Tag Archives: China Daily

Beijing ranked most global city on the mainland

China Daily

Beijing has made it into the top 10 of the world’s most global cities for the first time, ranking eighth in the A.T. Kearney Global Cities Index.

The index, introduced in 2008 by the global consulting firm, includes 84 cities.

Beijing scored an overall 3.5 in five categories, including business activity, human capital, information exchange, cultural experience and political engagement. It stood out from other Chinese cities in terms of the number of Fortune 500 companies, international schools, broadband subscribers and museums.

New York, London and Paris have held fast to their positions as first through third since 2012.

“The increasing global importance of Chinese companies has helped catapult Beijing to fourth place on the business activity dimension. This, together with some improvement in scores for human capital and cultural exchange, has been more than enough to offset declining relative performance in information exchange and international political engagement,” A.T. Kearney experts explained.

Johnson Chng, managing director of A.T. Kearney Greater China, said, “Clearly Beijing went up in the ranking due to its rising importance as a business center in addition to being the political center of China.”

However, he added, the air pollution issue is now a growing concern for many Beijing residents that, if not addressed soon, will cause an outflow of talent.

“In fact, many of my friends and business associates have moved out of Beijing in the last six months, and many are indeed contemplating the idea, too, for the sake of their family,” he said.

In a recent survey conducted by MRIC Group, an international executive recruitment firm, 47.3 percent of the 269 respondents in Beijing said they would like to relocate this year because of air quality concerns. The most-preferred destinations are North America, Shanghai, Europe, Hong Kong, Singapore and New Zealand.

As human capital is weighing ever more among the five categories, some companies have to improve the working environment to retain talent regarding the air quality in Beijing.

“Companies should prepare air purifiers especially when the buildings don’t have such machines,” said Robert Parkinson, founder and managing director of the international recruitment group RMG Selection.

Shanghai, ranking 18th in the index, was the only city on the Chinese mainland that came close to Beijing. In fact, it scored higher than Beijing in human capital, given its larger foreign-born population. Shanghai also performed well in business activity.

Beijing lags behind Shanghai in human capital because of the capital city’s “size of the foreign-born population, scores of universities in the global 500, number of inhabitants with tertiary degrees, international student population and number of international schools,” explained Chng from A.T. Kearney.

On the other hand, Shanghai ranked lower due to a less-ideal score in political engagement. Specifically, Shanghai is home to a smaller number of international organizations, embassies and consulates, think tanks, political conferences and local institutions with international reach.

The Shanghai Pilot Free Trade Zone will certainly help the city’s globalization in the long term. However, the impact and the speed of that depends on policy implementation as there are still lots of details to be sorted out in terms of how exactly Shanghai FTZ will work, Chng said.

“In the short term, I do not see any material change as most companies are simply trying to take advantage of the FTZ to help with the existing business rather than attracting significant new business,” said Chng.

Other Chinese cities in the list saw their rankings drop.

Guangzhou dropped from its rank of 60 to 66 this year due to a significant decrease in political engagement. Shenzhen dropped from 65 to 73 due to a decline in its human capital score.

Read the original article on China Daily: http://www.chinadaily.com.cn/business/2014-04/15/content_17434408.htm

Getting right fit is harder than it looks

China Daily

International fashion brands need to cut their cloth to suit the Chinese market

As world-renowned consumer goods companies enter China, a series of problems has sprung up in the Chinese market for international fashion brands.

Fashion brands such as Zara, C&A, Uniqlo and H&M bear striking similarities. Although they come from different cultural backgrounds, the brands will inevitably confront difficulties that international fashion brands face in China.

Mango, a Spanish brand, entered China at an early stage but was forced to shut shops after posting dismal sales figures, and gradually faded out of the market.

The first difficulty that the fashion companies face is fierce competition among international brands.

Esprit and Mango are among the brands that have faced serious problems in China. Since 2009, Esprit’s profits have spiraled downward. During the first half of 2011, the company’s net profit dropped 98 percent, and in one day its share price dropped $41. In response, the company began closing stores on the mainland.

Mango’s 2010 financial statements for China indicate that its market share in China accounts for only 2.7 percent of the global market, excluding VAT. Mango owned 115 stores in China last year, a 42.5 percent year-on-year drop compared with 2012. Most Mango stores were forced to offer big discounts to get rid of stock.

When brands like Zara and H&M make their debuts in China, they always try to label themselves as superior and high-end. They use eye-catching marketing in China aimed at making consumers forget about the brands’ down-at-home image in their local markets. However, the strategy fails when competing with real high-end brands like Hermes and Chanel.

The second difficulty is increasing competition from domestic fashion brands.

International fashion brands like Zara, H&M and GAP have flooded China in recent years, but domestic fashion brands are used to the competition. They have learned how to optimize their business models, and are now taking advantage of their localization to narrow the gap with international fashion brands.

As the market becomes mature, the design and development capability of domestic fashion brands has almost reached the same level as international ones. Although there is still a gap in grasping fashion trends, many companies have gradually implemented the appropriate strategies and cultivated local Chinese fashion designers.

Me&City, a typical representative of domestic fashion brands, recently worked with top international fashion trend forecasting agencies as well as renowned international fashion designers, keeping a close eye on international fashion weeks. Their Chinese and foreign designers have combined local and international elements of the brand and gone to fashion capitals to do market research.

While some international fashion brands have achieved great success in China, domestic companies realize they should not blindly follow them. It is essential for domestic companies to have a stable presence in the local market and integrate into the industry chain, adopting international standards on technical aspects such as product design, supply chain and a marketing strategy based on what is really happening in China.

The third difficulty is whether product quality can stand long-term scrutiny.

Last year, the results of the Comparison Test of Apparel & Fashion conducted by the China Consumer’s Association attracted widespread attention. Several international brands such as Zara, M&S, Guess and Paul Frank were tested, and more than one-third of the sample products did not meet national quality standards.

The authority conducted special tests for product identification, component content, formaldehyde content, pH value, color fastness, smell, tear strength, and several other things. It turned out that fabric is still the Achilles’ heel of international fashion brands, which is closely related to global sourcing and production.

Products of international fashion brands sold in one country are often from different regions in the world, which causes inconsistencies in product quality control. In addition, inadequate localization generates substandard products.

For instance, domestic and international markets have different criteria for fabric, which leads to substandard products. However, consumers still flock to international fashion brands because they believe there are no “fatal problems”.

However, that does not mean international fashion brands do not have issues. The quality problems that affect international brands are caused by a lack of supervision. Also, a gap between Chinese standards and the global sourcing and production model still exists.

Notwithstanding the popularity of international brands in China, especially in the initial market stage, once there is a “fatal problem” with material, brand image and customer loyalty will suffer. Even cheap and affordable international fashion brands will be regarded as low-quality and low-priced.

The fourth difficulty is a huge industry talent gap.

A survey from RMG Marketing Research Center shows that those in the fashion industry tend to be quite young, most with a good education, especially in the luxury field. However, the fashion industry still suffers from a serious lack of talent.

The fashion industry may seem glamorous to many, but many who work in it think this glamor is highly overstated. Moreover, many professional managers find it difficult to advance when they reach a certain seniority level. There is a disparity in the amount of talent in the domestic and international fashion industries. Recruiters and headhunting firms have become the main recruitment channel in the industry.

The “China Talent Flow-Survey 2013” conducted by RMG Selection reveals that about 70 percent of recruiting phone calls are from recruiters and headhunters in the fast-moving consumer goods and retail industry.

International brands must choose the right development strategy to succeed in China, where both opportunities and challenges exist.

The author is fast-moving consumer goods consultant at RMG Selection, an Asia-focused human resources and recruitment consultancy based in Beijing. The views do not necessarily reflect those of China Daily.

(  China Daily European Weekly 02/21/2014 page12)

Source: http://europe.chinadaily.com.cn/epaper/2014-02/21/content_17295763.htm

Making Sense of The Challenge of A Big Move

Recruitment | Robert Parkinson  

USA

China is the world’s second-largest economy with growth that would leave many countries salivating. In my view China is a fantastic place to live and work in. Because everyone’s experience is not mine, let me share some feedback on what I think is important about a career in the country.

It’s important to clarify that my target audience is people who have had at least three to four years of work experience outside China and are not of Chinese or oriental decent (which of course changes things a bit because issues of heritage and family come into play).

I believe one of the major success factors for my expatriate life in China is that I had already worked in a country (the Netherlands) other than my own for a significant period. OK, you might say, Amsterdam is a 50-minute flight from London whereas Beijing is about 8,000 kilometers away, but still it is a different culture; and I believe that truly understanding that we all see the world in a different way is something that only happens with time and experience.

I have seen many examples of expatriates in China landing in Beijing or Shanghai with the “I’ll get ‘them’ to do it our way (!)” mentality, and then slowly but surely their confidence wanes. Successful laowai realize that you will never change a culture thousands of years old, no matter how convincing you are. It is far better to understand and appreciate it.

The second, but perhaps most important tool for foreigners to do well in China is language. I can list at least 10 examples of people I know well who have enjoyed accelerated careers (in China) simply because they’ve made the effort to get to grips with Mandarin at a fluent or semi-fluent level. When I was at school in the 1980s and early 90s, there was tremendous emphasis on the European Initiative (basically, pupils from the age of 10 upwards were all taught German) which has since been quietly replaced with Mandarin.

Interestingly, learning English is also the most important advice I give to young Chinese people. I know many Chinese professionals who’ve done very well simply because they speak English fluently.

Staying with the practical and financial perspective for a second, the next most important element for foreigners – both early- and mid-career – is to be sent to China. Packages for the talented are still good and managers in disciplines such as finance, law and general management can expect tax equalization, paid apartments and schooling for children on top of hefty base salaries and bonuses (of course you have to perform, otherwise you’ll certainly be replaced).

I compare this with foreigners who move jobs within China who almost certainly will not get perks such as schooling and housing – and will probably be awarded a “local plus” package, or just a comparable package to a person from the local market.

Alongside expatriation, of course one has to understand that the expectations set at the beginning of an expatriate assignment in terms of timing have very little bearing on reality: three-year assignments quite often turn in to 10/15 plus year relocations. Why? Because for the vast majority of people working here, it takes at least two to three years to get used to life. At that point, most companies want to see a return on these investments so usually they prefer their managers to stay longer (if they’re good).

Finally, moving more toward the profound, one should consider such factors as: Are you genuinely interested in Chinese culture? Life is much easier if you are. Are you coming because you believe China is something of a magic cash machine? It isn’t. Are you prepared for the cultural differences? Read. Have you anticipated the problems? Ask.

There is a lot written about China, which is valid and useful, and equally a lot, which is based on prejudice, hearsay and speculation. Above all, do yourself a favor and come here for a week, there are thousands of travel options now, so come and explore, meet people and decide whether or not the challenge is for you, because above all else China is without doubt exactly that: a challenge.

The author is founder and managing director of RMG Selection, an Asia-focused human resources and recruitment consultancy.

Read the original version at: China Daily USA More information: RMG Selection

Making Sense of The Challenge

  EUROPE Understanding and appreciating finer cultural nuances can help expatriates succeed in China China is the world’s second-largest economy with growth that would leave many countries salivating. In my view China is a fantastic place to live and work in. Since everyone’s experience is not mine, let me share some feedback on what I think is important about a career in the country. It’s important to clarify that my target audience is people who have had at least three to four years of work experience outside China and are not of Chinese or oriental decent (which of course changes things a bit because issues of heritage and family come into play). I believe one of the major success factors for my expatriate life in China is that I had already worked in a country (the Netherlands) other than my own for a significant period. OK, you might say, Amsterdam is a 50-minute flight from London whereas Beijing is about 8,000 kilometers away, but still it is a different culture; and I believe that truly understanding that we all see the world in a different way is something that only happens with time and experience. I have seen many examples of expatriates in China landing in Beijing or Shanghai with the “I’ll get ‘them’ to do it our way (!)” mentality, and then slowly but surely their confidence wanes. Successful laowai realize that you will never change a culture thousands of years old, no matter how convincing you are. It is far better to understand and appreciate it. The second, but perhaps most important tool for foreigners to do well in China is language. I can list at least 10 examples of people I know well who have enjoyed accelerated careers (in China) simply because they’ve made the effort to get to grips with Mandarin at a fluent or semi-fluent level. When I was at school in the 1980s and early 90s, there was tremendous emphasis on the European Initiative (basically, pupils from the age of 10 upwards were all taught German); which has since been quietly replaced with Mandarin. Interestingly, learning English is also the most important advice I give to young Chinese people. I know many Chinese professionals who’ve done very well simply because they speak English fluently. Staying with the practical and financial perspective for a second, the next most important element for foreigners – both early and mid-career – is to be sent to China. Packages for the talented are still good, and managers in disciplines such as finance, law and general management can expect tax equalization, paid apartments, and schooling for children on top of hefty base salaries and bonuses (Of course you have to perform, otherwise you’ll certainly be replaced). I compare this with foreigners who move jobs within China who almost certainly will not get perks such as schooling and housing, and will probably be awarded a “local+” package, or just a comparable package to a person from the local market. Alongside expatriation, of course one has to understand that the expectations set at the beginning of an expatriate assignment in terms of timing have very little bearing on reality: three-year assignments quite often turn in to 10/15+ year relocations. Why? Because for the vast majority of people working here, it takes at least two to three years to get used to life, and at that point, most companies want to see a return on these investment so usually they prefer their managers to stay longer (if they’re good). Consider also that life in China offers a very high standard of living, buzz, excitement and rapid change when compared with the relative mundanity of cities, certainly in Western Europe. There aren’t many people I know who look forward to going home, and indeed, Westerners I know often retire to more developed Asian cities such as Hong Kong or Singapore. Finally, moving more toward the profound, one should consider such factors as: are you genuinely interested in Chinese culture? Life is much easier if you are. Are you coming because you believe China is something of a magic cash machine? It isn’t. Are you prepared for the cultural differences? Read. Have you anticipated the problems? Ask. These are all questions which need addressing, and will make whichever decision you eventually take far more concrete and assured. I’ve worked in China now for almost 10 years. I never expected to be here this long, but I love (nearly) every second and have made my life here. I would encourage anyone who’s intrigued to seriously explore a life in this gargantuan country, as there is no mistaking the significance of China in today’s world order, and for the right people there are some very serious opportunities here. There is a lot written about China, which is valid and useful, and equally a lot, which is based on prejudice, hearsay and speculation. Above all, do yourself a favor and come here for a week, there are thousands of travel options now, so come and explore, meet people and decide whether or not the challenge is for you, because above all else China is without doubt exactly that: a challenge. The author is founder and managing director of RMG Selection, an Asia-focused human resources and recruitment consultancy. Read the original version at: China Daily Europe  More information: RMG Selection

"Uncorking the Full Potential"_China Daily

Strategic use of micro blogs can help companies achieve marketing success

It comes as no surprise that Sina Weibo is one of the most popular and the fastest growing micro-blogging platforms in China, considering that it had nearly 500 million users by the end of February.

Along with its popularity the platform has also become an integral marketing tool for companies across various industries in China. According to the 2012 Corporate Weibo White Paper, there were 130,565 companies that had certified enterprise micro blog accounts by the end of February. Prominent among them are restaurants (50,000), automotive (7,546) and business services (7,212).

In the Fortune Global 500 list, there were 243 enterprises that have opened micro blog accounts, while 207 enterprises in the Fortune China 500 list also have micro blog accounts. All of this clearly underscores the point that a micro-blog presence is essential for a company that is planning to operate in China.

That also raises the question on the need for a micro-blog presence. The obvious answer is not just to tap the huge market with immense potential, but also to realize some benefits that only a micro blog can bring to a business. Micro blog is known as the Chinese Twitter, but in my opinion it is Chinese Twitter plus Facebook.

First of all, micro-blogging is the way for businesses to personally interact with potential customers to build brand image and customer loyalty. Micro-blogging can also create a positive association and friendly attitude toward the brand.

Secondly, a micro blog can be used as a market research tool since the company can learn current trends, and interests as well as what people are saying about its products and services. By constantly getting feedback on their micro blog, companies can come up with new ideas to approach customer needs and expectations.

Finally, it is free to open an account or to publish anything on a micro blog, and hence an option for companies to reduce marketing costs. If a company has a relatively huge number of fans, any posting on its micro blog automatically acts as a free press release.

Though these advantages are enticing enough, it is important for companies to have enterprise micro blog accounts if they are to realize the full potential. This is especially so as there are several challenges that companies face while using social media, or more specifically a micro blog in China.

Most of the people use a micro blog to connect and interact with others as a way to relax and entertain, while certain amounts of enterprise users in specific industries are more serious than that. Therefore, how to combine the entertainment factor and commercial factor is a question that many enterprise micro blog users need to ask themselves.

Companies should look at how to draw people’s attention but still focus on promoting the brands’ image. This is mainly to reach the goal of getting more micro blog users to become real potential customers.

An example of this is the strategy adopted by one of the top 10 Chinese banks, with a relatively low number of fans and activities on its micro blog. The bank came up with a strategy to get more attention from the public by encouraging other users to share posts, re-posts and comments on their micro blog posting. To encourage this activity, the bank also offered an iPhone 4S for the best posting. The initiative got excellent feedback with over 26,000 re-posts and 23,000 comments on the required post “What is your love and dream?” This strategy did boost up the bank’s popularity, but the post was not relevant to the business that the bank offered. Therefore, it did not really help the bank in getting more real customers but only in getting more fans onto its micro blog.

Many Chinese companies also consider micro-blogging as a powerful new media tool to build up brand image and increase customer numbers, along with the traditional marketing in newspapers, radio and television. However, the two media tools cannot be separated but need to be synchronized toward the companies’ objectives.

Much also depends on the business segmentation, and companies should consider using a variety of different media channels to effectively reach all the target audiences. Companies also need to work on how to create integrated marketing in general and how to generate micro blog numbers in particular.

A micro blog is an open site for employees and customers, and once information is published, it is impossible to stop it as people can keep re-posting the original post in just seconds. Another issue of using social networking sites is the risk of leaking confidential information such as salary, trade relations and innovative technology. Companies should take this into serious consideration and come up with a better way to tighten employee activities on social networking sites.

There is no doubt that companies want to do a good job in marketing on their micro blogs, but it also calls for a talented team to run it. RMG Selection recently released the China Talent-flow Survey Report, which showed that there is still a huge shortage of qualified online marketing professionals, especially in terms of social network platforms.

Micro-blogging and its strong influence on the public is definitely a great tool for many companies. However, it is a double-edged sword that can only benefit the business if the company knows how to use it strategically. Therefore, enterprise micro blog users should be aware of certain challenges and get cracking on a detailed marketing plan to uncork the full potential of micro-blogging.

The author is marketing director of RMG Selection, an Asia-focused specialist recruitment and executive headhunting firm. The views do not necessarily reflect those of China Daily.

Link to the article:

http://africa.chinadaily.com.cn/weekly/2013-04/05/content_16377459.htm