After years of trial and error in europe, a Chinese company finds it is on the right wavelength

Eric Wang, the 26-year-old country manager of TP-Link UK Ltd, says he was thrown into deep water when he first came to Britain to set up a subsidiary for the company in 2010. "We realized that we had to learn from scratch," he says.

Today, however, TP-Link is a trusted supplier of networking products to British customers, including well-known retailers like Argos and PC World.

Its British sales revenue has also grown from $4.5 million (3.48 million euros) in 2010 to an estimated $24 million this year.

Championing its slogan, "The Reliable Choice", TP-Link's brand image in Britain is representative of a new wave of privately-run Chinese technology companies that are going global with an emphasis on quality.

"From the beginning, we wanted to overcome the misperception that Chinese products are cheap. Our products are actually more expensive than some of our competitors'," says Wang, sitting in his office in Reading, 60 kilometers from London. "Our biggest advantage is our services. If there is a problem, we respond within 24 hours no matter if we're working on that day or not," Wang says, adding that most of TP-Link's products are guaranteed for between three and five years, longer than its competitors' average of one to two years.

But he believes that an even more important factor facilitating TP-Link's success in Britain is the support it receives from its headquarters.

As all of TP-Link's products sold in that market are made in China, its headquarters' expertise in research and development, product design and ability to control costs are all great assets for its British subsidiary.

Founded in 1996 in Shenzhen, in South China's Guangdong province, TP-Link has grown into an industry leader in China, selling a wide range of networking products from routers to Internet-protocol cameras.

In the fourth quarter of 2010, it was recognized by the research organization In-Stat as the world's leading provider of wireless local area network (WLAN) and broadband customer-premises equipment devices in terms of market share.

But even for a business with TP-Link's success, venturing into a new market is not easy. One significant difference Wang noticed about Britain's IT market is the way its sales channels are structured.

In China's domestic market, or even in some East Asian markets, TP-Link had no difficulty finding the IT shops that make up its customer base as they are usually clustered together, often in dedicated sites. By comparison, Britain's IT shops are scattered across the country.

"They are everywhere. We didn't have a database to track them down and even if we did, we wouldn't have the time to visit them all. Even if we had the resources to turn up at their shops, they won't talk to us about business," Wang says.

He then realized that selling through distributors would be the best way to break into the British market, as local distributors' reputations are key when it comes to winning customers' trust for new products.

"It was a great learning experience for us. We learned from our distributors how to manage a big sales team, how their bonus system works, how they motivate their workers, and how they provide support to customers. As a result, we can now provide the same or even better support to our customers."

Over the past few years, his team has grown to include about 20 workers, about half of whom are British. To lead employees from a completely different cultural background was another lesson Wang had to learn.

"I was not a football fan back in China, but after coming to the UK I realized that football is an inherent part of Britain's culture, and something my British employees show great interest in. I was prompted to learn more about cultural things like football, which helped me build a good relationship with my employees."

The process of getting to understand British employees made Wang realize that under the cultural differences on the surface, his British employees are likable individuals who are not so unlike his Chinese colleagues.

"I learned to embrace this difference, and try my best to think about things from their perspective."

For example, knowing that British workers value family time, Wang is keen to make sure that policies are put in place to ensure workers do not have to spend more time than necessary in the office.

"As I'm alone in the UK, I don't mind working any time of the day. But I understand this is not the case with my employees, so I adopt policies to accommodate these differences, which helps us to maintain a good working relationship."

Such instances demonstrate the flexibility within TP-Link's corporate culture. Unlike China's state-owned enterprises, which often make decisions centrally, privately-run businesses like TP-Link tweak their operations to suit local market needs.

"Our head office allows us to make many decisions on our own. If we discover some movements in a particular market in the morning, we could take the relevant action to make the most of the opportunity in the afternoon," Wang says.

He says such flexibility is achieved through transparent management. "We communicate openly, so that our head office trusts us to make the best decisions for the company as a whole."

TP-Link's process of internationalization started in 2005, when it began selling in overseas markets through distributors.

Looking to increase its international sales, TP-Link established its first overseas subsidiary in Sweden, but after a period of trial and error the company decided to leave the country in 2009.

"We realized that Sweden could not fully represent the characteristics of the whole European market. In contrast, the IT markets of Germany, the UK and Italy have often led the development of Europe's IT markets, whether in sales strategy, brand promotion or logistics management," Wang says.

Hoping to focus its resources on these key markets, TP-Link set up a subsidiary in Germany in 2009. From a team of three people, including Wang, the subsidiary's staff grew to about 20 people in 2010, at which time he was sent to Britain.

"Because we did so well in Germany, we wanted to replicate our success in other markets, so we then expanded into Italy and the UK," Wang explains, adding that Germany still remains TP-Link's biggest market in Europe.

Meanwhile, the company has established a presence in about 20 countries across Europe, the Americas and Asia. Last year, 49.8 percent of TP-Link's annual revenue was generated from international markets.

Its expansion into Europe has parallels with many privately-owned Chinese businesses that were motivated to expand overseas by commercial opportunities and the Chinese government's policy initiatives; China's 12th Five-Year Plan (2011-15) encourages privately-owned businesses to expand internationally.

Another factor is these companies' eagerness to learn the best technologies and management models in international markets. For example, the information about the British market gathered by Wang's team would become an invaluable resource for TP-Link's R&D team in China.

"Entering the European market has allowed us to learn local distribution methods and product application, which enables us to adjust our products accordingly," Wang says, adding that TP-Link's goal from day one has been to increase its international competitiveness.

"Since our establishment in 1996, our competitors have always been global brands, therefore our quality has always been set to withstand international competition.

"In the process of internationalization, our competitors never changed, but our markets have. Going global is a learning process through which we hope to strengthen ourselves and better service local customers."

cecily.liu@chinadaily.com.cn

(China Daily 11/02/2012 page15)