How to deal with the economic apocalypse - William Bao Bean

William Bao Bean

The crisis caused by COVID-19 is going to change many familiar habits by consumers and companies, says Shanghai-based VC and SOSV General Partner William Bao Bean to E27. Who will be the winners, despite the expected economic downturn?

E27:

“There are two things to take note of. First, that people need to understand we’re heading into an economic downturn. The second thing is that this type of shock is quite special because it’s driving an equally massive change in habits,” Bean says in an interview with e27.
“Stay at home is driving the adoption of digital [platforms] extremely quickly. So on the one side, it’s an economic apocalypse, but on the other side, people are focussed on the change of habits,” he continues.
While balancing these two directions can be tough, there is plenty of good news on the ground...
Winners of the future will be very different from the winners of the past which, according to Bean, will mostly be driven by newly formed habits.
E-sports is expected to be “fricking huge,” he says.
“With an audience larger than the NBA, tennis and American football, it’s over half a billion people who watch these sports. Plus, you know, some people [prefer to] watching it, instead of playing it. Right now, a lot of sports are not airing and who is the beneficiary of [having] no sports on TV?” the investor points out.
Gaming has become one of the most common past times of entertainment and experts predict that the trend is here to stay.
Twitch, a leading live streaming platform for gamers, noted a viewership increase of 56 per cent this quarter compared to Q1 2020 while growing 60 per cent year over year. Facebook Gaming also saw a boost from the lockdown growing 75 per cent throughout Q1 until now.
Aside from gaming, Bean also expects online education and online media to have a longevity period of growth. This is mostly driven by the needs of parents and students who were forced to study from home during the circuit breaker measures implemented in Singapore, and similar approaches taken in other countries.
As with the case of e-sports, online media are also experiencing a surge in popularity as customers see their offline entertainment sources becoming limited.

More at E27.

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The global fight between food delivery giants - William Bao Bean

Already before COVID-19, American and Chinese internet giants fought for dominance in the booming market for food and grocery delivery, and the coronavirus crisis has caused another boom in the market, says William Bao Bean, managing director of global venture capital firm SOSV in Shanghai in Marketplace. Having dominance in their home market helps the Chinese players.

Marketplace:

William Bao Bean

“Ordering groceries online is much more advanced in China than the U.S., and when I say ‘advanced,’ it’s market penetration. I’d say more than double the amount of groceries are ordered in China for delivery versus the U.S.,” said William Bao Bean, with the global venture capital firm SOSV in Shanghai. According to iResearch, the customers it surveyed used grocery delivery services one to two times a week in 2019... 

These differences matter, given that U.S. grocery and food apps are now competing against Chinese giants for customers in Latin America and India. This is a global food fight. 

“When you look at India, they’re definitely going more towards the China model,” said Bao Bean, the venture capitalist in Shanghai. “Whereas the U.S., the big-box format, with large parking lots and everybody driving a car, you’re simply not going to see that in Southeast Asia and South Asia.” 

He said Amazon is not doing as well in India compared to Chinese tech firms, and Chinese money is backing Indian startups. A report by the MacroPolo think tank found that Chinese apps overtook U.S. apps in 2019. 

Though, Chinese apps are now caught in the political crossfire between China and India.

More in Marketplace.

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Fintech will go through the roof when the recession is over - William Bao Bean

William Bao Bean

Shanghai-based VC William Bao Bean looks at the world after the COVID-19 recession will be gone. Fintech will go through the roof, like all things digital, home delivery, and health care applications he tells at this debate on India and China how the world will learn from China coronavirus crisis.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers' request form.

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COVID-19 made the wealthy wealthier - Rupert Hoogewerf

Rupert Hoogewerf

While the jury is still out on the economic effects of the coronavirus crisis, the majority of the wealthy ended off better since the COVID-19 hit the world, says Hurun rich list founder Rupert Hoogewerf in the Business Standard. "The two biggest ‘winners’ from the Hurun Top 100 of Covid-19 were online retailers Jeff Bezos of Amazon and Colin Huang Zheng of Chinese low-end ‘social shopping’ giant Pinduoduo," says Hoogewerf.

The Business Standard:

Amazon Inc boss Jeff Bezos, Reliance Industries chairman Mukesh Ambani and Dr Cyrus Poonawalla of Pune-based Serum Institute of India saw their wealth increasing during the coronavirus pandemic, says research done by a Chinese group. 

Hurun Research's 'Wealth Impact 4mths after Covid-19 Outbreak' tracks the wealth changes of the world’s most successful entrepreneurs in the four months ending May 31. It is a follow-up on the 'Wealth Impact 2mths after Covid-19 Outbreak' looking into wealth changes in the two months ending 31 March 2020 and the Hurun Global Rich List 2020, which had a wealth cut-off of 31 January 2020. 

As many as 60 per cent of the entrepreneurs on Hurun Global Rich List Top 100 had their wealth rise or stay the same in the four months since the outbreak. As many as 40 per cent entrepreneurs saw their wealth reducing. “Whilst the first two months of the outbreak saw a massive wealth wipeout of the Hurun Global Top 100, the second two months saw a V-shaped recovery for two-thirds of the Hurun Global Top 100, reminding us that it is dangerous to bet against the world’s best wealth creators,” said Rupert Hoogewerf, Hurun Report chairman and chief researcher. 

"The two biggest ‘winners’ from the Hurun Top 100 of Covid-19 were online retailers Jeff Bezos of Amazon and Colin Huang Zheng of Chinese low-end ‘social shopping’ giant Pinduoduo, who added Rs 1.51 trillion (20 billion US$) and Rs 1.35 trillion (18 billion US$) to their fortunes, pretty much all the gains coming in the past two months,” said Hoogewerf. 

Another big winner was Eric Yuan Zheng, 50, of popular video conferencing app Zoom, who saw his wealth triple from Rs 34,000 crore in January to Rs 98,200 crore today, propelling him up from 555th in the world four months ago to knocking on the door of the world’s Top 100 today."

More at the Business Standard.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers' request form.

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Making sense out of the Covid-19 information explosion - Arthur Kroeber

Arthur Kroeber

Renowned economist Arthur Kroeber, author of the bestseller China’s Economy: What Everyone Needs to Know®, dives into the information explosion after the Covid-19 virus did hit China. Much information is available, but most is of low quality, he argues, and here he does a reality check of what we can say at this stage in April, including Europe, the US and their relations with China.

Arthur Kroeber 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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Rule one: don't panic in the corona crisis - Harry Broadman

Harry Broadman

CEO's worldwide are figuring out strategies for the future, after the corona or Covid-19 crisis started to emerge from China. Veteran advisor Harry Broadman dives into the future for CEO's at the Chief Executive. Rule one: do not panic, he says.

The Chief executive.com:

“Even in this unusual environment, we’re all trying to out-game one another,” Harry Broadman, managing director of Berkeley Research Group and a globally recognized strategic advisor to CEOs, boards and the White House, told Chief Executive.  

“Even in crisis, that begets opportunities. You have to think carefully as the bathtub drains on everyone. You get important information because you’re going to observe how you’re doing relative to competitors—important market signals that you honestly wouldn’t have without this crisis.” 

Broadman said that one of the most important “overarching lessons from all of this will be how you manage risk.” It’s crucial in that regard, he advised, for CEOs not to panic; to remain confident in decisions that were made amid prosperity; to understand how the COVID-19 recession is going to stress the existing framework of your industry; and to make sound decisions right now about how to capitalize for the future.  

This is where fellow occupants of the “bathtub” come in. “Assume for the sake of argument that you’re all in the same bathtub and you’re all going to fall pretty much at once, even in different ways. Then the bathtub is going to refill again, and you may find that we all will be in the same relative positions as when the crisis began.  

“CEOs and boards need to be thinking through that issue in a cool, clinical fashion.”

More at the Chief Executive.

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In a killing stock market, China has been a relative winner - Rupert Hoogewerf

Rupert Hoogewerf

The massive drop of stock markets has wiped away unprecedented amounts of capital, says Hurun China Rich List founder Rupert Hoogewerf at the South China Morning Post. But in that bloodbath, China has been a relatief winner, he adds.

The South China Morning Post:

While most billionaires have seen their fortunes shrink drastically amid a stock market rout brought on by the Covid-19 pandemic and containment measures launched by governments, a handful have seen their wealth rise – significantly.

According to research by Hurun Report calculating the pandemic’s impact on billionaires’ fortunes, Eric Yuan, the US-based founder and chief executive of Zoom, the video conferencing software company, saw his net worth skyrocket by US$3.5 billion – or 77 per cent – to US$8 billion. This makes him the fast riser of the past two months.

Zoom has become ubiquitous as executives at companies around the world try to stay in touch while working from home. 

“The last two months have wiped out all the wealth made in the past two-and-a-half years, with the World’s Top 100 down 12.6 per cent, or US$408 billion, equivalent to each of the Hurun Top 100 losing US$75 million a day,” said Rupert Hoogewerf, Hurun Report’s chairman and chief researcher.

“China has been the relative winner,” he said. The country added six billionaires to the top 100 list, while India lost three and the US lost two. He said that the Hurun Report had 2,816 known billionaires before the Covid-19 pandemic, but that number had dropped by 20 per cent, as tanking stock markets wiped out net worth estimations.

More in the South China Morning Post.

Rupert Hoogewerf 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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Where does the world stand in the covid-19 corona crisis? - Shirley Ze Yu

The covid-19 crisis is not about the political system, but about the efficiency of government, argues economist Shirley Ze Yu. She puts the current crisis into perspective, the lack of international cooperation and different leaderships styles.

Shirley Ze Yu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Positive, confirmed and unclear coronavirus developments

As the severe economic challenges caused by the coronavirus or Covid-19 show a less favorable development, scientists still argue on how to count patients, and how to assess the medical situation. Revealing was an article in Nature discussing the difference between positive-tested patients and confirmed ones, and how to count them in must-quoted public statistics.

Those debates have a profound impact on the assessment of the disease, the fear for mortality, government action and in the end how long the economic standstill might last. 

Positive-tested patients mostly used a nasal test and got - if the result shows corona-related results - a 14-day quarantine to see if they would really develop symptoms, while they might not be sick or contagious at all. Confirmed patients have the disease, are put into isolation. The debate is which groups should be counted in the official statistics. The first group does include a large group of patients who will never develop the disease, so you get a pretty high number of patients in your statistics, and a rather low mortality. The second group has a much higher mortality, but you might also miss cases of patients who do not yet have confirmed symptoms, but can develop the disease later.

Either approach has pros and cons, but the problem is that both methods have been used next to each other and cause severe differences in the number of patients and the mortality for the virus. Western media have sometime been accusing China of hiding the real impact of the virus, but there seem also profound scientific assessments underlying different ways of counting patients.

That is a key scientific debate, but also has a profound impacts on the fallout of the Covid-19 disease. For China and its international trade relations damage has already been done, but a rising number of cases elsewhere - like South Korea, Singapore and Japan - signal a possible spread of the virus, depending on the way governments react on the latest scientific debates.

At this stage, for China, we do not see a fast recovery. Yes, it may become better after the virus has come under control, but before production, logistics, tourism and regular business practices have been restored, we might well be late in the summer of 2020.

In our event-related business we expect that even if in April planning is back on track, it might easily take two to three months to get things running again. And then we do not take darker scenario's into account, while come of our clients obvious do.

Do you want to discuss latest developments on the coronavirus and China, and how the China Speakers Bureau can help you in planning future events? Do get in touch.

More mixed messages from the corona front

While messages from the coronavirus front are mixed, to put it mildly, the current economic crash course might only be over by April/May, in the most optimistic scenario. Numbers of infected people and deaths by COVID-19 still vary to much to support any scenario at this stage, while it is also unclear whether the rest of the world can contain the virus.

Footage from metro subways still show empty carriages, as the central government tries to encouraged migrant workers to return to their workplaces. Local governments - including the big cities - advise returning migrants to put themselves in a social quarantine for two weeks to be sure they do not carry the virus. Native residents now have to report back for work, although they still prefer to work from home, if possible. The dilemma is obvious: different government make different choices when it come to prevent major economic damage or keeping their cities save from the virus.

At the China Speakers Bureau we did get a few calls from potential clients who try to plan ahead for events after this crisis is over. At this stage, we are not yet booking speakers who have to travel to or from China, or advise against planning international events with a major Chinese audience until we have more clarity. Even when life becomes more normal, we do not expect to resume activities in China before May/June and focus on activities outside China.   In China, the blame game on who to make responsible for the current crisis is in full swing, now becomes clear that the centralized approach of any contagious disease, as it exists in China, might not have been the best system to contain the virus. State media showing humming factories might not be the full truth.

International business is not recovering any time soon. International flights have come to a standstill because of lack of business. Even postal services have for a large degree to a halt, as collateral damage because of the lack of flights. Container traffic is only now experiencing a severe slowdown, as cargo has been under way from China to the rest of the world for the past weeks. Restoring those international services, even when the virus would disappear tomorrow, is likely to take a few months. 
Are you preparing for life after corona, do get in touch so we can give you our best assessment.

Xi Jinping's devilish dilemma's - Victor Shih

Victor Shih

Fighting the Covid-19 virus and saving the economy might not go very well together, says political analyst Victor Shih in Al Jazeera. While there is very little international supply chains can do at this stage, as Chinese governments make decisions, says Victor Shih, the message for the long run is: diversify.

Al Jazeera:

While that situation persists, global supply chains of everything from eyeglasses to cars, chemicals, batteries and electronic components remain crippled. 

"The instructions that we know Xi Jinping issued, are in a way in deep contradiction with each other," Victor Shih, associate professor of political economy at the University of California San Diego, told Al Jazeera by phone. 

"If the authorities are really doing everything possible they can to prevent new cases, then they would have very stringent measures to prevent migrant workers coming back in," Shih said. "But that, of course, will hamper economic activity."... 

Analysts say an even bigger issue is that thousands of small- and medium-sized factories, assembly plants and facilitators of global supply chains in those key manufacturing areas remain out of action. 

"A lot of these smaller companies are already operating on very thin margins and many of them have taken on a lot of debt," Shih said. "So even a few weeks of not having any business, not having any cash flows will potentially bankrupt these companies. This is why they don't pay their workers because they literally don't have the money." 

Many such plants either remain shuttered or are only slowly cranking up their activities...   

While global companies with international supply chains can do little to escape the short-term disruptions to their China operations, the long-term message to them is clear, says the University of California's Shih: Diversify. 

"This is yet another reason for a lot of foreign companies, especially those based in North America and Europe, to really try to diversify their supply chains," Shih said. 

"With global warming and with the advent of cheap airline and transportation infrastructure, you will have the potential for pandemics breaking out, not just in China, but other developing and maybe even advanced countries," he said. "So the more diversified a company's production chain is, the better they are able to weather these different shocks."

More in Al Jazeera.

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Government plays a number-game on covid-19 patients - Victor Shih

Victor Shih

China's Hubei province shocked the world as the number of confirmed covid-19 patients spiked because it started to use different way to diagnose patients. Political analyst Victor Shih sees it as a proof that the government is using different sets of tools to manipulate the number of patients and deaths, he tells to Reuters.

Reuters:

The sudden jump in new cases raises questions about China’s commitment to transparency, said Victor Shih, a specialist in Chinese politics at the School of Global Policy & Strategy at UC San Diego. 

“The adjustment of the data today proved without doubt that they have had two sets of numbers for confirmed infected all along,” he said. “If that were not the case, the government could not have added so many new cases in one day.” 

“A very disturbing aspect of today’s new numbers is that the vast majority of new cases accrued to Wuhan, but what if the rest of Hubei Province still did not adjust their reporting methods?” 

Hubei had previously only allowed infection to be confirmed by RNA tests, which can take days to process and delay treatment. RNA, or ribonucleic acid, carries genetic information allowing for identification of organisms like viruses. 

Using CT scans that reveal lung infection would help patients receive treatment as soon as possible and improve their chances of recovery, the commission said.

More in Reuters.

Victor Shih 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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