An Entrepreneur's Guide to Asia: The Main Differences in the Business Culture of the East and the West

Openness and self-sufficiency

Asia has a life of its own – in China, just a person with a European appearance attracts excessive attention. At the same time, it should be understood that for the Chinese, cooperation with foreigners and the search for international partners are not so necessary. They have a huge domestic market with a solvent population. According to CEBR, by 2028, China will overtake the United States and take first place in the list of the world's largest economies.

Two years ago, we came to China to chat with all the major VR rides manufacturers. Appointments were made by our full-time employee, Chinese Yi Er Lou. She found the companies we needed on Baidu (the local equivalent of Google), called and wrote cold emails, then went to WeChat with those who replied and negotiated the details there.

For cold calling, we purchased a Chinese number online to install WeChat on it. We thought it would be easier to get in touch with the locals. As a result, it turned out that it was impossible to link the messenger to this number, and our calls were immediately blocked. It was almost impossible to get through to Chinese companies. There have never been such problems with Western countries. Later, we learned that to combat spam and robocalls, China has strict rules: if the average duration of calls is less than three minutes or you call from one number too often, it is blocked.

As a result, we were able to communicate with all the companies we were interested in at the level of CEO and founders, but without an open and empathetic representative who speaks Chinese, it is incredibly difficult to reach partners in this country in the cold.

Lost in Translation
We came to China for three weeks and had two meetings a day: in the morning and in the evening. Each meeting took at least three to five hours, mainly due to the fact that all meetings took place through an interpreter. Even if we talked to top managers, one out of five knew English. And Er Lou connected online and made sure that the translators did not add anything of their own and did not distort the meaning.

For example, for some reason, one of the translators promised our partners the production of a device that we could not produce within the deadline they announced. This could lead to misunderstandings, dissatisfaction, and the complete termination of the partnership. I can't imagine how we would solve problems if there wasn't a person among us who spoke Chinese.

This is another reason why it is difficult to build business relations with the Chinese – in addition to cultural differences, the language barrier is an obstacle. You may not speak English well enough, but usually entrepreneurs know it well enough to at least assess whether the translator is getting the message across. In the case of Chinese, you don't understand what's going on at all and have to rely entirely on the accuracy of the translation or find a native speaker who is guaranteed to be on your side.

Tea Party in Guangzhou
The East and the West have different approaches to building relationships with business partners. In Europe and America, it is more pragmatic: personal and work are separated, private life remains private. In the West, business relations rely primarily on written agreements, which spell out all the obligations of the parties.

In Asian countries, including China, face-to-face communication is very important for the successful course of business negotiations. For bearers of Chinese culture, it is important to get to know strangers better before doing business. The saying "time is money" works in a peculiar way in Asian realities: locals invest a lot of time in building relationships if they see a promising deal.

When we talked to our Chinese partners, many meetings, especially in Guangzhou, began with a tea party. We were brought to a specially equipped room, and for the first hour we talked exclusively about general topics: culture, weather, quality of tea. Only then did we move on to the specifics. In Shanghai and Guangzhou, we were often invited to dinner after the evening meeting, and depending on the company, we were invited to different places, from expensive restaurants to street food markets.

We've noticed that in Western culture, people are more likely to be soft on the outside but the inside, while in Asia it's the other way around. Americans are very friendly and quite emotional, and the Chinese behave almost hostilely at the beginning of communication. They ask few questions and often start communicating in Chinese with each other right in the meeting (especially when the interpreter leaves the room). But if you manage to break through this wall and show that you can be trusted, and your project is interesting, the Chinese will become even friendlier than the Americans, and the communication will be more trusting. This is not so easy to do, but the "hygienic" minimum is as follows: express respect and interest in their activities, ask more questions yourself and bet on personal relationships (all your communication skills will come in handy).

"Face Saving"
Carriers of Asian culture rarely criticize people openly, often unpleasant feedback comes through third parties. More often than not, he will just keep silent, and if you persist, the middle manager will give you feedback. This complicates business interactions and makes you waste a lot of time.

You just have to take this into account, and if you realize you've been beating around the bush for months, ask the decision-maker a direct question. Ask if they are still interested in your product and what prevents them from moving on to the next stages. Explain the reasons for your questions and ask for a deadline. We once negotiated for quite a long time, and when the question was raised point-blank, it turned out that the Chinese partner had lost the main customer (for whom our product was intended), but we were not informed about it, "so as not to upset".

If we talk about outright criticism, then in the United States everything is not so simple. Most likely, they won't tell you directly that they are not ready to pay for the product, although for slightly different reasons. U.S. business etiquette does not imply direct criticism. In some form, it is likely to be heard, but it will be wrapped in a wrapper of compliments. Don't be fooled by the enthusiastic Great! and Wonderful! and watch what they say after that. Again, it's best to just ask what stops you from buying and what risks your potential partners see.

The Elusive CEO
There is a hierarchy in all organizations, but Western culture is focused on cooperation. Line personnel can calmly talk to top managers, more experienced specialists try to create a sense of equality within the team. Decisions are made taking into account different opinions and clear arguments, and personal initiative is encouraged.

Eastern culture is very different. According to the global organization International Dalit Solidarity Network, in countries with caste divisions, it is still possible to see discrimination against people from certain castes in hiring and exploiting their labor (although such discrimination is prohibited in India). In Asia as a whole, there is often a "smarter is smarter" principle: junior employees learn from their seniors and rarely dare to offer their ideas. The final decision is made by the manager, and it is not customary to challenge it.

When interacting with foreign companies, this manifests itself in the fact that it will not be so easy for you to achieve a personal meeting with the manager. When we arranged meetings in China, we were usually promised that there would be a CEO. In fact, we first presented the product to the technical director or sales director, they asked clarifying questions and tested the equipment. And only when they were satisfied with what they saw and heard, the leader appeared in the office. Although an hour before that, we could have been convinced that the CEO was not in the city at all.

Accordingly, you should be prepared that he will not be at the appointment with the CEO, as well as allow more time than usual for the initial negotiations. It is likely that you will have to tell the same thing to different people several times. If the manager does come, this is a good signal: most likely, your product has passed some kind of preliminary test for performance, and you have passed it for adequacy.

Dreamers and Realists
Despite the rational approach, American business partners love stories about the great and bright future of the project at pitches, it is important to "hook" them emotionally. In Asia, this can work when communicating with "visionaries" within the company, for example, with the chief innovation officer, who is looking at the prospect of 5-10 years. But for the CTO (Chief Technical Officer or Chief Technology Officer) or managers, a detailed risk assessment will be important at the very first meeting.