Asiatic markets: made in Italy to re-build

"The Crisis", as it has been defined by now in a simplistic way, has at least the merit for letting emerge the strong cultural, industrial bounds and restraints of Italian companies and of their management, provided that it can be named like that the thick rank of self-home-made-entrepreneurs and the thicker rank of their children catapulted into a comfortable place at the board of directors, dealing with some operative tasks often without having been specifically trained.

From our Chinese observatory we were waiting for a strategic afterthought about the role of Asiatic markets as great outlet markets, for a creative reprocessing of the internationalisation strategies, a willingness to learn the right approaches to enter these Nations and to invest in Asia in order to regain the market shares that have been dramatically falling down in the rest of the world.

But this is not the case. We have been watching a real attempt to make an assault on China under the pretext of regaining a chronicle ten-year delay in just two/three months. Of course it doesn't work. Everyday we get e-mails and phone calls from companies that would "sell in China" and according to our company policy we reply right to everybody, advising them honestly about the difficulties, the timing, the essential investments, the necessity of a fixed presence on the territory, with the following investment in human resources.

The feedbacks we get are really unedifying. Quoting randomly some recent episodes, let's try to make some examples:

1. After a lot of afterthoughts a small fashion accessories firm denies to invest 10.000 € and doesn't participate to a cooperative project funded 50% by the Regional Authority for the market penetration into China.

The firm always worked for made-in-Italy brands that have tightened the purse strings and started producing on its own or in outsourcing in Asia. It was the chance to start a project of market penetration into China at very low costs. This was a family-run firm with a smart, young child that didn't feel like frequently travelling to Asia. Without a brand of its own and without a retail trade structure this firm is bound to close if it remains in traditional markets. They don't know Asia at all. They just want "to sell", but they alone will not have the power to do it. Their doom is already sealed.

2. A very well managed middle company, with great technical competences in plant and industrial field, has got its orders cut of 50%. In Italy factories aren't built anymore and plant maintenances are extremely reduced. They know that in China there is a great market in this field but it is guarded by Japanese people, Germans, Koreans and they can manage to oust them just taking away market shares little by little, placing a Representation Office in China, employing a skilled engineer that works as commercial-technician and starting to reproduce the business model that has made them successful in Italy.

During our interview the entrepreneur tells me that some years ago he decided to give up orders coming from out of the region because there was enough work to do in the provincial area.

The idea of making business in China according to the model I have showed him is thousand-mile far away from his hypothesis. The 30-year-old son of one of their partner works for the company but the idea to send him to China starting business has not been taken into consideration. Can't he speak English? Isn't he up to it? I don't know. For sure regaining the fall of orders in the Italian or European market seems to be a chimera. The entrepreneur knows it too, but it can't arrange an alternative strategy. Is their doom already sealed? I hope not. 80 people have been working in this firm.

3. Italian wine. Recently the exportation of Italian wine to China have been increasing at a gallop, thrusting the countless Italian wine producers to rush towards China in an unrealistic way. Also in this case we assist to much improvisation, shortage or lack of knowledge about the market, and we are just requested "to find an importer". Our proposals are always much more complex than these, they are concerned with placing the brand, direct control over distribution, necessity of setting the selling into the frame of "Italian lifestyle" concept, with all the appurtenances, included the activity of "taste education for Chinese people ". That means building a structure in the Country, making investments and human resources. Also in this case we got poor feedbacks.

It seems that the Italians' "creative spark", their capacity to react quickly, their long sight, are asleep faculties because of the crisis. The great made-in-Italy brands have mostly passed under the control of equity funds that are uninteresting in development, brand, employment but are obviously interesting in quick profits (or in losses reduction).

Long-lasting experiences, years of work to build a trustful reputation on international markets, high-level artisan traditions, taste and elegance of fashion products, ancient values of agricultural traditions and Italian foods seem to be buried under a blanket of immobility that will soon force to (re)build the Made in Italy.