With the outstanding economic growth of China, more and more foreign companies are deciding to do business in China. Various XING groups discuss the chances and challenges, for example “The Greater China Desk” with over 4,800 members. We asked our Chinese country manager Dr. Xinyu Song for his advice to foreign companies wishing to start doing business in China. Dr. Song lived in Germany for 16 years, built up Roland Berger in China and has consulted many German and other foreign companies during their market entry in China. Read the top five “Do’s” culled from the experience of an expert, and learn what helped XING China to become successful.

Dr. Xinyu Song, XING Country Manager China:

1. See with your own eyes.
The first important step for an entrepreneur is to come to China in person, to get a feeling for what is going on here. Lars has been to China several times before we met.

2. Find the right partner.
Finding a Chinese partner whom you trust will save you a lot of mistakes and money. In our case, it was me who found Lars: I read an article on XING in the Handelsblatt and contacted the office in Hamburg because I was interested in starting a network for my clients. Lars invited me to Hamburg to talk about working together, and convinced me to start a joint venture with him.

Test run
Try to get to know  as many Chinese people as possible and make your decision after careful evaluation. Do not let time pressure influence your decision. Ideally you should first try a smaller venture with your potential partner, and if both parties trust each other, you can then expand the business.

References
References are very important – when looking for a partner, look at what the person has done before and how successful these ventures were. Find out as much as possible about your potential partner’s background. Lars and I did not need to convince each other: We had a lot of common friends, Lars knew a lot of people I worked with and vice versa.

Service company for legal requirements
To register your business, use a service company. They will take care of all legal requirements, saving you a lot of time and money.

3. Find good personnel.
To find – and to keep – good people is probably the biggest challenge. China is a very dynamic market and good people have a lot of opportunities.

4. Send your best people.
When you send a general manager from headquarters to China, always send your best. A foreign manager that comes to work in China has to be a fighter, very energetic and communicative. Many companies make the mistake of sending a manager to China for his last assignment before retirement.

5. Think in the long-term.
A plan to come to China, stay for a short time, make quick profits and then leave will simply not work. A good example for the importance of long-term strategic thinking is Bosch/Siemens: A couple of years ago, the American company Whirlpool was leading foreign producer of white goods in China. Bosch/Siemens entered the market later, and at the beginning they were struggling. But they stayed and followed a long-term strategy, while Whirlpool stopped all business in China when the situation started to get more difficult for them. Now Bosch/Siemens is the leading foreign brand for white goods in China. If you have a good product and the ability to change, success is only a question of time. 

One thing comes to my mind when I speak about foreign companies in China: A couple of years ago, when I was with Roland Berger, we did a survey on European investors in China. One question was if they would reinvest and come to China again if they had to make the same decision again. Almost every company answered: Yes.

I am always struck by the words of the late German banker Alfred Herrhausen: “Those who stop getting better, sooner or later cease to be good.” This philosophy rings true for me as an entrepreneur. That is why we place such importance on delivering real innovation and continuous technical improvements. And as time goes by, it is always very interesting to see just how many XING ideas have since been copied by others – and especially to take note of exactly who these copycats are.

We aren’t completely alone in our market. As the market leader in Europe and South America, and the only social networking provider in the western world with a considerable number of Chinese members, and not just American ex-pats, we also have a competitor in the US. Competitor being the right term here, and not role model. A wave of copying is currently sweeping across Germany, while China is also a well-known example of this phenomenon. This trend almost certainly began with the Samwer brothers, who set up a 100% copy of eBay with Alando, only to then sell it to eBay within a matter of weeks. Now this trend seems to be taking the upper hand in this second Internet wave. Not a day goes by without someone declaring themselves an entrepreneur just because they’ve copied a good idea from the US. This isn’t real entrepreneurship in my eyes. Copying is just a euphemism for what it actually is, namely theft of intellectual property. The most extreme example of this boldness has to be the German network StudiVZ, which even stole the CSS files from Facebook, calling themselves entrepreneurs in the process.

Whilst all this is going on, there are many excellent ideas being born in Europe: Skype, Plazes, Zopa, Betfair, Fon and last but not least SAP, all of which have achieved more or less international market leadership. We can also still think back to inventions or start-ups that served as the inspiration for what are now large US corporations. “Echtzeit AG” for Google Earth, all the small coffeehouses in Italy for Starbucks, the CD developed by Polygram, Philips and Bayer, or MP3s conceived at the “Frauenhofer Institute”. Innovation from Europe, Marketing from the US. The big question of who flew the first airplane makes this particularly clear: Popular opinion would have you believe it was the Wright Brothers. In truth however, it was actually Gustav Weißkopf in 1901 and Karl Jatho on August 18, 1903, a whole 6 months before the Wright Brothers on December 17, 1903.

So for the record – here is the order of events as they happened. We take the imitation as a compliment.

Public profile: 2003, US competitor 2005
Photo in profile: 2003, US competitor 2007
Web links in profile: 2003, US competitor 2006
Payment model for Premium services: 2003, US competitor 2005
Display of people visiting my profile: 2003, US competitor 2007
Add new contact feature: 2003, US competitor 2007
Mobile version: 2004, US competitor ?
Powersearches: 2003, US competitor ?
Groups: 2003, US competitor ?

It remains to be seen what the future brings. One thing is clear: Generally speaking, the Americans outclass the Europeans in marketing. Hopefully that will soon change: Porsche, BMW and Mercedes being a role model.

Starting this weekend, your profile will be clearer and easier to manage: you can now view and make changes from a single page. Not only have we simplified the design, we’ve also added room for more information. Now you can add more personalized information than ever before, including a wealth of additional details on your career and education. Plus, a new info box gives you a chance to tell the XING community what your reasons are for online networking on the XING platform.

But it doesn’t stop there: you can also include links to other personal Web sites or profiles you might wish to share, such as accounts with Web 2.0 providers like Amazon, eBay, Twitter, YouTube, Flickr, Mister Wong, Last.fm, Dopplr, Photobucket and Digg. Let XING become your primary point of departure for your multifaced virtual identity.

Of course, converting your profile will take some time, and XING will go offline for a few hours this weekend.

Stay tuned…

As CEO of a global company, Lars talks to international journalists on a regular basis. This week he made a special trip to Beijing to hold a press conference and meet various journalists for interviews. The press conference was a big success with over 40 journalists from Chinese newspapers, business and IT magazines, and online media attending. The conference was part of the “SNS and Business Networking Forum 2007” hosted by XING. Chinese Internet and SNS experts joined Lars for a lively panel discussion about the value of business SNS and networking trends. 

No doubt China will not only become one of the next economic superpowers but also the world’s largest Internet nation, with more than 150 million people online already.

As a first-time visitor to China, I was amazed at the signs of change and growth all around: Beijing looks like one huge construction site, with lots of new green areas being created and air much fresher than I had expected. It seems like the whole city is getting ready for the Olympics 2008. Here is a glimpse of the almost finished Beijing National Stadium, also known as the “bird’s nest”:

The highlight of the tour was the chance to get together with the XING China team, including Dr. Song and Cindy. Here you can see some of the team, as well as several Chinese moderators who attended a welcome dinner held for our most active members:

Thank you very much for doing an excellent job and for showing us such a great time!

XING AG, operator of the international business and career network XING (www.xing.com) and the Spanish platforms eConozco (www.econozco.com) and Neurona (www.neurona.com) has exceeded the four-million-member mark as of the beginning of September 2007. The Spanish networks Neurona (with over one million members as of August 2007) and eConozco, which were acquired by XING AG, have shown particularly rapid growth in their markets. The eConozco business network, which was only acquired in March 2007, has doubled in members to more than 360,000 since its purchase by XING AG. [more]

We have just published our third international survey “Communication and Networking on the Internet”, and this year's survey has a lot of interesting results. For example:
Did you know that standard communication technologies such as landline phones and Microsoft Outlook are becoming less important for XING members, while Internet-based networking is more and more popular around the globe? Or that 62% of XING members work in middle and upper management?

Importance of communication technologies

Sample: XING members

Take a look at this year’s survey, and find out how different countries performed!
 

For the first time, I am a participant at the World Economic Forum. Klaus Schwab, Founder of the WEF wanted to create a "Summer Davos" recognizing that a new class of leaders and innovators have emerged who are reshaping business and transforming society. The centre of business gravity is clearly moving east. Dalian,  a beautiful coastal city in Northeast China, was chosen to host this Inaugural Annual Meeting of the New Champions as both  and continue to demonstrate the dynamism and potential of growth. 

Dalian is such strong growing Chinese cities, I have not known before the meeting. Population of 6,2m massively growing since the late 90s for IT Outsourcing and Business Process Outsourcing.

Some soundbites and and insights from the Meetings:

" China is continuing to growth strongly and wants world peace". But with no word Premier Wen Jiabao is mentioning global warming.

"The top leaders in china consume first thing the morning the top ten blogs" (bottom up media), by David Kirkpatrick

Consumer impact on GDP: 72% of Amirca’s GDP is in consumer demand. It is not supported by income, but rather by equity from over-valued assets, such as property. This has come into focus with the recent sub-prime crisis.  China is slightly different with 35% like the average says Stephen Roach, Chairman, Morgan Stanley, Asia

China Mobile is adding 5 million new subscribers every month says Wang Jianzhou, Chairman and CEO, China Mobile Communications Corporation.

Subprime crisis is likely to lead to more protectionism by Amirca says Kevan V. Watts, Vice-Chairman, Merrill Lynch & Co

From the Web2.0 world many participants are here: David Siffry, Martin Varsavsky, Tariq Krim, Marko Ahtisaari, Rodrigo Sepulveda and many more.

Once again CYQUEST organized the fabulous NetSoccer Beach Clash (NSBC). This time the event took place at Veritas Beach, a location close to Hamburg. Participating Teams were: xcontrol, CoreMedia, cruisr.de, Alice/Hansenet, Travanto + Uhrzeit.org, XING, Freenet, Fluxx, AOL, TIPP24, Name Drive LLC, Faktor3, Lovells, CYQUEST, Libri.de, freiheit.com, Common Visions, Ynnor Systems, Advertising.com, StudiVZ, suesswarenversand.de, Google, Cellity, hamburg[at]work, eProfessional/Zanox.

Our team and the XING cheerleaders did an amazing series and won this years trophy! Congratulation to this success. XING scored victories against Fluxx, Google, AOL, Uhrzeit.org and lost only one match to Freenet in the prelims. 

I am really proud of our team, the team spirit and ability to party we share at XING. If you want to join our team check out the marketplace with current open positions.

Our winning team: Daniel (Danger), Nils, Sönke, Timo, Felix, Nuno, Nelo, Timo, Fabian, Stefan and Toni. Not in the picture: Johannes