Chinese Take-Out: Oriental Business Principles Demystified For Online Enterprises

By: Gunnar Berglund

"The expectations of life depend upon diligence; the mechanic that would perfect his work must first sharpen his tools." - Confucius

Chinese people are well-renowned for their industriousness and extraordinary minds for business. Cases of our Chinese brothers failing in their ventures are very rare. They have effective principles that have withstood history and tragedy. Chinese traders thrive even in the harshest business climate. They have survived wars, depressions, and competition from companies with gigantic resources.

For sure, their success is more than just Feng Shui. And if ever it was, it is highly doubtful that such geomancy is applicable for online enterprises, the latter being our primary concern for this discussion.

So what is their secret? Why are the Chinese so successful at business at a consistent and remarkable level? How could we apply their business principle to our online endeavors?

The Concept of "Guanxi"

Central in every Chinese business structure is the idea of relationships, or "Guanxi." Chinese people value honor and trust. They deal with persons who are trustworthy, and they strive to be just as dependable to win the respect of others. If you do a favor for a Chinese businessman, for example, he would do his best to be ready at all times so that he may be able to repay you when the need arises. If you're dealing with the Chinese and you deliver what was agreed upon on or before the time you have pegged, they will regard you as reliable and would consider doing business with you again.

"Guanxi" is the heart of their organized business. They strive to be good at what they do so that they could build relationships that would aid them in the long run. A Chinese business with well established "Guanxi" is susceptible to fewer risks and could easily get the best deal at any given time. Also, such Chinese enterprise is assured to have support if ever it encounters some trying times.

With customers, "Guanxi" is more about finding quality ones rather than settling for quantity. The Chinese rely in the goodwill they generate with their clients, and they believe that their reputation would eventually spread through word-of-mouth. People tend to believe those they know, hence the Chinese would rather pin their marketing strategies through their work rather than spending for costly advertising campaigns.

Long Term Relationships are better than Short Term Profit

Chinese people are very good with math. They could calculate ROI without using a calculator. They know their expenditures without the need of accounting software. It is no surprise then that the Chinese came up with an equation that is more profitable in the long run.

Chinese businessmen are known for their generosity in giving discounts. They make sure that their clients would feel that they are being given the best deal. This may result in minimal profit for their businesses, but the Chinese are looking at the bigger picture. A satisfied customer will always come back, thus assuring continuous income. In the long run, this would equate to a higher profit margin than a one time deal involving a larger markup price.

In doing online business, we could learn much from the Chinese's patience to delay gratification. Remember that people would view us based on how we conduct our trade. If they see that we offer quality products delivered with efficacy and expediency, they would most definitely consider us again. If we manage to reach out to them in a more personal level, the more that they will never forget us. In so doing, we would have assured ourselves of loyal patrons for our undertaking.

Frugality is a Virtue

Spend only what you could afford.

This is a doctrine prevalent in the Chinese culture, and is best manifested in their business affairs. Borrowing money is considered taboo in their society. They would rather start with menial jobs that no one else would dare touch than asking a loan from other parties. They will not consider expenses which they cannot afford. Instead, they look for ways around the necessity.

In Closing

Online businesses have much to discover from their offline Chinese counterparts. If the Chinese were able to successfully establish their trade through the traditional methods we've discussed in this article, there is no reason why we wouldn't be able to duplicate their success on the web.

Additionally, Chinese businessmen would not be disheartened when they do lose money, for as long as the experience have taught them valuable lessons that they could utilize later on. Perhaps it would be wise for us to take heed. Knowledge is power, and in this competitive world of online marketing, we need all the weapons we could get.