50 University of Auckland MBA students are tackling the complex China market on behalf of New Zealand business clients, a project unlike any other MBA course. Sarah Stuart reports.

If there's one thing the University of Auckland's 50 MBA students learned in Shanghai last week it was this: millennial women in China rule the consumer world, especially for foreign brands.

You could see it in the apple tastings a group of four students conducted in supermarkets for a Kiwi primary producer. While the older generation more used to floury, sweet apples turned their noses up at the crisp, fresh taste of a new Kiwi apple, the younger ones expressed delight in excellent English.

You could see it when another student group investigating the market for Kiwi baby products surveyed pregnant women on the streets of Shanghai. Up to $1,200 a month is being spent by some Chinese women on supplements and other health products for their cherished unborn babies.

You could see it at the factory tour of the Celestica electronics firm in Suzhou, two hours from the city where, in comical gowns and hats, the students toured the facility - marvelling at the management pictures on the wall proudly featuring large numbers of women in the most senior positions while others ran highly skilled engineering teams on the floor.


In one of the few hours off in this intense international business experience, one group saw female dominance in action as hundreds of mothers sat in a city park, an open umbrella in front of them displaying the details of the child they wished to marry off.

Most were mothers of sons, vastly outnumbered in Shanghai's population thanks to the one-child policy of the past. To attract a wife here, a son must often have an apartment (cripplingly expensive), a car, be able to cook and have "good character". Advertising in the park to other mothers may be the only way some have of attracting a prized wife.

Associate Professor Daniel Vidal and Dr Antje Fiedler, University of Auckland Business School, Course Directors, International Business, MBA Programme. Photo / Supplied
Associate Professor Daniel Vidal and Dr Antje Fiedler, University of Auckland Business School, Course Directors, International Business, MBA Programme. Photo / Supplied

So it was no surprise when Nanna Johansen, marketing manager of China Skinny marketing and research company founded by Kiwi Mark Tanner, said millennial women are the key to the Chinese economy. More than 73 per cent of economic growth here in the past year was driven by consumers. Women - the CFOs of the household - are the engine room.

Smart, well-educated with many speaking flawless English, young women are predominantly behind the 13 per cent of sales which are now e-commerce in China.

On social media sites and the many sales platforms which Kiwi products are increasingly starting to access, female consumers put in hours of research before they buy. New Zealand's green image, authentic storytelling and unique products are perfectly positioned to take advantage here, if only they can get noticed.

"From a very young age Chinese consumers are exposed to fakes," Johansen says. "That's why they do a lot more research before they buy."

Millennials are driving enormous change in China, and quickly. Most noticeable was the casual manner in which many would admonish or even mock the Chinese Government.

"Those born post-90s are not afraid to stand out. They like a good price, a quality product and great design. They do a lot of research online and are not afraid to ask questions."


By week's end, with days of market validation, distributor meetings and consumer insight groups behind them, the 10 teams of students presented their findings at a final dinner.

For many it was emotional: working with your peers in a frantic week of business development in an uncertain and volatile market such as China's was stimulating and draining in equal measure. All had a newfound respect for the Chinese consumer.

One student, a business consultant completing a midlife MBA to validate much of what she teaches, put it most succinctly: "I've learnt about the power of the story; the power of networks and the power of gumshoe."

Nothing from a textbook can compete with on-the-ground investigations, especially in an evolving market like Shanghai's. No amount of reading could have brought home the power of young women in China like the tour of a factory or a Sunday in the park.

Said almost every team at that final dinner in Shanghai: "I will be advising my client they need to buy a ticket and get here."

Success on every corner in Shanghai

You can smell success on every street corner of Shanghai. You can hear its origins in every dumpling shop and luxury goods mall.

Breakfast at the Shanghai Central Hotel, where 50 University of Auckland MBA students begin their day, is no different. Here for a week of seeking success for Kiwi clients, over coffee and bagels they discuss the businesses they have discovered as they navigate the city, running focus groups, setting up product sampling in malls, meeting with potential clients.

There are the expats setting up a pie business in the city using Australian beef and Kiwi favourite flavours. Business looks promising if they can only convince the Shanghainese the pies are not just pizza without the toppings.

There is the story of the Kiwi importer who brought in cases of wine for several years believing it was for a retail distributor, only to see them disappear into officials' hands with no sign of any retail business. Thankfully, the price was good.

And on a sultry Tuesday night, the students heard from young entrepreneur Carol Chyau, who in 10 years has taken her idea of social enterprise in Mongolia to a growing retail fashion business which uses yak wool harvested by tent-dwelling locals.

Even the old ladies on the streets outside the hotel know a thing or two about sales and marketing. They pat their rounded tummies to signal hunger and put out not a hand, but a shoe-shine offer, even if you're wearing rubber sandals.

So it was unusual to hear the raw and honest description of managing a business which has had to deal with decline in China, as international industry disruption ate its profitable base.

Between their intense project work for the Kiwi companies they are spruiking in China, the students get to hear from leading business experts and companies in Shanghai. Early one morning they boarded the bus to travel an hour from the city to a light industrial park where Kodak has its headquarters.

Watch: MBA Student Koro Dickinson
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The impressive general manager, Mr Hanting Lu, spoke movingly of the challenges he faces as a leader of a disrupted business in a country where face and honour is everything.

A modern-day leader who prioritises transparency, a people focus and investment in research and development over endless cost reduction, he has himself struggled to maintain his optimism as he was forced to cut 10 per cent of his workforce in 2014 and again in 2016.

The dramatic evolution of technology has boxed Kodak into a situation of volatility, uncertainty, complexity and ambiguity. Recruiting good people in this situation is difficult so Mr Lu offers flexible hours and a work life balance rarely seen in Shanghai. Looking after your valuable staff and promoting them is crucial, he says.

Mr Lu quoted Peter Drucker's "the most effective way to manage change is to create it"; even after Kodak faced Chapter 11 bankruptcy protection in 2012, he convinced his superiors to develop a small but powerful research and development team of strategists in China.

"Continuously cutting costs is a suicide mission," he says. People investment is where the growth will lie.
Yes, success is what drives Shanghai and the 24 million residents who power it. But the fast pace of change is driving creative ways of dealing with disruption and challenging the old rules of the Chinese workplace.

"You just can't understand China unless you are here on the ground," one of the MBA students remarked on the way back from Kodak in the bus. No amount of report reading could have replaced that meeting with Mr Lu.

Leadership in China is clearly not what the authoritarian stereotype depicted. In Mr Lu it is warmth, honesty, caring and a desire to put people at the heart of a business.

University of Auckland: MBA class navigates Shanghai

The clusters of high-rise apartment blocks began at the airport and didn't stop for 45 minutes. Late-model European cars swerved around mopeds and cigarette-smoking taxi drivers all the way into Shanghai's famous Bund area with its futuristic skyline, colonial buildings and teeming millions.

Weaving between the traffic were elderly workers on pushbikes carrying stacks of boxes teetering above un-helmeted heads. Shanghai marries lifestyles a century apart - the Jetsons jostle with ancient ancestors in a sea of chaotic harmony.

Daunting? You bet. Now imagine you're a New Zealand student in China for the first time, taking on the city for an expectant Kiwi business.

Yes, the 50 University of Auckland MBA students who landed here recently were nervous before they left. Mid-career executives with a wealth of experience in New Zealand, nothing can prepare them for the wave of heat, energy and consumerism which is modern Shanghai.

They are undertaking an International Business Experience unlike any other in MBA programmes around the world. Led by Adjunct Associate Professor Daniel Vidal and Dr Antje Fiedler, this is no travel jolly or series of lectures abroad. Instead, in groups of four, they are working for clients such as Tasti foods, Best Ugly Bagels and other big and small Kiwi ventures, acting as advisors on how to enter China.

Their projects are all built on market evaluation and validation - finding customers in an emerging market of 1.3 billion people. The business model the students are using is new, unexpected and results driven.

Dr Fiedler is a German-born Asian business expert whose research includes Kiwi companies who have knocked on the door of China.

"It is not easy," she says. "More have failed than have made it. Things change so fast, the market is huge, sophisticated and demanding. We have challenges as New Zealand can't compete on price because we don't have scale or technology because we don't have the R&D. Regulation can change quickly and as a business you have to adapt and pivot."

Too many New Zealand businesses come with a traditional market entry strategy and rigid plan, she says. What works in New Zealand, the US and Europe can still fail here. Old thinking won't cut it and traditional methods won't work, says Associate Professor Vidal, when applying them to settings where uncertainty is high.

"That's the reason we've introduced entrepreneurial tools and techniques," he says.
For the first time, the MBA students are using the entrepreneurial approach: fast, flexible and not wedded to long-term thinking. Finding a customer is key.

"It doesn't have to be the best segment or the most profitable customer, the idea is just to get into the market to understand it."

By week's end, the groups were charged with getting results and a lengthy report, rigorously marked by the course leaders. They'll have tested Kiwi products in a range of settings from late-night bars to supermarkets and five star hotels. There'll be focus groups, client meetings, and a lot of searching for the deal.

They just needed to learn to navigate the city first.

Sarah Stuart is a University of Auckland MBA graduate.
To find out more about the MBA programme at the University of Auckland, please visit the MBA website.