The China Connection
Think outside the box to find opportunities in China
WHAT is "out of the box" thinking when it comes to China? Starbucks, with its thousands of Starbucks coffee shops in China, is a good example.
Who would have thought, that a land dominated by tea drinkers for eons would support Starbucks, which primarily sells coffee?
Well, the powers to be at Starbucks thought it was possible to turn a profit in China's culture because of the company's iconic status in the United States, and the attraction of Chinese consumers to American products.
McDonald's, Coca Cola, KFC and Pizza Hut led the way. Among other things, these fast-food pioneers made it possible and fashionable for Starbucks to charge the equivalent of an average day's pay in China for one cup of coffee.
Starbucks plans to open 5,000 Starbucks in China, and is on its way to reaching its goal.
Another recent example of the "out of the box" thinking is the New York Yankees deciding to meet with baseball officials in China. The Yankees have been invited to Beijing by the Chinese Baseball Association, for the purpose of developing baseball players in the People's Republic of China.
In the near future, a working relationship with the Chinese Baseball Association could include sending Yankee players, coaches, scouts, and player-development personnel to assist China's infant baseball program.
Such an investment by the Yankees could even maybe result in finding the equivalent of a Yao Ming, the famous NBA basketball player from Shanghai, for baseball.
This is not a new concept. In fact, other major league teams have developed similar partnerships with baseball teams in the Caribbean and in Japan. The Los Angeles Dodgers and San Francisco Giants were some of the first to benefit from the wealth of baseball talent in the Caribbean islands. Also, the Yankees had established a relationship with Yomiuri Giants of Japan, which helped them acquire the rights to former Yomiuri Giant and present New York Yankee star outfielder Hideki Matsui.
What makes this "out of the box" thinking important is that it opens up a huge market for the Yankees brand in China, with its population of 1.3 billion people, that goes well beyond the game of baseball. If the Yankees are successful, everyone in China could eventually identify U.S. baseball with the Yankees. Yankees caps and jackets would be worn by baseball and non-baseball fans all over China.
Wal-Mart also has demonstrated "out of the box" thinking in China. Clearly, it makes sense for Wal-Mart to expand in the United States. Wal-Mart is providing a cheaper alternative for a certain segment of the U.S. consuming public.
But does it make sense to open Wal-Mart in China? Yes, it does, because Wal-Mart can provide products cheaper, even in China, because of its manufacturing strength there, and also because Wal-Mart is a recognized U.S. icon, which carries its own appeal.
In China, opportunities for "out of the box" are available for those willing to take advantage of them.
One example would be for U.S. manufacturers to produce a line of products for the Chinese market to be sold exclusively in the U.S. for the Chinese tourist.
With most products being produced in China, Chinese tourists are finding it difficult to find U.S.-made products to bring home as gifts.
I have shopped with frustrated Chinese tourists, with money to spend, who ended up frustrated because there were no quality gifts made in the United States to give to their friends and relatives in China.
There could be a huge market for the Chinese tourist seeking high-quality U.S.-made products.
Another example would be to find opportunities that are highly regulated by the government and limited to companies owned by Chinese nationals.
A joint venture would allow a foreign minority owner to be part of a business in China that would otherwise be off limits. The joint venture would then have access to industry information reserved for Chinese nationals, and could build relationships with the Chinese government, in some industries, by offering to develop Chinese government regulations that would match U.S. standards or long-range U.S. planning and marketing for that industry. Accordingly, the joint venture could be used to gain access to a restricted market.
For another example, consider taro. In Hawaii, there is a shortage of taro. In China, there is an abundance of it, and it is commonly used in many Chinese dishes. Why not work with the taro farmers in China to grow taro and manufacturer poi and taro chips in China? An unfinished poi product could be shipped to Hawaii to prevent piracy of the recipe and to assure the quality and texture of the poi.
With an abundance of poi and taro chip products, you could both supply the Hawaii and mainland poi/taro product market and develop a market niche in China.
THERE is a saying in China that if the door is closed, there are other ways of going through the same door.
Unlike Americans who understand "no" as being definite, Chinese take this as an opportunity to find an alternative way -- to make a "no" into a "yes."
Finding another way through the door in China is "out of the box" thinking.
Richard M. Sakoda is CEO of the Sino-Hawaii Association of Businesses and Manufacturers Inc. He can be reached at firstname.lastname@example.org