9 Business Tips from Shanghai Toy Club Owner

Cristina  Rueda runs two on-line businesses in Shanghai: Shanghai Toy Club and Bumps & Babes. Shanghai Toys Club is an imported children’s products online store. Bumps &Babes is a support initiative targeted to expat mothers and about-to-be new mothers who need advice and information on health and safety issues.

She was very generous in devoting some time to me and sharing some of her business tips. Lessons learnt on the ground.

 

 

 

 

 

 

Tip # 1. Be ready to do everything
You have to be ready to do anything, from a business plan to packing boxes. During a start-up’s initial stages you may need to do it all by yourself. I come from a corporate background, and it takes some time to get used to it.

Tip # 2. Look around. There may already be opportunities out there.
Sometimes you do not need to start a business from scratch. I bought Shanghai Toy Club from its owner who was leaving the country.
B&B has also existed since 2006 and it was going to die … so I took over the support group. I started writing a blog about the topics the speakers had talked about in our events, added links to interesting resources. I was pregnant, had my babes here, so decided to target women in the same situation (pregnant or with kids) and put up a website for them..Then I had all those vendors who wanted to sell products through us …
Shanghai Toy Club has more than doubled its size since then. And we get a very decent traffic flow to our B&B support website.

Tip # 3. Start slow …
We are currently targeting just the expat community. We feel this is a good tactic because it has allowed us to start slow,  figure out how things work, what the business potential is, what structure you need and what resources are required to grow our business.

Tip #4. And then think big.
In retail it is difficult to succeed with just an expat clientele … you need to access the Chinese consumer. Our Shanghai Toy Club business has more than doubled since I took it over, but we have still not started tapping into the Chinese market. It is a logical next step but we still needed to have the right product. I think we are much closer now.

Tip # 5. Listen to your consumers.
You may think a product is great but you need to listen to what your consumers say. More than once we’ve brought products to our portfolio feeling we had real winners and they’ve ended up being great disappointments. I remember a case in which we were importing really good Australian sun glasses for kids and later realised people were more than happy to buy fakes in the kids’ market.

Tip #6 . Be flexible and make tough decisions if required
When you realise something you are doing is not working you may need to make tough decisions. Our business initially had a rental activity. It was part of the business identity at that time and it was bringing in some money. It was difficult to give up but we realised we had to because it was a headache and it was not scalable.

Tip # 7. If you decide not to go alone… Choose the right partner.
Being an entrepreneur can be overwhelming at times and it often makes you feel lonely. It is nice to have a soundboard when you are making decisions and in particular, to share the responsibility. The right partner will help alleviate the weight of your decisions and compliment your ideas. But with that said, choose wisely your partners. It is better to be alone than to have a partner you don’t see eye to eye with, you feel you move at a different pace, or you feel that they are too expensive (both in terms of money and dynamics) for what they are bringing in to the business. When choosing a partner, make sure you do your due diligence before, identify exactly what/how/why they will add value to the business. An employee is a much better option than any partner. Entrepreneurs are a bit of control freaks and this can lead to a lot of tensions in partnerships. If you decide to have a partner, keep in mind than the dynamics of a partnership are very different from the dynamics of an employer/employee relationship and the dynamics of a 50-50 venture are very different from the dynamics of a majority/minority venture. The right partner will bring a lot of value to your business, the wrong partner can be very costly in terms of money, but most importantly, in terms of your time and energy.

Tip #8. You are the face of your company.
This may sound obvious to some people, but when you are an entrepreneur you can’t hide behind the wheels of a corporate structure. You are the face of the company and some people do not like that type of attention.

Tip # 9. Quality Control. It also applies to imported products.
We often hear horror stories about Chinese products and the need for quality control. We could say it applies to all suppliers. I remember we brought in an imported “Lead test kit” and decided to test it to see how it worked.  It came sealed and I did not initially check it. I sent it to a number of customers for feedback and it turned out lots of the kits were empty. The liquid had evaporated! … So I guess the learning is that bad things can happen with any supplier … not only Chinese!

 

Would you like to share your tips?

Exporting to China… not as easy as some people think

A few months back I met an entrepreneur working for an SME that was planning to start exporting into China. Their products are used in the building industry and they need their machinery to be tested and approved by a Chinese lab. It all looked good; their products are in good demand and they followed the right steps: registered brand, registered a product lay-out (they did not own a patent), identified a good distributor (financial reports included), negotiated a good contract (with exit clauses in case of low sales) and got the required certificates and approvals to start exporting…
So, today I met them again to clarify a few things for the post I was planning to write about their success story and surprise…., but not really surprise, things have not gone as expected.
Reasons:
– in the last two years, local manufacturers doing similar products have “mushroomed”
– there are multinationals producing similar products locally
– the same labs that certify products in this category, also offer in the market “their own technology” which happens to look a lot like a mix of several products available in the market (guess how they acquire their know-how, … some people say that stripping down machines during certification tests provides a lot of know-how)
– with all the above, the premium price that clients seemed to be willing to pay (justified by the higher quality that a foreign brand provides) is no longer a reality…

So, I looked at them and asked: what lesson did you learn from all this?
And their answer was: start with a good market research, understand competitive situation, market potential and consider producing locally if the numbers work out ok… And whatever you decide, move fast.

Does this story sound like something you’ve heard? Does it make sense to you?

China Food Industry: “Give them the Guts”

Excerpt from an interview to David Caselli, CEO New Zealand China Direct Ltd, a New Zealand owned WFOE importing and distributing food and beverages into the Chinese market.

Key Message on the Opportunities in the Food Business in China:
Although there are undeniable opportunities in the high end segment, the real breakthrough will be accessing the mass market with meat/fish & seafood derivative products and low end cuts that do not create value back home but are processed here into highly appreciated products in China.

Excerpts from the interview
“The average wage in China keeps rising and consequently massive parts of the Chinese community will be able to switch into eating more protein. It does not mean they are going to eat caviar and lobster … what they will be doing is eating more fresh meat instead of cabbage. So the biggest opportunity for us is not to sell high end lamb cuts but to sell a lamb derivative product that fits the market for the 9$ /day people… It is relatively easy to sell lamb to Western restaurants. The real challenge for us is to find out how to create products that use New Zealand lamb in Chinese dishes in Chinese restaurants. There are 20 million people in Shanghai and 400.000 foreigners. I’d rather sell to the 20 million than to the half million.

New Zealand meat industry sells some 500 million dollars a year of low end lamb cuts to China. Here it goes to a couple of provinces where they create a lamb roll (press it, add some duck fat…) which the Chinese mass eats. We have a whole lot of protein types that we don’t extract value from so the real opportunity is to unlock the value that works in China out of them.

Same holds true for other products. Seafood, for example, is there an opportunity to sell what we do not use but is appreciated here? There is also a mass market for fish frames, just heads, tails and bones. They process it and convert that into something useful.

Back in New Zealand we don’t understand the Chinese well enough to be able to identify what those products are (both in meat and fish). We need producers to get into thinking what are the uses and applications of the whole animal in China. Don’t get me wrong, they’ve probably been thinking about this for decades… what they’ve probably not done is come here and stay long enough to find the answer.”

Do you share his views?