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.

  • Podcasting + more things

    Listening in – Podcasting provides a space for free thought in China | China | The Economist – I suspect that podcasting will represent a new frontier in censorship for Chinese regulators. China has an eco-system that allows paid subscription via podcasting platforms for experts in different fields such as business or investing. More China-related content here.

    Mike Pompeo renews attack on HSBC as bank walks line between US and China | Financial Times – HSBC is about to get a lot of trouble coming its way. It has managed to make enemies of the Chinese government over Huawei, the US government over Hong Kong sanctions busting and the UK government over its support of the Hong Kong national security law. I don’t think that they will be able to wriggle out of the mess that they have got themselves into

    Chinese Diplomats Helped Military Scholars Visiting the U.S. Evade FBI Scrutiny, U.S. Says – WSJ – not terribly surprising

    Can virtual fit technology step up and replace fitting rooms? | Vogue Business – this could also accelerate the move to digital

    Alibaba wants American brands. The same ones as Amazon | Vogue Business – this could kill JD.com and Amazon China

    Rolls-Royce unveils “confident but quiet” rebrand by Pentagram – move away from skeuomorphic 3D branding lends itself better for apps online etc etc

    Are creatives better at creativity? | Contagious – While we’re always interested in the nature of creativity, it’s important to put experiments like these into perspective – there’s a lot more to being an agency creative than what was tested here. After all, being good at keep-ups doesn’t mean you can play professional football.

    Tech war chronicles: How a Silicon Valley chip pioneer landed in China  – Reuters – really interesting. MIPS, SPARC and RISC-V are arguably better architectures than ARM’s Core series of processors. MIPS has been ubiquitous in high performance computing to embedded electronics. It is very well understood, in terms of both design and writing software for it

    Wilderness of Mirrors – The Burning Shore – great meditation on the nature of conspiracy theories and culture

    KFC temporarily drops ‘finger lickin’ slogan in first global campaign – KFC believes its slogan is “inappropriate” at a time when hygiene is top of mind and so is dropping it temporarily, but is on the lookout for an interim replacement.

  • Things that caught my eye this week

    Indonesia is a fascinating place in and of itself and comes up with all kinds of cultural nuggets. The latest one that I came across was the Vespa Extreme moped sub-culture. Vespa scooters are plentiful in Indonesia, as is the desire to invent. Car tuning culture is big amongst the middle class. But for those who need something more affordable Vespa Extreme builds are a site to behold. The South China Morning Post put together this great documentary film on the Vespa Extreme culture and its riders.

    Like car culture there are meet-ups, cruises and even festivals organised.

    Vespa Extreme Culture.

    About half of the mobile game developers on iOS are based in China, the country’s universities turn out more programmers each year than anywhere else (including India). Yet China has still lagged behind other countries games in terms of incorporating technology and art. That’s where Black Myth: Wukong is supposed to come in. Sun Wukong is one of the names of the Monkey King in the Chinese literary classic Journey To The West. This has been a staple of Chinese animation and film for years.

    Black Myth: Wukong

    Could it be popular in China? It’s hard to tell from this pre-Alpha release footage. The biggest issues are likely to come from Chinese regulators. But hopefully the game won’t have to undergo the lengthy rewrites and changes foreign games have to do to comply. Instead the Chinese developers should be able to bake compliance in from the start. However, its China; so nothing is guaranteed.

    German software giant SAP created a Tinder-like internal matching app to connect isolated employees for virtual lunches during remote work – its an interesting approach to things I guess. Home working lacks serendipity of working in an office. There is no water cooler moments. Social interactions are limited and Zoom analogues (Microsoft Teams, GoTo Meeting etc) burden the user with a heavy cognitive load. I just hope that this is opt-in at SAP, rather than ‘enforced’ or ‘serious fun’.

    The Ikea Taiwan Facebook page faithfully created looks from their catalogue on Animal Crossing, much to the delight of their Taiwanese and Hong Kong based followers. The original post is here.

    Ikea Taiwan Animal Crossing
    The original Facebook post
    Ikea Taiwan Animal Crossing
    Front cover with Animal Crossing characters, but on Ikea furniture
    Ikea Taiwan Animal Crossing
    Side-by-side comparison between the original catalogue and a recreation using sets dressed in Animal Crossing
    Ikea Taiwan Animal Crossing
    Another example, all prices are in Taiwan dollars rather than Animal Crossing belles

    More Ikea related content here.

    Spotify is already encouraging media planners to start thinking about audio adverts for their client Christmas campaigns. More here; Spotify’s Christmas in Summer: Hear the Cheer 

  • 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.”