Welcome to ‘cowboy country’ Trunki’s Rob Law on China
With the world on the verge of an ‘Asian century’ – China is at the heart of it.
But with so much said about its potential, and trade delegation after trade delegation at the feet of the men who matter in the world’s strongest economy, what is it actually like doing business there; and where do you start?
Bristol based Trunki has been distributing in China for three years now and it’s Managing Director, Rob Law, says the country represents a huge growth market for them.
Trunki is already 200 per cent up on last year in terms of sales.
He says: “We’re in leading independent stores, department stores, airports and well known retail brands such as Mothercare.
“It’s a huge strategic market for us and a key part of it is the emerging middle class. If you can afford brightly coloured luggage for your kids then you’ve made it – our products represent a status symbol for parents in China.”
Rob had been visiting China for many years before taking the plunge with his business, which now turns over £8.5m, and says that researching and understanding the culture of business is, as you’d expect, vital.
He comments: “Finding the right partner to work with our products in China has been a real challenge. You get a lot of people saying they will represent your products and for us it’s vital we work with a partner that understands our brand proposition.
“It’s a premium product, we don’t want to pile it high and sell it cheap.”
He elaborates on some of the other challenges: “Doing business in China can be incredibly difficult and we’re very fortunate that we work with a partner that takes the brunt of the hard work.
“When operating in China you also have to navigate incredible corruption and sometimes to conduct business in an ethical way can be very challenging. Day to day tasks can take forever as well, the bureaucracy is phenomenal.”
Trunki operate in a whopping 97 countries globally, working with 22 distributors, and have production facilities in the UK, China and United States.
China is a strategic, long term market and Trunki already have an international sales team there, which Rob says has been vital.
On how the market shapes up he says: “E-commerce is very big in China and a good chunk of our sales go through online retail sites, where you can buy branded good.
“But there are also fake copy sites, so it’s important that you invest in a branded presence on, as it will be an important move in the long term.”
Rob also says that social media is booming in China.
He comments: “They have their own platforms which are huge.
“Our target market in China is mums, and they love social media, so engaging with them on how to be a good parent is something that really resonates with the Chinese – they look for peer advice.”
When asked about how he stops his products being copied, he is pragmatic.
He says: “Oh there are already ten copies of our product on the market but this is where the brand comes in. It’s a huge challenge for us and something we take very seriously. To combat this we have to build our brand.
“We had to take 2,000 listings off Alibaba last year – it’s become such a big job for us now. We’ve had to hire a brand protection agency.”
Handing over your business card is a ceremony
So what’s it like during a business meeting in China?
Rob laughs and says: “The absolute first golden rule is to hand over your business card, and not just hand it over but hand it over so you are holding it with both hands –the exchange of cards is a ceremony.
“And when a Chinese contact presents you with their card don’t put it in your pocket but read it and take an interest. It also helps to try and learn a few words in Mandarin or Cantonese.
“Expect the questions to be direct as well; and it is important that you are patient because meetings can take a long time due to confusion and translation, especially when we are talking about things like design.”
Trunki has been incredibly successful in China very quickly but entering such a big market can be daunting for businesses.
Rob’s advice is clear: “The first step to entering this market is to look at where your product fits – is it a branded product or a commodity one.
“For a branded product the best thing you can do is get your product listed on direct to consumer retail site. Engaging with a marketing agency in China can be useful as well.
“There are agencies that can carry out social media activities and marketing to get your products known in the correct spaces.
“Research, networking and engaging with trade bodies and businesses that have been there and done it, are also vital.”
Rob goes on to say that it is a very interesting time for China: “I keep referring to it as cowboy country – there is a completely new and pioneering spirit, everyone is trying to make money, and unfortunately this can mean that corners do get cut but it is fascinating to see.
“The Chinese people are very driven and very motivated; they are very nice people and have a good sense of humour. The country is evolving and changing so quickly. It’s also not true about quality issues in China, despite what people say, but if you use cowboys you will have problems. High-tech is big in China – our iPhones are made in China.”
Flooding the market
China’s history is complicated and its transition from a state controlled economy to a free market one has been dramatic.
This has led some to believe that a crash is inevitable and many commentators talking negatively about its ascent.
Rob comments: “It is clear China is expanding at a very quick rate and there is likely to be a recession quite soon. It will be quite painful but I don’t think it will be a twenty year recession like in Japan and there is such a big market that opportunities
“A great indicator for us is that are more airports opening in China than the whole of Europe put together; they are opening up in towns people have never heard of.
“The Chinese market means a lot to Trunki, our goal is to become the global travel brand for children and China is integral to this.”
UK sales represent 60 per cent for the company, with overseas at 40 per cent.