China, why don’t you speak my language?

It is so difficult to travel in China! Given that Chinese and English do not have a common alphabet, getting around is a challenge. While most signs here in Shanghai have the English version of the word underneath it, this translation does not always help. I can look at a map application on my phone, but I cannot type in an address that can be found by the application. Having the English name of the place I am trying to travel to does not work. Only by having the Chinese address will a taxi take me where I need to go. With the advent of Uber, transportation should be easier. Uber recently came to China, and the app is easy to navigate, but it does not work with a non-Chinese keyboard. I cannot point to a spot on a map in order to get there. Given these factors, transportation has been my biggest challenge. Navigating the metro is easier, since there seems to be English and Chinese writing for all stops. The metro is fairly simple to use, and is clean, but not the most convenient. It is not like New York City where there is a metro stop almost every block. Trying to meet with businesses is also challenging especially when trying to make it to an appointment on time. Having Chinese-speaking team members has helped, but with our large team, they are not always available to assist.

Uber ChinaDon't Play Water

On the other hand, shopping and eating have been surprisingly easy. Most restaurants have pictures on their menus, and some even have English menus. Prices are labeled, and it is fairly easy to know what you are going to get. While I want to buy some souvenirs, nothing yet has jumped out at me as something cool I want to purchase. The marketplaces tend to have low quality knickknacks, but I am sure in the end that I will have a bronze dragon or something that is unique to China.

Meat Products

As the end of the first week in country approaches, I will continue to explore the cultural and business aspects of the country. Expanding my global competence will benefit me as I continue my education at Fisher and ultimately move into a multi-national enterprise.

China Industry overview: Focus on Logistics & transport infrastructure

China is the second largest economy in terms of nominal GDP and the world’s largest economy in terms of purchasing power parity, with a very robust infrastructure system in terms of its roads, sub way and railway networks. China has a very heavy focus on manufacturing and is the largest exporter of goods in the world. Industry contributes around 40% of GDP with around 30% of the labour pool employed in industry. The Service sector contributes around 50% of GDP and the remaining contribution is by agriculture. With a population of around 1.36 billion, China has the world’s fastest growing consumer market.

Among the various industries, machine building and metallurgical industries have been given the highest priority and together they contribute around 30% of the gross industrial output in China. The Chinese focus has been on increasing production capacity or utilization and thus, innovation has suffered greatly, particularly quality and sophistication of its manufacturing systems. For example, China produces a lot of commodity steel products, but imports a significant quantity of specialized steel products. In the consumer goods segment, there is a high focus on textile and apparel industry: Shanghai is an important textile center.

China’s logistics market is fragmented, with the top 20 transportation companies accounting for less than 2% market share. The majority of the logistics companies are small and medium sized enterprises, and they mostly operate in the nearby cities. There are a few foreign-owned enterprises such as DHL, FedEx & UPS in China, as well as other state owned and private logistics companies. In 2013, Alibaba group launched “China Smart Logistics Network (CSN)”, a platform to be implemented in the next few years. CSN aims to support seamless information transfers between vendors, online operators and logistics providers.

Overseas companies are not able to dominate the logistics segments in the heavily regulated rail transportation, pharmaceuticals and the emerging e-commerce businesses. The state owned logistics companies operate smoothly in the regulated industries, whereas the private players operate more efficiently and are able to offer better prices for the price sensitive customers. Thus, the private logistics firms dominate the e-commerce market in China. The annual growth rate of online shoppers in some provinces, such as Henan, Shanxi and Xinjiang, is more than 100% and this fuels the rapidly increasing logistics industry in China.

Shanghai-huangpu river

Our first destination for our GAP project is Shanghai, a transportation hub with the world’s busiest port, located on the east coast of China.

Our team visited a local logistics company in Shanghai for a meeting regarding logistics and warehousing solutions for our project. The executives welcomed us warmly and were very enthusiastic about our project. They even involved someone from their office who could understand English which made things much easier for us. The company specializes in warehousing, inbound and outbound logistics operations. Currently, their major business partners are from the F&B (Food & Beverage) and cosmetics industry. The meeting went very smoothly, and we accomplished our set agenda in less than 30 minutes. Unlike popular perception that business meetings in China are slow and you cannot expect much out of your first meeting, I had a completely different experience. Things moved way faster than I expected!

China: New Beginnings

Nee-Hao from China! Sitting in the apartment in downtown Shanghai is an experience in itself. The China market seems interesting and starkly different from what I have experienced in India or America. The sheer amount of focus on brands and advertisement is amazing. There are progressive advertising banners on set intervals between the stations, which looks like a video ad when the train runs (imagine pictures coming to life in a flip-book!). There are huge billboards everywhere, and everyone seems to be in a hurry. The food is surprisingly different from the Americanized Chinese food that we get in Columbus. It is slightly sweeter everywhere in Shanghai, apart from the spicy Sichuan food, of course! The retail stores are single-brand owned stores, and there are no superstores that sell multiple brands. The apartment that we live in is comfortable, but we faced a few issues with our internet connectivity in the first few days. The weather is pleasant- misty rain almost through the entirety of the days as this is the plum season. My team members are diverse with their experiences. Xiaoran has been setting up very helpful meetings through his contacts, while Lucy has been a great translator, bridging the gap created by the language barrier.

Conducting business and entering the market here is easy and difficult at the same time. The brand name sells. No matter the material or the utility- if the brand is big overseas, the product will sell at a huge premium (~200 %!). The market is huge which means that there will be buyers for any product that you can get out there. There are 25 million people in Shanghai alone. There is a big possibility that someone will like your product!

But how to enter the market is the big question. How can our client enter the market with a mid to premium segment product in a country that is known for its notorious piracy and duplication? The answer to this question is our team’s challenge. We are hoping for some insightful days ahead that will help us learn how to conduct business in this mystic land of dragons.

In the Heart of Shanghai

Our first week in Shanghai has been a great experience. I was very impressed with the house that we rented, although, from the outside, it looked less than inviting. Overall, the amenities have been very good, and basically what I expected (and what I would expect in a country of China’s level). The neighborhood where we are located has been interesting as well. It is close to the large shopping areas, the old French colonial quarter, and the famous Shanghai skyline. The biggest surprise for me with our house (and buildings here in general) is the lack of centralized AC in a place that has proven to be relatively humid. Most buildings rely on fans, or nothing at all. In fact, there have been several days where the outside temperature has been a lot more pleasant than the air inside due to the lack of ventilation. This tends to give me the impression that I am outside and exposed to the elements regardless of whether I am outdoors or not. Overall, this isn’t a huge issue, but something that strikes me most times that I leave the United States.

One other surprising thing I’ve noticed is how little English the locals speak. Is not that I expect people to speak English in the countries where I travel, but it has been inevitably true in most other places. And, I don’t mean that  speaking English is meant purely to cater to Americans, but English more generally acts as an intermediary language between most international travelers that I have encountered. This is neither a good thing nor a bad thing, and in most business settings, it still seems like English is understood and accepted. However, it does act as a reminder to not expect anything when travelling abroad, and to be as well prepared as possible so that you are not left fumbling in the event of a minor road block. In other words, it’s important to consciously plan for all the ancillary day-to-day tasks that are outside of the strictly business-related activities that we are here to work on.

More generally, this boils down to the importance of being flexible – something that I have grown to embrace during my time at Fisher in general. It has been the most noticeable when working in groups and trying to coordinate schedules with teammates who all lead busy lives. A big part of adjusting to this has been limiting procrastination, which has been a common indulgence of mine in the past. By doing work immediately as it comes up, it is a lot easier for me to be flexible with meeting times and project deliverables because most of my preparation is complete ahead of time. And, that takeaway continues to serve me well both in the classroom and outside of it.