The Small Business segment of the The New York Times recently carried three articles featuring Deb Weidenhamer, the chief executive of Auction Systems Auctioneers and Appraisers. Since 1995, Deb Weidenhamer has grown her Phoenix-based auction house from $1.5MM in 1996 to $135MM in commissions today.
Deb Weidenhamer’s operations in China involve selling at auction Western-made goods to the Chinese on behalf of small American companies that cannot afford to have a full-blown, multinational presence in China.
The three articles feature interesting conversations on doing business in China and cross cultural differences. Here are the highlights.
What it Takes for a Small Business to Do Business in China
- On selling used goods in opposition to selling new goods: “There’s a huge stigma in China over used goods. They throw them away. It’s a very disposable country. Plus, a business liquidation would be a loss of face. You just close — maybe make a private, side deal to dispose of something.”
- On difficulties of setting up business in China: “It was a major project. To open an office, we had to have 18 different approvals from 18 different ministries in the government. Each took between 15 and 90 days.”
- On social media in China: “Many Chinese and Western companies buy followers so that new fans feel like they’ve joined a group of forward-thinking social media participants, but buying messages and advertising completely bombards the Chinese consumer. Successful social media strategies in China revolve around connecting with fans on other subjects rather than the business at hand, which is also consistent with the traditional Chinese custom of building relationships and not just breeding customers. For example, a cute photo of a puppy brings in thousands of comments and usually cycles back around to a conversation about auctions.”
On Cross-Cultural Distinctions and Communication Styles
- On the importance of learning the local language: “I think there’s an expectation from the Chinese community that if you are committed and you care about having a business in China that you will make a valiant effort to learn Mandarin.”
- On the Chinese mindset at negotiations: “Westerners come at a negotiation as a win-win for both parties. Obviously, I want to win a little more than you do on your end, but we try to make it a win-win for each other. The Chinese consider a successful negotiation in terms of a win and a loss. And obviously, their desire is to win.”
- On the importance of building personal connections: “The Chinese term “guanxi” means “relationship,” but it really signifies a person’s influence throughout their social network. This is the key principle in understanding how business gets done in China, but we foreigners typically struggle to grasp the full scope of this system. Building strong relationships and understanding how your web of associations works is critical.”
- On small-talk: “I struggled to restrain the American urge to dive straight into the matter at hand. I traded in my robotic business talk and learned to ask about the hometowns, education, hobbies and interests of those I hoped to work with.”
Recommended Reading on China’s Business Culture
- ‘Where East Eats West: The Street-Smarts Guide to Business in China’ by Sam Goodman
- ‘Doing Business in China: The Sun Tzu Way’ by Laurence J. Brahm
- ‘Chinese Business Etiquette: The Practical Pocket Guide’ by Stefan H. Verstappen
- ‘Chinese Business Etiquette: A Guide to Protocol, Manners, and Culture’ by Scott D. Seligman
- ‘An American’s Guide To Doing Business In China: Negotiating Contracts And Agreements; Understanding Culture and Customs; Marketing Products and Services’ by Mike Saxon