This role-script was written by Dr Mia Hsiao-Wen Ho © 2024, National Taiwan University, Taiwan
A US RETAIL CHAIN TO CHINA
SCENARIO
American Retail Ltd. (ARL) is one of the leading retailers and manufacturers of apparel in the US.
At present, ARL is negotiating to set up a joint venture 1 anchoring the promising e-tailing market to
China. China is the largest e-commerce market globally, generating almost 50% of the world’s
transactions 2, and it has reached a strong growth of 17.2% in 2022 as consumers increasingly shift
from offline to online. Against this backdrop, e-commerce value is expected to reach CNY21.4 trillion
(US$3.3 trillion) in 2025 3. The COVID-19 pandemic has further driven e-commerce activities in the
country, as concerned consumers are increasingly using online channel for their purchases to avoid
getting exposed to disease vectors, a trend that is expected to continue even beyond the pandemic
Earlier, 10 years ago, ARL built a manufacturing plant in Taiwan. That is the only experience it has
had in that part of the world. Two other competitors: Barcelona Design Ltd. from Spain and Happy
Mumbai Ltd. from India, are also negotiating to get the deal. These two firms always compete with
ARL in international projects.
ARL came into contact with the Chinese at an exhibition in Shanghai. The prospect partner firm,
China Ecommerce Ltd. (CEL) is a private concern owned by a powerful group related to the local
government. The group owns several other industries and also a logistics firm. There are two
dominating industrial groups in B2C market and CEL is one of these. The other (competing) group
Wonderful Ecommerce Ltd. is already collaborating with Barcelona Design Ltd.
The project group from ARL has visited China a number of times and discussed the offer for the joint
venture with the prospect partner. In these meetings, people from both sides met and discussed project
specifications and other terms for the joint venture. ARL has been invited to visit China for final
negotiations. Most of the project details and some other terms have been agreed upon and all parties
are quite optimistic about an agreement. Chinese are responsible for marketing and logistics on the
apparel and have promised to generate the traffic on the site, except for the website layout and product
category that can be decided by ARL.
NEGOTIATION TEAMS
ARL, US
Mario Plan is the Vice President responsible for the International Sales division. Earlier, he was
working as Marketing Manager, and given his young age at 36, he has enough experience of
international projects of this type. He was also involved in negotiations for the project in Taiwan, as
a team member.
Amy Skeptic is a chief designer of ARL and has prepared and altered the apparel collections several
times together with the Chinese representative, William, the CEL’s consultant.
1 There are strict regulations in Chinese e-tailing industries that hinder foreign direct investment. The import tariffs on apparel are
also very high in China.
2 Source: https://www.trade.gov/country-commercial-guides/china-ecommerce
3 Source: https://www.globaldata.com/chinese-e-commerce-market-reach-us3-3-trillion-2025-says-globaldata/
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Charles Witty is an experienced Sales Representative of ARL in Asia-Pacific region. He has been
working closely with distributors, such as department stores and outlets, across China, Japan, South
Korea and Taiwan. Due to increasing demand from Chinese customers, yet the difficulties to reach
prospect customers who live in the rural areas, Charles suggested ARL to tap into e-retailing market
in China.
Isabella Wang is the Factory Manager of ARL’s subsidiary in Taiwan. Given her young age of 28
and as the second-generation of her family business, she has solid knowledge and extent networks in
apparel manufacturing and logistics management across Asia-pacific region.
James Control, a relatively young MBA from Stanford University, has been working with ARL for
the last three years. This project is the largest so far and the first one with an international dimension.
James is very ambitious and has been working intensively with the offer.
Rose Chen, originally from Taiwan, is an interpreter from a communication consulting firm in New
York. She has extensive experience of working with Southern-Asia countries and has been helping
different American and British firms in China.
CEL, China
Doris Ma is the President and owner of CEL. She is also the leader of the negotiation team. She is
around 60 and merely speaks English. She owns several industries and is very rich and influential.
She controls most of her industries herself and is therefore, a very busy person.
Chris Ma, the only son of Doris Ma, just obtained Master in Law (LLM) from London School of
Economics. He gave up a prospect position in a distinguished Law firm in London and reluctantly
joined CEL as a Special Assistant to the President. His fierce temper makes his succession of the
family business shaky.
Molly Chang works as Marketing Executive and she is expected to be the first Managing Director of
the proposed joint venture. She is 45 years old and has been studying in Europe and the US. She has
a solid background in customer relationship management of the e-tailing industry.
Patrick Ho is the Website Operations Manager of CEL. Before joining CEL, he worked as IT engineer
in Google for 10 years, specializing in web designs and customer database analyses and maintenance.
He is responsible to construct the website for the deal.
William Money, Vice President of Fortunate Consulting Group in China – an American Chinese
consulting firm specializing in projects between Chinese and Western firms, is responsible for the
project feasibility study, carried out for CEL. William’s wife is Chinese, so he speaks good Mandarin.
Nicole Lee is Secretary of State for the Department of Industries. She takes part in the negotiations
for all big projects between China’s and Western firms and is responsible for questions on taxes,
custom duties, residence permits and other government rules and regulations.
THE PRESENT SITUATION
This is ARL’s first project in China, and there are good chances that if they get this project, it will be
possible to get more projects in China. At its head office in New York, ARL has recently invested in
expanding its design division by recruiting new staffs and its capacity has thus been enhanced. ARL
offered the project at a price of $3 million with the following terms of payment and guarantee period
of 12 months.
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20%
30%
30%
20%
at contract signing
when on-line store starts
after first 1 million traffic on site
3 months after the first online traffic milestone
Barcelona Design Ltd has earlier delivered a project to China to another party in e-tailing industry
which is functioning very well. William Money has disclosed to Amy Skeptic, (perhaps with the
consent of Doris Ma) that the price offered by the Spanish firm, for the same project, is much higher.
However, he also said that ARL’s apparel collections are perhaps considered a bit better, given its
tailored-design for Chinese customers.
ARL does not know much about the Indian offer. However, they know that William Money has all
the information on them. There is a rumor that the Indians have very good contacts with some local
important people, so called “Middlemen” and that they are working on Doris Ma.
ASSIGNMENT
1) All participants require to read the supportive case material “American negotiating a contract in
China” and understand the different cultural behaviors between American and Chinese before
joining the role-play activity. Your performance in the role-play will be evaluated by the extent
to which you acted as the assigned role, showing his/her professions, personalities and cultural
characteristics.
2) Both the groups (US-China) formulate a strategy for the coming face-to-face negotiations, that
what they want to achieve on each issue. The groups are not allowed to contact each other while
formulating the strategy.
3) The parties would meet and negotiate. This is the last session and you have to arrive at an
agreement or finish negotiating accepting that there will be no deal between the two parties.
4) The outcome of the negotiation shall show the price, terms of payment and delivery time, and
any other terms agreed (e.g., marketing proposals, legal contacts, etc.).
TIME
1) Negotiations up to 30 minutes (maximum including the break).
2) Time out: Negotiators may take 3-minute break (‘time-out’) with maximum of 2 times for their
own consultations or for informal contact with one or more of other party’s team members.
This role-script was written by Dr Mia Hsiao-Wen Ho © 2024, National Taiwan University, Taiwan
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