How to sell Britain to China

How to sell Britain to China

If you’re thinking of trading with China, speak to James Westwood – a Birmingham-born entrepreneur who’s both failed and succeeded in Shanghai. Steve Dyson reports.

It’s the biggest market in the world, but many businesses feel daunted by the idea of exporting to China. And so this year the China-Britain Business Council has appointed James Westwood as its China business adviser for the West Midlands. The words ‘exporting’, ‘business council’ and ‘adviser’ usually conjure up an image of a stuffy bureaucrat who talks in boardroom jargon, holds a clipboard and files reports in triplicate.

But that’s not the case with Westwood: he’s personable, friendly and keen to show you instantly-researched evidence on his phone screen. As he honestly describes his background and discusses his Chinese experiences, he feels like a man you can do business with.

Westwood was born in Solihull 35 years ago, and grew up in Acocks Green. He studied Chemistry at the University of Leeds, but after graduating he yearned for adventure and decided he’d go to live and work in China.

“I wanted to travel but couldn’t afford to,” says Westwood. “I’d always been interested in Taoism [Chinese philosophy] and Tai Chi [Chinese relaxation and exercise techniques] and met real Chinese people for the first time at university. So I decided that if I could only see one country, I’d see China – for its diversity, culture and geography.”

Westwood was aged 23 when he first landed in Shanghai, paying his way in his first year by teaching English as a foreign language, learning Mandarin in his spare time. “I completely immersed myself, meeting, eating and hanging around with Chinese all week, speaking as much as I could. By the end of the year I could have a conversation in Mandarin. I couldn’t believe the place back in 2004, there really weren’t that many foreigners around. I just loved it.

“I’d always wanted to launch a business, and by the end of that first year I knew it should be out there. I like cooking, but found it difficult to get good ingredients, so I’d asked my mum to send me seeds and started growing basil, parsley and thyme on my balcony.

“The sunlight meant I ended up with so much basil that I started selling it to a local Italian restaurateur. He said: ‘This basil’s so much better that I can get anywhere else – could you become my supplier all year round?’

“My family had always grown vegetables and food in the back garden, and we’d had an allotment. And so my first business was growing herbs and vegetables, and importing fruits to hotels and restaurants in Shanghai.”

This saw Westwood launching Gusto Fine Foods, securing $100,000 finance for his first huge greenhouse, and picking up a few partners along the way. Gusto developed into an organic fresh ingredients specialist, quickly gaining a reputation for the best produce available. It supplied ingredients to 80% of Shanghai’s high-end restaurants and 20% of its 5-star hotels, with sales of 1.8 million RMB (around £190,000) in the first year.

Year two was even better, with Gusto employing more than a dozen staff and sales reaching around 2.4m RMB (£250,000). But the economic downturn saw sales flatten out in Gusto’s third and fourth years, and what was still a young business became a struggle.

“We were hit by the 2008 financial crisis,” says Westwood. “And then by China cracking down on visas ahead of the Beijing Olympics. There’d been lots of growth in the hotel industry, and business had been good on paper, but the financial crisis and visa problems created a double whammy and lots of trade was cancelled.

“Business got tough, relationships with partners got hard and I realised my interests were not legally protected. I’d not set things up properly and couldn’t really fight my corner very well. I managed to get some of my cash back and arranged an exit, but I had to walk away learning a lot of hard lessons.”

James Westwood 02This sparked a career break for Westwood, and he went travelling across the Far East, seeing what he described as “one of the most beautiful but spoilt places” in Bali. It was a tropical paradise ruined by storms, with miles of white sand turned into a rubbish dump, with tropical fish and sharks lying dead, strangled by plastic bags. “I thought this is really wrong,” says Westwood, “and I knew I had to do something.”

Once back in Shanghai, he networked green industries, getting a job with a carbon training company. At the same time he took a distance-learning course in Environmental Science and Management at London’s School of Oriental and African Studies, gaining a post-graduate qualification. Westwood then worked for Schmittzehe & Partners, doing due diligence for institutional investors. This saw him researching governance, environmental records and the accuracy of financial reports of the likes of mining companies during multi-million pound transactions.

He then started working for PureLiving China, a leading indoor environmental health and safety firm, advising clients on air and water quality, mold and lead exposure issues. He spent three years there, ending up as general manager, helping to grow revenues and staff ten-fold.

By this time, Westwood had started micro-brewing beer with his brother, David, who’d joined him in China. This had been a teenage hobby at home, but the pair created a serious business called Westwood Ales – ‘Shanghai’s only British craft beer’.

Westwood says: “I used what I’d learned at Gusto foods. The company structure is all set up properly. And we didn’t buy all our own equipment – there’s no point in locking up all that capital. Instead we brewed at other people’s facilities, using their equipment but paying them as if we were buying it off them.”

Westwood Ales is now pumping out at least 100 kegs of pale ale a month, which at 20 litres per keg is 2,000 litres – and that was in January, a ‘quiet’ month. The company already supplies more than 100 bars in Shanghai and the cities of Wuxi, Kunshan and Nanjing.
As well as plans to launch its own stout and lager this year, Westwood Ales acts for other British brewers in China, including Fuller’s, exploiting a fast-growing interest in high quality beers.

“That’s starting to take off and we’re set to ride that wave,” says Westwood, who owns 40% of the company. “We’re in our second year and sales are picking up rapidly with the warmer weather. This year we expect sales of Westwood products alone to be around £570,000.”

Despite this success, Westwood came home to the West Midlands at the end of last year, and is now busy in his new role for the China-Britain Business Council. Why the sudden change?

“I came back for my family,” admits Westwood. “I’d spent eleven years in China and the Far East, including six months travelling with my ex-partner to places like Malaysia, Singapore, Indonesia, Vietnam, Thailand and India. There were various push and pull factors. But in the end, the most important and simple reason was family.

“My younger sister had had twins, I missed seeing my parents, and the death of a friend reminded me how short life is. I believe we should treasure links with the most important people in our lives.

“Then there was the quality of air in Shanghai which meant I couldn’t go running without suffering asthma attacks. And the things I love like nature, rock-climbing and hill-walking were all too far away.”

Westwood is now busy helping local small businesses looking to export to China: “We provide lots of free advice to help businesses understand the challenges of business in China, and how to circumnavigate those challenges. I was on the ground making mistakes, and I’ve also been more successful. This job is about practical advice based on that real world experience.

“I enjoy talking to business leaders about their aims, the resources they might need, getting them ready for challenges. So far, based on my knowledge of the Chinese market, I’ve almost always been able to put them in touch with someone who knows their sector or particular product.

“There are so many opportunities in China. The best ones are introducing novel concepts and new technology. That’s where we’re going to be strong in China. The more traditional industries – like engineering and mass production – that won’t work, because they’re already getting much bigger and better.

“But we’re good at new concepts, products and services. Things that focus on quality and play on the Chinese concept of the British national brand can be really successful. We can bring them to the market and the Chinese can amplify them. That’s where the Chinese government is trying to push. There’s also growing concern about food supply in China – people don’t trust the integrity of the systems. British health foods and fine foods are therefore really sought after. Also professional services, education, healthcare – the UK is universally respected for its approach to healthcare.”

What’s next for Westwood, once he’s fulfilled what’s currently a fixed-term contract for the China-Britain Business Council? “It may get extended,” he points out. “Or I could do what I’m doing now as a private enterprise: physically helping people set up in China. I love teaching and talking to people about how to do things.”

Westwood’s top tips for exporting to China

  • Research
    “You must do your research, but it’s hard to do it in China. So think of novel ways – and I don’t mean just Google! What about the local Chinese community, or students, do they like your product? Or perhaps a third party running focus groups. It depends on what you can afford.”
  • The UK brand
    “Modifying your product or services for the Chinese market is extremely important. Don’t just assume what works here will work in China. One easy way is to emphasise the Britishness of your product with the Union Jack. It might be garish to the British eye, but that’s what you need to do.”
  • Legal frameworks
    “Make sure you set up everything meticulously in China. Don’t assume that the Chinese legal system is not up to much – that’s rubbish. You can protect your intellectual property, and protect yourself with shares, and so on.”
  • Partnerships
    “Find the strongest partner you properly can. But don’t enter a ‘David and Goliath’ situation. You need someone with bigger aspirations, but not so big that they dictate all. They can be your market amplifier. Let’s take health foods: your best partner might not be supermarkets, but what about health classes?”