FIPP International B2B Conference

Munich 2002

B2B Media in China – Case study of a German-Chinese Joint

Venture

Vogel Media Group- Brief History

Established 1891Launched MM Maschinenmarkt 1896

Leading B2B Publishing House in Industrial, Automotive and Electronic fieldLaunched Automobil Industrie, Elektronik Praxis,

Process, Umweltmagazin...

New field of IT IndustryLaunched 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 beginningof the partnership

Publishing Concept Human Resources Management Right way of cooperation Investment

Publishing Background of STIP

Book publisherTraditional magazine publisher:

No controlled circulation: Subscription based

Scientific contentNo business modelNo 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 resourcesSalary structure: 2-class organization?Who is the boss? Foreigner in a foreign

countryEstablish a business model

6 Years later...

InternalProof your partnershipExpansion and investment

Contracts- a piece of paper External

CompetitionAdvertising development and pricesRentability

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 ofPeopleMarket

Time and patience Set concrete targets:

With German headquartersWith Chinese partner

And...

…RELATIONSHIP!

Thank you!