Final Analysis: See China for Yourself

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If you're concerned about competition from Chinese powersports manufacturers, you might seriously consider visiting China. I did just that earlier this year, and I was amazed at what I found.

(Dealernews' exclusive report on China's business activities appears as a separate publication inserted in this issue.)

Shanghai rivals anything you'll find in the United States in terms of energy and entrepreneurship, aggressive business thinking, finance and architecture. The designs of bridges, office towers and apartment complexes are daring and exciting. And the high-test nightlife is fueled by flashing, extravagant lighting schemes incorporated into building designs.

Whether it's the modern retail centers, or the streets jammed with BMWs and Mercedes, or the efficient toll roads built with private investment, or the serious, no-nonsense attitude of factory workers, the message you get is the same: We're here to stay, we want our share of the world's economic pie, and we'll do whatever is necessary to get it.

Here are some of the things that struck me during my two weeks of travel throughout the country:

  • Representatives of the service industry are much more eager to please than those in America. Hotel services, restaurants, retailers and manufacturers — they all want to satisfy your needs as a customer.
  • There is a drive to improve, to make operations and products better. This means acquiring technology from others through partnerships, acquisitions, purchases and even reportedly illegal means. But we shouldn't think China lacks the desire to succeed simply because many of its products are poorly made and many of its people poorly fed. These people are not beaten down, and they're not afraid to try new things.
  • Chinese business executives are eager to succeed in the country's new market-driven economy. Yes, they want to make money. And, yes, oftentimes they cut corners to increase profits. "Let the buyer beware" probably applies here better than most places.
  • Part of this drive to improve is reflected in the somewhat casual manner in which the Chinese treat intellectual property rights. China is, for the most part, a poor country, and most people cannot afford Western products at Western prices. That's one reason why they copy Western music, movies and computer software. On the manufacturing side, it's not unusual for a businessman to discuss the highly sophisticated software that is running his production processes, and for him to point out that it's a pirated copy of a Western program.
  • There is a distinct lack of R&D capability. Because most manufacturers are merely assembly operations, there has been no need to develop new products. They simply build to a buyer's specifications. The Chinese are addressing this weakness by negotiating for technology, by acquiring it through the purchase of Western companies and often by reportedly stealing existing ideas.
  • Assemblers are surprisingly lax in controlling the quality of components that they purchase and use. This is changing as the government continues to demand higher-quality products before it approves export licenses. Some of the more sophisticated companies are buying this capability through acquisition of Western companies.

There is much more to see and learn about the Chinese, as a competitor and, of course, as a customer. But you should experience it for yourself.

Contact one of the growing number of Western companies and business organizations operating in China, and if you're able, try to spend a few weeks over there feeling and sensing the atmosphere.

You'll be surprised at how much you'll learn, and I'm certain that you'll come back with many ideas about how you can improve your own business, whether you're a retailer or a manufacturer.

Contributing editor Joe Delmont is editor and publisher of The Delmont Report newsletter and B2B website www.powersportsupdate.com. Contact him at joe@powersportsupdate.com.