OSH-Interview — Alexander Protasov
In the second edition of OSH-Interview project we continue to introduce successful entrepreneurs who are doing their business in China to our readers. This time we have interview Alexander Protasov – an entrepreneur who initiated and accomplished a very range of various business-projects in different parts of the world. He started his career in France and then moved to China being amazed by its dynamic market. He believes that today China is a place where you have unique business opportunities which you could never have in any other place. In this interview Alexander shares his entrepreneurial experience, tells us about several of his projects and gives useful advices to young people who are eager to launch their business.
- Alexander, before we ask you about how you came to China and what you are doing here now, let’s remember the start of your career. As we know, it was something related to exhibition organization and providing all-inclusive services for exhibitors, could you tell us more about this period?
— Well, when I graduated from International Business School in Australia, I decided to go back to France to find first working experience. The first place of my work was an event company, which was organizing exhibitions. It was the organization of big professional exhibitions for example, the real estate exhibition MIPIM in Cannes, South France. My mission was to find and bring investors for this exhibition because the most important real estate projects in the world were promoted there and it needed investment to realize them. As an example the Palm Island in Dubai, or even the MIRAX Tower. It was quite tough job, participation of the exhibitors (Developer, Architect…) was depending of the venue of the investors, it was the heart of the business to realize such project.
I did it for two years and after that, a French communication company proposed me a job and persuaded me to quit my company. This company also was working in the field of organizing of exhibitions, but it worked specifically with exhibitors. It provided all the services which exhibitor can need during the exhibition, including the most luxury ones.
- Why was this company so interested in you and what wereyou in charge of there? Could you name us some of your clients?
— They wanted me to bring well-know Russian Groups since they knew that Russian companies had more interesting budget to promote their projects at that time. Real Estate business in Russia was booming, when in Europe it was already mature. I’m talking about companies like “RosCreditBank, “Peresvet Invest” and others. My main task was to bring these Russian companies to the exhibition in Cannes and then we provided all kinds of services which they basically can need on this exhibition: stand, translators, flyers, transportation, hostess, accommodation, yacht, cocktail-party and so on.
I can say that our company was quite small but we were growing very fast just because of Russian companies. When I started to be in charge of the sales department, my objective was to make 350 000 euro in one year. But we did 6 times more in only 9 months. Before the crisis in 2008, particularly Russian companies made 80% of our company’s turnover. They wantedto be the best, and we offered them what they needed. I started to hire many Russians employees. This French company became Russian-French company, it was a melting pot of culture.
- Can you specify what services did your company propose to your clients?
— Firstly, what we were doing for them is organizing their image. When some company wants to introduce a project on the exhibition it needs to have a strong image that everybody can see and remember. Only in such way they can attract investors and customers during the exhibition. That’s why they ask us to put up their project. As an example, “Metropol Group” which wanted to introduce a big project in Montenegro “Sveti Marko Island” and we organized everything for them. It was only tailor-made, each client wants a special service.
- If it’s not a secret, can you tell us, how big can be profit in this business when your clients are Russian companies and how much do they dare to spend?
— To be honest, a lot. The thing is, they understand that to make an efficient promotion in only few days of exhibitions, they need to show off and attract people with entertainments. They had an important budget for the communication. For one exhibition like MIPIM, which is about four days, some of exhibitors can spend more than 1 million euros. Our Clients were very picky and wanted to be on the top, they had good ideas but the problem they didn’t know how to get it. Especially in France where connections are more useful than money. Our strength was our connections and business network because it was our job. Get and offer what our client can’t reach, it was our business plan. For example, client needed a special request for the next day, he was contacting us, and we arranged it. A service like this doesn’t have a market price.
However, after the crisis in 2008, French companies started to go down, especially those, which were engaged in the sphere of exhibitions. Most of our clients in Europe and in Russia were maintaining a low profile and budget cut, especially for communication and events expenses. That time I decided that itwas the right moment to get into a new challenge.
- Okay, and then you came to China seeking for a challenge, what was your first project here?
— When I left my job, a few months I was travelling and discovering new culture. At the meantime my father, who is Russian, launched “DoorHan Asia” in Suzhou. This company is a Russian manufacturer and it is the first producer and distributor of automatic doors in Eastern countries. My father invited me to come to China and see how it was here. I liked Chinese market, it was very dynamic, especially for an entrepreneur. I came here a couple of times and in 2010 I opened my first company in Hong Kong, which was the easiest and fastest way to start trading business.
But after some time I realized that if you want to make trading in China, it is better to make it not in Hong Kong but in Chinese Mainland itself. One of the reasons is that you can hire people and it is more professional. I opened “Suzhou Ace International”with main office in Suzhou.
- What was the main direction of your company?
— The main direction was trading, only export and I was finding my clients only within my network. I was exporting all kinds of goods, automobile parts, electronics, and textile. It was very interesting, I learned a lot, from production to logistics.
- We heard that a certain period of time you had your own brand manufactured in China, what did you produce?
— Yeah, after some time I tried to become a little more focused. I wanted to be concentrated in only one thing and I created my own brand. In some way it was a crazy idea because I knew nothing about it, but I did it anyway. It was a massage product. I had distributors in France and England and after a year of existence of this brand we already had a good turnover. But for some personal reason, I sold my brand.
- So you started here in China with trading and then developed your own brand. What was the difference between these two kinds of doing business? Which one was more complicated?
— Of course, creating your own brand is more complicated. Firstly you need to find a manufacturer that is ready to produce for you with not a huge quantity at the beginning. I found my manufacturer in Shenzhen, it was not a very big manufacturerand it was the reason why we found common interest. Then you start to negotiate with them about a production of the new mold. In its turn, before the negotiation about a mold you have to work with designer, because you need something special and something what people would buy. Then, when you found the manufacturer and negotiated details of the production process with him, you need to design and produce the package of your product, which is also very and very important. You also need to register NP (Name Protection) of you brand, make your website and so on. In other words, you need to do a lot of marketing if you want to create your own brand. And the final task is to convince the client to buy your product. There are some steps to do it and certainly it takes some time before you start to make money. The most scary but also very exciting feeling, is that before launching your new product, you never know if it’s going to work, if your client likes it.
- Well, for some reasons you stopped your brand. But it wasn’t your only project, right?
— Right, at that time I was still exporting from China and the next project turned out to be in Angola. My sister has been living in Angola for 5 years already and she was working in Oil and Gas business there. I should say that Angola is a fast growing country, it is like new Dubai and there are a lot of opportunities. But at the same time it’s very difficult to make business there, because you are not a local person. You need to find a right partner, right connections. We managed to find a partner and opened “one-dollar-shop” there called “Mambos Fixe”. It is a concept shop where you can find all small commodities, from home furniture to jewelry. All the goods we imported from China. I was sourcing and my sister was distributing, selling throughout our shops.
- Why one-dollar-shop? Is a shop with a fixed price for all the products such a good business?
— This concept is famous in USA and now in many countries. Fixed price is a trick. You see one dollar things just when you come inside. And then, the more you come inside, the more expensive goods you can find. That’s the concept of one-dollar-shop. Illusion of fixed price just motivates you to go inside. Nevertheless, our prices are much lower than other shops around. We really want to offer the right price to our client.
- How many stores do you have now in Angola?
— We have 3 stores now and are going to open another one soon, this one will be bigger, about 1000 square metre.
- As we can see, you are engaged in lots of different activities, what other projects do you have in China?
— Yes, I like new experiences and today we are a Group that is well organized for each activity. Our main activity in Chinese market, at which I am working since a while, is protective equipment such as helmets, safety glasses and so on for workers of Oil and Gas and Industrial companies. We started to work with major Oil & Gaz company in Asia and today, we have several clients. You can visit our website: www.ace-ogis.com
- You said that you were doing it for Chinese market, do you import this equipment from Europe?
— No, it’s manufactured in China with international standards and I sell it to Chinese clients. We also have clients in Africa, but China is our main market today.
- That’s great! When you are a foreigner and sell Chinese product to Chinese customers in China, it really means that you are good at doing business. In the end, couldn’t you give some advice for young entrepreneurs? What do they need to do if they want to make business in China or any other place?
— When I arrived 5 years ago, I was seeing China like a jungle, I was completely lost. Now I have better marks. It was so fascinating that I decided to stay. It is much more difficult to do some business here than it was 5 or 10 years ago. A lot of competitors around you, there are plenty of people here who want to do business and they are motivated to do anything to get the market. Besides, this country has its specific culture and most of people who want to do business here don’t know the language, they don’t know how to get connected here. That is a big challenge for those, who are going to start some project in China. Also, the market is moving all the time, so quickly, you need to be always aware and follow the behavior of people.
Anyway, for young entrepreneurs I can give an advice to be focused on one thing and go step by step, don’t be in the rush to make quick money. Take actions, even if you fail a few times, one day it will be worth it. I tried different businesses before I realized what I really want to do. But it was the right decision for me. I took my time to understand the market. When you choose a direction you have to try to do something special and unique. Another advice that I can give is to choose right partners and be very careful when choosing them. It is better to work with people who you can trust, than have unexpected problems in the future. In China, you have many business opportunities that you will never have in your country, it’s you now to do your best to get in the market.
Interviewed by: Klim Likhitinov, Evgeny Lugovoy, Vadim Koziashev
Edited by: Vadim Koziashev
Photo by: Artem Chernov — OSH-Productions