Thinking Local in China

China, as this Wall Street Journal article notes, is no longer a place companies go just to make things. Thanks to its booming economy, China is now a place to sell things. Here’s an article clip:

    “The biggest error in the past that the multinational firms have [made] in the Chinese market is they haven’t had a sufficient enough appreciation of the domestic market,” says Sean Debow, who tracks technology companies and trends in Asia for international investment bank UBS. Now, he says, “people are focusing on adapting products designed abroad to meet the specific needs of China.”

Take Matsushita (Panasonic). The company had been steadily losing market share in China because it was trying to sell the Chinese the same products it was selling to its Japanese customers. No more…

    So Matsushita has changed its strategy. Rather than designing all products from start to finish in Japan, it has begun hiring local engineers to alter them, coming up with new models for the Chinese market.

    The Chinese design centers are proving to be crucial in areas such as cellphone handsets, where manufacturers produce a huge variety of styles — there are several hundred on the market — and the phones are viewed as fashion accessories. To compete, foreign concerns must churn out their own wide and diverse lineup. The development centers also allow the company to study cultural preferences. Employees realized, for instance, that Chinese consumers like brighter, vermilion phones compared with the darker red preferred by the Japanese.

Panasonic may be making progress with its product localization but it does still need help with its Web localization. I am now wrapping up a study of 200 global Web sites and Panasonic is ranked in the lowest quadrant.

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