The Entrepreneur’s Guide to Asia: Key Differences in Business Culture between East and West

The Entrepreneur’s Guide to Asia: Key Differences in Business Culture between East and West

Openness and self-sufficiency

Western culture is more open than Eastern culture. Under normal circumstances, in a modern business environment, the nationality of the business partner does not really matter. Rumors of “Russophobia” are often exaggerated, and the cultural norm in the West remains open to all potential partners, regardless of their nationality (the origin of investments that can be considered “toxic”, or technical issues with payments that may be due to sanctions, another topic we will not touch on). right Now).

Asia, on the other hand, lives her own life – in China, just a person of European appearance attracts excessive attention. At the same time, one must understand that for the Chinese, cooperation with foreigners and the search for international partners is not a necessity. They have a huge local market with solvent residents. According to CEBR, by 2028, China will overtake the United States and occupy the first place in the list of the largest economies in the world.

Two years ago, we came to China to speak with all the major manufacturers of VR attractions. The appointments were made by our Chinese employee Yi Er Lowe. I found the companies we needed in Baidu (a local counterpart to Google), called and wrote cold messages, then moved on to WeChat with those who answered and agreed on the details there.

For cold calling, we bought a Chinese number online to install WeChat on. We thought it would be easier to contact the locals this way. As a result, it turned out that it was impossible to connect the messenger to this number, and our calls were immediately blocked. It was almost impossible to reach the Chinese companies. With Western countries, such problems did not arise. We later learned that China has strict anti-spam and robocalling rules: if the average call duration is less than three minutes, or if you call a lot from the same number, they will be blocked.

As a result, we were able to communicate with all the companies of interest to us at the level of CEOs and founders, but without an open and sympathetic Chinese-speaking representative, it is very difficult to find partners in this country in the cold.

Translation difficulties

We came to China for three weeks and had two meetings a day: in the morning and in the evening. Each meeting took at least three to five hours, mainly due to the fact that all meetings were conducted through an interpreter. Even if we communicate with top managers, only one in five knows English. Er Lu contacted the Internet and made sure that the translators did not add anything of themselves and did not distort the meaning.

For example, one of the translators for some reason promised our partners to produce a device that we could not produce within the time period that they announced. This may lead to misunderstanding, dissatisfaction and complete termination of the partnership. I can’t imagine how we can solve the problems if we don’t have a Chinese speaking person among us.

This is another reason why it is difficult to build trade relations with the Chinese – in addition to cultural differences, the language barrier intervenes. You may not speak English well enough, but usually entrepreneurs know it well enough to at least assess whether the translator is getting the idea right. In the case of Chinese, you don’t understand what’s going on at all, and you have to rely entirely on the accuracy of the translation, or finding a native speaker who is guaranteed to be on your side.

Drinking tea in Guangzhou

East and West have different approaches to building relationships with business partners. In Europe and America, it is more realistic: personal and work are separate, and private life remains private. In the West, trade relations are based mainly on written agreements that spell out all the obligations of both parties.

In Asian countries, including China, personal contact is very important to the success of trade negotiations. For a Chinese culture campaigner, it is important to get to know them better before you start dealing with strangers. The saying “time is money” works oddly in Asian realities – locals invest a lot of time building relationships if they see a promising deal.

When we reached out to our Chinese partners, many meetings, especially in Guangzhou, started with tea. We were taken to a specially equipped room, and in the first hour we talked exclusively about general topics: culture, weather, quality of tea. Only then did we get to the details. In Shanghai and Guangzhou, after an evening meeting, we were often invited to dinner, and depending on the company, we were invited to various places – from expensive restaurants to street food markets.

We noticed that in Western culture people are somewhat thin on the outside, but tough on the inside, while in Asia it is the opposite. Americans are very friendly and very emotional, while the Chinese at the beginning of communication behave almost hostilely. They ask some questions and often start communicating in Chinese with each other directly in the meeting (especially when the interpreter leaves the room). But if you can break through that wall and show that you can be trusted and that your project is interesting, then the Chinese will be friendlier than the Americans, and communication will be more trusting. This is not easy, but the “healthy” bottom line: express respect and interest in their activities, ask more questions yourself and rely on personal relationships (all your communication skills will come in handy).

“save face”

Carriers of Asian culture rarely publicly criticize people, and unpleasant comments often come through third parties. A company’s CEO is not likely to say that your product doesn’t fit their needs. Oftentimes, he will simply remain silent, and if you insist, the middle manager will give you feedback. This complicates business interaction and wastes a lot of time.

It just needs to be taken into account, and if you find yourself wandering in the bush for months, ask a question directly to the decision maker. Ask him if he’s still interested in your product and what’s stopping him from moving on to the next stages. Explain the reason for your questions and ask for a time frame. Once, we had been negotiating for a long time, and when we asked the question blank, it turned out that the Chinese partner had lost the main customer (whom our product was intended for), but we were not informed about this, “so stay tuned”.

If we talk about frank criticism, then in the United States it is not so simple. There, most likely, they also will not tell you directly that they are not ready to pay for the product, although there are slightly different reasons. American business etiquette does not involve direct criticism. In some form, this will likely be true, but it will be wrapped in a compliment wrapper. Don’t be fooled by the great enthusiasm! And wonderful! And see what they say next. Again, it’s best to just ask what’s stopping you from buying and what risks your potential partners see.

It is not by chance that the expression of Russian reactions has taken root in the West – when they tell you as directly as possible what is really there, and not what you want to hear. Of course he is the closest to me. When working with foreign partners, I try to solve the problem through details: I suggest creating a pipeline if the product is interesting, and if not, do not waste each other’s time.

Dodgy CEO

Hierarchy exists in all organizations, but Western culture is collaborative. Line employees can easily talk to senior managers, and more experienced specialists try to create a sense of equality within the team. Decisions are made taking into account differing opinions and clear reasoning, and personal initiative is encouraged.

Eastern culture is very different. According to the International Dalit Solidarity Network, in countries where there is caste division, one can still see discrimination against people of certain castes in the employment and exploitation of their labor (although this discrimination is prohibited in India). In Asia as a whole, the principle “older is smarter” often operates: younger employees learn from older people and rarely dare to offer their ideas. The final decision is made by the leader – and it is not customary to appeal.

When dealing with foreign companies, this is manifested in the fact that it will not be easy for you to have a personal meeting with the head of the company. When we arranged meetings in China, we received promises that the CEO would attend. In fact, we first introduced the product to the technical director or sales manager, and they asked clarifying questions and tested the equipment. And only when they were satisfied with what they saw and heard, the commander appeared in the office. Although an hour before that, we were convinced the CEO hadn’t been in town at all.

Accordingly, you should be prepared for the fact that he will not be at the meeting with the CEO, and you should also devote more time than usual to preliminary negotiations. It is likely that you will have to tell the same thing to different people several times. If the manager came, then this is a good sign: most likely, your product passed some kind of preliminary performance test, and you – for adequacy.

Dreamers and Realists

Despite the rational approach, American business partners love stories about the great and bright future of the enterprise in the stadiums, it is important to “connect” them emotionally. In Asia, this can work when dealing with “visionaries” within the company, for example, with the chief innovation officer, who is looking to the future 5-10 years. But for CTO (the Chief Technical Engineer or Chief Technology Officer – Technical Director. – Forbes) or managers, a detailed risk assessment will be important in the first meeting.

In Japan and Korea, in the premiere, the company is expected to provide clear answers to the questions: how much money is needed, what other resources are needed, what are the main risks, how they can be reduced and what to do if the worst-case scenario materializes. They want to see that you understand that the world is not perfect and that something can always go wrong in it. For promotions in these countries, we have been prepared by professionals deeply immersed in their business culture. We’ve redesigned presentations many times, focusing less on market analysis and marketing and more on the risks and resources required for successful implementation.

At the same time, I strongly do not recommend imitating the culture of another country. Your partners will notice that you are trying to be something you don’t really want to be. This will increase mistrust. But understanding cultural differences will help you navigate what is happening at the negotiating table and beyond. Knowing what to prepare for, you can avoid many unpleasant situations and think about the best strategy.

The opinion of the editors may not coincide with the opinion of the author

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