China’s Millennial Consumers: What Victoria’s Secret Got Wrong, And Nike Got Right

Chinese millennials are a new breed of consumers who will shape the future of commerce. They are very interested in consumption and excited by it. They constantly live-stream fashion shows on their phones and discuss about new trends.

Photo credit: Jing Daily

Photo credit: Jing Daily

Yet, they are also torn between the old and new. They are conflicted between their national pride and their love for western brands. They are struggling to find their own individuality in a collective culture.

At a recent fashion show in Paris, Victoria’s Secret tried to woo Chinese consumers by showcasing dragon-themed lingerie. The supermodel Elsa Hosk appeared on the runway with an elaborate dragon wrapped around on her body, Kendall Jendall wore a pair of phoenix wings made of feather, and Adrian Lima cat-walked in a pair of dragon-embroidered stiletto boots.

But Chinese consumers found these outfits distasteful and tacky. Continue reading

What To Expect From Trump’s China Ambassador

Iowa Gov. Terry Branstad shakes hands with Chinese President Xi Jinping before a meeting at the Great Hall of the People on April 15, 2013 in Beijing, China. (Photo by Andy Wong – Pool/Getty Images)

One never knows whether President-elect Donald Trump means what he says or says what him means.

After his provocative phone call with Taiwan president Tsai Ing-wen and his tweet storms bashing China, many China watchers started to worry that a US-China trade war might be imminent.

But then, he nominated the Iowa governor Terry Branstad as his ambassador to China, a move immediately welcomed by Beijing. Mr. Branstad is considered “a longtime friend of the Chinese people,” and knows the Chinese President Xi Jinping personally.

If approved by the Senate, Mr. Branstad can play a positive role in US-China relations.

First, the Chinese value personal relationships more than anything else. Continue reading

How Alibaba Is Creating the Future of Commerce on 11/11

During the 2015 Tmall 11:11 Global Shopping Festival gala in Beijing on November 11, 2015. (Photo credit: STR/AFP/Getty Images)

Alibaba is counting down to its annual shopping bonanza: the Singles Day shopping festival on November 11. Since it was launched seven years ago, it has become the largest shopping day on the planet. Last year, it generated sales of $14 billion, more than double the total online sales from Thanksgiving, Black Friday and Cyber Monday combined in the U.S.

This year’s Singles Day will be like no other. Alibaba wants to make it a global phenomenon. It has already kicked-off a series of warming up events including an eight-hour live-streamed “see now buy now” fashion show from Shanghai, where consumers can order anything they see on the catwalk in real time.

But what’s really exciting about the Singles Day is its potential to change the way people shop. Here is a sneak peek at what will happen. Continue reading

Alipay Takes on Apple Pay and PayPal on Their Home Turf

A driver uses his smartphone to pay the highway toll by way of Alipay in Hangzhou, China on September 21, 2016. (Photo credit STR/AFP/Getty Images)

Ten years ago, eBay lost the battle to conquer China’s e-commerce market to small upstart Alibaba. Ten years on, China’s e-commerce market has grown more than tenfold, and Alibaba has become a global conglomerate with its arms stretching across multiple disciplines such as payments, big data, Hollywood and more.

The game of e-commerce has also changed. With proliferating smartphones, e-commerce has become increasingly mobile. Euromonitor estimates that mobile commerce will amount to $972 billion by the end of this year. By 2021, mobile payments are expected to reach $3 trillion.

This is an area where American companies are falling behind. Continue reading

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?

Shutterstock

Shutterstock

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.

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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?

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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.

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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