Expansion into the China Market

August 5, 2022

Heidy Zhou, Manager in Taylor Root’s Hong Kong office, specialises in recruiting in-house lawyers into the China market. She has successfully worked with numerous international companies to establish and build out their legal function in China. Heidy interviewed two lawyers, Terry Tai – Head of Legal at Pentland China and Bin Xu – VP Legal, Greater China & APAC at Farfetc who have both set up their China legal team and discussed their experiences;

1. Terry Tai – Head of Legal at Pentland China

What does your company do?
Pentland is a British privately owned global company that owns and invests in retail and wholesale businesses in the sports, outdoor and sports fashion sectors. In China, we have Speedo, a world-famous brand for swimwear and swim-related accessories. We also introduced the Ellesse brand in China in 2021, a brand for stylish sportswear, as part of Pentland’s strategy to drive the group’s commercial growth in the region.

What is your current role and how does the legal function work in China?
Taylor Root placed me as the first lawyer in Shanghai, China in 2020. I am now the Head of Legal, mainly responsible for the mainland China market. After I joined Pentland China, I believed that as part of the global legal function, we could work better with internal commercial departments in China. I tried my best to take a proactive role in cross-function collaborations, not only providing legal opinions but also offering solutions. When our value can be recognised by internal stakeholders, they trust legal more, and we are able to work well as a whole team.

What challenges have you encountered launching an in-house legal function in China?
Pentland Group is a brands management company, and different brands have different management and operations across different regions. As the counsel in China, I support not only the two brands that we have products sold in the China market, but also some other brands when they have affairs related to China. It is important for me to understand the different models and backgrounds quickly so as to act on the same page as my colleagues. The other thing I noticed was the cultural differences between the US company I had worked at before and the UK company I am currently experiencing. I am not meaning this was a challenge or that it was hard for me to adapt, it turned out to be an opportunity for me to test my resilience. Thinking positively on the difference and showing my sincerity and assiduity on the work, made it a smooth transition for me.

2.  Bin Xu – VP Legal, Greater China & APAC at Farfetc

What does your company do?
Farfetch is the leading global platform for the luxury fashion industry. Its e-commerce marketplace connects customers in over 190 countries and territories with items from more than 50 countries and over 1,300 boutiques, brands and department stores around the world. Farfetch’s business model is quite unique and is one of the few foreign TMT companies that have earned a solid business in the China market.

What countries are the wider legal team based in?
Farfetch’s headquarter is based in the UK and we have a well-established legal team in London. Farfetch is listed also in the US, so we also have a legal function there. In addition, Farfetch invests a lot in the Asia Pacific region with the core focus on the greater China market, therefore we have built up our legal team in Shanghai and Hong Kong, China to support our AP business.

Why did your company decide to launch a legal function in China?
Under PRC law, Farfetch’s e-commerce marketplace is defined as one of the value-added telecom businesses which are restricted to foreign investment. The business market for this sector in China is also quite competitive and largely dominated by local e-commerce giants like Alibaba, JingDong and Pingduoduo. From day one the company decided to enter into the China market and bring localized technology products and customer experiences to China consumers, the local legal function had been partnering closely with the business in navigating the regulatory complexities.

How has the China legal function evolved since you joined?
I joined Farfetch in mid-2017 as the first lawyer covering the great China region. Now we have built an APAC legal team of up to 10 members, covering a wide remit of scope from legal, compliance to government relations. Compared with traditional industries, our legal function has grown faster in order to catch up with the fast speed of the evolution of both the local business market and regulatory environment.

This article appears in our Global in-house market report 2022.

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