Master the three Ps to make it in China15th Feb '16
Patience, perseverance and a personal touch are the keys to success, says Steve Westlake of Coborn. Interview by Hugh Wilson
Company: Coborn Engineering Trading in: Thailand Sector: Machine tools
“The major barrier to our business is the difficulty Chinese customers have in obtaining visas to visit us in the UK”
Success in China cannot be achieved overnight. Establishing a presence there takes patience, perseverance and a personal touch, says Steve Westlake, managing director of Coborn Engineering.
“It takes several visits to China for a Chinese customer to become comfortable with you before they will think to buy anything,” he explains. “They are wise and careful businessmen who do their homework.”
Coborn, based in Romford, supplies high-precision machines to grind the tools used to cut super-hard materials such as industrial diamond. It has been selling to China for more than a decade.
“We had sold machines in China prior to 2007, but these had been mainly through state-owned investment companies and we had no direct link to customers,” says Mr Westlake. “We had little to no reputation in China until 2008.”
That changed when the company started to target Chinese SMEs directly, offering discounts and extended credit to get a foot in the door.
While Chinese customers like a bargain as much as anyone else, offering generous credit was only part of Coborn’s strategy. “We visited our customers several times before the first orders were placed and developed strong personal relationships with them,” says Mr Westlake. “I have spent over four months a year in China over the past seven years.”
Mr Westlake remembers visiting the company’s first Chinese customer three times before it placed an order for a machine. Now specialist toolmaker Weihai Weiying operates 10 Coborn machines.
“Equally, there are several examples of customers that we have visited on numerous occasions that have still not placed an order with us – but they haven’t bought a competitor’s machine either,” he says.
Today Coborn has an agent which it supports with regular visits from UK management. Its commitment to China has been rewarded with a strong and expanding Chinese business.
This has been no instant success, but attention to detail and a commitment to aftersales support have given Coborn a positive reputation among Chinese buyers and a solid slice of its niche market.
For anyone keen to follow, Mr Westlake advises adopting a similar long-term strategy. “Don’t just sell your product, try to start a long-term business partnership with your customers and continue to add value to their businesses by providing technical solutions,” he says.
“You need to do all you can to ensure that your established customers thrive. This will bring repeat orders from them and your reputation in the market will be enhanced.”
Mr Westlake believes UK red tape sometimes makes life for small businesses exporting to China more difficult than it should be.
“The major barrier to our business is the difficulty that our Chinese customers have in obtaining visas to visit us in the UK,” he says. “We’ve been able to help most of them, but we’ve had occasions when potential customers have had to limit their visit to competitors in Europe, because they could get a Schengen visa but not a UK visa.”
Coborn employs 80 people in Romford and had a turnover last year of £11m. Mr Westlake says that for a small company exporting is not without risks. The company has been obliged to provide significant credit facilities to customers to establish its market position. He believes UK Export Finance should offer more comprehensive export credit insurance for SMEs.
But the results have been worth it. The company exports 90 per cent of its machines, with China accounting for around 70 per cent of that total. And having established itself in China and sold machines in Thailand, Vietnam and Indonesia, Coborn is ready to take its products to other growing markets. India is firmly in its sights.