In China, New Arrivals Are Gaining an Edge On the Pioneers
Companies that get into new markets first can have a big advantage over competitors -- think Amazon.com Inc. in online books, or FedEx Corp. in overnight delivery.
But when it comes to the vast, sometimes-untapped markets of China, some companies are noting the opposite phenomenon: "late-mover advantage." It's the idea that companies just entering China now may actually have a leg up, in some ways, on firms that got in early.
In industries including autos, retail and technology, new entrants to the China market could have an easier go of it, executives and lawyers here say. Many can now set up their own wholly owned, foreign enterprises -- instead of clunky joint ventures with state-owned firms -- and learn from the mistakes of those who went before them. Some early movers still bear the scars of dealing with the maddening Chinese bureaucracy of the 1980s and 1990s, not to mention being forced to work with inefficient or even corrupt local partners.
When Volkswagen AG came to China to build cars in 1984, "there was no experience of dealing with foreign investors," says Walter Hanek, a VW managing director based in Beijing. "So the regulations were very, very tough."
GETTING THE WORM?
"Early movers in China have some advantages, but latecomers are also blooming due to new, loosened business regulations."
Early movers
? Volkswagen: Set up a plant to build cars in China in 1984; business still growing but market share is slipping.
? Procter & Gamble: Got into China in 1988, and now makes the country's top-selling personal soap and shampoo.
? Siemens: About 40 operating companies in China, and now trying to increase its stakes in some of them.
Late movers
? Nissan Motor: Started building cars last year with Dongfeng Motor in China and wants to quadruple sales in four years.
? Infosys Technologies: Building a 200-person, software-development center in Shanghai, to open this spring.
? Toyota: First passenger car made in China less than two years ago; hopes to produce 250,000 vehicles in China by next year and to sell one million there by 2010.
Companies that want to build cars in China still have to work with a local partner. But now, companies that come to China fresh "probably have a much easier way of setting up their JVs, and also an easier way of pushing their own interests," Mr. Hanek says. VW's market share in China has fallen from about 50% three years ago to 31% today. But Mr. Hanek says the company doesn't regret getting into China early, noting that VW's China sales are still expanding at a very rapid clip.
Auto makers that came to China a decade or more ago still have some advantages, such as established dealer networks and more localized staff, says Ashvin Chotai, the head of Asian auto research for Global Insight in London. But newer entrants, such as Nissan Motor Co., have been able to sign bigger deals faster.
In a few years, "a lot of companies with appropriate strategies on the ground are going to be able to catch up," he says.
Examples of early-mover foibles in China in many industries are legion: DaimlerChrysler AG's former Mercedes unit stumbled with a huge project, approved in 1995, to build minivans in China after a dispute with its state-linked business partner. PepsiCo Inc., which has 19 Chinese joint ventures, went to arbitration a year and a half ago to settle a dispute with a Chinese soda-bottler partner. Pepsi alleged the Chinese company brokered unauthorized deals and even threatened Pepsi's own auditors. The arbitration is ongoing.
These days, many companies don't have to team up with Chinese partners at all. Though auto makers still can't own more than 50% of a car venture, companies distributing auto parts and supplies can operate on their own; so can food and beverage companies. Other rules in the auto industry, such as those governing import tariffs and auto financing, are also loosening because of China's new membership in the World Trade Organization.
James Zimmerman, a partner with the law firm of Squire, Sanders & Dempsey in Beijing, says he's now busy helping clients in many industries buy out their Chinese partners or liquidate joint ventures. These days in China, he says, "you'd be insane to have a partner."
That was the view of India's Infosys Technologies Ltd., which is set to open a new, 200-person software-development center in Shanghai this spring. The company opted to open a wholly owned subsidiary in China instead of a joint venture. "We felt we could go on our own," says Vineet Toshniwal, the company's head of sales and marketing for greater China. The entire government approval process took three to six months and was "relatively straightforward," he says.
Indeed, in China today, companies often have to visit fewer ministries to obtain an official blessing. Other important business rules are also changing: The country is modifying its Foreign Trade Law, for instance, to make it easier for companies to sell and distribute products throughout China, including goods that are imported.
To be sure, many companies that blazed costly trails in China are still reaping rewards at the expense of newer arrivals. Consumer-products giant Procter & Gamble Co., which got into China in 1988, believes any "higher regulatory burden" it faced early on in China has been outweighed by the "opportunity to build longer and deeper relationships with customers," says Austin Lally, a P&G general manager.
But other early comers are scrambling to stay competitive in China's new, more lax regulatory environment. German conglomerate Siemens AG -- which struck its first Chinese joint venture in 1989 but first did business in China way back in the 1870s -- is trying to expand its stakes in many of its Chinese ventures to attain a two-thirds shareholding majority, which would strengthen its management control. Siemens has bought out other ventures, a process that can be time-consuming and expensive, lawyers say.
When some of those deals were struck, "your JV partner was not chosen by you, it was given to you," says Ernst Behrens, the president and CEO of Siemens Ltd., China. That led to problems because some state-owned partners didn't understand how to run efficient, profit-oriented operations, he says. Costs also rose because companies like Siemens sometimes had trouble consolidating functions such as human resources, purchasing and sales with joint-venture partners.
Siemens is currently involved in about 40 operating companies in China in industries ranging from power generation to transportation to telecommunications. Mr. Behrens, however, says the company is still starting some new joint ventures and views its overall foray into China as a big success.
In China, "the early birds, they pay more," agrees Ma Xiaoye, a former Chinese government official who now heads a Shanghai think tank. But "any company that has the patience to stay here will profit eventually."
外资进入中国后到者得先机
在企业界，最先进入某个市场的公司通常会较后来的竞争对手有很大优势。比如，网上书店行业的亚马逊公司(Amazon.com Inc.)和快递业的联邦快递公司(FedEx Corp.)就是两个很好的例子。
但对于中国的外国企业来说，很多时候情况刚好相反。在这片辽阔的、很多未开发领域的大市场上，后来居上的现象时有发生。实际上，刚刚进入市场的企业有可能从先行者那里获得支撑。
企业界和法律界人士说，在汽车、零售和科技行业，新进入的企业有可能更顺利。许多外国企业可以直接成立完全独资的公司，而不用与中国国有企业合资经营。而且，它们还能借鉴先期进入企业的经验教训。一些早先进入中国的公司现在还在忍受著上个世纪八、九十年代中国严重的官僚主义作风给它们带来的创伤，更不用说它们有时还不得不与效率低下甚至有贪污腐化行为的当地企业合作。
德国大众汽车(Volkswagen AG)驻北京的董事总经理韩尼克(Walter Hanek)说，当大众汽车1984年进入中国时，中国的企业还没有与外国公司打交道的经验。因此当时监管方面的规定非常苛刻。
韩尼克说，那时想在中国生产汽车的外国公司必须有一个中方合作伙伴。但现在，新进入中国的外国企业在成立合资企业，或在获得他们希望持有的股份时已经变得容易多了。大众汽车在中国市场的占有率从三年前的50%左右降到了现在的31%，不过韩尼克表示，大众并不后悔很早就进入中国市场。他说，大众在中国的销售还在迅速增长。
伦敦Global Insight亚洲汽车业研究部门负责人肖泰(Ashvin Chotai)说，十多年前就来到中国的汽车厂商仍有一些优势，比如完善的经销网络，员工的本土化程度也更高。但是，像日本的日产汽车(Nissan Motor Co.)等刚跨入中国的企业已能更快达成更大规模的交易了。
他说，许多对中国市场确立了适当经营战略的企业几年后就能迎头赶上。
在中国的许多行业，先期进入的外国公司中不乏遭遇挫折的例子。例如，德国戴姆勒克莱斯勒公司(DaimlerChrysler AG)的梅塞德斯-奔驰子公司(Mercedes)，早在1995年就获准与国内合作伙伴大批量生产小型货车，但与这家政府关联企业的纠纷最终导致项目夭折。此外，在中国有19家合资企业的百事公司(PepsiCo Inc.)与合资的中方饮料瓶装厂意见不合，一年半以前不得不诉诸仲裁机构。百事公司称，中方企业未经授权私自承揽业务，甚至威胁百事的审计人员。目前仲裁程序仍在进行。
不过，现在许多行业的外国企业已无需与中方企业合资。虽然汽车整车生产商在合资企业中的股份仍不能超过50%，但汽车零部件和其他备件分销企业可独资经营；食品饮料企业的外商也可百分之百持股。在中国加入世界贸易组织(World Trade Organization)后，中国汽车行业有关进口关税和购车贷款等方面的监管规定正在逐步放松。
翰宇律师事务所(Squire, Sanders & Dempsey)北京代表处合伙人詹姆斯?齐默尔曼(James Zimmerman)说，他正忙著帮助许多行业的客户买断其中方合作伙伴的股份，或对合资企业进行清算。他说，目前在中国经营的企业再选择合资是极不明智的做法。
印度公司Infosys Technologies Ltd.正有此意。该公司今年春季即将在上海成立一家有200名雇员的软件开发中心，它就选择了独资方式。
该公司驻大中华区销售和营销部门负责人托西尼沃(Vineet Toshniwal)说，政府整个审批过程需要3到6个月，相对还比较简便。
的确，今天外国企业申请在华经营时不需要再跑那么多的政府部门了，其他有关业务经营的规定也在变化。比如中国修改了外商投资法(Foreign Trade Law)，外国企业在华销售和分销产品（包括进口的产品）将变得更加便利。
的确，有许多曾付出沉重代价的探路者也获得了丰厚的回报，这是很多后来者难以企及的。美国日用消费品生产商宝洁公司(Procter & Gamble Co., PG, 又名:宝硷公司)早在1988年就进入了中国市场。宝洁大中华区总经理奥斯汀?雷利(Austin Lally)认为，虽然早期承受了沉重的监管负担，但相应地，它们的品牌也得以在市场参与者还很少的情况下与消费者建立了长期深厚的联系，它们的收获要远远大于它们付出的代价。
但其他先行的公司却没那么幸运。在中国已变得比较宽松的市场环境里，他们正为保持企业竞争力而绞尽脑汁。比如德国的西门子公司(Siemens AG)。该公司1989年在中国成立了第一家合资公司，但它实际上远在19世纪70年代就开始在中国作生意了。目前西门子正试图将它在多家合资企业里的股份扩大到三分之二，以便实现控股、加强管理层的控制能力。它还完全买断了其他合资企业的股权，法律界人士说，这是一个费时费（财）力的过程。
西门子中国公司(Siemens Ltd., China)总裁兼首席执行长伯伦斯(Ernst Behrens)说，当初组建合资公司的时候，合资伙伴不是由他们选择，而是由中国政府“派”给他们的。他说，这种方式带来了很多问题，因为合资的一些国有企业不懂如何提高效率、实现盈利。有时，由于公司在人力资源、采购和销售等方面难以与中国合资方整合资源，因而合资后成本显著上升。
西门子目前在中国的发电、交通运输和电讯等领域有大约40家经营性企业。但伯伦斯说，西门子还在成立新的合资公司。他认为，公司在中国市场的全面推进是一项非常成功的战略。
曾在政府部门任职、现在上海一家智囊机构工作的马晓晔（Ma Xiaoye, 音译）说，在中国是早起的鸟儿吃虫难，但耐心等待的人最后也会大有收获。
