Teams from the Class of 2016 wrote about their anticipation and experiences of their recent International Business Consulting Trip to Shanghai, PR China in a series of blogs. You are currently reading the third blog in the series.
We're Not in Canada Anymore: Team 4's On The Ground Perspective
Let's get Down to the Details
By Hugo Lafontaine, Team 4
As business professionals we know that organization is a key attribute for success. Leading up to our trip to Shanghai we were convinced that our schedule was sound. Meetings were planned out, the schedule included: start and end times, company name, address, phone number, key contact name, team and client members attending, and topic(s) for discussion. We ensured that our meetings would be conducted in English and that we did not need a translator. Our plan was to use the local taxi services to get to and from the various meetings. We were set!
Or so we thought...
The morning of our first meeting, we had cards drawn up to translate our various meeting addresses for the day into Chinese. The plan was to show these to the taxi drivers. Unknowingly one of our addresses did not get updated in our master schedule and we went to the wrong location; the office had moved to a new location 9 months earlier, whoops. We needed to recover from this but none of just knew how to speak Chinese and we couldn't locate anyone who spoke English. We were lost in Shanghai...
Luckily our team member had received the updated address already translated into Chinese via email the week previous. We downloaded the new address. let our contact know that we would be late, and flagged down a taxi (hand waving from a curb is a universal sign, yes!). We used our phone's mapping app to ensure we were headed in the right direction. We made it to our meeting albeit an hour late. Not a great first impression.
- Be able to interact in the local language;
- Double and triple check addresses;
- Have a data plan.
Understanding the Foreign Market
By Taylor Bildstein, Team 4
Our in-country work was extremely important for our project as it built upon our work in Canada and allowed us to build relationships, verify information that we had previously collected, collect new information, and cross-reference. Having multiple meeting on the same subject gave us different angles on the same business need. As a result, we have a high level of confidence in our recommendations to our client.
We are grateful to the Canadian Trade Commissioner’s Service for all of their valuable help. They offer a number of free services including summaries of best practices when opening up an office in China, and qualified introductions. The introductions that they made, which we then acted upon, turned out to be some of the most valuable meetings that we had during our in-country experience.
One of the key learnings for our group is that opening an office in Shanghai is easier than we had anticipated. There are many turnkey solution providers, many of which have been pre-screened and validated by the Trade Commissioners’ Service. These integrated, often global, companies offer full business administration services in English, starting at $1,500 per month. This is an especially valuable service, considering that business administration in China is burdensome.
We discovered that there is a very high level of regulation and processes have not been modernized. For example, taxes must be filed monthly and there is no online service: a company representative must physically go to the tax office with a paper copy of the required documentation to obtain the required stamps. These burdensome requirements and multiple layers of regulation mean that the cost of doing business in Shanghai is greater than in Canada.
Nonetheless, doing business in China is a huge opportunity and I would encourage any Canadian company who would like to grow exponentially to consider China. Although there are many things to learn, there are also many people who will help you. It is a fascinating country with rich history, culture and incredible growth opportunities.
Differences in Protocols and Perceptions
By Kyle Halajko, Team 4 (Transcript from Kyle's video blog)
Question: Kyle, what is the different in protocols between doing business in Canada and doing business in Shanghai?
Kyle: I would say the first thing is building strong relationships with clients in China. One of the first things we learned is that it is so critical to build solid relationships with customers in China, even getting to know them and know a lot more about them, before getting into a business relationship. That’s something that differed a little bit from Canada, because in Canada, sometimes you don’t need to—you know you build a rapport, but you may not necessarily need to be in a deeper relationship.
The second point I’d say, is that it is a lot easier than a lot of people think to set up a business in China. I think that’s still similar, but I think that the point I am trying to make is that with protocols there is a perception that it is difficult because it’s China- It’s somewhere very, very far away. So I’d say that if you do your research and you see that it’s not as difficult and a great opportunity to build your business in China.
The third thing, I’d say is business planning; it takes a lot more business planning in China to set up a business, because there are a lot of things to consider. For example, today we learned from an HR [Human Resources] perspective, letting go of an employee, you have to negotiate the severance, so you could end up paying a six month severance because of a bad negotiation. Take the time to plan, it takes a lot longer to plan in China and if you do so, you will have a lot of success.
Relationship, Relationship, Relationship
By Julie, Lupinacci, Team 4
In business we know that relationships are key vehicles for business success. In preparation for our trip to Shanghai, China we were told over and over that this is heightened more so. Here on the ground we are witnessing each day the importance of creating strong bonds with clients, suppliers, and employees. Let me share a couple of examples from our experience:
- In advance of coming we leveraged our business network. One of the contacts we made ended up being a tremendous asset in introducing us to his HR service provider network securing us three separate meetings. We then invited him to the opening banquet on Sunday. This propelled our relationship further resulting in his attendance at all three meetings acting as both a translator an intermediary to ensure that our needs were being addressed and answered directly.
- A popular set up in consulting projects is to appoint a lead and co-lead. We did this at the outset of our project with two of our team members being the main interface with our client. Although very logical we did see that the client was apprehensive in opening up certain areas of their business to us. After the first few days, we found our client opening up more and more as we shared key insights we made and as they saw us interacting with the potential suppliers. The tipping point was reached today (Wednesday) when the client invited us to a meeting that was previously earmarked for them only.
Lesson learned, relationships open doors that are at first found to be shut tightly. Do not underestimate the power of relationships.
Welcome to Shanghai
By Vivek Raju, Team 4
I have had an extremely interesting experience exploring Shanghai as this is my first trip to China and therefore I did not have a point of reference of what to expect of the city or the country like some of my peers who had been to parts of China before this trip.
My first take away was the perception of the city depends on where you are staying. We stayed on the edge of the Xintiandi district which is the formal French quarter of the city. It is certainly a tourist area with a diverse offering of foreign cuisine and pubs and gave me the similar feeling of being in a mix of New York City and Chicago, with high end skyscrapers and luxury retail stores, catering to the highest end consumers. However, driving to different parts of the city provided other perspectives of how other parts of the population in Shanghai live.
My second take away which I noticed on our tour was the socio-economic discrepancy evident through high-end, sky-reaching condos that sell for $4 million US that were built next to very modest housing where it is common for 8-10 people live together in a small dwelling just to meet their bare necessities of affordable shelter. I felt fortunate in our time here to visit our client's construction site in the Ligang New City district, which is an hour south from the core of the city. Here, this gave us exposure to the more 'blue collar' workers and the conditions where they live and work. The biggest take away that showed this descrepancy was certainly the health and safety standards or lack there of from a North American perspective for most of these workers and the high level of risk of serious injury they face on a daily basis.
Lastly, I found those that we worked with in Shanghai seemed to want to go above and beyond for us to ensure our client was well versed and educated to the implications of setting up operations here. I found those we worked with to be friendly and helpful, even if they had nothing to tangibly gain from the interaction.
I can honestly say I have thoroughly enjoyed this experience and feel very lucky to have had this opportunity. Shanghai really is an incredible city that is a global hub to hundreds of multinational companies, a lot of cultural diversity and from a business perspective, friendly and helpful people who want to provide value to companies looking to have a local presence in a country, that in many ways seems more sophisticated than North America today.
Additional Blogs in the Series: