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Monday, March 03, 2008

Emporio Nomoney

By Victor Cattermole, Asia Pacific Bureau Chief
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Last month I wrote about Elizabeth Liu the billion dollar real estate tycoon in Hong Kong. This month I have dashed across the boarder into China and met with a Chinese business woman who is probably at the other end of the scale.

A thirty minute train ride from Hong Kong, through customs and across the border into China. It’s a simple process unless you are American. Basically if you are traveling on a US passport it takes 2 days to get a visa.

Less than one minutes walk from the border crossing and I enter the Lo Wu shopping center which is in the city of Shenzhen. This shopping mall has over 400 shops per floor and a total of five floors. It is one of many in the area, because of its location this one is a popular spot for tourists.

I head up to the third floor and along to one of the far corners of the building. The trip is exhausting in itself with a continued barrage of “Mr do you want a copy watch” and “Mr cheap Viagra”. What an insult, how old do I look? This whole shopping center appears to mostly sell copy goods, bags, watches, clothing and electrical goods. I learned the tough lesson early on the electrical goods, basically the fakes look great but don’t work.

What's amazing about walking through this place is the relentless attempts to sell goods by these people even when they have observed you turn down ten or more vendors all pitching the same goods. Their never give up attitude is a credit to them and I personally learn a lot from their commitment to the process.

Vicky is in her usual position next to her 1.2 meter square watch stall. From this small $9,000 a month stall the whole family bases their business selling predominantly copy goods. Vicky is the eldest of five children which is unusual in China of course. All 5 children work from the stall and the mother keeps a close eye on whats happening. Vicky’s English is quite good although she never misses an opportunity to learn a few new words.

On the face of it there is nothing that sets this stall apart from the other hundreds of stalls in this centre selling similar goods. What's clear to me is there is no business plan and no banker funding any of these businesses. Looking at it from a western perspective quite seriously how could you. If someone arrived with a business plan to sell illegal goods in amongst other shops all selling the same goods no one in their right mind would provide funding. Despite that these businesses set up and survive.

I am fortunate enough to have known Vicky for about three years and so over that time I have found out a lot about how this business runs.

First of all the rent for the is RMB9,000 per month which is around US$1,250. Maybe not a lot to many of us but to a family in China it’s a fairly big commitment. The average income of a general worker in somewhere like Shenzhen is around RMB2,000 per month.

Whilst talking with Vicky she doesn’t hesitate still to offer her goods to passers by. Any interest means my discussion is dropped and within seconds she has her brothers, sisters and even mother racing around obtaining samples, books and complimentary bottles of water for any potential buyer.

Anyone clearly not local is fair game here as they will generally pay a lot more than a local. A typical sales negotiation on say a copy watch may start at US$300 and end up anywhere as low as US$20. The classic con with watches is that there are three different qualities and mechanisms, the sample is usually the best quality of course, the one the customer walks with is usually the cheapest.

I finally get to ask Vicky some tough questions on what it’s like to do business in China. She and her family work seven days a week, the day starts at 10am and finishes between 10pm and 11pm. She is 25 years old, doesn’t have a boyfriend, no time she says. Her take home pay is nothing, basically all the profit goes to her mother and father and they provide anything she needs.

So all of that is pretty interesting but not that amazing. What is amazing about Vicky is that her clients come from all over the world. She has photos with customers from just about every country you can name and she maintains regular contact with them through email. People in the know who make the trip to Shenzhen walk past vendor after vendor to shop at Vicky’s one square meter store and you have to ask yourself the question why?

It comes down to relationship with her customers, maintaining contact and being honorable in her promises.

Vicky is the only vendor in the whole mall that offers a 12 month warranty and means it. She may not be rich but she is effective, we can all learn a lesson from her.

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