Wednesday, June 04, 2008

Duff & Phelps Goes To China

Duff & Phelps (DUF) announced the opening of three offices in China with locations in Shanghai, Hong Kong and Beijing, as part of its continued global expansion. Of course the market is huge and visions of financial sugar plum fairies dance in the minds of executives and shareholders.

But wait a second the market is huge and growing. The Chinese Stock markets have a great many companies which are relatively unknown outside of their domestic markets. They have assigned nine professionals to be resident in three offices. The firm has 1,100 employees worldwide and only nine are earmarked for the Chinese offices.

The coverage is light to the point of being laughable. Expansion into China provides a conundrum . The market is huge. You do not know what your client will need. They will expect expertise and depth of knowledge across many companies. How do you generate that overnight.

Expanding into China in this industry is like expanding into the US opening an office in Manhattan, Chicago and maybe Silicon Valley and then claiming expertise in US business. There’s just a lot more to it.