We’re happy that long-standing member of our Shanghai team, Zhao Le, has been appointed Managing Director of Intralink China - with our former China MD, Alex Barton, relocating to our Singapore office for new adventures (more on that another time). It’s a great time to examine the overarching trends in China and the opportunities for overseas businesses to capture value from the market.
In an ideal world, I’d be facing Zhao over a plate of steaming xiao long bao in Shanghai’s bustling business district, near our now 20-year-old China office. But, in line with our environmental goals (and marketing budget), I’m here in the UK interviewing Zhao over video call to find out more about her background, plans for the China business, and the commercial prospects Asia’s Middle Kingdom presents in 2024 …
I’m originally from a city called Dalian, where I first worked in a small PR and marketing agency affiliated with the telecommunications bureau. I then went to the UK to get my Master’s in business management, before coming to Shanghai to work at another marketing company. But I decided marketing wasn’t for me, so I started looking for consulting work and came across Intralink. That was 18 years ago now!
We had an office in Shanghai with seven people. I started off as a Research Assistant before moving up to Project Director, now taking over the role of MD. I’ve been involved in all sorts of projects – channel development, supply chain development, market analyses, opportunity validations and full-scale business development initiatives across multiple industries – everything, really!
I will always remember starting a business development project for Oxford Nanopore Technologies as that was my first foray into bioscience – and highlighted that the world was starting to look seriously at opportunities in the Chinese bioscience market.
My biggest hobby is rock climbing, but I also enjoy binging a good TV series at the weekend. The last I watched was Crash Landing on You – the K-drama where a South Korean lady accidentally parachutes into North Korea and falls in love with a solider. A bit on the nose, but very entertaining!
China is one of the world’s largest consumer markets – its population now stands at 1.4 billion, with 400 million people making up the middle-class and wielding real purchasing power. GDP growth may have slowed from its previous rate but remains around 5%, and the past 40 years have driven high mobile and internet penetration, creating a wealth of opportunities for digital businesses. The country has also seen a rapid expansion of ecommerce - otherwise known as ‘new retail’.
China’s a thriving innovation hub, with many of its technology pioneers being global leaders in their fields. Plus, the infrastructure investment supported by central government will facilitate high-quality development for years to come.
If China is in your expansion plans, it’s better to get out here sooner rather than later.
One of the characteristics of the market is that competition gets fiercer and fiercer, meaning if overseas firms leave it too long, it can be difficult for it to keep up with local rivals. And often, market entrants unknowingly set their prices higher than their local counterparts, so being able to adapt – or justify your price point – when selling is important.
China isn’t leading in bioscience yet, and so there’s a lot of interaction with global players and an eagerness to collaborate in the field, representing a large chunk of our client base. Medical devices are also a high-demand market, with Chinese players still relatively unsophisticated. The need for innovations in these areas will only increase as China faces new demographic challenges.
Environmental technology is another area where China is still behind. Chinese companies are looking for better corporate governance, and if they implement environmental technologies, it will help them to develop their business in international markets. Plus, the government has bold net-zero policies and, to achieve these, its corporations need overseas expertise.
AI and autonomous driving are major areas for collaboration, too, with companies like Baidu and Tesla working together (see self-driving car in Shenzhen). Ecommerce giant JD.com is working with logistics companies all around the world, and Ant Group – the finance branch of Alibaba – has teamed up with many major financial institutions to provide financial services globally.
China is most definitely open for business!
Remember that the country is not all state-owned: most of the economy is made of privately-owned companies which are highly profit-driven – and many are seeking to do business with international partners. These are the companies with which we facilitate the majority of deals for our clients.
There are, of course, certain sectors where – depending on which country you’re from – it could be hard to do business with China right now. But foreign policies evolve and we’re confident a collaborative mindset will prevail.
What you do see is an ongoing effort to commercialise autonomous devices in big cities, with smart dustbins, smart vending machines and autonomous food delivery machines already in use. Plus, there are drone delivery services now, with the most recent development being a drone that can carry parcels up to 5 kg.
But this is only in designated areas set aside for large trials of autonomous technologies. For self-driving taxis, for example, there are test zones totalling about 200 km².
Most autonomous technologies are not yet 100% commercialised, and are only in major cities like Beijing, Shanghai, Guangzhou and Shenzhen. China will need continued support from overseas innovators for these technologies really to take off. But the vision and willingness are there – which is more than can be said for many other advanced countries.
We’re 17 people right now: four directors, 12 employees driving market entry initiatives for our clients, and one finance officer. It’s a diverse team - a mixture of British, American, Taiwanese and Chinese people.
Yes, we speak a bilingual mix. We’re not afraid of talking to each other in Mandarin because everyone speaks it well – even the Brits and Americans!
Yes, the current décor is a bit outdated … we’re thinking about modernising the office with a more open plan layout. It will not only make our day-to-day life more pleasant but offer an inviting work base for visiting clients.
Just a one-minute lift ride downstairs there are a few great noodle bars. But it’s a luxury shopping mall, so these cost around £10 a bowl, instead of the usual £4 a bowl in China.
We have the methodology and track record to prove it – we’ve been doing this in China for more than 20 years and have built a huge network. And we’re tenacious! It takes a particular set of skills and traits to close deals in China – something that’s hard to do remotely from London or Silicon Valley.
The Chinese consumer and tech sectors have much to offer to the world. There’s a need for Intralink’s services among Chinese companies looking to expand internationally – startups, larger technology companies and corporates alike. When they’re looking at overseas markets and don’t have the experience to make their own way, they need someone they can trust.
There are two sides to this: on the one hand, we help large international economic development organisations (EDOs) – currently from North America and the Middle East – to attract Chinese investors. The alternative approaches, such as setting up and staffing your own FDI office in China, are expensive and a slower burn process than outsourcing the operation to someone like us. New Jersey is the latest example of a client who has seen the wealth of opportunities in China and chosen to recruit our help. On the other hand, we can help Chinese EDOs to secure investment from abroad – a newer area of the business we’re focusing on bolstering over the next coming years as demand increases.
If you’re interested in hearing more from Zhao on her 15 years of business in China with Intralink, check out our workshop where she joined representatives from our Japan and Korea offices to discuss “sealing the deal in APAC”.
To talk about commercial opportunities for your business in China, you can contact Zhao Le at zhao.le@intralinkgroup.com.