Doing Business in Asia with a U.S. Mindset

Doing Business in Asia with a U.S. Mindset

(IE. Beating your head against a wall while people laugh at you in a foreign language.)

“Now is the TIME!” “Don’t let the Asian market pass you by!”

I see it or hear about it every day in the news living here in Thailand… Asia expansion, the AEC , ASEAN, China, Myanmar, a gazillion people tweeting in Indonesia, banking in Singapore and Hong Kong.

There are a multitude of reasons to want to break into the Asian business sector and tap into the market here to gain access to over a billion people who don’t have one of whatever you are selling. However, everything that makes America great will blow up in your face—occasionally quite spectacularly and publicly—in Asia.

Things are different here. Let me rephrase that…EVERYTHING is different here. It’s cultural. That means it is embedded in people’s life. It’s ubiquitous. It’s different DNA.

Asia sleeps different, eats different, looks different and cooks different. Not better, not worse…but definitely differently. And those of us from the West tend to think that we have cornered the market on the best way to do things, and, well, that just ain’t the way it works over here.

If there is a “best” way to accomplish something in Philadelphia, surrounded by Pennsylvanians, utilizing the same methods in Asia will typically get you nowhere, or worse, set you back and even potentially put your life in danger. Yeah, THAT’s how Asia rolls.

So, you are a small or midsize company, and you decide it’s time to stretch your wings a bit. Let’s say you sell solar rice cookers. You’ve taken the North American market by storm so you decide to expand into a global marketplace. At the meeting where you announce your intentions, some hipster in skinny jeans and earphones jumps up and says something vaguely intelligible about an Instagrube Pinterblog post he saw that had Asians in it, and they were all eating RICE! The light-bulb goes on, and you realize based on your research, that there is an average of 1.3 rice cookers per household in Asia and that electricity is expensive, so you are a win-win proposition with your solar rice cooker.

So, you decide, based on US business rules and assumptions, to open an office in Bangkok and from there expand into Indonesia, Malaysia and China. Maybe even Myanmar (Ooooh! Buzzword alert!).You pick one of your most valuable Vice-Presidents (Business Development, let’s say), map out a plan of world rice-cooker domination, and start jumping through hoops.

First, there is the visa issue for your people. Your company has to put up $60,000 to prove to the government that you are legit and can provide for your employees. Fair enough.

Now, you’re going to need work permits for your people. You can research this question for 2 hours or two weeks and still have no definite answer on what the regulations are. Maybe you can get a 1 year visa. Maybe you can get a visa that makes you leave the country every 90 days. Even if you get a visa, you still need a work permit. And for every work permit, you need a minimum of 4 Thai people on the payroll. Why? Because Thailand says so.

Now, there are ways around everything I have just written, so please spare me the “My friend told me that ________________ could save you ___________ and all you have to do is _____________ and give 10,000________ and a jade Buddha to _________ and click your heels together ______ times and say there’s no place like _________.”

I know all that…I’ve heard it all before.

I don’t care.

What I care about is educating small companies that are in a position to benefit from marketing to an expanding Asian demographic and making sure that they don’t miss their window of opportunity by setting themselves up for failure by applying Western principals while doing business in Asia.

So, let’s fast forward through a few mind-numbingly excruciating months of mixed messages, increasing fees and politicians who had their hand out for an offer of help one minute and disappeared the next. Let’s get to the part where you find a retail chain willing to carry your solar rice cooker, and you finally say to the head office “Send ‘em!”

So, they send 20,000 rice cookers in 20 shipping containers, tying up about $400K in capital, plus another $50K to get them to BKK (Bangkok International Airport). They arrive and you get a notice (that you can’t read), so you have one of your mandatory Thai employees (who swore he spoke fluent English on his CV) read it to you, and it says you need to go to the port to see the customs inspector because your goods have been seized.

“Seized?” you say. “But, we had prearranged a clearing agent to handle all this. “

“Oh, sorry. He’s out sick today, his cousin had to go receive package.” Because somewhere in the translation it was lost that you were receiving 20 containers, and it was understood that you were receiving 20 rice cookers. (Not REALLY, but that’s the story they’ll tell you.) When you finally get ahold of your agent 3 days later and get down to the port to receive your goods, they will tell you that the import tax you paid already was for 20 units, not 20,000 units.

It’s 2am in Chicago, the CEO was out late at the Blackhawks game, and now you have to call him and tell him that he needs to wire an additional $80,000 to your bank so that you can get your product released.

Not a good way to start doing business in Asia, or any new country for that matter.

The thing is, as outlandish as this story sounds, it happens, all or in part, every day in Asia. Not Bangkok or Hong Kong… Everywhere. And if you aren’t prepared for it, you will be literally victimized and figuratively sodomized by the locals. And guess what?

It’s YOUR fault.

If you weren’t in such a hurry, you could have avoided 90% of the pain and probably 80% of the fees. If you didn’t think that your way was the best and just start applying Western thought to a decidedly non-western set of circumstances, this could have been a win-win-win. (There’s ALWAYS a third party that needs a little $omething in Asia.)

Now, you can get up on your soapbox and scream about corruption and be indignant and hold your breath till you turn blue. Again, I don’t care.

Or you can listen.

When a culture silently acknowledges a behavior and accepts that it is part of their daily life, it’s not corruption. It’s cultural DNA.

And don’t think for a minute that we don’t have our own set of cultural subtext in the US that other cultures don’t understand and by default,  puts them at a disadvantage…we do.

But the question is: How do you avoid any more pain and financial discomfort than is absolutely necessary while addressing the overall goal as quickly and efficiently as possible?

You start with an open mind.

You realize that highly evolved civilizations exist that play by very different rules than you do, and they somehow manage to thrive.

You shut off your own assumptions about “how things should work” or “that would never fly here in the US.”

Accept that what works in business in Asia won’t work in the US…and vice versa.

Then, embrace it.

Surely there has to be SOMETHING to be learned by embracing an entire culture that is different from anything you have dealt with before. Maybe there are lessons to be learned. Maybe the lesson is that you should stay the hell out of Asia. Maybe it’s time to find a strategic partner who knows the ropes and can increase your profits with volume and lower your costs with insight. It’s certainly time to hire a consultant who has actually done business in Asia and can guide you through the initial stages.

There are a multitude of “maybes,” but one thing is for sure. The only way to survive and thrive in the Asian marketplace is to come prepared with an open mind and a dynamic approach to international growth and culture.

Doing Business in Asia with U.S. Mindset is Biggest Mistake to MakeBy Michael Aumock

-Michael has over 25 years of experience doing business development in the high net worth hospitality arena, specifically yachts, resort real estate, exclusive clubs and travel. His articles on luxury lifestyle in Asia have been published in 5 languages in dozens of countries. He took his skills to Asia in 2011 and hasn’t looked back. His company, The Delfineo Group, has worked with some of the most exclusive hospitality groups on Earth.

Image: helpingmedia on flickr.com