Check your suppliers!

It is not uncommon for Chinese companies to make themselves look bigger than they really are to attract potential foreign customers, by making a flashy site and pretend to have offices at a prestigious address. But yesterday I came across a US company that is trying to do the same. The story started last week when I was meeting with a European multinational to discuss about several serious gaming projects that they plan to develop (such as a virtual world or a Second Life presence). The person I talked to told me that they are contemplating to work with a US development studio in Shanghai as well. He told me their name, but I had never heard of them. That is actually a bit strange, because there are not too many foreign-owned (or partly foreign-owned) game studio’s in this city, let alone ones that also make serious games.

So I decided to get in touch with them, to find out how they had ended up here, and see if there are possible ways that we could work together in the future. When I called them, however, it turned out that the address and phone number belonged to another company. The lady who picked up the phone said she did not know much about this company. They did not have an office in China and just used their phone number, but that they have a US sales person with a Chinese mobile number who I could call. The Chinese mobile number she gave me did not work, likely because it was the middle of the night in the US (where this person was based, I found out after a Google search). At first I thought the Shanghai company was their outsourcing company in China, but even that was not the case. The company actually only sells analytical instruments.

It seems the US company just pretends they have a Shanghai office, but is in reality probably just an outsourcing company without telling their clients this. From their (high quality) website you can see that they have many multinationals as clients. They even have a corporate blog in which they describe that they travel around Asia, among others visiting their office in Shanghai. Not sure what they did here (or if they even were here), but likely they did not visit their office. For merchandisers it’s now almost standard practice to visit factories in China before doing business with them. But it seems that the internet industry should also do this in order to ensure they are working with a professional company.