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I will be speaking at Northern California Business Marketing Association on Sept. 28 in Santa Clara, California, on how to do business successfully in emerging markets.
Other people who are on the panel include Joanne Vliet, Silicon Valley Export Assistance of U.S. Department of Commerce, Milton Ribiero, Vice President of Cypress Semiconductor, Tatyana Kanzaveli, marketing manager of Deloitte & Touche, Chris D’Couto, Ph.D, President & CEO of Neah Power.
Here is the description of the event:
Over the past decade, Emerging Markets have contributed more than 1/3 of the world’s GDP growth. This number is expected to rise to 49% by the year 2020, when BRICs will also account for 1/3 of the global economy. Despite recent global recessionary downturns, Emerging Markets are already showing early signs of a strong return, affording savvy marketers great opportunities to enter tomorrow’s markets today. Based on the standard BRIC(S) model, we are pleased to offer a panel of experts who will share their thoughts and provide insights.
For the details of the event and registration, click here. Hope you can come!
Event details- Begin: September 28, 2011 at 17:30
- End: September 28, 2011 at 20:00
- Add to your calendar: Download ics file
- Place: 2831 Mission College Boulevard Santa Clara, CA 95054
 While the US economy is stumbling into recession, China’s retail spending, fueled by a burgeoning middle class, is on the rise. In 2007, China saw a 17 percent growth in its retail market, and there is no sign of slowing down. Continue reading An Old China Made Young
In writing my book on the middle class in China, I am trying to understand China’s legal reform and its implications. Xu Zhen-Xiao, who has a law degree from Xiamen University and is a senior researcher at the Zhejiang Academy of Social Science, gave me a brief history of China’s legal reform.
 When I arrived at Orrick, Herrington & Sutcliffe LLP in Menlo Park yesterday, the presentation had already started. Jane Jie Sun, the CFO of Ctrip – the Expedia equivalent in China, was giving an enthusiastic talk about the company’s success. The room was full of aspiring entrepreneurs, mostly Chinese, who are trying to catch a slice of China’s economic boom, or at minimum, to admire what others have achieved.
This is one of the events put on by HYSTA – an entrepreneurial association in Silicon Valley. Standing in the audience, I couldn’t help to be impressed. Just look at the following facts:
- China’s travel industry is growing double digits every year and there is no sign of slowing down due to the emergence of the middle class.
- Ctrip aggregated more than 80 % of a fragmented market, which was typically characterized by mom-and-pop hotels, and handles a daily volume equal to the volume one travel agent does in a year.
- The company’s revenue is growing at 50 % year to year, with a gross margin as high as 80 percent (whew, where on earth can you find a business like that?!).
Although Ctrip is a copycat of Expedia, it successfully adapted to China’s situation and provides the services that are “China unique.” For example, we already know about the call-center and free ticket delivery, but its “express service” is quite remarkable. In Beijing and Shanghai, because traffic is so bad and people cannot predict how soon they will get to the airport, Ctrip invented a service that allows people to call while riding their taxis to the airport, and issues the air ticket including boarding pass within one hour. Wall Street analysts said Ctrip is the only company in the world that is doing this.
Other things I have learned are: since 2006, GDP growth in the second-tier cities in China has surpassed that of first-tier cities. Recently, China relaxed visa restrictions for people to travel to the U.S. as tourists. It is predicted that by 2020, China will be the largest outbound travel country in the world. A minor point, it will certainly help the huge trade deficit between the United States and China.
A friend of mine told me that her sister, who works in IBM Beijing, travels every year, and each year to a new country. For the young Chinese middle class, travel to see the world is an essential component of their lives. Some consider it an important achievement in their lifetime. We will see the Chinese are coming.
A recent McKinsey report “How half the world shops: Apparel in Brazil, China, and India” reveals some interesting patterns of consumer spending in these countries. Two things stand out for me on the Chinese consumers. I thought I would comment briefly here as the Chinese consumers are related to my upcoming book on the Chinese middle class:
First, the Chinese mass market consumers (defined as annual household income from $3,000 to $12,000) have relatively small, undifferentiated wardrobes – 40 percent of the Chinese women reportedly wear similar clothing at work, formal social occasions, and dates with friends or family.
 This photo was taken at Vienna Cafe in Shanghai. The picture on the wall is Chairman Mao and his famous motto “Serve the People.”I did notice, even in Shanghai, people are less sensitive as to what to wear for different occasions. For example, I met a girl friend, who was wearing a beautiful dress, for coffee on a Saturday afternoon. She used to be a marketing professional in a multinational and is now running her own PR firm. But the next day when I met her again in a totally different situation, I was surprised to see that she was still wearing the exact same dress as she wore the day before. However, as China continues opening up to the world, I would expect people will become more sophisticated in this area.
Another thing is that China’s urban youth (18 to 25 years old) is dramatically different from other consumer segments (see my previous post on China’s cyber-savvy and pragmatic youth). They favor international brands and are much more open to try on foreign products compared with the youth in other countries. This segment currently comprises about 15 million people.
This photo was taken in the Plaza 66 – the luxury mall in Shanghai
When I visited the Plaza 66 – the luxury mall in Shanghai, I was perplexed to see that most consumers in the mall were young people in their early twenties. I really wondered how on earth they could afford to buy Fendis and Luis Vuittons and where they got the money. My friend Shaun Rein, who studies the youth culture in China, explained: “It was the secretaries who are making 3,000 yuan a month who buy these luxury goods.” Well, if so, it’s hard to imagine this kind of consumption will sustain.
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