WINNING IN CHINA

A business book examines the challenges of establishing a foreign company in China.

How does a foreign business gain a foothold in the vast Chinese economy? In this slim volume, Sang and Ulrich present a series of case studies of companies that have succeeded and failed in the enticingly large, albeit potentially disastrous, market. The enterprises analyzed include, among others, Amazon, Hyundai, and Intel. Readers are given a breakdown of what happened with each business and what can be learned from the experience. Amazon, for instance, spent some 15 years trying to establish itself in China with little to show for its exertions. The causes for such an outcome are many, including the inability of Amazon’s “Buy Box” feature to be of much use to Chinese vendors. South Korean carmaker Hyundai made careful progress in its endeavor only to suffer from an unexpected political event involving the United States deployment of a missile defense system in Seoul. The authors point out that “China strenuously objected to its deployment, arguing it could be used to spy on its territory. Anti-Korea protests erupted across China.” Italian luxury retailer Ermenegildo Zegna took a gamble in opening a store in Beijing in the 1990s. That bet finally paid off after “five years of operating losses,” with the brand establishing itself as the choice for a certain class of “Rich Uncle” businessmen. But with fashion tastes ever changing, Zegna now finds it must shift to the needs of a new generation of wealthy shoppers. Such examples are merely a sampling of the information provided in this organized guide. If readers find some points dull, such as the finer aspects of why, say, the Amazon logistics network did not translate well to China, a summation is provided at the end of the pertinent chapter for a faster look. But the work is at its best when addressing more unexpected topics. One standout portion involves Norwegian Cruise Line, which, in its attempt to tailor to the wants of Chinese customers, went so far as to design the ship Joy to cater to their specific needs. Things did not ultimately tilt in Norwegian’s favor yet the details illustrate just how far a company will go in trying to crack a lucrative market—and how it can come up short even with its best effort.

A navigable, sprightly primer on an often elusive Asian market.