We're Not in Kansas Anymore

From CHEN principal Barbara Ewen...

China’s economy is expected to surpass the U.S. economy by 2039 and the Japanese economy within 10 years. Across the Asia Pacific (APAC) region there are 3.3 billion people, a gross domestic product of $9.8 trillion – the U.S. is at over $12 trillion – and a 2004 information and communications technology spend of $633 billion. With the U.S. and European economies slowing, it is not surprising that both large and emerging companies are moving to seize the opportunities afforded in APAC.

According to the speakers at last night’s well attended CHEN PR seminar, Asia Pacific: Risk, Rewards and Best Practices, successfully building brand awareness and winning sales in the region is complex, highly diverse and fraught with potential failure. Understanding that each country in the region has its own culture, language, geography and maturity is essential to success.

Fairchild Semiconductor was one of the first semiconductor companies to identify the APAC opportunity and today has manufacturing facilities across Japan, South Korea, China, Philippines and Malaysia. Senior Director of Global Corporate Communications and Government Relations Fran Harrison shared her real time successes and “moments of sheer terror.” She stressed the importance of ensuring that the top management of the company is committed to be in the region regularly as level of titles are extremely important to success, especially in China. Marketing titles are not well regarded in China, for example. Localization is also critical as what works in Japan will not work in Korea or China and Western approaches to messaging often can lead to disaster.

Dr. Gordon Wong and Claire Walker, Founder/Media Director and PR Director respectively of Hong Kong-based Techworks Asia discussed the changing media environment, especially in China and offered their top ten tips to success. Companies with plans to do business in China must be able to discuss their business strategy, not their sales strategy, demonstrating at least a five-year commitment to the region. Commenting on the differences between Western approaches and what works in China, they highlighted how “involved” the Chinese Ministries remain, citing an example of a publication that wrote an article about a company that was not favorable. The company complained to the local Ministry and the next day the publication was shut down. Censorship is still an issue in China and all chat rooms and Internet cafes are monitored. As things change rapidly in China, it is vital that there are local company representatives who are knowledgeable and significantly titled.

The York Group helps firms build sales and distribution channels throughout APAC and Harald Horgen, President, cited key business challenges to entering China, Japan and India and highlighted key go-to-market considerations. While the opportunities abound in APAC, Harald cautioned that companies must select their initial markets carefully, be prepared to spend money, to always localize the product and the marketing and to think long term.

The seminar presentations are available at our website.

Many thanks to our law firm, Morse, Barnes-Brown & Pendleton, P.C. for hosting this event at their elegant new offices.

Good Reads:

Asia-Pacific Piracy Cost Software Cost $8B in 04: Watchdog, Wall Street Journal, May 18, 2005 (subscription required)

Better Business With China, Line56, May 20, 2005

China's Future: A Nation of Geeks? Fortune, May 19, 2005

Congress Seeks To Head Off U.S.-China 'Standards Wars', InformationWeek, May 12, 2005

eBay Eyes China for Growth, Reuters via CNET, May 16, 2005

Gartner Outlines Threats and Opportunities for the Global IT Industry In Anticipation of Continuing Sino-Japanese Tension [Press Release], Yahoo! Finance, May 26, 2005

Getting Tough with China? CNET, May 20, 2005

Indian Software, Service Exports on Rise, CNET, June 2, 2005

Japan Beefs Up Cyber Defense In Wake Of Chinese Attacks, Wall Street Journal, May 11, 2005 (subscription required)

U.S., China Clash Again Over Tech, InternetNews.com, May 13, 2005