“We live in times where increasingly protectionist and inward-looking worldviews are gaining popularity as individuals blame “all that is foreign” for the problems they face in their everyday lives. I hope to inspire more professionals and everyday people to travel to become more globally aware. It’s easy to get caught up in news headlines about why a certain country “is bad” and another “is good,” but when you actually travel to another country and meet local people, you’ll find that we’re more alike than we are different. This was a message championed by the late Anthony Bourdain as he visited local cultures and shared their stories, food and culture through his television shows. More people need to follow in Bourdain’s footsteps to help those of us who cannot travel to faraway lands better understand the global community we are all a part of — only by looking outward can we see how similar we are, and ultimately develop productive solutions to our shared global problems.”
I had the pleasure of interviewing global marketing strategist, author, and international keynote, Joel Backaler. He is a Managing Director at Frontier Strategy Group, a member of the National Committee on US-China Relations and the award-winning author of “China Goes West.” His writing has been featured in publications such as Forbes, BBC, and The Financial Times, and he is currently in the process of launching his second book with Palgrave Macmillan titled “Digital Influence: Unleash the Power of Influencer Marketing to Accelerate Your Global Business” (September 2018).
Thank you so much for doing this with us! What is your “backstory”?
I’m extremely passionate about identifying emerging global trends to help executive-level business leaders stay ahead and always thinking about new opportunities and risks. I do this on a daily basis, helping companies go global through my work at Frontier Strategy Group, but my interest in international marketing dates back to when I began my career in Asia.
I first traveled to China in 2001 when the International Olympic Committee historically announced that they would award Beijing the 2008 Summer Games. In what seemed like a matter of days, massive countdown clocks popped up across the city, ambitious construction projects broke ground, and I realized that the 2008 games would be unlike any other Olympics. For China, the games were more than an athletic competition, they represented an unprecedented opportunity to show the world its new economic might.
Convinced that China’s role in the global economy would only increase in the decades to come, I dedicated the first half of my career to becoming fluent in Mandarin, working within and consulting for Chinese companies, and, ultimately, building a family with a local wife and Chinese-American son. I lived and worked in Beijing, Shanghai, Taipei and Singapore with significant regional experience throughout Asia, and, to this day, I continue to work on projects throughout Asia while being based in the United States.
We know that it is not always easy for a foreigner to do business in China. Can you share an interesting story about a challenge that you faced, and how you overcame it?
One of my first jobs was a consulting analyst role in Beijing for a large global management consulting firm. Our project was to help one of China’s largest State-Owned chemical companies improve their financial processes in preparation for an overseas stock exchange listing. Our team was based within the chemical firm’s old office building in northeast Beijing. I was the only foreigner — my consulting team was all Chinese and our client team was comprised of veteran Chinese state-owned enterprise employees.
It was certainly challenging to interact in a fully Chinese workplace, while working long consulting hours, but the most challenging part was how each day was structured. For example, I am a morning person; my productivity is the best during the day and tapers towards the evenings. However, our consulting team had a bad habit of wasting tons of time during the day, going out for long lunches and then not starting any real work until 7pm, lasting late into the night. A few days a week, while my colleagues went out for long lunches, I stayed in the office and started writing my first blog called, The China Observer, where I wrote about my observations working in an all-Chinese workplace. The blog led to increasing visibility, quotes and mentions across mainstream business media outlets, and ultimately the release of my first book, “China Goes West.” In the end, the challenging work environment, which forced me to quickly adapt to a new work culture, opened doors to tremendous opportunities throughout my career that I never could have predicted.
Are you working on any new or exciting projects now?
Yes, in September 2018 I will be releasing my second book with Palgrave Macmillan titled, “Digital Influence: Unleash the Power of Influencer Marketing to Accelerate Your Global Business.” In China, and most global markets, there’s a major shift happening where consumers are tuning out traditional brand messaging channels (e.g. television ads, print, radio, etc.) and relying on the trusted voices of local influencers and key opinion leaders.
Ultimately, people want to learn from trusted peers, not faceless companies. Better than any corporate marketing function, influencers understand how to make best use of social media platforms and tailor content for their respective cultures to engage consumers in their home markets. I’m really excited for this book’s release, because I know it will help companies learn more about how they can take advantage of this fast-developing trend to more authentically connect to their end customers and grow their businesses.
What advice would you give to other business owners who do business in China, to help their employees to thrive?
I think one of the greatest challenges Western companies face across many aspects of their China business is a natural tendency to want to simply “transplant and translate.” By that I mean, take their way of doing things at headquarters in a market like the U.S. or Europe and then do the same exact thing in their China office, with very minimal adaptation. This is no way to business in China or any international market for that matter. Companies need to strike the right balance between having a global framework and leaving sufficient room for local teams to have a certain degree of autonomy to help localize the business.
This advice is particularly relevant to doing business in China, where local Chinese companies are extremely competitive and cutthroat. If the local China office of a Western company cannot recruit, train, and retain top talent by implementing standards that their Chinese rivals are able to, then Chinese employees will seek out new opportunities; often with competing Chinese firms. One of the greatest words of wisdom one of my veteran “China-hand” mentors used to describe this approach is, companies need to provide “freedom within a framework.” The local Chinese office needs to work within a set of general global best practices; however, they have the freedom to tailor implementation based on their understanding of the local market.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
During my first job search in Beijing, a mutual friend introduced me to David Wolf, who is currently Partner for Global Corporate Affairs and Advisory at the communications firm, Allison + Partners. David is one of the wisest people I know when it comes to doing business in China — and life in general. Earlier in his career, David served as the head of Asia-Pacific for Burson-Marsteller’s technology practice prior to founding his own award-winning Beijing-based corporate communications firm. A fluent Mandarin-speaker, David is one of the few individuals I’ve come across who can seamlessly conduct business as an authority with Chinese clients and senior Western businesses executives alike.
David has become a great friend over the years and has offered countless words of wisdom. One story that stands out is when I was considering leaving the Beijing-based consultancy to find new job opportunities where I could work more closely with American and European clients. He taught me about his “Octopus Strategy.” When facing a major change, don’t just hope for an unrealistic reach opportunity, or settle for the first thing that comes your way. Proactively develop a range of opportunities: 2–3 top reach opportunities, 2–3 high-likelihood opportunities and 2–3 “OK” opportunities (in a worst-case scenario, you’d be happy even though it’s not what you ideally wanted). Of course, it takes an informal team of thoughtful friends and mentors throughout your career to navigate the complexities of the modern-day workforce, but David stands out as a pivotal figure in my career journey among many incredible professionals I turn to on a regular basis for guidance and support.
What do you think are the new untapped markets in China that may become the next “big thing”?
China is on the cutting-edge of social media and e-commerce, and these sectors are rapidly developing — leading to tremendous opportunities for both Chinese and foreign companies. China’s digital landscape is dominated by apps and products produced by Baidu, Alibaba and Tencent — known collectively as “BAT”. Tencent’s WeChat in particular has become an invaluable tool for everyday Chinese consumers. The WeChat app is used for everything from basic messaging, to a payment device, to even serving as an official digital version of government-issued ID cards in some parts of the country.
What excites me the most, and part of the reason why I wrote “Digital Influence,” is the connection Chinese WeChat influencers have to their followers that result in actual purchase decisions. WeChat influencers publish articles to their WeChat accounts and accumulate massive numbers of followers who turn to these Key Opinion Leaders “KOLs” to learn about the latest market trends and overseas products. To get a sense of how powerful these KOLs can be, a fashion bag influencer named Tao Liang, known by his followers as “Mr. Bags,” promoted a limited time Givenchy handbag on WeChat that sold out (1.2 million RMB) in just 12 minutes. There are other cases where influencers produce content on product categories like online education, beauty and nutrition to help drive awareness and sales among Chinese consumers who don’t trust locally-produced products due to years of high-profile product-safety scandals.
We keep hearing about the “Trade War”. What are your thoughts about it? Given the unknowns, how do you plan to pivot?
We have entered a period of increasing tensions for US-China relations. Along with my colleagues at Frontier Strategy Group, we’ll continue to use this moment as an opportunity to advise the multinational companies in our client community how to prepare, monitor and react to changes in the US-China business landscape. All companies should have contingency plans in place for significant tariff increases by the US that could end up harming their businesses.
There are also opportunities to do business with China outside the walls of the Middle Kingdom. As my first book, “China Goes West” explains, there are more Chinese companies doing business in markets all around the world than ever before. At the same time, there are massive Chinese diaspora populations of entrepreneurial immigrants popping up in major cities from the US to Europe to Latin America to Africa. Building business ties with these overseas Chinese individuals and entities can help open up business opportunities back in China as “Trade War” rhetoric subsides.
What are your “5 Things You Need To Know To Successfully Do Business In China.” (Please share a story or example for each.)
It’s hard to narrow down everything you need to know to successfully do business in China to just five things, but here are 5 essentials that anyone doing business in China needs to get right:
#1. Go to China: I meet too many people who learn all their China-related business wisdom from articles, books and their friend or staff “on the ground.” While these are important sources of information, nothing beats the first-hand experience of traveling to the country. Given how rapidly the country has developed, you will learn more from a few weeks in-country than reading an entire library of China business books. Speak to long-term expats, speak to local Chinese businessmen — you’d be surprised how international the younger generation is — and be sure to take a side trip outside of Beijing and Shanghai to see rural China and get a taste of what life is like for most of its population.
#2. Learn Chinese: Mandarin is an extremely challenging language — believe me I learned the hard way — gaining fluency after countless hours of writing character strokes until my hand cramped up, and enduring multiple Beijing-based language programs that required students to sign a language pledge to “only speak Chinese” with violators being swiftly kicked out. While it may be unrealistic to gain fluency, just learn a few basic phrases. You will find that your Chinese peers will warm up to you and even praise poorly pronounced words, setting the foundation for a stronger relationship.
#3. Download WeChat: The more you do business in China, and travel there, you’ll find that e-mail and phone calls are highly inefficient. When I do work with China-based teams, we have never-ending chat-stream meetings on different topics because that fits their communication preferences. WeChat is the lifeline for nearly every citizen — being able to leave short voice or text message as opposed to a lengthy email or formal conference call will separate you from other Westerners seeking the attention of your Chinese counterparts.
#4. Maintain Global Standards But Be Open to Adaptation: Similar to my mentor’s advice above — everything should be approached with the idea of “freedom within a framework.” At the end of the day your business has certain principles, processes and standards that need to meet the same global level of compliance. This is especially true for American companies that are bound by the Foreign Corrupt Practices Act (FCPA). However, be prepared and willing to adapt aspects that can be localized to more effectively compete in the marketplace.
#5. Always Remember, China is Now Global: Given the rise of Chinese companies investing abroad, and Chinese individuals traveling/studying/working all around the world, entrepreneurial-minded foreign business can do business in China indirectly, oftentimes avoiding challenging regulatory and business hurdles that come with doing business in the country. Think about how your business may be able to identify a WeChat “KOL” to build awareness for your product and help sell to their audience acting as a third-party distribution partner.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Nothing happens to anybody which he is not fitted by nature to bear.” -Marcus Aurelius
This life lesson quote is very important for two reasons.
First, throughout your life and career you will undoubtedly encounter challenging moments and question your ability to persevere. However, you always need to keep in perspective that there’s a way to overcome these challenges no matter how insurmountable they may seem.
Second, even if everything’s going great in your life, you always need to consider that the people around you may be in their own challenging period. Use this mindset to have empathy and be mindful of how you handle your dealings with them. They could just be having a bad day, or a bad year, but use empathy to calm the flames rather than add fuel to the fire.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
We live in times where increasingly protectionist and inward-looking worldviews are gaining popularity as individuals blame “all that is foreign” for the problems they face in their everyday lives. I hope to inspire more professionals and everyday people to travel to become more globally aware. It’s easy to get caught up in news headlines about why a certain country “is bad” and another “is good,” but when you actually travel to another country and meet local people, you’ll find that we’re more alike than we are different. This was a message championed by the late Anthony Bourdain as he visited local cultures and shared their stories, food and culture through his television shows. More people need to follow in Bourdain’s footsteps to help those of us who cannot travel to faraway lands better understand the global community we are all a part of — only by looking outward can we see how similar we are, and ultimately develop productive solutions to our shared global problems.