In some respects, Asia is a whole different ball game to Australia. Businesses wanting to export to Asia need to learn about the array of different written and unwritten rules which dictate behaviour and business conduct and arrangements.
Amarasena says “business diplomacy” is needed when exporting to Asia.
“Different cultures have different ways of doing business. Understanding other ways of doing business and adapting to a different system is all about showing respect for each other,” he says.
The book, Kiss, Bow or Shake Hands: Asia by Terri Morrison and Wayne Conway details some of the cultural differences which, if you remember, will give you a leg up in the Asian markets.
In China, understanding name orders and titles will immediately give you an advantage and set you apart from others who haven’t done their research. Age is also respected more so than in Western cultures and the oldest person is expected to be respected and elder representatives at business meetings or conferences are expected to enter and leave the room first.
Handshakes also differ greatly between Asian nations and if it’s not done correctly, it can be seen as a sign of disrespect. In India, a two-hand shake is common, where the person offering the handshake places their left hand over the top of the other party’s left hand. In Japan, handshakes are not common, as traditionally bowing is the accepted greeting and they are often repeated multiple times. In China, handshakes have become more commonplace, particularly when dealing with Westerners, but unlike in Australia where a firm grip is preferred, a limp hand indicates humility and respect.
Businesses should also be aware in China the use of the internet is subject to far stricter government controls and websites and the media are censored.
Legally, there are also a number of things to consider, such as intellectual property rights, bribery and competition laws.
Mace says legal agreements and entitlements in Australia do not necessarily apply overseas.
“Agreements made here under state or Australian law might not apply in overseas court systems. Agreements and court documents also need to be made in the local language, so it’s important to make sure the translation is correct,” he says.
Mace says time in overseas courts can be costly, but there is an alternative.
“Arbitration procedures through the International chamber of commerce offer internationally binding agreements subject to enforcement worldwide. This process is much cheaper and quicker and sometimes more effective than going through the courts,” he says.
When exporting overseas, it’s also worth reading up on the World Trade Organisations TRIPS Agreement, which provides some international intellectual property agreements for countries belonging to the WTO.
Mace says it’s important to receive sound legal advice throughout the entire exporting process in order to ensure you’re compliant with local regulations such as custom requirements and bribery.
“Just be aware that you need to be careful and seek good legal advice. The Chinese government is quite keen to cut down on all the bribery and corruption going on, but in regional centres people tend to have a fair bit of local power and some business people go in there a little bit naïve,” he says.
When entering a new market, clever marketing tactics can be used to make your product or company a household name from the outset (for all the right reasons).
Amarasena says knowledge of the local language is crucial when translating product names between cultures, in order to avoid embarrassing or negative connotations with the brand.
“There needs to be sensitivity in translating the language. I used to promote for Ceylon Tea and the logo was a lion. But when ‘lion’ was translated into Arabic, it turned out it meant ‘Asad’ or ‘Assad’ and this had connotations of the Syrian president,” he says.
Mace cites another example where Western brands need to understand how something translates to the local language.
Popular drink brand Pepsi created the slogan “come alive with the Pepsi generation”, but this was translated a little too literally in Taiwan and ended up saying “Pepsi will bring your ancestors back from the dead”.
Mace says getting established in the local market is one of the greatest challenges, but clever marketing can help you gain market traction.
“You’ve got to have the marketing and there are a range of methods which can be used. In India, if you get a cricketer to endorse the product, it’ll be a household name.
“All the Asian countries are quite different, but some markets, such as Japan for instance, buy from catalogues. In other markets they are quite happy to buy from online. Look at what others are doing in your sector and if it will work for your product, for example advertisements, endorsements and partnerships,” he says.
Building relationships with local agents and distributors is a fundamental part of exporting. Without working relationships built on a foundation of respect and trust, your exporting business is doomed.
Mace says Austrade is able to help businesses establish partnerships with distributors and agents worldwide.
“Austrade has offices in most Asian markets and would be aware of the distributors who are trustworthy and reasonable to work with. Businesses can also work with some of the bi-lateral business chambers who are in regular contact with those in the market. You can also contact local lawyers and accountants who have offices in those countries for advice on who is trustworthy.
Austrade detail a list of points to consider when choosing a distributor. Its suggestions include making sure you choose the distributor (not the other way round), looking for distributors capable of developing your markets, discussing expectations and setting clear performance criteria.
Amarasena says building relationships with distributors can take time and there can obstacles.
“These include making continual unconscious references to your own cultures and also ethno-centric behaviour; which refers to evaluating other people’s cultures according to the standards of one’s own culture which can act as a barrier,” he says.
The ability to finance your exporting business is essential, but help is available if you don’t have the capital at hand.
Various grants are now available to kick-start your exporting business, such as the Export Market Development Grants Scheme.
Austrade says the EMDG scheme is a longstanding form of assistance to exporters. The scheme pays grants to a large number of Australian exporters each year and allows 50% of expenses incurred on eligible export promotion activities, above a $20,000 threshold, to be claimed back in the year they were incurred.
Eligible applicants are able to apply to the scheme for up to seven grants.
Another source of funding help is through the Export Finance and Insurance Corporation, the Australian government’s export credit agency.
The EFIC is able to provide loans, guarantees, bonds and insurance, which collectively brings businesses one step closer to their exporting goals.
