Generation Z turns to domestic brands - Shaun Rein

Shaun Rein

Chinese consumers always had a preference for foreign brands, because of quality and status. But the wealthy Generation Z - the post-millennials - is turning the tables, warns branding analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order in the South China Morning Post.

The South China Morning Post:

Huawei was considered the top Chinese brand it nevertheless ranked only 70th among global brands, according to Interbrand research in 2017. 

“What’s interesting about post-millennial consumers is that they’ve inherited a lot of wealth and this makes them more worldly and sophisticated than any Chinese consumer base before,” said Shaun Rein, managing director of China Market Research Group. “We’re starting to see brands designing products with these Post-00s in mind from the beginning, and releasing new products and services specifically for the China market.” 

China’s one child policy, which came into effect in the late 1970s and was dropped officially in 2015, makes this generation a unique group, whose parents are the only sons and daughters in their families. Described as an “unprecedentedly realistic” generation, the Post-00s actively ask for resources from their families to develop their own interests, the report [released this week on the country’s Post-00s generation] said... 

Rein pointed out that this generation has pushed China’s mobile services ahead of the world. “These younger consumers are quick to adopt mobile services, so social video companies like Kuaishou and Douyin are doing well,” said Rein. “China is two to three years ahead of Silicon Valley when it comes to mobile innovation.” 

Kuaishou and Douyin (known as Tik Tok outside China) are two of the increasingly popular short-video and live streaming apps available in China – drawing massive interest from younger users, who like to post videos of themselves singing, dancing and generally larking around.

More in the South China Morning Post.

Shaun Rein 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 branding experts at the China Speakers Bureau? Do check out this list.

Tension will move to non-trade areas - Arthur Kroeber

Arthur Kroeber

The US is moving from a trade war on commodities towards tech firms like ZTE and Huawei, trying to get a foothold with for example 5G into the US, says economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know® in the Nikkei Asian Review. "I think there probably is a desire to try and do what can be done to retard the progress of the Chinese firms in that."

The Nikkei Asian Review:

"A lot of what we're going to see over the next couple of months will target much more directly [on] nontrade areas that have to do with technology transfer and investment," said Arthur Kroeber, founding partner and head of research at Gavekal Research, on an April 17 conference call. He also pointed to the upcoming competition for the next-generation mobile-telecom system. 

"I think the timing of this is significant, because it is also at a time where the U.S. is increasingly concerned that ZTE and the other Chinese telecom company, Huawei, are stealing a march in the development of 5G technology, the next generation of technology for mobile phones," he added. "And so I think there probably is a desire to try and do what can be done to retard the progress of the Chinese firms in that."

More in the Nikkei Asian Review.

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.

Are you looking for more experts on the trade war between China and the US? Do check out this list.

What if your customers cannot pronounce your name - Shaun Rein

Shaun Rein

Chinese brands like Huawei and Xiaomi have not only legal problems to enter the lucrative US market, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order. It would also help if potential buyers would be able to pronounce the name of the product they are expected to purchase, he tells the South China Morning Post.

The South China Morning Post:

Huawei isn’t alone. Xiaomi, aiming to revolutionise China’s consumer electronics along the style of Apple, is almost impossible to pronounce. Xiaomi literally means “little rice.” 

Or take Tsingtao Beer, arguably the most internationalised among China’s brewers, its distinctive green bottle often the only Chinese brand found anywhere outside mainland China. Its name, spelt in the Wade-Giles system for romanising Mandarin, is the name of its home base of Qingdao city in Shandong province. 

Chinese brands need to be “something that roll off the tongue easily” to succeed, said Shaun Rein, founder and managing director of the China Market Research Group in Shanghai. Names like Huawei or Xiaomi, which “haven’t created English names that Americans and western Europeans can memorise or pronounce easily” have a bigger problem breaking into the market, he said. 

Americans spent US$14,564 per person on retail spending in 2014, more than three times the per-capita spending by Chinese consumers in the same year. That underscores the attraction of the consumer market in the planet’s biggest economy, even if its population is a quarter of China’s size... 

There are exceptions. DJI, the world’s largest producer of recreational drones, is headquartered in Shenzhen in southern China. Its full name, spelt out, is Da Jiang Innovations, inspired by the Chinese adage “Great ambition has no boundaries”.

But the company rarely goes by its full name in English, preferring to obscure its origins. It has an estimated 75 per cent share of the world’s market for drones, with the US among its biggest market. 

“American consumers sees DJI and they don’t know its heritage,” said Rein. “DJI is easily memorised by Americans and I think that’s the reason why Alibaba and Tencent do reasonably well, at least in recognition by Americans investors. Because their English names are easily memorable.”

More in the South China Morning Post.

Shaun Rein 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 advisors at the China Speakers Bureau? Do check out this list.

China: struggling for its position in the world - Tom Doctoroff

Tom Doctoroff

China gains economic and financial power, but is still struggling to find its place in the world, writes China veteran Tom Doctoroff in the Huffington Post."So China’s road to becoming a “soft” superpower will be long and rocky indeed," he says.

Tom Doctoroff:

Unlike Japan, a cocooned island, China is not apart from the world. Indeed, the country fancies itself the center of the universe, a cultural supernova that sucks in anything in its path. China - as much as civilization as a nation-state - has endured for thousands of years, a feat attributed to natural order. The “idea” of China is, in local people’s eyes, absolute truth. China analyzes, dissects and atomizes the political systems of other nations. It studies Western competitive advantages and applies them to local circumstances. But it is also a country in search of its own Copernican revolution. It remains unable to weave itself through the warp and weft of other societies. 

For example: Other than Huawei, a business-to-business telecommunications company, no Chinese corporation has achieved significant scale in any developed market - Haier’s fifteen percent share of cheap microwaves and mini fridges in the US does not count - due to, among other factors, the inability to balance marketing and sales functions; 

International cuisine is a hit in public settings where middle class Chinese bend over backwards to project an image of cosmopolitan erudition. However, even sophisticated Shanghainese rarely eat foreign foods at home. According to Treasury Wine Estates, only 5% of booming red wine consumption occurs at home; 

Chinese expatriates, particularly men, do not assimilate well. They often return home with a simplistic view that the West “looks down on” them. But reality is subtler. At business schools and in offices, clusters of Chinese retreat into self-effacing, gun-shy cliques reinforcing stereotypes of Chinese men as soft; 

Second- and third generation American Born Chinese struggle to reconcile the imperatives of Chinese heritage - obedience to parents, obsession with “face” - with US individualism. Identity confusion sometimes results in an odd hyper-Americanism; 

Oversees students, acutely aware of the deficiencies of China’s memorization-based education system, nonetheless avoid Western liberal arts like the plague. The most popular majors are still engineering, math and business; 

Starting in 2004, the government opened hundreds of Confucius Institutes to promote inter-cultural “harmony.” Due to a dearth of effective outreach ambassadors, they have ended up as language schools; 

So China’s road to becoming a “soft” superpower will be long and rocky indeed.

Much more in the Huffington Post.

Tom Doctoroff 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 political experts at the China Speakers Bureau? Do check out this list.  

Doing business with China - Zhang Ying

Zhang Ying

Chinese investors are moving into the world, including Europe, and doing business has become easier, says RSM professor Zhang Ying. Often they know each other already from the past investments into China, and communication has become much easier, she tells a website of the Spanish government.  

Zhang Ying 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.

She started March 2017 a partnership between Huawei and RSM on digital education.

Are you looking for more experts on China's outbound investments at the China Speakers Bureau? Do check out this list.

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Zhang Ying leads RSM Huawei partnership focus on education

Zhang Ying

The Rotterdam School of Management(RSM) and telecom giant Huawei have signed a partnership to deepen their cooperation on the digitalization of the transformation of education. RSM professor Zhang Ying will lead the new partnership, according to the China Daily.

China Daily:

The project, headed by Zhang Ying, associate dean of China Business and Relations at RSM, represents a collaboration between the industry and the education sectors in China and Europe, helping industries, education institutes and research bodies move into the era of digital transformation. 

Both parties aim to facilitate knowledge sharing between technology, innovation, business development and education in order to add value to the local social-economic community and academic-practice by means of joint research, China-EU relevant business relationships, and applied projects. 

Wonder Wang, CEO of Huawei Technologies Netherlands, said Huawei is committed to investing in Europe, and the MOU is part of the company's mission to aid in talent development across Europe. 

"The goal is to achieve local employment to contribute to the European economy and serve European industries for generations to come," said Wang.

More in the China Daily.

Zhang Ying 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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How Samsung pissed off its Chinese users - Ben Cavender

Ben Cavender

Samsung had a loyal group of users in China, but its way of dealing with the latest security scare has shocked their loyal follower, says retail analyst Ben Cavender to AP. Samsung did not recall its Note 7, despite possible igniting batteries, and recalls in the rest of the world.

AP:

Chinese consumers are unusually alert to safety issues following an avalanche of scandals over shoddy or fake food, medicines and other goods. They also are sensitive about being treated as well as Western consumers. 

"I think consumers are pretty unhappy with Samsung," said Ben Cavender of China Market Research Group. "Consumers start to feel like they are being taken advantage of, that they are not being accorded the same respect here as they are abroad."... 

Working in Samsung's favor is the fact that phones are sold through retailers in China instead of carriers. That allows users to switch brands quickly and new competitors to enter the market. 

"In any given month, a brand is going to leapfrog another brand and come up with a brighter screen or bigger battery of faster charging," said Cavender... 

Longer term, the Note 7 in China is likely to "take a major sales hit," said Cavender. 

"People who want to buy a phone are going to switch to Apple or to a local brand like Huawei," said Cavender. "Or if they want a Samsung, they probably are going to wait for the next generation, because they don't want to take the risk that they will get a faulty product."

More in AP.

Ben Cavender 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 to deal with your China risk at the China Speakers Bureau? Do check out this list. 

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8 Chinese innovations that might disrupt your industry in the year of the ape

Looking back at the demand from our clients at the China Speakers Bureau over the past few years, we see a distinct development into the future, into the year of the ape.

When we started our operations, many companies and organizations were looking for solutions to enter the often murky China markets. How to deal with consumers, governments, competitors and questions related to the country's developing economy?

Many of the larger and middle-sized foreign companies now have their operations going in China, often hired and employed Chinese staff, and got a better handle on the country. And China itself has entered an area of normality that would have been unthinkable ten years ago, despite regular complaints from foreign companies. 

But the perceived challenges, are now of a different dimension. China is becoming an innovative nation, offering disruptive technologies, unsettling traditional industries. And while most disruption took place in China itself, the relatively slow economic growth is forcing Chinese companies to look to the rest of the world. That change reflects profoundly in the demands we get from our clients.

And gaining a market share in countries where established internet companies are already present might not be easy for Chinese companies. 

Here we offer you an overview of the top-8 Chinese innovations that might disrupt your industry in the years to come, and where China has already made huge advances.

1. Mobile payments, wiping credit card and banking services away; Alipay has 80% of the market, based on Alibaba's giant following. Can it be copied elsewhere?
2. Online mapping services, offering discounts, payment services and reservation models.
3. Chatting services develop into profound platforms, offering a wide range of services. WeChat is changing traditional marketing and their features are already being cloned by Facebook Messenger. 
4. The Chinese style of organizing successful companies: the end of the middle management (Haier, Tencent, Huawei) and a strong focus on consumers.
5. insurance: P2P models are taking over old-style insurance models
6. Crowdfunding: larger internet companies have taking over VC-style and traditional bank lending in China. Can this trend develop also outside China?
7. Self driving electric cars: traditional car companies are losing their competitive edge, while internet companies in both the US and China are fighting to conquer the markets first.
8. The Internet of Things: Huawei has become the fastest growing for handsets and other mobile connections, taking on now Samsung and Apple successfully.

In the coming months we will flesh out some of the subjects here, and offer suggestions for speakers who can cover these disruptive developments. Otherwise, we wish you all the best in the upcoming year of the ape.

Trend: rich move from Apple to Huawei - Rupert Hoogewerf

Rupert Hoogewerf

While Apple´s iPhone 6S got an enthusiastic reception in Shanghai, some observers see some of the glory of the US giant is fading. Rupert Hoogewerf of the China Rich List sees even some of the rich moving to the domestic competitor Huawei, he tells the International Business Times.

International Business Times:

And there are signs that even Apple, which has stayed above the fray, trading on its reputation for innovative software, is facing tougher challenges. 

"I do get the impression that the Apple effect has faded a little,” said Rupert Hoogewerf, CEO of Hurun Report, which specializes in trends among China’s wealthy consumers and last year named Apple for the first time as the country’s most valued luxury brand for gifting.  

“I’ve seen lots of leading Chinese entrepreneurs carrying Huaweis recently -- I’d say between 10 and 20 percent have them now,” he added.

More in the International Business Times.  

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.

Are you looking for more stories by Rupert Hoogewerf? Do check out this list.  

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Britain gains most jobs from Chinese investments - Rupert Hoogewerf

Rupert Hoogewerf

First rich Chinese send their children. Then they invest in real estate. And then other investments and jobs for the locals follow. China Rich List founder Rupert Hoogewerf was the first to discover that trend, and his latest Hurun report shows the UK has been in 2015 a key winner of job creation, led by Huawei, he tells Xinhua.

Xinhua:

In its report named "the UK Engaging the Chinese Private Sector 2015," the institute highlights eight key findings, including Masters courses and boarding schools have been the most important drivers of personal connections with Chinese entrepreneurs; led by Huawei, Britain has seen notable rise in job-creating investments from China's private sector. 

Rupert Hoogewerf, Chairman and Chief Researcher of Hurun Report, said that the private sector of Chinese mainland is the most dynamic and the one with the brightest future. According to a report released by UK Trade & Investment on Tuesday, China made 112 foreign direct investment (FDI) projects in Britain, becoming the fourth biggest FDI countries for UK in fiscal year 2014/15, which ended March 2015. 

"There has been a clear evolution of Chinese wanting to send their children to the UK and US, whereas a decade ago it was Canada and Australia," said Hoogewerf. 

The education destination choice also bolsters the residential purchases for Chinese high net worth families in Britain. London was the only European city to make the Top 10 preferred cities for Chinese to buy residential property, according to Hurun's report in June 2014.

More in Xinhua.

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.

Are you looking for more experts on China´s outbound investments at the China Speakers Bureau? Check out our list here.  

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Reasons Chinese firms fail and succeed abroad - Joel Backaler

+Joel Backaler 

Chinese companies are increasingly going abroad, for a large variety of reasons, and with an even larger variety of success and failure, says Joel Backaler in Knowledge CKGSB. The author of China Goes West: Everything You Need to Know About Chinese Companies Going Global looks at Huawei, Lenovo, Baidu, Xiaomi and TCL.

Knowledge CKGSB:

Chinese technology companies are looking for a variety of things in their investments and acquisitions abroad. They may take controlling stakes or minority stakes in foreign companies to access new markets, to acquire useful technologies, capabilities or talented personnel, or just to diversify their investment portfolios.

Of all these goals, accessing new markets typically offers both the highest risks and highest returns. As Joel Backaler, the author of China Goes West and a director at Frontier Strategy Group, says, “There [are] some very real business reasons why these Chinese companies, particularly tech companies, are going out. The market [especially for smartphones or consumer electronics] is highly competitive within China. Therefore if you can take that kind of product and adapt it for other markets, it can be a good way to diversify your business and maintain your margins.”

Chinese companies have tried their hands at both developed and developing countries. Companies operating in the former, such as Huawei, the telecoms manufacturer, and Wanxiang, an automotive parts maker, have had success focusing on hardware. While Baidu and Xiaomi, a company best known for its smartphones, have targeted the latter, with Baidu focusing on Southeast Asia, the Middle East, North Africa and Latin America....

Backaler points out that many of China’s early failed acquisitions were the result of Chinese companies with plenty of money going after assets that were failing for complex reasons. Chinese companies like TCL Corporation “weren’t necessarily in a position to go overseas, let alone to bring a company facing tough times back to life,” he says. He also cites Huawei as another Chinese company that failed to listen to the market, made mistakes in managing its image, and now is essentially barred from doing some types of business in the US.

On the positive side, Backaler says that Lenovo has done a great job of managing its US-based acquisitions. By retaining the acquired company’s management and staff, and only gradually making changes to the business model, Lenovo has convinced its American employees at IBM and Motorola Mobility that it was ready to learn from their experiences and dedicated to managing the company for the long haul.

There are other obstacles to Chinese outbound investments: hurdles to financing and approvals within China, or potential security threats with high-tech investments. However, the biggest obstacle to Chinese outbound investment appears to be connecting interested Chinese companies with potential targets. Very often, investors and investees just don’t know how to find each other.

“I think it’s challenging, because on one hand there is tremendous interest on the Chinese side to go out, and then if you’re looking from the American perspective there’s a strong desire for that investment, however there’s a really big gap in between,” says Backaler. Typically, interested Chinese investors go on tours or attend conferences where they can meet investment targets, and foreign states, cities and other local governments set up organizations inside China to recruit investment. However, both methods fall short of connecting all the interested parties.

More in Knowledge GKCSB.

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How can Chinese brands become global? - Joel Backaler

+Joel Backaler 

Chinese products are entering the global markets fast, but have a hard time to establish themselves as truly global brands. In European Huawei commercials even the voice actors have no clue how to pronounce the firm´s name. But there is hope writes Joel Backaler, author of China Goes West in the China Daily.

Joel Backaler:

What makes a brand "global?" According to the former head of marketing for Starbucks and Nike, a global brand "can travel worldwide, transcend cultural barriers, speak to multiple consumer segments simultaneously, create economies of scale, and let you operate at the higher end of the positioning spectrum - where you can earn solid margins over the long term". 

Based on this definition we have yet to see any Chinese companies develop brands with global appeal. Even current "success stories" such as Haier, Huawei, Lenovo and Tsingtao have brand names that are more challenging for some Western consumers to pronounce than childhood tongue twisters. 

But despite the current absence of truly global Chinese brands, I remain optimistic that Chinese companies will create globally competitive brands soon. This is due to an evolving domestic business environment that is beginning to reward competitive brand positioning combined with an emerging class of Chinese business leaders who recognize the importance of building a strong globally recognized brand. 

The responsibility of marketing in any company is to strike the right balance between driving sales today and building a long-term brand for tomorrow. In the years of double-digit economic growth, Chinese firms focused almost exclusively on sales to drive corporate growth. Marketing was all too often focused on the next product launch rather than building a brand asset for the future. While researching for my book, a China public relations executive shared an industry joke used to describe the way many Chinese companies perceive marketing: 

"'Branding' means designing a new logo, 'marketing' is the equivalent of purchasing ads on China Central Television, and 'PR' does not stand for 'public relations' but rather 'pay the reporter'."

More in the China Daily. 

Joel Backaler 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 China´s outbound investments at the China Speakers Bureau? Do check our latest update.

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Chinese pick Chinese brands on Singles´Day - Shaun Rein

+Shaun Rein 

A major shift in consumers preferences in China is that from foreign brands to Chinese. Author Shaun Rein of The End of Copycat China: The Rise of Creativity, Innovation, and Individualism in Asia explains in CNBC how the top-5 brands at Singles´Day illustrates the growing China pride.

CNBC:

The top 5 brands, ranked by gross merchandise volume, were budget smartphone manufacturer Xiaomi, followed by telecommunications hardware and phone maker Huawei, consumer electronics and home appliances company Haier, furniture retailer Linshimuye and Japanese apparel retailer Uniqlo, an Alibaba spokesperson told CNBC via email on Wednesday. 

Top 5 ranking reflects "the growing pride Chinese consumers have in their homegrown brands", said Shaun Rein, founder and managing director of the China Market Research Group. "That's why they are buying brands like Xiaomi and Haier." 

"Uniqlo is one of the hottest brands in China now because they make clothing and [have a] marketing campaign that fit the aspirations of Chinese consumers unlike Louis Vuitton with their blond hair, blue eyed models," said Rein, who is also the author of 'The End of Copy Cat China: the Rise of Creativity, Innovation and Individualism in Asia.' Many Chinese consumers are unaware that the brand originates in Japan, he said. 

Alibaba on Wednesday revealed that the Singles' Day sale saw over 1.2 million large home appliances, 3 million lighting products, 200,000 bottles of laundry detergent and 50,000 new cars sold. 

"Those categories are very popular in China," said Rein. 

White goods makers tend to engage in aggressive marketing campaigns for Singles' Day, he said. Discounted laundry detergent, meanwhile, is a popular item as Chinese consumers prefer to have it delivered rather than carting it home. Finally, online car shopping is booming, he said, because consumers know what they are getting when they order one.

More at CNBC.

Shaun Rein 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 interested in more branding experts at the China Speakers Bureau? Check our latest list here.

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Apple treats Chinese as second-class citizens - Shaun Rein

+Shaun Rein 

Chinese customers have to wait to get an official official release on Apple´s new iPhone, while China is Apple´s second largest market. "Apple can not longer treat Chinese as second-hand citizens," says business analyst Shaun Rein in Nikkei.

Nikkei:

"It really doesn't make sense that Apple continues to treat the Chinese consumer as a second-class citizen," said Shaun Rein, founder of Shanghai-based China Market Research Group and author of the forthcoming book, "The End of Copycat China," about Chinese innovation. "Because of better Google Android platforms, and rising cheaper domestic brands such as Xiaomi, Huawei or Lenovo, Apple can't afford to treat Chinese consumers, I think, with what looks like disdain and contempt." 

The other disadvantage is that iPhones cannot accommodate dual subscriber identity module (SIM) cards, which can be a major handicap in markets such as India and China, where consumers are sensitive to pricing on data plans. Migrant workers, particularly in China, appreciate having two SIM cards in their phones -- one for incoming calls that they keep, and one for outgoing calls, which they change depending on where their jobs take them.

More in Nikkei.

Shaun Rein 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 interested in more branding experts at the China Speakers Bureau? Do check our recently updated list. 

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