3 ms·

I've been doing business in China for over 20 years as an Asia Pacific leader in cyber consulting. HQ in the US always pushed hard to take market share in China

I've been doing business in China for over 20 years as an Asia Pacific leader in cyber consulting. HQ in the US always pushed hard to take market share in China. These execs are like deers blinded by headlights. The actual market in China for foreign companies is miniscule. In my experience and anecdotally from all my peers in non cyber firms, China is a huge time, money, energy time sink and ethical / compliance minefield. Although we did succeed with very large deal with a GSIB Bank the project ended up being negative margin due to outrageous complications. On several occasions I had to pull consultants off client site due to verbal abuse and profanity from the client. In another instance I was literally offered to win a client deal if a certain red Porsche was magically delivered in his wives name. It's the wild wild East.

DiogenesKynikos 7y ago
> The actual market in China for foreign companies is miniscule. That's simply not true. China is a massive market for a huge number of foreign firms. VW has the largest share of the Chinese auto market. Starbucks has thousands of stores in China. Chinese supermarkets are filled with Western brands you'd recognize. I'm not just cherry-picking examples here: you could go sector by sector in the Chinese economy and see massive foreign investment in many of them.
- thelittleone 7y ago
  Thanks for that info I’m not familiar with non tech based firm performance and I should have been more specific. For Tech, the % gap between real and perceived opportunity is far wider than any other country in Asia Pacific. Note that I worked for NASDAQ listed companies with Sarbanes Oxley compliance requirements. A large % of opportunities outright non-compliant (e.g., wanting a Porsche). Another frequent client requirement was warranty terms on consulting engagements. That might expire 12-24 months after service completion. So you can’t recognise revenue until then. And finally a signed SOW and terms carries some legal gravity in countries outside China. Scope creep is a huge problem in China, good luck with change requests or referring them to the SOW. Total opportunities - non compliant deals - delayed revrec deals (or similar issues) - scope creep = minuscule %. Also I’d argue that revenue and EBIT are better indicators of actual opportunity than total foreign investment. In firms like mine, China is a “strategic market” where investments are being made because these conditions may change one day. If your competitor is present when that happens and you are not, then HQ will think you failed.
baybal2 7y ago
> if a certain red Porsche was magically delivered in his wives name. It's the wild wild East. Welcome to China :) The art of finding a good client in China is all about finding what is in his head. It's all true that people who earn to be party officials, don't make good company execs, as they try to run companies like their party committees. If the guy is 50+ he is just a lost cause most of the time

DiogenesKynikos 7y ago

> The actual market in China for foreign companies is miniscule. That's simply not true. China is a massive market for a huge number of foreign firms. VW has the largest share of the Chinese auto market. Starbucks has thousands of stores in China. Chinese supermarkets are filled with Western brands you'd recognize. I'm not just cherry-picking examples here: you could go sector by sector in the Chinese economy and see massive foreign investment in many of them.

thelittleone 7y ago
Thanks for that info I’m not familiar with non tech based firm performance and I should have been more specific. For Tech, the % gap between real and perceived opportunity is far wider than any other country in Asia Pacific. Note that I worked for NASDAQ listed companies with Sarbanes Oxley compliance requirements. A large % of opportunities outright non-compliant (e.g., wanting a Porsche). Another frequent client requirement was warranty terms on consulting engagements. That might expire 12-24 months after service completion. So you can’t recognise revenue until then. And finally a signed SOW and terms carries some legal gravity in countries outside China. Scope creep is a huge problem in China, good luck with change requests or referring them to the SOW. Total opportunities - non compliant deals - delayed revrec deals (or similar issues) - scope creep = minuscule %. Also I’d argue that revenue and EBIT are better indicators of actual opportunity than total foreign investment. In firms like mine, China is a “strategic market” where investments are being made because these conditions may change one day. If your competitor is present when that happens and you are not, then HQ will think you failed.

baybal2 7y ago

> if a certain red Porsche was magically delivered in his wives name. It's the wild wild East. Welcome to China :) The art of finding a good client in China is all about finding what is in his head. It's all true that people who earn to be party officials, don't make good company execs, as they try to run companies like their party committees. If the guy is 50+ he is just a lost cause most of the time