Going Global!

SKYPE is not Just For Kids Anymore

Skype ia an amazing global business communications tool. I must admit, I was a late adopter and only started using Skype last year. It is a great free way to stay in contact with customers all over the world. The calls are pretty clear and when they are not, hey what do you expect for free?

My 11 year old daughter has an Apple computer supplied by her school in 5th grade (and paid for by her parents). She never calls friends on her cell phone or our land line, it is only Skype video calls for her and her friends. She even Google Chats (with video) with my wife at work!

I remember when we used to look at Star Trek and think about video communication as a thing of the future. If my 11 year old is any indication, that future is now! Better get a Skype name!

 

Door To China Could Be Closing For Late Comers

Over 18 years I have visited hundreds of factories in China. These factories were making items for famous brands like Timberline, Mattel,Nike, Apple,HP, and retailers like Wal*Mart,Sears, and Target. 

This week I visited several factories making automotive aftermarket products for famous US aftermarket companies. These factories were eager to make products for export to Europe, the Middle East, Latin America, and Asia, except China.  When I asked about selling their products in China (because we have a Chinese company with a full business license), they said we would have to work with their ‘domestic sales department’. When we toured the production lines, we saw thousands of beautifully packaged products being produced for Citroen, Toyota , and Lexus to sold in China. What is happening in China is the car manufacturers and ‘4S’ (car dealer) groups are developing their own products and aftermarket supply chain for accessory items.  This will make it much more difficult for latecomers to get their business established in the booming Chinese auto aftermarket.

This also signals the dramatic change that occurred during the recent economic crisis when export orders fell and the Chinese government stimulated the economy, hundreds of Chinese factories hired sales teams and worked hard to develop their domestic business. We saw the fruits of their hard work and success as we watched thousands of aftermarket products destined for domestic Chinese consumption roll off the production lines. In fact on that particular day I do not think we saw any products destined for the US or Europe, what a change!

U.S. Commercial Service and HKTDC Join Forces

The US Commercial Service and the Hong Kong Trade Development Council initiated a trade pact to recognize Hong Kong as a trade hub. Hong Kong  is an amazing China trade center. 

As a US citizen who has worked with many U.S. companies growing their international business, it is gratifying to see the Commercial Service and the HKTDC working together. Both are excellent organizations and trade proponents! Any US company looking to go global should consult them. 

 

Referral Friday: e-Print Hong Kong

Hi out there! Sorry we missed you last Friday, we were doing business in China without access to the blog. I have lived in Hong Kong for over 18 years, always working in Marketing. Man have I printed a lot of catalogs, sell sheets, packaging business cards etc!

Generally printing in Hong Kong is excellent. Most of the printers use the very best presses from Germany and the U.S., with ink from Japan and Europe.

A few months ago, we discovered e-print. Their website is www.e-print.com.hk .  Their English site  is:  www.e-print.com.hk/en/aboutus.htm . e-print is an amazing time and money saver. We estimate e-print saves us 30% on our printing costs, and because they operate 24 hours per day, they are twice as fast as a normal printer!

Imagine ordering 100 business cards in 4 color for HK$38 or US$ 4.90 and getting them in 48 hours!  Imagine getting a banner like this made 6 feet tall for less than US$15.00 and getting it in less than 2 days! e-print does everything from envelops to pizza boxes!

Referral Friday: TEN The Entrepreneurs' Network

It is Friday again so it is time to refer something that really works if you are trying to do business in Hong Kong, or in China from HK ,or do business globally. This week I would like to share TEN or The Entrepreneurs' Network with you. 

It is a funny story of how I found out about TEN. I had a vendor, an American guy in Hong Kong, who made merchandising aids and POS materials. He helped me made signs and furniture for a chain of car care centers we were creating. Just after the program launched and the furniture and fixtures were shipping, he vanished. Phone calls and emails were unanswered but the only place we knew we could find him was at the TEN meeting the second Thursday of every month! So this is how  I came to attend TEN meetings. What I found was a group of entrepreneurs born all over the world: HK, China, Australia, Canada, Nepal,India,the US,France,Germany, Holland, you name it, TEN had it! In the men and women who attended TEN, I saw several things: the desire to improve themselves and their businesses, eagerness to 'give back' to teach/help others, no desire to sell me anything, lots of creative and practical advice for the small entrepreneurial business. The club is not for profit and charges just HK$ 300 (US$39) for annual dues or HK$100 per meeting for non-members including a free drink at the door.

Sometimes when you are in your own business you have no one to talk with about the opportunities and challenges you face daily. Also you may not have the time or money to hire consultants or take time away from work to attend seminars.TEN is a great sounding board.  From TEN I learned how:

*Do email blasts very professionally for less than $80 peryear

*What Facebook could do for my business

*How to get a CEPA certificate so we could set a full legal subsidiary in China that could invoice.

*How to be a better negotiator

*How to get 50% of our tradeshow expense refunded by the HK government

*How to get government backed , low cost SME financing

*How to do complete background searches before hiring new team members

*What to look for before buying a factory in China

I certainly got my $39 out of TEN!  Check it out, the next meeting is Thursday 14th October , 6:30 in Vertigo Ultralounge, QRE Centre (across from Hopewell Center) 

Find TEN at

website: www.ten.org.hk

blog: tenhk.typepad.com

TEN also has groups in Linkedin and Face book, Check it out!

One Chinese Company Captures almost 1/3 of the California Solar Panel Market in Less than 1 Year

Image by richardmasonervia Flickr

When I was last in the U.S. at Christmas I saw, what I thought were stimulus funds at work repaving the highways. This was worrying. In our last serious economic event in the early 1980's the U.S. economy shifted from manufacturing jobs to service and technology, a strategic shift that worked very well for almost 30 years.

Now is the time for the U.S. to pioneer and develop alternative energy sources. Wind and Solar are great examples. While we pave the roads, the Chinese government and smart, fast, and aggressive Chinese companies are getting into solar and wind energy in a big way (often funded at the local level by U.S. or state tax credits). Click one the link  View this photo  to read how Yingli, a Chinese Solar panel company captured over 1/3 of the California market in less than a year. Now they are moving into New Jersey.

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• GT Solar signs new contracts worth more than $200M(seattletimes.nwsource.com)

CEPA Gives Hong Kong an Edge

Image by jondresner via Flickr

For centuries China Trade has been important. Never before is it more importantant than today, and CEPA gives Hong Kong an edge over regional rivals like Singapore. CEPA (Closer Economic Partnership Arrangement) originally created in 2003 to help open the door for HK businesses to operate in China as 'Chinese' businesses has been broadened dramatically. TEN (The Entrepreneurs' Network of HK) recently featured the topic of CEPA in it's March meeting www.tenhk.typepad.com

William Lam and Winy Tse attorneys at Hui & Lam delivered a fact filled and informative presentation on CEPA. Please click the link Download CEPA EXPLAINED

We are in the process of getting our HKSS CEPA certificate so we can distribute our products directly and invoice in China. If you want to do business directly in China, I recommend you set an appointment with the China Trade Specialists at the Hong Kong TDC (Trade and Development Council). The service is free, although the extremely knowledgeable trade specialist we consulted with did not speak English, so be prepared to bring a Mandarin or Cantonese speaker along. Once you decide CEPA is for you, a China attested lawyer in HK is your next step. You can get a list of these lawyers from the TDC. We used HUI & Lam.

If you are a successful business doing business in China or you would like to be, do check out CEPA. It is available for companies in the trading, services, or investment fields.

Alibaba is Changing Sourcing

Ever heard of www.alibaba.com ? It is an amazing sourcing portal out of China. In September we bought an apartment in Hong Kong and we wanted a large L-shaped  leather sofa with the opposite orientation to many we found in HK furniture stores. We were about to settle for something on the floor, only to find out it would take 4-6 weeks for delivery. Out of frustration (and since most HK furniture is made in South China anyway), we decided to look on Alibaba, China's on-line sourcing portal. We typed 'leather sofa' into the search box and found more choices than we could possibly process. Then we refined our search to factories in Guangdong Province. Found several reputable looking factories and emailed them. I asked them how many units they supplied to the U.S. and Europe (in an effort to get the best quality). Come Monday morning, I asked Lily in our office to talk to one factory by phone who responded quickly and professionally. We asked for a catalog and samples swatches of local and Italian leather. By Wednesday the samples were in our office. The exact sofa we wanted with a matching chair would cost U.S. $700 in local leather or $1100 in beautiful Italian leather. We wired the 50% payment for the Italian leather combo, and ten days later at 10PM at night, our sofa and chair were delivered (at a cost of $400). A comparable sofa in Hong Kong would have taken 3 weeks longer and cost U.S $4000 - $6000. The quality and workmanship are amazing. They exceeded our expectations. 

On last Tuesday (second day of the Chinese New Year), I went to give my best wishes to a Nepalese friend who is the operations manager at the marina where we keep our boat. He and his supervisor were trying to figure out a locking mechanism for marina carts they had bought on the internet. It seemed the chains to secure the carts to the lock were too short. They were referring to an internet picture on , you guesses it: Alibaba! I suggested they phoned the factory and ask them for longer chains. In the past, these fellows would have sourced the locks either from a marine supply house in the U.S., or through a local HK supplier. 

 The one thing about Alibaba: you need to be very specific in what you ask for. Every factory in China is on Alibaba it seems.  

For us speed of response/delivery and a professional response is as important, often more important, than price. 

China Cornering the Market for Rare Minerals/Metals

Minerals/metals such as dysprosium,europium,neodymium are all essential ingredients in today's high tech devices from fluorescent light bulbs, Ipods, hybrid vehicles to fiber optics. A fascinating article appeared in today's Hong Kong Standard newspaper about how China supplies over 95% of the world's rare earths. China is controlling the supply of these materials to the point of restricting export of these items. Click on the link to read the article View this photo

Guangzhou Fair

Just returned from two days at the world famous Guangzhou or Canton fair in China. It's where buyers from all over the world come to buy almost anything under the sun made in China. I spent two days walking the fair from  10 AM to 7 PM and only saw about 40% of what was on offer!

After 17 years in Asia spent selling over $500,000,000  of U.S. made items, I thought I'd see what all the fuss was about.  My customers in Europe and Latin America have been coming to the fair for years. One buys automotive audio, accessories, and bulbs while another buys motorcycles and spare parts. The exhibitors told me  this year traffic  was way down (China's GDP fell from 11% to 6% ) adding credence to these observations. Any way you look at it: China is still growing faster than any other major market.

I've been to China perhaps over a hundred times, but this fair season, everyone I encountered went the extra mile to be friendly and helpful from the immigration officers to the fair workers to the staff at the hotel.  Stayed at the Guangzhou Shangri-La right at the fair. A superb hotel, more expensive than most, but you do not have to deal with taxis (which are in very short supply during the fair).