Last year, China recorded its slowest economic growth in 28 years. But for leading e-commerce player Pinduoduo, it was boom times, with business up 234% for the year thanks to a largely ignored market—China’s vast rural regions and smaller towns and smaller cities, termed “non-first tier cities”.
In addition to the “black swan”, a term which refers to improbable and unforeseeable events, is the “gray rhino”, an expression coined by Michele Wucker to describe highly probable threats that have a potentially high impact yet are often ignored. Why do leaders and decision makers so often fail to address obvious dangers before they spiral out of control? That is the topic of Wucker’s book, The Gray Rhino, which is essential reading for managers, investors, planners, policy makers, and anyone else who wants to understand how to avoid getting trampled in an increasingly changing world.
Right up until the moment his company imploded, Ofo founder Dai Wei insisted he was building a corporate empire to rival Google.
But the young entrepreneur has now come to resemble a modern-day Ozymandias: all that remains of Ofo’s bike-sharing dream are the battered, unusable yellow cycles still littering China’s streets. The collapse of the Beijing-based startup, which just two years ago was valued at $3 billion, has captivated China over recent months.
You may not recognize the name SenseTime. But if you have spent time in China recently, SenseTime will almost certainly recognize you. Founded just five years ago by a group of data researchers at the Chinese University of Hong Kong, the startup has rapidly established itself as China’s leading provider of facial recognition technology. Its face-scanning software is used everywhere from smartphones to office blocks and police stations.
On a remote farm nestled deep within the mountainous region of Daozhen, in China’s southwestern Guizhou Province, thousands of chickens are being watched closely. Aided by surveillance cameras and distance-tracking ankle tags, every step, meal and sip that the chickens take inside their paddock is uploaded in real time to an online platform. This farm, along with hundreds like it across China, is part a program that gives consumers a direct data trail from egg to plate. Launched by the technology arm of online insurer ZhongAn in 2017, it aims to boost transparency in China’s food supply chain. The technology behind GoGo Chicken is blockchain.
After years of enjoying the fruits of a booming economy and sharply rising disposable income, life for many of China’s higher earners is getting harder. Amid mounting debt levels and economic headwinds, urban middle-class consumers have responded by scaling back their discretionary spending and reducing luxury purchases—an emerging phenomenon known as the “consumption downgrade.” The newfound frugality of middle-class spenders may be good for their wallets, but it is an unwelcome development for Beijing.
Learning how to please Chinese audiences without alienating moviegoers in the US is becoming crucial for Hollywood as box office receipts stagnate in home market but explode in China. Quarterly ticket revenues in China surpassed those in North America for the first time ever in the first three months of 2018, with Chinese cinemas netting $3.15 billion compared to $2.85 billion in Canada and the US. Those figures were boosted by massive takings during the Lunar New Year holiday, always a peak time for Chinese cinemas, but China could become the world’s largest film market in whole-year terms in 2019.
Sometimes, a major innovation starts at the top of a market and works down—think of Tesla’s electric sports car. Other times, as innovation theorist Clayton Christensen noted in The Innovator’s Dilemma, innovations bubble up from the bottom, beginning with a product that has limited functionality and seems at first like little more than a toy. That second uphill path has been the trajectory of the electric bicycle, which over the past 20 years has become an important mode of personal transportation in China and is now beginning to make inroads in the rest of the world.
Chinese millennials promise to reshape the global tourism industry. Unlike their parents’ generation, who preferred to travel abroad on Chinese-organized tour groups, today’s young Chinese are independent, individualistic and willing to try more adventurous vacations. This shift is opening up huge new opportunities for travel and tourism operators worldwide. They can now advertise directly to China’s 400 million children of the 1980s and 1990s, who often book their next trip online and on impulse. For operators able to target this group, the rewards can be spectacular. Chinese millennials already make more overseas trips than all American tourists combined.
By 2045, there will be nearly 350 million people in China aged over 65. The rapidly aging society is the legacy of a huge baby boom that was abruptly halted by the introduction of the one-child policy in 1979. Over the long term, this trend threatens to drag on economic growth. There were five Chinese taxpayers for every senior citizen in 2010; by 2030, there will be just two. But for businesses that stay ahead of the demographic curve, there will be big opportunities—another 200 million new customers. Slowly but surely, digitally-savvy seniors are changing the game for brands in China.