I believe that the concerns faced by companies from any country are very common when it comes to seeking business opportunities in China, or anywhere else where the business, language, and cultural differences are significant.

While the following advice is not an in-depth report of how to do business internationally, I hope that it may highlight some common sense approaches to frequent general questions.

As many experts would advise, it is a good first step for any company (that wants to do business in China for the first time) to think of China as Europe, with vast cultural and language differences between one end of the Country and the other.

In doing business abroad, it is important to approach the new opportunity with good attitude. Of course, certain precautions are expected to be taken by any business when entering a new market. However, do ensure that you approach the new relationship with your Chinese counterparts with an attitude of trust, openness, patience, and mutual cooperation. I have seen/heard of companies that approached a new relationship with an attitude of “I’ll assume my potential partner is a crook unless they can prove otherwise” and became the business case for a self-fulfilling prophecy.

Remember that your potential foreign business partners are as apprehensive of doing business with you as you are with them. So keep an open mind and the chances of your success will automatically improve significantly.

With that in mind, the common challenges, in my experience, would be the following:

1. Language

This includes both interpretation and translation. You will need a decent interpreter to accompany you to meetings and trade shows. Also note that translations of legal contracts from English to Chinese by professionals can be costly, but necessary. Ensure that there is an agreement with the Chinese counterpart about which version (English or Chinese) prevails if a change in the meaning of a clause or document occurs during translation.

2. Communications

Perhaps a related aspect to the language factor is the ‘culture of communication’ that exists in the new market(s). Questions such as “What is a common response time to emails and messages” in China are important to understand beforehand in order to manage expectations. This will help you to avoid a communications gap that might lead you (or them) to misinterpret long response times as an indication of non-interest in the business opportunity instead of it being a simple cultural norm in that particular country.

Here is one hint: Be aware of local holidays in the other country. Chinese New Year is usually accompanied with a month-long hiatus in business activities. Labour day equates to a week of slow-down. Major events like elections can also contribute to a general slowing down of business activities.

3. Legitimacy and Non-Performance

This is the big and common concern with doing business in foreign countries. It is even a bigger concern in countries where regulatory frameworks don’t offer much protection or viable recourse for non-delivery/performance.

I would suggest you follow some of the following methods in vetting your opportunities/partners so as to reduce the risk of seeking legal recourse later:

• Seek help and recommendations from your country’s trade offices in China (e.g. Brazilian Chamber of Commerce, World Trade Centers, Commercial/Cultural Attache office of your Embassy in China, etc.). Often times they can vouch for the reputation of a local company or business person.

• Check your potential partner’s standing/reputation in local professional associations of your industry, accreditation bodies, or 3rd-party assessors (e.g. credit bureaus)

• Seek referrals from business people you can trust, whether in China or in your Country.

For a new market entrant, almost all the above can be easily achieved by working with a local partner/consultant. They can help with your legal, business, financial, and cultural integration. They can also assist with interpretation, HR, and sourcing what you need.

So go forth and frollick in this exciting world of international business and global opportunity. The rewards are certainly worth it, and a little courage can take you and your company a long way!

On the Halifax front:

Local developer and Lebanese Honorary Consul, Mr. Wadih Fares, had a good couple of weeks. He was named ‘Businessman of the Year’ by the Canadian-Lebanese Chamber of Commerce, and his controversial 19-story condo building proposal was approved by city council in a historical 21-1 vote. Critics of the proposal involved the usual crew of Heritage advocates, with unbeatable arguments like ‘the building will throw a shadow that may touch a nearby heritage neighborhood’. The same critics are planning to show up en-mass to an upcoming public hearing for another waterfront development project, this one for the $30 Million complex proposed by Halkirk Properties as a restoration/redevelopment of the Alexander Keiths Brewery District.

Canadian News:

CBC lost the rights to the theme song of ‘Hocky Night in Canada’. CTV immediately swiped up the license and locked it in for infinity and beyond. The theme is considered Canada’s ‘second national anthem’. The news prompted this jab from Stephen Colbert.

http://www.youtube.com/watch?v=s8BhSXEu3fo

International Business:

As of last week, Iran began pulling out their assets from EU banks to respond to the threat of additional sanctions. A new effort championed by the US seems to be on its way to convince EU member countries to increase their squeeze on Iran’s nuclear program. Before any potential asset freezing takes place, Iran is taking out their foreign exchange assets (reserves valued at $80 Billion USD) and converting it into gold and equities.

To the speculators out there: take note of the following three market reactions to the Iran asset-pull:

1. Gold will increase as a sudden increase of demand for bullion will hit the market through Iran’s bullion buyers
2. Oil prices will increase as the new potential sanctions may have an impact on supply out of Iran, the fourth largest oil producer in the world.
3. Look for investment opportunities in small banks who plan to continue dealing with Iran. Also look at banks in China, Middle East, former Soviet-bloc and other countries that remain friendly (or at least neutral) to Iran. These banks will be getting the windfall from the Iranian assets that will be pulled from European banks.

Technology:

Apple’s iPhone debuted in Japan in association with Softbank. The prospect of success for the iPhone in Japan was discussed in a previous post (click here for post). Meanwhile, Yahoo!’s board of directors is still in hot waters after they botched the Microsoft offer to buy them out. They went back to Microsoft begging for resumed negotiations, but were met with a firm ‘not interested anymore’. Quick to show SOMETHING to their investors and dodge a visit to the guillotine that Carl Icahn is setting up for the Yahoo! executive board, a deal was struck with rival Google to outsource a portion of Yahoo’s search advertising business for an estimated $250 to $450 million of additional annual revenue to Yahoo!.

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That’s it for now. I will try to post more often!

According to the waste management expert, at least 50 new recycling plants are needed to deal with construction waste in Dubai. This corresponds to opportunity number four in my Middle East business trends post.

Are there any Canadian waste management companies out there who wish to pursue this opportunity?

Here are five leads into top business opportunities for businesses seeking to position themselves along growth sectors in the Middle East:

1. Finance and Banking ICT & Software: The Arab banking sector will invest $1.8 Billion in information and communication technologies in 2008, a 15% increase from what they already spent in 2007. Arab banks boast one of the highest rates of growth in technology investment in the world (mainly because they got on the boat a little later than everyone else). Ofcourse, being a late adopter in this sector also means that Arab banks are being fitted with the latest technologies in the industry, giving them an edge compared to banks using archaic systems. Canada has 83 ICT companies that specialize in the Financial industry. Please, at least one of you should go down there and grab a contract or two!

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1. Sharia-Compliant Hospitality Products: Aha! Read that again. It’s not Sharia-compliant Banking. This time, a new Islamic trend is set to launch, and with it a new need for niche products. This May, Dubai-based Al-Mullah Properties will announce plans to invest $2 Billion to develop an Islamically-compliant hotel brand portfolio appealing to lifestyle travelers – both Muslim and non-Muslim. A new chain of up to 90 international hotels (branded as Cliftonwood, Adham and Wings) will operate with universal Islamic codes such as no alcohol and Halal food only. If you are a manufacturer/exporter of luxury and fine food products for the hospitality industry, now is the time to think about new product lines or re-branding existing products.

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1. Cement and Construction Materials/Technologies: Everyone knows it. Dubai is the fastest growing city in the world, with anywhere between 15 to 25% of the world’s cranes working constantly on its towers. The real estate boom in the UAE is about to face a crisis. Cement is on back log! Zawya.com reported that “Companies that provide ready-mix concrete have issued their clients notices that they are not in a position to supply more than 45 percent of the ready-mix orders. In some cases, ready-mix companies have even ceased production.” If any company has a solution, get on the next plane to Dubai and bring home some goat meat! (sorry, no bacon in UAE)

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1. Recycling and Industrial Waste Management Solutions: With all that construction comes much industrial waste. Lots of it. Recycling and Waste Management technologies have an open opportunity here. (Edit July 13 2008: This recommendation has been confirmed here).

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1. Oil, Oil, and Oil: Duh! Oil services are still in high demand. Better, cheaper extraction technologies. Maintenance services for older wells. Training services for labour localization initiatives. It’s all there. This week Bahrain announced plans to add 700 new oil wells to meet increasing energy demands. This summer, Yemen will award its first round of contracts for off-shore operations, prompting a scurry by local firms to find international partners who have much needed expertise in providing offshore services in a market that traditionally relied on on-shore production.

And there you have it. If you are a company that found this advice helpful and was able to capitalize on it in any way, shape, or form… congratulations! You are one of very few smart chicks who found a crack in the shell of Canadian reluctance and broke out successfully!

http://www.youtube.com/watch?v=T3bsY6Cfqsw

Business Week reporter Kenji Hall gives a good overview of the state of innovation in the mobile communication industry of Japan and the options that Apple may be negotiating with NTT DoCoMo, Japan’s largest wireless operator. You can read the full article here.

I remember reading about one of DoCoMo’s innovations back in early 2005. The ‘Finger Phone’ (called “Finger Whisper”) used bone vibrations to conduct sound instead of ear pieces. I4U News reported that the Finger Whisper phone is answered by touching forefinger to thumb and then by putting the forefinger in the ear to hear who is ringing. The call is ended by again touching forefinger to thumb. The phone has no keypad but users can make a call by saying out loud the number they want to reach.

DoCoMo was prototyping the phone in 2000 and had anticipated launching to retail by 2005. I haven’t heard much about it recently though. I wonder if Canadian consumers would ever be attracted to something like this. After all, seeing someone walking down the street with his finger in his ear is no more strange than seeing people pace around the side walk talking to themselves (the usefulness of hands-free communication still does not justify how ridiculous people look like when using a bluetooth ear piece in public, specially when their hands are visibly free to hold up the phone like the rest of us mobile-yielding common folk).

A new software by Boston-based Lebanese tech entrepreneurs Habib Haddad and Imad Jureidini has the makings of the next big Google or Yahoo acquisition. Language Analytics LLC, an internet startup, unveiled Yamli.com, a web-based tool that empowers users to easily use and access the Arabic web. (Yamli means ‘to dictate’ in Arabic)

As an Arabic speaking person who struggles with written communication and web navigation in Arabic, this software is a Godsend! While I operate in a purely English environment using English tools, I often need to communicate with Arabic-speaking businesses or research certain aspects of the Middle East market. With Yamli, I can simply type in English the phonetic iteration of the Arabic word that I want to write and the softwae will convert it automatically to the correct Arabic text! Hatha barnamej 3ajeeb wallahi! (This is an incredible program!)

To give you an idea of the opportunity here, consider the potential size of the market, its need for this product, and the number of current suppliers. According to German search company Seekport (who are also targeting the same market need), there are currently around 24 million active Arabic internet users, less than 10 per cent of the total Arabic population. Arabic internet users are expected to grow to 43 million users by 2008. Despite the size of this user group, there is no search engine geared specifically for Arabic language users.

An excerpt from the press release notes:

“The Arab world has one of the highest internet usage growth rates. Yet, access to and development of Arabic content has been difficult, mainly because of the complexity of typing Arabic. Although Arabic keyboards are available, the vast majority of Arabic-speaking Internet users are accustomed to an English keyboard. Users often resort to spelling Arabic words out phonetically using English characters, a process known as transliteration. Yamli allows users to convert these English characters into Arabic words.”

The release explains that Yamli’s initial release encompasses two tools: Yamli Search and Yamli Editor. Yamli Search allows users to search the web using Arabic keywords with Google. Users can search for general web content, videos, news, images and blogs. Yamli Editor allows users to write Arabic text that can then be copied into any electronic medium.

Co-founder Imad Jureidini says: “The Arabic web will truly take off when people can do two things easily: find and write Arabic content. While there are many applications for our technology, we sought to address these two fundamental needs immediately.”

And he couldn’t be more right. As I noted to Mr. Haddad, I see this service going cross-platform next. The software is so versatile that it works for internet and non-internet applications. Aside from providing a desktop version of the software, here are some possibilities that will see patent-pending Yamli become the service of choice for anything to do with English-Arabic transliteration:

1. Yamli widgets and plugins, for use in
- blogs (wordpress, etc.)
- Content Management Systems/Software (Joomla, etc.)
- Browser plugins, to quickly convert text without having to open another window for Yamli. (firefox plugin, etc.)
- Instant Messaging (Yahoo IM, ICQ, MSN Messenger, etc.)

2. Yamli mobile, for your cell phones or smart phones
- for mobile internet search and navigation
- for mobile email
- for text messaging

These are some ideas right off the top of my head. Monetizing them is a whole other issue, but it’s not very hard once you have a proven software that works.

Yamli, like the Arabic video sharing website , is on track to being the next YouTube-ish success story. With Google’s entry into the Middle East earlier this year, and other search and software giants taking notice of the opportunities in multi-lingual accessibility, I bet someone will be ready to pay good coin to gobble up and integrate any established platforms that support their efforts to dominate the lucrative Arabic internet market.

If Ikbis and Yamli play their cards right, I think we’ll see another significant purchase by a software/search giant in the coming 2 years. Between advertising revenues, licensing revenues, and possible kick backs from service and device charges (ala the Nokia-Ikbis scheme), please do let us know when you float your stock, Habib. I won’t miss out on this one!

The term Halal tends to refer to Muslim diet and specific food restrictions, particularly when it comes to meat.

Another new business idea catering for the booming Islamic market!

(via TrendHunter)

Simon Townsend, director of the company’s Middle East branch, said Dubai’s commercial buildings are impressively designed on the outside, but often lack the interior functionality that potential tenants require.

“For corporations, the perfect floor plate is a big rectangle with a small central core and very few columns, so they can plan the space perfectly,” he told delegates during a seminar at Cityscape. “The shape of the future supply of office space is going to make it very difficult for tenants to get a nice big open floor plate.” (Read full article from Gulf News here)

He said many office blocks in Dubai are sold on a floor by floor basis, a commitment that global firms are often unable to make. Clarification of the office building management and service charges is also cited by analysts as an area which needs attention. They say corporations are desperate to locate in Dubai, but are unsure about who pays what towards a building, how much they pay, how it is audited and what happens in the event of default.

“The vast majority of those products that were recalled were the result of a design flaw in Mattel’s design, not through a manufacturing flaw in China’s manufacturers,” Thomas Debrowski, Mattel’s executive vice-president for worldwide operations, said at a meeting in the office of Li Changjiang, chief of China’s product quality assurance agency.

“We understand and appreciate deeply the issues that this has caused for the reputation of Chinese manufacturers.”

I am sure anti-outsourcing propagandists are not happy with the news. The Mattel recalls brought all critics of China out of the wood-work under the guise of ‘protecting public safety’.

In other news, while the kids’ Toys giant is dealing with outstanding financial repercussions due to their massive toy recalls, Mattel is also suing porn star Terri Gibson, known to her fans as ‘China Barbie’ of ChinaBarbie.com. Mattel is suing Terri for infringing on their trademark ‘Barbie’. The Asia Times has the juice on the lawsuit, as well as the NY Post.

Kijiji? Joomla? BooRah? LaLa? Blame Google, the one that started this trend of silly, but catchy, names. Choosing a unique company or brand name these days can be extremely difficult. Having gone through the process twice in the past year, I can tell you that it can be frustrating. Whenever you think you have the perfect name, you find out that the name is registered to another company, or the web address is taken.

That’s where professional branding companies come into the picture, like Catchword Branding. Catchword is the company that came up with the name ‘Kijiji’, and many other familiar brands. “Old-school ideas about sounding trustworthy or sounding big are not as important as they used to be,” said Burt Alper, co-founder of Catchword Branding, which has helped companies pick such names as Vudu (makes a device for watching videos) and Promptu (creates voice-recognition products). “Now, it’s about sounding different and standing out from the crowd.” he told the LA Times.

Perhaps I should have ignored the 20 names my brainstorming group suggested for my trade consulting business and went with something like “TukTuk.com – Delivering Your Products… Beyond Traditional Markets” instead of “Midman International Trade Services”.

You know? I actually like that one. Hmmm…