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.
I took this picture almost two decades ago on a visit to Hong Kong of ghost signs.
I was reminded of this picture when I watched the below documentary on ghost signs. Specifically it reminded me of the former industrial units I saw in Fotan, which is in the New Territories of Hong Kong. Their structure used as a giant billboard advertising their former uses making fur coats or plastic flowers. The ghost signs of Hong Kong were fast-fading evidence of an industrial golden age in Hong Kong extinguished by China’s entrance into the World Trade Organisation (WTO) at the end of 2001.
The UK ghost signs highlighted in the documentary benefit from a slower rate of building replacement and a more temperate climate that helped preserve lead paint over a century old.
Ghost signs show that history is all around us, if we care to look around us.
Volkswagen China CMO deported from China for drug use | News | Campaign Asia – Volkswagen Group China’s chief marketing officer, Jochen Sengpiehl, has been expelled from China following a positive drug test upon his return from a holiday in Thailand. This development has caught significant attention on Chinese social media, as reported by the German tabloid Bild-Zeitung. AFP reported that German officials confirmed the news on Tuesday. Sengpiehl was detained for over 10 days and instructed to leave the country immediately after Chinese officials detected traces of cannabis and cocaine in his blood, according to AFP’s coverage. He was held in custody before Volkswagen and officials from the German embassy managed to secure his release. However, he was required to leave the country instantly, as reported by Bild. Campaign Asia-Pacific reached out to Volkswagen Group for comment. A global spokesperson offered a terse response: “We ask for your understanding that we will not comment further on the content of your questions in light of our contractual and data protection confidentiality obligations.” The incident throws a harsh spotlight on the differing legal landscapes around drug use. While Germany legalised cannabis use earlier this year, and Thailand became the first Asian country to decriminalise it for medical purposes in 2022 (though recreational use is slated for prohibition by the end of the year), China maintains extremely strict anti-narcotics laws, with severe penalties for violations. – This also says a lot about how little China needs Volkswagen in the country now.
Gen Z’s joy in chaos: Why maximalism is back | Jing Daily – at odds with the sleek pared down looks currently driving Chinese fashion. Not really that much of a surprise given how young people over the years have rated thrift shops, army surplus stores and shopped while travelling in search of authenticity and a story behind their eclecticism.
54: Double 11 (Is Ralph Lauren a victim?), The fall of Will’s and ClassPass | Following the Yuan – Chinese consumers using returns policies to hit ‘boycotted’ western companies in the pocket by exploiting the elevated business costs of returns in e-commerce. Double 11 or singles day is one of the premier shopping days in China. If this movement is real, the results for targeted brands like Ralph Lauren would be exceptionally brutal.
Culture
Camcorders are now going through a ‘lomography‘ phase now – where creators love their limitations and flaws.
Cocaine Cowboys by Nicola Tallant tells the story of the Kinahan organisation. The Kinahan organisation is a group that wholesales and retails illegal drugs in association with other organised crime groups. Tellant explains how deprivation, geography and economic growth fuelled drug trafficking and abuse in Ireland. Isolated council estates and economic hardship drove a heroin epidemic. The subsequent Asian Tiger economy only uplifted young professionals who then were a ripe market for cocaine. Cocaine added to Ireland’s already difficult relationship with alcohol use and abuse.
Crime journalism such as this is popular in Ireland because it is so concentrated through blood and marriage ties. We don’t have the kind of diversity that the British criminal underworld has. This means that it’s much more ‘relevant’ to Irish society.
But the book title itself is very interesting. There is a clear parallel to the scale of the cross-border drug trade between the US and Mexico.
Irish country music star Daniel O’Donnell courtesy of TG4
But there is also an underlying western theme across Irish culture. The vast majority of us are at most a few generations from the farm. We have had hard times which is why country music appealed and even morphed into a localised genre Country and Irish popular in rural areas and amongst lorry drivers (or in American truck drivers that drive ‘semis’.)
Tallant’s stance is definitely anti-Kinahan; but the book title Cocaine Cowboys gives them the hero status and taps deeply into the mainline that the cowboy and related elements like country music have into Irish culture at home and abroad. Cocaine Cowboys might be the inspiration for the next generation to replace the Kinahans.
If you want to know more beyond the book Nicola Tallant and her colleagues at Irish tabloid the Sunday World host a podcast called Crime World.
After peak woke, what next? The Economist – in the past decade, a form of wokeness has arisen on the illiberal left which is characterised by extreme pessimism about America and its capacity to make progress, especially on race. According to this view, all the country’s problems are systemic or structural, and the solutions to them are illiberal, including censorship and positive discrimination by race. This wokeness defines people as members of groups in a rigid hierarchy of victims and oppressors. Like the Puritans of old, adherents focus less on workable ideas for reducing discrimination than on publicly rooting out sinful attitudes in themselves and others (especially others). The Economist has analysed how influential these ideas are today by looking at public opinion, the media, publishing, higher education and the corporate world. Using a host of measures, we found that woke peaked in 2021-22 and has since receded. For example, polling by Gallup found that the share of people who worry a great deal about race relations climbed from 17% in 2014 to 48% in 2021, but has since fallen to 35%. Likewise, the term “white privilege” was used 2.5 times for every 1m words written by the New York Times in 2020. Last year it was used 0.4 times per 1m words. – Of course, woke’s failure could be viewed by proponents as a sign of deep-rooted systemic prejudice
Economics
Why Britain has stagnated? | Foundations – this reads true and hits hard. My parents came to the United Kingdom when the motorway network was being built, power stations were being constructed and the first generation of nuclear submarines were being constructed. In London the Victoria line was constructed. Now the UK struggles to build any infrastructure and its strategic industrial capabilities have been hollowed out or disappeared.
FMCG
Unilever moves on ‘sub-par’ marketing | WARC – That means consistent execution in marketing innovation, marketing quality, proposition sharpness, execution of pricing, execution of distribution. Fernandez suggested that, on a scale of 1-10, the business is currently at around six but needs to get to eight or nine (“ten doesn’t exist”). A&P spending is increasing as a proportion of revenue, from 13% in 2022, to 14.3% in 2023, and 15.1% in H1 2024. “There is an implicit recognition that our level of investment was not in line with our ambition of volume growth,” he said. That increased investment is not there to fund a growing volume of marketing content, he added. “I’m much more concerned about the quality of the stuff that we put in the market than the amount”. And that also means a focus on brand-building. “We see other people putting much more focus on promotional pricing,” he said, “but we always will prefer to invest in long-term, equity-building activities.” – CFO burns marketing teams ‘I believe our marketing was subpar”
Is marketing entering its ‘era of less’? | WARC – based on Gartner CMO surveys marketers are increasingly being seen as cost centres and are being asked to do more with less which is affecting mar tech spend, staffing and agency spend.
Innovative research that literally put people in the driver’s seat | WARC – More than half of strategists (59%) are integrating AI into their strategy development process in a cautiously progressive way. They need to identify the skills that AI can’t replace, such as getting buy-in for a strategy, and double down on them. Speedy access to research and insight (74%) and streamlining repetitive tasks (74%) are the top opportunities strategists see in leveraging AI in the strategy process.
Future of Strategy 2024: Synthetic data – speedy saviour or another example of the industry’s arrogance? | WARC – it’ll be useful when time is of the essence, and you want to ‘speak’ to people and get their thoughts on your hypotheses, ideas or campaigns. In that scenario, I can see how that approach may replace an ad-hoc focus group set up hastily in the agency’s boardroom. But we’re not here purely to understand people. If the role of communications is to move people emotionally, shouldn’t we also be here to feel people? As Richard Huntington, CSO of Saatchi & Saatchi says: “You can’t feel data.” The beauty of humans (and the beauty of ethnography) is that so often it’s not what we say that powers an ‘insight’ or a strategy, a campaign or some NPD… it’s what people don’t say. It’s the nods and winks, the gestures, the objects with meaning they have in their homes and in their lives. That texture isn’t picked up by a typical conversation – be that with synthetic data or in a focus group. These feelings that are elicited from ethnography are the special sauce that can separate the wheat from the chaff.
Home | LibreOffice – Free and private office suite – Based on OpenOffice – Compatible with Microsoft – I have 35 years of content saved, and LibreOffice can open them all. When you’ve been writing for years, your manuscript formats will often be obsolete (though I’ve tried to make decisions that make my poems available platform agnostic, such as using plaintext, but line breaks and stanza breaks don’t always translate well in markdown). LibreOffice is an incredible tool for opening 25 year old wordperfect files when I need them.
Apple Knew Where the Puck Was Going, But Meta Skated There – the PAN or personal area network has been talked about for 20+ years. What this misses is that the Orion glasses were possible thanks to silicon carbide lens which are a non-trivial thing to manufacture at scale
Mooncakes were a big part of my time in Hong Kong and Shenzhen. This year, mid-September marked mid-autumn festival across Asia or known as Chuseok in Korea. It is similar to harvest festivals that happen elsewhere in the world.
It is celebrated in Chinese communities with mooncakes. Mooncakes traditionally have been made of fat filled pastry cases and lids filled with red bean or lotus seed paste and a salted dried egg yolk.
Mooncakes are moulded and have auspicious messages or symbols embossed on the top, like the double happiness ideogram which also appears on new year decorations and at weddings.
In the past mooncakes have been used to make political statements in Hong Kong where they were embossed with messages against the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill 2019. This mirrored mooncake history, where concealed messages were alleged to have been used to ferment rebellion against Mongolian rule in China centuries ago.
China saw a halving of mooncakes sold this year, compared to last year. This is a mix of fast-moving events like the state of consumer spending and longer term factors including gifting culture and attitudes to health and fitness.
The economy
The consumer economy seems to be doing worse than industrial output. Youth unemployment is still an issue.
Gifting culture
China saw a crackdown on premium priced mooncakes as part of a government move against ‘excessive consumption‘ driven by societal excess and ‘money worship’. This overall movement has dampened luxury sales. The Chinese government stopped officials buying mooncakes a decade ago as part of a crackdown on corruption.
Some consumers just aren’t into them
They were as divisive as Christmas cake is in Irish and British households. Brands like Haagen-Daz and Starbucks have looked to reinvent mooncakes into something more palatable.
Health and fitness
Health and fitness has been steadily growing as a trend in China. A number of reasons have been at play including changing beauty standards. Chinese women are still going to favour slimness over muscle, but home workouts and running have been increasing in popularity. The fitness industry has been growing and the Chinese government has also tried to foster interest in winter sports. So there would be a good reason to avoid ruining all the hard work that you put in by eating mooncakes.
Why Do Workers Dislike Inflation? Wage Erosion and Conflict Costs* by Joao Guerreiro, Jonathon Hazell, Chen Lian and Christina Patterson – workers must take costly actions (“conflict”) to have nominal wages catch up with inflation, meaning there are welfare costs even if real wages do not fall as inflation rises. We study a menu-cost style model, where workers choose whether to engage in conflict with employers to secure a wage increase. We show that, following a rise in inflation, wage catchup resulting from more frequent conflict does not raise welfare. Instead, the impact of inflation on worker welfare is determined by what we term “wage erosion”—how inflation would lower real wages if workers’ conflict decisions did not respond to inflation. As a result, measuring welfare using observed wage growth understates the costs of inflation. We conduct a survey showing that workers are willing to sacrifice 1.75% of their wages to avoid conflict. Calibrating the model to the survey data, the aggregate costs of inflation incorporating conflict more than double the costs of inflation via falling real wages alone
FMCG
Unilever ends up as a punching bag for Greenpeace and having their purpose blown up. As a campaign idea, the public celebration by the Dove brand team of the 20th anniversary of Dove’s real beauty positioning and creative left themselves open to this. Greenpeace used a skilful reframing in this creative.
The reason why the developing world seems to be disproportionately affected by plastic waste highlighted is for a number of reasons:
A lot of and paper and plastic recycling is shipped abroad. It used to go to China, but they declined to accept waste to recycle from 2018 onwards. So this waste went to other markets.
Developing markets have single portion packaging so that FMCG companies can distribute via neighbourhood shops and sell the product for the price a consumer can afford.
Plastic is easier to colour, manufacture, package and transport than glass, metal or coated paper. Biodegradable or effective post-use supply chains are well behind where they should be. And even if you were open to recycling, there may be brand issues.
The pairing of advertisers with consumers close to the point of purchase via rich, first-party data is leading to better ROI relative to other channels for some advertisers and is cited as a key driver of increasing retail media investment.
Retail media is growing in double digits every year; it currently accounts for around 14% of global ad spend and is projected to account for 22.7% of online advertising by 2026.
Retail media is no longer a ‘medium’ in the conventional sense but is instead evolving into an infrastructure underpinning the entire digital advertising ecosystem.
This section on AI search is largely down to Rowan Kisby’s observations over at LinkedIn. I worked with Rowan when I was her client at Unilever, super-smart, can’t recommend her enough. Now on to AI search: Google has looked to augment its web search in a more obvious way with generative AI providing ‘AI search’ features.
The AI search features have adversely affected publishers of non-time dependant evergreen content according to Authoritas. This has sparked concern amongst media publishers, but early feedback on IAC and Ziff-Davis shareholder calls indicated little change in traffic numbers. Google claims that AI search feature ‘AI previews’ actually delivers more, rather than less click throughs.
Dr Mike Lynch OBE | Obituary – Sound on Sound magazine cover’s Lynch’s music hardware career which happened before he started Autonomy. The bit that this story misses is how Lynch’s developments helped move forward digital music and affecting electronica during a particularly creative point in culture including house and the rave scene that spun out of it.
I can’t recommend Phoebe Yu‘s content enough, this video on colour, culture and user experience design is a great example of her work.
The Geopolitics of Wine | Peter Zeihan – thanks to increasing costs of capital, aging worker demographics and climate change New Zealand and Australia will do better than Latin American wines and most European offerings except France
Is marketing entering its ‘era of less’? | WARC | The Feed – based on Gartner CMO surveys marketers are increasingly being seen as cost centres and are being asked to do more with less which is affecting mar tech spend, staffing and agency spend.
How to connect offline to China’s Gen Z and Alpha? | Jing Daily – Young Chinese consumers are finding new consumer interests away from blind boxes and claw machines: ‘Guzi’ (谷子) stores. ‘Guzi’, derived from the phonetic English ‘Goods’, describes merchandise featuring popular ACG (animation, comics, and games) characters, including badges, standees, and posters. – China develops it’s take on otaku culture
Luxury beliefs is a term that I came across from the writings of Rob Henderson. Henderson has a similar kind of story to JD Vance. Addiction in the family and escaping his home environment by enlisting in the US Air Force.
After his service Henderson used funding via the GI Bill to go to Yale. He then got a scholarship to go to Cambridge to do a doctorate. Like Vance he had written a memoir: Troubled: A Memoir of Foster Care, Family, and Social Class that highlights the challenges faced in working class American society including violence and addiction. In his book Henderson explores the idea of luxury beliefs, how they benefit the privileged and harm the most vulnerable in society.
What are examples of luxury beliefs?
The luxury beliefs Henderson cites are seen to be widely held progressive views including:
Defunding the police
Defunding the prison system
Decriminalising or legalising drugs
Getting rid of standardised exams – Henderson sees these as helping less privileged children get into college
Rejecting marriage as a pointless concept. – Henderson claims that one of the strongest predictors of success was if they were brought up in a nuclear family.
Henderson believes that the common thread that holds luxury beliefs together is that they are held by privileged people, the beliefs make them look good (and feel good about themselves), but harm the marginalised.
Luxury beliefs allow the privileged to look good by:
Playing the victim
Protest without penalty – which is less likely to happen to more marginalised protestors
Push the less privileged down
Henderson labelled this ‘saviour theatre’. Henderson reminded of previous generation protestors like Patty Hearst and participants in the Weather Underground’s Days of Rage which would seem to fit Henderson’s definition of holding luxury beliefs.
The store, which recently went viral on Chinese social media platform Xiaohongshu, not only sells house-made essential oils – must-have souvenirs for visitors from mainland China thanks to the exposure – but recreates the signature scents of popular malls and other venues in Hong Kong.
On its shelves are familiar – sometimes odd – concoctions. Bottle labels reference K11, a shopping mall in Tsim Sha Tsui, the five-star Rosewood Hotel, and the Hong Kong International Airport. Sportswear brand Lululemon has one too.
The consequences of the psychoboom are both logical and contradictory. As the Chinese economy has expanded and citizens have grown wealthier, the demands of everyday life have grown in number and kind, expanding from physiological and safety concerns to a desire for love, esteem, and self-actualization. At the same time, such desires run counter to traditional Chinese values like the age-old concept of Confucian filial piety and the relatively new ideology imposed by the Chinese Communist Party (CCP), both of which place the well-being of the collective above the happiness of the individual.
Morgan Stanley, Goldman Sachs Say Recovery in Private Equity Deals and Fees – Bloomberg – Morgan Stanley and Goldman Sachs Group Inc. are confident that their most important clients are about to get active after a long spell on the sidelines and help goose the long-awaited revival in investment banking fees. The private equity deal machine has been mostly jammed up for the past two years, leaving many investment bankers twiddling their thumbs while their bosses talked up green shoots that failed to flourish. There are plenty of potential road bumps ahead, but there’s reason to put more weight on the better outlook now even compared with just three months ago: The wave of debt refinancing that has led banks’ revenue recovery this year has also been helping to fix the prospects of many companies owned by private equity firms
Sony is killing off recordable Blu-ray, bidding farewell to disc burning | TechSpot – Sony admitted it’s going to “gradually end development and production” of recordable Blu-rays and other optical disc formats at its Tagajo City plants in Miyagi Prefecture, Japan. Essentially, 25GB BD-REs, 50GB BD-RE DLs, 100GB BD-RE XLs, or 128GB BD-R XLs will soon not be available to consumers. Professional discs for video production and optical archives for data storage are also being discontinued. – the big shocker is the issue for archival formats
“When launching products back then, we didn’t have to have a profit timeline for them,” said a former longtime devices executive. “We had to get the system in people’s homes and we’d win. Innovate, and then figure out how to make money later.”
To do that, the team had to keep prices low. Amazon sometimes even gave away versions of the smart speaker as part of promotions in a bid to get a larger base of users.
Another Danish biotech can help investors’ hunger for obesity drugs | FT – this probably explains why Zealand pivoted from taking its medications to market to becoming research and selling on as its not big enough to exploit this opportunity on its own. (Full disclosure, I worked briefly on the diabetic emergency injection product until the company pivoted).
Age of Ozempic: Predictions for the luxury industry | Vogue Business – Analysts agree that the pop culture influence of weight loss drugs is giving luxury labels and mass-market brands, alike, licence to refocus on straight-size. “Luxury brands have long been staunchly unwilling to cater to plus-sizes outside of the occasional token representation, but typically premium and mass players would invest more readily in plus-size,” says Marci. “Now we’re seeing the effects of Ozempic and weight loss culture on retail as a whole.”
Already, a host of US-based retailers and fashion companies including Rent the Runway are seeing boosted demand for smaller clothing sizes, and falling demand for larger sizes, according to The Wall Street Journal. Retailers have been investing in fewer products that offer larger sizing
EssilorLuxottica expands into streetwear with $1.5bn Supreme deal – the deal was a “no brainer” and had happened “very quickly” because VF was under pressure to divest its most “iconic asset”. EssilorLuxottica planned to use Supreme’s wealth of customer data and its Gen Z fans in China, Japan and South Korea to target new consumers – it shows how good a deal James Jebbia got with private equity and VF Corporation
Lewis Hamilton Named Dior Ambassador | BoF – formula 1 driver and pit lane dandy has also worked with Dior men’s artistic director Kim Jones to guest design a collection of clothing and accessories set to launch in October
Even Disinformation Experts Don’t Know How to Stop It | New York Times – Researchers have learned a great deal about the misinformation problem over the past decade: They know what types of toxic content are most common, the motivations and mechanisms that help it spread and who it often targets. The question that remains is how to stop it.
A critical mass of research now suggests that tools such as fact checks, warning labels, prebunking and media literacy are less effective and expansive than imagined, especially as they move from pristine academic experiments into the messy, fast-changing public sphere.
