It’s hard to ignore the patriotic “us versus them” wave spreading across Western nations, including the US. And it has come on the heels of exponential growth in technologies such as artificial intelligence, or AI, and big data analytics that are making real-time changes in the way the world’s regions do business with one another.
How will global businesses survive in such a climate? Experts say a big-picture perspective is essential. That means recognizing and embracing the reciprocal nature of our world, as well as the colossal technological innovation that is transforming everything at warp speed.
The theme of the 2019 World Economic Forum in Davos, Switzerland, was Globalization 4.0. Orit Gadiesh, chair of global management consulting firm Bain & Company, discussed how rapid advances in tech and artificial intelligence, especially in China, will present both challenges and opportunities for businesses around the world, especially in the face of widespread ethnocentrism.
“There are a lot of questions about values, about democracy, but also about globalization—what that means when you say, ‘my country first.’ That has consequences in terms of trade, in terms of where people put their operations, et cetera. That is a short-term issue, which is a very serious issue,” Gadiesh told the BBC. “I think there’s a longer-term issue that is being less discussed, and that is, in China right now, the way AI and machine learning is applied is almost breathtaking.”
China has almost 1.4 billion people who are constantly using smartphones that enable super-apps to pull together and manage data from every aspect of their lives, Gadiesh says. That data presents people with everything from highly specialized shopping experiences to the ability to pay government bills on the social platform WeChat. Though China is ready to export its technologies to companies that are open to it, she says, privacy issues and an overall lack of readiness are keeping the US largely out of the loop.
The “my country first” mentality also has a huge impact, says Daniel Butler, the Thomas Walter Center Professor of Marketing at the Harbert College of Business. Amid situations such as Britain’s departure from the EU and a wave of US patriotism that stigmatizes specific nationalities, ethnic populations, and groups of immigrants as “the other,” global marketing is stifled, he says.
Butler often has his marketing students examine the labels of their classmates’ clothing or shoes to give them perspective on the impact of the global economy; by the end of the exercise, only two to four percent of the students find they are clad in American-made garments.
“The quickest way for people to understand that they are in the global market is to look at the labels of everything that they’ve purchased and understand that if the label does not have ‘made in the United States’ on it, then that individual, by choice, has sent business to another country,” Butler says. “And most of us aren’t even aware of what we do and why we do it.”
What it comes down to, he says, is having an awareness of how the world is vitally connected.
“What happens in Buenos Aires impacts people in Miami. What happens in Chengdu, in China’s local economy, is going to impact people in the United States. What happens with the war in the Middle East is going to impact the almond growers in California.
“How do we work together? If I treat everyone as a zero-sum game—either mine or yours—then there is no compromise. There is no ability for us to find solutions to global problems,” Butler says. “We have to learn to work with people who don’t talk like us or look like us, but who have the same needs.”
In their book Global CMO, authors Greg Paull and Shufen Goh talked to chief marketing officers and other leaders from top US companies about how they grapple with presenting their goods and services to fill those needs.
One success story that emerged from Paull and Goh’s’ research wasn’t exactly an instant triumph. In 2017, Mattel partnered with the large Chinese e-commerce merchant Alibaba.
Alibaba would aggressively market Mattel’s big brand toys, such as Fisher-Price and Barbie, to its almost 450 million active users. In turn, Mattel would glean the Chinese data to develop toys specifically for that market.
What was the barrier? Mattel CEO Margo Georgiadis says that unlike American parents, Chinese parents who have a little extra money to spend on their kids seek out products geared toward learning, not play. With this information in hand, Mattel tweaked its product line specifically for the Chinese market, developing toys such as Hotwheels Speedometry, which teaches children about distance, measurement, and potential and kinetic energy, all through the construction of miniature racetracks.
The product met a universal need—to buy a recreational device for the kids. It just had to look and act differently. The story illustrates the remarkable progress of US companies in the global marketplace.
This was the same Mattel that, in 2010, opened a six-story standalone store in Shanghai called the House of Barbie, complete with cocktail bars, a custom fashion line, and hundreds of display cases. It tanked less than two years later, largely because Chinese women just weren’t into the styles worn by Barbie, a doll they perceived as little more than an American pop-culture curiosity.
In the last decade, big-box stores like Walmart and Best Buy have faced similar fates in China, where shoppers prefer picking up compact packages from small stores that are conveniently located. Businessweek reported that Walmart’s tagline of “everyday low prices,” in particular, did not appeal to Chinese consumers, who often associate cheaper prices with low-quality, inferior products.
And in that same time, tech giants including Google have faced trouble overseas, especially in China, where entrepreneurs are far more in sync with the speed-of-light pace of technology than those in the US.
But recent success stories provide hope for the future of the global marketplace.
Marvel, the legendary entertainment franchise and home to superheroes, recently sought to distribute single-issue and collector-edition comic books to 2 billion potential customers via a multilingual app on iTunes. The company Language Connect was tasked with translating a thousand Marvel comic books into 12 languages. And they couldn’t be verbatim phrasings, either. Marvel has a language all its own, with words like “Ka-pow” that can’t be found in any dictionary. The bigger-than-life characters needed to resonate powerfully with fans all over the world.
How could that happen?
Language Connect crowd-sourced the brand’s devotees across the world, largely through online forums and fan sites. From that group, 400 selected translators worked nonstop via a global content management system establishing localized vocabularies for every market. It was a Ka-pow moment, one that offers a glimmer of hope.