Exporting to Taiwan: Guanxi in Action
You are the newly-hired marketing manager of Glorious Paints, a Singapore manufacturer of marine paints. It is a fast-growing company headed by three young, Western-educated directors.
Last year the marketing director led Glorious Paints to its first overseas sale, selling a large quantity of paint to Australia and New Zealand. Director Tan achieved this success by first sending information to potential distributors along with cover letters requesting appointments.
After receiving replies, Tan met with the interested candidate firms at their offices to negotiate a distribution agreement with the company best qualified to handle that market area. This process took about four months and today sales volume already exceeds expectations. Following that success you were hired to expand exports to other Pacific Rim markets. The director called you into his office to discuss market research showing that Taiwan is a very promising market with high demand and little local competition. So you were instructed to set up distribution there using the approach that had worked in Australia/New Zealand.
By searching a number of data bases you came up with the names and contact information of a number of Taiwanese importers, agents, representatives and wholesalers involved in the paint business. Next you sent off brochures and product information to these prospects, enclosing a cover letter requesting an appointment to discuss possible representation. To your surprise, six weeks went by without a single response. At a strategy session Mr. Tan pointed out that many Taiwanese are not comfortable corresponding in English, so you fired off a second mailing, this time in Chinese. But after another two months not a single prospective distributor has answered your request for an appointment.
Mr. Tan is upset with your lack of progress in this attractive market. He has called an urgent meeting for this afternoon and expects you to come up with a solution. As you sit stirring your tea the questions revolve in your head like the spoon in the teacup. “What have I done wrong? This strategy worked fine with the Aussies. Why not with the Taiwanese? What do we do now?