28 participants of PGPX embarked on a Study trip to Chinese University of Hong Kong in August. The agenda of the international immersion was to expose participants to different country and business environment. The program was designed to balance industry tours and insightful lectures by professor who have established themselves in Industry and the Academia.
Chinese University of Hong Kong is one of the most prestigious university of China. Its location in Hong Kong makes it closer to world of trade and commerce where as its proximity to mainland China allows to feel the pulse of Mainland China.
They course began with insight into Made in China, journey of China to become a manufacturing hub for the world. China developed its infrastructure at a rapid pace and provided enablers for the supply chain for its manufacturing base. As the time progressed and income levels have increased China is now seen as a large attractive market. Increasing cost has not deterred many from China as no other country provides a robust integration with the rest of the world. China is improving upon lapses in food and product safety that have tarnished many brands in China
The following session we discussed about sustainable growth that keeps the environment and health into consideration. How is next 30 years of growth to be sustained with growing demand of resources?
Industry expert and visiting professor then shared the experience of marketing in China. How to understand and interpret the Chinese consumer. China being a diverse market needs a bespoke approach in every region. Its demographic is diverse in terms of age, preferences, lifestyle and income levels. We discussed how global brands have to apply there global genes to meet local needs.
Chinese culture is based on relationships and building trust. Culturally people believe that self is small and attribute their success to externalities. Hanxu-nonverbal communication-is integral part of the communication. People do not express their feelings openly and especially strong and negatives ones. These insights will be very helpful while doing business with China.
Industry visits to Chinese Gold and Silver exchange Society, Invest Hong Kong, Pacific Andes and Hong Kong Exchange and Clearing were good learning experience. Hong Kong has positioned itself a business hub by designing an administrative system that is pro-business and open to world. Absence of capital control and complete convertibility of currency makes it magnet for global business.
During the period of stupendous growth the environment was largely ignored and overexploited. The focus has now changed to sustainable growth that maintains the quality of air, water and bio diversity. There have increasing number of protests in China for improved quality of water
An eye-opening analysis allowed us to see beyond the made in China label. The analysis talked about value addition at each stage of bringing a product to the consumer. The analysis showed that manufacturing adds least value to product while R&D, Sales and Marketing takes the lions share of the products final sales price. This has led to China refocusing its energy in moving up the value chain. Chinese companies are endeavouring to innovate and build brands. This journey is long and arduous but worth taking.
The final sessions talked about business relationships between China and India. How should the two countries position themselves? As competitors or as strategic partners. How can two countries collaborate at government, business and market levels? The dynamics of these relationships will be determined by externalities.
Learning and experience during the visit was enriching and all of us came back with new perspective and ideas. It was two weeks well worth.
Siddhartha Shekhar (PGPX 2013-14)