Biz Blog

Mar 2019

Accessing China market from your homebase

    Thinking about selling stuff to China? Puzzled by the hassel of finding local landing point? The Internet has eliminated the boundary of businesses between domestic and international.

    Brand internationally but act locally, may be the best starting point. Still puzzled? Just look at Canada Goose.

    They started to be popular all in a sudden in China and got so many fans even years before openning their own shop in China. Thanks to the magic of Internet driven meme, the overseas Chinese including the residents, students and tourists, lended their overwhelming buying power for the brand.

    The business set up costs and procedures are comparatively higher and more complicated, than if you target the overseas Chinese as a great pilot run. While you could monitor real time whatever you are investing in the branding and marketing campaign, it's so easy just to do everything in your homebase channel, adding in the Chinese favored charactors. Of course it wouldn't allow you to bypass the critical stage of internationalize/localize your brand for China market, but at least makes you more focused on your brand itself, instead of worrying too much about the logistics, local regulations, etc. Of course, those factors should be considered more or less, and I'm not encouraging any export of unlawful goods to China or in an unlawful way, but bear in mind, each returning Chinese would be allowed with a specific amount of goods carrying across the border, leagally. One should always abide the law, no matter which business, but anyway, the Internet has shortened the distance very much between you and your customers, and don't forget to use the Internet influencers properly, to greatly enhance the efficiency of your marketing, from your homebase.

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Jun 2018

Fly by train?

    China has been well known of its fast developing high speed trains in recent years. Viral videos have flooded Youtube showing off the tricks of real time speed indicator and coin-standing experiments.

    But how do I decide if I should take a high speed train in China over flying?

    Good question! And according to my own personal experience, especially regularly traveling by both air and train, I would set the bar at 5 hour journey for the train over airplane, for the sake of time efficiency. If you count in the factors of at least 90mins head time arrival at the airport for security check and so on, plus the 40mins delay as common sense of domestic flight risk, your 2 hour flying time could be easily added up to 5-6 hours door to door. But for the train, mostly its stations are closer to downtown than the airports, plus the head time before departure could be as short as 30 mins to be safe( I literally had slipped into the gate just 15 mins before the departure, not recommending though), your journey would be more delightful if you could take a walk whenever you feel like on a high speed train, on a mostly punctual shedule, within a 5 hour jouney.

    To put it another way, that happens to be within the distance from Beijing to Shanghai/Hangzhou area or anywhere in between. So if you are just winning by a half to one hour by flying but risking way more of delay, why not take the highspeed train with flying speed?

    Just check out the pictures taken of my own trips, not bragging though, to be honest the one way ticket of Business Class on a 350KM/H train from Beijing to Shanghai, is only about 300USD per trip, meal included, probably just about a regular season Economy Class airline ticket! Can you tell the differences between the pictures?

    One more tip: no need to wait for the take off to flatten your seat/bed, when you fly by train!

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Nov 2017

Numbers are numbers

    The perception of seriousness comes differently from around the world, though most of people would take seriousness very serious, especially in their businesses. I'm not sure about all the laws in North America, but at least in Ontario, I was told that the highway patrol might pull you over if you drive constantly at 90 or below, or you'd be passed by many vehicles impatiently even if you stuck to the speed sign of 100KM/H. Of course, over 120KM/H on HW403 would definitely risk you a speeding ticket. But here's the trick, how come people have a "buffer" tolerance on speed limit on top of the sign? In China, I'm not saying there's no speeders, but you literally could get a ticket once you pass what the sign says.

    In other words, numbers are numbers! It shouldn't be overinterpreted as "being casual or tolerant" or not, they're simply the different ways of thinking.

    My working experience proved that this difference not only could impact your driving behavior but also influence your more serious business. The concept of being punctual would be one simple example, but I'm here to talk about occurance in even more challenging situation.

    One of my Canadian client in agri-food industry once carried out production as per its Chinese client's specs. And there was a key quality indicator that the moisture was allowed to be between a specific range, say 10-11% for example. However, the Canadian fellows perceived the indicators and carried out the production targeting a moisture at 10.5% within that range as worldwide recognized, though having the final product indicators ranging from as high as 11.3%. The Chinese side raised their concerns very quickly, questioning Canadian side's seriousness to their specs.

    The Canadian side felt very innocent saying, "yeah we aimed the best at your upper limit, and will seriously kick out those failed ones once above 11.3%, which we set in our mind as a common sense. Everything will be fine! "

    "Oh no, it's not fine, we set the range from 10-11%, any point below or above would be rejected!"Complained by Chinese side.

    After assisting a little while of discussion, I found this was rooted in the difference of perceptions of numbers, between the two countries, just like how we see the speed limit differently. The extra 0.3% on top of 11% was set in mind by Canadian fellows just as their own perception of giving "a bit of flexibility" to the "seriousness", though they still respected the given 11% upper limit, just having different understanding about where and when they should start kicking out the failed ones. Misunderstanding was cleared then and we all learnt a good lesson, that how we keep it up to the numbers. 

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Nov 2015

Double Eleven(Nov 11th) Carnival Is About To Rock

    It is very well known by Commonwealth of Nations plus the United States as a day to commemorate those veterans and deceased heros in the wars on Nov 11 each year. Coincidentally, with no disrespect, the same day was interpreted as a bachlor day then with four "1"s representing the single people and afterwards innovated into an online shopping carnival promoted by the e-commercers, in light of encouraging those who don't have a date to shop instead to celebrate themselves.
    Dated back to 2009, when Alibaba first started this event as a shopping carnival that allied with its hosted e-commercers to give selective promotions on this specific day, the successful campaign was said to have created a holiday out of the calendar.     Within that single day, the Tmall, B2C subsidiary of Alibaba, has reached 50Million RMB. 35Billion RMB sales was accomplished in 2013 event though the first 10Billion RMB sales was sealed within the first 38minutes on Nov 11, 2014, with 70% contributed by the mobile app side!
    Behind the scene, an evolution of e-commerce is undergoing, from a complementary of the offline businesses to somehow a combination or even subsitute of online-offline businesses. The pinch-point was accuratedly targeted that the geographically inbalanced shopping resourced are curved by the online shopping plus the acitivated offline logistecs. The courier service was first boomed and even then paralyzed by the overwhelming request occured within a single day or so. It might have taken 2-3weeks for you to get your package which used to take only 2-3days normally. The transitting stations are overflown with the package floods, see picture below.
    The big data theory was emerging along with the explosive development of the online transactions. And one of the practices was to predict and balance the transactions in terms of when, where, who, and how many. Nowadays it is no more of a simply multipled volume promotion but a complicated planned and monitored event otherwise the whole system could be halted that no one could get nothing by the end of the day.
    The demonstration of the success inspired many other players in the field including Alibaba's long-term competitor, JD.COM. With Alibaba's claim "Double 11" as its own brand to the authority, JD and other competitors started to fight back by questioning the legitimacy of this monopoly along with creating their own shopping events on different dates. Though Nov 11 remains its dominating position.
    And this year, the fight expanded into the supply chain that JD accused Alibaba to force its suppliers to pick an exclusive side.Some say this fight will lead to no winner but consumers annoyed. Anyway, more interestingly, the international players are rushing in, including the Amazon, and what is more, is some business like AirCanada, just released its exclusive promotion in China, with a 11% off on "Double 11 Day". The storm is brewing, let's see how it goes this year.

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Aug 2015

Would distorted subsidies strangle the Internet Biz after reshaping it?

    When Apple finally released its Apple Pay service in late 2014, China has long ago owned its huge base of mobile payment users, boomed by its local Internet tycoons, like Alibaba and Tencent, even thereafter those innovated Internet payment services has already caused the caution of Central Bank of China and other traditional game keepers.
    It all started from one simple application or two in about 2 years ago, when the Chinese stocks were numb and people were offered with an Internet packaged way of buying monetory funds, especially through their cellphone based mobile Internet. The higher than bank interests attracted billions of personal savings within a year. And during the same time, some Uber like taxi calling applications went online when people's complaints about getting a taxi accumulated to the peak. You get free rides or rides costing you almost nothing during the battling Chinese New Year session between Didi and Kuaidi, two of the major competitors back then. As most of people were aware that there was no free meal but only hundreds of million subsidies from the application operators as a stimulus for you to use their apps.
    It started to go off the track soon after more and more investors rushed into the game. It was like the old Internet Bubble that everyone would expect to earn the quick money by simply putting another "0" after the current company equity value and sell it to the next taker. Everyone buys on the future instead of the solid profit or at least something makes sense in the business. So the only standard turned into the "volume" and "activity" of the user bases, which in the eyes of traditional telecom carriers are very much easily to be manipulated. Yes, even the old players in the field of traditional telecom business jumped into the arena, fully armed.
     Why so? Well, if you recall, the major telecom carriers have been subsidising their distributors for years to fake numerous cellphone sim cards as actual users. Or to say the distributors would buy the sim cards in bulk and activate them as real users and keep them online everyday in order to get the subsidy from the carriers. In that sense, the carrieres didn't care about the status of the users nor the costs to keep those zombies alive. 10s or 100s Yuan per user was a very fair subsidy to the distributors every year. Check out the picture of a specialized sim card cultivator for the distributors to keep the card "alive".
distortedsubsidy1 distortedsubsidy2
     The enforced "real name" policy by the government requesting every sim card sold to be matched with a real ID, plus the damatic cut in the budget of such kind of subsity from the carriers to the distributors, the zombies had to survive in other ways. "Fortunately", the Internet "Angels" brought the blood. Now as one Internet startup would only be considered for a next round of investment and rather not think about their profit, the enterpreneur would instead "buy" the users instead of "winning" them. 10 yuan per user per application per month, sounds like a fair deal! And the zombie keepers are openly saying they worry that they don't have zombie enough! When the companies care about more of luring and looting the investor for the next round than getting their business heathily profited, what would happen? They dump the real business. Yes, you heard me right, and I couldn't believe I heard someone in the real world running an Internet startup just refused a 100 yuan per user commission instead looking for even more bulletins to pay for its own advertisement! You can't say that some of the investors were NOT aware of that but still fond of that, to pass the problem to the next one while keeping the profit of selling the equity to themselves. Some enterpreneurs even openly say that they don't mind closing down or claiming bankrupcy after the C-round investment if they can not make it IPO afterwards, no matter the business turns profitable or not. Or they didn't intend to go IPO at all.
     The individual adventurers are also rallying to cash the subsidy by acting both seller and buyer in the same app. Even Uber can not exemplify itself from a subsidy driven business model in China, and it suffers a lot of hostile drivers faking themselves to be passengers with another phone, to book their own car in a Uber less-active area where they can have a great chance to succeed. For the record, in China, Uber subsidies the drivers other than the fee that passenger pays to the driver, in a good will. Sadly the subsidy didn't fully go to boost the real needs. But so far no one has had enough gut to break the curse of "no spending without subsidy".
     What would happen next? Another Internet Bubble Burst? But I still believe some real good guys would survive. Curious to know!

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Jul 2015

Gadget up your jogging!

    Once upon a time, Chinese were considered to be a group of skinny or even tiny people or at least used to be in good shape. But nowadays the modernization of the country brings people not only the faster pace of the life, better choices of cuisine, but also the obesity. The research revealed that the total weight that Chinese has put on during the past 10 years might have been more than that gained by westerner for 30 years. So Chinese people are facing the challenge of those obesity related problems and sickness right after their suffer from the poverty and the starvation.

    Like many countries, working out becomes more and more of a trend in all age segments. And the way varies from traditional Chinese Wushu, to all kinds of indoor/outdoor acitivities. Jogging has been somehow thouht to be edged by other activities which involves either more of a social character like playing in a soccer team or at a badminton course or more of a luxury/trendy factor, like in the gym or on a golf course. But all in a sudden jogging turned the table and became one of the hottest work-outs among people. From parks to trails, you might have noticed more and more people are joining this campaign, even in teams. What changed people's first impression considering jogging as a boring and more professional way of work-out into a popular rush? The answer lies in the gadget, and in most of the cases, it is just an app in your smartphone.

    About 2 years ago when mobile internet becamed handy to people, it perfectly bonded with the step-counting or location-based service(such as GPS) to depict a roadmap of your daily jogging/walking. And you may share that as a diagram on your Wechat(a very popular Instant Messaging/Social Media in China) or many other channels on the Internet, by simply one single click. The game was on since then and more and more people joined for the motivation, fun and even serious competition. Jogging became no more boring and lonely but fun and social. A lot more people joined the campaign even as starters, and they would feel less shy because you could always find some of your friends at the same level and people tend to encourage each other no matter what level they are in. You may encourage or be encouraged by your old friends and even meet new friends, both online and offline. Please see below the snap shot samples of one kind of the jogging social app.

jogging social app jogging social app

    In this wave, wearable gadget suppliers have been turned on and yet many new products would come out of the inspiration of the trend, but also many traditional sport gear brands like Adidas, Nike are excited to enhance their success and even release the cross function products with Internet connections.

    The market will further grow and inspire the newer gadgets/apps. Let's make the work out more of fun for the exercisers and profitable for yourself!

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Jul 2015

Cafe enthusiasm turns enterpreneurship on in China

    Several years ago, you might have heard or even witnessed a successful surge of the coffee out of an ancient tea dominated country. Back to 15 some years before, from Starbucks, many Chinese learnt that coffee is not only a specific drink, but with a variety of Espresso, Latte, Americano, etc. And 10 years before, the private cafes were starting to boom, whereas you might have found different brands of the cafes around the city, to provide people some taste of a western quick-bite stop, or somewhere you could hide for hours, or even a meeting place to be, for serious and casual.
    The most cafe spotted places have been the malls and tourism attractions, in light of a sustainable and heavy customer flow. Those placed once have been dominated by Starbucks but now more and more chained stores have emerged during the past 5 years, with Costa Coffee as a representative. And even more recently, some private brands with smaller scale, probably only 1 store, have penetrated many popular spots. But those private brands once started from the office buildings with a relatively independent eco-biz system in one single building. It was witnessed that every office building must have its own cafe just like its own toilets, no matter how close the neighborhood buildings are, as it was self-proved in the CBD area in Beijing.
     With this background knowledge, it wouldn't be hard to envision that a cafe show is something necessary in China, to introduce different blends, brands, equipment and store solutions to the enthusiatic investors and amateurs. The 2015 Cafe Show was held in Beijing Intl Exhibition Center during July 2-4, with around 200 exhibitors from around the world, showcasing, free tasting, and bonding with the visitors. It was noted South Korean exhibitors tend to provide a one-stop store level solution to the investors. And this is very much likely because of the success of multiple South Korean chained brands like Zoo Cafe, Manncafe in China.
    If you thought cafe is all about coffee, then you have to check this out. A picture was taken earlier of the year by the media of Li Keqiang, Chinese Premier, paid a visit to a famous enterpreneurship cafe that facilitate a basic business operation environment for those high-tech startups. It was said with one cup of coffee, one set of desk and chair, plus one laptop, one can start his enterpreneur dream in the cafe with a collection of fellow enterpreneurs and most importantly, a bunch of investors attracted to the site. The Premier showed his support to the enterpreneurs and government would further favor this kind of one man show by a legal recognition and even tax cuts. Just like in Silicon Valley, but with a larger population, the enterpreneurs could drive a next wave of cafe enthusiasm!

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