The CMO Show: Andrew Collins on breaking into China and beating its dragons
How do you crack a foreign market that shifts your business values, depends on local partnerships, and has a work culture of “close enough”?At the age of 27, Australia’s Andrew Collins arrived in China to do just this, acquiring the ‘Postkard Media’ agency Mailman Group. He now admits if he knew more at the time, he wouldn’t have gone.“The reality is [you’re] dealing on different terms. The approach is very different. The quicker you understand that, the quicker you're going to start to realise where it is that you're going to find value and create a business in China.”Collins has established Mailman as a Chinese advisory and gatekeeper for Western brands looking to plunder this lucrative audience.Navigating China’s unique online environment, Mailman has engaged 100 million+ Chinese fans for Manchester United, produced 26 million Weibo reads for UFC, and garnered 140 million media impressions for GoUSA.With numbers like these, many see the ‘Middle Kingdom’ as an unchartered land of opportunity, but Collins cautions the voyage. “Expect you'll lose. Expect it's going to be difficult. Expect that you won't win without local support. Expect that the market is not designed for you. It's designed for them.”With a warning like this, would you still take on the dragon? In this episode of The CMO Show, JV and Mark share the story of the man who broke into China’s accelerated market, thrived, and survived to tell the tale.Listen to the podcast below and subscribe on iTunes and SoundCloud.Resources:
- Lang Lang Is Named New York’s First ‘Cultural Tourism Ambassador’
- Chabuduo! Close enough … How China became the land of disastrous corner-cutting
- I bought an agency in China when I was 26 and turned it into a digital juggernaut
- East beats West: US tech giants' failure to crack China is the power shift we all expected
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The CMO Show production team
Producers - Megan Wright & Tom van Leeuwen
Audio Engineer - Jonny McNee
Design Manager - Daniel Marr
Got an idea for an upcoming episode or want to be a guest on The CMO Show? We'd love to hear from you: cmoshow@filteredmedia.com.au.
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Transcript:Participants:Mark Jones (MJ)Jeanne-Vida Douglas (JVD)Andrew Collins (AC)MJ: Hello and thanks for joining us on the CMO Show. I'm Mark Jones.JVD: And I'm JV Douglas.MJ: Yes, you are.JVD: I'm glad I got that one out.MJ: Yeah.JVD: Today we're speaking with a chap named Andrew Collins. He's the CEO of Mailman Group. He's managed to do something that a lot of business people have attempted to do but not achieved. That's he's operating successfully in a Chinese market.MJ: It's a really fascinating story, having gone over and identified an opportunity to build and grow an agency in China some ten years ago. Now look at him, doing really well and investing in other companies. What I'm fascinated to know is how did you do it? This story of going to China and making it big is kind of a fascinating, enduring one, but it's not an easy one, is it?JVD: It's not easy one at all, especially when we're talking about marketing and communication services. We've kind of for a long time, we've had a relationship with China that is basically about trading stuff. Marketing and communication is basically about communicating ideas. We're talking about more than a language barrier. We're talking about an entirely sort of cultural barrier and set of expectations. What I'm really looking forward to is having a chat about how you communicate effectively in this very different space. I guess also what we can expect when we're seeing more Chinese companies coming into traditionally European markets, which is effectively what we are in Australia.MJ: It's going to be awesome. Let's have a listen to Andrew.JVD: We're here with Andrew Collins. He's the CEO of Mailman Group. We're delighted to have him on the program. Welcome, Andrew.AC: Thanks for having me.JVD: Can you tell us a little bit about the digital landscape in China? What are the websites that you use? What are the mechanisms that you use? How do you actually share content and share information with your target audience?AC: I love that marketing speak, that target audience word. We market to people all across China. We distribute content through all the major networks. China's media landscape is far more dynamic than let's say the Australian landscape, in a way there's about 200 large streaming platforms. There is roughly 10 significant pay per viewing model, or free to air television delivered online. There's tons of TV networks, satellite networks. It's almost like all of Europe in one country. Then you've got social networks predominantly driven by Weibo and WeChat. There's some other peripheral networks like WhatsApp, which would create a niche audience through fashion and travel that we work with. We work with every major network in China, anyone that's worth talking with. Just recently, we produced a television show for online distribution in California. We just topped 8 million views of that show. We did another show in Florida late last year, which hit about 12 million views. We actually had a live streaming show on Friday, New York City with Lang Lang, a very famous Chinese musician. He took us for a tour of New York City. He's an ambassador to New York City. I think it was 1 million views over the 25 minute live streaming show. Things are distributed in many different ways. Video is becoming more and more powerful as you guys probably know. It's a very fast moving market. They're very quick to adopt new things and find their own ways of using that technology.MJ: One of the questions I've always had in this context is as you build you out and scale in that kind of capacity, there's a sense that you need to do it in partnership with those media organizations, and also the ownership model. Are you completely independent or is there a local Chinese component?AC: For the best part of nine years, we've been entirely owned by myself, and then more recently, we just raised thereabout 100 million RMB, about $20 million USD from a consortium of media and sports investment companies, including China Media Capital, Tencent, Wanda, Yao Ming, and the Chinese cultural bureau. They invested into our business. They actually own about 35% of our company now in China. Yeah, we're now like very clued in, I guess you could say to local partnerships. I think that's the next evolution of our business. I think anyone who wants to create a company with a degree of scale and size, you'll need to go local as much as possible.MJ: Yeah. If anyone has looked at the experience of expats going into China and trying to build a business. It is difficult. What would you say the most important lessons that you learned in that first chapter?AC: Understand your value, understand your role. That just takes time. That's the problem. Most people, I'd go as far as saying, everyone comes into this market with their own set of ideas and their own paradigm of which they want to approach the Chinese market. The reality is they deal on different terms. Their approach is very different. The quicker you understand that, the quicker you're going to start to realize where it is that you're going to find value and create a business in China. Most of the time, that just takes three to four years. I think it's a minimum three to four years. Then the problem is most people don't have the staying power to weather the storm. Either they're under capitalized or they haven't built the right reputation over that period of time, and so they're left with a poor customer base, poor relationships, no cash, and then they take a corporate job or they leave China. Yeah, for me, I never really intended on ... Quitting wasn't part of my vocabulary. I think that was a really important part. We had a lot of tough times in building the business here. Many times, it was difficult to pay wages, difficult to find new revenue, but quitting was never an option. I think that approach really helped us and it gave people here doing business with us that we would be sticking around. We weren't going anywhere. That was probably the most valuable lesson, which I shared with other people that I meet with that are coming here. Just take your time and learn to understand what is going to be your value and your role. Understand that it's most likely not going to be what you came here and intended to do.MJ: That's a really great insight. Another cultural thing, which I think is important for us to understand, I read a fascinating essay by Aeon, and it talked about, and I'm going to mispronounce this, but it's Chabuduo? Do you know this one? It's basically another word which means good enough.AC: Chabuduo.MJ: Chabuduo, okay. Excellent. Thank you for that. The sentiment here is that to put in any extra effort to make it brilliant would be the act of a fool or a waste of time. Just doing enough seems to be, if you like, a pervasive aspect of work life in China. In the digital realm, where performance is important, where you have such incredible opportunities, and you really need to do an excellent job, How you moved people from saying -JVD: Yeah, how do you inspire people?MJ: "Yeah, that's not good enough. You got to go a bit further."\AC: Well first of all, you have to understand, you're not going to change centuries of culture. Yes, we respect the fact that there's going to be a difference in the degree of quality you may expect from local teams. In saying that, sometimes just a different approach. We have enough foreign influence and people who help lead the way and demonstrate. We've also now seen a lot of local people over the last few years who are now taking much more leadership in their approach to developing better quality and not accepting good enough is okay. It's not easy. It's sort of just an ongoing concern. It's not something that keeps me awake at night.MJ: Okay.JVD: What do you wish you'd known before you started out, or you wish someone had told you before you went into business in China?AC: Nothing. Basically I wouldn't have come. If I knew any more, I wouldn't have come.JVD: What would you advise other people? I know you said never give up, but is there anything a bit more tactical about understanding what to expect in the Chinese market?AC: Expect you'll lose. Expect it's going to be difficult. Expect that you won't win without local support. Expect that you won't win without a very strong local team with you, even if you won the company. Expect that the market is not designed for you. It's designed for them. Expect that you're playing with different rules. Imagine playing the game Monopoly, and you're playing one way, and everyone else is playing a different way. Ultimately, if you understand all those things, you at least have a chance of getting success in the market. Then and only then will you see any real platform for success. Even the big giants, they've all lost. Most of them.MJ: Yeah, that's an amazing insight. Looking ahead, we're seeing a number of companies that have become quite big in China, wanting to move to the west, and growing and expanding out. How do you see that trend intersecting with what you're doing and maybe your longer term horizons?AC: Yeah, it's a good question. I think it's important. There's a lot of brands now who are making a lot of headway globally. Huawei is one that springs to mind. Xiaomi is aggressively growing in Southeast Asia. Yeah, there's a lot of brands. Our role in that is limited. Right now we're very focused on building a platform in China to support global athletes and sports organizations to connect with local customers, with big sponsors, rights holders, or new fans. Yeah, I think there's a lot of opportunities for companies around that, helping these companies go global. We do need a lot of help. I think they look at the global market a little bit like how I'm talking about China is for us. I don't think they're all foolish. I think that they do need help. There is a few companies that are now creating a real business around helping these Chinese companies go global.MJ: That's fascinating.JVD: You say it's very different sort of operating structure. What about clients? What are some of the rules when it comes to demonstrating success to your clients in the Chinese market?AC: A client for us might be Kobe Bryant. That would be determined by commercial value, how much money we make, especially in rights. Secondly, how much money we raise for the charity, the Kobe Fund, in China. Third, it might be development of fans across these social networks, and then the content that's being created around that. Secondly, like someone like Manchester United. That's fan development, giving themselves the best opportunity for commercial opportunities. On our tourism side, we've got companies like Brand USA, which is a government destination representation group. A little bit like Aussie tourism. They're measured by people who purchase a visa waiver into the USA. That number's measured every year. A portion of that is related to the work that we do here. So far so good. Yes, each client has different metrics. We're actually running a program for Tough Mudder, which is -JVD: I've done Tough Mudder.AC: Yeah, the first event in two Saturdays away we'll all be competing in. It's all about ticket sales, engagement in the content, and building the brand, which they expect to build a 10 city experience every year by year 4 or 5 here in China. It's at a building state. Yeah, different clients expect different things. When we do a television opportunity or a program, it might be a number of views.JVD: One of the things I understand people struggle with when they're moving into the Chinese market is finding good staff locally, and convincing them to stay on. What are some of the management techniques you've learnt when it comes to attracting great people in China and keeping them onboard, keeping them part of your organization?AC: Good question. Yes, staffing is an issue for most companies here. Finding great talent is always difficult. A couple of things we do. One is we have a very good brand. We let the brand sell itself. We do a lot of local communication. We do a lot of engagement events in the company. In all of our exit interviews, the culture for us has always been the most talked about component or desire to work here. In saying that, it's a very different culture from a local company, and it's a bit of a culture shock initially for a lot of the Chinese. We're about 80% Chinese here, maybe 75% Chinese. Secondly, making sure that we are sharing a lot of great news with the team that they can share with their parents. They're very much driven by parental perception. Most of them, they're one kind in the family. That's their number one bet. That's their parents ticket to financial freedom. That's their parent's retirement plan. They want to make sure their kids have the best opportunity of success. We've got to be showing them a very clear path to success, and that they're in the right place. Otherwise, they get snapped off by Alibaba, Tencent, Sina, and the rest of the Chinese tech giants. Yeah, it's a combination of culture, branding, and then strong, positive messaging that can be relayed to family and friends.MJ: Andrew, thank you for joining us on the program. We do wish you all the best for the growth of Mailman.JVD: Yeah, we'll definitely be watching. We're fascinated by the story.AC: Oh great. Stay for tuned in to the Mailman reality show.JVD: Wow. Wasn't that fascinating?MJ: He was awesome.JVD: Yeah, absolutely. I guess I'm just so keen to find out more about how you communicate effectively in the Chinese market, because you've got a couple of different things that are happening all at once. You've got a very different culture. You've also got a culture that's changing incredibly quickly.MJ: Yeah. I agree. The impression, really, that I'm left with is, and the word I'll give it, is tenacity.JVD: Oh yeah.MJ: You can't give up. You have to keep going. Even when you think you're going well, and things don't go well, and you can't pay people or whatever the challenge might be, he was speaking about, not giving up. I mean, it's easy to kind of talk about it in this context, but having lived it as a boss myself, I tell you what. It's hard yards and it just feels like in China, it would be that much harder.JVD: Yeah, but I guess too, it would be that ... For someone who's just naturally deeply curious about different cultures, it would also be incredibly rewarding, because when you're working with other cultures, or when you're working outside your own culture, I have this theory. I used to live in Mexico, just to give everybody a bit of context, but you're always wrong. You've just got to accept the fact that if there's a misunderstanding, it's going to be you who's made the mistake. There's some unwritten piece of cultural law that everybody else knows, because they've been getting it since they were born.MJ: You've missed something.JVD: Yeah, you've missed something. So long as you accept that, and you have that deep sense of cultural modesty of being able to get things wrong, you can actually kind of get your way through.MJ: Yes. That's an attitude, right?JVD: Yeah, totally.MJ: I guess it is hard, but it is just knowing that in order to get through that scenario you just described, you've got to know that you're just going to have to keep working at it. You want this to succeed, you just can't give up.JVD: But then you get to this beautiful point where you have this a-ha moment. You realize where that miscommunication was and where that misunderstanding was. There's this beautiful sense of, "Hey, wow. I just learned something that no one else has had a chance to learn yet, because no one else has been here." It's a beautiful process. It's great.MJ: It is. It's awesome. Well thank you for joining us this week on the CMO Show.JVD: Absolutely. We hope you enjoyed it as much as we did.