A couple of years ago, the government in Canberra published a white paper entitled “Australia in the Asian Century” to gasps of astonishment from many in the country’s business community, most of whom had not yet grasped the idea of embracing the continent to the north and its attendant advantages…
But Ryan Arrowsmith didn’t read it or even hear about it, because he had already been there and done it. He was already living, working, and prospering in the heart of the Far East and building the business that is today the Greater Group.
Today, the concept of the ‘Asian Century’ appears to have fallen short of its promise, but companies with the foresight and courage to get out and try swimming in the markets of Asia are not only taking advantage of burgeoning demand for quality and service, but also stealing a march on stay-at-home rivals who have only the inevitably limited domestic market to swim in. Big fish, but small pond.
The Greater Group is a global, design-led retail consultancy serving clients of the stature of Samsung, Bank of Melbourne, Hudsons Coffee, JB Hi-Fi, and a string of top telcos with end-to-end input on their stores and their interaction with the customer. Co-founded by Ryan’s father Neil, the group remains firmly Melbourne-based but long ago overcame its fear of flying and started exploring China and other Asian markets in transition. The results have been startling.
Ryan stationed himself in Shanghai for nearly a decade (speaking fluent Mandarin) before recently moving to Hong Kong. His family has had a shopfitting business since 1989. Ten years or so ago, having established its own design consultancy, “we recognised that most of our competitors were looking offshore.” In the main, this meant moving some or all the sourcing offshore and the company was losing traction by remaining land-bound. “It was almost a sink-or-swim situation. We had no interest in closing down our facilities in Australia. We felt that if we did not look offshore and explore the opportunities China had to offer both as a procurement market and a sales environment, we would get left behind.”
In the last couple of years, experiencing tremendous growth rates in their business, Ryan and his colleagues on both sides of the equator have been re-evaluating the strategy. Originally, Ryan ran a business in Shanghai that was focused on procurement before the operation consolidated and merged into what has now become known as the Greater Group together with the shopfitting factory and the design consultancy. “Since the merger I have been looking at ways to expand all our services – not just fixtures but design, project management and build – into Asian markets.” They include China and Hong Kong (where the retail landscape is older and more developed than Shanghai, but which remains intensely dynamic, as shown by projects such as Times Square and IFC) but also Singapore and, further afield, a lot of work in India and beyond. A new target for 2015 is Vietnam.
Hong Kong is a useful ‘entry point’ to China and, as Ryan acknowledges, it is still “not half bad” as a place to base oneself. It took him, as a relatively raw 20-year-old, some time to come to terms with the sheer pace of change in Shanghai, but nowadays he admits that when he goes home, although Victoria remains that home, it kind of lacks the pace and energy of Shanghai or the Fragrant Harbour.
Not that China is a piece of cake when it comes to procuring. The group’s clientele demands premium quality in everything and finding the right suppliers and consistent quality was “a long road, especially in the early years.” Now the company finds itself selling back into that market and “it’s certainly a change of pace. But we have so far been happy at how receptive the market has been to what Greater Group is offering, particularly in our core segments.” These are telecoms, banking and services, and technology. “We have gained some really good traction over the past twelve to eighteen months. It’s a trickier place to sell than most western countries, of course, but we have learned a lot of the rules of the game over the past ten years. If you play with a straight bat and ensure every negotiation is as win-win as you can possibly make it, it’s as good a place as any to do business.” It’s risk and reward. Ryan says his management style has been cautious and conservative but with a base in the territory – many people make the basic first mistake of adopting a FIFO style to overseas markets, which just doesn’t wash with the locals. “It sounds like a cliché, but it is absolutely crucial to build relationships. It’s the way the entire market works in China.”
Australia as a brand is “held in good esteem” abroad, which helps the cause, as does the way it has become part of ‘Asia’ rather than ‘Asia-Pacific’. One intriguing current project for Greater Group is a six-storey ‘experience centre’ called Australia Town on Shanghai’s North Szechuan Road shopping strip. This is an attempt to create more or less a permanent ‘World’s Fair’, competing with similar efforts in the area from France, Ukraine, and other nations.
“We pitched with a lot of other companies from Australia and won the work. It was very important to us as a business because we have for some time been promoting Australia outside the country. Having been working away from home for so long it feels as though I have become much more patriotic than if I had stayed home. One is very aware of how Australia looks on a global level and very keen to promote that brand.” Greater Group is working very closely with the Australian Chamber of Commerce in Shanghai, designing the new premises they are due to move into very soon. “It is very much part of our strategy to shout from the rooftops that we are an Australian group and we are proud of it and can mix it with the best of them.”
All well and good, but how does this admirable flag-waving help the business back in Melbourne? Ryan explains that the company will always be wholly Australian with Australian shareholders so all the profits filter back into the country (forecasted 2014 revenue for overseas operations was some $25 million with substantial growth expected in the next 2-3 years). In addition, the China procurement operation has meant the group is more competitive and that enables it to win a lot more work, driving the other group services on the ground. “We have had to employ a lot more people in Australia,” increasing headcount from 25 to around a hundred in the last five years “plus a couple of hundred contractors that assist us to build the shops that the China procurement is providing.”
Shanghai has been design headquarters for several years (this is not just a cost element, as much larger companies have also found. Corporations such as General Motors have plugged very successfully into the fresh and different thinking being brought to bear on industrial design in the region). Inevitably, following the merger of a number of quite disparate operations, there was apprehension within Greater Group as to its future direction and the welfare of its staff. Ryan recommends the group’s approach, which is to face the issues head-on, involve everyone and integrate wholeheartedly, rather than trying to maintain the silos between departments and countries.
From the cultural point of view, integration has paid dividends. “We have worked hard to ensure the China operation is not an island. All our staff in Australia, China and Hong Kong feel part of the same team.” More than 20 staff each year travel from Australia to meet colleagues in the other offices and Shanghai staff come to Melbourne for training. “It’s an exciting place to be around at the moment.”