How to exit China without upsetting existing customers or losing valuable revenues
As an American company focused on the China software market for over two decades, we understand why many Western software companies are hesitating or do not want to enter or invest in China these days.
Our objective at ADG is not to persuade companies to operate in China but support the ones that have to or want to be there – whether to support their current customers or address the market. For most of our clients this means helping them enter and scale more quickly and compliantly with the least “locked-in” investment.
Here, we’d like to share a common scenario how we help customers looking to reduce their exposure to China without damaging their relationships with their current China customers or reducing their revenues.
Background
A global SaaS platform solution provider had a local China entity and several important Chinese customers. The customers were profitable and reliable, and our client wanted to continue to work with them but also wanted to shut down their China entity and the associated costs and hassles to maintain it. We were approached by their executive team to see if ADG, as an operator of SaaS solutions in China, could help.
Solution
Because ADG is fully licensed in this area, we were able to quickly provide them with a solution where we could step into the middle and contract directly with their end customers. With our client’s approval, we immediately reached out to the customers to provide comfort that the business relationships would stay intact with ADG in the middle. Within weeks, the contract was in place and the new relationships began.
Analysis
The idea of shutting down their entity and moving to a local distributor is not new or particularly innovative. The missing piece of the equation is that deals like this have risk to both sides if the party in the middle is not experienced, flexible and trusted by both sides. It was also important that they could sign a contract with a company based in the US. Our client needed to know that we were there to protect their relationship and their reputation, and we needed to know that we had a client that would work through the inevitable surprises that come with China.
Conclusion
As an American owned company with 23 years of experience in China we have earned the respect and trust of both Western and China companies allowing us to execute solutions that appear simple in concept but can be tricky. And most important we had a happy client that was not only pleased with the ease of execution but also with a solution that reduced their overall costs.
ADG has been playing this role for decades working with leading PE/VC firms and their portfolio companies as well as select listed companies.
If you have similar objectives in China, please reach out to see if ADG can help.