Case: Robot company Tries A 'Give first' approach in China
(Above: The UK company behind Titan the Robot emphasises partner relationships in its China strategy. Image: company's own).
The Millennium Dome, the arena built to celebrate the dawn of a new millennium in London's historic Greenwich district, is not an obvious source of UK export successes today.
However, the visitor attraction played its part in the origins of Titan the Robot, a partially mechanised robotic suit developed by Newquay-based Cyberstein Robots which has wowed audiences at festivals, shopping malls, trade shows, and corporate events in more than 45 countries.
During the late 1990's, the company's founder, Nik Fielding, developed a reputation for making robot-style suits based on Hollywood films for fancy dress parties and won a prestigious contract to work at the high-profile Dome.
Soon after the Dome contract ended, Fielding decided to turn his interest into a business and build the Titan the Robot suit, which is powered by a combination of a human operator and batteries and incorporates complex engineering. The suit can be hired out for a variety of occasions and lengths of time.
At the time of writing, the company has 15 employees with partner offices in Dubai, Seoul, and Shanghai. Clients have included Siemens, Toyota, Virgin, Formula 1, the BBC, Merces Benz, Miral, and Microsoft, and the business has valuable experience of working in the fast-changing Chinese economy.
It entered the Chinese market following a fact-finding mission with the Department for International Trade which established that there was an appetite in China for its entertainment product.
The company put the emphasis on building friendships with key Chinese partners rather than making hard sales pitches, and it believes that this focus on relationship-building has helped see it through tense negotiations and "seemingly impossible" situations.
Even simply describing its product and its potential benefits to a Chinese business partner has proved tricky.
The company cites a presentation in Shanghai when it attempted to explain how the use of Titan the Robot could increase audience footfall to venues such as shopping malls. Unfortunately, the term "footfall" was translated in Chinese as "tiny feet", causing disbelief and laughter from the audience.
A more serious development occurred when a Chinese company defaulted on the final stage payment of a lease and exclusivity contract for Titan the Robot during the first year the UK business operated in China.
A second year lease was signed to a company formed out of the ruins of the collapsed Chinese group.
Although Cyberstein had done extensive due diligence of its Chinese prospects, with the help of the China British Business Council, before investing in the market it says that it knew that if China's economy slowed down, the entertainment sector could be one of the first hit.
Mr Fielding says: "Like any new market, it takes time, resources but mostly patience to build a business, especially one as unusual as ours.
"Trying to keep this newly-formed company moving forward has been very challenging. At this stage, it is too early to see if this lease will carry for on for the full-term. Ofcourse, we hope that our Chinese partners prevail in their market and with a bit of luck, which is always needed in business, that we move ahead with a third annual lease, but with two robots instead of one."
The company believes that in general there is great demand for the work of UK creative companies in China, but also that Chinese businesses learn quickly from competitors, so Titan the Robot may well have to compete in future against local rivals in China. However, the suit includes sophisticated engineering that may be too expensive for others to imitate.
It advises other UK creative organisations looking to succeed in China to work with local Chinese partners and to adopt a 'give first' approach.
Mr Fielding said: "We found it better to utilise and partner up with a Chinese company rather than going it alone. Small companies like us need that added local support to help with the vagaries of Chinese business culture."
He also advises: "Make sure that above all else you work on those friendships with your Chinese partners and do as much research as possible, including being comfortable with the very basics of etiquette and culture in China. Eating with a knife and fork at a Chinese banquet is not the way to go!
"We are very different people in very different cultures, but always go out of your way to take on the culture you find yourself in, even if it goes against the grain. If you want to do business, then accept everything that goes with it."
Mr Fielding addes that there should be more support to help UK businesses continue growing in China beyond the 'honeymoon' period which can follow first entering the market. More trade missions that promote joint ventures or focus specifically on the Experience sector would also be welcome.
Due to economic uncertainy in China, a company partner office in Beijing has had to close.
However, the company has used the lessons learned in the Chinese market to enable it to secure a big export win in South Korea, and it is diversifying its business and product offering to grow its business in other international markets.
Mr Fielding said: "We now have a much bigger global presence which in turn has helped throw a spotlight on the company and led to more enquiries and contracts.
"Because of the recent export wins we have embarked on a very exciting project to back up our company name, ‘Cyberstein Robots” by building a new ‘real’ female robot, which we hope will bomb proof our business for years to come if the project proves successful.
"There are a whole new raft of issues in trying to turn an idea into a practical business plan but we are confident of achieving our goal whilst maintain our present business activities."
It is aiming to get the female robot to market in 2020.
Turnover grew in 2018 to £850,000 and it hopes to exceed £900,000 in 2019. Since demand for its style of entertainment product is currently slow in the UK market, the business is looking to drive its growth via overseas sales.
The USA is now viewed as its key priority international market outside China, and the company is targeting having 75 per cent of its revenues come from outside the UK within three years.