Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.
I’ll start with statements of Fact. UK boybands want to break the US. Publishers, outside of China, want to break China. What was a murmur while running my publishing businesses has become a near scream since launching our global rights licensing platform. It is perceived that the pot of gold is not at the end of the rainbow but on the other side of the Great Wall.
Note: that is likely to be the only time I include boybands and publishers in the same paragraph.
As we talk to our publisher members at IPR License, we usually discuss markets they are particularly keen to grow business in. We hear a lot of US, Latin America, Eastern Europe, increasing mentions for Africa, but probably the most frequent is China. So, what drives this belief? At a guess, I would say key drivers are:
- It is difficult to break into. In a paradox that would please Groucho Marx, by not being included, it becomes an obsession to be allowed in.
- The country is huge.
- The population is huge.
- The remarkable financial and business growth from China in recent years makes it seem there must be money to be made.
IPR License has recently announced a partnership with The Charlesworth Group to expand our operations in China. A week later, the UK and Chinese governments announced £14bn worth of business deals between the countries. Maybe we should have waited a week.
I will also be attending the Beijing International Book Fair in August where IPR License will have a presence as well as the company distributing the Beijing edition of the IPR Rights Magazine. What all this means is that it is a market we have been looking at very closely and for any company even considering growing business there that is what’s required – research and a strong understanding before taking a forward step.
It is a unique market and while there is huge opportunity, there is also huge misunderstanding and, like Columbus, it is very easy to immediately head off in the wrong direction. Being allowed into a huge market does not guarantee riches.
There is no point trying to crack China for the sake of it – you can of course run a very successful business without it – but if you have first recognised enough demand for your product then you need to take the correct next steps.
From what I’ve learnt so far, and over the coming months I am about to learn a great deal more, there are some essentials:
- You need a presence in the country. There are strict rules around approved distributors and so much red tape around importing in as a new company that without people on the ground you might as well task your future grandchildren with completing the first transactions.
- You need patience and long-term planning. While the idea is shaking hands on a huge deal and jumping back on your plane with a big cheque, the reality is that not only will there be a number of processes for companies to go through but the culture is very business savvy – they are unlikely to jump into something without due consideration. China is a great place to be for the long-term but not the place to go for a quick buck.
- You need some level of language translation – while English is well-spoken you are narrowing your exposure as well as appearing distant and, well, English, by not making some effort to have multi-lingual information.
- You need to understand regionality. When people think of China they think of Beijing. If you want to quieten someone rattling on about doing business in the country, ask them to name somewhere other than the capital. Again, it is a huge country with cultural and business differences between regions, so you need to broaden your horizons
In summary there is plenty of opportunity in China and it is a fascinating market, but any move towards business there needs to be fully understood, planned and carried out in a number of steps. Don’t ignore the market but make sure you get to grips with it first.
I might make a note to revisit this is a year and say what else I’ve learnt about business in China – an exciting journey ahead.
Tom Chalmers is Managing Director of IPR License. Feel free to send your thoughts on this article to @Tom_Chalmers