We’re happy that long-standing member of our Shanghai team, Zhao Le, has been appointed Managing Director of Intralink China - with our former China MD, Alex Barton, relocating to our Singapore office for new adventures (more on that another time). It’s a great time to examine the overarching trends in China and the opportunities for overseas businesses to capture value from the market.
In an ideal world, I’d be facing Zhao over a plate of steaming xiao long bao in Shanghai’s bustling business district, near our now 20-year-old China office. But, in line with our environmental goals (and marketing budget), I’m here in the UK interviewing Zhao over video call to find out more about her background, plans for the China business, and the commercial prospects Asia’s Middle Kingdom presents in 2024 …
On Zhao
Firstly, congratulations, Zhao, on your new role as MD of Intralink China! What’s your background, and how did you come to work at Intralink?
I’m originally from a city called Dalian, where I first worked in a small PR and marketing agency affiliated with the telecommunications bureau. I then went to the UK to get my Master’s in business management, before coming to Shanghai to work at another marketing company. But I decided marketing wasn’t for me, so I started looking for consulting work and came across Intralink. That was 18 years ago now!
What was the China operation like when you first joined?
We had an office in Shanghai with seven people. I started off as a Research Assistant before moving up to Project Director, now taking over the role of MD. I’ve been involved in all sorts of projects – channel development, supply chain development, market analyses, opportunity validations and full-scale business development initiatives across multiple industries – everything, really!
Out of those many projects, do you have one in particular that sticks in your memory?
I will always remember starting a business development project for Oxford Nanopore Technologies as that was my first foray into bioscience – and highlighted that the world was starting to look seriously at opportunities in the Chinese bioscience market.
How about outside of Intralink? What do you do after a long day at work?
My biggest hobby is rock climbing, but I also enjoy binging a good TV series at the weekend. The last I watched was Crash Landing on You – the K-drama where a South Korean lady accidentally parachutes into North Korea and falls in love with a solider. A bit on the nose, but very entertaining!
On the China market
Let’s talk about the opportunities to enter the Chinese market. Why should international firms be interested in China?
China is one of the world’s largest consumer markets – its population now stands at 1.4 billion, with 400 million people making up the middle-class and wielding real purchasing power. GDP growth may have slowed from its previous rate but remains around 5%, and the past 40 years have driven high mobile and internet penetration, creating a wealth of opportunities for digital businesses. The country has also seen a rapid expansion of ecommerce - otherwise known as ‘new retail’.
China’s a thriving innovation hub, with many of its technology pioneers being global leaders in their fields. Plus, the infrastructure investment supported by central government will facilitate high-quality development for years to come.
What are the challenges of entering the Chinese market?
If China is in your expansion plans, it’s better to get out here sooner rather than later.
One of the characteristics of the market is that competition gets fiercer and fiercer, meaning if overseas firms leave it too long, it can be difficult for it to keep up with local rivals. And often, market entrants unknowingly set their prices higher than their local counterparts, so being able to adapt – or justify your price point – when selling is important.
Are there areas where there’s not as much competition, where China really needs help from international players?
China isn’t leading in bioscience yet, and so there’s a lot of interaction with global players and an eagerness to collaborate in the field, representing a large chunk of our client base. Medical devices are also a high-demand market, with Chinese players still relatively unsophisticated. The need for innovations in these areas will only increase as China faces new demographic challenges.
Environmental technology is another area where China is still behind. Chinese companies are looking for better corporate governance, and if they implement environmental technologies, it will help them to develop their business in international markets. Plus, the government has bold net-zero policies and, to achieve these, its corporations need overseas expertise.
In which other areas is cross-border collaboration flourishing?
Industrial tech is a hot sector. A good example of collaboration here is our British cleantech client, Econic Technologies. We helped them with a joint development project with Changhua Chemical, a fine chemical processor based in Zhangjiagang City. In June, Changhua announced the construction of its manufacturing site producing a new line of PCE polyols derived from waste CO₂ which they’ve developed with Econic.
AI and autonomous driving are major areas for collaboration, too, with companies like Baidu and Tesla working together (see self-driving car in Shenzhen). Ecommerce giant JD.com is working with logistics companies all around the world, and Ant Group – the finance branch of Alibaba – has teamed up with many major financial institutions to provide financial services globally.
These days, due to souring geopolitical relations, some companies have been put off doing business in China. Is China still open for business?
China is most definitely open for business!
Remember that the country is not all state-owned: most of the economy is made of privately-owned companies which are highly profit-driven – and many are seeking to do business with international partners. These are the companies with which we facilitate the majority of deals for our clients.
There are, of course, certain sectors where – depending on which country you’re from – it could be hard to do business with China right now. But foreign policies evolve and we’re confident a collaborative mindset will prevail.
When we hear about China, we think about futuristic cities and technologies miles ahead of the rest of the world – robots, ultra-high-speed trains, autonomous driving and so on. To what extent is this true?
What you do see is an ongoing effort to commercialise autonomous devices in big cities, with smart dustbins, smart vending machines and autonomous food delivery machines already in use. Plus, there are drone delivery services now, with the most recent development being a drone that can carry parcels up to 5 kg.
But this is only in designated areas set aside for large trials of autonomous technologies. For self-driving taxis, for example, there are test zones totalling about 200 km².
Most autonomous technologies are not yet 100% commercialised, and are only in major cities like Beijing, Shanghai, Guangzhou and Shenzhen. China will need continued support from overseas innovators for these technologies really to take off. But the vision and willingness are there – which is more than can be said for many other advanced countries.
On the Intralink China operation
Tell us more about the team you’re leading?
We’re 17 people right now: four directors, 12 employees driving market entry initiatives for our clients, and one finance officer. It’s a diverse team - a mixture of British, American, Taiwanese and Chinese people.
Do you speak to each other in both English and Chinese?
Yes, we speak a bilingual mix. We’re not afraid of talking to each other in Mandarin because everyone speaks it well – even the Brits and Americans!
Any new plans for the office?
Yes, the current décor is a bit outdated … we’re thinking about modernising the office with a more open plan layout. It will not only make our day-to-day life more pleasant but offer an inviting work base for visiting clients.
Where would you take me for lunch near the office if I was with you in Shanghai?
Just a one-minute lift ride downstairs there are a few great noodle bars. But it’s a luxury shopping mall, so these cost around £10 a bowl, instead of the usual £4 a bowl in China.
Sounds cheaper than what we pay for noodles here in London! Back to business – why is Intralink the go-to consultancy for international firms looking to expand in China?
We have the methodology and track record to prove it – we’ve been doing this in China for more than 20 years and have built a huge network. And we’re tenacious! It takes a particular set of skills and traits to close deals in China – something that’s hard to do remotely from London or Silicon Valley.
How about the other way round – why should Chinese companies come to you for help expanding outside of China?
The Chinese consumer and tech sectors have much to offer to the world. There’s a need for Intralink’s services among Chinese companies looking to expand internationally – startups, larger technology companies and corporates alike. When they’re looking at overseas markets and don’t have the experience to make their own way, they need someone they can trust.
Finally, tell me about the trade and investment work the team has been placing more focus on recently?
There are two sides to this: on the one hand, we help large international economic development organisations (EDOs) – currently from North America and the Middle East – to attract Chinese investors. The alternative approaches, such as setting up and staffing your own FDI office in China, are expensive and a slower burn process than outsourcing the operation to someone like us. New Jersey is the latest example of a client who has seen the wealth of opportunities in China and chosen to recruit our help. On the other hand, we can help Chinese EDOs to secure investment from abroad – a newer area of the business we’re focusing on bolstering over the next coming years as demand increases.
Thanks for talking to me today, Zhao – next time it’s a £10 bowl of noodles on me.
If you’re interested in hearing more from Zhao on her 15 years of business in China with Intralink, check out our workshop where she joined representatives from our Japan and Korea offices to discuss “sealing the deal in APAC”.
To talk about commercial opportunities for your business in China, you can contact Zhao Le at zhao.le@intralinkgroup.com.