Welcome To The Chinese Century?

With the turbulence of the Chinese economy as a backdrop, Day 3 of the Page Annual Conference is all about the opportunities and challenges of doing business in this burgeoning and increasingly crucial market.

To succeed in China, businesses need to appreciate the complex and nuanced environmental, political and historical context. Both Orville Schell of The Asia Society and a panel of agency members from Ketchum, BlueFocus and Brunswick Group talked about the Chinese yearning to be powerful and respected in the world and to be economically prosperous. China is the biggest market in the world, and companies recognize that and are entering in droves. But China lacks transparency, suppresses freedom of speech and clearly has different stances on certain social issues. And China, susceptible as any country to the volatility that is inherent in financial markets, often succumbs to its impulse to "safe face" by attempting to artificially prop up markets and exert control. These conditions complicate efforts to conduct business and operate effectively

Exacerbating the challenge, there persists an atmosphere of mistrust between China and foreign players, by both governments and businesses, which inhibits the cultivation of mutually beneficial relationships. It will simply not be possible over the next 20 years to solve pressing global issues like climate change without unified action, but the persistent tendency of China and the west to often misread one another's strategic intentions compromises the ability of both to work together.

On the consumer front, Western companies are being introduced to a vibrant economy that differs from their own in very critical ways. Alibaba, as a massive marketplace of products and a leading form of online payment, is in many ways at the center of it all.

China doesn't really have retail brick-and-mortar to the degree we do in the U.S., said Alibaba's Jim Wilkinson; their consumers are far more accustomed to making purchases online, particularly via mobile. 75% of Chinese people shop online weekly compared to the global average of 21%. And those consumers generally don't have credit cards, so payment systems like Alipay that are linked to users' bank accounts are the rails on which China's e-commerce runs.

Companies looking to do business in China need to focus sharply on mobile and on online marketplaces like Alibaba, which Chinese consumers favor over individual brand websites. Americans may be checking sports scores or social sites on their mobile devices to pass the time waiting for an elevator, said Wilkinson, but in China the social leisure activity is cruising e-commerce marketplaces for the latest and hottest stuff.