Giraudi: When and did you decide to set up your own business in China? How
long had you been in China by then?

Shaun Rein: I established the China Market Research Group (CMR) 2 years ago to help firms get better information on what their target customers wanted. I have spent most of my time in China since 1997 in a variety of roles -- as a Chief of Research of Asia's first venture capital firm, Inter-Asia Venture Management and as Country for software company WebCT -- and I found that there was a huge demand and need for very high end market intelligence at a level premium to the big consulting firms like McKinsey and BCG.
As China has become increasingly important to the bottom lines of companies like Gucci or Bulgari, it is important for companies to gain good consumer insights so that they can launch the right marketing communications strategy and position and brand themselves to the right target market.
China is changing so rapidly that strategies that worked 5 years ago just do not work anymore. For instance relying on JVs or connections might have been the only avenue in the 90s to set up operations, but not that is an option of last resort.
We set up CMR in order to give insights for our clients' into their customer bases and to help develop strategies and actionable items for them.

Giraudi: - Can you please briefly describe your company focus and history?

Shaun Rein: -We have expertise in a wide number of industries. We work a lot with luxury companies and have also completed projects in FMCG, retail, financial services, chemical, private equity, hedge funds, cosmetics, and fashion.
The main difference between us and other firms is our methodologies which are China focused.

Giraudi: - Have you seen any changes in the market research / consulting
business world in the last years? And where do you see this industry
in China heading in the future?

Shaun Rein: - I think it is important that companies choose consultants that have both an international and local China perspective. It is important that consultants here understand the China market but who also can see outside of China to see possible trends that might come into China too.
In some respects China is very different from other markets, in other respect it is similar. For instance, we have always believed and told our clients that as Chinese consumers get wealthier they will spend more money on leisure activities, just like Europeans. However, many consulting companies got it all wrong and advised their clients that Chinese were price sensitive. We did not and continue not to believe that to be the case.
The result is that many companies like a Dell positioned themselves poorly to capture rising incomes. However, it is important that consultants in general understand the specific China mindset.
It does not work to parachute consultants in from other countries. They are at a loss to understand what is happening in China.
Thus, CMR has foreigners on the team who have lived in China for many years and we have Chinese who have been exposed to other countries in the world. Having such diverse viewpoints makes our team able to develop the insights and actionable items out clients need.

Giraudi: - Given the impressive track record of your company, what were the most difficult obstacles to overcome for you as a successful entrepreneur?

Shaun Rein: - Setting up a company is not easy anywhere in the world, especially in China where there are so many regulations and capital rules.
However, our biggest obstacle has always been about recruiting and retaining the best people. Since CMR is considered as premium to firms like McKinsey and Bain, we have to compete with them for their very best talent. It is not always easy to do that as a start-up, especially when we first began because we were not famous.
But of all of our accomplishments, I might be proudest of assembling what I consider to be one of the best teams in strategy consulting in the world.

Giraudi: - Recruitment is always a problem in China, especially in the service industry. How do you manage this issue?

Shaun Rein: - In order to retain great talent, we make sure that our team members see their career progression and see where they can be in 3 years, 5 year and 7 years both as they and CMR develop. There is no glass ceiling in CMR, meaning that people from different nationalities can all reach the top. For us, it is about productivity and contribution to the team.

Giraudi: - Do you have any particular advice for Italian (or western) companies willing to start their operations in China? (besides hiring you...)

Shaun Rein: - Make sure you get people on the ground who understand the China market or who understand that they do not know it. I see too many companies send in people who were successful in leading other BRIC operations who then thought they knew how everything worked in China because of their past experiences.
Companies also need to get a country head with credibility back in the home organization so that if he makes a decision and needs to lead the company in a certain way, he gets the support back home.

Giraudi: - What has been the biggest achievement for you and your company in China, so far?

Shaun Rein: - It has been great to assemble such a great team of bright and motivated people who constantly strive to get better information and strategies for clients.
I was also very happy when we beat Bain in a head to head pitch for a Fortune 100 client and when we got hired by a company to redo a project that McKinsey had done for them at a poor level.

Giraudi: - What is your personal professional goal for the year of the rat?

Shaun Rein: - Right now about 80% of our clients have returned to us for 2nd and 3rd projects. I would like to continue working with our current clients and expand to add some more key ones.
I expect our revenues to increase 300% this year.

Giraudi: - Any last comment?

Shaun Rein: - There are a lot of great opportunities for Italian companies in China. Companies just need to understand that their core target markets might be younger here than in Italy or have different motivations.
China has become such a potent and important force in the global economy that companies need to develop winning strategies for the China market.

Shanghai, 10th January 2008