Taking the hard road to China
Article Date: Aug 08 2005
Instinct told Doug Currie that expanding into China was the next logical step for Genesis Forwarding Services, the business he co-founded in 1986. But before long, a host of obstacles began to hinder his path to becoming a global freight forwarding company.
At the beginning of this year, Doug Currie’s Far Eastern strategy was threatening to come apart at the seams. His hopes of turning his company, Genesis, into a genuinely global forwarding business rested on breaking into Asia and, in particular, into China.
Genesis had been an independent force in Shanghai since 2002, trading on a reputation for quality freight established by working with high-end brands such as the Saville Row tailor Gieves & Hawkes. Six months ago, China took a major step towards fully joining the global economy when quotas on its textiles were lifted and the big fashion houses began to seriously move into the market, but Currie was in danger of failing to deliver consignments to his usual exacting standards.
Currie thought that by setting up an office in China, he would be in full control of local business – he quickly learnt he was mistaken. ‘We found that there were individual negotiations and deals related to the business that we were not party to.’ As a result, the contract with the local general manager was terminated at the end of last year.
‘China can be a difficult market because the laws are constantly evolving as the country’s economic growth and prosperity increases,’ says Currie. ‘What we believe is culturally sound, those in China may not. It has not had our form of corporate governance and does not understand it.
‘Imposing your standards and working practices on the Chinese doesn’t work. They basically say, "this is our country and system. If you want to do business here, you do it our way”. Some aspects of our approach are a total anathema to them.’
Picking up the pieces
Following the departure of the general manager, there was some damage to Genesis’ office and items were removed. The eight local staff then received a series of veiled threats and after two weeks they all left the business together.
A full service was maintained through the assistance of Genesis agents in Beijing and also the co-operation of staff in Singapore. Currie flew over and stayed for ten days to support his Chinese manager in recruiting a new team, as well as to find lawyers who were more confident in handling these types of incident.
Genesis is now in a stronger legal position to operate as an independent entity in China and Currie has learnt that it is not enough to have a presence on paper. ‘You have to have people who speak the dialect,’ he admits. ‘We are now perfectly positioned, with an international network of local staff.’
So far, Asia only accounts for ten per cent of Genesis’ annual sales of £28 million, but its strategic potential is already proving to be more substantial. ‘We are not a small company, but we are a small forwarder,’ Currie states. ‘In China, we are getting more and more invitations to quote from multinationals, who would never ask us in the UK or US on account of our size.’
