BIZ TALK INTERVIEW: Charles Merkle – President and CEO of CBC Business Consulting.
In 1995, Charles Merkle founded his research and business consulting company CBC in Shanghai. Since then, he expanded to Beijing, Guangzhou, Hong Kong, Tokyo, Mumbai and Berne and is currently preparing for the IPO in Switzerland.
You came to Shanghai in 1995. What brought you here, and why did you stay? C.M.:After a career with ABB in the former Soviet Union, I was looking for a more promising perspective. I did a small research project for myself and travelled to countries in Asia and the Americas to find out where growth was happening, and where industrial investments would be successful.
How did you get started in market research? C.M.: From the very beginning it was clear that investors had only limited knowledge about the Chinese market(s) and that careful studies of the different segments would be the key to success. The second most important factor for being successful was definitely to have the right staff. This is why we added a recruiting firm to our China-based activities.
The market research firm turned out to be fast growing with an interesting transaction volume. After a while our international clients would ask us if we could conduct research in Hong Kong, then in Japan, Korea and so on. In 2005 we felt confident to expand to Japan and Switzerland, especially for conducting phone interviews with consumers worldwide.
The goal, still today, is to reach global coverage. Research, especially in big industries such as automotive or IT, is becoming more globalised, and many questions have to be asked in different countries at the same time.
You built CBC as a marketing and consulting firm in Shanghai and expanded to Hong Kong, Japan, India and Switzerland. Most companies do it the other way round. Why did you begin in Shanghai?
C.M.:In 1994 it seemed to me that Shanghai would be the most promising place for starting a new business. I was, however, not too sure if this would be the right bet.
Nevertheless, I wanted to give it a try. First, I went to Fudan University to learn some basic Chinese. In November 1995, I rented a very small office in the East China Power Building with the goal to have three consulting clients by the end of the year. With the help of the newly opened Swiss consulate, I managed to get into business. Our first client was a textile machine manufacturing company, which intended to start a JV in Xiaoshan. We served as a project management company, setting up their manufacturing JV in China. Our consultancy got good exposure in the media and even Swiss TV reported about us. A Geneva-based researcher saw the report and as he started to work on a project for Aprilia, the Italian scooter manufacturer, he called me to see if we could help.
For marketing research in China, what are the similarities/differences between other Asian and global markets?
C.M.:The biggest difference is probably that China is still new to research and there are many areas to be explored. Often, very basic statistic information has not yet been established, due to the size of the population and the fast development of China's industry. Take the motorbike industry, for example. The vast majority of motorbikes are now manufactured and used in the countryside. Factories which produce scooters go in and out of business in no time. It is extremely difficult to come up with an accurate figure of the total number of motorbikes produced in China. Estimates will vary from eight to 15 million per year, depending on the source.
CBC has many automobile clients. What are the current trends in the Chinese car market? C.M.:The Chinese car buyer still likes big cars, limousines and no hatchbacks. This will not change very quickly. On the other hand, there is little brand loyalty and people easily switch from Mercedes to BMW or even aim higher: “a Bentley” that’s what suits the Chinese driver’s ego best (smiles).
Earlier this year, you filed with the Berne Exchange, a market for small and medium sized companies in Switzerland. Why do you list there, and do you plan to list in Asia as well? C.M.: Originally, we wanted to list CBC in Hong Kong. We were, however, told this would be difficult for a company in the service industry. Shanghai would also be an option but does not yet accept listing applications from wholly foreign owned enterprises.
Then, we saw an opportunity in Berne. The Berne stock exchange is around 400 metres from our Swiss office. We decided to give it a try and hope to get listed this year. The main purpose is to be able to purchase other companies in Asia and Europe. We also believe that listed companies enjoy an excellent reputation, making it easier to gain the trust of new clients.
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