Consultants bridge gap

PUBLISHED : Wednesday, 25 April, 2012, 12:00am
UPDATED : Wednesday, 25 April, 2012, 12:00am


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With the global economy still sputtering and growth slowing, the mainland has become more important and competitive than ever for multinational companies. It's big business for international firms and the consultants who help them, to the tune of US$15 billion per year.

The mainland's rapid evolution means the very nature of consulting has changed in the past decade. Five years ago, companies would hire a China hand who knew the right people and could make the right connections.

'The people hired today tend to be professionals who can really add value in a specific field such as marketing or finance,' says Shaun Rein, managing director of consultant China Market Research Group.

Li Qiang, a former Dell China finance director, says consultants have become a key part of the market because 'you can't hire the entire world and it's cheaper to hire a consultant who has seen the same thing many times to focus on that one point for a limited period'.

While marketing, financial or strategic advice is never cheap, 'a good consultant will save you bags of money, 100-fold what he or she costs', says Glenn DeSouza, a Shanghai-based managing director of Transfer Pricing Management Consulting.

Consultants frequently help global companies adapt their products or services to the needs of the mainland.

Multinationals succeed when their brand image or product appeals to the local consumer.

A notable success is Starbucks. 'Its brand DNA fits what Chinese consumers want - products that suit their lifestyle,' Rein says.

Starbucks tweaked its products by adding local flavours and creating a dine-in environment that matches China's cafe culture.

Li says that, at their best, consultants serve as 'a bridge connecting China to the West and helping multinationals reconcile company culture to the local environment'.

However, negotiating that relationship is a continuing process, requiring active management. 'Once a [joint venture] has been launched, it is difficult to reconcile disparate cultures,' warns Jonathan Fenby, author of the China-focused Tiger Head, Snake Tails.

Marketing is another crucial area in which consultants can help multinationals tailor their message. Rein warns that when companies use blue-eyed blonde models, a Chinese audience will say 'the clothes look good on him but not on me'. If an audience cannot relate, they won't become customers.

International and mainland firms have become receptive to the use of consultants. 'In the past, local businesses were defensive about adopting the advice of outside consultants,' Li says. 'Today, that is far less true.'