Building a Business in Asia

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01/07/2019 |

Building a Business in Asia

Udo Kampelmann, Managing Director OTRS ASIA,
shares some business insights about our start in Asia.

Airport Singapore waterfall

Asia can be an intriguing region to operate in – presenting a steady flow of opportunities and equally, challenges. After 4 years of living and building a business in Asia, I’m happy to share some of my experiences and insights into how I manage those challenges.

In my mind, finding the right business strategy is an iterative process. No doubt that it needs a lot of hard work, dedication and passion.

When it comes to giving “advices”, I suggest “Just keep moving forward – even if there are hurdles”.

What are the Challenges for foreign companies looking to grow their business in this region?

For this very reason, many businesses use a step-by-step approach in this region; taking one country at a time.

Diversity

Even though almost every MBA and best-selling management book mentions this, I feel it is important to re-iterate. In reality, it is very difficult for foreign companies interested in market penetration to accept that a standardised “one size fits all’’ model will not be successful. In some cases, the problem may not be “acceptance’’, but rather it is the inability to execute country-specific customized business models.

Asia is a region which carries rich & diverse economic, political and demographic constituents. Even though there are many countries that fall under the umbrella of Asia, it is important to understand the different sub-clusters such as ASEAN, SEA and Greater China. These sub-clusters are far from being homogenous for various reasons – which we can explore in another blog article.

For this very reason, many businesses use a step-by-step approach in this region; taking one country at a time.

OTRS ASIA takes a regiocentric approach which is the key to quicker growth.

We defined regional clusters only after having a better understanding of the similarities and differences between each country. Operational strategies were formulated on the basis of those regions rather than individual countries.

Decentralized management style, hiring of local employees based on merit, adaption of marketing strategies are just some characteristics of the regiocentric approach that OTRS ASIA pursues.

Establishing 2 offices (Singapore & Hong Kong) in the region is just the beginning for OTRS ASIA. We look forward to have more region-specific partnerships with local companies as we continue to expand.

Competition & Speed

While there are certain countries like US, China and India which dominate global technological innovation, we see a growing pool of highly skilled talents in parts of Asia (i.e. Indonesia and Vietnam) that is driving a new business niche – scalable tech and IT start-ups which can compete at international levels whilst solving local problems.

At OTRS ASIA, we don’t just limit ourselves to closing contracts with the big players. We are equally keen to work with smaller and more local companies whom we feel can help us formulate niche go-to-market strategies and accelerate the speed at which we do business in Asia.

The fact is communication style in ASIA is very different from the West. It is indirect in most of the Asian countries.

Communication

The fact is communication style in ASIA is very different from the West. It is indirect in most of the Asian countries – and this could be unusual for someone who is not used to it.

For instance, brevity is valued in Germany. However, in many Asian countries it may be interpreted as rudeness.

Another great example is that business partners and customers in Asia tend to go to great lengths to avoid offence. One of the many lessons I’ve learnt in my journey so far is to listen more intently to the unsaid words. I’ve also observed that when business partners in Asia disagree with something, they are more likely to remain silent. Having said that, as someone who is naturally very people orientated, I very much appreciate this different way of communication and find myself at ease when conversing in business and in personal life in Asia.

Something that got my attention is “Guanxi” – a word that I stumbled upon during my business trips in China.

Relationships

Something that got my attention is “Guanxi” – a word that I stumbled upon during my business trips in China. “Guanxi” can be loosely translated as personal connections, relationships or social networks. It has been an essential part of the Chinese business landscape for the last few centuries. However, what I found is that this business approach is not unique to China but can also be found in many other parts in Asia – though the terminologies might differ.

For managers from other countries, it might take some time to decipher the social, economic, cultural and business issues relating to the complex concept and practice of “Guanxi” in this region.

To dive deeper into this concept would go beyond the scope of the discussion but in general, I can say: built strong relationships as quick as possible.

It is also my experience that being introduced to a company by a trusted third party can be a more effective form of getting your foot in the door – compared to going in cold.

Please don’t get me wrong – “Guanxi” should not be a substitute for the hard work of convincing customers about your product or solution. For example, even when there were no personal connections, I was able to close contracts with some of the biggest players in the region – just by focusing on the strengths of our products.

Think of “Guanxi” as having 2 additional cylinders in your car engine. You don’t need “Guanxi”, but having personal connections will certainly help you speed up your business in Asia.

Until next time,
Udo

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Photos: Palu Malerba from Pexels

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