China Market Research Group (CMR) Founder Not Looking for Investors or Acquisitions, but Says Company Could be Acquired in Five Years

Privately held, Shanghai-based China Market Research Group (CMR), a newly formed market intelligence provider, could be acquired by a strategic in five years, according to its managing director. Until then, however, CMR is not looking for outside funding or for acquisitions, said Shaun Rein, the American citizen and veteran China hand who founded the company and financed it with his own money.

Down the line, CMR could be acquired by companies like Aegis Group-owned Synovate, VNU-owned Nielsen or British-based Taylor Nelson Sofres, Rein said.

The financing for CMR is "100 percent me," said Rein, who is a Chinese-American, fluent in Mandarin. His background is in China-related research for venture capital, particularly at Inter-Asia Venture Management, which he billed as "Asia's first VC firm." Inter-Asia was the company that brought McDonald's and Ikea to China, noted Rein, who was a principal and chief of research for Inter-Asia in the post-McDonald's years.

Rein's research specialties at Inter-Asia and elsewhere were the education sector and IT investments, which led him to Boston-based WebCT, an educational software company that in turn made Rein its country head in China. WebCT recently sold for USD 180m to Boston-based Blackboard, Rein said, and when he left WebCT after the sale, at the turn of the year, he founded CMR. At CMR, he advises Fortune 500 companies and small- and medium-sized enterprises on entering into or expanding in China.

The firm specializes in qualitative research and competitive and market analyses, and currently focuses on three areas, Rein said: first, VC and PE due diligence; second, educational technology; and third, food and beverages. In addition, Rein has advised companies in other sectors, including fashion and cosmetics, he added.

The start-up expects to do under USD 10m in business in its first year and to expand to a ceiling of around 50 employees. "I don't think you can find enough good people in China to do the level of quality research that I want above 50," he said.

American firms entering China need to understand the fashion and quality aspirations of Chinese consumers, as well as the differences between the biggest cities, Shanghai and Beijing, and the rest of that vast country. "Very often what I advise clients is: Look at what worked in Shanghai and Beijing 10 years ago; now copy it and bring that into the internal center and western parts of China."

As far as Western companies entering China, generally "I think it's better to be a second mover," he said. "Let the first mover go in, get the government support or non-support, and then the second mover can navigate properly."

by Louis Chunovic

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