Boundary conditions to business relationships in China: the case of selling wine in China

Purpose - This paper aims to examine the role and limitations of relationships between buyers and sellers of grape wine in China. Although networks are believed to be critical for market entry in Confucian societies, they may also dampen the entrepreneurialism necessary to build a sustainable niche, suggesting that under certain market conditions relationships may have limitations, Design/methodology/approach - in-depth interviews with 26 marketing managers of Australian and New Zealand wineries exporting to China were completed. This information was supplemented with published comments from importers and agents in China. Findings - The nature and limits of relationship-specific investments in China were examined. Four boundary conditions to business relationships were found that suggest that, with certain product categories and early stage market conditions, close business relationships may undermine brand equity and growth strategies. Research limitations/implications - The four boundary conditions identified can be examined across other product categories and markets. Also, they can inform further longitudinal work on the interaction between relationship effectiveness and market structure. Practical implications - Managers should be careful about operating on stereotypical views of Chinese business buyers. Also, they should assess the viability of buyer-seller relationships under market conditions of high uncertainty and instead consider whether competitor relationships that assist with market creation would be more useful as an entry strategy. Originality/value - The findings identify the limitations of the relationship metaphor under certain market conditions.