Who Are the Serious Chinese Investors?
It is known that foreign companies that have to travel to China for a business or academic visit send one to three people max., and so such a small delegation isn’t a big burden for a local recipient – manufacturer or government, because they don’t often meet a delegation from the same country more than once a month. Today, however, Chinese delegations happen to travel abroad in groups for business or academic reasons, coming from all over China, in order to have a greater visual effect. You can imagine what that looks like - as if tourists came to one place for their holidays from all around the Europe.
For example, while we were visiting locations we plan to co-work with in Tel Aviv in 2016 we witnessed this ourselves. We were also told that today most of the delegations come from China and that the host often receives them on a weekly basis, some even on a daily basis. Now you know the difference. Thanks to the relationship we have with the Embassy, who organizes our business tour through their Trade Commission office, we found out that before we travel overseas, each time they have to explain to their people that “These” Chinese are not “Those” Chinese…I am sure that you get the rest of the message.
So, after all these visits, did anything really happen? Let me share with you my personal experience from 15 years ago, when I started my entrepreneurial experience as a business development person. “Who are the serious foreign investors?” was a significant question that hit me. After reaching out to dozens of foreign “investors” in order for them to pay visits to local manufacturers and sites, it is normal to expect that something could happen between the visitor and the local manufacturer/governor, right? However, nothing happened. Those who asked for market research before and/or during the visit closed deals not only with us but also with identified local partners. This was thanks to the requirements for our research in the very beginning, which mostly incorporated Market Entry Study, Partner Search, and Site Analysis.
So what have I learned? I stopped chasing down “visitors” and re-focus on companies who ask for research before any visits. Visits shall be the next stage of our services. We also discovered that those who asked for research before any visits had already had faith in their future business action, and the research results and visits were used to help their decision-making process. Faith and trust are empowered, as a wise man said: “who doesn’t trust enough will not be trusted”, or in another words, “who trusts enough will be trusted in return.”
Taking another case as an example, in 2013, we were spontaneously asked by a Chinese Fortune 500 company to carry out a Market Entry Study for their commercial microwave oven on the US market. Thanks to this 8-month endeavor, they are now doing great in the US market seeing how they hired the associates suggested by our report. There is something behind this story. When we were on this mission in the US in December 2013, we visited and interviewed a number of relevant local contacts, consisting of industrial experts, consultants, customers, distributors, dealers, resellers, brokers, custom workers, etc. (see the photo), in order to form high quality and responsible result. These approaches would only be used by professional researchers, not by the visitors.
Therefore, when we travel, we come with serious purposes and most importantly, with the hope that their faith already lies in the process, leaving the rest up to the selected partner and the real investor.
Recently, I was approached by a pivotal Chinese governor who would like to invest in two areas, which are: 1) the introduction of environmental technologies such as odor control, leachate treatment, sludge disposal, and soil remediation, into the Chinese market; and 2) M&A of local real estate companies. On account of the fact that the Chinese real estate industry has entered into the period of integration, it’s good timing for foreign investors or developers to acquire local developers for cost-effective projects. I was very straightforward with the governor, emphasizing the “seriousness” of the matter, and that dispersing information at random and trying to see who the winner would be is the approach of the “visitor”, and it isn’t something we would do. The case is the same when vice versa. If we come to you we have a serious approach, but if you are qualified, the process is easier and our result is more predictable than any visits which are based on hoping that something might happen.
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