Riedel Communications has announced the opening of its office in Beijing, China. Inavate APAC discussed the move with manufacturer to uncover Riedel’s motivations and plans for the future.
Expansion is in vogue, but Riedel is not just following a trend. Cameron O'Neill, director for APAC at Riedel, lays out the road that has brought the manufacturer to the opening of its Beijing office: “We started to pivot to Asia and the US around 2014 and 2015, we started to see the importance of expanding our operation beyond Europe. Prior to that, we had some subsidiaries in Asia and the US but from that point onwards we made concerted efforts to enter these markets. China has been on the books since then and it took us a while to get here. Japan was first but now that our base has been established, we’ve moved on to our latest venture in China.”
Martin Berger, CSO at Riedel, talks about the motives behind the opening of the Beijing office: “From a strategic perspective, and evaluating our global footprint, China is simply too important for us right now and for the future for us to not be here. While supporting our clients and our partners is our main priority, our direct presence also allows us to get firsthand knowledge and market insight that we can take to HQ. We want to be closer to our customers and understand their needs and understand what is happening in the market.”
O’Neill sheds further light on the importance of the Chinese market to Riedel: “From 2014 to now, Asia has gone from a fraction of a percent to 15% of our total manufacturing sales and out of that China has gone from nothing to approximately contributing a quarter of the total in Asia. We got to the point that we couldn’t support our operation remotely and needed people on the ground not just for sales but also to support our customers and to move forward with our plans for the future.”
In terms of structure, initially the Beijing office will be part of Riedel’s APAC operation which comprises the regional HQ in Tokyo and other offices in Singapore and Sydney. These report to Riedel’s HQ in Germany.
Gao Jian, general manager for Riedel China, discusses the avenues the manufacturer will be exploring: “The business in China has really grown, especially in the field of esports where we have a very strong lineup and partners with great expertise. Also, we are looking to get involved with projects that involve HD-UHD because China is really pushing forward to 4K and even 8K. We have experience with higher resolutions because of our presence in Japan where broadcast is moving ahead, and it translates to the projects here in China. We’ve also seen demand for rental services, product service and system services growing gradually. We are not just here to do manufacturing sales but also to support our partners in service and other businesses as well.”
A standard route of entry into the Chinese market for manufacturers has been partnering with a distributor that has a strong presence in the country. O’Neill explains why Riedel decided to establish its own presence instead: “We deliberately made the choice to create a legal entity in China because we wanted to support people locally, employ people locally and possibly provide rental services locally. We took the more difficult route to make this happen. Creating a legal entity might have been a harder process but it made sense for us to do it.”
Regarding initial operations, Gao says: “We have a sales team in place and already have system engineers to help our customers and partners, to help them create applications and to help them understand Riedel systems better. Of course, there are administrative employees as well and hopefully we are going to grow and work to help the market and our customers. We are also planning at providing rental services which will require numerous technical people as well as teams for logistics and accounting.”
Looking ahead to the future, Berger foresees the Beijing office expanding: “Usually, growth comes with growth. We have an example with our operation in the US which started a few years ago and today we have more than 30 people there and that points in the direction of where China could go. We have a small team to start but it can grow quite quickly.”
To summarise, O’Neill says: “For me, opening the office in Beijing is basically about breaking down walls. In China there is the language barrier, cultural barriers, and even simple things related to how interactions happen, both on the technical and business side, can be a challenge. These walls can constrict people and companies when they come here.”
He continues: “I’ve seen the impact these barriers have in Japan when speaking to contemporaries from different companies at tradeshows. They view Japan and China as a small part of their businesses. These are two of the three biggest economies in the world and you are not considering them? I think that is because of the barriers to entry. We are here to knock them down for Riedel. I honestly believe that this office will be on the same scale as our German office and our US office once it matures. There is an emphasis on the arts in China, corporate AV is coming along and yes broadcast is tightly controlled but we are seeing that become looser. You have to be present and you have to get yourself ready and speaking the right language to the right people if you want to reap any rewards in China. You reap what you sow, but if you don’t sow something now you won’t reap anything in the future.”