US firms’ analysts in China advise your competitors, not your clients

Barbara French, a savvy follower of the analyst industry, notes that the expansion of US analyst firms into China is unlikely to produce meaningful influence on technology purchasing there – but does boost the analysts’ credibility with US vendor clients.

However, Barbara suggests that these analysts could start to influence buying in China: “Monitoring decision-makers in China is crucial work. Sales efforts can go off-track by the unexpected involvement of an analyst through local partners and resellers.”

Lighthouse feels that analyst influence is limited in China, especially the influence of US analysts. As a result, it may not be crucial to build them into AR programs. Indeed, because US analysts are primarily there to better advise your competitors, it’s a better rule of thumb to exclude, rather than include, some of the international analyst firms in China.

In China, SMEs are very skeptical on hiring consultants (whether domestic or overseas). The key areas where consultants can flourish are money laundry and bribing.

Leaders in Chinese organisations love “brands” so they tend to engage business advisory firms (McKinsey, PwC etc) rather than specialized consulting firms and analyst companies – even if they could offer better advice.

On technology side, it’s important for Western professionals to appreciate that large firms in China are not very ignorant. Often their CIO etc could be overseas Chinese or or from Hong Kong. Usually the problem is not CIOs in China don’t know what the best solutions out there are, but they don’t have the budget. Of course, if they can’t afford the technology they probably won’t spend money on advisory services on technology. For those who have money, they normally don’t need any cutting edge technologies.

There are big opportunities for analysts in China: the opportunities are mainly with exporters; other opportunities are for small local firms. Despite the US recession, the Chinese (and world) markets will continue to grow. Chinese brands will overtake western competitors.