Book Excerpt: Seeds Of Alibaba’s IPO Planted In 2004 Battle With eBay

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In light of Alibaba’s upcoming IPO, I thought it would be appropriate to run a series of excerpts from my book The Chinese Dream, which documents Alibaba’s humble beginning, its triumph over eBay, and Jack Ma’s legendary story.

The first episode is set in 2004. eBay just entered China and planned to dominate China’s nascent online market. An unknown Chinese company, Alibaba, started a sister site called Taobao to compete with eBay. Everyone thought this was a crazy idea. However, Jack Ma, Alibaba’s founder and CEO, was undeterred. He asked his team to stand upside down so that they could look at the world from a totally new perspective.

He said, “EBay may be famous in the United States, but in China, if you ask one hundred people whether they’ve heard about eBay, I believe that less than 10 percent have heard of it. But if you ask one hundred people whether they’ve heard about Alibaba, 90 percent know about us…. I believe we have a chance.”

Read the full story on Forbes.com.

McDonald and Coca Cola’s New Mobile App Lures Consumers

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Recently, McDonald and Coca Cola launched a new app that encourages people stay engaged with each other rather then being distracted by constant phone calls and messages. As featured in Trendwatching’s July newsletter:

In May 2014, McDonald’s and Coca-Cola partnered in the Philippines to launch BFF Timeout, an app that rewards users for not using their phones. Once individuals in a group have all opened the app, the timeout begins and points are earned for every moment the phones are left alone. As soon as anyone uses their phone, the timeout ends. Users’ scores are ranked on a public leaderboard, and prizes include trips to Japan and Singapore.

I believe that the next wave of innovation in mobile-commerce and social-commerce will come from Asia. Companies need to pay close attention in this area in order to stay ahead of the curve.

SAIC Taking Wrong Approach to Build Its Brands

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China’s number 1 auto maker, Shanghai Automotive Industry Corp. (SAIC), is setting up a venture capital firm in Silicon Valley to tap advanced technology for its automobile brands back home. As Rose Yu writes in the WSJ’s China Real Time blog:

Chinese car companies, including SAIC, could do with all the help they can get, as the majority of Chinese consumers prefer foreign-branded cars. Chinese domestic brands’ market share in the country’s passenger-vehicle market fell to 36.5% in May from 39.4% in the year-earlier period, the ninth-consecutive month of decline, according to data from a government-backed industry group.

“Building a brand is an arduous job,” said Chen Hong, Chairman of SAIC Motors. “Chinese car makers must go upscale, otherwise the situation will be worse.

“In terms of sales, SAIC is a big car company. But when it comes to core technologies, we are far from strong enough,” said Mr. Chen, who became chairman in May. “Silicon Valley houses a number of emerging-technology companies. Having a footprint there will help improve our innovation ability.”

But how could “having a footprint in Silicon Valley” help improve their innovation ability? It’s not like breathing the Silicon Valley air will automatically make a company more innovative. Money isn’t only the way to acquire new technologies. The best innovations happen where the problems need to be solved. SAIC doesn’t need to look farther than China to find these.

The Wall Street Journal Interview: The Barbie Story in China

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Recently, I was interviewed by The Wall Street Journal about how American toy-maker Mattel misread feminism in China. As the result, it had to close its flagship store, the House of Barbie, in Shanghai, and threw away over $30 million investment.

Since then, Mattel seemed to have learn a thing or two about the Chinese market. The Wall Street Journal article indicates that the company is making new efforts in China.

The Chinese toy and games market has been growing at 14% in the last five years. The demand will continue to be strong as growing Chinese middle class families want to give their children the best. And, they have the disposable incomes to do that.

There are still opportunities for Mattel to get it right in China. I will soon have an article on Forbes.com to comment on Mattel’s newly launched Barbie “Violin Soloist.” Stay tuned!

Chinese People Must Define Their Own Dream

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China’s incoming president Xi Jinping has struck a new tone: “the Chinese Dream.” In a visit to the “Road to Revival” exhibit at the National Museum in Beijing, Xi delivered a speech, calling for the revival of China into a strong nation.

“Everyone has their own ideals, pursuits, and dreams,” he said. “The greatest Chinese dream, I think, is to achieve great rejuvenation of the Chinese nation.”  He then went on to say that his generation of Communists should continue to build the Party and forge ahead with the goal of the rejuvenation of the Chinese nation.

Since then, the term “the Chinese Dream” has been repeatedly discussed by media and on Weibo, a Chinese social media site with over 300 million users.  Both Chinese and foreigners are asking the question: what is the Chinese Dream? After all, the Chinese middle class is now approaching half a billion. What is the Chinese Dream that can inspire their aspirations for a better life?

Clearly, it is not Xi Jinping’s version of the Chinese Dream.

Chinese People’s Reaction

On February 1, the Chinese government newspaper People’s Daily published an article to further explain Xi’s Chinese dream, “Power Source of the Chinese Dream.” The article says: “The American Dream is this: regardless of one’s background, with hard work and determination, one can achieve whatever one aspires. The Chinese Dream promotes the concept that what’s good for the country will be good for individuals. It reflects the Eastern culture of collectivism and believes as long as the country is strong people will be rightfully benefitted.”

Soon after the article appeared online, hundreds of people commented on Weibo: Continue reading