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Even in the digital business era, success requires learning, localization

In today’s digital business era, it can be easy to slip into believing that customers around the world all want pretty much the same things. But that’s definitely not the case, as the recent departure of Uber from China illustrates.

Uber’s decision to sell its China operations — which had been losing $1 billion a year — to the locally based Didi Chuxing doesn’t mean the ride-hailing app company is giving up on China completely, as the deal gives it a 20-percent share of Didi Chuxing. But it does illustrate what New York University’s Robert Salomon calls the “pitfalls of globalization.” Doing business in Silicon Valley and doing business in China are different in several significant ways, he says, including this: “Chinese consumer tastes are so different from Westerners’ that foreign companies find it challenging to adapt their products and services to meet the specific needs of Chinese customers.”

In a recent article in Tech in Asia, writer Tara Kola describes some of the differences that have posed major hurdles in China for not just Uber but Amazon, Facebook and Google as well.

“For instance, when eBay and Amazon entered China, Chinese users, like American users, could only view seller reviews,” Kola writes. “The problem was that Chinese users wanted to talk to the seller, develop a relationship, and haggle — similar to an in-person shopping experience.”

China’s Alibaba succeeded where eBay and Amazon failed by making sure its online marketplace, Taobao, included a chat feature so buyers could easily talk with sellers in real time, just as they would in a physical market.

Other western tech firms, most notably Apple, have also been able to hold their own in China.

“It all comes down to the company’s mindset and willingness to adapt,” Edward Tse, founder and CEO of Gao Feng Advisory Company, wrote recently in Tech Crunch. “Some firms decided they didn’t want to play in such a context, like Google, and withdrew their operations. Some want to play but got blocked, like Facebook, yet continue to lobby the government for access. Some were allowed to play but couldn’t quite get their act together (for whatever reason), like Amazon, Viadeo and perhaps even Airbnb.”

On the other hand, Tse notes, LinkedIn seems to be succeeding in China after making its debut with a localized site — Lingying — in 2014. Besides creating a product specifically for the Chinese market and partnering with local companies, he says, LinkedIn also hired a local president and collaborated with China-based tech firms like WeChat.

“While for some, the market is not open or they are not welcome, for many, the opportunities are right there,” Tse writes. “China is not easy, but why should it be? It’s tough for everyone, no matter if one is foreign or not. And no one can be sustainably successful if they don’t observe, learn and adapt.”

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