What does Culture have to do with Business?

Culture was the most frequently mentioned word at the 2015 China Business Summit. Not because it was the most popular word of 2014 and business people were all in the trend, but because it was consensually agreed that culture matters in cross-cultural business.

Culture is a big, vague and elusive term. What exactly does the term imply? Some say culture is “what happens when nobody is looking”. In more formal terms, culture implies a set of implicit social contracts that governs peoples’ behaviours, rituals and values. It is mostly invisible, which makes it even more difficult to grasp. Yet, cultural awareness is something that you cannot afford to neglect if you wish to succeed in a global market. Without exaggeration, culture has an intangible yet magic power that determines the success or failure of an international business.

At the 2015 China Business Summit, people talked about culture in different terms. Mark Tanner, Managing Director of China Skinny told the Summit that there are three things to watch for when entering the Chinese market, namely perceptions, trust, and competition. “If competition is more of an economic nature, perceptions and trust are both culture issues. How to understand people’s perceptions and how to gain trust are key elements of a successful marketing strategy,” he says.

So, during the 2015 cultural situations in the Chinese market, what were the Chinese consumers looking for, especially in terms of New Zealand products? Kestrel Lee, Executive Creative Director of George P Johnson, Greater China, addressed this, saying that in China, it was not ecommerce that we should be focused on, but rather social commerce. “Social phenomenon and value shifts are driving the Chinese economy towards a consumption-led economy from a traditional export economy.”

Ecommerce had provided platforms for ordinary Chinese consumers to reach a massive range of imported products. Did the Chinese consumers still care about prices? The answer was perhaps, yes, but what they appreciated more was perhaps the value added to the product. These added-values could be good service, brand effects, or in New Zealand products’ case, the quality and safety of the products. As Prime Minister John Key explicitly pointed out: “China values the quality and safety of a New Zealand product – the potential is massive.”

In conflicting social contracts, or cultures, mutual trust is hard to gain – yet it was also the most elemental in building business relationships. Thanks to big companies like Air New Zealand and Fonterra, which had established excellent reputations for New Zealand services and products, many other companies could take advantage of this opportunity to thrive in the China market.

A word of caution though – nothing stays stagnant. New Zealand companies doing business with China should keep a close eye on the transitions to enter China and adapt marketing strategies accordingly.