Q&A with Brent Ferguson, an EO Shanghai member
Conducting business overseas can be tough, especially when you’re trying to get your foot in the door of an international market. The Entrepreneurs’ Organization (EO), a global thought leader on entrepreneurship, recently launched the EO Business Beyond Borders, an immersion program that affords leading entrepreneurs the tools, resources and access needed to excel in international markets. With the first leg of the program occurring in Shanghai, China, we reached out to EO Shanghai member Brent Ferguson, who offers first-hand insights on the benefits, challenges and opportunities associated with taking your business beyond borders.
1. Tell us a little about your business and industry.
My company is Procore Direct Ltd. We produce over 10,000 items of Industrial Supplies across 20 different product categories that are used in the Canadian Oil & Gas, Mining, and Transport industries (mostly). I started the company 10 years ago in Canada as an import company and established warehouses in the West and East of the country. After only about 2 years, I realized that a better model was to ship direct from Asia to well established Canadian distribution channels. So I moved the HQ to China and now we are mostly an export company looking outward.
2. How was it moving your business to China?
Eight years ago was actually the second time I moved to Shanghai from North America. I first moved to China 20 years ago, the day after my last university exam. I had a one way ticket and wanted to be part of the Asian economic boom that was starting -somehow. I ended up in Hong Kong, then Beijing, then back to Shanghai, while working for a major Asian real estate developer. I initially wanted to be a real estate tycoon! … maybe someday in the future. After 7 years, I moved back home to get some fresh Canadian air. A few years later, after getting my company going in Canada, and many trips back to Asia, I decided to moved back and run everything more conveniently and efficiently from my favorite city, Shanghai. I’ve never looked back.
3.What are some key differences in doing business in China from other regions in the world?
China is the most dynamic place I know on earth. The business environment, culture, and rules are always changing. It’s not for the complacent. It’s a wild ride.
4. What are the advantages to doing business in China?
I’m not sure about “China”. The country is very different everywhere I go. If I had to generalize, size and growth rate are the obvious, but in my view China overall is so very capitalist. The rules of the game: tax laws, IP laws, employment laws, etc., are very clear. They change all the time, but they are clear. I find once one understands that, and can identify a business that can work within that dynamic, then the rest is all up to you and how well you can perform against your competition. It’s a very free market for many industries.
5. What are some unique ways entrepreneurs can promote their brand and create a niche in China?
One thing for sure, a significant marketing budget is essential. The entire world is here to compete and everyone claims to have something unique. There’s a lot of noise and it’s a very green market, so it takes some clever marketing to cut through and capture the attention of new consumers.
6. Are there any key insights or take-aways that you can share?
Many companies approach me to ask us to produce something for them in China, expecting massive cost savings. Sometimes, these companies already have more competitive advantages producing where they do than they think. There is a “China Advantage” in manufacturing, and it’s usually related to cost and scale. But there are other important advantages that may play a greater significance in ones’ business, and that ought to be reflected upon first before diving head first into China.
7. What advice would you give an entrepreneur looking to expand their business into China?
It really depends on the type of business. If he/she wants to sell a consumer product in China, spend the time to learn and understand buyer behavior. If it’s consumer products, research and assistance is more easily available. B2B relies on quality relationships and that takes time and trust.