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.

  • Dyneema + more things

    Dyneema

    The Lifestyle Applications of Dyneema – Core77 – the interesting thing for me is how old Dyneema is and how long it has taken to adopt the product. Back when I first started work before college, I worked briefly for DSM – the maker of Dyneema. Dyneema and Dupont’s Kevlar both required exceptionally pure chemicals in their process. Kevlar reputedly had to scrap a third of the product made. Both were expensive and used in special functions:

    • Ships ropes
    • Motorcycle crash helmets and robust composite moulded products
    • Ballistic vests and bullet proof armour
    • Climbing ropes

    Business

    PR Agencies Need to Be More Diverse and Inclusive. Here’s How to Start. | HBR – starting points valid but nowhere near the whole formula. Angela has written an interesting article on diversity and inclusive agencies. But Angela misses so many other data points:

    • That PR degree courses are often 90+% female graduates
    • That the industry (like advertising) does really poorly at retaining older (40+ year old) staff.
    • In the UK PR agencies struggle to attract graduates from working class backgrounds as well as from minority communities

    The article is behind a paywall. More related information here

    Mark Zuckerberg in Washington DC on machine learning and hate speech. Bringing their security team up to 20,000 people to look at issues like this. Hate speech is hard to compute in comparison to (Islamic) terrorist materials. I am guessing that what constitutes hate speech changes country by country (and its interesting that Facebook is looking at this from a global perspective, rather than placating the US first). Secondly, the language that constitutes hate speech evolves to circumvent restrictions and incorporate memes a la Pepe the Frog.

    Culture

    North Korean defectors are learning English so they can survive in South Korea | The Outline – interesting English loan words in South Korean language

    The Facebook Current | Stratechery – well worth a read

    Luxury

    Streetwear Reigns Supreme, Say Teens | News & Analysis, News Bites | BoF  – The growing popularity of streetwear negatively impacted Nike, as their appeal among teenagers dropped from 31% to 23%. In contrast, brands like Vans and Adidas have successfully leveraged an “open-source” approach, allowing pop culture to shape their brand image and consumer perception.

    Marketing

    Chinese International Students Are the New Brand Champions | Jing Daily – 31 percent of Chinese students in New York and Boston escort friends and family on shopping trips at least once every three months. Thirty-four percent purchased luxury goods to take back to China at a similar frequency

    The clock is ticking for brands to ‘go native’ | The Drum – highlights issues with native ads such as ROI

  • App constellations 2018 research

    I initially looked at app constellations back in 2014, when Fred Wilson put a name to the the phenomena. And every two years or so I have gone back and looked at a number of major internet companies to see how many different types of apps that they had in play.

    I originally selected the companies back in 2014 because I felt that they represented the largest and best of their ilk. It skews Asian because the west can be viewed as one eco-system represented by Google, Facebook and Microsoft.

    China is an enclosed eco-system; though Microsoft is actively engaged in the app eco-system there. I chose Tencent and NetEase as being my Chinese bellwethers. DaumKakao and Naver were representative of the Korean eco-system which blends highly-used domestic services with western platforms. Finally LINE of Japan (a subsidiary of Korean company Naver) provided a similar bellwether of the hybrid Japanese eco-system which mirrors Korea.

    App constellations survey methodology

    For the sake of convenience I have compared the contents of Apple’s mobile app store for each of the companies. While most of the internet companies have some Android-only or iOS-only apps; the iOS app store is still a good indicator of their app activity.

    I stayed true to the definition of app constellations in terms of deciding what kind of app should go in.

    App constellation definition

    I manually assessed each app, rather than relying on the category that the app had been submitted into. Tencent and Netease, had a number of mobile utilities that aided discussion and kept players updated on their favourite game. These didn’t fit within the definition.

    Changes in the environment

    Since 2016, a couple of things have changed:

    • Apple had a purge of apps that didn’t support 64 bit processing
    • They moved away from supporting the app store within iTunes application and on the web; to within the app store on the device

    2018 marks over a decade of mobile apps in the Apple store. Many of the major players have delisted almost as many Android and iOS apps as they currently have in the store. This happens for a number of reasons:

    • The app was serving a purpose for a fixed time
    • It is an application that has fallen so far out of favour that it is no longer worth maintaining
    • The code base no longer meets Apple’s or Google’s minimum standards
    Data analysis

    I started off by looking at the number of apps. In terms of app constellations:  Tencent, Microsoft and Google were clear winners.

    Number of apps

    Both Microsoft and Google’s growth has been driven by ‘experimental’ apps that they have put out in the public for their own reasons and enterprise focused apps.

    compound annual growth in app number

    But it was quickly apparent to me that the number of apps developed were only part of the story. What about the rate of change in numbers of apps developed? This would be indicative of the rate of change in moving to mobile. Here both Facebook and Microsoft’s pivot became immediately apparent. The Asian companies looked less impressive as they had been able to keep steady in their focus on mobile.

    All of this growth in the number of apps developed by major internet companies is all the more remarkable when you consider the following:

    • In mature markets consumers are not really downloading new apps
    • They are sticking with a few in terms of regular usage. Many of the apps on their phones don’t get used
    Notes on a few of the companies in terms of their app constellations
    • Daum Kakao – notable for being the only company who I looked at who had a decline in the number of applications versus 2016. A lot of this seems to be in service consolidation of both Daum and Kakao to remove duplications or non-core services. It is the Daum brand that has taken the biggest impact. This is understandable, since Daum struggled on the move to smartphones and Kakao is a mobile-first brand.
    • Dropbox – the growth in apps has been down to the larger business acquisition strategy at Dropbox. I don’t expect further growth like what we have seen with  Facebook’s pivot to mobile
    • Facebook – Facebook’s pivot to mobile was one of the reason why I decided to look at compound annual growth rate as well as the size of app constellation in terms of app numbers. In terms of raw app ‘SKUs’ Facebook is dwarfed by most of the other companies that I have looked at. It is only by looking at the growth in apps developed where one can really see their move to mobile
    • Netease – was interesting for its focus in a couple of areas. Like other Asian internet companies, education was a big target area, but Netease went into it with major commitment. Both NetEase and Tencent were big in magazine and book apps as well. I think this is down to the fact that ‘traditional’ web surfing is harder to do with (at the moment) when URLs are written in western script and numbers.
    • Tencent – the raw app numbers beggars belief. There are a number of reasons for this. Like NetEase, Tencent has a lot of apps solely optimised for the iPad and a separate iPhone app. There are free and paid-for product variants. Lastly Tencent will have four or five apps competing in a given category like streaming music which seems insane. Only time will tell if Tencent is spreading itself too thin; like when Yahoo! was described Brad Garlinghouse’s Peanut Butter Manifesto
    More information

    Jargon watch: app constellation – back in 2014 when I wrote this post, it still took me the best part of a week to research and describe each of the apps in the main eco-systems. It would take me much longer today due to the growth in apps

    Peanut Buttergate – analysis of Garlinghouse’s original memo about Yahoo! from back in 2006

  • Voice activated coupon + more news

    Voice activated coupon

    Google’s First Voice Activated Coupon – WPP – Google distributed its first voice-activated coupon offering customers $15 off Target purchases placed on Google Express through Google Assistant –through desktop, mobile or Google Assistant enabled devices – I am surprised that Amazon didn’t introduce the voice activated coupon before Google.

    Beauty

    SK-II finds success in selling to younger Chinese: P&G | Advertising | Campaign Asia – luxury brand with an on ramp for college students

    China

    China Bans Online Bible Sales as It Tightens Religious Controls – The New York Times – I am concerned about Vatican appeasement of China. It looks like Neville Chamberlain

    Consumer behaviour

    Headline from China: Purchase Restriction and Red Streetwear | Jing Daily – interesting how streetwear brands are being cleared out of the way by the Chinese government to support Chinese originated brands

    How Americans Self-Sort Themselves by Age and Class – CityLab

    Culture

    The Overwhelming Emotion of Hearing Toto’s “Africa” Remixed to Sound Like It’s Playing in an Empty Mall | The New Yorker

    Molly Ringwald Revisits “The Breakfast Club” in the Age of #MeToo | The New Yorker – good read, what I remember is how those films nailed emotion

    Japan

    Japan to place accident liability on self-driving car owners – Nikkei Asian Review – makers liable only in case of a system flaw

    Online

    China’s Didi Chuxing prepares to launch Mexico operations | HKEJ Insights – China going global

    RSS is undead | Techcrunch – no RSS is alive, but Techcrunch haven’t worked out issues the RSS users have already. Much of the issues are solved by using NewsBlur and finding sources is organic rather than an instant end state. More online related topics here.

    Security

    Could Cambridge Analytica boss be probed for Philippine meddling? | SCMP  – This could get interesting. Putting aside arguments about whether Cambridge Analytica’s technology actually works as promised, Philippines law would still have been broken. It forbids all outside parties from participating in its election process.It is alleged that they were supporting Duterte, which would make the foreign reaction to it interesting as well.

    Technology

    ARM Mac: Piece of Cake Or Gas Refinery? – Monday Note – assumes that there will be a transition, which I am not convinced about

    API and Other Platform Product Changes – Facebook for Developers – reduces information that can be taken out to beef up privacy

    Wireless

    Smartphone shipments fall again in Q1 | Shanghai Daily – China looks saturated in terms of smartphones

    Cell Spotting: Studying the Role of Cellular Networks in the Internet by Rula, Bustamante and Steiner – (PDF)

  • Family & other things that made my day this week

    Untitled

    I spent a good deal of the week seeing the family. It was great to have homemade soda bread and finish off my Mum’s Christmas cake. Yes, you haven’t read that wrong, my Mum specialises in making rich fruit cakes for Christmas. They keep for a good few months afterwards.

    A good deal of that was spent watching Homeland and assorted  films with my Dad. This included Accident Man – a pretty accurate remake of the Toxic! comic book character from the early 1990s by Pat Mills (of 2000AD fame) and Tony Skinner. We didn’t watch them as a family for reasons that will become apparent.

    For a brief period from March to October 1991; the UK comic scene had a darker, more anarchic publication than had been previously seen. Toxic! was originally designed to address failings in 2000AD magazine.

    The film is so anachronistic in its nature that its audience will be niche. That doesn’t reflect on the quality of the action in the film. It features Ray Stevenson, Scott Adkins (you’d recognise hime host of Hong Kong and Hollywood movies) and Ray Park (who played Darth Maul). Adkins is a bit lean to play the titular character Mick Fallon, which is a surprise given his Boyka role in the Undisputed franchise. Adkins to his credit manages to make it all work.

    Both the director and the script writer managed to skilfully blend the unreconstructed misogyny of 1991 with with the great ‘unawoke’ attitudes of a post-Brexit Britain.

    Watching Wanted: Dead or Alive with Rutger Hauer shows how much the media portrayal of Islamic terrorism has changed over the past 30 years. The plot itself is a bit odd. Sex tape star Gene Simmons plays an Islamic terrorist looking to cause a Bhopal-type disaster as an act of revenge on the United States – where do you even start with that plot?

    Hauer’s car has an early generation cellular phone and what seems like some sort of satellite navigation equipment with a monochrome CRT display.

    Dated films weren’t the only things that I saw. The family car is still a Polo diesel that I helped them buy. Whilst I heard of a few people who had a Nissan Leaf; Merseyside is still firmly in the petroleum age. Most of the cars were a decade old on average and I didn’t see any obvious charging stations. Importation of secondhand cars from Japan is still a thing. Both J60 and J80 series Toyota Land Cruisers seem to have a loyal following.

    For something more recent and music-related, I can recommend this from Resident Advisor: How did UK garage become dubstep?

    I think that we must be pretty close to peak-vape. I was in a Wilkinsons store and wandered past the cough and cold medicine section. Wilkinsons is a discount retailer that does a mix of food cupboard staple grocers, household cleaning products and over the counter pharmacy products. A good analogue for Hong Kong readers would be 759 Store.

    On the top shelf of the unit above cough and cold remedies was vape fluid and e-cigarettes.

    Douglas Rushkoff | Present Shock Economies – great YouTube video which explains why Amazon is likely to be more trouble over time than Facebook ever will be. Well worth listening to during a lunch hour.

    Finally Asian Boss had some great vox pop interviews with Beijingers about what they thought of Sesame Credit which is a financial and behavioural credit system being rolled out in China.

  • Belkin buyout + more news

    The Curious Case of the Belkin Buy – Om Malik – not really so curious. It makes sense for Belkin and Foxconn. Belkin and Foxconn can use the advantages that they have in terms of production and understanding of Apple products to get ahead. Having a recognisable brand in Belkin that gives Foxconn better margin in the home. More related content here. 

    China gives preliminary green light for two largest shipbuilders to merge | SCMP – makes sense given the current over supply of ships and bankruptcy of ship owners like Hanjin in Korea

    Top Facebook Executive Defended Data Collection In 2016 Memo — And Warned That Facebook Could Get People Killed – The best products don’t win. The ones everyone use win – unsurprisingly the guy who wrote the memo was an ex-Microsoft executive who had been there during Gates and Ballmer

    Telenor sells off Eastern European assets to refocus on Asia | total telecom – interesting move, they seem to think that the belt and road initiative won’t benefit them as it moves through Eastern and Central Europe. Disclosure, I worked on Telenor Myanmar.

    Standard Chartered joins TBWA in crowdsourcing platform launch | Advertising | Campaign Asia – Only really works if there are producers looking to enter an industry that is worthwhile getting into

    Facebook locks out third-party data providers | Digital | Campaign Asia – GDPR related and the official notice: Shutting Down Partner Categories | Facebook Newsroom

    ‘Print is dead’ – then why do even the tech giants use it for their apology ads? | The Drum

    Teenagers Say JUUL Is A Discreet Way To Vape In Class : Shots – Health News : NPR – great if unintentional brand building

    Trump hates Amazon, not Facebook – Axios – and I can understand why

    Clark gives Melrose extra firepower in battle for GKN | Business | The Times  – Oddly, almost as important a deal — the £24 billion takeover of Arm Holdings by Softbank, of Japan — slipped through the net. Hatched in the chaotic days after the Brexit referendum, ministers hailed the deal as a triumph of Britain still being open for business, when for the technology community it was one of its greatest setbacks.

    Take a look at these two versions of a Guardian article: The great British Brexit robbery: how our democracy was hijacked | Technology | The Guardian and The great British Brexit robbery: how our democracy was hijacked | Technology | The Guardian. Which makes me wonder about the veracity of the journalism. Why the edits? Was it that it couldn’t be verified, didn’t fit the story the Guardian wanted to portray or something else? More questions than answers.