Will China Lead Innovation In Mobile Social Commerce?

Social commerce is a novel term in the US, and many people are not familiar with it. Some think it refers to those annoying ads on Facebook. According to Wikipedia, social commerce is the use of social networks in the context of e-commerce transactions.

In China, social commerce has taken up a life of its own and become the backbone of e-commerce.

While the “Ice Bucket Challenge” has gone viral on Facebook, Chinese consumers use social media in a much more thoughtful way. Instead of posting some silly videos and pictures, they turn to social media to solve real life problems, to seek advice from friends and opinion leaders, and to decide what products to buy or not to buy.

Read the full article on Forbes.

The Rise of the New Global Middle Class

The global middle class will explode in the next fifteen years, growing from 1.8 billion in 2009 to 4.9 billion in 2030. About 66 percent will be in Asia Pacific, compared to only 7 percent in North America and 14 percent in Europe. New Asian Pacific consumers will wield nearly 60 percent of total purchasing power, double that of North America and Europe combined. This is a significant shift in economic power from West to East that hasn’t been seen in the last 300 years. Its impacts could dwarf the Industrial Revolution.

China and India will make the biggest waves in this surge of the new global middle class. In 2009, these two Asian countries comprised just over 5 percent of global middle class consumption; in 15 years, their share of global middle class consumption will increase to 41 percent or more.

What do you make of this? Comments are welcome.

SAIC Taking Wrong Approach to Build Its Brands

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 1990 Institute: China’s Growing Global Impact

I was honored to speak at The 1990 Institute’s Teachers Workshop on Monday in San Mateo, California. The two-day workshop, titled China’s Growing Global Impact, was designed to help high school teachers understand what’s happening in China and prepare our students for a future that will be very different from their parents’.

My presentation, of course, is on the subject of the rise of China’s middle class. Here are the slides I presented at the workshop:

The 1990 Institute is an organization that fosters better understanding between the U.S. and China. Other people on the panel include Dr. Tom Gold, professor of sociology of UK Berkeley, Dr. Mark Henderson, program head of Environmental Studies at Mills College, and John Kamm from Dui Hua Foundation. It was a real honor to be in such a distinguished company.