Zhejiang province: best in producing billionaires - Rupert Hoogewerf

Rupert Hoogewerf

"Highly collaborative and versatile." That is how Hurun rich list founder Rupert Hoogewerf describes the billionaires coming from Zhejiang province, China´s region that produces most billionaires than any other in China and the world. And it is not over yet, says Hoogewerf to CNN Money.

CNN Money:

Among the 72 billionaires from the Zhejiang region are Neil Shen, a venture capitalist and founder of Sequoia Capital China in Beijing; Ding Lei, founder of NetEase, also in Beijing; Frank Wang, founder and CEO of drone-maker DJI, based in Shenzhen; and Li Khufu, founder of Geely Auto Group, which owns Volvo and is based in Hangzhou. 

"Zhejiang province people are head and shoulders above other entrepreneurs in China," Hurun Report chairman Rupert Hoogewerf told CNNMoney. "They're highly collaborative and versatile." 

Even though people from Zhejiang make up about 5% of China's population, the region produces about 15% of the country's richest people, according to Hoogewerf. He also believes that Zhejiang will continue to produce more millionaires and billionaires, mainly because of (Jack) Ma. 

"Ma has worked with so many partners in China," Hoogewerf said, noting the billionaire's wide-ranging investments. Over the past six years, Alibaba has spent about $30 billion to $40 billion on over 100 investments and acquisitions. 

And Ant Financial, which was formerly called Alipay and spun off from Alibaba, will eventually have an IPO, likely making yet another billionaire in CEO Lucy Lei Peng, who Hurun estimates to be worth about $940 million. 

"Alibaba and Ant Financial have already created more people on our rich list than any other company in China," said Hoogewerf. "They're a great example of what cooperation can yield."

More in CNN Money.

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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Chinese consumers prefer German over American brands - James Roy

James Roy

Especially in the car industry, American brands are fighting heavily with their German competitors. And the Germans are doing better tells retail analyst James Roy to Bloomberg.

Bloomberg:

Mainland buyers have traditionally equated luxury with German nameplates. Volkswagen-owned Audi is China’s top luxury brand, with 30 percent of the high-end market in 2015; BMW is No. 2, with 25 percent; and Daimler’s Mercedes-Benz line is third, with 20 percent. 

Cadillac is far behind, tied with Chinese automaker Geely Automobile Holdings’ Volvo at No. 6—they each commanded 4 percent of the market last year, according to Bloomberg Intelligence. Lincoln had less than 1 percent. “There really is a solid association in Chinese consumers’ minds with the premium German brands,” says James Roy, associate principal of China Market Research Group. “American cars are viewed as fine and good and functional, but they don’t have that premium image.”... 

President Xi Jinping’s campaign against corruption and conspicuous consumption among officials may also provide an opening for U.S. cars. “Consumers are trading down,” says Roy of China Market Research Group. “People are not looking to be as obvious or flashy with their wealth as before.”

More in Bloomberg.

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Expensive cars and their drivers: what are their characteristics? - Rupert Hoogewerf

Rupert Hoogewerf

Rich Chinese think their cars represent the way they stand in society. But Rupert Hoogewerf, founder of the Hurun Rich List, found out there might be a huge difference between the car owners and the rest of the Chinese on how they feel about the cars, he tells the Shanghai Daily.

The Shanghai Daily:

The Hurun Report found some disparities between the public stereotype of specific luxury car owners and how the owners think of themselves. 

Mercedes Benz owners are viewed as entrepreneurial, cultivated and successful, which is pretty much in line with how their owners see themselves. 

BMW owners describe themselves as owners of small and medium-sized businesses or senior managers in multinational companies. They say they have a positive attitude and believe in living life to the fullest while being relatively discreet. That’s not quite the public stereotype of BMW owners as nouveau riche, materialistic and show-offs. 

Land Rover owners are considered to be nouveau riche, second-generation wealth and show-offs, while Land Rover owners consider themselves to be professional, senior managers and self-made people. 

Volvo owners are viewed by the public as valuable members of society, low-key, morally upstanding and family-oriented. Of the eight car brands surveyed, Volvo car owners came closest to their image. Additionally, they consider themselves to be returnees. 

Audi owners are viewed as government officials, mature and experienced. This image is the most defined in all the eight brands. Audi owners consider themselves to be white-collar workers with a positive attitude toward life and a zeal to live life to the fullest. 

Cadillac owners have the image of mature and successful white-collar workers. The owners consider themselves to be senior managers in multinationals. Infiniti owners have the public image of second-generation rich, film stars and highly active people, while Infiniti owners view themselves as white-collar workers. 

Lexus owners don’t fall into any distinctive public stereotype, while Lexus owners consider themselves to be white-collar workers, professionals and senior managers in state-owned enterprises.

More in the Shanghai Daily.

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 luxury goods at the China Speakers Bureau? Do check out this list.  

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How Geely bought Volvo - Joel Backaler

+Joel Backaler 

In his book China Goes West: Everything You Need to Know About Chinese Companies Going Global author Joel Backaler describes how Geely bought Volvo. An example of how China´s business leaders do things differently. From an excerpt at his weblog.

Joel Backaler:

Ever the ambitious visionary, Li (Shufu, Chairman of Chinese automaker Geely) had his sights set on Volvo early. Through Li’s research, he had learned Volvo was never a strategic brand for its American owner, Ford Motors. This is because Ford has been and remains primarily a mass-market car company; as a premium brand, Volvo was out-of-reach for many of Ford’s target consumers. As early as 2002, Li began contacting Ford, to try to convince them to take his intention to buy Volvo seriously. He sent letters to Ford’s senior management and networked with them at auto shows, but without success. Li took his first trip to Ford’s headquarters in Detroit to visit its Chief Financial Officer in 2007, but he did not receive a warm welcome. Instead, Li was met with concerns about his ability to raise sufficient capital for a deal, and was reminded of the fact that Geely was a relative unknown in the West. At the time of his first visit Volvo was not nearly as troubled as it was about to become, but Li had his heart set on acquiring the Volvo brand from Ford at all costs.It wasn’t until the 2008 global financial crisis occurred that Ford’s leadership finally became receptive to Li’s proposition. Li began to rack up miles on overseas flights to Detroit and Gothenburg, Sweden, where Volvo was based. To appease Volvo’s senior management, Li committed early on to ensure Volvo’s headquarters stayed in Sweden and its leadership team remained intact. Geely’s acquisition of Volvo would keep 16,000 local employees at their jobs. Back in China, Li communicated with regulatory authorities to make them aware of the potential acquisition and procedural obstacles before they arose later on to impede the deal’s progress. Li effectively painted the picture of a win-win situation for all parties involved in the acquisition. In fact, many of Li’s fellow Chinese automotive executives believe that one of the greatest talents he brings to the table is public relations. 

Li also wooed the Swedish leadership team of Volvo by emphasizing the vast untapped potential of the Chinese auto market. He argued that while the US, Germany, and France had all been major markets for Volvo in the past, they were highly competitive and increasingly saturated. China was not only the world’s largest auto market; it also had tremendous growth potential given China’s historical absence of car ownership. There were 62 million automobiles on China’s roads in 2009, which some projected would grow to reach 200 million by 2020. By selling China as the world’s largest automobile market, Li helped paint a path of opportunity for future growth, and a chance to make Volvo profitable in China. Li also underscored the potential for selling Volvo’s European premium brand to China’s growing population of luxury consumers. With Li offering the localized know-how to navigate the intricacies of doing business in China, Volvo’s management saw how they could benefit from the acquisition by Geely. 

In August 2010, the farm boy from Hangzhou, China, officially acquired the movie star from Gothenburg, Sweden, for $1.5 billion. By 2013, China became Volvo’s most profitable market, where it produced 42,000 automobiles. Doug Speck, Senior Vice-President of Sales and Marketing for Volvo told the Financial Times in a 2013 interview: “We expect a significant bump-up from localization.” Management expects annual sales to increase to 200,000 by 2015 after the Chinese government officially recognizes Volvo as a local firm through Geely’s ownership in 2014. Li Shufu fulfilled his commitment to open new markets for Volvo, while acquiring a global luxury car brand to help boost Geely’s international image.

 More at the China Business Review.

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Profiles of luxury car owners – Rupert Hoogewerf

Rupert Hoogewerf

Luxury car brands tell much about the ambitions of their owners, and how people think about them, disclosed the Hurun White Paper on luxury cars last week. In the Global Times an overview of the profiles of the owners of Audi, BMW, Mercedes- Benz, Lexus, Volvo, Land Rover, Cadillac and Infiniti, according to Hurun founder Rupert Hoogewerf.

The Global Times:

The report came to some interesting conclusions. For example, the public opinion of Mercedes-Benz and Volvo car owners are very similar to the way the owners of these cars view themselves. The public perception of BMW owners contrasted greatly to the personal opinions of the owners. 

Mercedes-Benz: Owners of Mercedes-Benz cars are considered to be entrepreneurs, cultivated and successful. This was very much in line with how owners of Mercedes-Benz cars viewed themselves. 

BMW: Those who drive BMW cars consider themselves to be small and medium sized business owners, or senior managers of multinationals. They see themselves as being positive and are relatively discreet, all of which contrast to the public perception that they are nouveau riche, materialistic and pretentious. 

Land Rover: Land Rover car owners are considered to be young rich people who are boastful and vain. However, the owners consider themselves to be professionals and self-made businessmen. 

Volvo: Volvo cars, often viewed as inexpensive and practical, are unsurprisingly associated with low-key and valuable members of society. Of the eight car brands owners surveyed, Volvo car owners came closest to their public image, viewing themselves as being family-orientated and loyal Volvo customers. 

Audi: Government officials are thought to be the most likely owners of Audi cars. This image was the most distinct image of all the eight brands. Audi owners consider themselves accomplished white-collar workers. 

Cadillac: The owners of Cadillac cars are perceived as being mature and family-orientated, while the owners describe themselves as senior managers in multinational companies. 

Infiniti: Infinti cars are viewed as being owned by film star types, but the owners see themselves as young, active and middle-class workers. 

Lexus: The survey among the public failed to find a distinct class for Lexus car owners, with many respondents giving contrasting opinions. Lexus owners, however, consider themselves to be hard-working professionals in senior management roles of State-owned enterprises. 

Rupert Hoogewerf, the chairman and chief researcher of the Hurun Report, shared his opinion on the survey's results. 

"Spending money on a nice car is the first outward sign of success for many Chinese. The objective of this report is to highlight the brand image of these luxury cars in China," he said.

More at the Global Daily.

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 luxury good experts at the China Speakers Bureau? Check out our latest list.  

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Why China bought American movie theaters - Shaun Rein

Shaun Rein

Wanda's purchase of AMC Theaters raised more than a few eyebrows in the US? Is China buying a backdoor to execute its soft power?  Business analyst and author Shaun Rein explains in Foreign Policy what is behind this and other high-profile corporate purchases by Chinese companies.

Shaun Rein:

Unlike Japanese companies in the 1980s, which believed in the superiority of their own management techniques and sought to replace senior teams at American firms they bought out, most Chinese companies are keenly aware that they lack international-standard best practices. They acquire companies primarily for brand equity and as a learning opportunity. When Lenovo bought IBM's ThinkPad line, then the largest producer of laptops, there were few layoffs; Lenovo actually hired executives from Dell to run operations... 

Wanda's acquisition, like China Bright Food's purchase of the British food brand Weetabix and the Chinese auto company Geely's purchase of Volvo, shows Chinese brands want to acquire global brands rather than the painful, often multi-decade process of building them organically. Chinese companies have the cash and ambition to expand overseas, and are not afraid to do so through mergers and acquisitions. They are looking to become "truly global" -- as Wanda chairman Wang Jianlin recently said the AMC deal would make his company. Americans need to be ready for more of these purchases and understand that Chinese companies are looking out for their own profit and loss column.

More in Foreign Policy.

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.

More on Shaun Rein and The End of Cheap China, at Storify.

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