How — and how not — to have a love affair with China

Updated: 2015-05-13 06:05

By Chang Jun(China Daily USA)

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China remains a lucrative market with tremendous potential for virtually any business. So it's no surprise to see foreign companies and investors flocking there in droves with strategies for kindling a romance with the world's most populous country and second-largest economy.

But, alas, not all love stories have happy endings, and while China can turn out to be "a land of milk and honey" for some American companies, for others it can be a Waterloo.

The secret formula — if there is such a thing — seems to lie in not only the products and services, but the company's operational wisdom, corporate philosophy and how well management understands China's regulations and policies.How — and how not — to have a love affair with China

No other companies better exemplify the rule "you either make it or break it in China" than Apple and Uber, two Bay Area-based high-tech stars.

Recently, Guangzhou and Chengdu officials raided Uber's local offices, accusing the taxi-hailing app of not having the "legal status" to provide livery services in their cities. Guangzhou police seized thousands of iPhones and other equipment during their investigation, alleging that Uber was operating an illegal taxi service without proper business registration and threatening fines of $4,860 to each individual vehicle involved in the operation.

In January, China's transportation authority had banned drivers of private cars from offering paid-ride services through apps, something Uber should have known.

In a contrast, Apple's love affair with China keeps blossoming, thanks to the tech giant's down-to-earth, practical and interactive approach in China.

Unlike his predecessor Steve Jobs, Apple CEO Tim Cook views the Chinese market as having greater importance and takes a more proactive approach to wooing Chinese consumers. Since Cook took over as CEO in 2011, he has visited China five times, and modified previous marketing strategies by including China among the first batch of countries for releasing new products, such as the iPhone 5s and 5c, as well as the Apple Watch.

During a visit to China in October of 2014, Cook sat with Chinese media and predicted that the Chinese market "will likely contribute the most revenue to Apple in the future — it is just a matter of time."

Apparently, he was right.

Visiting Beijing this week, Cook opened an account on China's popular social media Weibo, China's equivalent of Twitter, on Monday. By Tuesday morning, around 400,000 netizens were reportedly following his inaugural tweet — "Hello China! Happy to be back in Beijing, announcing innovative environmental programs" — sent out via an iPhone 6.

On Monday, IDC data indicated that Apple had, for the first time, surpassed rivals Xiaomi and Samsung to become the largest smartphone vendor in China, even though China's smartphone market had slowed by 4 percent.

Chinese consumers have purchased more iPhones this year than their American counterparts, and Apple's market share rocketed to 14.7 percent in the first quarter, up from 8.7 percent for the same period last year.

Apple's revenue in greater China has increased by 71 percent to $16.8 billion, outpacing the company's overall global growth of 27.2 percent.

Cook is reportedly ready to ink a deal with the World Wildlife Fund to manage around 1 million acres of forests across China by funding a five-year project to plant trees and make paper, using less land and water. Apple survived earlier scandals about maltreatment of employees and low hourly pay.

The love affair continues.

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