GEOFF MANNERING
China Power: Guanxi and Growth
Geoff Mannering: Managing director at Ali Group Food service. Originally from the U.K.
Key lesson: Always expect the unexpected, be open minded
How long have you been living in China?
I have been living in China for twenty years. I came here in 1994.
Can you briefly describe your company in a few words?
The company that I am working with is a rather large group. It is a manufacturer and supplier of commercial kitchen equipment, professional refrigerators, professional ovens, professional dishwashers and microwaves. We handle everything from convenience stores, right to six star hotels. We are a major supplier to the hotel and restaurant industry. We call it Horeca---hotel, restaurant, catering industry. We have 55 manufacturing plants around the world. We have 76 brands in the group and we hire about 8300 people worldwide.
The headquarter is in Vienna. In Asia, the headquarters are in Shanghai, Beijing, and Shenzhen. We have three offices, across the country.
What is your position?
I am the managing director of the group activities, in the meantime I am also a member of the board directors. I deal with legal representatives and power of attorney activities here. I look after the business, sales, marketing, manufacturing, particularly focusing on the sales network, and the three branch offices we have here. I expand around the region to Taiwan and Hong Kong, Eventually, it will expand to Korea and Japan. There will be a bigger Asian Pacific role as we get on going. The company itself has only been here for seven years.
What did you do before this experience?
I worked for another company in the same industry, I used to be the managing director of the Electrolux.
Who are your customers?
My customers typically are high-end hotels. They can be local hotels, but mostly they are international hotels, which are present in the region here. There are many new hotels in construction in Asia. I also deal with Independent restaurants, high-end restaurants, celebrity chef restaurants, Michelin-star restaurants. We also cover institutional businesses, such as hospitals, universities, large cafeteria, prisons. We have cruise ships as customers and even, fast-food chains. We work with big brands: McDonalds, KFC and Starbucks. We also supply smaller kind of equipment, like cooking equipment. For convenience stores, we supply commercial microwave ovens. So it’s really the full portfolio of equipment, going into every segment of the food service industry. Whether it’s a small shop, a convenience store, right to a one thousand room hotel.
Can you describe a typical day?
I can’t say there is typical day on how you do and how I spend my day. Checking messages and checking work that I have done the day before, and keeping pace with all the inquiries we have, making sure that the project managers are following up the projects that we are doing etc. I will be discussing, negotiating with existing clients, or potential new clients.
As I am the managing director, I am looking at the numbers, I am looking at how we are doing, compared to our budget, month by month, year by year.
We also have to deal with service issues, if the equipment is not functioning properly.
What has changed most since you started to do business in China?
I would say that there are more business regulations.
I have been in the hospitality industry for twenty years.
Shanghai has attracted many investors and many new hotels and restaurants have been built.
According to you, what is most challenging when working in China?
- Westerners and Chinese have very different understanding when it come to the idea of agreements and contracts. When Westerners are sitting at a table and negotiating, and have contracts signed, for them, it means the deal is done. For the Chinese, it is just the start!
-Nowadays, business is even more difficult.
The whole world wants to do business with China, competition is tougher and Chinese companies are in stronger negotiating positions. In Europe, the economy is flat, so to grow you business you have to build some presence in China. When you are coming to China, you already know that you are almost willing to compromise because you are in a weaker position.
-Another fact is that Chinese don’t need foreigners as much as they did before. They have the technology, the machinery and the skills.
Twenty years ago, foreign companies used to send over managers, to build their business in China. Chinese used to import specialized equipment.
There is a lot of Chinese competition going on…
What would you say is the biggest difference when doing business here in China compared to the US, Europe or elsewhere?
The only difference I can identify off quickly would be the power of relationships in doing business.
Here, I think, doing business means first, having a relationship, and then you do business afterwards. So it’s the amount of effort and time that you put into building a relationship, which actually generates your business out there.
The Chinese need to like you first, before they would do business with you.
What mistake you wish you had avoided?
I made a mistake of not understanding that in China, there are rules and there are unwritten rules.
For example, there are driving rules, but when you are in the streets of Shanghai, you realize that there are so many people, the rules are different in real life.
In business, it is the same. There is an unwritten code.
What a piece of advice you wish Somebody had given you when you first arrived?
Take everything with patience and do not make people lose face.Nothing is ever black or white, there is always a grey zone in China. When I worked for a German company, everything was black or white. But here, you have to understand each other and live in a the grey zone!
Your role is to bridge the headquarters’ culture and the Chinese culture.
I am still learning, I’m still learning after twenty years.
I still learn that, which it still surprises me, it still shocks me, it still amazes me, it still makes me laugh!
Now it’s a new Chinese generation. This new generation, is nothing like what it was twenty years ago.
What is the biggest lessons you would like to share?
One is to always expect the unexpected:
Hardly anything goes straight, be always be ready to put all your passion to reach your goal
I’ve always compared doing business in china with driving a car here. You need to know when is the right time to accelerate and when to slow down.
How did you manage to build your business in China?
Hard work obviously, I think nobody has ever built a business by himself. I have a great team, I’ve been with that team for a long time, which is an advantage.
How do you manage the gap between your business and the Chinese culture?
Our group is based in Europe, in Milan . Our cookware service equipment is all western equipment.
However in China, food is very different. Eating habits are different. Most hotels have western restaurants but we also need to adapt to Asian eating habits.
What advice would you give to teenagers doing business in china?
You need to be open minded!
Never try to put things in little boxes or categories. You have to get the big picture about what this country is all about.
