The Negotiation

Topics Discussed and Key Points:●      How the last 18 months changed the economy forever●      How things have changed in Kimberly’s line of work in China●      What happened to the global supply chain and its impact on the Chinese economy●      Moving forward in 2022 and beyond●      Maintaining business relationships in China●      How the business landscape in the region has changed overall●      How the B2B buying process has evolved throughout COVID Episode Summary:Today on The Negotiation, we talk with Kimberly Kirkendall, founder and President at International Resource Development.We recently had Kimberly on the show in September 2020 to discuss a myriad of topics, including the art of negotiation, building relationships, and managing suppliers, as well as interpreting and navigating written procedures and policy documents. She sits down with us almost 18 months later to speak on what’s changed since that last conversation.In a nutshell, she believes that nobody should count on any semblance of the “old normal” rearing its head until at least 2024. From drastic shifts in the supply chain to the now-dead culture of on-demand travel to continued logistical issues and labor shortages, the many challenges of the new normal are here to stay for a long time.With regards to the many changes in the global supply chain over the past two years, Kimberly says that China has effectively been scrambling to stay ahead of an ongoing chain reaction. It has been particularly damaging for manufacturers who for a couple of decades had been relying on just-in-time inventory and lean supply chain and logistics.Today, building and maintaining relationships in China has become even more important than it already was prior to COVID. “You have to have trust on both sides,” stresses Kimberly. “You have to trust that they have your best interests at heart, and it’s harder to do when you can’t be face-to-face.” Partners should be mindful in their communication, taking care to feed the personal side of the relationship instead of being all business.Overall, Kimberly believes that the new normal is here to stay. Regionalization and decentralization are not going away. Geo-political tensions and the rise of hierarchical government structures will continue to develop. Concerning international trade, business, and labor, Kimberly simply says, “I don’t see us going back to where we were. I just don’t.” Key Quotes:“Companies that thought they could triage their supply chain problems, and that it was going to be six months of hiccups and they would go back to normal, that obviously hasn’t been the case. So, more and more companies are realizing that there is a new normal.” “Across Democrats and Republicans and economic divisions, the one thing that unites people in the United States right now is the threat of China. We need to have the ability to have a conversation about that, where you can actually influence somebody that what they’re reading is not true and is not all bad. It’s crazy how divisive it's gotten.” “You have to have trust on both sides. You have to trust that they have your best interests at heart—that they’re acting as a good distributor, that they’re acting as a good supplier on your behalf. And they have to trust that you’re a good customer. And it’s harder to do when you can’t be face-to-face.” “You really need to understand your market in China and how your products are used. It’s critical. [...] For foreign brands going into China, you really have to challenge your own bias and expectations, and how you judge and value what the customer—whether it’s a business or a consumer—thinks about your business, because they may have a completely different perspective in the use of it or a different value system around what makes it work.”

Topics Discussed and Key Points:●      The main thesis of The Politics of the Asia-Pacific●      The biggest evolutions in the Asia-Pacific over the last 15 years●      Relationships between countries in the Asia-Pacific●      Major non-governmental actors in the Asia-Pacific region●      How average citizens regard tensions in the region●      How the pandemic impacted politics in the region●      Often overlooked factors by the West concerning politics in the Asia-Pacific region Episode Summary:Today on The Negotiation, we talk with Mark Williams, Chair of Political Studies at Vancouver Island University. He is the editor of The Politics of the Asia-Pacific: Triumphs, Challenges, and Threats, published by the University of Toronto Press. He previously authored a book on the politics of Indonesia titled Indonesia, Islam, and the International Political Economy: Clash or Cooperation?.Says Mark: “My road to China is through this broader prism of the politics of the Asia-Pacific.”In Politics of the Asia-Pacific, Mark discusses the so-called “East-Asian Miracle” as it was referred to by the World Bank in a 1993 publication. In that publication, it is said that the economic success of the Asia-Pacific had a 1 in 10,000 chance of occurring.This success did not come about by chance, of course; it’s by design, thanks to public officials working with government bureaucracies as well as heads of major industries to coordinate what is sometimes called a “developmental state model” for the region. This way, the government channels investment into specific industries to try to find and maximize comparative advantages rather than just leaving it entirely to market forces.Mark notes that world order is a “nebulous” concept influenced by a number of different factors such as questions of legitimacy. But certainly, one pillar of world order is the distribution of power in the international system, and that distribution of power has shifted considerably over the past decade.The dynamic between the different countries within the Asia-Pacific is characterized by “a thin degree of institutionalization”, or the delicate balance between the supreme sovereign authority of the state and the “pooling” of the sovereignty of every state for the purposes of maintaining a rules-based international order.With this in mind, China looms over the rest of the countries in the region. Mark dissects the various moving parts that contribute to tensions within the Asia-Pacific and what Western observers need to consider when discussing these tensions. He touches on the question of why the Western conception of liberal democracy may be largely incompatible in Asia, and how ASEAN can serve as a dialogue partner to find a shared purpose between every nation in the region. Key Quotes:“Back in 1993, in this World Bank publication called ‘The East-Asian Miracle’, it said that, if it was random chance, the economic success of the Asia-Pacific would have had a 1 in 10,000 chance of occurring.” “By 2050, the Chinese economy will probably be about 150% the size of the United States. This is just an unprecedented transformation and redistribution of power in the international system.” “The rise of China, and the uncertainties and anxieties that it provokes, is something that reverberates across Southeast Asia as well as Japan and South Korea.” “This is going to be the approach to working with China: Every country in the region really needs to be careful about its bilateral relations. It needs to look for these multilateral relationships where possible, and that’s not easy to do.”

Topics Discussed and Key Points:●      The dynamic between heritage brands and startups●      How consumption patterns for Chinese consumers change when purchasing abroad versus within China●      Comparing travelling Chinese consumers with travelling Western consumers●      Whether most big beauty brands need to have a dedicated travelling consumer program●      How COVID-19 has changed beauty brands and their marketing●      How the pandemic impacted retail●      Considerations regarding KOLs and KOCs●      How to market hero products versus new products●      All about VIPKid●      Addressing the “pressure cooker” environment around academic expectations Chinese parents have of their children●      Comparing the American and the Chinese school systems with regards to setting students up for success in the workforce Episode Summary:Today on The Negotiation, we talk with Karen Raghavan, a Brand and Business Development Consultant and Growth Advisor to both heritage beauty brands and startups. She is also the Vice President of Brand Development at natural ingredient company Purissima.Karen is a member of Chief, a private network built to drive more women into positions of power and keep them there.Years ago, it was incredibly difficult for a new company to gain traction in China. Observing this, Karen set out to discover what captures the minds of Chinese consumers.She found that consumers travelled to neighboring countries such as Japan and Korea to take advantage of price differentials, while at the same time introducing new brands to friends and family back home. She also discovered that younger Chinese consumers tended to travel abroad individually while older generations tended to do so in groups.Today, eCommerce has become an indispensable avenue for the majority of brands. It is important for a company to hone their brand messaging and create compelling content that helps them stand out and attract their ideal consumer amid a sea of countless brands competing within the attention economy.Further, the barrier to entry has now been lowered, again thanks to the ease of access to eCommerce solutions. What remains to be seen is whether all of these new brands launched during the pandemic will be able to scale moving forward.Finally, Karen speaks on the “pressure cooker” environment around academic expectations Chinese parents traditionally have of their children. She also gives her thoughts on how well the American and Chinese educational systems prepare students for success in the workforce. Key Quotes:“The Chinese have a very intentional purchasing behavior, where they will research the brands at length, research the products at length, research the pricing at length, then create a list per location, per destination, and even do a group buy.” “I don’t think there needs to be a specific Chinese traveller program anymore. I believe that a lot of brands have gotten way more educated over the last few years on the China market and the Chinese consumer.” “We’re still human beings at the end of the day; so, having somebody talk me through a compelling brand story or demonstrating how a product actually could solve some of my skin problems or makeup needs—it’s hard to compare that with an Instagram ad or even somebody showing me how to do it on TikTok.” “Unless there is a structural change in how children and students enter university, that pressure cooker environment will remain.”

Topics Discussed and Key Points:●      About Relay Video●      The typical dynamics between creative agencies and their Chinese clients●      How Relay aims to “create China’s first truly global brand”●      How roadshow videos become an IPO marketing tool for companies●      Monetizing your YouTube channel as a China vlogger in 2022●      About Jim’s upcoming app, Relay.club Episode Summary:Today on The Negotiation, we talk with Jim Fields, Founder and CEO of Relay Video, a Beijing-based creative marketing agency that specializes in creating stunning pieces of video content, both for disruptive startup businesses and large technology brands.Established in 2016, Relay Video was built on the belief that Chinese brands are the brands of the future. Relay’s mission, therefore, is to make films that tell the stories of these brands to a global audience.Jim is also a marketing consultant for the Chinese venture capital investment fund 10Fund and a mentor at Chinaccelerator.Asked about Relay’s unique thrust as a creative marketing agency in China, Jim explains that “the rush to iterate” that the market is known for comes at the expense of the brand story. “Each story is different,” says Jim. “But, the key thing is clarifying the narrative and then using that clarified narrative in a visual format that makes the company’s mission make sense to viewers.”Further, the goal is to create videos that those who do not live in China can relate to, not just on a rational level, but on an emotional one, too. To this end, Relay makes sure “to visualize not just the company but the actual landscape of China” in its films.Jim also talks about his YouTube channel, GRTR, and his experience so far as an American China vlogger in 2022. Key Quotes:“You’re starting to see brands in China that have products which are either at the same level or perhaps even surpass their counterparts in other markets. The interesting part about it is, in China, a lot of the founders of these companies are STEM graduates who know a lot about engineering and how to create a product; but, they might not know about the soft skills—storytelling, communications, PR, marketing. Especially when these companies take that step onto the global stage, many of them are lacking marketing collateral and materials that are going to tell that story—particularly in English—to a global audience.” “For a lot of folks who live outside of China, China is a complete unknown. So, when you think about film, we really have to find a way to visualize not just the company but the actual landscape of China—whether it’s things like the ease of delivery that takes place in Chinese cities or the ubiquity of mobile payments or the fact that most folks are interacting primarily with technology products on mobile as opposed to via desktop. So, we have to really find a way to encapsulate the entire landscape of China in 2022 via these films and do it in a way that someone who lives in a Western market who has never stepped foot in China can actually understand.”

Topics Discussed and Key Points:●      China’s hockey culture versus that of America●      How China’s youth is typically introduced to hockey●      Hockey leagues and training programs available for adults in China●      Active recreational rinks in China●      A geographical layout of hockey in China●      The business of sports development in China from a Westerner’s point of view●      Chinese parents’ motivation for getting their kids involved in hockey●      Chinese hockey referees●      Hockey fans in China●      Professional hockey in China Episode Summary:Today on The Negotiation, we talk with international hockey consultant Mark Simon. He has spent 15 years as an expert in the Chinese hockey industry, from team coaching to program creation to on-the-ground operations. He has also collaborated with numerous media outlets on navigating the Chinese landscape from a marketing perspective.Mark is a key member of the leadership team for China Hockey Group, the country’s largest organization dedicated to running high-level adult and youth hockey programs both locally and on the world stage.He is also the founder of Hockey Hands, a non-profit organization teaching English and hockey to orphans, migrant children, and children with disabilities.Hockey’s popularity in China is nowhere near that of Canada or the U.S., nor is there much of a “grassroots” movement around the sport. Mark points out that the youth largely treat hockey as just another “class” rather than as a genuinely fun activity they voluntarily engage in, not to mention the fact that enrolling a child in hockey is a particularly expensive endeavor in China.Teenagers who do develop passion and demonstrable skills for hockey end up migrating elsewhere to be able to pursue their sport in a country with an established hockey scene. As for adults, ex-pats make up a large majority of local hockey players and enthusiasts as hockey remains a minor sport in China.Mark gives his thoughts on the role of guanxi in any business interaction among the Chinese, hockey and sports, in general, being no exception. He also notes the glaring lack of professional teams in the country, especially amid the pandemic, and what the future of hockey might look like going forward. Key Quotes:“There isn’t much of a hockey culture in China, unfortunately. It doesn’t enter the zone of the common person at all. It’s really only the hockey parents—the hockey families—who end up learning anything about the sport.” “In China, it’s very much about relationships—guanxi. [...] I had to learn that you can’t just be as honest as you’d like to be because, typically, Chinese people don’t want to have a confrontation.”

Topics Discussed and Key Points:●      China’s football landscape●      Why football has a more active fanbase than basketball in China●      Grassroots football in China●      How prioritization of education over almost all else impacts sport culture in China●      The biggest football teams in China and their dynamic with fans●      Chinese football and the Chinese government●      Where Chinese football players need to improve on a tactical level●      Covering football in China as a foreign journalist●      The future of football in China Episode Summary:Today on The Negotiation, we talk with Cameron Wilson, a writer on all things Chinese football published by World Soccer, The Guardian, and AFP. He is the Founding Editor of Wild East Football.Football has been “on the go” in China since 1994 but has had uneven development since its introduction. From corruption scandals to failed investments in an attempt to give local players a platform on the world stage, Cameron says that Chinese football “is in a bad place” up until today.Cameron names another issue regarding the slow growth of football in China as the lack of a grassroots system. As with other sports in the country, attempts at development very much come top-down—and so far, there has been no Yao Ming of football to inspire the youth. The relatively low interest in building the national player base is further compounded by the fact that parents continue to push education as a priority above all else.Chinese football, according to Cameron, is probably “too tactical” for their own good. That is, there is very little if any, encouragement to be creative on the pitch, as opposed to the football culture of the West.Finally, Cameron speaks on the difficulty of being able to paint a full, well-rounded picture of Chinese football as a foreign journalist, considering there is a lot of suspicion toward the foreign press.Overall, football is not dead in China, but it is developing at a snail’s pace. Now that the pandemic has further hampered the growth of the sports landscape in general, the future of Chinese football is uncertain. Key Quotes:“The U.S. has been a consistent World Cup qualifier since it was launched. So, basically, the domestic league in the U.S. has supported the national team; whereas in China, it has not had the same effect. China has only been to the World Cup once, which was in 2002, and they basically went home after three defeats and scored no goals.” “Grassroots football in China is quite unlike grassroots sports elsewhere, because there is simply a lack of people involved. [...] There is not really a casual or leisure grassroots sports system in China. Everything is based on identifying young talents at a very young age and whisking them off to an Olympic gold medal factory.”

Topics Discussed and Key Points:●      China’s consumer PC market in the early-to-mid-90s●      Why many companies struggled in the 90s while Intel thrived●      Building the Chinese social networking app Guanxi in the early-2010s●      Co-founding mInfo, the official mobile search provider to the Beijing Olympics in 2008●      What internet marketing looked like 20 years ago and the impact of mobile in the 2000s●      The early days of eCommerce and the reasons for its dramatic growth●      What foreign VR companies should do to localize for the Chinese market●      How VR is perceived in China versus the West and why it took a long time to take off●      Where the world of VR will be in five to ten years●      What Alvin means by: “The metaverse will expand—not replace—the internet.” Episode Summary:Today on The Negotiation, we talk with Alvin Wang Graylin, China President at HTC. Established in 1997, HTC is an award-winning developer of smart mobile, connected technology, and virtual reality products.Alvin is also the Vice President of the Industry of Virtual Reality Alliance (IVRA) and the President of the Virtual Reality Venture Capital Alliance (VRVCA)He has almost three decades of business management experience in the tech industry, including 20 years in Greater China beginning with a Senior Management position at Intel in 1993. Prior to HTC, Alvin was a serial entrepreneur, having founded four venture-backed startups in the mobile and internet spaces, covering mobile social, adtech, search, AI, big data and digital media. Additionally, he has held $100+ million P&L roles at a number of public companies.Today, Alvin is a sought-after speaker and thought leader on the topics of VR/AR/AI in China and globally.According to Alvin, the key consideration of the Chinese government when scrutinizing foreign companies is the potential for technology transfer. It is a tit-for-tat attitude that Intel was able to abide by, resulting in a collaboration that allowed Intel to thrive while most other foreign consumer PC brands of the time failed to penetrate the market.Alvin looks back on an early career in the Chinese tech space where innovation was rampant, including his experience building the Chinese social networking app Guanxi in the early-2010s, as well as co-founding mInfo, the official mobile search provider to the Beijing Olympics in 2008.Finally, Alvin discusses his current role at HTC developing smart mobile and VR products. “In every area of this industry,” he says, “there is innovation happening.” The common thread tying these innovations together is the ever-blurring line between distinct features that make up many of today’s devices. In the near future, Alvin foresees smart mobile devices for both personal and business uses, incorporating both VR and AR technologies.Alvin concludes: “Anybody at any age can put on these devices and behave as they do in the real world.” Key Quotes:“There were tons of consumers out there, but how could we get them into this new internet and multimedia trend that’s starting to happen? One was getting the prices way down. Two was helping to take all this global content and localizing it. And three was creating low-end consumer channels that were able to reach out to all the different Tier 2, 3, 4, 5 cities that didn’t have access to computer stores at all.” “COVID has really accelerated the interest in the VR industry because people are now recognizing that you’re able to be productive and eliminate a lot of business travel. But having a video-only interaction doesn’t feel personal enough; so, VR is a good alternative to help enhance that sense of being together.” “The old internet—the 2D internet—does not go away. I actually see the Metaverse as, essentially, the internet of today expanded to interact with 3D content, and uses an immersive device—like an AR or VR device—to experience this 3D content. But at the same time, these 3D devices can be used to experience 2D content. [...] This Metaverse needs to be something that’s completely open, that anybody can get into through any device, and it needs to be at global standards to be operable across different countries and different operating systems.”

Topics Discussed and Key Points:●      Major trends across China eCommerce and consumer behavior in the past year●      Categories that are doing really well in China today●      Non-traditional categories that are on the way up●      The younger generation’s move “back to basics” and “materialism fatigue”●      Finding the keys to finding purchase motivation amid China’s “post-consumer high”●      China’s anti-monopoly policies and their long-term implications●      What digital online platforms Michael is most excited about●      The rising dominance of “information capitalism” and its implication on culture●      Bridging the in-store and the digital experience●      Why live streaming has not taken off in North America yet (and when it will) Episode Summary:Today on The Negotiation, we talk with Michael Zakkour, founder of 5 NEW DIGITAL, an exclusive consulting organization that advises its clients on strategy, structure, implementation and transformation in the age of the digital industrial revolution - across the "5 New" - New Retail, New Technology, New Finance, New Supply Chain and New Manufacturing. He is also the author of "New Retail: Born in China, Going Global.” We look back on the past year and note the major developments across China's eCommerce and consumer behavior.Michael says, “What we’re really seeing now is a blending of the idea of, ‘What is eCommerce?’ with the idea of, ‘What is social commerce?’” He contends that this is an inevitability that was fast-forwarded as a result of the pandemic. The typical Chinese consumer now no longer sees a distinction between the two—that live streaming, AR, VR, ER, and the like are now one and the same. “It’s all becoming part of this larger-than-life, technicolor, robust experience of shopping.”He then goes into the current and rising trends in the market, which turn out to largely be the home, beauty, and kitchen industries as consumers—particularly the younger generation—have begun to embrace a “back-to-basics” lifestyle in the wake of “materialism fatigue”.Michael also does a deep dive into the question of monopolistic practices in China and how they relate to those in the U.S. He addressed the potential for decoupling, saying that it is not so much the economies of the West that we should be considering in this particular case, but the decoupling of the world of technology and information between East and West.Finally, Michael looks forward towards the retail landscape in 2022, touching on the economic and cultural impacts of what he calls “information capitalism”, China’s mastery in bridging the in-store and digital buying environments, and why live streaming is set to take the world by storm this year—even in the West. Key Quotes:“What we’re really seeing now is a blending of the idea of, ‘What is eCommerce?’ with the idea of, ‘What is social commerce?’ [...] Live streaming, VR, AR, ER—it’s all becoming part of this larger than life, technicolor, robust experience of shopping.” “Chinese companies have been far better than their Western counterparts at making digital commerce, shopping—where people are actually shopping: It’s social, it’s fun, it’s engaging, it’s robust, it’s loud, it’s colorful. It’s everything that shopping should be.” “You will find all the keys to purchase motivation in China through [their] language, culture, history, and philosophy. Over and over and over again, the brands and the retailers and the CPGs and the companies that make it in China spend the requisite time ahead of time, and are constantly looking into those core four in order to build the Chinese version of who they are.” “Are we headed to a decoupling? Now, when people talk about decoupling, they’re usually thinking about the decoupling of the economies of the West in China. But in this particular case, we’re talking about: ‘Are we heading towards the decoupling of the world of technology and information between East and West?’ That’s the big question.” “Our relationship with and the usage of technology and information, along with our relationship with the environment and sustainability, and our relationship with our government are going to be the three mega-forces that will shape the rest of this century.” “Physical retail matters and it always will. So, the question then, is, ‘How do you build a relationship between the physical and the digital worlds, and the physical and the digital experiences?’”

This episode is a look back at all of our podcast guests and the topics we covered in 2020, putting together some of our favorite moments for you into one single episode of goodness. The guests featured in this special episode are:Matt Sheehan, episode #75John Pomfret, episode #78Anne Stephensn-Yang, episode #82James McGregor, episode #83Chloé Goncalves, episode #85Charles Lavoie, episode #91Benjamin Wahl, episode #92Greg Turner, episode #93Ambassador Dominic Barton, episode #100Zak Dychtwald, episodes #101 & #102Mark Dreyer, episode #106Rui Ma, episodes #110 & #111Freddie Bacon, episodes #112 & #113Craig Smith, episode #121Gordon Houlden, #122

Topics Discussed and Key Points:●      Snowsports culture in China versus Japan●      Consumers in China’s snowsports industry versus the West’s●      How Burton markets and localizes snowsports in China●      Marketing snowsports as a lifestyle in China●      The evolution of retail in China and how Burton has adapted●      How to set goals and strategize for a market entry into China●      The impact of the 2022 Winter Olympics on Burton China Episode Summary:Today on The Negotiation, we speak with Craig Smith, CEO of Burton Snowboards China. Founded in 2013 in Beijing, Burton China has grown to over 40 dealerships nationwide and seven premium partner resorts.Craig started with Burton at their Tokyo office two decades prior. Regarding snowsports, Craig says that “the cultural differences in China and Japan are numerous.” One major example is Japan’s strict attention to detail as compared to China’s spontaneity and love for adventure.Likewise, consumers in the Chinese snowsports industry differ considerably from those of the Americas and Europe. For one thing, snowsports only began to explode in popularity in 2016. Also, Chinese consumers generally make most of their buying decisions based on the Key Opinion Leaders (KOLs) they follow, whereas consumers in the West—particularly with regard to the sports industry—refer to magazines for the information they need.Asked about how Burton goes about their marketing snowboarding in China, Craig says that education and painting a vivid picture of the lifestyle around snowsports rather than the products and facilities themselves is key to winning consumers’ hearts. In Burton’s own words, “We’re bringing the spirit of snowboarding to the consumer 365 days a year.”Craig goes on to offer his advice to foreign companies looking to enter the Chinese market, which includes doing deep research on the cultural nuances of the market and your ideal customer, finding a local partner to help you navigate government regulations, and being prepared to move at China speed.Finally, Craig speaks on Burton’s plans for the 2022 Winter Olympics and how they aim to be a player in the Chinese government’s goal to create “300 million snowsports enthusiasts” in the country. Key Quotes:“Chinese consumers are in a very different stage of development in the snowsports industry compared to consumers in the Americas and in Europe, just because snowsports are so new—snowsports really only took off in 2016.” “The most important focus for Burton China is sharing the fun of the lifestyle around snowboarding.” “My suggestion for companies looking to enter the Chinese market is: Learn about the market first and foremost. Learn about the consumer. Learn their wants—what motivates them to engage with a brand. That takes time, and that takes a lot of patience.” “In China, government relations are extremely important. It’s difficult for foreign companies to come in and build government relations, and that’s where a local partner certainly can help.”