Jim A James - Blog #Beijing

How to enter the China market

Mon, 05 Feb 2024 21:13:18 +0000

Getting Your Business Ready for Success in China's Year of the Dragon in 2024

In 2019 I presented a webinar with Crayfish.io on the topic of market entry to China for entrepreneurs.

Getting Your Business Ready for Success in China's Year of the Dragon in 2024

As the Lunar New Year approaches and China enters the Year of the Dragon, all eyes are on opportunities and challenges within the world’s second largest economy. With over 25 years living and working extensively in Asia, few people understand China’s business landscape better than veteran expert Jim James.

On a webinar presentation hosted by Crayfish.io Jim shared invaluable strategic insights distilled from helping launch numerous British brands across diverse industries in China over the past decade. With a framework grounded in both successes and failures, his guidance provided a clear roadmap for entrepreneurs considering expanding to the 1.4 billion person Chinese market.

The first lesson James emphasized is having the right mindset to thrive as an entrepreneur within China. He likened qualities needed to those of an ox - persistence, stubbornness and strength. “China requires showing up consistently and pushing forward even when obstacles arise,” James explained. The rewards never come quickly and it’s an emotionally demanding environment. Going in with only a half-hearted approach all but ensures failure to achieve real results.

Commit fully or don’t commit at all was the underlying message. Success stems from treating China with the same level of focus, resources and perseverance as any other major market opportunity. While the rewards can be huge, so too are the challenges - from navigating complex regulations to adapting products for local tastes. Only by approaching China with an ox-like mindset can businesses withstand inevitable hurdles along the way.

Another key lesson focused on choosing the optimal market entry strategy. James presented a framework weighing risk, time to market and profit potential across three options - renting services like agents, sharing risks through a joint venture, or fully investing via ownership. For many companies, starting small by renting provides valuable learning with relatively low risk.

As understanding grows, sharing ownership via a joint venture can help navigate regulatory and cultural complexities faster while a local partner shoulders some risk. Ultimately, only the most committed may reach the buy stage of fully owning Chinese operations. But James was quick to note this is not a linear path - circumstances often require pivoting strategies along the way. The critical part is finding the right balance based on each company’s situation.

Perhaps most illuminating were the case studies James provided on both successes and failures of British brands in China. On the success side, companies like Dyson found their vacuum cleaners met a need in China’s developing urban areas. By innovating through new product features, they found fertile soil among Chinese consumers. Auto brands like Jaguar also thrived by delivering on what Chinese drivers truly desired.

On the failure side, James said Marks & Spencer made the mistake of assuming brand recognition would translate but failed to localize the in-store experience or name itself in a way Chinese customers could understand. Others struggled when government subsidies later boosted local competitors or regulations changed unexpectedly.

The key takeaway - do thorough due diligence, continuously adapt based on learnings, and partner with those fluent in navigating China’s complex policy environment. By celebrating top British businesses through the British Business Awards, James also showed that with the right strategies, companies of any size or sector really can achieve success.

How the Morgan Motor Company brand was launched in China.

Mon, 01 Feb 2016 22:48:00 +0000

A case study of automotive brand building in China

From 2011 to 2018 I worked to build the brand of Morgan Motor Company in China. I was a fool. I didn't own the brand but my wife and I became the importer, overcame the homologation challenges, and built a network of dealerships. I say I was a fool because I didn't own the brand that I was building, only the rights to sell the products as an agent. Still, we did great work and through multiple means from PR to CSR to building our own car configuration app with over 10,000 images. Many lessons learnt, and some nice examples of how to build engagement with a new and increasingly interested audience. I was proud of publishing a magazine in China, and the web work we did brought over 250,000 unique visitors to the site from a blank launch.

Morgan Roadster bonnet 'the length of a Chinese tractor.'

Mon, 19 Nov 2012 11:05:49 +0000

It is quite easy to understand why there is a lot of cash in the Chinese banking system; it is required to inject a great deal of cash to start a company, it can only come from designated sources, and taking the money out of ones own accounts is onerous. Bank of China The Bank of China declared our Capital Account open on 14th November, the account for foreign funds to be injected to the Chinese Wofe. A foreign investor must inject 20% of their working capital into this capital account within 3 months of company incorporation. In our case Sept 12. I have therefore just under a month to inject US$160,000. I made an expensive mistake in our incorporation documents - for some reason I nominated the currency as US$ instead of GBP. I have had to use GBP to buy US$ in HSBC Hong Kong to remit to Beijing Bank of China funds which will be converted to RMB. When I remit funds to Morgan Motor in the UK, it will have to be in GBP. An expensive lesson on reading the fine print. To make payments to Morgan Motor Company (MMC) is an exercise in patient paperwork, which is not my forte. The Bank must have our dealer agreement, duly chopped (it is emboss stamped not ink chopped which is causing an issue), and car invoice precisely with the names of the bank accounts, two companies and dealer agreement all matching. If I ever start another company, I will ensure that the company name is very short and easy to spell - Malvern Morgan Cars (Beijing) Co. Ltd. was too long for the HSBC internet banking forms and the absence of the final 'd' meant that the funds were rejected by the Bank of China. Once we have injected the funds required we can proceed to the capital verification stage. This is to prove that we have invested the 20% of our registered capital. The balance is required over 3 years. This procedure takes 6-8 days. With this verification we can then apply for the import license for the cars from Morgan. This money can then be transferred to our RMB current account for certain types of usage including renovation, salaries and inventory. Assuming that we one day make a profit, the repatriation of this money and exchange for foreign currency will be another exercise in patience. As we are a long way from profitability or cash flow positive, I shall worry about that later. Today the showroom work was allowed to start again after the Communist Party Congress. Our appointment as dealers for Morgan cars was November 2011. I had submitted our request to be dealers in December 2010. The wheels of industry are rolling, but not not at great speed. New Proud Owners Meanwhile the saddest part of all was the departure of our beloved Roadster. In order to finance the business I had to take the decision to sell her. As a foreigner we can only bring in US$50,000 per year and my investment in the Morgan business exceeded that long ago. Only now with the capital account could we bring in sufficient money for our investment in the roadshow, showroom rental , legal expenses and paying our own living expenses. We had believed that she was the first Morgan in China, only to find that there was one which arrived 6 months earlier in Beijing belonging to a Chinese pop singer called Yang Cun.

That didn't stop the joy though. A family holiday in France, driving around Tiananmen Square and the feeling that I had my 'little piece of England' in the garage in Beijing. As the relatives of the new buyer came to collect this rare vehicle, Amity, my 5 year old daughter, kept asking why these people were in our Morgan. Halo, my 3 year old, had refused to let me park in the garage earlier because then she would not be able to see it.

As the pregnant woman eased into the Roadster, memories of Amity and Halo in the back seats, and Erika laughing as we sped through the Britanny countryside with the roof down came flooding back, enough for my eyes to swell. Erika overhead the man driving the car make a comment about the length of the bonnet, only for the woman to say, "it is no longer than the tractor you are used to driving." It isn't only the rich and famous who are going to be driving Morgan cars in China.

Morgan Cars China moves at a SAFE Pace

Mon, 22 Oct 2012 15:09:56 +0000

SAFE Identity Card It is our one year anniversary of being appointed a Morgan Motor Company dealer in China. It has been an interesting learning process with some patience required, but overall tremendously exciting and potentially rewarding. On Friday we took part in our first planning process for the next year's cars. I ordered 30 cars as stock. This is nearly double our 18 units in my business plan. This rash of confidence is due to the early sales we've made (2 x Plus 8, 2 x Roadsters, 2 x Plus 4 and a forward booking for an Aero). We now have partners in Guangzhou, Chengdu and Qingdao and took the Plus 8 and Aero on roadshows to those cities. Our Weibo following has reached 830 and unique visitors to the Morgan-cars.com.cn site rapidly approaches 10,000 since it's launch in February. All the marketing excitement can't mask the need for simple bureaucracy. Therefore I was pleased to see that we received our State Administration for Foreign Exchange Identity Card today. Once the Bank of China has opened our bank account, the inspector visited our offices last week to ensure that we really are a company, which should be this week, I can use this new SAFE IC card to apply for an account which will enable Morgan to convert RMB to Sterling. The process is part of the way the Government manages foreign invested companies, and to ensure currency monitoring. The documentation required is well structured and transparent, if a little like a financial obstacle course: According to Shang Zi Han No.1078 of the Beijing Government Bulletin who explained this clearly:

'Foreign-funded investment companies may, with the approval of local foreign exchange bureau, directly use RMB profits, RMB obtained in China by way of early recovery of investment gains, liquidation, equity transfer and capital reduction for domestic investment. Foreign investors may also carry out domestic investment with the said legitimate income after register capital (investment increment) to investment companies. Foreign-funded investment companies shall provide the foreign exchange administration authorities with the following materials when applying for domestic investment approval:

(A) Written application;

(B) IC card for foreign exchange registration of foreign-funded companies

(D) Evidence of RMB funding sources and documents submitted for domestic reinvestment of profits, early recovery of investment gains, liquidation, equity transfer and capital reduction (increment) of legitimate RMB income of foreign-funded investment companies.

(E) The latest capital verification report and financial audit report (with the audit report of foreign exchange income and expenditure).

Foreign-funded investment companies may transfer RMB funds directly to the invested enterprises, or transfer to a foreign-funded investment company,before transferring to the invested enterprise after the materials are reviewed and approved by the local foreign exchange bureau.

The local foreign exchange bureau shall process capital verification with the working letter of accounting form, the application (for inflow) for capital verification, letter of inquiry for capital placement of foreign investor, and copies of the said documents for domestic investment from local foreign exchange bureau. The amount and date of verification should be marked on the original copy.'

Morgan Cars (HK) moves into Nexus SOHO in Beijing

Sun, 05 Feb 2012 14:36:50 +0000

The Year of the Dragon started with a roar for Morgan Cars in China. On the 1st Feb we moved into our new offices here in Beijing, and on the 6th Feb we submitted our our battery of documents for the 3 ministries for submission for the WOFE application. Once the WOFE, Malvern Morgan Cars Beijing Limited, is approved, then we shall be able to apply for the import license. This whole process will take some 4-6 months with good grace and well organized documentation. Our new office is in the Nexus SOHO on the east 3rd Ring Road of Beijing. We have taken a 12m2 unit which is neatly configured as part of a large serviced office. The funds from HSBC left HK on the 18th Dec but weren't cleared by ICBC until the 3rd Feb due to the national holidays. In the meantime the Servoffice staff have been accommodating and let us move in before the funds were cleared. On the 3rd, within hours of moving in, we were up and running with entrance cards, wireless, phones, and access to limitless coffee and comfortable seating areas. The team at Lee & Lee have been superb at helping us to get all the documentation together. We had to collate documents from Morgan Motors Company in Malvern, HSBC in Hong Kong, a company secretarial firm in HK, and our own documentation from Beijing. HSBC in HK were very helpful and responsive to our needs for letter of good standing required by the Chinese authorities; helped by their long standing relationship with Morgan Motors. I thought it worthwhile for the sake of record to list the number of papers required. This is such a lengthy process in China but one which appears to be all above board, transparent, and structured. For name pre-approval of Administration for Industry and Commerce (AIC) 1. Authorization Letter (signature) For Commerce Bureau ( MOFCOM): 1. Namelist of Board Member (signature) 2. Authorization Letter of Service of Legal Files (signature) 3. Authorization Letter for Administrative Licensing Item (signature) 4. Application Letter for Administrative Licensing Item (signature) 5. Appointment Letter (signature) 6. Feasibility study report (signature) 7. Articles of Association (signature) For Administration of Industry and Commerce: 1. Certification of Incumbency for Board Member, General Manager or Supervisor (signature) 2. Authorization Letter of Service of Legal Files (signature) 3. Articles of Association (signature) 4. BAIC Application Form (signature) For Public Security Bureau: 1. Application for Chop-making (signature) For Code Bureau: 1. Advice of Codes Pre-assigned (seal) 2. Application Form (seal) For Tax Bureau: 1. Business License (seal) 2. Organization Code Certificate (seal) 3. Approval Certificate (seal) 4. Address Proof (seal) 5. Articles of Association (seal) 6. Passport copy of Legal Representative (seal) 7. Registration Form (seal) For Foreign Exchange Bureau: 1. Foreign exchange registration application form (signature and seal) 2. Business License (seal) 3. Approval Certificate (seal) 4. Articles of Association (seal) 5. Organization Code Certificate (seal) 6. Passport copy of Legal Representative (seal) 7. Passport copy of finally holding person (seal) For Finance Bureau: 1. Financial registration form (seal) 2. Approval of Commerce Bureau (seal) 3. Approval Certificate (seal) 4. Approval Certificate (seal) 5. Organization Code Certificate (seal) 6. Tax Registration Certificate (seal) 7. Bank Account Opening Certificate (seal) 8. SAFE card copy (seal) 9. Business License (seal) For Statistics Bureau: 1. Application Form (seal) 2. Organization Code Certificate (seal) 3. Approval Certificate (seal) 4. Business License (seal) The new address: Morgan Cars Limited (HK) B-16. 10th Floor SOHO Nexus Centre 19 East Third Ring Road Beijing 100022 Office: +8610 5735 1173 Email: drive@morgan-cars.com.cn Web: http://www.morgan-cars.com.cn

Morgan Cars (HK) moves into Nexus SOHO in Beijing

Sun, 05 Feb 2012 14:36:50 +0000

EO Beijing awareness advert in Agenda Magazine - Jan 2012.

Mon, 09 Jan 2012 20:08:39 +0000

Halo and I were featured in an EO awareness campaign in Beijing. The concept was one of Work|Life Balance. I loved this photo taken with Halo when she was 6 weeks old; I look so proud and she so non-chalant about the whole affair. This is one of a series of advertisements produced by Redstar in Beijing for our local EO Chapter. It was run in Agenda Beijing magazine.

Morgan Roadster on sina.com luxury auto portal in China

Thu, 22 Dec 2011 14:28:17 +0000

Luxury Auto Channel UM on Sina.com made a shoot of the Morgan Roadster at 798. The shots then appeared on the front page of Sina.com and as a feature article. The images were electric thanks to the quick and professional work of Frank Lui 吕凡 and his photographer who completed the shoot in 4 hours, and posted a lengthy report within 3 days. Within days the Morgan Weibo account (morgancarschina) added 30 new followers. To view the lengthy report on sina.com click here

Morgan Cars on Luxury Car panel in Beijing

Fri, 02 Dec 2011 13:08:53 +0000

A Panel discussion on the future of luxury cars was held in Beijing on 1st Dec., organized by 21st Century Media and sponsored by Bentley Motors China. The overall theme was on the growth of the market (Bentley predicts China to be #1 market in 2012 with over 1500 units), the diverse nature of customer profile, and the opportunity for 'heritage' brands to establish themselves in China.

MC: Mr. Xu Feng "Global Entrepreneur" Magazine Editor, Director of Automotive Version of 21st Century Business news report

Guest speakers (L to R):
Liu Hongcang                                             Editor of China Auto Pictorial
Mr. Richard Leopold                                Bentley Brand Director, China
Jim James                                                   Manager of Morgan in China
Guo Sheng                                                   President of British Wings, Aston Martin importer
Bian Jianping                                               President of Peace Faith Strategy Consultants

Motor Brands represented: Jim James, Morgan Cars, Richard Leopold, Bentley Motors China, Mr Guo, British Wing

The Britcham Young Professional Forum - Young professionals in China: entrepreneurship and creative industries

Tue, 29 Nov 2011 15:34:42 +0000