By Doug Barry
As we hear more stories about Americans doing business in China, one common element is the number of people who got involved with the country because of studying or visiting there when they were young. Though not a prerequisite for success, it does provide certain advantages and insights.
Jon Garrison of Salt Lake City, Utah, went to China in 1998 on what he called “a lark” to study abroad for a semester at Nanjing University. While there, he came across the Hopkins-Nanjing Center (HNC), an academic partnership between Johns Hopkins University and Nanjing University, the first Sino-American academic partnership to be established in modern China. After graduating from college, in 1999 Garrison returned to HNC to earn a Certificate in Chinese and American Studies.
Years later, Garrison went to work for Dalian Wanda Group, a privately held Chinese multinational conglomerate that invests in real estate, makes films, and owned a chain of movie theatres in the United States among other assets. He learned early on about the unique characteristics of large Chinese-owned companies, for example the Communist Party official embedded in the company. “I wondered why this person, who was second only to the chairman in seniority, was there, but it was really about reminding everyone of the revolutionary principles.” Garrison worked in the division responsible for investments in cultural industries abroad for a couple of years and loved it. No mastery of revolutionary principles required.
EnRoute is on its way
In 2017, Garrison’s friend Jinhua Hou, a China native who had worked with Garrison at the investment bank Goldman Sachs, was ready for a new challenge. The two wanted to start a business together. Their combined experience of private finance and spotting opportunities in China led to the creation of a new company providing inflight entertainment for Chinese airline companies. EnRoute Global was on its way.
“We started with Sichuan Airlines and their 100 planes,” Garrison recalled. Then we expanded to an even bigger carrier, China Southern Airlines, and have multi-year contracts with them.” Early on, EnRoute’s inflight hardware consisted of tablets handed out on board. That evolved to passengers bringing their own devices and EnRoute providing the inflight entertainment options with the company generating advertising revenue. “Companies responded well to having a captive audience of higher earners who had nothing to do but look at a screen for several hours with our content screening.”
EnRoute is now working on a similar business model with Chinese railways and the over 3.5 billion trips taken each year by a captive, and for advertisers, a captivating audience. But that business suffered during the pandemic and has just recently shown signs of life again. “This experience reminded us of the importance of knowing your vulnerabilities, so we began exploring other opportunities. Also, when the airline customers decommissioned tablets in favor of Wi-Fi systems, that cut our audience size in half.”
Meanwhile, EnRoute aligned with licensed payment processors out of Silicon Valley that handle Alipay, WeChat Pay, and Union Pay. NihaoPay of Santa Clara, California, the brainchild of a Chinese American, enables Chinese buyers to purchase products and services with Chinese currency and pays the US vendor in dollars.
Are there vulnerabilities from China’s strict data privacy requirements? Not for EnRoute because it doesn’t collect or use personal data, which is limited to the banks, airlines, and other partners. Garrison is aware of the rules and has external compliance experts if he needs to advise others on privacy issues.
A solution for that
Garrison is a keen observer of China consumer trends and the challenges some US companies have monetizing them. He has used this knowledge to expand EnRoute’s service offerings. They want to be a turn-key solution provider for their clients. Some clients may just want to get their brand in front of a captive audience. But others might have payment issues or fulfillment issues. For example, some US companies that send goods to warehouses in Hong Kong and the mainland have trouble tracking inventory and losing track of product expiration dates. EnRoute has a solution for that. In other cases, the client will tell them the product and EnRoute will figure out how to get it in the market from start to finish.
“Honest private conversations are welcomed and are part of building trust.”
“We have 10 products going through our process right now. One is a bottled water product in China. We are looking to expand the portfolio for that client. We will provide payment solutions, logistics, and related services.”
Another venture is a ski and snowboard company that Garrison and his partner are helping get established in China. They are helping with finance, operations, marketing, personnel, budgeting, and other tasks. “Being an entrepreneur is so cool. You get to learn things all the time.”
In the middle with the middle kingdom
One lesson he’s learning is the fragility of the bilateral relationship. He has many friends in China, and his wife is Chinese. They have two young daughters, who on the day we talked were eager to start their Valentine’s Day party. “My family is in the middle of these two countries,” he said.
He understands that relationships wax and wane. The country’s politics and policies have evolved. China’s approach to Taiwan and to the United States will also evolve—for the better he believes. “The massive population of China will endure. And our company wants to engage with it.”
He thinks the idea of westerners believing China will liberalize with more engagement with the United States has lost some credibility, but he thinks it is too early to tell. He wants to keep engaging and see where things will go. Will he join the voices publicly critical of China’s behavior? “No. What purpose will that serve? Obviously, I’m opposed to people being maltreated. We can and do work for the common good in the space where we have influence.”
“If others are bailing out, that will create opportunities for those dedicated for the long haul.”
He said he always felt he could be frank with friends and business associates in China. “Honest private conversations are welcomed and are part of building trust.” On the US side he believes: “It’s a little much to expect everybody to put themselves on the line by advocating loudly for American values, especially for those of us who don’t have a secure government job.”
Garrison says he cares as much about the issues as his elected representatives do, and he pays close attention when they speak at the World Trade Center Utah, where he’s a member. “People like me are practical. We ask ourselves and others about looking for alternatives to manufacturing in China. But you have to ask, ‘to where?’”
“I believe in civic duty. I was an Eagle Scout and was a Scout leader when I lived in China.”
That’s one way to introduce different values in another country. As for future business prospects in China, he said, “If others are bailing out, that will create opportunities for those dedicated for the long haul.”