Floris Koppejan has been working at Aexus since June 2020. He lived in China from 2014 to 2019 and in Singapore and Indonesia as a young child. For his Trade Management Asia study’s minor, Floris ended up in China as an exchange student. His study focused on business in Asia where Floris ended up staying a while. During his time there, Floris studied, did an internship and worked at a Dutch consultancy agency in China which has a full focus on its home country and employs about 100 people.
Is it interesting for Asian companies to enter the European market?
Floris: “Yes, why not? Europe is a digitally mature continent if you compare it with other territories. European governments are constantly trying to improve trade relations with the East and European companies are always eager to look into new tech innovation, no matter the source. Some Asian economies are frontrunners in special fields and it would be wise for them to enter the large European market. I do want to stress the large wealth and cultural differences in Asia, so sometimes it is difficult to compare and to generalize. Singapore, for example, is very internationally focused resulting in some interesting partnerships with Aexus. The one benefit coming from the Covid-19 situation was that everybody proved they can work remotely and that you can reach many people online. We also noticed that a partnership can definitely be managed online. I now see many opportunities in that regard.”
“You can have the world’s best business deal on paper, but if the CEO of company X doesn’t trust you, the deal is off.”
Floris feels networking and relationships are much more important in Asia than they are in Europe. Floris: “You can have the world’s best business deal on paper, but if the CEO of company X doesn’t trust you, the deal is off. It therefore takes a lot more time to close a deal and you need to build up a solid, friendly relationship. This often includes taking the other party to dinner, which in Europe is not necessarily a requirement. As soon as a European company has signed the contract, we can commence our activities.”
How do you build such a friendly relationship during Covid-19?
Floris: “The Asian companies that already worked with Aexus have now developed a strong urge to enter the European market. They have already had a first investment round and a healthy sales outsourcing budget, and so they come to us. When it comes to relationship management, companies should certainly have a local presence in Asia which would allow them to better focus on relationship management. In addition, referencing the successful Asian projects we have worked on, and the structured methodological frameworks we use to find opportunities for our partners can lower the trust barrier.”
Do you have some examples of cultural business differences?
Floris: “Trust is a major topic when conducting business in Asia. While European firms might come to an agreement if the deal makes sense in business terms, Asians generally put more focus on the personal relationship between founders and/or decision makers. This means that the terms & conditions of a deal could be mutually approved, but the final go will only be given after a couple of dinners and nights out. This is why entertainment plays an extensive role in doing business; big dinners are regularly followed with a late night karaoke bar visit, not seldom with plenty of drinks going round.
An interesting custom in China is the toasting at dinner through which you show respect for your counterpart by slightly lowering your glass during clinking. However, if your counterpart has the same idea, you might end up clinking glasses below table level at a certain point.
Naturally, most Asian countries have their own traditions and customs that require extensive research and experience to be fully exploited.”
“An interesting custom in China is the toasting at dinner through which you show respect for your counterpart by slightly lowering your glass during clinking. However, if your counterpart has the same idea, you might end up clinking glasses below table level at a certain point.”
Why should Asian tech scale-ups venture into the ‘West’?
Floris: “Notwithstanding the large developed markets, high adoption rates of technology, digital maturity, and high purchasing powers, advanced technologies present an enormous growth potential for Europe. Technologies such as the Internet of Things, industrial data, advanced manufacturing, robotics, 3D printing, blockchain technologies and artificial intelligence offer a range of opportunities that will enable the European industry and consumer market to grow towards a better future. The EU has several continent-wide initiatives of which EU businesses are not taking full advantage yet; think of technologies that aid the shift to a greener economy and intelligent cities. Even though big data, digital platforms and AI are changing some industries, there is still room for more innovative tech to keep up with the expected population growth.
Conversely, ASEAN countries have a need for innovative solutions to solve local challenges and problems. The main fields of interests are water technology, waste, agriculture and healthcare. Aexus has a long track record working together with partners in agritech, logistics, medtech & life sciences, and is therefore well positioned to introduce the right technology to the right partner. Europe is known for a strong focus on topics such as circular economy, digitalisation and the maritime sector. Companies thriving in the industries mentioned above should definitely investigate entering (specific) Asian markets.
And if this is not enough, macro-economic trends such as high GDP growth levels and purchasing power, a growing middle class and a market covering 60% of the world’s population should seal the deal.”
Which challenges do Asian companies experience when entering the European market?
Floris: “The EU and Asia already have strong ties to each other due to their mutual trade dependencies. In recognition of this, the EU has developed strategic partnerships with major Asian players such as China, Japan, India, Singapore and South Korea. Furthermore, there has been an increase in inter-regional cooperation between the two continents. These efforts are partly made to overcome geographical and cultural differences.
“One major challenge is the significant difference in pricing standards in some Asian economies, perhaps making it tougher to compete with European pricing standards.”
Asian companies willing to do business in Europe face the same obstacles as any other region willing to profit from the market. One major challenge is the significant difference in pricing standards in some Asian economies, perhaps making it tougher to compete with European pricing standards. However we can make it happen if an Asian tech company is technologically and financially ready to scale. Furthermore, one of the few positive upsides the global pandemic has taught us is that working remotely and doing business online can actually work. Through this realisation, a major financial barrier (regular faraway business trips) for the entering of the European market has been removed. At Aexus we have successfully introduced new technologies in Europe without physically meeting our partners. However, we do believe an ideal partnership consists of occasional business trips and physical meet-ups in addition to online business development. We are looking forward to build upon an offline and online trusted partnership, and to introducing more Asian technology in Europe.”
If you’d like to find out more about this, get in touch. We’re always more than happy to jump on a call.