Showing posts with label Jeffrey Towson. Show all posts
Showing posts with label Jeffrey Towson. Show all posts

Thursday, December 28, 2017

How bike-sharing might work - Jeffrey Towson

Jeffrey Towson
Bike-sharing firms like Mobike and Ofo might work out, explains Jeffrey Towson, investment professor at the Peking University. "It is unusual but not crazy," he tells about the pervasive marketing strategy of bike-sharing. Independent assets moving around might just be the new thing.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on how Chinese companies work? Do check out this list.

Monday, December 11, 2017

Bike-sharing: only at the start of their development - Jeffrey Towson

Jeffrey Towson
Bike-sharing companies in China had a rough year, combining huge investments and limited returns. Smaller ones went bankrupt and market leaders Mobike and Ofo are rumored to discuss a merger. Peking University investment professor Jeffrey Towson still see enough room for success, he tells the South China Morning Post.

The South China Morning Post:
For users, the cost of a ride is a pittance – about one yuan, or 15 US cents, for an hour – with much cheaper deals available. In a recent promotional campaign to lure riders from its competitors, Mobike offered unlimited rides for three months for only five yuan. Rival Ofo has a similar inventive scheme. 
Despite the unattractive economics, Jeffrey Towson, an investment professor at China’s elite Peking University, said bike sharing is “definitely not a fad”. 
“The economics of the business are becoming clearer. Rental revenue is still the foundation. Advertising revenue may be part of the picture,” he said. “Some Ofo bikes, for example, have had Minions advertisements on them. And perhaps delivery and e-commerce revenue will come in the future.” 
While Towson is bullish on the industry’s business prospects, he is not confident that more than a couple of companies can peacefully coexist. 
“If it was in the United States, I think it could end up as giants with many smaller players coexisting. But there seems to be a Chinese phenomenon to eliminate the competition by taking over the entire industry,” he said. 
One example in the car hailing business was the fierce rivalry between Didi Dache and Kuaidi Dache. In 2015 they merged to form Didi Chuxing, which absorbed Uber China the following year, becoming the only dominant player in the mainland Chinese market.
“Investors tend to step in to stop a price war because it is their money. It is better to spend the money on growth than fighting each other,” Towson said. 
Bloomberg first reported in October that Ofo and Mobike were in merger talks, but neither company would confirm the speculation. In November Zhu Xiaohu, a tech sector venture capitalist and early investor in Ofo, called for such a merger during a forum attended by Mobike co-founder Hu Weiwei
Despite pressure from investors, there is no sign that the two bike-sharing giants will merge any time soon. Ofo is raising another US$1 billion from investors, including Alibaba, and is expected to put any proposed merger plan with Mobike on hold, according to a number of news outlets, citing market sources. Ofo has declined to comment. 
“The merger of Ofo and Mobike is going to be a big topic of discussion in 2018,” Towson said. “But [whether it happens] depends on the availability of capital … and in China there is a lot of capital.”
More in the South China Morning Post

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more innovation experts at the China Speakers Bureau? Do check out this list.

Thursday, December 07, 2017

Will bike-sharing firms merge? Not yet - Jeffrey Towson

Jeffrey Towson
Will Mobike and Ofo, China's largest bike-sharing companies merge, like car-sharing firm did in the past? Not yet, says Peking University professor Jeffrey Towson. International expansions goes well, capital is freely available, and a crippling price war has not yet emerged, he argues.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list. 

Wednesday, November 22, 2017

Why works the sharing economy in China? - Jeffrey Towson

Jeffrey Towson
Huge usage of mobile phones, popular internet payment systems and 1.4 billion users are some of the elements that explain why the sharing economy in China is doing so well, says Jeffrey Towson, investment professor at the Peking University at the TV program China Matters.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.  

Are you looking for more experts on e-commerce at the China Speakers Bureau? Do check out this list.

Tuesday, November 21, 2017

The real force behind the sharing economy - Jeffrey Towson

Jeffrey Towson
The winner among the sharing companies is not the one who sells most rides, but the one who is best in collecting smart data, says Peking University professor Jeffrey Towson to the New York Times. “The fight is no longer over who has the biggest fleet,” Towson says, “but who has the smartest fleet.”

The New York Times:
Cities around the world have embraced the sharing economy — Seoul, Amsterdam, Milan — but China is the first country to frame it as a “national priority.” While innovation can’t be conjured on demand, Beijing has financed start-up incubators, offered tax incentives, formed think tanks and kept foreign competitors away. “This is state capitalism,” says Jeffrey Towson, a private-equity investor and a professor of investment at Peking University. “When the government gives the green light, everybody follows.” That includes investors. Mobike and Ofo, which are financed by China’s biggest tech giants, Tencent and Alibaba, respectively, have raised roughly a billion dollars each in venture capital. (Didi Chuxing, the ride-sharing company that bought out Uber’s China operation last year, is even bigger — with $5.5 billion in financing and 450 million users across China.)... 
Every time consumers scan the QR code on a bicycle — or basketball, handbag, umbrella — they provide information about habits, locations, behaviors and payment histories. That’s invaluable not just to Tencent and Alibaba but also to city planners seeking precise information about where to build roads, bridges and subways. “The fight is no longer over who has the biggest fleet,” Towson says, “but who has the smartest fleet.”
More in the New York Times.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Monday, September 18, 2017

The amazing shows by China's tycoons - Jeffrey Towson

Jeffrey Towson
The world looked with awe when Alibaba's chairman Jack Ma performed as Michael Jackson during a massive show for employees and customers last week. But Chinese tycoons like to put up a show, says Beida business professor Jeffrey Towson to CNN. Western CEO's seldom let themselves go (perhaps with the exception of former ABN Amro CEO Gerrit Zalm).

CNN:
Robin Li, the founder and CEO of internet giant Baidu, likes to mix things up. 
He turned his performance at the company's summer party into a family affair this year. His daughter sang "Call Me Maybe" while accompanied by professional dancers. Proud papa, dressed in jeans and a polo shirt, strolled on stage at the end of the song, strumming the last few bars of the song on an acoustic guitar while his daughter crooned along. 
That performance was understated compared with a 2015 extravaganza, when Li donned a studded gold lamé outfit to sing and play the drums in a dazzling routine -- complete with smoke machines and a laser show -- at the company's annual gala. 
Many other Chinese business leaders like to put on a show, according to Jeffrey Towson, a private equity investor and professor at Peking University. 
"You see these kinds of crazy events all the time," he said. The outlandish galas allow bosses to be playful and self deprecating while also demonstrating how successful the company has been, according to Towson.
More in CNN.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill our speakers' request form.

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Wednesday, August 02, 2017

Trying something new is hot in China - Jeffrey Towson

Jeffrey Towson
The rest of the world looks with amazement at the crazy, booming sharing economy in China, and wonder whether the rest of the world might follow. One of the reasons, people here like to jump in when something is new, says Peking University professor Jeffrey Towson at CBS.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more e-commerce experts at the China Speakers Bureau? Do check out this list.

Monday, July 31, 2017

Crossing boundaries: tough for all tech companies - Jeffrey Towson

Jeffrey Towson
Foreign tech firms have a tough time entering the Chinese market, but Chinese tech companies going global have an equally hard time, despite increased financial firepower. Peking University business professor Jeffrey Towson discusses the international development of the tech market at CGTN. Even his mum in California knows now Alibaba's Jack Ma, but it does not mean she uses his products, yet.

CGTN:
A large population used to drive China’s economy through cheap labor. But it is now benefiting the country’s technology in a particular way. 
Jeffrey Towson, professor of investment from Peking University, believes China’s tech giants can beat US companies “fair and square,” both within the domestic market and abroad. 
Supporting his view is the large scale of native tech companies and consumers.
“When a company like Huawei, which has 170,000 employees and 70,000 of them are in R&D, that’s bigger than Cisco (a world leading IT company based in the US), which has 70,000 for the whole company, that’s incredibly difficult to compete with,” Towson said... 
New groups of labor and expertise have also helped China’s tech industry thrive.
“If we talk about gaming, we’d also be talking about artists, people coming from design schools and animation schools, of which there are a lot now. So there's population migration on top of government action – sometimes things just happen,” Towson said.
Let’s now argue against that opinion from The Economist – if the Chinese government drops censorship and restrictions on foreign tech companies, will they win?
More (including two videos) at CGTN.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list. 

Monday, July 03, 2017

Brainpower: How China changes the world - Jeffrey Towson

Jeffrey Towson
Apple's Steve Jobs was the first American CEO to discover China's massive brainpower potential when he got the first iPhone produced in six weeks time, by 200,000 workers and 8,700 engineers. China's massive brainpower is a disrupting force for the world, says Beida business professor Jeffrey Towson, co-author of The One Hour China Book (2017 Edition) on his weblog.

Jeffrey Towson:
There are two important aspects to this story – which may have become somewhat embellished over time. The first is how incredibly fast, flexible, and smart the Chinese manufacturing ecosystem is. This situation was not about being cheap. It was about speed and flexibility. Figuring out how to redesign iPhone screens took lots of brainpower deployed quickly. In the US, the iPhone screens simply could not have been redesigned in such a short timeframe. 
The second is that Apple had 8,700 Chinese industrial engineers overseeing production. That is a lot of engineers. The New York Times reported that Apple had estimated it would take 9 months to find this many engineers in the US. In China, they found them in about 15 days. 
This is a story of Chinese brainpower as a game-changer in global business. The ability to mobilize so much talent, so many engineers, and so quickly, is something new in the world. 
But we have also heard this kind of story before. 
Twenty years ago, the scale of Chinese manufacturing began emerging as a similarly game-changing phenomenon. Suddenly, everything from shoes to bicycles began to become much cheaper than before. Low-cost Chinese manufacturing changed what was possible in industry after industry. “Made in China” became a household phrase. 
Businesses around the world have since incorporated the large-scale and low-cost of Chinese manufacturing into their operations. And it wasn’t really optional. Businesses either had to take advantage of the phenomenon or suffer as their competitors did. 
The large scale and low cost of Chinese brainpower is another game changer. Suddenly thousands of engineers can be ramped up in a matter of days. And this phenomenon is starting to ripple through industry after industry. What is the impact on the pharmaceutical industry if companies can now access tens of thousands of scientists cheaply? If your competitor is opening a research and development center in China with 10,000 technical specialists, how big of a problem is that for you? Chinese brainpower is starting to impact many industries – often in unexpected ways.”
More at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form. 

Are you looking for more experts on innovation at the China Speakers Bureau? Do check out this list
.

Tuesday, June 27, 2017

Booming creativity in China - Jeffrey Towson

Jeffrey Towson
More than a million Chinese graduated over the past years in art and design. Beida business professor Jeffrey Towson visited earlier Oriental DreamWorks and explains at his weblog why creativity is a booming business in China. The best of two world's approach.

Jeffrey Towson:
At ODW’s offices, I interviewed their creative head Peilin Chou and got a tour. Walking around their offices, you could see their animators (they call them artists) working in teams on everything from story ideas to designing the hair and surfacing of various characters. Overall, it’s impressive – but as a finance creature I do find the whole creative process a bit of a mystery. 
My discussion with Chou mostly focused on their creative professionals. I wanted to know where they come from and how they work together to create the animated films. ODW does appear to be producing a level of quality mostly unmatched in China for animation. And the key to this appears to be how they combine young Chinese artists with Hollywood expertise and experience. 
ODW had about 250 staff total, with the creative team having about 150 artists and animators. Their artists were over 90% native Chinese, and mostly trained at China’s art and design schools. The staff overseeing project development were about 50% native Chinese and 50% Chinese-Americans with Hollywood experience. So it’s a hybrid “best of both worlds” approach.
The first major work by ODW was the January 2016 release of Kung Fu Panda 3. It was the top grossing animated movie in China at that time. And it is a compelling example of what world-class movies, made mostly by Chinese talent, can look like. The characters spoke fluent Mandarin and story was full of cultural subtleties that foreign audiences probably missed. The movie stood out as both high quality but also uniquely Chinese. 
Two other people to keep in mind when thinking about ODW are its famous founders. There is Li Ruigang, head of China Media Capital. Li is arguably at the forefront of creative China and has long been a “partner of choice” for Hollywood in China. 
And there is DreamWorks co-founder Jeffrey Katzenberg, who has been consistently ahead of the curve when it comes to China. His launch of Oriental Dreamworks in 2012 was an important first in terms of joint venture studios in China. However, prior to this he was also the person who created Disney’s film Mulan, the first animated movie based on a Chinese character. And prior to that he was the studio executive who approved The Joy Luck Club, the first major Hollywood movie about Chinese-American families. Around the same time, he was also responsible for creating a Disney internship program that brought some of the first Asian-Americans into the Hollywood studio system. 
According to Peilin Chou, “Jeffrey[Katzenberg] has always been a visionary who understood that a great story is a great story. And regardless of the culture, audiences worldwide will tune in for a great story. In addition, he has always had a genuine passion and love for China.” Chou, a Hollywood veteran and now rising star in China, was one of the first four interns selected for Katzenberg’s internship program back in 1994. 
The Chinese education is a big part of this story. I am a professor at Peking University so I do have a reasonable view of the education system. And it is impossible not to notice the huge improvements in students over the past five years. They have become much smarter and more sophisticated. And they are shockingly ambitious. So the idea that there are similar advances in arts and culture is not surprising to me.
More at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on cultural change at the China Speakers Bureau? Do check out this list.  

Monday, June 19, 2017

What works in China, might not work elsewhere - Jeffrey Towson

Jeffrey Towson
Whether bike-sharing is heading for a success or just a financial sinkhole is still unclear, despite a giant surge in VC funding. But Beida business professor Jeffrey Towson, a bear in this industry, is sure that it will not work outside China, because of the rather special situation in China, he tells the South China Morning Post.
The South China Morning Post:
Jeffrey Towson, an investment professor at China’s elite Peking University, views the booming industry slightly differently, calling it a new wave of “digital disruptors” in access and convenience: a living example, he adds, of “making it easy and making it now” for consumers. 
“This is only possible in China,” he added, “because of the arrival of smartphones, mobile payments, and a very dynamic mobile app ecosystem. 
Wilson Chow, the technology, media, telecommunications leader of PwC in China and Hong Kong, agrees completely with Towson, but adds the nation’s tech-led stampede for sharing, isn’t really about saving money, it’s more to do with convenience.
More in the South China Morning Post.

Jeffrey Towson is a speaker at the China Speakers Bureau Do you need him at your meeting or conference? Do get in touch fons.tuinstra@china-speakers-bureau.comor fill in our speakers' request form.

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Tuesday, June 13, 2017

Why has Starbucks no real competitor in China? - Jeffrey Towson

Jeffrey Towson
Competition in China is rough and bloody for almost every company that even has the smell of possible success. But Beida business professor Jeffrey Towson did not yet find a reason why this rule does not apply to Starbucks. No competitor gets near the giant and - he wonders at his weblog - there is no real reason for that.

Jeffrey Towson:
Chinese Wanda is openly challenging Disney. Uber spent $2B fighting with Chinese DidiChuxing. Adidas has been fighting Chinese Li-Ning and Anda for decades. And Apple is now struggling against multiple rising Chinese competitors,(Xiaomi, Huawei, Oppo, etc.). One thing you can always count on in China: A successful international company will inspire serious domestic competitors. 
So why doesn’t Starbucks have a serious competitor in China? I’ve been asking people this for months and I still can’t get a good answer. It’s weird. 
Starbucks has been in China since 1999 and currently has about 2,400 outlets. They have likely had the majority of the China retail coffee market for years. And CEO Howard Schultz has recently announced plans to open 500 new outlets per year. That will get them to 5,000 China stores by 2020. 
Also, on Starbucks’ November 3, 2016 earnings call, Schultz said “our newest class of Starbucks stores in China is delivering the highest AUVs, ROI and profitability of any store class in our history in the market.” 
So Starbucks in China has big market share, rapid growth and apparently attractive economics. Although they are breaking the #1 rule of doing business in China as a foreigner: If you are doing really well, keep it quiet. 
Starbucks does have some smaller competitors in China. There is Costa Coffee from the UK. Costa is planning to have 900 China stores by 2020. There is CaffeeBebe from South Korea and Coffee Bean from Los Angeles. Both are fairly small in China. There is UBC Coffee (originally from Taiwan) but this is really more of a restaurant. And there is Pacific Coffee of Hong Kong, which has been majority acquired by China Resources. 
You could also consider convenience stores like Family Mart and 7-11 as competitors. Certainly lots of coffee is sold there and they both have huge operational footprints. Also, there is McDonalds which has its McCafes. But these are a stretch as direct competitors I think. 
Overall, I just can’t point to any serious Chinese competitor for Starbucks. I don’t see a China Mobile, Alibaba, Suning or Wanda-type company fighting them for their customers.
More possible answers at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Thursday, June 08, 2017

Why is Didi raising so much capital? - Jeffrey Towson

Jeffrey Towson
Since last year car-hailing giant Didi Chuxing has been raising over US$15 billion, even after it won the costly competitive struggle with Uber. Beida business professor Jeffrey Towson sees at his weblog four reasons why Didi continues to raise so much capital. Here are two of them.

 Jeffrey Towson:
Explanation 3: Going international. 
Another natural use of the newly raised funds would be to expand abroad given that Chinese app users are already going abroad in great numbers. Didi led a $100 million fundraising round for Brazilian ride-sharing app 99 in January and earlier invested in India’s Ola, Southeast Asia’s Grab and American app Lyft as part of an alliance of the four companies to take on Uber globally. In March, Didi opened an R&D center in Silicon Valley. I would not be surprised to see another string of international investments over the next twelve months, especially in Southeast Asia. 
Explanation 4: There is a big disruption coming. 
In theory, self-driving cars (i.e., autonomous driving) could reduce costs dramatically for Didi. Some reports suggest that driver fees, insurance and driver acquisition costs add up to two-thirds of the company’s operating expenses. 
However, the cost-saving argument misses the bigger implication of self-driving cars. If the technology is successful, it could wipe out the business model and competitive advantage of most ride-sharing services and could be a body blow to Didi’s current business. 
The reason this sector has consolidated down to just one or two dominant companies per region is because of the powerful economics of two-sided platforms. To get drivers, you need riders. To get riders, you need lots of drivers. Being bigger in a region not only creates a superior service — since more drivers means shorter wait times for pick up — it also creates an insurmountable barrier for new entrants. 
Self-driving cars will disrupt this competitive strength. If you no longer need drivers, you no longer have a two-sided network. Didi and Uber will then be exposed to new entrants with good cars, clever technology and different operating systems. Self-driving cars could make driver-rider networks obsolete or marginal at best. 
So Didi and Uber have a strategic imperative to transition to this new technology and search for a new source of competitive advantage. This could be by becoming the transportation ecosystem in which self-driving cars operate. It could be by becoming the operating system, the “Microsoft of moving computers.” It could be by integrating with public transportation services. Possibly though there may just not be an opportunity to be so dominant in this emerging market. 
Google, Apple, Uber and lots of major Chinese companies are rushing into self-driving cars (article here). One to keep an eye on in China is Baidu. It is developing an open-source autonomous driving platform involving hardware, software and cloud data services. This could enable lots more automotive and autonomous driving companies to enter the business. Code-named Apollo, Baidu’s project will provide capabilities in obstacle perception, trajectory planning, vehicle control and vehicle operating systems. Note that Baidu first successfully road tested its self-driving cars on the highways of Beijing back in December 2015.
More reasons at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.    

Tuesday, June 06, 2017

Does Alibaba's merchandise deal with Pokemon makes sense? - Shaun Rein/Jeffrey Towson

Shaun Rein
Alibaba Pictures has expanded its merchandise market with a new deal for the successful Japanese Pokemon. But experts differ on the question such a more makes sense for Alibaba Pictures. A diversion from its core business, says business analyst Shaun Rein. But Beidu business professor Jeffrey Towson lauds the effort for a comprehensive approach of the total value chain, he tells the 6th Tone. 

The Sixth Tone:
Alibaba Pictures estimated that the total sales of licensed Pokémon products on Tmall will surpass 20 million yuan ($2.9 million) in 2017. 
However, the move might be “dangerous” for Pokémon because collaborating with Alibaba means they will give away the power over quality control in China, Rein said. If manufacturers produce poor-quality products, consumers will naturally associate the bad quality with Pokémon, he added. 
Whether the strategy will bode well for Alibaba Pictures’ overall business development also remains a question. The deal is the film company’s latest expansion into licensing after suffering economic losses amounting to 976 million yuan last year. Alibaba Pictures has established partnerships with several foreign companies such as the classic arcade game “Pac-Man” and the American animated television series “The Powerpuff Girls” to sell licensed merchandise on its e-commerce platforms. 
Jeffrey Towson
For a company whose core business is movie production and distribution, tapping into licensing might prove distracting, Rein said. 
But Jeffrey Towson, a professor of investment at Peking University, regards the move as part of Alibaba’s strategy to build an integrated online and offline marketing capability across the entire entertainment value chain. 
“They have Tmall, [e-commerce platform] Taobao, [video-platform] Youku, and so on, and they can push not just movies, but also merchandise, online streaming, and other derivative products,” Towson told Sixth Tone. The movie arm “is becoming a data-driven movie studio with a unique suite of integrated marketing capabilities,” he added. “It’s basically what you would get if Amazon and Walt Disney had a baby.” 
With all the data collected from consumers across Alibaba’s myriad online services, the e-commerce giant is becoming the “must-have partner” to content companies in China and around the world who hope to succeed in the Chinese entertainment industry, said Towson.
More at the Sixth Tone. 

Shaun Rein and Jeffrey Towson are speakers at the China Speakers Bureau. Do you need them at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How baseball is slowly conquering China - Jeffrey Towson

Jeffrey Towson
Soccer has been catching most headlines in trying to conquer China. But the long term strategy to root baseball into the country might offer more chances for success, writes Beida business professor Jeffrey Towson at his weblog. "Major League Baseball (MLB) Is Copying the NBA in China – And It Might Work."

Jeffrey Towson:
The NBA has long provided free public access to its games in China. Starting in 1987 state broadcaster China Central Television began showing weekly game highlights that the NBA sent on video tapes to Beijing. This was particularly good timing as CCTV then had little competition for viewers and Michael Jordan was becoming a big draw. The NBA has continued to provide free access since, most recently via a deal for online streaming with Tencent Holdings. 
MLB has put in place a similar free mass dissemination strategy. Since around 2008, MLB games have been shown on more than 10 government TV channels, reaching most of the population. Under a three-year deal signed in January, Le Sports, an affiliate of online streaming company Leshi Internet Information & Technology, is streaming 125 live games in China per season. 
These are the early moves in a long-term strategy. The Chinese Baseball Association was only formed in 2002 and MLB did not have a China office until 2007. According to Leon Xie, managing director of MLB China, there were then only three real baseball diamonds in all of China. 
MLB is very unlikely to create a phenomenon as big as Yao Ming but it is working to develop Chinese players. MLB opened its first training camp in the country in 2009, in the eastern city of Wuxi. Training centers have also opened in Changzhou and Nanjing. Some younger players have gone to the U.S. to play in elite high school leagues. In 2015, Xu Guiyuan became the first player trained in Wuxi to sign with an MLB club, joining the Baltimore Orioles. 
Players at the training centers are now playing over 100 games a year and often moving directly onto Chinese university baseball teams upon graduation. The number of baseball diamonds in China has grown to over 50. And the official Chinese Baseball League, which had gone dormant, was relaunched in 2014 in partnership with property developer Hengda Lianghe Investment. 
As shown by the success of the NBA’s Jeremy Lin, Chinese consumers can also become very enthusiastic about Asian-American athletes. Given that baseball is popular in the U.S. and Taiwan, these could be sources for high-profile ethnic Chinese players. For example, Chinese-American Ray Chang, born in Kansas City, has been playing for minor league teams for more than a decade and is now on a team affiliated with the Cincinnati Reds.
More at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more stories by Jeffrey Towson? Do check out this list.  

Tuesday, May 30, 2017

Why China's health care apps are failing - Jeffrey Towson

Jeffrey Towson
Thousands of mobile apps have tried to tap into the poorly organized health care system in China. They failed, despite massive funding, says Beida business professor Jeffrey Towson at his weblog, because the developers knew more about mobile phones than about health care. Health care is modernizing, he writes, but government supervision hampers speed.

Jeffrey Towson:
More than a thousand Chinese healthcare apps have been launched in the past five years. These startups, targeting the seemingly super-hot intersection of booming smartphone usage and modernizing healthcare, were supposed to be the next big thing. And many have been backed by top venture capitalists and leading Chinese companies such as Alibaba Group Holding, Tencent Holdings  and Ping An Insurance Group
But as of yet, there have been few real successes in Chinese mobile health. In fact, most health apps have failed to generate significant numbers of active users, let alone produce much revenue. And forget about profits. 
Now as investor sentiment in the idea cools, many of these startups are cash poor and heading towards a painful shake out. Chinese healthcare appears to have defeated China’s smartest entrepreneurs. 
There are lots of reasons for this. But at the simplest level, investors just knew a lot more about China’s smartphone market than its healthcare system.... 
In my opinion, absent big, immediate changes in the core structure of SOE hospitals and government insurance, the best target for Chinese health apps is consumers and consumer-facing businesses. They should essentially bypass the core hospital system and go direct to consumers. Focus on ancillary services such as dentistry, medical tourism, optometry, beauty and aesthetics, and health and wellness. Do e-commerce for OTC products – and for prescription products when that becomes allowed. Basically, sell directly to Chinese consumers who have money and smartphones and want better healthcare now. 
Looking at the big picture, it is clear that Chinese healthcare is in fact modernizing. And the changes that have been happening have been quite dramatic. But this is modernization under government direction and with a mix of business, political and social objectives. So the speed of China’s healthcare modernization is slow and step-by-step. And this has created a mismatch with the rapid pace expected by mobile health app startups and their venture capital investors. This difference in pace is the fundamental problem for these apps. And it will probably not end well for most of these startups.
More at Jeffrey Towson's weblog.

Jeffrey Towson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more innovation experts at the China Speakers Bureau? Do check out this list.  

Monday, May 29, 2017

Who will be the Disney of China? - Jeffrey Towson

Jeffrey Towson
Entertainment parks are becoming big business in China, but there are at least three players trying to come the Disney of China, including Disney itself. Who will be the real Disney of China, wonders Beida business professor Jeffrey Towson on his weblog.

Jeffrey Towson:
The takeaway here is that while Disney’s dream is capturing the Chinese market, that is not the objective of the government, which is actively operating in this sector as both policeman and player. They are focused on the development of an entertainment industry in Shanghai. 
And while the government needs Disney today, it is worth keeping in mind this will not always be the case. 
Finally, well-funded locals, like Wanda and Alibaba Pictures, are now giving chase. This force is the most worrisome. 
Disney is off and running in China. But so are well-funded local competitors. Dalian Wanda Group clearly wants to be the “Disney of China” and has come out with guns and press releases blazing. They are opening multiple theme parks and are the largest owner of movie theaters in China and the U.S. (and #2 in Australia). They are also actively acquiring in Hollywood. Plus you have Alibaba Pictures, Huayi Brothers and others. The competitive picture is daunting. 
However, lots of rich companies have tried to be Disney in the past and have failed. When Disney entered Europe and Japan, lots of local companies had the same ambition. And for decades, other Hollywood studios have tried to replicate Disney in the US. All have largely failed. It turns out copying Disney is pretty difficult. 
Two companies have arguably had some success: Dreamworks, founded by Jeffrey Katzenberg (who previously ran Disney Animation); and Pixar, run by John Lasseter (purchased by Disney in 2006). You could also perhaps point to Lucasfilm, creator of the “Star Wars” franchise (now owned by Disney as well). But all of these are essentially pure media companies. None have replicated Disney’s combination of animation and theme parks. 
I think this has a lot to do with cash flow. Creating animated (and singing) movies that children love is tricky. It takes years of work for one movie, costs a lot of money and is “hit or miss”. If the movie is a hit, you make lots of money. If not, you probably go bust. The unpredictable cash flow makes funding animated movie development and then building large, expensive theme parks impossible for most all companies. Disney’s advantage is that it already has a stable of popular characters and international operations that create financial scale and stability. 
But even Disney has had trouble being Disney at times. It had great success under Walt Disney but struggled in the 1980s as its movies lost their appeal. And when the movies aren’t hits, the theme parks can suffer. New leadership took over (Eisner and Katzenberg) and a string of successes like “The Little Mermaid” and “Aladdin” followed. Disney again stumbled in the early 2000s until it bought Pixar, which made Steve Jobs the largest Disney shareholder. 
So now Chinese companies are trying to be like Disney in China, which is actually really difficult. Wanda is opening theme parks and starting to make animated movies. We will see if they are more successful than past attempts by cash rich companies. Overall, it is going to be an interesting fight to watch.
More at Jeffrey Towson's website.

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