Dragon Tactics – The Secrets of Western Companies That Successfully Establish Themselves in China.
And why Amazon failed to conquer China.
Several business leaders or multinationals still ask themselves the question. Why did they fail in China when others succeeded? Amazon, for example, left the field in 2019, four years after its arrival, recount Sandrine Zerbib and Aldo Spaanjaars in “Dragon Tactics: How Chinese Entrepreneurs Thrive in Uncertainty.”
The online retail champion's adaptation to the desires of Chinese consumers was “too slow and it imposed a one-size-fits-all model from its global headquarters.” Amazon has clung to “minimalist graphic codes when its Chinese competitors use colors without restraint and allows customers to observe the coveted products from every angle, in pictures.”
The same failure for the French Carrefour, which lacked innovation to adapt to the changing market.
On the other hand, the fast-food chain Kentucky Fried Chicken and the sports goods manufacturer Adidas are successful because they have developed “a strategy in China for China,” say Zerbib and Spaanjaars, two former Adidas China executives, who are respectively founders of the Chinese e-commerce company Full Jet and creator of the J. Walter-Thomson-Beijing advertising agency.
You have to “dare to take a step aside from the international strategy.” It is also necessary to “adapt your offer to the local demand, bet on speed and flexibility while using your international assets,” they summarize by detailing the tactics of Chinese entrepreneurs who have “the obsession of survival,” favoring the organization in the platform, long-term objectives but total flexibility in the short term.
Chinese entrepreneurs also favor the “try, fail, try again ...” method. This can be seen as “a process leading to chaos, but overall it works,” the authors believe.
The 10/100/1000 rule
For Ren Zhengfei, the founder of Huawei, and quite a few Chinese leaders, “being a company is about managing to train a pack of wolves.” This amounts to prioritizing tenacity, and collective spirit ... But it's not just about “adapt or die.” “Western philosophy requires thinking well, while for the Chinese, the important thing is to observe well,” emphasizes the book “Dragon Tactics.”
Pony Ma, the founder of Tencent, one of China's leading digital players, developed the 10/100/1000 rule, for example. Every month, Tencent's product managers must nurture their relationships with end users through ten surveys, reading a hundred blogs, and analyzing a thousand comments.
Another strong point of Chinese entrepreneurs is their capacity to innovate at a very fast pace.
And, as a key lesson, “these companies are run from the top but are quick to move” and aim for speed rather than perfection. Internationally, however, “the habit of moving forward without a clear, linear strategy” can be a drag “in new cultural environments.” Not to mention, the authors add, that “China needs to assimilate that a win-win approach is far more promising than the behavior of a rude, self-assured neighbor.”
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