Doing Business in Asia – How to Avoid Culture Shock

Grant Wilson, Corporate Advisory Director for William Buck SA, provides this advice for setting up a services business in Asia.

Understand Why

  • Define the opportunity for your business. Don’t do it just “because everyone else is”

Understand the Culture

  • The greatest barrier to business success in Asia is not respecting cultural and business practices. You will need to invest time and patience to understand how business works and what is and isn’t accepted.

Target Your Market Place

  • What works in one country may not work in another. If your resources are limited, target one country, or even a region of a country.

Build an Expert Team on the Ground

  • Businesses who establish a permanent presence in Asia gain more traction than those that try to control operations from Australia. Have staff or key contacts in the regions with experience in those markets.

Trust Your Local Team

  • Providing autonomy and trust to your people is necessary so they can take advantage of business opportunities as they arise.

Implement Control and Reporting Mechanisms

  • Things taken for granted in Australia cannot be assumed in Asia. How will you control product quality? Can you protect your IP? What are the financial credentials of your potential customers?

Understand Local Legislation and Compliance

  • Lost inventory, failure to get paid and lack of understanding of the taxation and compliance requirements are three common issues. As an example, until February 2011, China still carried the death penalty for tax evasion, and the death penalty remains in that country for the offence of corruption.

Invest Time in Relationships

  • This is extremely important in Asia and particularly China. The consideration of human relationships is ingrained in many Asian cultures and is a key component of business practice.

Develop a Strategic Network

  • The Asian economy is sophisticated and rapidly evolving, you will need to develop a network. However be wary of granting sole distribution rights without proven credentials being demonstrated.

Take Professional Advice

  • A professional advisory firm with established offices or relationships in Asia will not only limit your commercial risk and maximise your after tax bottom line, you can tap into their already established professional networks There’s also a range of government agencies that can assist you to make initial steps and connections in Asia, so you don’t have to go it alone.

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