26 June Negotiation Skills Training in Singapore - Top Tips for Business Negotiations in South East Asia

In the end of May I was giving two negotiation skills trainings for a German chemical company at their sales office in Singapore. The participants came from different cultures as Thailand, Japan, Malaysia, Philippines, Myanmar, Indonesia, and Singapore. Thanks to this great experience, I would like to share some findings with you on how to negotiate with customers or suppliers in South East Asia.

Tip 1. Each SE Asian country is different

South East Asia is a mixture of nations and cultures which have combined under regional block called ASEAN to assist with the development of the region. These nations are Thailand, Malaysia, Philippines, Singapore, Brunei, Indonesia, Vietnam, Cambodia, Laos, and Myanmar. Each Nation has a unique culture and is at various stage of development. It is critical to understand each of these nations are different – sometime very different and should be considered individually when developing a negotiation strategy. Be aware of intercultural differences and different levels of English skills.

Tip 2. Be prepared to negotiate

Negotiating is an in-built part of most Asian cultures and is therefore unavoidable. Be prepared that your negotiation partner will be familiar with bargaining tactics and will feel comfortable in applying them. As Western European negotiators are not so used in haggling this might feel unfamiliar to them. Seek advice of locals if unsure on how to develop your pricing strategy or do not have knowledge of these many variables. Negotiating in ASEAN has become an art, and many foreign negotiators will, when asked for their best price, immediately give the bottom price without realizing this is only the beginning of the negotiating process and are then left with a bad outcome.

Tip 3. Always have a smile on your face

Negotiating should be easygoing, so think of it as a game. Usually you will get the best deals when you’re friendly and keep smiling and laughing with the negotiation partners. Remember, face-saving has a much higher value in most of SE Asian cultures. A smile plus saying hello and thank you in the local language goes a long way. I also make a point of always making eye contact. These small signs of respect will help seal the deal.

Tip 4. Develop a structured pricing structure

When developing cooperation with SE Asian companies develop clear and well-structured pricing strategies. Put simply, price list "A" which is what you would really like to achieve (wish), price list "B" what you would consider your domestic wholesale price and therefore acceptable (want/realistic), and pricelist "C" which is your final offer (walk). Bear in mind that many ASEAN exporters, will expect you to consider quantity discounts, longer than normal payment terms, open account, and 90% of the time exclusivity. Finally, one must consider shipping terms, FOB (freight charges), etc., and the impact these pricing terms have on your prices. One point to your advantage might be the term exclusivity, this give you the right to demand minimum orders, minimum yearly sales and contribution to marketing and promotion costs in getting your product to market.

Author: Jutta Portner

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