5 Things You Need To Know To Successfully Do Business In China, With Andrew Kuiler, CEO of The Silk Initiative

“I am very passionate about connecting these older generations with younger Chinese, particularly troubled youth. Even though elderly in China are becoming disconnected with the rest of society, they have incredible skills, talents, and life lessons to pass on. If I could inspire a movement, it would be to form mentorship programming and have elderly […]

“I am very passionate about connecting these older generations with younger Chinese, particularly troubled youth. Even though elderly in China are becoming disconnected with the rest of society, they have incredible skills, talents, and life lessons to pass on. If I could inspire a movement, it would be to form mentorship programming and have elderly play a more active role in the lives of China’s next generation. With many young people suffering from abuse, Internet addiction, self-esteem issues, and isolation given the one-child policy, having a group of people to simply talk to and share experiences with may be enough of a start.”

I had the pleasure of interviewing Andrew Kuiler, founder and CEO of Shanghai-based brand consultancy, The Silk Initiative. Andrew has studied, lived, and worked in China for over 20 years. His firm works with global food and beverage brands to give them the strategic direction they need to understand, enter, and prosper within the Chinese market.

Thank you so much for doing this with us! What is your “backstory”?

My love for China, food, and entrepreneurship goes all the way back to when I was growing up in country Victoria, Australia. As a child of immigrant parents, I was exposed to foods from all over Europe. That was taken to the extreme, however, by my Chinese godparents. They moved from the mainland to Australia mid-century and ran a successful Chinese food restaurant in our town. It was there I’d spend countless nights sitting at the counter, or sneaking into the kitchen to watch them cook. Alongside cooking lessons after the restaurant would close for the day, they would teach me Cantonese. I also received life-changing schooling in how to run a business from them, and also my parents who were very successful entrepreneurs as well.

Fast forward to university and I was invited to study in Beijing on a full scholarship in Mandarin. When I first arrived, 22 years ago, China was a very different place. Over the past two decades, I’ve seen the country become a global superpower and the world’s second-largest economy. My many years in Beijing, Shanghai, and Macau have only solidified my love for this place and the fascination I feel each morning as I navigate the crowded streets.

It’s also shown me that, through all this development, China still has its long-standing, unique particularities. Among these is the need to find innovative ways of feeding 1.4 billion people today, and millions more in the future. That’s why I founded The Silk Initiative to ensure food and beverage brands, both domestic and multinational, lead the charge in addressing these needs.

Since opening our doors four short years ago, The Silk Initiative has garnered an enviable portfolio of well-known, global brands. Our mission has been to ensure the success of these brands in the Chinese market. We not only act as a bridge to enter China (there are plenty of companies doing that) but work to make brands as treasured here as they are back home.

We know that it is not always easy for a foreigner to do business in China. Can you share an interesting story about a challenge that you faced, and how you overcame it?

My most interesting challenges have always been people-related as attracting, growing, and retaining people here needs a complete rethink from our conventional western ideas. I have seen dozens of people leave a successful company overnight, following their boss out the door when they felt she or he was not respected.

My biggest challenge was exiting an overseas Chinese employee out of a company. She was let go due to poor performance and tardy attendance. While she took the feedback and accepted the decision, soon we found ourselves with her immediate family in the lobby of our office. For 5 hours they ranted about her unfair dismissal, disrupting the office in the process. Unwilling to listen to our rationale, or review the multiple warnings provided to the employee, we finally suggested to the family we all wander down to the local labor bureau and present all the paperwork supporting the reason for the dismissal. It was at this stage the family completely backed down and finally left.

There were two major lessons here.

Lesson 1: Drama and excessive emotional outbursts (the louder you are the more you will be heard) can be a typical negotiation tactic in China. In this case it wasn’t about the facts at hand but really about finding a way to negotiate their niece back into the role. The Chinese family, as caretakers, saw it as extremely shameful to tell their niece’s family in Australia exactly what had happened.

Lesson 2: Document, document, document! Note down every step of the personal process, from hiring to on boarding, goal setting, check ins, and exit paperwork. In a fast-moving environment like China, it can often be so easy to forget one or more of these areas. Before you know it, you can have a rather trying situation on your hands. While this might seem far too regulatory and “in the weeds” in the west, in China it could make all the difference.

Are you working on any new or exciting projects now?

Countries across the Asia-Pacific region seem to be going crazy for cheese.

• Earlier this year, we conducted a study for a major U.S. branded pizza chain’s south-east Asia operations. The goal was to understand perceptions of cheese across the region, and how to sensorially connect with consumers. Our findings were a critical component of a major cheese innovation push by the brand for the Asian market.

• Within the past month, we were again asked to explore the world of cheese. Sponsored by the EU, a major European cheese producing country wants to understand how to position themselves for the Chinese market. This is going to go beyond just market landscaping, and include some interesting, local innovations on a time-honored product.

What advice would you give to other business owners who do business in China, to help their employees to thrive?

While the talent pool in Shanghai is very technically capable, many lack sufficient soft skill training. It’s just not part of the overall curriculum when it comes to business. For business owners in China, I can’t stress enough how critical soft skills are for all members of a team.

This doesn’t mean offering a lesson here and a lesson there. Companies should have formalized training and soft skill development, along with personal coaching, to upskill. Think of this as an academy. It would be transparent, so all people know the steps involved and what’s ahead of them. That way they understand what skills they’ll gain, but also what’s expected at x, y, or z level.

Young professionals in China are also craving quality mentorship and an employer of choice. This, too, is lacking in a largely command-and-control business environment. One doesn’t have to reinvent the wheel on this. Providing quality coaching and mentorship, a caring working environment, and opportunities to grow will be a great first step in the right direction.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

The most formative mentors I have ever had were Pat Hughes and Jane Braum (nee Ormiston). We worked together at GFK in New York and spent many hours in town cars driving across the tristate area. Today, most people would take these trips for granted, napping, listening to music, or talking about the weather. Not Pat, Jane, and me. This was where they handed down to me their decades of knowledge in market research, brand understanding, and client development. Summed up, their attitude was always one of asking forgiveness instead of permission, being the bigger person, and constant tenacity.

• I fondly remember Jane teaching me to be ruthless with clients, going to them versus waiting for them to come to me. At Johnson & Johnson headquarters, we managed to sweet talk one client into giving me a campus pass. That became my second home, hot desking before it was a thing. It’s much easier to build business when you can nag people face to face, instead of waiting for an e-mail to come in.

• Pat taught me empathy. Business is important, but we have to care about the people behind the work as well. A trip to Istanbul hammered this home. My client had been going through a rough patch and was on medication. The airline lost her luggage, so she was without medicine or clothes for the week-long trip. For three days I acted as therapist and shoulder to cry on, not to mention loaning her my clothes. Behind the scenes, Pat was coaching me all the way from Minneapolis. Her words of advice were to be the bigger person, suck it up, and get on with things.

These skills are the ones which follow me today. Gumption, resilience, tenacity, empathy, flexibility: these are all key to survival in a place like China.

What do you think are the new untapped markets in China that may become the next “big thing”?

In China, everyone is focused on this question. It seems companies today, by default, look to millennials for the answer. Whether these are key opinion leaders, Internet celebrities, or trend setters, the lion’s share of attention is on them. I’m not convinced, though, they are actually indicative of the next big thing in China.

Given the country’s rapidly aging population, coupled with chronic disease and a potentially huge gap in the workforce over the next few decades, my bet is that the public and private sector will start focussing more on China’s elderly segment. We already see this in the health care sector, which is testing out new approaches to managed care for chronic pain. Social good campaigns aimed at appreciation for the elderly have also popped up around China. These will eventually evolve into more strategic campaigns related to health, wellness, and critical issues for the segment.

For foreign companies operating in China, this means anyone in the health and wellness or nutraceutical space is going to do particularly well. Aged care facilities are also a hot commodity for wealthy Chinese, but expect these to lower in price as demand increases.

We keep hearing about the “Trade War”. What are your thoughts about it? Given the unknowns, how do you plan to pivot?

The trade war is no mere conjecture. Just look at Peak Pagasus. This American cargo ship was the first victim of the 2018 U.S.-China trade war. Peak Pegasus rushed across the Pacific to the port of Dalian but arrived an hour after the new tariffs took effect. Its cargo, soybeans, will be one of the centerpieces of this war.

Soybeans are the third largest U.S. export to China and one of the few that run at a surplus. With the new 25% tax, experts estimate a US$4.5 billion drop in shipments. This opens the door for other global producers, like Brazil, to fill. Other major agriculture sectors hit hard by China’s tariffs include Washington cherries, California almonds, and Missouri pork.

The online movement Counterattack the Trade War (反击贸易战) sums it up well in saying. “…we do not want a trade war with America, but we certainly do not fear it.” Ultimately, the question will be whether or not Chinese consumers are willing to spend more for their favorite goods, or if they’ll simply buy less. The latter will only add to what the Brookings Institute already estimates will be a loss of 2 million U.S. jobs.

In the end, it will be the U.S. that loses this war. The U.S., and world for that matter, is very dependent on Chinese goods. These aren’t just plastic toys, but the food we eat as well. Essentially, the U.S. has put all their eggs in one basket relying so heavily on China. On the flip side, China has a diverse set of countries from which to import. The long-term threat of this war is what it will do to these import relationships. While the U.S. may think this is just a short-term salvo, it may be a precursor to a new balance of power.

What are your “5 Things You Need To Know To Successfully Do Business In China.” (Please share a story or example for each.)

• You need to have a huge amount of energy. China, as a market, is always on. This is because of the sheer magnitude of people and the speed of business. While it sounds like an exaggeration, there is no down time here. Most business people including myself, are up by 5 or 5:30. Rarely does a day end before 7 or 8 and that’s before cocktails or dinner with clients.

• You need to spend a lot of time outside work building and maintaining relationships. The lines between work and play are very blurry here, but relationships are crucial.

• You need to be on top of governmental policy changes and have strict compliance. This is no longer the wild west. Any slip up could mean the end of your business.

• You need to understand the new environment for business communication. In the past it used to be simply e-mail. Now, most business is conducted on WeChat. This presents a number of opportunities, but lots of risks as well. It makes compliance, tracking, and accountability very difficult. It also means my team are accessible to the client at any time. Again, there is the lack of work/life balance and the always-on mentality.

•You also need to have a flexible mindset and roll with the punches. There’s no such thing as a typical day in China. You can get disrupted by anything, anytime. Maybe it’s nonsensical bureaucracy asking you to spend five hours in a government office or bank. Perhaps a big client makes a power play by leaving you waiting (or not showing up at all). Regardless, you have to be resilient and recognize the way things are done here is not at all like they are back home.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Every accomplishment starts with the decision to try.” John F. Kennedy

I feel that this really encapsulates the story of my life. To get where I am today, I’ve had to take risks daily. These only happened once I decided to try.

My last 20 years have really been a series of building blocks, with some decisions made strategically and others by pure chance. Moving from Ballarat to Melbourne to Shanghai, then to Macau, Sydney, New York City, and again to Shanghai certainly sounds risky in hindsight, but was definitely the right thing to do at the time. At each stage, I was able to make some significant wins that then influenced the next life move. Had I just stayed in Australia, though, none of that would have happened.

As a result of all these decisions to try, I now have a successful and respected brand consultancy in China — something I’ve always dreamed of.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

China is at an interesting crossroads. There are distinct generational gaps between those born during the time of the Cultural Revolution and those born after. We could even parse this out to those born after 1990 as their own segment. As I mentioned, the focus really is on the younger generation as representative of the new China. This means the older generation, those who would normally pass on societal knowledge, have largely been forgotten. The problem is even worse in rural areas, where elderly are viewed as caregivers for left-behind children.

I am very passionate about connecting these older generations with younger Chinese, particularly troubled youth.

Even though elderly in China are becoming disconnected with the rest of society, they have incredible skills, talents, and life lessons to pass on. If I could inspire a movement, it would be to form mentorship programming and have elderly play a more active role in the lives of China’s next generation. With many young people suffering from abuse, Internet addiction, self-esteem issues, and isolation given the one-child policy, having a group of people to simply talk to and share experiences with may be enough of a start.

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