Going with the rhythm

Updated: 2014-07-04 12:12

By Oswald Chan in Hong Kong (China Daily USA)

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Trend forecasting and retail analysis provider, WGSN Group, believes it can capitalize on its global networks and knowledge, along with its local staff on the mainland, to provide tailor-made business solutions for international fashion apparel retailers.

The group is facilitating the expansion of overseas retail brands in the mainland consumer market (by offering its mainland market expertise), and helping its mainland counterparts to venture into overseas markets by providing them with information on global markets as well as design trend analysis.

"The mainland is entering an economic transition - from a manufacturing base to a design powerhouse. WGSN is working to facilitate this transition and join our clients on the journey," WGSN's Asia Pacific General Manager Dan Cotton told China Daily.

Expressing optimism over the company's future business potential, he said: "We now see fast-growing companies on the mainland focusing on developing design talent. They're thinking of how to better leverage local designers and Western content to create mainland-relevant designs. Mainland companies are also learning fast about how to expand their brands globally.

"We also help global clients enter the mainland's retail apparel industry by leveraging our networks to connect companies and guide them through this learning process."

WGSN has been active on the mainland since 2002 and, currently, has 500 mainland customers and about 5,000 users, accounting for some 33 percent of revenues generated in the Asia Pacific region. The company is adding about 150 new registered accounts every year on the mainland, with a growth rate exceeding 20 percent.

Going with the rhythm

Cotton said WGSN is learning to adopt the mainland's cultural business practices as it provides tailor-made services to clients.

"We have learned that the critical point in promoting our services on the mainland is not only the quality of the services, but helping customers to use them efficiently and benefit from them.

"Compared with other countries, the mainland's business rhythm is very fast. Professionals do not have the patience to wait and see how a solution works. And if they find a service too complicated to use, they will quickly look for alternatives," he said.

"We are also offering better and better market advice for our clients, as this is vital in helping them to improve their business processes for design, marketing and the merchandising logistics process," Cotton said.

In order to provide more localized business advice, WGSN signed a partnership agreement with China Textile Information Center (CTIC) in April this year, enabling WGSN to serve retail and apparel customers better on the mainland. In partnership with CTIC, WGSN now can provide an in-depth China textiles and garment library for its customers, and which is embedded in its website portal.

Global business advisory firm OC&C is also confronting cultural challenges in expanding the mainland's management consulting market. The company specializes in devising corporate and business strategies for clients, advising customers (multinational companies which intend to penetrate the mainland market and mainland firms that aim to venture into overseas markets) on how to outperform their competitors or to execute an investment acquisition or disposal deal.

"One major hurdle in developing the mainland's business consultant market is that some of our clients are not willing to pay the full price for getting business strategy advice because they do not know how to utilize the services fully provided by the business consultants," OC&C Greater China Partner Jacques Penhirin told China Daily. "We have to put more efforts into educating our clients to recognize the consultants' contributions."

Another challenge is recruiting the right talents to be business consultants. "The need to recruit the best candidates as business consultants is a big problem, especially when we need candidates who are more service-oriented in character and can show genuine care to our clients. We also have to provide the training to the consultants we hired so that they can do their jobs properly," Penhirin said.

Despite the hurdles, Penhirin is optimistic that the mainland market will be one of the fastest revenue growth engines for OC&C.

"Rapid technological change, the more faltering status of the global economy, the growing tendency of mainland companies going abroad, and the mainland's limited adoption of management consulting services compared with the US and Europe are creating big opportunities for us," he said.

"Those multinational companies and domestic firms on the mainland are not seeing business and profit growth as high as they expect, so they need our services to ensure they can grow their businesses in a profitable and faster way."

OC&C envisages recruiting 20 percent more business consultants to maintain an annual 15-percent business growth.

Mercer, a global advisory services firm in talent advisory, medical insurance package design and broking, retirement and investment solution provision as well as worker productivity enhancement, also expects to benefit from the opening up of the mainland's services sector.

"The globalization of mainland companies is a major growth driver for us," Mercer Greater China Managing Director Jonathan Gove said.

"We see huge outbound investment by mainland firms as an increasing number acquire businesses around the world. We help mainland companies compete globally by helping them build up multi-country teams and functions. Essentially, we help them to go global, facing all the issues and challenges a global workforce brings, and by giving them a competitive edge through advancing the health, wealth and performance of their most vital asset - their people."

The trick remains that service providers must integrate global networks and expertise with local knowledge.

"We have large and very strong teams on the ground. We understand how to do business on the mainland, and can also access Mercer's experts around the world to provide services and advices to our clients as and needed," Gove added. "We bring to our clients experience and access to global expertise and global knowledge that local companies cannot."

Currently, Mercer operates in more than 130 countries, with more than 20,000 employees based in 43 nations. It has five offices on the mainland employing some 400 people.

Gove believed the current slowing down of the mainland economy will, at worst, provide temporary challenges to Mercer's advisory business. "The slowing down of the mainland economy provides challenges for many of our clients, and competition becomes more intense. But our job is to help clients navigate change and so we expect our business to grow accordingly."

"By investing in our mainland business, expanding our team size and increasing our solution portfolios' breadth, we hope to grow our business very rapidly - even two to three times faster than the mainland's economic growth," Gove envisioned.

The mainland is striving to transform its economy from manufacturing and investment-reliant into a domestic consumption-led and service-oriented one, in an effort to upgrade its economy amid a declining overseas exports market.

Besides a weak exports market, rising labor costs in China, restrained resources supply, declining environmental quality and eco-capacity, yuan currency value appreciation, and growing trade protectionism have all crimped the overall competitiveness of the country's manufacturing sector.

oswald@chinadailyhk.com

Going with the rhythm

(China Daily USA 07/04/2014 page7)

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