Katherine Whitman, equal partner and one of the co-founders of Pomegranate International, helps build bridges between American and Chinese businesses. “It’s not just doing business. It’s breaking barriers so people aren’t afraid,” Whitman said. “So many people in China will tell us ‘In America everybody owns a gun and people are all afraid.’ I say ‘That’s not true.’ And you can take away some of those misunderstandings [here] that all China’s goods are going to swamp us.” Whitman is a visiting professor in China at Mount Saint Mary’s College in Los Angeles which helps her facilitate business relationships. She got her BA in economics from Mount Saint Mary’s College and then went to work in the field of worker’s compensation. Next, Whitman earned two master’s degrees, one from UCLA in economics and one from the University of Redlands in international business, before she went back to teach at her undergraduate alma mater. In 1987 she and Peter Antoniou launched Pomegranate International to use their backgrounds in international business. According to Whitman, it was a time when China was starting to open up to American business. The company started as a trading company and in the early 1990s the transition began from trading to providing services such as consulting, business matchmaking and training. Specifically Pomegranate consults in the areas of contract manufacturing, technology transfers, joint ventures, executive training and product distribution. Whitman would not release revenues for her privately held company, but said it had 4 partners and 40 to 50 contract employees depending on the assignment. Whitman has led multiple business trips to China from MBA excursions, to trips with L.A. Mayor Villaraigosa to Guangzhou. She recently took a scouting trip to Burma and Laos. According to Whitman, Pomegranate International is targeting Vietnam as the next country to expand into. Question: Can you tell me about a situation where you have helped to build bridges between American and Chinese businesses? Answer: Bella Crafts from Guangzhou, whose product line is seasonal. Its market ranges from Kohl’s to dollar stores. Vice President Bella Huang was interested in expanding her distribution in the United States. She took me to her showroom and we talked. I thought she would be perfect to meet the 99 Cent Store, so I took her there. A lot of people could have done that, but she didn’t understand that there were many markets in the United States. She was selling to America and she didn’t understand that the people who shop at the 99 Cent Store have a different demographic then the people who might go to Macy’s or Kohl’s. If we’re talking about Easter baskets [for example] Huang had no idea what the Hispanic market was and that market likes certain colors more than others. The woman at the 99 Cent Store was trying to say they like bright colors not soft pinks. Huang was not able to meet the price point that they needed because she was putting in too much work on the products. Now they are both very happy as supplier and purchaser. Q: Are there any larger companies? A: Our specialty is almost exclusively small to medium-sized companies. For example, Hirsch Pipe and Precision Dynamics are big enough to do global marketing research on their own. It has to be a company that can’t afford to have someone do this exclusively. Q: Can you name any contract manufacturing companies you have worked with? A: Prescolite but they’ve been purchased by another client. They make recessed lights so they’re flush to the ceiling. We went from factory to factory and did marketing research for them. Q: Do you run into a lot of Chinese automotive aftermarket manufacturers? A: Before they entered the American market we worked with a number of those companies. They engaged us to show them where aftermarket things would be sold. I went around taking them to Pep Boys and they spoke with the managers or the buyers in order to get an idea especially of quality and price point. They then took these leads that we gave them and worked directly with the corporate buying headquarters. We provided them with the buying research they needed. Q: How has your core market grown? A: After we started in China we were invited to China to speak to businesspeople and then we were approached by some Chinese Americans who wished to host executive training groups from China. We were asked to do the organizing and training. Those groups could stay for a month. So we became familiar with the people. We would often go to visit them on our return trips to China. Members of these training groups asked us to help them buy equipment in the United States and help them sell these products in the United States. Because we had customers in China we started to find people in the United States for them. So it started from the Chinese side and it’s grown from the U.S. side. Q: What do your contract employees do? A: We have everything from translators both here and in China to people who do communications and brochures. Or we have a client who sends us all of her publications that will be for her American customers and we do all of the editing. I do a lot of contract work with people that do communications work. What they think is well-translated is not always well translated into colloquial English. Q: Speaking of public relations I know you said earlier you have been encouraging Chinese businesses to increase their PR efforts in the United States. Are they doing it? A: They’re moving in the right direction. Showing that you are engaged is our emphasis. Recently where there was a concern about contaminated pet food or products that had defects in them you had very little response from the Chinese side…There certainly still is not the sophistication…We just try to convince people that what Americans are interested in is responsiveness, to know you’re caring and doing something about it. The Chinese government has hired Hill and Knowlton and other big PR firms working for them now. Q: What are some technology transfers you have done? A: That is the least successful. A lot of Chinese companies ask us to do that. Most American companies are reticent because of intellectual property issues. Maybe the best thing you can do is try to buy an American company. This is just starting to happen. A lot of Chinese companies are now buying. They say it’s a lot cheaper to do it that way. Q: Is there anything you’d like to emphasize about your business? A: If anybody is thinking of becoming involved in the Chinese market they should recognize that it is not a single market. Entrepreneurs need to know there are some areas where certain products might be very easily received and there are others where they would not be. They need to understand the makeup in the Chinese market both geographically and economically . . . 70 percent of the people don’t live in the city.
Building Bridges
