China, Canton Fair 2010

Ni Hao. I am back posting again after a visit to the 108th Canton Commercial Fair in Guangzhou, China. It was my first visit to this country working for ChromaticWorks in finding new forms of business and ventures for a client. Opportunity hunting! The experience was amazing and the objectives were accomplished, now it’s time to execute the plan alongside our client to make the profit. Let me tell you a little bit about the trip and my experience on Chinese innovation.
The Canton Fair is a three week event held twice every year in April and October, where large factories and distributors from all over China present their products and services, divided in phases according to product categories, from electronics to clothing to what-ever-you-can-imagine. I’ve never seen in my life so many large companies creating one same specialized product, such as compass or stuffed teddy bears.

Even though the Canton Fair it is one of the world’s largest commercial fairs, do not imagine you will see a lot of innovation or new product releases in the expo. We were actually disappointed in some categories such as sports and health. For what I saw, many Chinese companies have not given that step on innovation either and have focused on creating pre-existing low cost merchandise. Although words on the street say quite the contrary, with a large portion of wealthy Chinese acquiring good education overseas, China being a territory where most western companies are finding growth areas after opening their borders and politics to private investment and, of course, low production and employee costs.

But there are some aspects you should consider in doing business in China, especially in innovation:

When assembling products in China, beware of your intellectual property. For example, in the expo a company showed us a toy that was being created exclusively for “Discovery Kids” and was therefore not included in the catalogue and had no apparent price. After a few moments of asking them about the toy, they offered: “Well, some minor changes can be done, you can send us the packaging design with your logo and we can sell it to you.” We also visited a company that sold beauty-fitness machines and during the factory tour around the place, we were able to see a customized product for a Spanish company being assembled. We liked that product more than any other generic design the company sold. At first they had told us they could sell exact replicas to us, although in our next visit they told us they couldn’t. Still, we had already seen the design and even taken pictures, we could have easily gone to a nearby factory that created the same kind of machinery. (just so you know, we didn’t).

Most Chinese I met during our company visits were pretty “squared” and didn’t know how to react when asked outside their planned outline. For example, an import and export service company took about an hour and a half to create a Service License Agreement since they were never asked for one before (!!??). We found many companies telling us “I don’t think we can” or “I don’t think so, we’ve never done that” to what appeared to us were fairly easy changes that in US or Mexico would have been no problem. We met an Argentinean who had worked in China for years, having Chinese employees and said they were the hardest working employees he had ever had, but lacked thinking outside the box or beyond the technical problem and you had to supervise them constantly and carefully.

Another good recommendation is to check the quality on everything and ask for certificates and references, specially if they are new products. We found some companies explaining their product to us for several minutes, and when we told them about certificates they would say they still don’t have international approvals and couldn’t sell them yet. Be sure certificates are specific for the product you are buying and not general approvals for the company itself. There are a lot of urban legends about Chinese product importation gone bad, such as shoes made out of cardboard paper or an importer who got only left-side shoes.

One thing that did amaze me and we should learn from was Chinese attention to details in order to gain costumers. In a service company we visited, in the 20th floor of a nice building, after the elevator door opens, a display greets you with your names. Inside, many desks had small Mexican and Chinese flags together. In the showroom they hanged a picture of all the Mexican clients they had worked for, including gobernment. I’ve never seen that kind of personalized attention and makes you think they are prepared to handle your business. They even wrote out Chinese addresses for the best restaurants and tour places for us to visit! In another company, one of the main engineers waited for us in the metro station to take us to the company since they had no car to pick us up and then he even helped us with hotel and taxi reservations.

Chinese people were kind and friendly to us and I want to thank all of those who made this experience a success. Sadly, this blog (as all others) is blocked in China.

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