These French are doing business in China and they succeed!

This article comes from Capital magazine

Cyril Giorgini welcomes himself to having opened a branch in Shanghai thirteen years ago.Because, this year, it is from her that the salvation of her group, audience, one of the French event leaders will come."Before the crisis, France was by far our first market, with 60 million euros in turnover, against 29 million for China.But the latter should take first place from 2021, with 50 million euros in revenue against 35 for France and we will make the majority of our profits there, as this year, estimates the CEO.The Chinese left, not us. ”As proof: on November 12, its agency orchestrated the launch of the next Volkswagen electric vehicles in the Middle Empire, with 2,000 drones illuminating the sky of Shenzhen, from Champagne to Gogo, and a grand fiesta.For a budget of $ 10 million.

Affairs continue in the country of "Chinese characteristics" socialism!It has already been months, already, that the sons of heaven have removed their masks.The COVID-19?Listening to the Beijing government, he disappeared from his territory almost as fast as he had come."Bars and restaurants all reopened, and there are even some again," applauds Jean-Etienne Gourgues, Chinese Director of Pernod Ricard.Shopping centers too.The crowd is back on the boulevards.She ages in the metros.For a bit, we would forget that airports remain curly.

All has its objective of increasing domestic consumption, President Xi Jinping encourages its 1.4 billion citizens to spend as much as possible.Enough to make companies around the world salivate, including ours, still seized at home.At the last score, there were about 1,600 of our groups in China and 65,000 of our compatriots."We are putting on the rise of the middle class," explains the entrepreneur Laurent Le Pen, installed in Shenzhen.Here, 500 million people already have the purchasing power of a Pole, and 100 million that of a German. "Of course, it has nothing easy to set up there.China remains a complex market, bristling with obstacles.Whole sections of its economy are prohibited to us.But it is possible to cross the Great Wall and many of our companies have shown the way.

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The first problem that arises for French companies is that the Chinese do not buy what they know how to do better than us.No need to try to sell phones when you are European, we know.Likewise for drones.Our champion of these flying machines, Parrot, lost the war against his rival Dji.But when it comes to more complex objects, this is another story.In 2008, Airbus leaders suffered from many criticisms during the inauguration of the Tianjin assembly plant (the parts come from the old continent).The Chinese did not manage to copy our A320neo for as much.Comac, their aircraft manufacturer, apparently fell on a bone.

His C919, "the large Chinese plane", as the local press calls it, accuses years behind its program when it is already obsolete.In the meantime, Airbus garigns.In 2019, the aeronautical sector represented 35.4% of our exports to the People's Republic, collecting 7.4 billion euros out of a total of 20.9 billion, according to the Treasury.Not enough to restore the bilateral deficit of France with the Middle Empire, which rose, last year, at 31.6 billion euros - the worst score all countries combined.But it's always taken.

Vuitton, Hermès, Gucci… Nos griffes du luxe sont, elles, quasiment en terrain conquis dans l'empire du Milieu. Aucune marque locale n’est parvenue à contester leur domination pour le moment. Et les rachats de Lanvin, de Sandro ou de Baccarat par des groupes chinois se sont soldés par des fiascos. L’enjeu pour le géant asiatique est pourtant de taille. Selon une étude du cabinet Bain & Company, ses ressortissants génèrent un tiers des recettes mondiales du luxe, et le chiffre devrait atteindre 48% en 2025, loin devant les Américains (18%) et les Européens (14%). Les marques françaises devraient s’arroger la plus grosse part de ce gâteau. «Le consommateur chinois veut un produit authentique, constate Sidney Toledano, le P-DG de LVMH Fashion Group. Notre savoir-faire, qui n’est pas délocalisable, est notre meilleure arme.»

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This success is proof that patience pays. Because our Robin of the Bois de la Balance Commerce all have one thing in common: they settled on site several decades ago, they worked like crazy, and never discouraged. "In 1997, when L’Oréal arrived here, the Chinese did not put lipstick," reveals Fabrice Megarbane, the regional director of the King of Cosmetics. We converted them! Today, they use five to six beauty products per day (against three for French women, editor's note). We are number 1, and this is our second market. " "When we settled there, in the early 1990s, the only customers were men, often senior officials," said Sidney Toledano. Most of our competitors were content to market low -cost products, small leather goods. Not us. We have chosen to sell the same items as elsewhere, to bet in the long term, to invest in the best locations for our shops. "

You still have to be able to adapt its offer to oriental tastes.Each year, for local Valentine's Day, which takes place in August, Dior thus markets a specific line: Dioramour.Bags, shoes and clothes with big hearts or "I love you" written in the language of Xi Jinping, in red of course.The Parisians sulk them, but the ladies of Shanghai tear them off.L'Oréal also adapts its tubes and bottles."Our range of Maji Fashion coloring, which pleases a lot, has been designed for dark hair of Asians," says Fabrice Megarbane, specifying that he has just asked his teams to develop, in just 59 days, a night creamFor Chinese Internet users who spend long hours in front of their computers - a habit identified thanks to social networks."It was a great success," he said.

Pernod Ricard also had to put water in his pastis."In China, Baijiu, traditional rice alcohol, still occupies two-thirds of the market, 22%beer, 10%wine, and spirits imported 1.5%," explains its regional director, Jean-Etienne Gourgues.We are still very small, but it goes up.Five years ago, it was 1%. "To seduce the Chinese, the French group does not hesitate to develop its offer according to fashions.“Before, we only sold very high -end, especially cognac and Scottish Blended whiskey.For the past five years, our customers want more wine, single malt and craft alcohols.We adapt. "

Notice to the French who try the adventure, to unravel the country of Tiktok, you also have to bet in digital. There, 95% of purchases are made on smartphone. No other solution, therefore, than investing in apps. "In 2016, my local team offered to sell a Lady Dior bag at 4,000 dollars on WeChat (a kind of WhatsApp which also allows you to do your shopping, editor's note)," recalls Sidney Toledano. I accepted by offering a series limited to 500 copies, over five days. The bags all left in a few hours, and the next day the customers line up in front of our shops to ask for them. ” Some chic brands, such as Kenzo or Cartier, have even created sales spaces on Tmall, a subsidiary of Alibaba. It's a bit like buying a suit, a gold watch, or a claw bag at Cdiscount. Others engage influencers who unpack the goods in front of millions of consumers on the "live streaming" services, kinds of Téléachat 2.0.

Being patient, knowing how to adapt ... If that is not enough, manufacturers should not hesitate to set up production establishments on site.This is what Lesaffre did."In the past, the Chinese did not use bakery yeast to make their steamer," explains the director general, Antoine Baule.But they got there for health reasons, and that promotes us. "So much the better, because the Chinese yeast market is growing 5% per year, compared to 2% in the rest of the world.The Marcq-en-Barœul (North) company, which employs 1,200 people and has four factories in the Pays de Mao, also markets animal food without antibiotics."It is a strong trend in the Chinese market."

Michelin, too, boldly put Made in China."We manufacture all tires on site for the local market, then we distribute them thanks to a network of 1,600 shops throughout the territory and by internet, which generates 20% of sales," said the CEO of Michelin China,Kamran Vossougui.A strategy that keeps the precious know-how of the Clermont-Ferrand manufacturer in France.To offer tires at suitable prices, sold 95% in China and 5% in Asia.And to be responsive.Thus, when the activity left in China last summer, Michelin was able to serve its local customers without delay, despite the closure of the borders, unlike some of its rivals.Well seen."We are number 1 on the top of the range, on the tourism and van segment, in first rises as in replacement, as well as that of buses and trucks," rejoices the boss.

In the People's Republic, we must also do with the Communist Party.An automobile giant wondered why the president of his Chinese subsidiary could not put order in the accounts of one of its sales directors."We had to hurry up a Western framework of the group to have the end of the story, reports an official of this manufacturer.The subordinate in question had a higher rank than that of his leader in the Communist Party, and he played it to act as he pleases. ”

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Good news: in the general opinion, the time when it was necessary to grease the legs of civil servants and regional elected officials is over."Just as the banquets that do not end, it's a bit of a shot," said Joachim Poylo, the CEO of Aden Services, a giant of the services he founded twenty years agoHong Kong and which now employs 26,000 people.But in this country of censorship, it is good to know how to keep your language."We had an interesting experience with one of our muses," recalls a manager of a luxury house.She said during a Cannes festival that China had not been nice enough with the Dalai Lama."We had to apologize to the authorities," confesses the businessman.

The most dangerous is when the government announces radical caps that affect business.An example ?The fight against corruption launched in 2012 by President XI seized the sales of Pernod Ricard for three years."But we have now returned to a beautiful growth trajectory," argues Jean-Etienne Gourgues.And China, our second market, represents 10% of the group's turnover (around 900 million euros, editor's note). "

Little surprises to wait, on the other hand, for loose lessectors: they are, they remain so. Airbus Helicopters teams know something about it. Admittedly, the Marignane group is number 1 in China with a market share of 40%. But, despite the immense size of the territory and a factory on site, there are only 90 customers against 800 in the United States, its first outlet; And only 300 aircraft in service against 2,600 in Uncle Sam. "The growth of the Chinese helicopter market is limited for administrative reasons and for lack of infrastructure, recognizes Marie-Agnès Veève, the regional director of Airbus Helicopters. The airspace is controlled by the People's Army, each flight to be subject to a specific request. ” Beijing plans to open its airspace to the helicopters in 2030. Only, the experts know this: it will first be to promote its own devices, including those of Avic, copied to our dolphin.

On the other side of the globe, human resources management can also turn to the headache. "We lived years at 30 or 40% of turnover, and three years of wage inflation at +30%," says Cyril Giorgini, of the audience agency. Here, when you offer 3 or 4% increase to an employee, he leaves. " Fortunately, he admits, the salary flambé is largely offset by the increase in turnover. And above all, the labor market offers unknown flexibility with us. "At the worst of the crisis, in July, I brought down my local workforce from 120 to 70 employees in a few days, and there I just brought it up to 120." In this Far West of Far East, there is only one law after that of the party: that of supply and demand. "The Chinese hardly have access to unemployment, and let's not talk about French safety nets like the RSA: there is none," said consultant David Baverez.

The fact remains that our bosses should not fall asleep. "Two of my employees left to try to set up a competing box, reports Laurent Le Pen, who founded Omate, specialist in connected objects. Fortunately, they failed. " This entrepreneur praises the incredible dynamism of Greater Bay Area, which brings together Hong Kong, Shenzhen and Guangzhou (the former canton) in particular. This area is the cradle of star applications like WeChat - the local equivalent of WhatsApp -, and electronics giant like Huawei. "I could never have developed my business in France, we no longer have the skills, unfortunately. When you're in hardware like me, Shenzhen, it's Mecca. " It’s also a jungle. "To all the young French graduates who disembark, I say, be careful: here, if you reveal a new product, even with a patent, you can be sure that three months after you will have twelve competitors who will do the same thing." Sacred cowboys, these Chinese.

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