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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China is catching up with the west - Shaun Rein

+Shaun Rein 

A lot of the old perceptions of China as cheap, and Chinese as avid saver, are cliches from the past, tells business analyst Shaun Rein in Arnnet. And while China is catching up with the west, western companies and country should make sure they deal with a fast changing China.

Arnnet:

Already some top Chinese companies have seen the holes in the market, such as infant formula, and advertise the fact that they cost 50 per cent more than the competition as a positive, because their supply chain is reliable. Technology is the same.

This has lead to a corresponding rise in the prominence of Chinese homegrown brands, such as Lenovo, Huawei and Xiaomi, products which are high quality by any markets standards.

"The west is no longer light years ahead," said Rein.

A 3M representative told Rein that 5 years ago, the company would've considered itself 10-20 years ahead. Nowadays Chinese firms have caught up, not just in terms of quality and price, but innovation. Its no longer a knock off game.

Lenovo is now the world's largest PC manufacturer, and continues producing high quality devices. Xiaomi mobiles, which are middle to high end smartphones, are set to be launched in North America, alongside ZTE and Huawei who have made market share in the low end.

Ericsson spends $5bn in R&D, Huawei is just behind on $4.9bn, and has picked up several key contracts in Ericsson's home turf, such as Deutsche Telekom. Rein said that Cisco executives have told him 'we're not that much better than Huawei anymore'.

"We are hearing the same thing in category after category," he said.

Part of the key to this innovative surge has been the 'bamboo ceiling'; the perception amongst China's youthful elite that they can't be senior executives in western corporations. This leads China's best and brightest back home to drive growth in their home corporations, and we're seeing the effects now.

One of the key advantages we still have left is that brand trust, which Australian tech businesses should take advantage of - and quickly, because its an advantage that's rapidly eroding.

More in Arnnet. 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.

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Buying a mobile phone in China - Bill Dodson

Bill Dodson

China veteran Bill Dodson got his mobile stolen and took to opportunity to investigate China's fast changing and competitive battle ground for mobile hardware. A report from the shopping mall in Suzhou on his weblog. Bill Dodson:

Instead of just going back to HTC I decided to check out other brands, including domestic labels. For those who have never been to a Chinese mobile phone market, it is very much like a bazaar. Sales clerks could be selling socks and knit caps for all they care; which isn’t to say they don’t care. Instead, in general, sales staff are young, energetic and talkative, for the most part. They go to great lengths to find you a phone that matches your requirments, instead of bending your requirements to one brand. Sales staff at mobile phone bazaars typically hawk several brands, and have no resistance to placing on high-gloss glass counters phones from several competing makers. 

I checked out Motorola and Samsung phones, and took a glimpse at Sony Ericsson’s offerings. The Nokia stands seemed rather lonely, if not well staffed. It was clear Nokia was putting a great deal of attention on the China market. However, the Microsoft squares didn’t seem to stimulate much interest in the shops I visited. Motorola, surprisingly, seems to have begun a resurrection, of sorts; however, I found the version of Android and accompanying apps loaded on its phones uninteresting. 

Samsung was very strong, especially with its Galaxy offering. Its cameras were amongst the clearest, and it had the fullest line of phones with cameras mounted on the face of phones, to take advantage of apps like Facetime, to ease video calling. 

The Chinese domestic brands had breeded like rabbits since I had last bought a phone at the end of last year. Now, in addition to ZTC, Huawei, Konka, Dopod, Amoi and Lenovo were phones from online service providers: Tencent (with its QQ phones); Baidu, the Google knock-off; Qihoo 360, Netease, Xiaomi and even Alibaba. Handling these smartphones, however, was a disappointment. 

At the price point of about 1500 rmb the resolution of the cameras on the phones was sorely lacking, while their implementations of Android expressed a sense of arrested development. Of course, they were not meant to go head-to-head with the Samsung Galaxy or Apple iPhone; but were instead meant to meet demand at the low-budget end where students and country folk find their finances more constrained than the middle class. 

However, Samsung, Motorola and Sony Ericson makes at the low end were still more rugged and feature-rich than domestic brands. 

At one mobile phone market in Suzhou I wandered to the HTC exhibition, which was the most crowded in the large room. I spotted the model I had bought for myself six months before. It was a staggering 30% less expensive than half a year before. 

Now, still less than the compact model I had previously bought, were newer models that were black, thin and sleek. The HTC One V was one of them. 5 megapixel (self-focusing) camera; half the thickness of an iPhone; 3.7 inch display; Android 4.0.3. Matte black. Very cool. No. Awesome. 

I wanted one. 

And at 2,300 rmb (just under US$400), it was a great value.

More at Bill Dodson's weblog.

Bill Dodson 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.

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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Changing China trends on innovation - Bill Fischer

Bill Fischer

China has a poor record on value-creation and capturing value of innovation outside the country itself. But times are changing, very fast, suggest IMD-professor Bill Fischer on the website Management-Issues. China might surprise the world again.

Bill Fischer:

Interestingly, there was no disputing the role of appropriating the ideas of others to build China's innovative capital, as evidenced by the clustering of many of China's new economy champions in the lower left-hand quarter. Bu this is not so surprising: many Western firms also owe their historical origins to the ideas of others. Google, for example, was judged by my Chinese observers to have originated by building upon the prior search-engine innovations of others, but then, as the arrow indicates, has subsequently grown through mastering the ability to both create and capture its own value - something that few of the Chinese firms have apparently achieved. 

But what is more notable about these impressions is that all but a handful of the Chinese firms are essentially only capturing value in the Chinese domestic market. They have, to date, been unable to launch strategies to create value and they have not been very successful in capturing value outside of the Chinese domestic market. 

This could start to change, however. Baidu announced earlier this year a new "box computing" strategy aimed to differentiate it from Google, and Sina Weibo has recently entered the Japanese market and is rumored to be launching an English language rival to Twitter. If these are, in fact, realized then perhaps we'll see more value-creation in the growth trajectories of Chinese firms?. 

Also interesting is that Lenovo and Huawei, two of the Chinese three firms most "northeast" in their location on the chart (both creating & capturing value — presumably where we would find the most sustainably successful innovators), would probably regarded by outside observers as being the least "entrepreneurial", the least "new economy", and the least "independent" of all of the firms represented. If we had added Haier to this set, the results would have been similar. So much for the innovation stereotypes so cherished in the West!

More on Management-Issues.

Bill Fischer is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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CSR program adds to competitiveness - Rupert Hoogewerf

Hurun by Fantake via Flickr

Programs for corporate social responsibility (CSR) adds to the competitive advantage of companies in China, says Hurun or Rupert Hoogewerf in his latest report. Most of the top-50 companies in his CSR list are domestic, says he says in the Shanghai Daily.Over 30 companies were domestic, the others foreign multinational companies.

The list is based on a survey of 50 leading CSR experts in China.

Bayer stood out as the company with the most respected CSR program among multinational firms, followed by HSBC and Intel.

Domestically, Vanke, Lenovo and China Mobile held the top places.

Commercial
Rupert Hoogewerf, better known as Hurun, is a speaker at the China Speakers Bureau. When you need him at your meeting of conference, do get in touch.

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Lenovo tops Greenpeace' guide

Lenovo, China's largest manufacturer of PC's, head a Greenpeace listing on green policies, report ChinaCSR and China Tech News.

"Given the growing mountains of e-waste in China - both imported and domestically generated – it is heartening to see a Chinese company taking the lead, and assuming responsibility at least for its own branded waste," said Iza Kruszewska, Greenpeace International Toxics Campaigner, "The challenge for the industry now is to see who will actually place greener products on the market."