Ged Carroll

Category: china | 中國 | 중국 | 中華

Ni hao – this category features any blog posts that relate to the People’s Republic of China, the Chinese communist party, Chinese citizens, consumer behaviour, business, and Chinese business abroad.

It is likely the post will also in other categories too.  For example a post about Tong Ren Tang might end up in the business section as well. Inevitably everything is inherently political in nature. At the moment, I don’t take suggestions for subject areas or comments on content for this category, it just isn’t worth the hassle.

Why have posts on China? I have been involved in projects there and had Chinese clients. China has some interesting things happening in art, advertising, architecture, design and manufacturing. I have managed to experience some great and not so great aspects of the country and its businesses.

Opinions have been managed by the omnipresent party and this has affected consumer behaviour. Lotte was boycotted and harassed out of the country. Toyota and Honda cars occasionally go through damage by consumer action during particularly high tensions with Japan.

I put stuff here to allow readers to make up their own  minds about the PRC. The size of the place makes things complicated and the only constants are change, death, taxes and the party. Things get even more complicated on the global stage.

The unique nature of the Chinese internet and sheltered business sectors means that interesting Galapagos syndrome type things happen.

I have separate sections for Taiwan and Hong Kong, for posts that are specific to them.

  • Epic Games + more things

    Why Epic isn’t an innocent victim in the Fortnite battle with Apple, and why it deserves a loss today – BGR – interesting argument that goes against the popular media narrative. I wonder why Epic haven’t gone after console makers as well? Not all gamers might get the fact that Epic has created this crisis fully knowing it would breach the contract, fully knowing what Apple’s responses could be, and full knowing that Apple will call its bluff. That’s why it had all those lawsuits on hand and the viral commercial. Whether it expected Apple to go for the nuclear option, that’s debatable, but the same email chain above proves that Apple’s response was swift. From the moment Epic released the update, Apple let the company know that it’s risking losing access to its developer tools, which can hinder app development for games based on the Unreal engine that Epic licenses to other game makers.  The same response also details another dishonest behavior from Epic that shouldn’t be ignored. Epic took advantage of Apple’s developer tools to quietly push an update to the App Store that turned on an IAP payment functionality that Apple would never approve. Epic has been cheating, and that’s a company that’s supposedly working for other developers. That’s a company that other developers should trust when dealing with a hypothetical Epic App Store inside the App Store that would be governed by Epic’s own rules

    Vietnamese tech firm sues TikTok, alleging copyright infringement – Reuters – VNG are a highly creative outfit. They do great games, their messenger platform has done well despite Vietnam allowing access to WhatsApp and Facebook. They had some challenges over IP over five years ago and have since built up their own stable of recording artists

    Chinese-Made Smartphones Are Secretly Stealing Money From People Around The World – how cheap Chinese smartphones take advantage of the world’s poorest people. Current security concerns about Chinese apps and hardware have largely focused on potential back doors in Huawei’s 5G equipment. More recently, people have focused on how user data collected by TikTok could be abused by the company and the Chinese government. But an overlooked and ongoing threat is the consistent presence of malware on cheap smartphones from Chinese manufacturers and how it exacts a digital tax on people with low incomes

    Why are prices so damn high by Eric Hellend – health, education and the Baumol cost disease

    Jack Ma’s Ant Group Produces $3.5 Billion Profit in Six Months as IPO Looms – WSJ – one thing to remember is how Ma unilaterally bilked Yahoo! shareholders out of Ant Financial when Carole Bartz was CEO. Probably not a good investment for a foreigner in China

    ‘The new definition of luxury’: Highsnobiety unpacks how the landscape of high-end fashion has tilted toward accessibility – Digiday – Carvalho said that through the recent research Highsnobiety performed, his team has learned that younger shoppers don’t care about exclusivity in luxury like previous generations did. Instead, they want accessibility. And for the most part, the designer brands that have successfully attracted a younger audience no longer have closed shop doors that only allow in certain clientele.  “Accessibility doesn’t mean that every consumer will have the means to purchase a product, but the doors are open for them,” he said. “The hope is that down the line” this 16- or 17-year-old will become a paying customer of the brand.” More luxury segment content and analysis here

    Frasers Group announces deal for DW Sports | RTE – buying into gyms and fitness studio business

    First, private equity holds us to ransom. Now it wants us to bail out its losses | Private equity | The Guardian – Its excessive debts, once the route to fortunes and, it would say, “business discipline”, are crushing it. On top, the commercial property market no longer looks a one-way bet. It wants its vast mortgage debt guaranteed by the government, even though the interest charges drive the underlying companies into operating losses – but this has been apparent way before COVID. Private equity in these sectors has been like an unpleasant game of pass the parcel

    Chick-Fil-A Fires Employee for a Menu Hack Video That Went Viral on TikTok | Inc.com – the article points out the various different reasons why Chck-Fil-A is wrong. I get it, the challenge for businesses like this are:

    • The businesses provide a consistent experience – like McDonalds that’s their thing. This means very hierarchical structures.
    • Finally restaurants tend to make money on controlling the margins tightly, doing the right thing here would be going against pretty much every trait that makes them successful all of the time

    Imagination in China lab RISC-V deal | EETimes Europe – RISC-V is often overlooked as a platform but is has great potential

  • Megatrends by John Naisbitt

    John Naisbitt’s Megatrends was on the New York Times bestseller list when it was first published in 1982. Naisbitt outlined some big long term trends that he’d found as part of a decade of research. Hence the mega in Megatrends; though one could argue that macro may have been a more accurate term to use.

    I wasn’t that familiar with the work of Naisbitt; but came upon it by a circuitous route.

    My circuitous route to Megatrends

    I was introduced to the works of futurist Alvin Toffler in college reading Future Shock, The Third Wave and Power Shift. At the time these were cited on the technology degree courses my friends were on; as well as the marketing course I was studying.

    My house mate and I would talk about Toffler’s books as much Robert Pirsig or Emmanuel Kant, on the sofa of an evening sipping really bad instant coffee. I wouldn’t say that those were particularly happy days for me, but they did give me the time to think and read. Something that is much more of a struggle now.

    As I became more interested in Asia in the late 1990s; l read about how Toffler had influenced technocratic leaders from Singapore to China. I also started to read about John Naisbitt. Like Toffler, Naisbitt had done the Asian speaker circuits, met senior officials and conducted projects in-country through the 1990s. The management consultancy Toffler Associates eventually operated in China on government and private sector briefs.

    Compared to Toffler; Naisbitt seems to have become much more personally committed to China and central Europe. He has alternately lived in Vienna and in Tianjin, China. As the dot com boom kicked off I was reading this book. It fitted right in with similar writings from publications like Gilder Technology Report, Wired and Upside.

    LONDON
    Megatrends by John Naisbitt

    Back to the Megatrends review

    In Megatrends Naisbitt sets out X large scale long term trends that he sees in society

    • Information society and the rise of the knowledge worker
    • High tech / high touch – Naisbitt saw that roles would focus more on technology, or on ‘high touch’ sectors where humans aren’t easily replaceable like nursing care
    • Globalisation – a move in focus from the national economy to the world economy as the world becomes more interconnected
    • A move in strategic focus from short-term planning to long term planning.
    • Decentralisation of power and structures
    • A move from institutional help to self-help
    • Bottom-up governance across government and other organisations as a channel for public opinion
    • The move from hierarchies to networks
    • The population shift in the US from north to south
    • Increase in consumer choice

    At the top line we can still see much of these changes. I can see how Naisbitt’s vision of globalisation would appeal to the likes of Singapore and China. I am less sure about how Chinese technocrats would have made of bottom up decision making or as Naisbitt puts it ‘participatory democracy’.

    Naisbitt failed to take the next logical step; to look at the interactions between the trends. Instead the chapters remained siloed, rather than in context.

    For instance that the decline of hierarchies and rise of knowledge workers saw layers of management shed by organisations. Or the link between consumer choice and the rise of globalisation.

    Conclusion

    Megatrends has value in the way that looks at trends without looking at the how (usually mentioning digitalisation or some similar vehicle of transformation). This is something that we probably wouldn’t be able to do now; given that our mindset is about big data and agile processes. More book reviews here.

  • Influencer endorsements + more stuff

    Influencer endorsements fail to influence purchase decisions | WARC – Influencer endorsements play only a small role in affecting the purchase decisions of their followers, according to research from influencer endorsements platform Influencer and GlobalWebIndex. In their survey of consumers in the UK and US who follow influencers on social media, just 15% said influencer endorsements motivates them to make a purchase – the tenth most common response. In comparison, more than half of consumers who follow influencers say free delivery (57%) and offers/promotions (52%) would motivate them to make a purchase. – Interesting in light of the high amount of spend put around influencer endorsements by the likes of Unilever personal care and beauty products. Is this a lack of ‘influence’ or being more budget conscious that is the driver? There might need to be a readjustment of charges for influencer endorsements. Also as WARC notes, a long term test is required.

    Jailed WeChat User Says Chinese Police Monitor Overseas Accounts Too – Jin Chun, a former big data engineer at Huawei’s Nanjing Research Institute, meanwhile recently told reporters that all Chinese communications companies and internet service providers companies are required to monitor users on behalf of the ruling Chinese Communist Party. Faced with an official request for data, no company will resist, because they would cease to operate, he said. More on China here.

    Will Blaize Trailblaze Edge AI Market?   | EE Times – what people tend to miss about this is the pushback against the cloud, even with 5G connectivity

    Puncturing the paradox: group cohesion and the generational myth – BBH Labs – yet more evidence against generations

    Google giving far-right users’ data to law enforcement, documents reveal | Technology | The Guardian – Saira Hussein, a staff attorney at the Electronic Frontiers Foundation, said in a phone conversation that EFF was concerned about the “vast amounts of user data” Google appeared to be voluntarily passing on to law enforcement, but questioned Google’s goal in doing so. “Are they expecting law enforcement to do something, or is this just a way of covering themselves? Does Google see its responsibility as simply reporting this to law enforcement and moving on?”

    Automated assistants – Wunderman Thompson Intelligence – limited but coming

    China drought, heavy rains spark concern over grain supply as Xi Jinping launches campaign against food waste | South China Morning Post – interesting when one reflects on this in conjunction with the Chinese government ‘clean plate’ initiative in the news last week

    She Helped Wreck the News Business. Here’s Her Plan to Fix It | WIRED – TL;DR brand safety is destroying online advertising in news and current affairs

    New Cold War With China Demands Radical Industrial Rethink for United States – Since March alone, China has threatened to withhold medical equipment from the United States and Europe during the coronavirus pandemic; launched the biggest cyberattack against Australia in the country’s history; hacked U.S. firms to acquire secrets related to the coronavirus vaccine; and engaged in massive disinformation campaigns on a global scale. China even hacked the Vatican. These incidents reflect the power China wields through its control of supply chains and information hardware. They show the peril of ceding control of vast swaths of the world’s manufacturing to a regime that builds at home, and exports abroad, a model of governance that is fundamentally in conflict with American values and democracies everywhere. And they pale in comparison to what China will have the capacity to do as its confrontation with the United States sharpens

    Miss M: Guarding the City We Call Home | We Are HKers – Like many of our forefathers, Mainland Chinese flee to Hong Kong and even overseas for obvious reasons.Among the younger students in my school, 80% have Mainland Chinese backgrounds (they are either from China or they speak Mandarin at home). Many treat learning English with disdain and fantasise that China will rule the world in the near future and foreigners will have to learn Mandarin to please the Chinese. This is a tragedy. Their parents send them to Hong Kong to study despite all the hardship, but the kids fail to forego their conservative Chinese mindset. This happens not only in Hong Kong, but also in Canada. The CCP have already gotten their hands on Chinese language newspapers such as Mingpao and Sing Tao Daily. Lennon Walls in Canadian universities are destroyed within days by Mainland Chinese students and their physical attacks on Hong Kong students are common – the degree of population change is quite phenomenal

    Why marketers should embrace Share of Search as a metric | WARC – “The SoS calculation itself is simple. Calculate a rolling 12-month average of the various brands to be analysed, including your own. Total this. Divide each individual brand’s 12-month rolling average by the total and turn into a %. This is Share of Search, using Google Trends data.”

  • Battle for open platforms + more stuff

    Epic’s battle for open platforms ignores consoles’ massive closed market | Ars Technica – and the majority of games played on Fortnite are played on consoles. Epic’s battle for open platforms rings hollow. More gaming posts here. More on other (more legitimate) battles for open platforms here. Epic’s battle for open platforms is about extra revenue not consumer benefit. They’ve deliberately picked a fight for some reason that won’t become apparent yet. One also has to view Epic’s battle for open platforms through its Chinese ownership as well

    Why marketers should embrace Share of Search as a metric | WARC – “The SoS calculation itself is simple. Calculate a rolling 12-month average of the various brands to be analysed, including your own. Total this. Divide each individual brand’s 12-month rolling average by the total and turn into a %. This is Share of Search, using Google Trends data.” More here in an interview for Contagious by Les Binet. Why share of search is a vital marketing metric | Contagious – The internet has made it almost impossible to accurately measure brands’ share of voice and the world seems perfectly content with that trade-off, so marketers have been forced to look for a replacement metric fit for the digital age. Share of search, it seems, might just fill the void…. Binet however is tentative on the tantalising prospect that share of search can give marketers an almost immediate insight into how a brand-building ad will perform over the long term. ‘Kind of,’ he says, when asked if share of search could show brands the value of emotional advertising in days instead of years. ‘You can to some extent use it to get a prediction of the long-term effects in the short term,’ he says, ‘but it may not work in every category. It tends to work best in categories with considered purchases.’ What most excites Binet about his research, though, is that when he looked at the effects of advertising on share of search he saw – consistently across all categories – that around 40% of the impact was felt in the short term (the first month) and around 60% of the uplift was delivered over the long term (the following two years). ‘That 60/40 ratio is one I’ve seen before,’ he jokes, alluding to his earlier work with Peter Field, The Long and the Short of It, which established a 60/40 rule for brands looking to divvy up their marketing spend between long term brand building ads and short term activations. ‘So the share of search analysis provides a further piece of independent, empirical evidence for the hypothesis we have about how advertising works.

    Brand is a strategy | WARC – Gartner recently announced that, partially at least, in response to the pandemic and its associated uncertainties, CMOs now rank ‘brand strategy’ as their top priority. As with any survey, we should consider the research skeptically — but since CMOs largely direct how they spend their budgets, it’s worth the industry that serves them considering what they might be looking for assistance with.  The survey was interesting beyond the headlines. Last year the same group considered analytics their most vital marketing capability, which highlights both the increased scrutiny that marketing faces to be accountable and the endless pendulum that swings in the industry, between brand and performance. And they are going into prioritisation of brand just at the time when the board will squeeze them on performance

    Google ends direct cooperation with Hong Kong on data requests over national security law – The Washington Post – Google is blocked in mainland China, but accessible in Hong Kong. By refusing to review Hong Kong government requests for data through its normal process, Google seems to be acknowledging the broad reach the law gave China into Hong Kong. – Contrasts with the kind of dance that HSBC and Swire seem to be doing

    Strategist’s Digest: the gulf between corporate values and company culture | Contagious – Over 80% of large companies publish on their websites the values they profess to live by, according to research. Integrity was the most often listed value, claimed by 65% of all companies. Collaboration came second, with 53%, and customer focus was third at 48%. But do these values make a difference to the companies’ culture and how they behave? The researchers used Glassdoor reviews, posted by employees, to find out. After analysing 1.2 million reviews for more than 500 large companies, they found no significant correlation. In some cases there was even a negative relationship between core values and the company culture as reported by employees. And more at the Sloane Review – | When It Comes to Culture, Does Your Company Walk the Talk? | Sloane Review 

    Jimmy Lai/Hong Kong: buy orders on democracy | Financial Times – Next Digital is a benchmark for resistance to Chinese authoritarianism in other ways. Views on its digital platform double when there are protests, to an average of 80m a day. Next Digital has survived constant mainland pressure, including the withdrawal of its underwriter just before its listing and advertising boycotts by Chinese companies. The shares trade at a just over 0.3 times book value. Investors with ethical policies may have awkward questions for HSBC and Standard Chartered. These UK-listed banks have expressed support for the law under which Mr Lai was detained. The arrest of a chief executive warns foreign multinationals to locate elsewhere.

    How Car Companies Engineer the Sounds of Their Doors to Imply Safety – engineering to design every aspect of the experience

    Anti-mask group in Tokyo slammed for “cluster festival” | SoraNews24 -Japan News – thankfully only a fringe behaviour but interesting that it gloms on to similar patterns as UK protestors, such as concerns about 5G

    Sweatpants Forever: How the Fashion Industry Collapsed – The New York Times – For years, Sternberg had been saying that the fashion industry was a giant bubble heading toward collapse. Now the pandemic was just speeding up the inevitable. In fact, it had already begun. An incredible surplus of clothing was presently sitting in warehouses and in stores, some of which might never reopen. “That whole channel is dead,” Sternberg said. “And there’s no sign of when it’s turning on again.” – well worth reading particular the section about novelties. Novelties is when fashion houses put on additional zips or features just to get into department stores

    Movable wealth｜Ngan Shun-kau – Chinese UHNW (ultra high net worth) individuals (100 of them or so) have 78 trillion yuan offshores in Switzerland

    Why share of search is a vital marketing metric | Contagious – share of voice for the digital era

  • Mamahuhu + more things

    Scarlett, Shanghai and Me is a short film by comedy troupe Mamahuhu. They describe it as a film about coming to the end of your life as an expat in China. But I thought it was interesting as an examination of our lives with technology. Major Chinese cities now routinely use facial recognition as a biometric ‘key’ for things like entry access and voice services. Mamahuhu then ply a good deal of creative licence on top. The technology drives a ‘programmed’ world around you, what I’ve called in the past, the web-of-no-web.

    Action Bronson’s latest single Latin Grammys taps into Bronson’s long held love of bodybuilding and powerlifting. The video is like a sophisticated version of JibJab’s Elf Yourself with the sheen of VHS tinged nostalgia.

    Sam Chui got a behind the scenes tour with United Airlines to see how they were preparing for passenger flights in a COVID-world. Its fascinating to see how they’re re-engineered the passenger experience and back-end pre-flight processes such as cleaning the plane. It’s fascinating to watch, I am curious to see how much of this will stay when the COVID crisis is over?

    If you have ever watched Reservoir Dogs; or listened to the soundtrack you will know the ‘boss radio’ sound. (The Reservoir Dogs soundtrack was very popular in its own rights; in a similar way to The Guardians of The Galaxy mixtape of a few years go). ‘Boss radio’ was started in Los Angeles in the 1960s. You had a rise in teenage culture, surf culture. So KHJ decided to compete by devoting more of their air time to music. It was also famous for the ‘sound’ of their DJs. You can here this sound in this sales presentation recordings, presumably for brands and advertising agencies at the time.