A New Sheriff In Town

The Google Vs. China showdown is still front page business news, but very few journalists are looking past the theatrics of the situation (i.e. somewhat heroic David versus Goliath tale where Google stands up to the injustices of governmental censorship, etc.) and asking the question of, ‘do the Chinese actually care about western companies and products when they have their own, thank you very much?

American internet giants are just part of the scenario of this massive emerging economy. What companies still fail to realize are the cultural chasm’s that need to be bridged in order to win ‘the hearts and minds of the consumer’. Recently, Eurocheddar mentioned how Walmart had a substantial learning curve when they expanded beyond U.S. soil. It simply wasn’t enough to move the store model to Latin America and expect local customers to be the same as in the states. In the same way, western companies have to understand the Chinese culture and traditions firstly, in order to then understand and ultimately create desire for their products.

Of course it helps to be first, as many market analysts point out. The fact that China has its own versions of Facebook, YouTube, and Ebay has certainly played a major role in foreign companies peddling the same wares, and achieving a lesser effect. But also, Ebay learned too late when they quit the country several years ago, that their business model didn’t translate to what the Chinese want. Local version, Taobao, won in the end because of the simple fact that they don’t sell used goods. The Chinese want new goods, not used. Had they understood that, they could have saved much money and time.

It reminds me of the cautionary tale of Chevrolet trying to sell ‘The Nova’ in South America in the seventies. They couldn’t figure out why it was bombing. Finally it dawned on them that Nova means ‘no go’ in Spanish. Although this is apparently an urban myth, it does highlight one simple fact: Due your research!