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November 19, 2009

Comments

China Law

Great post and it just goes to show that business in China is not really all that different from business anywhere else: you put out a good product/service, your chances of thriving are far better than if you don't.

Adam Daniel Mezei

Hi David,

Good to see you posting here again...

Just returned from my inaugural trip to CN, and I'd have to say that the service experiences I was anticipating -- in line with the reports to be found in the research I'd done online and heard about from local colleagues -- prepared me for a fate that didn't thankfully transpire. On the contrary, we had plenty of great service tales to write home about! Now, I'm not being intentionally cheeky or pollyannaish about this, nor am I acting like a panda-hugging silly laowai -- I realize the bad stuff is there in droves and we spoke to more than enough Beijing and Shanghai colleagues who shared with us their woeful stories -- but there were instances of genuinely sensational service in cases where there were no closed guanxi-feedback loops; in other words, where there was nothing for them to gain by behaving hospitably vis-a-vis us. They went out of their way to make our experience pleasant. I can supply examples, if you wish.

Thank you for this post, though, because it only reinforces the notion in my mind that the nation is changing so fast, almost 2010: A Space Odyssey-like, when the monoliths overtook the planet like subdividing amoeba. One day one receives bad service...the next it's like it never happened before.

I'll be back to China soon, though. Very soon.

peternh

Could we just get past the (very tired) observation that in China people have 'long memories', and in particular the increasingly clich├ęd connection of this observation with 1860 which has been running in the foreign press since at least 2000. If people mention 1860 it is because they have been taught to do so both at school and in the media as part of the Party's positioning itself as China's sole defence against devious foreigners. They do not 'remember' those events for the obvious reasons that they weren't there, and that what they are taught about 1860 is at worst utterly mendacious and at best incomplete. They cannot 'remember' what is false.

It should also be noted that they are equally taught to forget unpleasant events (Great Leap Forward, mass starvation, Cultural Revolution, the events of June 20 years ago), and learned amnesia on these topics also says little for any supposedly special quality of Chinese memory.

This is propaganda at work through the education system and the media, without which a fuller and less palatable account of events (from the Chinese point of view, although still not excusing European behaviour) would be 'remembered', but only in the sense that any of us know odd details about events in the 19th century.

David

Hi Adam, it is good to be back after what has been a fairly busy six months on the business side of the house. So much for the economic slump...

Service experiences here are good and getting better, at least in my experience, and in Beijing at least, a smile and a friendly word takes the level of attentiveness to new heights.

All of which makes GOME's missteps that much more egregious. Certainly, most Chinese will follow the low price, and GOME appears to be depending on that tendency. But down that path lies oblivion, as China's own television manufacturers have discovered to their lasting damage.

I am not betting on any company - even in China - that leads with price. Long run, that is a losing strategy, WMT notwithstanding.

David

Peter, you're right - my remarks about the Summer Palace sacking was flip, dumb, and it failed to support my point. That sort of memory is in fact stoked by propaganda and the education system. Thank you for calling me on it.

But consumer memories here are long, and what I should have used to illustrate that are negative cases like Toshiba (who is still paying for a stupid misstep with customer service a decade ago), and positive side, National Geographic, Shell, and Bayer, (all of whom retained strong brands in China despite long absences because they had been well thought-of before the Revolution.)

None of which is to say that the consumer memory is any longer here in China than elsewhere, or that there are different mechanisms at work to keep that collective memory alive (you mentioned propaganda, but competitors find ways to stoke negative memories about companies as well.) Indeed, people still remember the Tylenol poisonings, the e coli in Jack-in-the-Box's burgers, and the Ford Explorer rollever issue.

Rather, it is to suggest that the speed of development here does not erase memory, so it is unwise for a company like GOME to depend on it.

Thanks again.

Matthew

I have no view on whether the reference to 1860 provides a good analogy to current consumer preferences in China. However, I am interested in Peter's (apparent) assertion that what Chinese are taught about what occurred in the 1860s is "false". I would have thought that even the standard Western version of those events would provide ample material for foreign resentment.

Further, I have not seen any evidence that government attempts (assuming they exist) to make people forget the cultural revolution have been successful. My work colleagues and family all appear to have a stunning understanding of the events of that period.

The assertion of a long memory may be cliched but I do think that it still remains rather apt.

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It would be dumb for a foreign company to bet on mass public amnesia to solve its image problem in China.

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