In China, for China

US com­pa­nies fo­cused on cus­tomiz­ing their prod­ucts to meet de­mands of Chi­nese con­sumers, keen to gain more ground in var­i­ous in­dus­tries

China Daily (Canada) - - SHANGHAI - By YU RAN in Shang­hai

My ad­vice for forth­com­ing US com­pa­nies is to be aware of what is dif­fer­ent about con­sumers here. You can’t as­sume that the prod­uct you have in the US will at­tract peo­ple the same way here. You will need to ad­just it.”

yu­ran@chi­nadaily.com.cn

As the com­mon say­ing goes: “When in Rome, do as the Ro­mans do.”

Amer­i­can com­pa­nies in China have been quick to sub­scribe to this way of think­ing, as ev­i­denced by the 2015 China Busi­ness Re­port re­leased by the Amer­i­can Cham­ber of Com­merce in Shang­hai.

Ac­cord­ing to the re­port, US com­pa­nies are con­tin­u­ing to pur­sue an “in China for China” strat­egy, with 67 per­cent of com­pa­nies stat­ing that their top pri­or­ity in China is to pro­duce or source for goods or ser­vices for the Chi­nese mar­ket — a record high re­sponse. This in­cludes de­sign­ing unique prod­ucts and ser­vices for the China mar­ket.

“US com­pa­nies are try­ing to learn more about how Chi­nese con­sumers shop and what they look for,” said Ken­neth Jar­rett, the pres­i­dent of AmCham in Shang­hai.

Gen­eral Mo­tors, for ex­am­ple, tweaked the de­sign of the back­seats in its cars so that they would be more com­fort­able — Chi­nese peo­ple of­ten have their most im­por­tant guests sit in the back. An­other Amer­i­can brand, Oreo Cook­ies, has ad­justed the fla­vors of their prod­ucts to suit the Chi­nese palate.

“My ad­vice for forth­com­ing US com­pa­nies is to be aware of what is dif­fer­ent about con­sumers here. You can’t as­sume that the prod­uct you have in the US will

Ken­neth Jar­rett, at­tract peo­ple the same way here. You will need to ad­just it,” said Jar­rett.

Ac­cord­ing to Jar­rett, most mem­bers at AmCham have a pos­i­tive eco­nomic out­look de­spite the cur­rent slow­down in China, with al­most half of the re­spon­dents (44 per­cent) pre­dict­ing pos­i­tive five-year growth prospects, while 45 per­cent of them es­ti­mated that an­nual growth in their pri­mary mar­ket sec­tors will be mod­er­ate (6 to 10 per­cent).

“How­ever, they are try­ing to ad­just their busi­ness plans to deal with the chal­lenges such as man­ag­ing their mar­gins and be­ing ef­fi­cient so that they can con­tinue to be prof­itable,” he said.

Of the chal­lenges faced by US com­pa­nies in China, Jar­rett pointed out that Chi­nese gov­ern­ment poli­cies con­tinue to fa­vor do­mes­tic com­pa­nies in the bank­ing and in­sur­ance in­dus­tries.

Over in the in­for­ma­tion tech­nol­ogy sec­tor, US com­pa­nies have been con­cerned about pro­posed poli­cies that will limit their abil­ity to sell to their Chi­nese coun­ter­parts.

He claimed that about 63 per­cent of US com­pa­nies in China agree that such reg­u­la­tions are wors­en­ing over time and hin­der their busi­nesses, a jump from the 58 per­cent re­ported in 2013.

“We be­lieve that the cur­rent re­la­tion­ship be­tween the US and China is mu­tu­ally ben­e­fi­cial. Healthy and open en­gage­ment be­tween the US and China is good for both coun­tries,” said Jar­rett.

“There are ar­eas of dif­fer­ences, but this is quite nat­u­ral. What is im­por­tant is that th­ese dif­fer­ences are also dis­cussed openly and with a view to­ward find­ing com­mon ground. US com­pa­nies are ex­pect­ing to be treated the same way as Chi­nese com­pa­nies, which will give greater con­fi­dence to in­vestors and en­cour­age more com­pa­nies from the US to do busi­ness here,” he added.

pres­i­dent of AmCham in Shang­hai

GAO ERQIANG / CHINA DAILY

Ken­neth Jar­rett, the pres­i­dent of AmCham in Shang­hai, be­lieves that the US and China have much to gain from a healthy and open en­gage­ment with one an­other.

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