FIPP International B2B Conference Munich 2002 B2B Media in China – Case study of a German-Chinese Joint Venture

Vogel Media Group- Brief History  Established 1891  Launched MM Maschinenmarkt 1896  Leading B2B Publishing House in Industrial, Automotive and Electronic field  Launched Automobil Industrie, Elektronik Praxis, Process, Umweltmagazin...  New field of IT Industry  Launched CHIP Das Computermagazin 1978

•Vogel Media goes Asia =International editions of Export Markt (Chinese edition in 1968) =Established a Joint Venture in HongKong in 1990 =Launch of Tranfer –Magazine (Asia edition) =Launch of Export Channel 1990 =Launch of TT&M (Technology Tranfer and Management) 1993, later MM China

•Internationalisation Strategy •Follow the clients •Clients go international •Clients want more than „just an ad“ •Follow the markets •Limited growth in Europe •Asia plays a new role in global market •Expand Brands and consolidate leadership Why going to Asia?

Vogel goes from Hong Kong to Beijing – Key reasons Acceptance by the readers – „only a local market leader is a real market leader“ (not Hong Kong imported) Acceptance by the government Acceptance by the market/clients Financial reasons

Vogel Media meets STIP (Scientech Information & Publication)  First Meeting in Beijing in November 1994  Why STIP  Introduced by Ministry of Machinery Industry  Relationship to government and industry  Publishing Permissions  Image  Target  Key people: Mr. Wu Guosheng and Ms. Lucy Xiao

Major difficulties in the beginning of the partnership  Publishing Concept  Human Resources  Management  Right way of cooperation  Investment

Publishing Background of STIP  Book publisher  Traditional magazine publisher:  No controlled circulation: Subscription based  Scientific content  No business model  No professional ad sales

The Business model – Right way of cooperation Move in a restricted environment: Publishing Joint Ventures not allowed Advertising Agency: Minority Shares Distribution: in Local hands Publishing License in the hands of Chinese publisher

Organization  Human resources  Salary structure: 2-class organization?  Who is the boss? Foreigner in a foreign country  Establish a business model

6 Years later...  Internal  Proof your partnership  Expansion and investment  Contracts- a piece of paper  External  Competition  Advertising development and prices  Rentability

The right business model Get close to the partner Secure your part of cooperation and knowledge License agreements Renew the targets

How we solved the main problems?  Understanding of  People  Market  Time and patience  Set concrete targets:  With German headquarters  With Chinese partner  And...

…RELATIONSHIP!

Thank you!