This month, we are flying from Vietnam to China to meet Matthew Heller.

Matthew is the founder of XpandAsia, a Shenzhen-based agency making market expansion to Asia accessible for global brands.

He could not have started in a city better than Shenzhen.

After decades of closed-door policy, China’s Reform and Opening-up Policy (or 改革开放 gǎi gé kāi fàng) in the 1980s propelled Shenzhen into unprecedented growth.

Situated just a stone’s throw from the Hong Kong border, Shenzhen transformed itself from a tiny backwater fishing village with a population of a mere 30,000 into China’s tech hub of 12.6 million people.

This is where we start Matthew’s journey. Let’s read on…

In the hot LA summer of 2006, I was at a bit of a crossroads.

I could continue my education and pursue a job in my field of study or continue my well-paid sales jobs that also left me unsatisfied.

Then, like in any movie or drama, I got a call from a friend who had moved to China to teach English. He was working for an apparel manufacturing company in Shenzhen, China and the company was looking for salespeople for a 6 month contract.

Two weeks later, I found myself on a plane to China.

Because I worked the night shift in China I would spend my mornings exploring Shenzhen. In 2006, there were not many foreigners and I spoke no Chinese so It was hard to have much of a social life. On one of my morning walks I came across a basketball court with a pick-up game in full swing, I joined and would join every morning after that for weeks.

I became friendly with one of the regulars there and although we barely could communicate, we taught each other words in our respective languages. Over time, I came to learn that he was a buyer for a major supermarket chain in China, one of the only ones at the time that had a large selection of imported products. I also learned of the struggles he had in understanding and communicating with some of these foreign brands, so I asked if I could be an asset in solving some of these issues.

He became my first customer in China and until this day we still work together on various projects.

Through that interaction what was supposed to be 6 months working overnight in a factory doing sales turned into me starting a company and living in China for almost 17 years.

There has indeed been a noticeable slowdown in consumer retail in China since COVID-19, affecting both online and offline channels.

The data reflects this trend in both online and offline channels. Consumers are more cautious with their spending and buyers have become more risk averse. Likewise, brands are seemingly more hesitant to wait and see how China recovers post-pandemic.

However, I’m still bullish, as one of the things I have learned living and working in China is that China’s ability for rapid innovation is present and persistent. Platforms like Douyin are a prime example of this innovation. They allow brands and companies to communicate with consumers in a way traditional e-commerce and physical retail cannot.

Because of China’s ability to adapt so quickly, brands and service providers that have been able to remain flexible enough to mimic that adaptability have always won. I think that will be true now more than ever, while those companies who wait might find themselves lagging and having to play catch-up.

Lack of Transparency

Many brands face issues when relationships with distributors or partners deteriorate without clear explanations. We aim to address this by providing honest and constructive feedback and fostering a collaborative approach to problem-solving.

Discounting Wars

In China, there is frequent pressure to discount products as a means of boosting sales. To counteract this, we set rigorous pricing standards from the beginning and explore alternative strategies to drive value. Our distributors understand that we prioritize our clients' interests, ensuring that our pricing remains stable and avoids excessive markdowns for short-term gains.

Clear Channel Strategy

It's crucial to define channel operations clearly before starting. Often, distributors make short-term deals without discussing long-term strategies, leading to problems later. We advocate for a comprehensive omnichannel strategy from the beginning to avoid issues and ensure sustainable success.

While taking proper precautions is important, the notion that the primary interest is in copying is misleading. It’s essential to focus on genuine market opportunities rather than the fear of imitation.

The Chinese market is unique, and success elsewhere doesn’t guarantee success here. Localizing your approach with the help of knowledgeable partners is crucial for success