Brendan Mason: Beijing is extremely expat-friendly
Interview by Molly O'Brien.
If there is someone who understands what is involved in scaling an Australian company to Chinese markets, it’s Brendan Mason.
Having now lived in China for ten years, Brendan initially made the move to work at the helm of Cochlear in their China and Mongolia division. Brendan was responsible for a drastic increase in sales in the Chinese market and helped to establish high-level relationships with a range of regulatory agencies.
Keeping close ties with the Australian community in Asia, Brendan also served as Board Member, Treasurer and Chairman of the Australian Chamber of Commerce to China in Beijing for four years.
In his latest role, Brendan Mason has been CEO of SmartTrans since July 2017, continuing to serve the segment of individuals and companies who needed assistance in a foreign market. As it stands, he is one of only two ASX listed company heads who are based in China. Brendan shared with Advance his invaluable insights into the types of companies that should be looking to China and just as importantly, the right way to go about working in this massive and complex market.
What was your first experience with China, and how long have you been currently living there?
I’ve been living in China for about ten years, I moved here just before the 2008 Olympics. My very first trip to China was in 1989 when I worked on moving a shoe factory for Puma from Taiwan to southern China for work. It was my first taste of this amazing country, back when things were very different.
In 2007 I was asked to come to China by Cochlear. It was a point at which they were experiencing a sales plateau. It became clear that China was the biggest growth opportunity for the whole organisation, and I was sent here to explore new channels to market.
Did you face any challenges when expanding Cochlear into China?
A standard problem that many Australian (or indeed international) businesses face when they're breaking into the Chinese market is that there’s a natural tendency to sit behind an agent or a third party when you first begin. Whether it’s tax, marketing, distribution or law, there’s usually a lack of face to face presence with the Chinese market. I call this Phase One.
Phase Two is when a company decides which bits of the value chain they’re going to manage themselves and what can be outsourced. This phase, for Cochlear, came about two or three years after we entered the market. By then, we had about four or five channels, not just one, and some of the new channels included government and philanthropy-focused customers. The initial channel was selling to distributors, who then sold to the market.
Moving from Phase One into Phase Two can be a struggle, and it is where some Australian businesses may falter.
What advice would you give to Australian businesses looking to expand to Chinese markets?
Firstly, it’s important to ask yourself if China the right place for you to go. As a general rule of thumb, if you're not successful in Australia, don’t try and export.
Secondly, you need to assess if China the right place to be your first export market. Quite often, the answer is no. After Cochlear, I was consulting with a number of companies to help them come to China and often I’d advise them that America was the better choice.
Thirdly, the ability to identify the correct distribution channel for the product. Who is the target market? And how will you get to them?
Why was China the right market for Cochlear?
Cochlear’s products are difficult to copy and would require quite a lot of detailed engineering. With most other products that are simpler to replicate, I would probably not advise jumping straight into the Chinese market. Generally, it's better to go to a place where there is a clearer rule, and by that I mean willingness to implement, of law.
A lot of it comes down to who you know and about making sure that you've done enough research on your distribution channel. As the second biggest market in the world, when you come to China it can be about more than selling. It can also be to take advantage of the opportunity to buy and source products.
What are the main opportunities available to Australian individuals and businesses in China that would not otherwise be available to them in Australia?
I think it depends on your product. If you're selling food or fast moving consumer goods, there is a huge opportunity in the fastest growing area of retail, which is e-commerce. If you have a tech-based product, there tends to be a much higher barrier to entry. Once you get through all the hurdles of regulation and distribution and marketing and IP protection, the market will identify if your product fixes a problem that is prevalent in China.
Do you find Beijing a difficult city to live in as an Australian?
Beijing is great. I find it more difficult down in southern China to get things done because I perceive there to be more boundaries. Shanghai has probably 50% of all the Australians who live in China, Beijing has probably 30% and the other 20% are scattered all over the country, in places like Chengdu and Guangzhou.
I do feel as though the Chinese Government, the people and businesses are interested in hearing about our experiences and what we think. And the fact that we've got a voice and an audience for is a very uplifting and enriching experience.
A lot of people don't think that Beijing is expat-friendly, but it is. You've just got to make a little bit of effort. I don't think I've ever lived or been into a safer city in the world to wander around at night.
The pollution is slowly getting better, too. It’s still not perfect by any stretch, but we’re getting there.
Could you give me an overview of your current role at SmartTrans?
I was at Cochlear for seven years as the Country Manager and decided to stay in China instead of going back to Australia.
The opportunity with SmartTrans arose because there was clearly a niche for individuals and companies who were looking for assistance in a foreign market: we help companies export goods and hire people. In time, I was appointed CEO of the business, which is a publicly listed company. To my knowledge, there are only two ASX listed CEOs living in China.
SmartTrans effectively has two divisions: an Australian-based division, which helps truck fleets and supply chain operators become more efficient through using clever software applications; and the China division which is about helping Australian fast moving consumer goods launch and become successful in China.
Do you plan on staying in Beijing for a while?
From a personal perspective, I like the idea of my son finishing high school being fluent in Mandarin. I've been here about ten years now, and if I end up back in Australia in the next few months or later this year, then that's a pretty good run. I also think there are logical exit points for any expat who lives overseas, and they tend to kind of swing in three, seven and 15-year pendulums. It could be time to go back, but I haven’t stopped having fun living overseas and helping companies becoming successful – I still love it.
What has been a highlight of your time there?
One of the amazing things about living in Beijing is just the incredible diversity of people. Not just Chinese people, but foreigners also. Every country in the world has an embassy here. The people you tend to come across, especially diplomats, are highly intelligent and incredibly interesting to interact with and talk to.
I've had the opportunity to rent a five room house up on the Great Wall and it's given me and my family an incredible insight into rural village life. Getting out of the city, not just for the pollution, but to experience a part of China you'll never get to see ever again and hang out with the locals. It’s a lot of fun.