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Partners the key to successful offshore investment

By Greg Earl

For an Australian business to succeed in the region, it’s necessary to have a good, and – most critically – trustworthy local partner.

Sometimes a partnership can be as simple as finding the right person to help open the doors or navigate the often-byzantine bureaucracies of countries with foreign languages, customs and systems.

“Partnerships can range from cornerstone investment in public companies, fully formalised legal joint ventures, to less formal partnerships, to vital partnerships for distribution and logistics,” says Richard Cant, an Australian lawyer who is the Yangtze River Delta managing partner at Dezan Shira, an Asia-wide business consultancy.

“The best models vary from country to country and industry to industry.”

Melanie Brock, chairwoman of the Australia and New Zealand Chamber of Commerce in Japan, says “partnerships in Asia take time to develop and won’t happen overnight”.

“Be persistent and remain committed, make sure you provide all information requested of you, look at who your potential partner works with and how they are regarded in the host country.”

Brock also predicts the recent free trade agreement with Japan will offer Australian businesses opportunities in newly opened sectors, including agriculture, inside the world’s third-largest economy which will be magnified by finding the right local partner.

Bryan Carr, chief executive of ASX-listed mobile payments and technology group SmartTrans, agrees that persistence pays off.

“Once we had decided to focus on China, we knew it was essential to secure the right partners to distribute our technology,” he says of the group that began life in Perth before setting its sights on Asia after nailing down a software deal at the Beijing Olympics.

After several years travelling from Beijing to the provincial city of Taiyuan, the company finally inked a deal with China Mobile, the world’s largest cellular wireless company with more than 700 million customers.

After several false dawns, Carr says the partnership with China Mobile is showing signs of finally paying off, after the introduction of SmartTrans’ software on to the mobile giant’s national technology platform.

Companies in some sectors use local partners on a less formal basis, but local know-how is still critical to achieving success in Asian markets.

Melbourne native Justin Downes, president of Beijing-based Axis Leisure, says locking in the right ¬partner was of critical importance to his company’s success when it secured the contract to design and project-manage the $6 billion Yanqi Lake golf course and resort outside Beijing.

Every year there are hundreds of events in every conceivable business in China, and Downes confides that the deal came via a contact he had made at such a sector summit.

Dezan Shira’s Cant notes that, as important as the right investor or door-opener can be – especially for companies selling goods or services – sometimes finding the right local partner for distribution and ¬marketing is even more critical.

“Understanding Chinese consumers can be hard enough for local companies, as the market is moving so fast, but it’s almost impossible for Australian companies and it’s generally a huge mistake to try to apply Australian experience to this,” Cant says.

This story first ran in The Australian Financial Review, as part of a joint initiative with ANZ Banking Group.  

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