How Video Arts broke into China
Article Date: Jan 17 2008A producer of training DVDs in English seems a business unlikely to succeed in China. But Video Arts, co-founded by comedian John Cleese in 1972, now counts the nation as its fourth-largest export market.
Martin Addison, the company’s MD, explains that Video Arts had always taken a global view, winning industry awards for export in the 1980s. Initially of course, this success was concentrated on English-speaking countries, or areas where English TV was popular such as Scandinavia and Holland.
That’s not to say Addison hadn’t considered the Chinese market. ‘In 2001, we had distribution in Hong Kong, Singapore and Malaysia,’ he says. ‘We had looked at [mainland] China, and seen how tough it would be. Our options were to start a business from scratch with no background, or look at approaching a third party as our distributor, which was our usual model.’
Addison adds that a lack of understanding of the key players in the market made it hard to identify a suitable distributor with a decent track record. Breaking into the world’s most populous nation seemed simply too difficult, until a former customer put Addison in touch with a management team which looked the part. The trio of Chinese nationals were former employees of US training organisation AchieveGlobal, and had returned to their home country with the intention of running their own business.
It wasn’t all plain sailing, however. ‘There was a lot of reticence [within Video Arts] about pitching into China with DVD because of the copyright problems,’ explains Addison. ‘So we took the decision to break into China with VHS only.
‘The trouble was that China, as a burgeoning marketplace, had leapfrogged VHS completely. So we found ourselves in the strange position of giving away VHS players with our products so people could use them.’
The products themselves, with the trademark blend of education and humour that Cleese and his fellow founders had established, went down much better in China than they had in Japan, according to Addison.
‘Professionals in China are more open to Western management styles and best practice,’ says Addison. ‘Japanese business culture is entirely different. For example, our content about the “unorganised manager” wouldn’t work in Japan simply because no manager would ever act this way.’
After five years, Addison still regards Video Arts as being in the ‘initial roll-out’ stage in China. Most of its sales there are to the domestic arms of multinational businesses, with state-owned behemoths presenting the next challenge.
‘Never forget that for all the growth of capitalism, China is still a communist state,’ Addison says. ‘Within each state-owned organisation there is a Party official linked to the HR department, so any material will be under that kind of scrutiny.’
Despite the difficulties, Addison hopes that China will be at the vanguard of Video Arts’ transition from a seller of DVDs to a cross-platform learning business.
‘Just as China leapfrogged over VHS, it is very much a marketplace where online learning has huge potential,’ he says. ‘For example, mobile TV is much bigger in Beijing or Shanghai than it is here [in the UK].
'Rather than people simply learning from us, we’re learning how people use technology to get information when and where they need it.’
More stories of British businesses succeeding in China will appear in the February issue of Business XL, the magazine for growing companies. Click here to find out more.
