Mastering the Digital Marketplace in the Middle Kingdom
- Oct 5, 2018
With London and New York firmly entrenched as the leading global financial service hubs, rising stars China, Singapore and Hong Kong are unquestionably knocking on the door. But this massive geographic region encompasses dozens of languages, religions and cultures. How can an external entrant, particularly non-Asian, expect to conduct business in such an environment? Well, it happens every day, and the companies that are the most successful approach it from a micro standpoint. In other words, they are mindful of the local culture – how people make decisions and what their values and traditions are.
What helps facilitate this transition is technology, specifically the internet. We take it for granted in the U.S. that most of the population is online. However, in China, that number is somewhere around 55%. Internet growth in China has been gradual, but the gap between the U.S. and China as a percentage of population access and use continues to shrink.
Whether it’s Amazon or Alibaba, Facebook or WeChat, Twitter or Weibo, the digital consumer marketplace is thriving here and in the Middle Kingdom. Combine that with China’s rapidly growing middle class—one that is migrating from the countryside to the cities—who has ever-increasing discretionary income and you have an economic juggernaut. It’s not uncommon to see retailers like Starbucks, Apple or Nike in China’s shopping malls—that most American of inventions.
And with such investment in a consumer-based economy comes the need for business and financial advisors—for tax consulting, construction projects, alternative investments, supply chain technology and so forth. This is where China looks to the West to leverage its decades of business experience. And whether it’s developing blockchain technology for significant, real-time transactions or simply an American businessperson and his Chinese counterpart discussing shipping methods over lunch, this continental win-win relationship ultimately gets back to understanding how to navigate the local culture.
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Timothy Speiss is a Tax Partner in the Private Client Services Group and Vice President of EisnerAmper Wealth Planning LLC. He chairs our Asia Practice and is a member of the firm’s community service group, EisnerAmper Cares.
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