewhat curious.

Once the media coverage of super GDP growth rates and consistently bright economic prospects have been put down and managers are introduced to some of the deeper challenges of China, there becomes a need for in depth, reliable, accurate and timely business research. The question is, how and where do you get that?

I have no idea where the Hu Tao Road is in Songjiang but that’s this morning’s destination – around 90 minutes drive from the central Shanghai districts that are familiar to me – at Hu Tao Road is the Zhun Zhen textile factory where we are hoping to grab an hour with General Manager Mr Sun to talk to us about some of what influences his purchasing decisions and what he thinks the increasing numbers of international players in the textile market should do about their relatively low market share. As a man with 35 years experience in this industry, international training and some impressive contacts within the industry trade association, we were pleased to get the interview.

The smart international companies in China realize that Mr Sun and others like him hold the key, that they need his insights and local advice to help predict the movements in this complex and rapidly changing marketplace. Macro-economic data about rising GDP and double digit industry growth has its place but it needs supplementing with hard facts about the situation on the ground in China and that information needs updating on a monthly basis.

Challenges for the B2B interviewer and other intelligence gatherers in China:

• The company receptionist is under instruction to allow nobody past and tries to avoid picking up the phone any time between 11 and 3pm or after 5pm!
• Reading between the lines in a different culture – where ‘should’ means ‘is’ and where being ambiguous in business is the ‘norm’.
• Respondents for one study can be from social and educational backgrounds ranging from First to Third World but all be working in the same district.
• Protecting information is part of the culture as is a reluctance to be the one blamed for losing information
• Fragmented industries and a vast country with hundreds of local marketplaces – extracting comment on the nature of one industry across the whole country is unrealistic and so it is for the researcher to merge the jigsaw pieces from across the country to build a national picture.
• Cultural variations – for companies in Beijing, sending a fax before calling can help a lot and preparing the ground for the approach is more needed than it would be in Guangdong, down South.
• Distances - a national study can involve many hours on China Eastern planes where the food and beverage offerings are often not as tempting as they might be - Nescafe and bread and butter anyone?
• And finally, the clients cause us some problems too occasionally – they know that they need to know something about their industry but they often don’t know what that is…!

So why do we do it?

• A number of global experts in their fields now reside in China and many are Chinese making the rewards of uncovering reliable market information from top sources all the better.
• This is a fast moving environment where the ‘can-do’ business ethic even rubs off onto some of the international managers occasionally.
• Client variety – small market entry projects, customer satisfaction work with Fortune 500’s. Everyone’s competitor is here in one marketplace so our role as information providers is heightened.

For the coming 3-5 years, we expect a scramble for information so will continue to pack our sandwiches for those local flights and will continue to be amazed by the revelations of this emerging powerhouse.

Amber is a market intelligence and B2B research company based in Shanghai, serving the Greater China region.

For more information or to comment on this article, please email the author at lmitchelson@amberinsights.com

Laura has 15 years experience in China advising companies on operations and marketing strategy and managing large-scale research projects.

She is a fluent Chinese speaker who has worked with both mid-large sized firms and small companies considering China as their first overseas investment.

Email Laura at lmitchelson(at)amberinsights.com