Multi-nationals go for ‘guanxi’ at Expo

Agence France-Presse in Beijing
22 April 2010

Coca-Cola is flying in hip-hop stars, Barclays is bringing English football’s Premier League trophy and General Motors will offer a glimpse of the future as foreign firms woo China’s massive market at the Shanghai Expo.

Multi-nationals are seizing on the six-month event beginning May 1 to build their brand presence in the market of 1.3 billion people, but also the business and government connections – or “guanxi” – crucial to making money in China.

“At this Expo, because it’s going on in Shanghai and in China, everyone wants to showcase their latest and best here,” Jean Liu-Barnocki, GM’s Expo project manager, said.

GM and Chinese partner Shanghai Automotive Industry Corporation have built a state-of-the-art theatre that creates the sensation of soaring over Shanghai in the year 2030, with emissions and congestion eliminated by electric cars.

Behind the scenes, corporations will be laying the groundwork for such future visions by entertaining high-powered visitors to their pavilions.

“Every pavilion has a hospitality programme or VIP experience as part of its overall design. Of course we wanted to make sure our friends and customers can be very well taken care of,” Liu-Barnocki said.

Signing on as an Expo sponsor helps build brands and consumer contact that can translate into sales, but often the main goal is networking, said Pippa Collett, managing director of London-based Sponsorship Consultants.

In China, building “guanxi” – often through lavish banquets and other wining and dining – is a considered a key part of doing business.

And Collet, who has advised giants such as Shell and Unilever, said that Expo sponsorships from the likes of GM are often “an excuse for a group of individuals to be in the same room at the same time”.

Britain has spent 25 million pounds (US$38 million) on its striking dandelion-like pavilion to promote business encounters.

It hopes the venue will generate more than 1,000 meetings between British and Chinese business leaders, said Katherine Dixon, Britain’s political and economic consul in Shanghai.

“This is the stuff you don’t see… This is actually what the UK is focused on. So we haven’t done retail, we haven’t done catering,” Dixon said, emphasising that unlike others, Britain is not selling souvenirs or snacks.

“Our focus is on targeting the right people to interact with over six months.”

David Wright, vice chairman of Barclays Capital, which is a 500,000-pound sponsor of the pavilion, called it “a major opportunity” to push the bank’s brand deeper into China.

Barclays, which sponsors the world’s most popular football league, will show off the premiership trophy in Shanghai after the English season ends on May 9, and plans more generally to promote British financial services in September.

ANZ’s board will meet in one of the VIP rooms spread out over three levels in Australia’s pavilion and will host forums on natural resources and agriculture, said Nancy Wong, head of Asia-Pacific strategy for the bank.

“That’s to bring together very high-calibre CEOs and government officials and economists to talk about regional trends and show how we can help bring all these people together,” she said.

Coca-Cola has been at every world Expo since Belgium in 1905, and is making a “huge investment” in its pavilion, said Neeraj Garg, head of the beverage giant’s Expo project.

It will host events including a concert by rapper K’naan, whose song Wavin’ Flag is Coca-Cola’s anthem for the June-July football World Cup in South Africa.

It too has VIP lounges, where the company will host retail executives and bottling company bosses, Garg said. He added: “Expo in China is going to be the largest showcase event ever.”

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