Three Strategies To Win In China’s E-commerce Market

Recently, American retailer Macy’s announced that it will launch an e-commerce site in China in 2017.  Will Macy’s follow the footsteps of other American giants such as e-Bay, which failed miserably, or Amazon, which couldn’t gain much footing in China?



For Macy’s, or any other retailer large or small, the Chinese consumer market is both enticing and intimidating. China’s e-commerce market is the largest in the world, and has been growing by double digits. However, Chinese shoppers behave differently than their Western counterparts, and market conditions are fundamentally different as well.

In order to win in China’s e-commerce market, the following three strategies are essential. Continue reading

Reasons Why Chinese Millennials Have More Cash To Burn

Xiao-jie is 21. A senior in college, she is one of six million people who traveled overseas during China’s Golden Week holiday (Oct. 1-7). Japan was her destination. The trip cost about 10,000 yuan (about $1,500), which her parents paid for. As the only child in the family, Xiao-jie gets pretty much everything she wants.


The same is true for her friend who traveled with her.

Xiao-jie and her friend are not alone. According to China National Administration of Tourism, more than 120 million Chinese traveled abroad in 2015, spending $194 billion. About half of those Chinese travelers were millennials–born after the 1980–and they accounted for two-thirds of Chinese outbound travel spending.

The travel industry is excited to target “wealthy” Chinese millennials. While some Chinese young people are from wealthy families, most of them are not. But compared to Western millennials, they have two significant advantages. Continue reading

The Chinese Consumer Is Driving Global Innovation

This year’s Economist Innovation Summit in Hong Kong brought together about 200 industry luminaries, entrepreneurs and venture capitalists to debate one of the hottest topics regarding China: will China become an innovative economy and what will it mean to the world?


One of the themes that emerged was Chinese consumers have become a driving force for global innovation. In 2015, China’s industrial sector barely grew, but its service sector saw higher than usual growth at 12%. Latest data indicate that consumption accounted for more than 60% of China’s GDP.

As I wrote here and here, there are more than 600 million Chinese middle class consumers–and counting. They have been evolving and maturing quickly over the past decades.

“I don’t think that there is a consumer in the world now that is more demanding than the Chinese consumer,” said Victor Fung, chairman of Fung Group, a business consultancy based in Hong Kong. Continue reading

How Starbucks Can Revive China’s Lost Tea Culture

Starbucks’ announcement to enter China’s tea market has raised a few eyebrows. Some questioned why Chinese consumers would want to drink tea from a foreign coffee chain, given their own rich tea tradition. I wondered, however, why it took Starbucks so long to venture into China’s tea business. 

China may have thousands of years of tea-drinking history, but its tea culture has been largely lost.

Little has changed in China’s tea culture

I recently visited Longjing Village in Hangzhou, one of China’s famous tea capitals. A college friend wanted to treat me to my hometown’s finest green tea—the Longjing tea, also known as Dragon Well tea. Legend has it that the Qing emperor Qianlong favored Longjing tea so much that he planted 18 tea trees in the hills himself.

Farmers at Longjing Village have been growing tea for centuries. In recent years, they turned the village into a tea garden with restaurants featuring local cuisine. Its countryside setting is much sought after by locals and tourists alike who want to escape the stress of city life. Continue reading

Tweets from The Economist Innovation Summit

The Economist Innovation Summit 2016 was held on Sept. 6 in Hong Kong. I was honored to speak at the event.


While attending the event, I live-tweeted highlights from the event. The following tweets have been getting many impressions and retweets:

Markus Steilemann: Innovation is about invention that makes money, and China is doing great in that

Victor Foo: innovation should be focusing on solving local market problems.

David Chao: Government directed programs never do well. Let the markets take paths

Continue reading

Why China Can Dominate Next-Generation Manufacturing

In a recent article in the Washington Post, “Why China won’t own next generation manufacturing,” the author Vivek Wadhwa discusses China’s new 10-year plan, called “Made in China 2025.” The plan aims to modernize China’s manufacturing with advanced technologies such as robotics, 3-D printing, cloud computing, and big data.

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China has committed $150 billion to this gigantic modernization scheme. “But no matter how much money it spends,” Mr. Wadhwa writes, “China simply can’t win with next-generation manufacturing.”

The reason? Chinese robots are poor quality, Wadhwa argues, and they cannot be more productive than American robots. And most importantly, the Chinese workforce lacks the skills to perform in an advanced manufacturing setting.

But I would not write off China’s ability to advance its technologies as well as its workforce so quickly. There are signs that Chinese industries are catching up with, and in some cases, even exceeding the West. Continue reading

A Native’s Homage to Hangzhou, The G20 Host

Twenty-eight years ago, I would never have imagined that the President of the United States and other world leaders would visit my hometown, Hangzhou, and discuss important matters that will affect humanity’s future.


The Hangzhou I left behind was a backwater town, with narrow alleys and rundown dwellings. There was only one department store, Liberalization Department Store, one decent hotel, Hangzhou Hotel (now renamed as Shangri-La). Many people still wore Mao suite. Most rode bicycles to work and for daily chores. The only automobiles on the streets were dusty buses, which ran sparsely between hours and were almost never on time.

Yes, there was West Lake, and people said it was beautiful. To my unappreciative eye, however, it was a dead lake. The stillness of the lake seemed lifeless to me. I was yearning to see oceans. I grew up hearing people say that “above there is heaven, and below there is Hangzhou.” But I was desperate to leave the “paradise on earth.”


Now one of the wealthiest cities in the country, Hangzhou has 9 million inhabitants. Most of them are members of the new middle class, who have seen their life dramatically improved over the past decades.

When President Barack Obama arrives in Hangzhou on Saturday, he will not see a backwater town. Instead, he will see a bustling modern metropolis nestled in lush hills.


I finally understand why people say Hangzhou is a “paradise on earth.” Now that I have seen the oceans, visited the Lincoln Memorial, and watched Martin Luther King’s “I Have a Dream” speech many times, and looking from the other side of the Pacific, I can truly appreciate Hangzhou’s beauty.

(Read the full article on Forbes).

Three Innovative Ways to Reach Chinese Consumers

The Chinese super app WeChat is not only a superior social media tool (as I wrote here), it is also at the forefront of mobile e-commerce innovation that the West has never seen.


As of this writing, WeChat has over 800 million users (yes, it seems that WeChat’s user base is growing by the minute). Better yet, its users are super active. An average user checks into the app 10 times a day. They are practically living on WeChat.

This has created a tremendous opportunity for brands to reach consumers. Reports indicate that brands in the fashion, watches, and jewelry categories receive an average of 7,000 views per WeChat post.

WeChat offers platforms for brands to engage in interactive and one-to-one communication, driving online-to-offline activities and encouraging loyalty. WeChat’s payment system allows brands to sell directly to consumers seamlessly. Its true potential has yet to be tapped. Continue reading

Apple: A Trend Follower in China?

It was not too long ago that Apple’s iPhone was a status symbol among young Chinese middle class consumers. They would stand in a long line before the launch of a new iPhone and spend a month’s salary just to own one.


This has changed. According to a Financial Times article, Chinese consumers no longer buy into the hype they once did in iPhone. These days, Apple looks like “a trend follower” and is struggling to “keep itself interesting” in China.

Apple has continued losing ground as China’s smartphone market becomes increasingly competitive. iPhone sales dropped 32 percent in the second quarter, and the Silicon Valley company fell to fifth place behind Huawei and other unknown brands such as Oppo and Vivo, according to research from International Data Corp (IDC) Continue reading

3 Lessons from Uber’s Defeat in China

When I was in China this March, one of the best conveniecnes was to ride around town on Uber. The price was ridiculously cheap. Uber drivers told me how much bonus they would get as long as they were on the road.

Uber-ChinaI knew Uber was locked in a bloody battle with its Chinese rival Didi Chuxing. In order to gain market share, Uber subsidized its riders heavily, losing $1 billion a year. To me, that was a sign of trouble, because competing on price is never the way for foreign firms to win in China.

When Apple invested $1 billion in Didi this May, I knew Uber’s days in China were numbered. Didi had more than 80 percent market share in China’s ride-hailing business. Apple clearly saw that Uber had no chance and bet on the top dog.

Even without Apple’s blow, Uber was in a disadvantageous position. It was a late comer Continue reading