Any traveller will appreciate what ‘culture shock’ feels like; that moment when we first set foot in an unfamiliar civilisation and realisation suddenly strikes: Our understanding of social cues, customs, behaviour, and communication have suddenly become defunct. These are our social navigation tools – tools we take for granted – until they’re no longer there and routine practices present a challenge. Well here’s the news, this experience of ‘culture shock’ is also shared by the many businesses that pursue international expansion opportunities. Suddenly, they too realise that their practices, tried and tested in one market, no longer ‘fly’ in another.
‘It’s near impossible for a Western business to navigate the digital and business landscape’
Digital Jungle Founder & CEO, Dr Matthew McDougall
Dr Matthew McDougall understood the plight of Western brands that brought their own, pre-set perspectives to the Chinese market. After all, he had lived in China for over a decade where he had an active involvement with brands, advertising, marketing and PR agencies. With a number of published articles and speaking engagements under his belt, Dr McDougall was a renowned expert in in digital marketing, especially in the area of Chinese digital marketing. That’s why today, after a decade observing consecutive Western failures in his new-found territory, Dr McDougall is the Founding CEO of Digital Jungle, a global leader in cross-cultural digital marketing.
Dr McDougall told Dynamic Business “I was fortunate to have established a couple of businesses in China before Digital Jungle and this gave me plenty of time to make mistakes and learn about how to operate and run a company in China.
“There is no easy path and it takes hard work and discipline to build any business; when you do this as a foreigner in China you have added complexities of language, culture and Government structure to deal with.
“It’s near impossible for a Western business to navigate the digital and business landscape.”
‘China has been a magnet for almost every multinational and SME’
Since Digital Jungle was founded in 2011, the business has expanded from a single office in Beijing to a global agency with offices in Shanghai, Sydney, Auckland, London and Paris. Next month will also see the opening of a new office in North America. Throughout this extensive network, the organisation has shared its cultural acumen with some big-name clients including Westpac Bank and Air New Zealand, to name only two.
“Our clients range from publicly traded companies to start ups,” said Dr McDougall.
According to Dr McDougall, China has been a magnet for almost every multinational and SME looking to expand and tap into the incredible growth China has seen.
“In the minds of most, China equates to financial opportunity.
“The realisation from many brands that Chinese forms a new marketing segment has helped us expand rapidly. Digital Jungle has been profitable from day one and in the past year grew 150% in terms of revenue, with 2016 expected to exceed this growth rate,” said Dr McDougall.
‘The West is individualist and the East is collectivist’
Poor consumer/market understanding, inappropriate strategy planning and non-transparent marketing practices from Chinese partners are just some of the stumbling blocks that have tripped many Western organisations in their quest for Chinese expansion. All emanate from one core cultural disparity according to Dr McDougall:
“The West is individualist and the East is collectivist.
“This idea impacts and explains many of the cultural and business approaches taken by Chinese and why there is a natural conflict of approaches between Western and Chinese companies,” he said.
Dr McDougall believes that this overarching distinction between business environments is shaped by a number of cultural nuances. He believes that in the West, equality is valued; but in the East, respect for hierarchy remains priority. And while individuals stress rights and freedoms in the West, it’s more about societal and familial obligations in the East.
Then there’s the legal structure:
“In the West, the rule of law guarantees that rights and obligations will be enforced by independent courts.
“In the East, rule of law is weak and rights and obligations are only as strong as the relationship that underpins them,” Dr McDougall said.
‘The challenges are immense’
It was from these time-honoured learnings that Dr McDougall spotted an opportunity in waiting for Digital Jungle – and from that opportunity, others came along. Starting out as a full-service digital agency providing traditional digital marketing services, 2013 saw the business expand by offering Chinese naming, branding and brand development solutions.
“It became apparent as Western brands came to us looking for a single solution, that we needed to expand beyond typical digital agency services,” said Dr McDougall.
“Digital Jungle works through a process to understand the business and help establish the best approach to China.”
Much like intrepid travel however, Dr McDougall emphasises that expansion into China is not for every organisation. While there are big opportunities for industry sectors such as groceries, alcohol and healthcare, he says it is not easy and “the challenges are immense.”
“Many brands underestimate and have unrealistic expectations on the time and cost when getting started.
“Each business needs to evaluate their goals and aspirations against the potential of China.”