Go East, young man

European entrepreneurs get ready for the long haul in China regardless of the barriers

Uninspired at home and in search of adventure, Alex Devoto was just 23 years old when he set up Devotec Industries, a technology company that develops and sells a range of electronics products manufactured in China.

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"When I graduated I didn't want to become a banker. Going to China and setting up a company seemed a lot more fun," says Devoto, a British national whose company has tasted success by selling solar powered speakers. "I had no technical engineering background so it was largely a leap into the unknown.

"I had done a masters in China Studies, had begun to learn the language and had just finished an internship in Beijing so it sort of made sense. China is probably the cheapest place in the world to get things done, and we were looking at electronics so basically you had to be in China."

Devoto is part of the new generation of young entrepreneurs who not only see huge opportunities in China, but unlike many of their predecessors, are not undaunted by the prospect of doing business in the country.

With economic prospects in Europe turning extremely bearish as more nations find themselves reeling from debt crises, many young entrepreneurs are now looking eastwards for growth opportunities.

Alex Devoto

Aside of the desire to make it big, these entrepreneurs are also attracted by the huge domestic market in China, easy availability of talent and raw material, friendly investment policies and an overall environment that fosters and kindles entrepreneurship.

But it is not that everything is smooth sailing in China especially for small- to medium-sized enterprises (SMEs) and start-ups. Many companies like Devoto realized that learning and adapting quickly to the business environment was the key to survival in China.

"I learnt a lot of things along the way, which is one of the reasons why we've grown quite slowly. We were making mistakes but always looking to narrow down the options until we found the right answer.

"We saw a very basic speaker product in China that we thought was quite cool. We wanted to add some modifications. So we talked with designers and found manufacturers that could add a solar panel and a couple of other pieces to it."

But the company did face a lot of issues, especially in its negotiations with manufacturers that sometimes had different notions of quality control and standardization.

"There were definitely cultural issues," Devoto says. "You can spend a lot of time going around in circles. The best thing we did was getting someone on the ground in China who was well trained, to be there and really inspect things. The difference in quality is huge between manufacturers, and you need someone who understands the quality demanded in Europe or the US."

While Devoto largely learnt as he went along, European entrepreneurs now have access to an unprecedented support system both at home and in China to help them turn ideas into viable business propositions. The EU SME Centre, which is funded by the European Union, supports small- to medium-size enterprises looking to establish themselves in China.