Doing Business in Asia

Barry Lloyd gives an interesting presentation on doing business in Asia.

  • All Asian countries are very very different
  • Cultures are different and totally different from western customs
  • Getting products in front of your target market is easier than any previous time in history
  • Research is critical to doing business abroad in Asia – understand culture and rules
  • opportunities are plentiful real deals just as hard as ever

Major errors

  • never refer Taiwan Macao or Hong Kong as countries – you’ll get banned !
  • must work out a local partnership foreigners cannot own more than 49% of a local company

In Asia Google is not #1

  • Baidu #1 in China
  • Japan and Korea love Yahoo! (so does Hong Kong wih 989% share)
  • Other regional engines/portals (Alibaba as an example)
  • Yahoo! has no standard PPC interface
  • analytics tools don’t work out there (character sets are a problem)
  • bid management tools won’t work either
  • listings are displayed differently as well

Patience and trying to understand different ways of doing business – it take time to build relationships.

Micheal Bonfils – SEM International

China, Japan, Korea

  • Assessing the market, start from the usability of your website – website design needs re-adjustments
  • Analyze your (Asian) competition
  • Research the Asian market

75% of population is under 30 with an average income of just over 130,00 USD

There are 170.000 advertisers with an average of 20 keywords per advertiser.

In Japan 70% of population is online (89 million)

2/3 of Google Japan users also search on YAHOO! and has a huge blogosphere

Korea has a smaller Internet Population with scaled down parameters

If you are focused in E-Commerce Japan, then Korea then China (Very difficult) – branding is very important in China, you need to brand before “somebody” does it before you.

In China Google is at about 24% and BAIDU at 61% and YAHOO! around 11%

NAVER powered by YAHOO! is big in Korea – Google is nearly unknown in Korea.

Translation is not Localization.

Face to Face interaction and trust building is the key to get into any Chinese Heart. Business in Asia is personal. Human face to your online presence = trust building

You need to monitor local competition – separate your local competition (the toughest to compete with)

Local hosting in these countries is recommended.

Always include your contact info.

In Cina Google converts better when compared to BAIDU – the audience is very different as mentioned earlier.

In Korea implement directly through YAHOO/Overture – they like complexity, if it’s complex it’s advanced ! Complex sites have great conversions.

The session wraps up with a Chinese proverb:

Be not afraid of growing slowly, be afraid only of standing still

9 Responses to Doing Business in Asia

  1. Nelson says:

    Sorry, but when you do business in Taiwan, do think of Taiwan as a country. If you do business based on China prospective in Taiwan, you will encounter huge troubles, that is, you might get banned in Taiwan!

    To Taiwanese, Taiwan is not China, not to say belong to China!!!

  2. Barry Lloyd says:

    Just came across this and would like to comment on some of the points raised about my talk.

    My point about referring to HK, Taiwan etc as countries rather than regions in things such as drop-down menus possibly causing problems is from advice given by numerous contacts in China. Indeed, we were told to change our entire software interface before any major Chinese user would implement it. If you think about it, it is logical. These places are considered regions/provinces of China – not nations in their own right. Failure to respect this may cause problems for your company in China in certain markets (as it could have done for me). Why take the risk?

    My point about analytics tools (and bid management tools) is absolutely correct. Very, very few handle double-byte character sets accurately (there are some – but not many). DART (for example) freely admit they cannot handle double-byte. However, the point is purely for double-byte – of course the tools will work with latin characters. But to handle PPC in China (via a tool) the choices are even more limited if you wish use Baidu. I can count the number of companies who have even a partially working tool (that also works with all other main APIs) on one hand. If you don’t believe me – then ask Baidu!

    On foreign ownership – I didn’t say all companies had to be owned 51% by nationals of the nation you were in (I, for example, own 100% of my company in Thailand – which is, though, fairly unusual for a foreign national) – but I did say watch for the issues of ownership as invariably companies that are set up MAY require 51% ownership by nationals of that country for certain types of businesses(as in Thailand, for example) – so if that is the case – make sure you are prepared.

    Sante has given a good summary of what was said – but, like all summaries, left out some of the nuances of what was actually in the talks.

  3. Monica says:

    Could you elaborate on “analytics tools don’t work out there (character sets are a problem)”

    Does this apply to Google Analytics for Chinese, Korean, Japanese language sites?

  4. Quentin Kilian says:

    Interesting comments by the authors. Not what I would consider deep though and I must concur with the respondant GK in much of what he/she’s saying.
    I have been living and working in Asia for the past 17 years and have learnt a great deal over that time about the differences, both visible and subtle, in doing business in Asia.
    Not sure where this reference about foreign ownership comes from though. There are a number of countries across Asia where fully owned foreign enterprises are allowed, and that includes China. There are taxation issues to consider in various countries, such as India where taxes on foreign owned companies are massivly higher than on ‘branch offices’ run by a local employee; or the Philippines where it can be easier to put an amount into a bank account and establish a ‘marketing office’ through a law firm. But each case differs, so there is no one size fits all rule.
    I have also lived in Hong Kong and Macau and I’m not sure what you mean about getting banned by referring to them as countries. Whilst they are now part of China, Hong Kong in particular operates under the ‘One Country – Two Systems’ law and maintains its own rule of law, its own legislature and its own particular style of doing business. Hong Kong people accept that China is their ‘master’ but still see themselves as very independent in their thinking, their lives and the way they run their buisness.
    I would like to contribute more to forums like this if people are interested in my comments.

  5. Quentin Kilian says:

    I found this site through a websearch and found the comments made by the author(s) most interesting. Not entirly factual, but interesting.
    I am afraid on this occassion I must side with the respondent GK in that a large bulk of this article is just common sense, not enlightening.
    I have lived and worked in the Asia Pacific region for the past 17 years and have a good perspective as an ‘outsider’ – and yes, even after a decade and half in the region, I am and will remain to most Asians, an outsider.
    The comment that each Asian market is different could not be a truer statement. Apart from language differences, there are social and political differences that influence the way in which you conduct buisness. There are marked differences say between how I would conduct a business meeting in Japan as to how I would conduct the same meeting in Manila. And for those readers in western economies, particularly the US, the methodology of buisness communication and ettiqute in Asia differs substantially from that of the US (I have also worked for a major US corporation so I can make first hand comparisons).
    One of the interesting assumptions I often see buisness people who are new to Asia make, is that they have a superior knowledge of the market, market forces or demands than their local counterpart. This can be a very bad move in your dealings in Asia. Just because parts of China or the Philippines or Thailand may appear, on the surface, not to have the business savvy that you have encountered in say Singapore or Hong Kong, don’t ever underestimate the ability or knowledge of your business opponent or partner in these markets. But this misapprehension of knowledge also has the twofold effect of making these western business people appear arrogant and aloof. In countries such as Japan, China and Korea where face and respect carry a lot of weight in both business and social engagment it is much better to err on the side of defference rather than arrogance.
    Throughout Asia your best tool is something the Chinese refer to as Gunagxi – relationships. But relationships that cross between business and social. To put it in an Australian context, to have good guangxi with someone means you have established a relationship that opens doors for networking on both business and social levels, but you are not neccessarily bound so closely to that person at either level. In other words, you’re good friends, good business partners, but not neccessarily BBQ buddies.
    This form of relationship building, by whatever name you wish to give it, is paramount right across Asia. I have spent much of my 17 or so years bulding relationships in buisness, the political arena and with people of influence. This have proven invaluable on many, many occassions.
    I would be keen to contribute to forums such as these on Asian business, social and travel tips if readers are interested in getting more of my comments and thoughts. And I would invite you to visit my blogs at http://www.crocsinternational.com.
    Good hunting.

  6. Motoko HuntMotoko Hunt says:

    I’m glad that GK pointed out those information about Korea. Regarding Japan, yes, we do love Yahoo, but not necessarily the Yahoo Search. Most people go to Yahoo for other reasons such as shopping, mail, news, blog, etc.

  7. GK says:

    Don’t know where you get your info but:

    You are mistaken and misleading about Korea. Some of the info is even insulting wrong. In fact, I barely see an info you got RIGHT!! (other info is just as bad, but I’ll focus on Korea)

    1) “Koreans love Yahoo”…. um…. then why is it 7th in terms of reach behind five other local grown search portal sites (and one shopping site). And has less than 11% of the search market in Korea. That’s not much love for the longest and first running portal in Korea.

    2) EVERYONE in Korea knows Google well (in fact, it was voted best place and most desired place to work recently)… just no one uses it (less than 2% of the search market). Same for youtube here (less than 1% of the video UCC market).

    3) Naver (about 70%!! of the search market )is NOT powered by Yahoo!. It serves Overture(ie: yahoo) sponsored links. That’s it. Naver has its own search technology that has nothing to do with Yahoo.

    4) “Korea has a smaller Internet Population with scaled down parameters” is just a useless statement as saying China has a bigger internet user population than the US. US population is bigger than japan. Watermelons are bigger than oranges…. so??? Interesting perhaps, but not useful nor insightful. Comparing Japan and Korea internet markets in the regard just shows how much someone does NOT know about the markets. “Germany internet is a scaled down US market” is about as useful and accurate.

    5) bid managment and analytic tools don’t work in Asia? says who?? work fine for me.

    6) “Koreans like complex sites… if its complex its advanced” is just plain insultingly stupid. And wrong. Its a waste of time for me to list 230984023489324023094890 billion examples of why.

    If this is what Micheal Bonfils of SEM International (whoever they are) is saying, I’d realllly question using their business.

    I think the only thing right was the first paragraph… which frankly, were just general obvious statements, but I’ll repeat them anyway so I can stop laughing at the rest:

    - All Asian countries are very very different
    - Cultures are different and totally different from western customs
    - Getting products in front of your target market is easier than any previous time in history
    - Research is critical to doing business abroad in Asia understand culture and rules
    - opportunities are plentiful real deals just as hard as ever

    +_+

  8. Paul says:

    Asia is still the fastest growing region in the world. THanks for the info.

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