Patience and localization key to cracking China market, executives say

Dave Zhong | Getty Images for CNBC

From left to right: Jay Li, General Manager of Greater China of WWE, Derek Chang, Chief Executive Officer of NBA China, and Richard Young, Managing Director of NFL China at CNBC’s East Tech West conference in the district of Nansha in Guangzhou, China on November 28, 2018.

To break into China and expand their businesses in Asia, companies need to establish a long-term strategy and a deep understanding of local practices, several business leaders told CNBC.

“If you want to come to Asia, and think that (you can just) turn around, bring back a bag full of money, don’t make that mistake,” said Hakon Bruaset Kjol, senior vice president, partner and external relations Asia, at mobile network operator Telenor. “We have seen so many companies come and try to do that. You need to be long term.”

Speaking Wednesday at CNBC’s East Tech West conference in the Nansha district of Guangzhou in China, Kjol said that the process of entering the Asian market will take longer for companies coming in with Western-developed principles and codes of conduct.

Beijing especially has tended to take a more reactionary approach to regulating fast-growing industries such as technology. As a result, Chinese start-ups have often pushed beyond the ethical boundaries of what a Western company might consider appropriate, before authorities step in.

“There aren’t many Western tech companies that have had success in China because it is a very competitive environment,” Mikkel Hippe Brun, co-founder of cloud-based supply chain company Tradeshift, said in a separate session at the conference on Wednesday. “Chinese companies run with Chinese speed and very short decision cycles. So Western companies (are) always behind, (and) seen as slow in those decision cycles.”