hit more fairways. make more putts. avoid the hazards. play by the rules.
Doing Business in China

Posted on Thursday 13 April 2006

I have a tiny bit of experience dealing with the Chinese. Back in my Mobitex days Ericsson was trying to get a network up and running on the mainland, and fledgling operator launched in Hong Kong. I had more than a few meetings with the young operators and with a variety of potential network operators. In addition, many of the folks I regularly dealt with in Korea, Singapore and Australia had ongoing business relationships on the mainland. That doesn’t make me an expert by any means, but it gives me a little basis to comment on a preemptive move by one of the Chinese cellular companies against RIM.

RIM, as you may know, has been selling BlackBerry in Hong Kong for several years. They have developed distributorships with all three major HK carriers and have launched all their latest GSM hardware there. They have also said publicly that they are developing a BlackBerry launch for the mainland in conjunction with China Mobile, one of two state owned dominant carriers, and plan to launch commercial service in May.

Earlier this month China Unicom, the other major carrier, announced a new service called “Redberry” designed to push messages to CDMA handsets. The company was blatant in its press release. “The RedBerry name extends the vivid name of BlackBerry that people are already familiar with, and it also combines the new red symbol of China Unicom.” Which gets me to the point.

China is a difficult place for Western companies to compete, quite simply because the Chinese do not bother to acknowledge patents, copyrights and trade mark registrations from outside the country. While this is not universally true enough companies have had their work stolen to make it common knowledge. The Globe and Mail put it this way:

Brand piracy remains rampant in China, despite several court rulings against illegal imitators. In December, Starbucks won a court ruling against a Shanghai coffee shop that was using a similar logo and an identical Chinese translation of the Starbucks name. It won $62,000 in damages from the Shanghai imitator, but an appeal has been filed.

Ferrero, the Italian confectioner, won a court case in January against a Chinese rival that produced copies of its Ferrero Rocher chocolates.

China can be a wonderful market for many companies, given the almost fairy-tale growth, especially in technology products. But until they start respecting outside intellectual property it will not reach its full potential.

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