How to do business in China
The Happy Donut Corp executives sat around the conference table one fateful afternoon and looked at each other in their button down shirts with their button down smiles. The executives had gathered to discuss the company’s latest overseas venture into China.
The conference room was located on the seventh floor of an office building nearby the Massachusetts Turnpike. Out of a small window in the back you could see a chain grocery store parking lot littered with shopping carts.
One executive stood at the front and waved his index finger about a map of China. He explained that Hongqiao Airport in Shanghai was their best choice for their flagship store based on the latest consumer data reports.
The executives nodded their heads while avoiding eye contact with one another. No one said anything.
Soon the flagship store was opened. There was a ribbon cutting ceremony that nobody attended. Back at the Happy Donut Corp headquarters, employees posted pictures on their social media as part of the company’s mass marketing strategy.
A few weeks later an executive stopped by the flagship store during a layover at Hongqiao. He stood in the center of the terminal and frowned at the emptiness of the store, as travellers passed him by with children and luggage in tow.
Rubbing his chin between his thumb and index finger, the executive surmised that their flagship store was, in fact, a failure.
When the executive returned to the Massachusetts offices later in the week, he promptly told the CEO who, in turn, called an emergency meeting.
The company’s finance department produced some colorful graphs and made some colorful analysis. One revenue chart showed that they had sold three donuts, two black coffees, and one hundred and fifteen bottles of water since opening. A particularly bright executive surmised that the Chinese did, in fact, enjoy water.
After the presentation the CEO stood up at the back of the room and cleared his throat. He had famously started the company out of his garage at the age of eighteen. He lived and breathed donuts. His head, in fact, looked like a donut from the combination of white curls and his bald spot.
“It seems that the Chinese do not like our happy donuts. I will travel to Shanghai and conduct more due diligence. Anyone who has a better idea please see me after the meeting.” Then he sat down. Nobody said anything.
Later that month the CEO flew to China. Like the first executive, he too rubbed his chin between his thumb and index finger at the dismal state of their flagship store.
Sitting at the table in front of their airport location he asked their head manager, Li Min, to bring him his favorite donut: the Boston Cream.
As he ate the chocolate glazed, cream filled pastry, his mind wandered in a sugary dance about China and the potential of so many donut converts.
He invited Li to have a Boston Cream with him at the table. She said that she would love to join him, but actually she preferred the plain donut.
The CEO threw his hands up in the air. “It’s because there is too much cream, right? I often find myself having difficulty eating a donut with this much cream. The key is to eat it at a slant so that when the cream starts to burst out, it doesn’t escape too much. You see? Like this.” The CEO demonstrated one of his most famous donut eating techniques.
She laughed and looked away sheepishly.
He looked across the table as travellers rushed by in the busy airport. “OK, it’s not that. Perhaps you don’t like the donuts because of the tremendous amount of cream that we place inside each and every one, like a promise of sugar to our customers.”
She looked at him and then slowly shook her head. “Their too sweet…”
Upon returning to Massachusetts the CEO called another emergency meeting. There, instead of a graph, he simply had a piece of paper that read “TOO SWEET” in all capital letters.
“The conclusion that I have extracted from my journey to the Middle Kingdom is that our donuts are too sweet.” said the CEO to the executives.
The words bounced around the room until a hand shot up in the back. It was Larry, the in-house lawyer and head of the legal team. His favorite donut was the frosted strawberry.
“What do you mean, too sweet? How can something be too sweet?”
“Well, Larry, it would appear to be a case of too much sugar” said the CEO.
“They don’t like sugar?”
“No, they don’t.”
Another hand shot up farther back in the conference room.
“So, you mean to tell me that these people don’t enjoy a good Boston Cream? Who doesn’t like a good Boston Cream?” the entire room now started to murmur about the oddity of Chinese taste buds. Soon, the once docile meeting had been enveloped into an uproar.
After the room had quieted down, the CEO began to explain his plan.
A week later the CEO returned to China with Larry the in-house lawyer and Isabella, a strong Latina who had climbed the ranks from cashier to head of marketing.
Shanghai was hot and sticky when they arrived. But they wasted no time and went directly to their flagship store.
At a table in front of the Happy Donut Shop, Li Min sat eating her lunch. She had bought some beef and rice with a green sauce from a Japanese chain next store.
“What’s that?” ask the CEO.
“Oh, this is just some wasabi and beef.”
The CEO extracted a notepad and pencil from his back pocket and began to furiously scribble. And so, the wasabi and beef donut was born.
They took a taxi into the city and visited the Bund. The CEO stood next to the bull statue and had Isabella film a movie in which he proclaimed that he would open his next Happy Donut Shop in the same location. He also promised to not make their donuts too sweet, but borderline savory.
They left Shanghai in search of more donut recipes. In the river town of Suzhou they found a woman selling brittle peanut bars. Larry loved them. And so the Peanut Brittle Donut was formed.
In each city they travelled to they found more recipes; in Guangzhou was the crispy shrimp donut, Hangzhou, the West Lake Donut, and Xi’an, the Terracotta Donut.
In Beijing, or Peking, as the CEO liked to call it, despite being told multiple times that the name had changed, they ate Peking Duck.
The CEO, drunk on watery Yanjing Beer, stood at the front of the restaurant and proclaimed that he would create a special Peking Duck Donut. This, he continued, would be as thanks for the incredible hospitality shown to him by the Chinese people.
Everyone applauded the bold CEO. Li Min, who had accompanied the group throughout their travels, laughed and took a picture on her phone. Then she looked back to Larry who had only recently been divorced.
When the trio returned to Massachusetts they wasted no time. The CEO went into product development with his reams of notes. Isabella met with her marketing team and began to lay out a strategy. Larry did
n’t say anything. He mostly chatted with Li Min on his new Wechat account, on which he only had three friends: her, the CEO, and Isabella.
Eventually the CEO developed a robust line of donuts. He laid them on the board room table and invited everyone to try. Everyone thought they were too salty. The CEO smiled.
Isabella decided to create a cartoon character for their Chinese brand. It was a cross between a donut and a rabbit. Everyone thought it was too childish. Isabella was pleased.
The Happy Donut Corps new Chinese menu was a hit. Their donut shops began to pick up traction throughout China. They even had an app where you could make your own virtual donut in the shape of your favorite Emoji.
Larry, infatuated by the seed of Chinese culture that had been planted during their initial trip, as well as Li Min, headed back to China and eventually married the original manager of their flagship store. They lived in Shanghai and had two children. Much to Larry’s surprise, the children preferred Chinese donuts over the originals.