Wednesday, December 20, 2006

Could U.S. International model work in China?

Heard from someone on a very interesting observation: "There are two theory in China's internet world: (1) If U.S. could do it in this way, we could also do it", (2) Nothing in U.S. could be implemented in China.

In fact, I would like to see U.S. International model will work in China but only under the management of local professionals. Say, when Ebay finally reached the deal with on selling(sorry, they called it the cooperation) of, many big financial media called it is a failure for American Internet model to work in China. However, it seems no one could remember how, a once popular star auction website based in Shanghai, wrote a new page in China's internet history when the two HBS-graduate founders successfully implanted Ebay's model into China. The failure today is not caused by a couldn't-work model, but by the local management Ebay hired to run Eachnet.

So I would only sigh to Eachnet which couldn't deserve some excellent local management. But in another word, it is more like U.S. corporate culture to control everything in its acquired companies. Different from European peers, American companies consider the controlling right as the most important item when they make international acquisition. For example, Citigroup, who just bought Guangdong Development Bank, already assigned a new CEO to the Chinese venture. Succeed or not, we will see, though I hold a negative view.

In the different business environment, businessmen should try to trust the local professionals as they are the only people knowing the market. That's the most important key in developing business in other countries and other cultures.

Good luck to Eachnet, and thousands of companies which may follow its fate.

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