Paul Denlinger

TOM Online Must Focus on Products: Connections Don't Ensure Success

Taobao's biggest advantage is that it is run by Chinese and serves the Chinese market from China. Large American corporations have a hard time accepting this simple and basic truth. From their US HQ, it is hard to understand why other markets, even one as big as China, should develop any differently from the US market.

Add to that virtually all of the management people in the US don't know Chinese, and don't know enough to hand it off to people who do know Chinese. It is worth noting that most American corporations, until very recently, have put no added value on foreign work experience and linguistic knowledge.

And when they fail, they inevitably blame the Chinese market, saying that they lack connections. "This proves that the Chinese market is biased against western corporation," they inevitably proclaim in a loud chorus!

This is why many US corporations will continue to fail in China, and management in China will continue to localize. It isn't that the Chinese market is biased against western corporations; it's just that western companies which do not know Chinese and are not willing to learn from Chinese consumers have no value-added to offer in this growing market.