Observations from Shenzhen, China

I spent some time in Shenzhen recently and here is some of the things that I found during my stay.

The pace of development is slower than it was before, the number of cranes I saw and ready-mix concrete wagons on the road was less than before. There is still a lot of building work but there is less of it

Odd products showing up in Shenzhen.

A case in point being an Orange-branded MiFi router that I used whilst I was there. It was your standard Huawei mobile internet Wi-Fi router as sold to Orange customers across Europe. We used it with a China Unicom 3G SIM in the device. It wasn’t just a case of badging, the device had an Orange admin page and served Orange-branded ‘no internet connection available’ error pages.

Just how did this device end up in Huawei’s back yard? Did the product ‘fall off the back of a wagon’? Are they being dumped in the marketplace? Is there some black market ‘carousel’ sales tax scam going on?

Smartphone users

Talking about mobile devices: a quick poll of a mix of people I met:

  • Advertising agency owner: Apple iPhone 5S
  • Creative industry entrepreneur: iPhone 5C for personal use, an iPhone 5S likely to be gifted
  • Professional photographer and interior designer: iPhone 4S
  • 7 taxi drivers: 5 Samsung, 1 iPhone 4 and one Xiaomi handset
  • Businessman who owned a pharmaceutical distribution business and various properties: Samsung
  • Businessman: Samsung
  • Museum/ gallery curator: Samsung
  • Professional driver: Samsung

It is hard to explain the ubiquity and usage of:

  • Weixin (WeChat) – running out of your data package cuts you off more than running out of voice minutes. My friend has her 70+ year old mother WeChatting her incessantly
  • TaoBao – the impact of TaoBao can be seen on the streets with a volume of delivery people darting around the city. Electric mopeds were banned in Shenzhen for anyone who didn’t work for a delivery company as the devices were a silent killer who ran over unsuspecting pedestrians. Shenzhen still has electric bikes (more professionally handled) by delivery people delivering online shopping. TaoBao and its sister site TMall are the e-tailing game. Apple recently opened a store on TMall in parallel to the Chinese version of its familiar online store

The Chinese creative industries are coming on in leaps and bounds. I met with an advertising and design agency owner and was bowled over by the quality of the branding design that they had done for a new creative hub. Having worked alongside western big branding agencies in China working for Chinese clients I can say that the work was equal, if not better in quality.

This is also matched by the creative infrastructure that the Chinese central and regional governments are putting in alongside private enterprises. A classic example of this is the continued development of the OCT LOFT complex. This was once an area of factories run by Overseas Chinese as a separate Town, these sturdy concrete buildings have been converted into retail areas a la the Truman Brewery, offices, studio spaces, co-working spaces and social clubs.

There is a live performance space in OCT LOFT called B10 with a really well engineered sound and lighting system. This has managed to attract sponsorship from the likes of MINI. China is serious about building a creative class and is doing something meaningful about providing all infrastructure needed within a cluster.

Talking of live performances, I got to see a local band play at B10; I don’t know if this was just this band but the crowd did much more interaction with the band on stage, singing along, dancing, synchronised clapping and a lot less viewing the performance through their smartphone than I had been used to in the UK and Hong Kong.

Electric vehicles are big business; Shenzhen now has blue and silver taxis from local firm BYD that are electric powered. BYD is a famous battery company and Warren Buffett is a shareholder. Admittedly, the electricity probably comes from a lot of coal-fired power stations as well asnuclear-powered ones, but China is serious about the future of transportation.

Hailing a cab is pretty much done by app, the Chinese version of Hailo is as ubiquitous on peoples phones as Weixin.

Changing perception of western country brands. This is just anecdotal stuff speaking to a couple of people, but the brand of the UK in China has changed over the past couple of years. It used to be that the UK was thought to be a great nation to do business.

David Cameron’s recent trip to China and launch of a Weibo account was seen as an act of desperation to try and capture inbound investment. Now the view that I heard expressed is that Britain is a good place to visit and shop (for luxury goods), to get an education or learn English – but that’s it. Entrepreneur visas didn’t hold that much appeal to the people I spoke with.

There is a change in what it means to be made in China. Over the past few times that I have been in China there has been a move away from products that are good enough to providing a quality experience. Brands like retailer Emoi have been at the head of it, alongside Oppo whose Blu-Ray players give Denon and Onkyo a run for their money.

This time friends of mine have set up a venue, one of the primary purposes of the venue is to showcase quality Chinese-made products from craftsmen made ceramics, to furniture, modern art and vacuum-tube hi-fi amplifiers. Just as China is raising it’s creative game, it is also looking to make better quality products. However this isn’t a universal move; there are still value-orientated companies, particularly those in the business-to-business space.