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.

  • Calvert design & things that caught my eye this week

    Margaret Calvert at the Design Museum: signs in tune with their times | Financial Times – Calvert was responsible for signage across all aspect of UK life. Her work also influenced traffic signs across the former British Empire including

    • Hong Kong
    • Mauritius
    • Pakistan
    • Singapore
    • United Arab Emirates

    It has taken decades for Margaret Calvert to get the full recognition that she deserved. Calvert defined the design language of the UK I have lived in. It created a system and common sense in modern life. It is quite shocking that sexism held back recognition of Calvert’s full role in it.

    Hong Kong protestors built small brick arches to slow down police vehicles. At the time I didn’t understand why; but the Design Museum has explained it – Brick arches – Design Museum More on design here.

    Growing up in the 1980s the immortal letters DX7 seemed to be in every music performance. It’s sound is iconic.

    Jalopnik partners with an automotive engineer to try and work out how the Changli electric vehicle is made for a ludicrously low price. The design process is fascinating. Don’t let the toy town aesthetics of the vehicle fool you. A lot of thought has done into the vehicle. In particular there were some really interesting engineering hacks in the product design that other automotive designers could learn from. Despite all the talk about China automating and using robotics on the shop floor, the vehicle has got a fair bit of manual work in the manufacturing process.

    Record marketplace Discogs celebrates 20 years online here: Discogs 20th Anniversary: Thank You for 20 Years! Discogs has completely shaken up and democratised record collecting. Knowledge that used to be hard earned is now a couple of clicks away as Discogs is part eBay and part Wikipedia.

  • Ant Group saga + more things

    Ant Group saga

    Beijing interviews Jack Ma over $37bn Ant IPO | Financial Times – Ant Group founder and shareholder Mr Ma last month gave a speech in Shanghai criticising regulators in China and abroad. He felt that Ant Group shouldn’t suffer their excessive regulation of banking and financial technology.

    That didn’t go down that well with Chinese financial regulators and then Shanghai’s stock market operator calls a halt on Ant Group’s imminent listing, citing changes in regulatory environment | South China Morning Post which resulted in Ant to refund US$167.7 billion to 1.55 million Hong Kong investors in two batches after IPO is suspended | South China Morning Post 

    Ant Group aggregates large loans from banks and doles out the money as high interest small loans to young Chinese. Think Wonga or similar payday loan businesses that have sprung up since the 1990s. Ant also have savings and investment products that they get from other firms and act as an agent to sell. The huge IPO valuation of Ant Group already felt like hubris before Jack Ma criticised the financial regulators. More on China related stories here.

    Everything else

    MERICS China Industries Briefing – October 2020 | Merics – The laws have significant ramifications for Europe. Vague wording in both the Export Control Law and the draft Personal Information Protection Law open the door to sweeping retaliation measures against foreign companies and countries. The former cites harm done to China’s “national security and interests,” while the latter cites “discriminatory” measures taken against China concerning personal data as examples of legislative violations that warrant retaliation. On a more practical level, European firms with extensive operations in China, especially in R&D, will likely face additional compliance hurdles. These could include novel license requirements and security review procedures related to exporting goods, technologies and services, as well as collecting, processing and transferring personal information

    Battle at Arm China threatens $40bn Nvidia deal | Financial Times – Mr Wu also has backing in some corners of the Shenzhen government. In September, for example, Mr Wu was named on a high-level reform committee in the city, alongside other high-profile business figures such as Merlin Swire and Zhang Lei, founder of Hillhouse Capital, according to a document seen by the FT. Both the Shenzhen government and Beijing have a keen interest in the outcome of the battle, since Arm’s intellectual property underpins almost every mobile phone chip designed in the country. – what a mess

    Stanley Black & Decker shuts Shenzhen plant amid US-China trade war ｜ Apple Daily – Chinese media also report that most of the workers have already been recruited by other factories and obtained employment on the same day. Middle management and executives were snapped up by other firms. Staff from a neighboring electronic factory claimed they hired up to 200 former employees of Stanley Black and Decker. Kevin Tsui, an associate professor of the Department of Economics at Clemson University, casted doubt on the authenticity of these reports. While the Chinese economy has shown steady recovery, it is unlikely for firms to be able to take over unemployed workers on such a large scale. Stories of the generous compensations were published to stabilize public sentiment and prevent people from panicking as more and more foreign investors are pulling out, he added. Veteran news commentator Johnny Lau said the growing production costs in China, as well as new labor law restrictions, have prompted firms to move to South East Asian countries, which are more welcoming to foreign investors – fascinating reading on how globalisation is affecting China from a negative perspective

    Key Takeaways | ChinaFile – reading this a topline report, it reminds me a lot of the UK’s disparate CCTV operations

    In Hunt for Coronavirus Source, W.H.O. Let China Take Charge – The New York Times – it is hardly the only international body bending to China’s might. But even many of its supporters have been frustrated by the organization’s secrecy, its public praise for China and its quiet concessions. Those decisions have indirectly helped Beijing to whitewash its early failures in handling the outbreak.

    Burberry announces partnership with Tencent Games’ blockbuster title Honour of Kings – Burberry – As interactive digital content is increasingly becoming a source of inspiration in luxury fashion, games offer another opportunity for consumers to connect with Burberry’s products online. Younger consumers are redefining community spaces, choosing to connect with each other and with brands in digital environments, such as sharing experiences through online games. Chinese luxury consumers’ offline and online lives increasingly intertwine, with more demand for a seamless connection between the two. Adding virtual products into existing online games environments offers a bespoke experience that aligns with the consumer’s existing lifestyle. – only a decade or more behind sports apparel…

    Inside Apple’s Eroding Partnership With Foxconn — The Information – Foxconn has tried a variety of tactics to enhance its margins, all previously unreported, such as using Apple-owned equipment when doing work for Apple’s rivals and taking shortcuts on component and product testing, ex-employees said. In turn, Apple has tried to step up its monitoring and tracking of Foxconn employees and of Apple’s own equipment that resides in Foxconn facilities. Meanwhile, the relationship between the two companies is changing, as described by interviews with more than two dozen former Apple and Foxconn employees, including some senior managers. Apple, like its rivals Samsung, Nintendo and speaker design firm Sonos, is diversifying its manufacturing sites in an effort to hedge its bets. These companies are aiming to expand the number of manufacturers they work with and the countries where they operate in response to growing geopolitical risks such as the U.S.-China trade war. As a result, Foxconn’s bright satellite in Apple’s orbit has lost some shine. – This looks like a slow car crash

    30 female engineers from India ask Silicon Valley to do better on caste discrimination – The Washington Post – The legacy of discrimination from the Indian caste system is rarely discussed as a factor in Silicon Valley’s persistent diversity problems. Decades of tech industry labor practices, such as recruiting candidates from a small cohort of top schools or relying on the H-1B visa system for highly skilled workers, have shaped the racial demographics of its technical workforce. Despite that fact, Dalit engineers and advocates say that tech companies don’t understand caste bias and have not explicitly prohibited caste-based discrimination. A new lawsuit shines a light on caste discrimination in the U.S. and around the world. In recent years, however, the Dalit rights movement has grown increasingly global, including advocating for change in corporate America. In June, California’s Department of Fair Employment and Housing filed a landmark suit against Cisco and two of its former engineering managers, both upper-caste Indians, for discriminating against a Dalit engineer

    Tory group in push for watchdog to counter Chinese interference | Financial Times – and so it starts, I have been expecting this for a while

    How Borat 2 reveals the playbook for the streaming movie blockbuster – it had exactly four weeks to generate word of mouth. In Hollywood marketing terms, a four-week movie campaign is unheard of, ludicrous—or, as Borat would say, “Very nice—not!” Yet Amazon pulled it off by leaning on Baron Cohen’s relentless energy and creative salesmanship. There were Borat stunts galore both online and IRL, which helped create a burning sense of immediacy and helped the film explode into the cultural consciousness, as opposed to being slowly fed to audiences by an IV-drip marketing campaign over the course of lumbering months – I also imagine this was due to legal scrutiny of the film content

    Three actionable insights with… Sir Martin Sorrell | The Drum – ”Marketeers have surrendered control. Too few marketeers are CEOs of companies. There are probably too many CFOs who are CEOs of companies and I can say that as an ex-CFO. I think this started in 2008 after the Great Recession. Then there’s a huge pressure in 2009. It rebounded in 2010, but ever since then and up to 2018 there’s been a relentless pressure on cost. It‘s nonsense that it‘s Google and Facebook that are putting pressure on the holding companies. The simple fact of the matter is the clients have been so focused on cost, they put pressure on the agency middlemen or middle women, and they push them. Remember the chat around ‘non-working’ costs around advertising — basically on production costs. But you know this phrase ‘non-working’ and the implication that a lot of what the agencies did wasn‘t working or it wasn‘t working well enough, so you had to get rid of it. This is huge pressure. So, instead of asking media owners for 60-day credit or 90-day credit, they asked the agencies. – Sir Martin Sorrell is as much sinner, as sinned against but this rings true

    Breakingviews – China’s latest five-year plan girds for battle | Reuters – The message from China’s leadership seems to be that things will get worse before they get better. It elevated the status of technological self-reliance to be a “strategic support” for national development as a shield from overseas restrictions on imports. That will translate into greater R&D funding and subsidies, and diversion of funds to high-end manufacturing from property markets. There are early signs the approach is working: new registrations for semiconductor makers have jumped by a third this year, according to local media reports – the move away from overheated property markets is a good thing

    The FT – Huawei develops plan for chip plant to help beat US sanctions and a good analysis on the challenges that will be faced on Radio Free Mobile – Huawei – Nowhere to run pt. XXIV. – these will be way behind the curve, it makes more sense if Huawei partners with other Chinese chipmakers

    The resource curse and Hong Kong: Why the city has stagnated ｜Dr Michael Lawson ｜ Apple Daily – in many ways Hong Kong is now suffering in the grip of a resource curse, where the opportunities from catering for finance and tourism for mainland China have crowded out almost all other areas of the economy. It has often been said that Hong Kong is a very bureaucratic place, where trying to do anything new is almost impossible without multiple government approvals. This can be seen from the lag in adopting electric buses, the ban on electric bikes that is unique in the world, and the strange rule prohibiting tandem paragliding. This is because due to easy access to income sources which require little innovation, there has been no pressure to let anything change or develop in the Hong Kong economy. Like the rulers of other resources cursed countries, the nettle of economic reform is not grasped and vested interests are allowed to divide up the spoils. In fact, it is noticeable that the decline of the film and manufacturing sectors of the Hong Kong economy has neatly coincided with the rise of China as an economic powerhouse, with many of the established industries in Hong Kong willingly moving their operations there before being overtaken or taken over by more nimble mainland firms – pretty succinct analysis of the current economic problems facing Hong Kong

  • Vietnam boomtowns + more things

    Apple’s Shifting Supply Chain Creates Boomtowns in Rural Vietnam – Bloomberg – Vietnam is becoming the new China. While China has been impacted by problems of its own making, resulting in diversification of supply chains and trade disputes. This Vietnam build-out feels very much like build out in China during the late 1990s and the early 2000s after China joined the World Trade Organisation. Vietnam is now likely to experience double-digit growth. Hopefully Vietnam will climb up the value chain in a similar way to China. Vietnam is already a great place to develop software and applications. More Vietnam related posts here.

    Apple develops alternative to Google search | Financial Times – “Any reasonable search engine has to have 20bn-50bn pages in its active index,” Mr Ramaswamy said. When a user runs a query, the retrieval system must sift through vast troves of data then rank them in milliseconds. Some observers still dismiss the idea of Apple creating a complete search rival to Google. Dan Wang, associate professor of business at Columbia Business School, said it would be “extremely difficult” for Apple ever to catch up. “Google’s advantage comes from scale,” he said, as the endless user feedback helps to tune results and identify areas of improvement. “Google gets hundreds of millions of queries every minute from users all over the world — that’s an enormous advantage when it comes to data.” – Apple needs search for its app store, mapping services, media services and even on device. It doesn’t necessarily mean that Apple will do a ‘Google’

    Army of avatar robots readies to invade Japanese job market – Nikkei Asia – stocking shelves in a FamilyMart

    Apple develops alternative to Google search | Financial Times – explains Apple’s massive amount of overcapacity in their datacentre space for the past decade as they built around the world

    Chinese retailer Miniso beats Uniqlo and Muji at their game – Nikkei Asia – interesting profile of Miniso. What becomes apparent is how Luckin Coffee has poisoned the well with investors for Chinese retailing businesses

    Surveillance Startup Used Own Cameras to Harass Coworkers | Vice News – not terribly surprised that this was in their sales team. It fits right in with the sales cultures I have known

    25 Years In Speech Technology. …and I still don’t talk to my computer. | by Matthew Karas | Oct, 2020 | Medium – great essay on voice technology on computers (including smartphones)

    German spy chief Gerhard Schindler: China is poised to dominate the world | World | The Times – Gerhard Schindler, who led the Federal Intelligence Service (BND) from 2011 to 2016, said Germany needed to curb its “strategic dependence” on Beijing and ban Huawei from its 5G mobile phone network. He also warned that Angela Merkel’s liberal approach to the 2015 migrant crisis had left Germany with a “large reservoir” of young Muslim men susceptible to violence and jihadist ideology, and that the true scale of the danger was only now becoming clear.

    UK risks road rage with China in Africa – POLITICO – United States Assistant Secretary of State for African Affairs Tibor Nagy told a Congressional hearing in 2019 that Washington was “weaponizing” its African embassies “to confront China on a whole range of issues, most prominently a commercial one.” Westcott, from the Royal Africa Society, pointed out that Britain was so far aiming to maintain its own influence in Africa rather than reduce Chinese influence — but that it could take a more aggressive approach in future, for example attempting to outbid China for projects.

    How The Epoch Times Created a Giant Influence Machine – The New York Times – The Epoch Times was a small, low-budget newspaper with an anti-China slant that was handed out free on New York street corners. But in 2016 and 2017, the paper made two changes that transformed it into one of the country’s most powerful digital publishers. The changes also paved the way for the publication, which is affiliated with the secretive and relatively obscure Chinese spiritual movement Falun Gong, to become a leading purveyor of right-wing misinformation. First, it embraced President Trump, treating him as an ally in Falun Gong’s scorched-earth fight against China’s ruling Communist Party, which banned the group two decades ago – the enemy of my enemy is my friend. I see this as a failure of liberal politicians engaging with a plurality of opinions about China.

    The Belt and Road Strategy Has Backfired on Xi | Palladium Magazine – The Belt and Road is less a geoeconomic power play than a marketing strategy. Few of the myriad projects and investment schemes labeled ‘Belt and Road’ exist because of the initiative as such. Grand strategists in Beijing did not cause the tremendous outbound flows of money, men, and material that comprise Belt and Road, and they cannot direct it either. What statesmen like Xi Jinping do have power to influence is how these flows are understood and perceived by the world

    How Did China Beat Its Covid Crisis? | by Ian Johnson | The New York Review of Books – ambiguous lessons on handling COVID-19

    WeChat ban a catch-22 for Chinese Australians – The China Story – some members of the Chinese Australian community have created parallel chat groups on WhatsApp, Letstalk, Line or Telegram in case of a local WeChat ban. But they continue to be drawn back to WeChat as their main social media platform. Why do members of the Chinese diaspora choose to self-censor when they have many other options available? The answer may lie in platform affordances available in WeChat as well as techno-material features of the app that produce ‘habits’, engender ‘necessity’ and provide users with a sense of ‘vitality’.

    Inside Out: China’s Forgotten Domestic Politics – The China Story – China digging itself into a soft power hole

    Adobe’s new AI experiment syncs your dance moves perfectly to the beat | The Next Web – I was thinking about the effect that quantisation had on music software in the early 1990s which allowed for perfect beat synching (in theory, though MIDI and USB could throw that off slightly

  • Mental health data hack + more

    Hackers hijack and publish mental health data of hundreds of people – a scandal caused by the extortion of a group of hackers to a private company that provides mental health services as a psychotherapy center for the Finnish public health system. Finland claims to be at the forefront of digitisation and data security. The criminals managed to access the mental health data of thousands of customers of the Vastaamo after detecting vulnerabilities in their system.How can Vastaamo be sure that mental health data won’t be leaked or sold on in the future. Hackers have already targeted women who shop for plus size clothing with weight loss scams. Now imagine the ‘opportunities’ for bot based counselling, black mail or fake medications that mental health patients offer. Hackers would enrich this data and sell it on again and gain over time allowing for relentless targeting and retargeting of vulnerable people with mental health issues. Given the increase in mental health issues among adults, this would present hackers with a total lifetime revenue stream.

    Smart Solution: Laser Indicators to Make Backing Trucks Up to Loading Docks Easier – wonderfully clever piece of design

    Mark Ritson: Fred Perry must do more than stop selling the Proud Boys shirts – Indeed, if you really want to make something hot among any group, the use of faux-exclusivity or – even better – a genuine attempt to exclude people from the product typically sends them rabid with desire. De-list a salad cream and once-uninterested consumers start bulk-buying it. Make your clothing in sizes that won’t fit older blokes and they will queue up around the block to squeeze their big units into it. Shutting down sales of black and yellow Fred Perry shirts in America will have zero impact on the proportion of them being worn by the Proud Boys. It will most likely exacerbate the situation. Those who already own a shirt will treasure and wear it with even greater pride. And the rest of the membership will resort to the grey and black markets to ensure that they too look like all their fascist mates. – advertising is the way forward, though I would be doing a photo shoot with leather subculture members

    The 1.4bn-people question – Apparatchiks and academics alike struggle to take China’s pulse | China | The Economist – For decades the party had scorned opinion polls as bourgeois and unnecessary—it embodied the will of the Chinese people, so why ask them what they thought? But it has become more open to pulse-taking since Mr Yang’s ordeal, which was described in an article by Tang Wenfang of Hong Kong University of Science and Technology, published in 2018. Mr Yang says the party is “more paranoid” about public opinion than its democratic peers because it lacks elections or a free press for feedback – this also explains why IPSOS MORI type research is very hard to do in China

    China’s digital signage market to reach CAGR of 18.5% 2020-2024 – (paywall)

    Activists Turn Facial Recognition Tools Against the Police – The New York Times – “I am involved with developing facial recognition to in fact use on Portland police officers, since they are not identifying themselves to the public,” Mr. Howell said. Over the summer, with the city seized by demonstrations against police violence, leaders of the department had told uniformed officers that they could tape over their name. Mr. Howell wanted to know: Would his use of facial recognition technology become illegal? Portland’s mayor, Ted Wheeler, told Mr. Howell that his project was “a little creepy,” but a lawyer for the city clarified that the bills would not apply to individuals. – I can see an increased pressure for legislation making videoing and photographing law enforcement a crime

    ‘Small-budget fallacy’ hurts marketing effectiveness | WARC – Marketers, similarly, erroneously presume that newer digital tactics represent the best approach for brands on a limited budget – a perspective countered by analysis of thousands of case studies from WARC. “Channels like content marketing, social media, influencer marketing, or online display are among the media more likely to create an effectiveness disadvantage,” Hurman said. “And some of those more traditional channels – like TV, PR, events or [direct mail] – are the ones creating an effectiveness advantage.” – Probably one of the most effective articles that marketers could read right now. I don’t disagree that influencers can be effective, but there seems to be a dataless cargo cult built up around it over the past few years.

    Mark Sedwill: Dominic Cummings undermined the government | News | The Times – He also conceded that Britain had at times been “naïve” in dealing with threats from Russia and China. “I think when we’ve allowed the rhetoric to suggest that countries with very different political systems, essentially authoritarian political systems, are edging towards our values and viewing the world, then we’ve probably been mistaken and have overstated the natural alignment.” – the tone towards China in political elites throughout the world is going a lot colder

    Donald Trump paid nearly $200,000 in taxes to China, report claims | The Guardian – paid more tax in China than in the US. I am surprised that more hasn’t been made of this

    Chinese tech firms eye Singapore base amid US-China tensions, coronavirus border closures | South China Morning Post – Bytedance and in particular TikTok data safety issue moves from US and Europe to Singapore

    Nearly half of internet users in Philippines pirate content | Data | Campaign Asia – I wouldn’t be surprised if that number was that far off in the UK given the amount of pirated content on YouTube etc

    If Crisis or War Comes – The Swedish Civil Contingencies Agency – great advice in general here (PDF)

    Daring Fireball: The iPhone 12 and iPhone 12 Pro – interesting thoughts on the iPhone 12s. What Gruber doesn’t touch on is the radio improvements, particularly in 4G. I suspect that smartphones are on a 4 – 5 year replacement cycle for many people

    Justice Dept. files long-awaited antitrust suit against Google | Ars Technica – why so rushed? There aren’t votes in this prosecution and going off without the required level of preparation against a well-resourced defence is very risky

    #DanceAwesome Hashtag Videos on TikTok – Samsung has low consideration amongst the young, they used the existing Samsung partnership with K-Pop girl group BlackPink (18.9 million fans on TikTok). A new track Dance Awesome was created with an accompanying dance. Black Pink give it some energy and the dance instructions got 2m views on YouTube. It felt authentic. It resonated with TikTok users. The campaign generated 5m user videos and over 20 billion views, though I would like to see how it affects longer term consideration levels. 

    Open backdoors into apps and adversaries will use them too | Financial Times  – it is interesting how long this has been discussed without significant action taking place. Japan underwent a sales boycott by China of rare earth metals ten years ago and this is still only at the discussion stages in the west

    Conoco/Concho: surfing the wave | Financial Times – interesting consolidation in shale oil businesses. I found CK Hutchison selling out at this time interesting: Cenovus snares Li Ka-shing’s Husky Energy in $7.8bn deal | Financial Times

    Toshiba launches global Quantum Key Distribution QKD business with UK factory – Toshiba estimates the QKD market to grow to approximately $20bn by 2035 and the company aims to take 25 percent of the market (approximately $3bn) in 2030. TDSL has been awarded the contract from the National Institute of Information and Communications Technology (NICT) in Japan to deploy and manage the QKD systems that will be installed at multiple locations on their network. Toshiba plans to deliver the system in the fourth quarter of FY2020 and the deployment will start to roll out from April 2021. Outside of Japan, Toshiba Europe worked with BT on the UK’s first industrial deployment of a quantum-secure network, while in the US, Toshiba has participated in the recent QKD demonstration by Verizon Communications with Quantum Xchange. – Fascinating, it means that banks and governments can have secure communications, but consumers can’t, at least until we have several qubits of quantum computing power in a desktop computer and PGP-type situation gain.

    Ericsson and China Telecom achieve 5G Standalone data call – Ericsson Spectrum Sharing is a new way of rolling out 5G that uses existing hardware, spectrum and sites, while enabling increases in mid/high band coverage. It enables 4G, 5G NSA NR and 5G Standalone to be deployed simultaneously across FDD spectrum without the need for dedicated 5G spectrum. With Ericsson Spectrum Sharing, 5G radio resources are shared on a 1 millisecond basis, maximizing spectral efficiency. Most 5G networks have so far been deployed in Non-Standalone (NSA) mode where the underlying 4G network layer supported the necessary signaling. SA removes this 4G dependency. – Great, but Sweden’s ban on ZTE and Huawei in their network is likely to kill off Ericsson’s potential business with China Telecom – Sweden bans Huawei, ZTE from upcoming 5G networks | Reuters 

    First room-temperature superconductor demonstrated | Smart 2.0 – I am skeptical. I wouldn’t have shared it at all but for the fact that the article is from from part of the EE Times group

    Apple Launches ‘Apple Music TV,’ a 24-Hour Music Video Livestream – Variety – MTV left the door open for this, surprised that it hasn’t been done before

    Taiwan’s top 100 brands: Line, Taiwan Mobile, Rakuten among biggest gainers | Campaign Asia – Among the worst declines this year, Japanese electronics brand Sharp and China-based smartphone maker Xiaomi. Sharp’s decline mirrors the waning power of Japan’s legacy brands that we have seen in several other markets this year. – To be fair Sharp’s star has been falling for a long time, which is why Hon Hai Electronics could purchase them. Even Sony is inconsistent across product categories. Toshiba and Hitachi are no longer really consumer names

    String of Firms That Imploded Have Something in Common: Ernst & Young Audited Them – WSJ – is Ernst & Young damaged in the same way that Arthur Anderson was after the Enron scandal or will they survive? It is easy to forget now, but even if Arthur Anderson has escaped the Enron scandal, there was also the WorldCom scandal to pull them down. This is why E&Y feels rather like deja vu

    The flipside of China’s central bank digital currency | ASPI – DC/EP intersects with China’s ambitions to shape global technological and financial standards, for example, through the promotion of RMB internationalisation and fintech standards-setting along sites of the Belt and Road Initiative (BRI). In the long term, therefore, a successful DC/EP could greatly expand the party-state’s ability to monitor and shape economic behaviour well beyond the borders of the People’s Republic of China (PRC). Another great paper by the Australian Strategic Policy Institute. – I suspect that is the fear of most consumers with a government backed digital currency. I can also understand the concern regarding a digital reserve currency. It is also similar to what can be had with a lot of credit card payment system records

  • North Face + more things

    From Supreme to Gucci: How North Face uses big-name collaborations to drive ‘brand heat’ – Glossy – Tim Hamilton, North Face’s head of global creative, said it typically does two collaborations per year, at most. In addition to its upcoming collab with Gucci, North Face has an ongoing collab with Supreme that started in 2015. And it released collabs with athletic brand Brain Dead and MM6, the sportswear line of Maison Margiela, in August.  Hamilton said the brand’s collaborations typically require a lead time of 1-2 years and are almost always manufactured and produced by North Face. The MM6 collab, for example, began with discussions between Hamilton and the Margiela design team in 2019. – This lead-up time probably explains the balance in their collabs between hype and steadier brands. Hence no Virgil Abioh or Yeezy deal with North Face. Abioh has flirted with Canadian technical brand Arcteryx; which is owned by Chinese sports and outdoor clothing conglomerate Anta – who have a lot of cash. It is interesting that nothing has come from Abioh’s visual love letter so far.

    Op-Ed | New Balance Collabs Are Second to None This Year – New Balance places an emphasis on “aligning with brands that are authentic in their space and have substance behind their message.” New Balance’s roster of collaborators represent a wide range of aesthetics, communities, and subcultures, meaning the brand can speak to a variety of consumers based on what product has been matched with which collaborator. In a sense, putting together a New Balance sneaker collaboration is like a game of exquisite corpse. “We’re able to keep product executions and stories fresh while creating different followings for each type of partnership,” – you could argue that adidas and Nike’s deals with Yeezy and Off-White relegate adidas and Nike to little more than original equipment manufacturers (OEMs). But New Balance also doesn’t have the deep pockets to go up against adidas and Nike head-on. That lack of deep pockets also affects North Face as well. I am surprised that the North Face and New Balance haven’t collaborated, though part of the issue maybe New Balance’s Danner Boots business. This competes somewhat with North Face’s boots business, but they have a very different aesthetic appealing to a different audience. North Face is owned by VF Corporation with sister brands Dickies, Timberland and JanSport. This means that brand collabs for North Face are probably complex politically.

    A millennials love affair: China’s second-hand luxury goods market booms | Reuters – yes Chinese like new things like new apartments. Yes but: Chinese luxury consumers have become more sophisticated. Chinese consumers have travelled and seen the pre-owned market like Milan Station and BRAND OFF in Hong Kong and Japan respectively. In absolute terms middle class wages are lower in China still than the US; yet this isn’t reflected in luxury product pricing

    Alibaba Takes Over China’s Top Hypermart Chain for $3.6 Billion – Bloomberg – interesting that Alibaba is working on an offline retail strategy

    Robert Lighthizer Blew Up 60 Years of Trade Policy. Nobody Knows What Happens Next. — ProPublica – I am not normally interested in publishing about politics, but this article on US trade policy is an interesting starting point to think about the current debacle

    Revisiting Lyn Collins’ “Think About It” – Micro-Chop – great essay. Its also good to see how the edits of Ultimate Breaks and Beats played a role in popularising the ‘think’ break

    Hong Kong walks: discovering traditional, trendy Tai Hang | Financial Times – it makes me ‘home sick’ as Hong Kong island was my home for a while

    Baaaa for business: Princess Diana’s iconic sheep sweater is back | Financial Times – its interesting that luxury brands are now raiding not just archives but childhood memories for cues. Also the convoluted customer journey outlined in the article for the original purchase via a bridesmaid’s mother

    Debate over vegan ‘sausages’ and ‘burgers’ heats up ahead of EU vote | Financial Times – unsurprising given the size of the beef and pork industries in the European Union

    WPP back on hunt for deals, says chief | Financial Times – Read’s challenge is to win back investors who think agency holding groups are struggling with multiple structural tests: cost-cutting and clients taking business in-house, competition from consultancies such as Accenture, and waning clout as middlemen in digital ad markets dominated by Google and Facebook. WPP’s share price is 65 per cent lower than its 2017 peak, and has fallen more than a third since the pandemic battered the economy. The three-year decline is a more severe than at rivals such as Omnicom and Publicis. Meanwhile, investors have flocked to the simpler growth story of adtech providers such as The Trade Desk, which this year has soared to almost three times WPP’s market value on a tiny fraction of its revenues. The £2bn market capitalisation of Sir Martin’s S4 Capital, a digital-only advertising group, is almost a quarter of WPP’s value even though it generated less than three per cent of its £12.4bn sales in the year to June 30.  – a number of things from this interview. The Trade Desk has a lot of heat around it, WPP attempted to do this with Xaxis but has got little credit. Read tried to spin that Accenture and WPP have sweet spots at different points in the economic cycle. Hence the comment about Accenture being good at cutting marketing costs.

    Mr Read’s pitch is that WPP has combined its traditional creative strength with the tech expertise to build ecommerce platforms for clients such as Sainsbury’s, and become the single biggest integrator of Adobe’s software. “Our goal is to be to revenue growth what Accenture is to cost reduction,”

    Chinese-Americans campaign for Trump on WeChat | Financial Times – it is becoming increasingly difficult to organise on WeChat, not only because of the looming US ban but also because of Chinese censorship. Simple WeChat filters for sensitive terms such as “democracy” can detect articles about US politics. Sometimes when Mr Ming sends articles to his groups, those with Chinese-registered phone numbers on their WeChat accounts cannot receive the links, no matter where they are in the world. Ms Wen, who used WeChat in 2016 to organise a door-knocking campaign for Mr Trump, was glad to shift away from the platform this year. “I know it is completely surveilled. Nowadays I mostly use Telegram,” she said, referring to the encrypted messaging app. – interesting move to Telegram, mirrors what I saw in my Hong Kong friend network after the Hong Kong National Security law was passed

    Google’s new ‘hum to search’ feature can figure out the song that’s stuck in your head – The Verge – now this is clever

    The future of fashion week? Look to Shanghai | Vogue Business – Shanghai Fashion Week, which pioneered digital pivots like live streaming, returns today as a largely physical event, featuring around 90 brands across a number of venues, including its main stage in fashionable shopping district Xintiandi and emerging designer platform Labelhood

    How to steer clear of discounts this holiday season | Vogue Business – “Markdowns have almost single-handedly ruined our industry,” says Hewitt. “They train the consumer not to buy in-season because they can come back in three months and get a discount. It’s a vicious cycle.” – during the 2008 recession Rolex reputedly bought back watches in its retail and wholesale channels. And then recycled them

    Kibbles & Bytes #1122: Apple Releases Four iPhone 12 Models and the HomePod mini – Don Mayer nails the assessment of 5G in the latest edition of his newsletter.

    Why a new generation of challenger brands need to rethink how to challenge | A Little West of Centre – Blands. That’s what Ben Schott, writing for Bloomberg, coined them. And what a coining it is. The new generation of humble, conscious, in-it-to-sell, underdog companies, sporting D2C models, consumer champion narratives, minimalist aesthetics, affordable luxury positionings and post-choice selling techniques (this is THE mattress, that is THE toothbrush).

    Sony Launches SR Display: You Can See 3D Pictures Without Wearing 3D Glasses – Gizchina.com – really interesting technology

    Indonesia’s central bank hints burglary in e-wallet player – consumers should look at the track record of providers before using them to save large amounts of money. Indonesia’s total e-wallet transaction value size is expected to reach US$15 billion by 2020, according to a recent report by The Asian Banker

    Problem Solved #13: A lesson in tackling bloody taboos from Bodyform | The Drum – the result was to present the viewer with flame-engulfed apartment of a perimenopausal women; a monster ripping at an endometriosis sufferer’s uterus; a ‘flood gate’ moment following an unexpected sneeze; a woman who has chosen not to have children; and the often-turbulent journey of trying to conceive

    Diane von Furstenberg: Interview | Vanity Fair – The iconic wrap dress, designed in 1974 and sold more than 15 million times since, made von Furstenberg an overnight sensation and began a dialogue with women that she has maintained ever since, in a large part through admirable philanthropic efforts, including the annual DVF awards. Now she’s taking that dialogue to the podcast, a medium she champions for its value in shifting the focus away from appearance.

    British Airways Avoids Huge £180 Million Data Breach Fine for Hack That Compromised the Personal Details of Over 400,000 Customers – good for BA given airlines are haemorrhaging cash at the momen. I am worry about the message that this sends to large corporates and customer data

    Shenzhen — Justin McGuirk – pretty much nails how I found Shenzhen over the decade that I visited regularly. More on Shenzhen related posts here.

    Facial recognition data leaks are rampant in China as Covid-19 pushes wider use of the technology | South China Morning Post – interesting that this is being collected by non-state actors such as property management companies and schools as well as the state bodies

    iPhone 12 launching without earbuds or wall chargers is compared to eating without chopsticks in China | South China Morning Post – I was expecting this as Chinese consumers are value orientated, brands focus on ‘client delight’ and there is a culture of free gifts with products. So taking items out of the box and the green explanation won’t wash

    Beijing 1986: portraits of a forgotten China | Financial Times – amazing photos from 1986.

    Shenzhen/Huawei: the other Bay Area | Financial Times – The impression of military manoeuvres by alternative means was reinforced by Tencent, another Shenzhen resident. It was among big Chinese social and video platforms including iQiyi and Weibo, that simultaneously cancelled the livecast of Apple’s iPhone 12 launch – a small example of the nexus between the Chinese government, corporate decision-making influenced by the government and an undercurrent of Han nationalism