Negotiating In Asia

Guide To Negotiate With Asian Foreign Suppliers

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Negotiating with foreign suppliers, especially in Asia, can be daunting.   Many foreigners are unsure of what to do or how to finish the deal. Most of the time, things can get outright frustrating and infuriating.

To survive negotiating with your foreign suppliers, especially those in Asia, you need to understand what is going on in the negotiations. In Asia, many outstanding negotiators will use different techniques in their negotiations, including using your personal relationship to help them get what they want.

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Guide To Negotiations With Foreign Asian Suppliers

When you are dealing with foreign Asian suppliers or those with a different culture than you do, it is essential that you understand their culture, so you know how they are negotiating. Some cultures are very good at negotiating; for them, it can almost be a game.

I have found in Asia, and there can be some excellent negotiators. They will often use different techniques to get you to do what they want you to do. Each technique can come with a unique personality; to properly negotiate with them, you need to understand what is happening with these negotiations.

Understanding Different Types of Asian Foreign Personalities And Negotations

We have outlined our top five basic Asian Foreign Negotatiions personalities and what each of them means. Each is very different, and I have seen all of these used many times during my time in Asia.

Tip 1 – The Asian Survival of the Fittest Negotiation

This Asian negotiation personality will usually put you through an endurance test during the negotiation process; it is the Olympics of all negotiations.

The negotiation could take hours and hours or go on for days or months. There can be many going back and forth about things that may not seem essential or have little relevance to the overall negotiation.

I have been negotiating with Chinese suppliers sitting before me for hours and blowing smoke while talking to my staff in Chinese. They often ignore me and talk to my manager in a local dialect of Chinese I can’t understand. At that point, I usually try to tune it all out and let my Chinese manager take over.

During the negotiations, I have to sit back, bite my ego, and allow things to ride out and the negotiations to happen in the rhythm and pace they have set. To get angry will not help, and trying to rush it will tell them I will give in to what they want.

I have learned there is no point rushing it as I would lose the deal, not my supplier. So I sit there looking interested and happy to be there, but for me, it is an endurance test.

This kind of negotiation can be brutal, especially if you do not understand the language. The supplier may sit in front of you and smoke while blowing smoke in your face, and then they talk about things that have nothing to do with the overall negotiations.

If you are not a patient person – as I am not – it can be challenging, not to mention breathing in a ton of second-hand cigarette smoke going straight into my lungs, hair, and eyes. Many in Asia, particularly some parts of China, may not think that nonsmokers appreciate second-hand smoke.

The tricky part of these negotiations is that they usually take a lot of time, and most of that time is spent not about what you came to negotiate about but more about other things. Often, the blame game can start with both sides saying, “well, you did this,” and then you need to counter with “what about this?” which can go back and forth.

It will finally be, after several hours, days, or even months, that we will finally get to the point of the negotiation. After a very long time of talking, the actual negotiations of what we came to discuss can only take 15 to 30 minutes.

The hard part about this is that I often feel like the other party probably knew what they would or would not accept at the beginning. They came into the meeting with an idea but dragged it all out to get a bit more. But, whatever the reason for the length of the negotiations, the best thing you can do is smile, act interested and allow it to ride out until the very end.

Tip 2 – The Asian 50% – 50% Split Negotiator

The other Asian negotiator type is the person who splits right down the middle no matter what you want. They will never give you what you want but always come back and say, “l will split the difference.” I’ll admit that I have also used this one a lot.

This kind of negotiation often happens when you are negotiating for something on the streets in Asia. You may see something that is 100 RMB, and so you say to the person, I want this for 40 RBM, they come back and say, “No, cannot do it, ok I will give it to you for 90 RMB. Then you, “Oh “that is way too expensive; I can only go to 50 RMB.”

You each start to inch your way down or up until you even start to walk away and tell them, “Ok, if you do not give it to me, I will not buy it.” Then suddenly, they say, “Ok, let’s split the difference, you give me 50%, and I give you 50%, and we will meet in the middle.”

So you both arrive somewhere in the middle for the amount you will each accept. In theory, each of you gives up a bit so that everyone can walk away happy.

This kind of negotiation happens on the streets and in business here in Asia. Someone who always wants to split the difference no matter what you ask them or what price you ask.

For this kind of negotiator, no matter what you try to negotiate at the end, they will come back to say, “ok, let’s split the difference 50/50.” There is nothing wrong with this, but understand this at the start, be ready for this, and know what price you can or cannot accept.

Asian Negotiations
A goal for any negotiation should be to feel good about the negotiation or a win-win for both parties.

Tip 3 – We’re Friends Asian Negotiator

This type of Asian negotiation relies on your relationship.  They may feel you are friends or have a personal relationship, so you are obligated to help them somehow because of this so-called relationship or friendship.

To many, this kind of negotiation technique can almost seem like a kind of emotional blackmail since the element of friendship is being used as a way to get what they want. Other times it may simply be because you are friendly to them, so they may feel that there is a special bond so they can get whatever they want from you.

This can be a problem for so-called friendships and maybe even business relationships. This is why you must understand the cultural and social norms of the country you are buying or negotiating with.

Relationships in Asia are critical. If people like you, they may be willing to help you somehow, so friendship or friendliness in business can work both ways and be a good thing. Generally, most people like to work with people they like and know.

So this can be a touchy kind of negotiation. If you tell a supplier, you are not friends, this can hurt your business relationship. And saying no to this kind of negotiation can always be tricky as you do not want to say no to a friend or insult them. So you may need to tread very carefully with this Asian negotiation to get what you want and keep the long-term relationship intact.

Tip 4 – The “Help Me Please” Asian Negotiator

This Asian negotiation is, “you need to pity me, so you need to help me.” Sometimes in Asia, people will tell you a sad story, or they may try to get your sympathy in part to set up this kind of negotiation. They may have done this in the past, and it has worked, so they will keep doing it as they feel it helps them get what they want.

I have found that the stories they tell you often may have been entirely embellished. Not that the story is not true – or a small part of it valid – but the story may have added things or stressed things that are not as bad as they are.

The ” help me please ” Asian negotiation is not the same as our friends though they are similar.  This one is more a “poor me” or “you are so rich, and I am so poor, so you need to help me.”

There is a sense of obligation there, but it is more about one having more than another. Often, the Asian negotiator may play the poverty card on purpose when reality, they have a lot of money.

You need to understand who you are negotiating with to win this negotiation. Then you can maybe even play a bit of the “poor me” back at them or tell them, “oh, that is terrible, but did I tell you what happened to me? Or what happened to my Uncle or Aunt?”

This way, you can try to put the “poor me” on an equal footing in the negotiation.

Another great way to handle this kind of negotiation is to have a local person you can trust to help you with the negotiations. Most of my local employees know what is going on and will not fall into this trap.

Tip 5 – The Tit-for-Tat Asian Negotiation

Anyone who has watched many US-China trade negotiations will quickly understand how tit-for-tat negotiations work in Asia. Even with large-scale negotiations, this tactic is being used.

The tit-for-tat Asian negotiator is the kind that will say, “Ok, you do this, then I will do that.” In this negotiation, you plan a one-plus-one or a minus-one plus-minus game. You will get as much or as little as you are willing to give or not give.

This type of negotiation is based on equality; the other party is only willing to do, give, or take away as much as you are willing to. Depending on how much people are willing to give or not give, both parties can be the losers, or both parties can be winners.

The tit-for-tat relations can also be one that also digs up the past if you have a relationship with that person. They may dig up the past repeatedly to get a better deal for the future.  Sometimes this kind of behavior can be justified, and other times, it is not justified as they are looking for a bargaining chip to help them get what they want from you or have the upper hand through the tit-for-tat spat.

If you can understand this is happening, it can help you to be able to get a better deal in that you know and understand what game is being played. The idea is to try to find something they want that you can give up that will not cost you too much but still allow you to get what you want and allow them also to feel like they have won. In tit-for-tat negotiations, it is best that both parties feel they have both won, especially if it is a relationship you want to keep.

Why It Is Important To Understand How To Negotiate With a Foreign Supplier

Understanding these kinds of foreign negotiating personalities is essential because it will help you strategize where or at what point you need to start your negotiations. This will then help you to be able to negotiate for what you want.

It can be said that in Asia, relationships are critical. In their book entitled The Overseas Chinese of Southeast Asia: History, Culture, Business by Ian Rae and Morgen Witzel, the authors said:

“It is sometimes said that one of the differences between Western and Eastern society is that in the West people put their trust in institutions, while in the East, people put their trust in individuals.”

Ian rae and Morgen Witzel

In other words, when there are problems in the West, we will look to the courts, governments, legal systems, or the rule of law. We like to have contracts, and we believe in the power of a contract.

But in the East and many other parts of the world, they like to have relationships with people they know and know they can trust. This means there is a better chance that neither party will ever default, nor will there be a problem.

In Negotiations Do Not Cause The Other Party to Lose Face

One of the most essential things in foreign negotiations is that you do not cause the other party to lose face, or all will be lost. All trust will be gone, and it will be challenging to get that trust back.

Be careful to understand this when you are negotiating so that both parties can negotiate in such a way that both parties can come out feeling OK about the negotiations. The win-win attitude in Asia and many other parts of the world is essential.

If you understand this, both negotiating parties will come out of the negotiations having won to some degree, and then the business relationship can continue without any problems.

If a loss of face happens, you may win this time, but the next time they may refuse to do anything for you again. And if that is the case, then the relationship is more than likely lost. If the business relationship is essential to you, then be sure everyone comes out feeling good about the negotiations or there is a mutually beneficial win-win.

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Frequently Asked Questions

How important is building a personal relationship in negotiating with Asian suppliers?

Building a personal relationship is crucial when negotiating with Asian suppliers. In many Asian cultures, trust and a good personal connection are valued in business dealings. Taking the time to understand and connect with your suppliers on a personal level can significantly impact the negotiation process.

What cultural nuances should I be aware of when negotiating with Asian suppliers?

Understanding cultural nuances is essential. In Asia, communication styles, hierarchy, and the significance of saving face can greatly influence negotiations. Being sensitive to cultural differences will help you navigate the negotiation process more effectively.

Is it common to haggle over prices in Asian business negotiations?

Yes, haggling is often a part of the negotiation process in Asia. It’s not just about the final price but also about building a mutually beneficial agreement. Be prepared for some back-and-forth, and consider it a normal part of the negotiation dance.

How can I establish trust with my Asian suppliers?

Trust is fundamental in Asian business relationships. Consistency, transparency, and fulfilling commitments are key to building trust. Demonstrating a genuine interest in your suppliers’ success and well-being can go a long way in establishing a strong foundation for trust.

Should I express my emotions during negotiations, or is it better to remain composed?

Maintaining composure is generally advised in Asian negotiations. While expressing enthusiasm or concern is acceptable, it’s crucial to avoid confrontational or aggressive behavior. Calm and collected negotiation styles are often more effective in building positive relationships.

What role does patience play in negotiating with Asian suppliers?

Patience is a virtue in Asian business negotiations. Rushing the process can be counterproductive. Taking the time to understand your suppliers’ perspectives and patiently working through the details can lead to more favorable outcomes.

Are there specific strategies to handle hierarchical structures in Asian companies?

In many Asian cultures, hierarchical structures are prevalent. Understanding and respecting these structures is important. Building relationships with key decision-makers and influencers within the organization can facilitate smoother negotiations.

How important is face-saving in Asian negotiations, and how can I ensure it?

Face-saving is highly valued in Asian cultures. Avoid putting your suppliers in a position where they might lose face. Provide constructive feedback privately, and focus on finding solutions that allow all parties to maintain their dignity and reputation.

What are common negotiation tactics used by Asian suppliers?

Asian suppliers may employ various negotiation tactics, such as building personal connections, emphasizing long-term relationships, and using silence strategically. Being aware of these tactics can help you respond effectively during negotiations.

How can I ensure a win-win outcome in negotiations with Asian suppliers?

Strive for a win-win outcome by understanding the needs and goals of both parties. Look for mutually beneficial solutions that address the interests of both your business and the supplier. Building a partnership mentality can lead to long-lasting and successful collaborations.

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