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!

 

HKTDC a Valuable Business Partner

 

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Are you trying to develop your China entry strategy?

Are you a Hong Kong based company or regional office trying to expand globally?

The HKTDC is a valuable free business resource. Its sole purpose is to suppose trade with and through Hong Kong.

In our company we have used the HKTDC to:

*find out the process to get our CEPA certificate (Our company now has a full China subsidiary in Zhuhai with a business license to trade as a local company in China). The HKTDC pointed us in the right direction in terms of outlining the process, helping us find a China attested lawyer etc.

*find thousands of prospective international distributor prospects for our products. The HKTDC has many proprietary databases that you can search for free on their terminals in their Wanchai HQ (pictured above in the Convention Center).

*The HKTDC puts together publications and now videos (they has a first class production team - with talent exceeding many of the HK TV stations, in my opinion). The HKTDC saw an upcoming article for the British Chamber of Commerce in Hong Kong on how our company is leveraging Web 2.0 to take our brand of luxury car mats Posh Pile global. Joe Kainz of the HKTDC asked if we would help them do an educational piece for HK SMEs on leveraging technology to connect with end users. Check out our 'behind the scenes' video of us filming the HKTDC (link on the video link above)   For more info on the Hong Trade Development Council visit:  www.hktdc.com 

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• China key to booming Hong Kong biz (variety.com)

Two Best Automotive Aftermarket Shows in China

   There are so many Automotive Aftermarket Shows in China! Often I am asked which shows in China are most effective. I have been selling products for U.S. Companies in China since 1992 and have done so many shows!

 

    My observation is that in the 1990's we were perhaps too early for the market, however our brand, Permatex is now famous due to the hard work of the Loctite China team I had the privilege to work with.

 

    Today however, the auto aftermarket in China is booming. China became the #1 new car market last year and new car sales are forecasted to grow 10% in 2010. There are still too many shows. We did over 7 shows in China last year and I can tell you from our own real world experience: two shows are the most effective in terms of adding new distribution and they are:  

 

    Beijing: The CIAACE Show www.ciaacexpo.com . This year's show was held from March 12-14. There was over 2,089 exhibitors and 66,571 buyers. This is a huge show! Over 126,000 people visited CIAACE 2010. The majority of the buyers come from Beijing and northern China. The number of exhibitors and buyers doubled this year. We invested $ 3000 for 6 x 6 meter booth. We launched:

 

Posh Pile floor mats

 

 

 

Gorilla Glue (Consumer Adhesives from the U.S.)

 

 
Vibra-Tite Aftermarket and Industrial Adhesives (also from the U.S.)

 

    CIAACE 2010 exceeded my wildest expectations. We sold 4 new Posh Pile distributors, 3 Gorilla serious prospects (and sold out of all our samples.) and one significant Vibra-Tite buyer.

 

    The CIAACE has a very professional international sales person, Ruby Yang. She can reached at ruby.yang@yasn.com.cn. Ruby is super helpful and speaks perfect English.

 

The other can't miss show is:

    Zhengzhou: The 7^th China Auto Accessories Trade Fair from June 30 to July 2. (Zhengzhou has a population of 7.35 million, and buyers from all over China attend this show.) This show has even more foot traffic than Beijing. We look forward to taking our 3 lines to Zhengzhou late June and adding distribution! The website is www.hdcy.com.cn. The English speaking sales person is Ms. Cong Wei Wei, email: hongdahuizhan07@163.com.

 

    If you are serious about building your China aftermarket business, check out these two shows!

 

Tom Muldowney is the Managing Director of International Market Access Ltd. He formed IMA in Hong Kong in 2000 to help take American brands global. Tom has sold more than $500 million of U.S.-made products to international markets. He has been based in Asia for 18 years working with global brands/organizations such as Loctite, Henkel, Permatex, Teroson, 3M, Meguiar's, ND Industries, and the Gorilla Glue Company. IMA just launched it's own brand of high end car mats called Posh Pile. He has set up subsidiaries in Korea and representative offices in China. Tom can be reached at: tom@intlmarketaccess.com. IMA's new Web site: www.intlmarketaccess.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. 

Where is the Shopping Cheaper Paris or Bangkok?

 Bet some of you world travelers might say Paris. Well it depends on factors such as: distribution, where the goods are made, duty, competition, VAT, freight etc.

In the case of the Philips IMageo rechargeable LED candles, they cost $36 in Paris and almost twice that sum in Bangkok where they sell for $71. This is according to the December 4-6 weekend edition of the Asian Wall Street Journal in their excellent Arbitrage column. Click here to see the comparison...View this photo

Business Travel Pays

Image by sainzvia Flickr

As a person who travels internationally 200 days per year by necessity rather than by choice, the above title from the November 25th edition of the International Herald Tribune, rings completely true.

We have kept seeing customers during the recent challenging year and as a result: we have significant new customers and new business. A couple of month's back due to my busy schedule, we tried to introduce several new business opportunities via the internet to a client in Singapore/Malaysia that I know very well. We took them through a very well organized Power Point presentation via a video and audio link up. The result was nothing like being there. I wished we had paid the air plane fare and hotel bill to go to present to this important client in person!

Are your competitors getting the edge by actually traveling and calling on more customers face to face? If so, you should read this article...View this photo

Finding the Best International Distributors

I am frequently asked where/how to find great international distributors.

First question: in which countries do you want to focus? Virtually no one has the global reach and time and money resources to launch in all markets at once.

Consider segmenting your prospective international markets into 3 segments: small, medium, and large.

You will need to focus on those markets with the biggest opportunities first. Once you get them up and running, go for the ‘mid sized’ opportunities. Later you can fill in the gaps, going for the smaller opportunities. As smaller opportunities arise, you can always choose to trade opportunistically without devoting resources devoted to larger opportunities.

In one automotive aftermarket project I worked on, we focused only on cars, not on all vehicles because trucks and buses were a far smaller opportunity for this particular product. We identified that markets with 5 million cars or more presented the most attractive opportunities for the first phase of our expansion.

So who is the right kind of country distributor for your products? To get an idea, first examine the top 20% of customers in the US (or your most successful international markets) that bring you 80% of your sales. Profile them.

• How do they sell?
• Who do they sell?
• How do they feel about your product or brand?
• Do they share any special education or background? For example: are they: mechanical engineers, mechanics, body technicians by training?
• What 3 or 4 personality traits do they share in common?

Now, you need a plan or dream of exactly what you are trying to build internationally. Lay out very specifically the tools/resources you have or will need to build the brand: catalogs, product line, advertising, web strategy, sales promotions, US brand share/data etc. Find a metric you can use (i.e.: consumer spending, population, number of cars, GDP growth) to benchmark your opportunity. Build a PowerPoint presentation to entice/excite potential international distributors.

Now it’s time to find excellent international distributors. I have found my very best international distributors in the following ways:

Trade Shows: Actively working in your brand’s booth at Industry trade shows in the US, France, and Germany. Stay out of the ‘USA Pavilion’: it is the kiss of death. No one wants a ‘US brand’ they want to be part of a ‘Global Brand’. Build the best booth you can afford. Effort shows and impresses. Position your brand as the world leader and showcase your products like jewels. Also post a professionally prepared sign listing the countries you are looking for distribution in.

Other companies: Find out the other companies from the US doing international well in your industry. Get to know their ‘road warriors’ who travel international markets. Become their friends (usually they are great guys). I have found great partners in Latin America and Russia through my friends who traveled those areas seeing non-competitive products. Be sure to return the favor when they ask for help. Industry Associations can be great ways to meet international distributors. Many US Associations have relationships with their European, Latin American, Middle Eastern, and Asian counterparts. Some organize overseas visits often in conjunction with US government agencies. As the domestic economy (and often opportunity) declines, these associations are focusing more and more of their expertise and resources on international markets.

The US Government Commercial Service can be a great resource. Each embassy has commercial service agents, some specialized in certain industries, who are there to help you get international business! I have used their ‘Gold Key’ service where they will organize one or two days of visits to importers/distributors who specialize in your industry, usually after a briefing at the embassy.

Emails and faxes inquiries from international distributors who have either visited your booth at an industry show or checked out your website are a great source of potential distributors. You should send them a questionnaire so you can find out more about:

• The nature of their business
• Years in business
• Number of sales people
• Numbers and types of outlet serviced
• What other international lines they import and sell and in what volume

Websites – Check out the websites of leading companies who sell quality products in your industry. Who represents and sells their line in international markets? These representatives or distributors could be great prospects for your product line.

From all these sources you should be able to put together effective prospecting trips where you can visit 4-10 prospects in each country that you wish to get focused on.. Speed is of the essence. Once you have 4-10 prospects in your big opportunity markets, buy a plane ticket and go to see them in their market.

Plan on:
• Introducing your company and the international opportunity for your product. "Dollarize' the opportunity if possible and 'show them the money'.
• Demonstrate how your products work (if possible with end users present so the distributor can see their positive reaction and eagerness to purchase your product)
• Finding out as much as possible about their company, culture, passions, like and dislikes
• Have them take you to the market and see how well they understand the outlets, how successful they are, and how well they are like/respected. Do they see opportunities with the same enthusiasm that you do?
• Spend some ‘away from business’ time perhaps eating with your prospects to determine if they are the type of people you are excited to enter into a long term relationship with.

Be tenacious, enthusiastic, invest the time and money to visit the markets, and have an exciting marketing plan (that you will really deliver) and you will do very well. We have some helpful market penetration calculators on the front page of our website. Check them out on: www.intlmarketaccess.com