Chinese Cultural Differences and Understanding how to do Business with them [Podcast Ep04]

 

 

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Haggling prices

Applying a lot of pressure to achieve a certain target price is not the best solution.

The Chinese don’t want to say no and may happily meet your target price.

The problem is, you may feel very disappointed later when you find corners were cut, shortcuts were taken, and the quality of the product is not great.

From their perspective, the Chinese believe they did you a favor by meeting your price.

From your perspective, they’ve done you a disservice by giving you a poor quality product and omitting things that you expected.

Get everything in writing

This will clear up any misconceptions and makes sure that everybody is 100% on the same page.

While communicating back-and-forth, details can get lost in translation.

Put it in your purchase order and have it signed, no matter how many times you have to update it.

“No” means no, but “yes” doesn’t always mean yes

If they tell you, “No, we really can’t do it,” don’t think you’re going to get it.

However, Chinese suppliers can often say “yes” in an agreeing tone BUT they haven’t actually acknowledged or confirmed they’ll give you what you want.

They use “yes” to acknowledge what you’re saying, NOT to agree to your demands.

It’s a simple thing that leads to many misunderstandings.

Your market vs. the Chinese market

Requirements of western or foreign markets can be very different in terms of packaging, designs, style, the method of transportation, shipping, etc.

In many cases, the Chinese don’t use the products we purchase.

So, they don’t have use-case experience and this can lead to them missing certain details.

It isn’t intentional, it happens because of cultural differences.

Saving Face

Chinese social interactions work on the principle of “Face,” and gaining or losing it. 

Your Face is your self-image, dignity or prestige in social contexts.

The Chinese are easily embarrassed or upset if they do something wrong.

Here’s how that plays out in a business context:

The boss of the factory is the most important person to deal with.

He makes all the decisions and everyone follows his instructions.

In many cases, you won’t be able to deal with the boss, particularly on day-to-day matters and order follow-up.

This is where it can get complicated because some of your requests might be rejected internally by the boss and the staff will not be able to tell you the truth of why they can’t do something, why there’s a delay, or why there’s a problem.

They don’t want to make their boss or their factory look back, so they make a lot of excuses to “save face.”

Western culture typically has a more direct approach to answering questions and solving problems.

The Chinese are a much more gentle culture who prefer to answer questions indirectly.

This can often be misinterpreted or feel frustrating when dealing with Chinese suppliers.

You need to understand this concept of Face so you can know when to press and when not to, and when and how to read between the lines.

As you gain a better understanding of the cultural differences and get more experience dealing with the Chinese, you’ll figure out other ways to get what you want.

And here is a crucial point:

Often it’s this idea of Face that creates an impression of a lack of logic when dealing with the Chinese.

But it’s not the logic that is important.

It’s the implication of saying “no,” which is impolite in their culture, or the implication of implying something is wrong with their boss, that leads to what appear to be illogical answers.

But they are expecting you to read between the lines and figure out the message behind the message.

Understanding and accepting this will save frustration and allow you to deal with problems in a different manner.

Again, if you remember to put it in the purchase order and sign off, this will mitigate many cultural issues.

Because if they sign off, they accept it. If they’re not willing to sign it, there’s something else going on behind the scenes. Which means you have to figure out what that is and deal with it.

The Silent Treatment

Suppliers sometimes stop replying, take a long time to reply, or simply never get back to you.

Unfortunately, this often relates to your size as a customer and how valuable you are to the factory/manufacturer.

It’s important to remember these factories are approached by hundreds, if not thousands of people every day.

And, as you look for the good manufacturers, they too look for good customers.

But, most importantly to them, they look for big buyers and these people take up most of their time and attention.

Everything is a function of work versus reward. It’s as simple as that.

Suppliers won’t get back to you if they’re busy with other customers and don’t have enough time, or if they haven’t prioritized your orders due to size, price and other factors.

Another possibility is the email communication and correspondence you’ve sent them has already created a preconception in their mind of how big your orders are going to be.

Or it may have demonstrated the type of buyer you are and they might not be willing to even entertain you.

Another reason they might be delayed in responding is if the questions you asked are complex and require additional information from R&D, engineering, or procurement before they can give you answers.

Rather than saying “we’re checking and we’ll get back to you,” they just go silent until they’ve got the right answer.

Remember, they are dealing with many other clients.

Instant responses to everything might be expected from your side but it’s not realistic from their side.

The biggest challenge of doing business in China is patience, patience, patience.

Simple hacks to get Chinese manufacturers to take you seriously

This is an obvious one:

Deal with a professional buying office like Global TQM.

Let the supplier know you have a qualified team of experienced people on the ground, in China, looking after your interests.

Let them see you have these resources, of people speaking their local language, and they will certainly know that you are not a first-time buyer and that you are going to be well looked after.

Even something as simple as CC’ing your China team in emails will let them see that you have resources and experience, and they will take you a lot more seriously. This is not to be underestimated.

Having a qualified team like Global TQM on your side also drastically speeds many activities (e.g. getting samples.)

And manufacturers find it quite refreshing to have somebody local to speak to in their timezone.

They also feel comfortable there won’t be miscommunication, and they will give you a high level of attention.

Download your FREE gift…

We’ve put together a handy guide for businesses who want to source their products from China – “China Sourcing for Startups.”

Even if you’ve been at it a while, you might find some useful tips to improve your experience overall.

Click here to download your FREE copy.