Topics Discussed and Key Points:●      The landscape of sports in China today●      How motivation to go into sports differs between kids in China versus kids in the West●      The development of sports infrastructure in China●      The importance of sports celebrities in driving the popularity of sports in China●      Popular sports in China today●      Physicality in Chinese sports●      Educating Chinese parents in the world of sports●      Chinese athletes going international Episode Summary:Today on The Negotiation, we speak with Radley Mackenzie, Founder and CEO at SinoSports Development, “a China-focused international sports and education platform, supporting Asian student-athletes with online and offline expertise and exposure” based in Toronto. Radley is also the President of consulting firm Radley Hall International and the Toronto Representative for high-tech manufacturing company Saimen.To this day, education is a higher priority for the youth in China than the arts or sports. Radley notes that, originally, “sports in China was closely tied to national program development. The Chinese government has always thought sports were an important flagship for them globally.” He likens it to the Soviet approach to national pride.The government’s traditional approach was to handpick who they consider to be the best performers and optimize their athletic capacity in isolation, i.e. without the support athletes in most other countries enjoy.Fortunately, this decade has seen a wider adoption of sports. On one hand, parents now see sports as a great way to complement their children’s education at school. On the other hand, the government itself now sees the economic benefits of sports and has encouraged wider participation in recent years. In fact, the Chinese government has announced that they would like to have 300 million winter sports enthusiasts involved in the 2022 Winter Olympic Games in Beijing.Over the last 20 years, badminton, ping pong, and martial arts have been the most popular sports in China. Western sports have seen massive growth in more recent years, in particular basketball, soccer, and tennis. Last year, according to the NBA commissioner, there were 300 million basket players in China. Today’s soccer players number around 30 million, and tennis players around 15 million. Figure skating is also seeing greater popularity, with around 1 million skaters across China. Key Quotes:“Originally, sports in China was closely tied to national program development. The Chinese government has always thought sports were an important flagship for them globally. “SinoSports was originally founded on increasing human contact between coaches and players in both markets.” “Sports are a sector right now where China is desperate and eagerly looking for foreign expertise and have recognized that they can’t do it alone.” Resources Mentioned:SinoSports [email protected]: radleym

Topics Discussed and Key Points:●      How Gang Lu became the founder of the premier tech media in the country●      The transition from a competitive to a collaborative startup environment in China●      The connection between changing family dynamics and the rise of innovation and entrepreneurship in China●      The business of media in China●      All about BEYOND Tech Expo 2021 in Macau●      The future of the 996 working hour system●      Gang Lu on the U.S.-China trade war●      The current state of blockchain in China Episode Summary:Today on The Negotiation, we speak with tech influencer Gang Lu, Founder and CEO of TechNode.com. Formerly known as MOBINODE.com, Technode.com today is “the leading bilingual tech media in China covering startups and large listed companies, entrepreneurial community, and angel/VC investment activities.” Gang Lu is also the Co-Founder of OpenWeb.asia Workgroup, a blogging network focused on the Asian web industry and enhancing “the intercommunication of local Internet markets.”Gang Lu speaks to the parallels between the relatively recent relaxing of the top-down cultural dynamic in the Chinese family and workplace as the key that sparked the level of entrepreneurship that we see in the country today. With the government now encouraging the growth of new tech startups, Chinese society has become ripe for innovation that, according to Gang Lu, is only beginning.The world of media is obviously very different in China than it is in the West. For one, copyright is not enforced at nearly the same level, leading to a lot of outright plagiarism between companies. Advertisements are also valued much lower in China. Instead, to stay profitable, media companies rely heavily on sponsored articles. It of course follows that since articles can be commissioned by outside parties, the integrity of the information being published is often questionable.With the rise of the tech industry in Asia, TechNode, in collaboration with the Macao International Grand Events Promotion Association, is organizing the first two-day BEYOND International Technology Innovation Expo at the Venetian Macau on June 17, 2021. Gang Lu believed the time had come to shine a spotlight on Asia-based tech startups and other companies at an Asian venue instead of in the West where most of these events are usually held. Calling Macau “the Vegas of Asia”, he pinpointed the Venetian as the perfect place to kick off the first BEYOND Expo.Finally, Gang Lu speaks on the 996 culture, the U.S.-China trade war, and blockchain. To these three developing topics, he adopts a wait-and-see mindset, saying that China does not currently seem to be budging in its big-picture economic priorities despite (or maybe because of) the ongoing pandemic, increasing global dependence on digital solutions, and the transition of power in the U.S. Key Quotes:“I think, before 2011, you didn’t see that many startups. But after 3G took off, suddenly you saw the mobile market booming.” “If we look at the global tech space, there are so many new companies that are not in the States or Europe. They are in China and other Asian countries. We need not just an event, but a platform where people can go every year to showcase their technologies and innovations in Asia.” “Why is China moving so fast? I think China, for many reasons, is able to open the market to adopt new applications and infrastructures like 5G.”

Topics Discussed and Key Points:●      How workspaces change as people’s work change●      Efficient communication with clients in the design space●      Redefining the purpose of the office●      Differences in the work environment in China versus the West●      The impact of COVID-19 on the way work is done in China●      Commercial architecture in China Episode Summary:Today on The Negotiation, we speak with Nabil Sabet, Group Director at global workplace design firm M Moser Associates in North America and Greater China. The company “has specialized in the design and delivery of workplace environments since 1981, with clients from the corporate, private healthcare and education sectors.” Nabil’s experience in the China market goes back to 2006 when he worked as a space manager at M+W Group in Shanghai.Nabil shares his thoughts on evolving work environments as the nature of work itself changes. He also discusses how different sectors vary in their understanding and appreciation for workspaces that are appropriate to what they do. Ownership of space in the tech sector, for example, is relatively low because there is a lot of sharing of spaces. Legal work, on the other hand, is done in more segmented, even hierarchical, spaces.However, Nabil says that the COVID crisis has put the office space in “an existential crisis”. Due to the many uncertainties that most businesses continue to face moving forward into 2021, Nabil and his team are spending a lot of time “redefining the purpose of the office altogether.” He also explains how China in many respects was able to rebound relatively quickly in spite of the pandemic.Nabil gives his observations on the differences between how Westerners and the Chinese approach work, and how these differences impact the design of their respective work environments. He says that the workforce in China “really has a strong sense of obligation” to the country, the company, the team, and their leaders. This collective attitude makes work incredibly fast and efficient. In the West, there is “a stronger sense of rights and individuality”, meaning organizations spend more time creating consensus among their people.M Moser owes its effectiveness as a design firm to its complete focus on environments to which people go to work, including research centers, office spaces, innovation centers, and so on. This narrow focus allows them to collect an abundance of data and a thorough understanding of both “the hard stuff and the soft stuff”.There are many factors that go into an office that is totally dependent on the nature of the work to be done, and M Moser positions itself as a company that “owns the entire problem”. Key Quotes:“When people’s work changes, then the environments that support that work also need to change.” “The office is a gathering place for the team. The real purpose of the office is for people to come together. Yes, there’s an element of focus: You go to the office and you focus and you work. But, largely, the reason we will be going to the office is for human connection. It’s for connecting to other team members; corralling around a common purpose; getting inspired about our work and seeing our contributions as part of a team.” “Depending on where you live in the world and the culture, the home setting can be more conducive or less conducive to remote work.”

Topics Discussed and Key Points:●      The increasing simultaneous “closeness” and “friction” between California and China●      What makes California special to China as opposed to other U.S. states?●      Matt speaks on co-hosting the Heartland Mainland: The Iowa China Podcast●      Emerging tech trends in China●      Eroding trust in Chinese tech platforms●      Key takeaways on MacroPolo’s October 2020 report on what China will look like in 2025●      How AI, blockchain, and other emerging technologies will transform Chinese society●      How China is able to consistently stay on the cutting edge of AI●      Why China has been incredibly malleable and willing to overhaul its society over time●      What Silicon Valley thinks of Chinese tech Episode Summary:Today on The Negotiation, we speak with Matt Sheehan, Fellow, and Researcher at MacroPolo, the digital think tank of The Paulson Institute. MacroPolo covers politics, economics, technology, and energy in China. Matt’s portfolio features writings on technology in China and its interactions with the U.S. and the rest of the world. His subfield focuses on artificial intelligence, a topic to which he has dedicated 90% of the last three years of his work.In 2016, Matt wrote The Transpacific Experiment: How China and California Collaborate and Compete for our Future. His thesis for the book is that “California is Ground Zero for a new era and a new type of U.S.-China relationship.”Matt notes that the relationship between the U.S. and China back in 2010 was characteristically more distant and “trade-based”. Around 2018, that relationship had become more “ground-level and face-to-face” as a result of the opportunities generated via the gradual influx of Chinese students, investors, immigrants, and homebuyers over the years. Matt’s book goes into how California (i.e. Silicon Valley and Hollywood) and China have been both collaborative and competitive at the same time.Listen in as Matt explains how the multifaceted powerhouse that is California influences the trajectory of China’s economic growth. He also dives deep into what he means by the two regions being collaborative and competitive at the same time.Matt then describes Iowa’s unexpected importance to the U.S.-China relationship and why he, in fact, co-hosted and co-produced the Heartland Mainland: The Iowa China Podcast. He goes on to speak on the future of the Chinese tech ecosystem as written about in MacroPolo’s October 2020 report. Finally, Matt reflects on shifting perceptions of China through the years and how the country is able to stay so malleable all this time. Key Quotes:“Even as California and China have become closer in recent years, that closeness also brings a lot of new frictions.” “In five years, I don’t foresee chip restrictions and export controls hobbling Chinese transition to this industrial tech juggernaut that it wants to become. But as we stretch it out further to 2025 to 2030 and beyond, I do think that restrictions on China’s ability to access leading-edge semiconductors are eventually going to serve as a bit of a cap on how far they can go with this foundational technology.”

This episode is a look back at all of our podcast guests and the topics we covered in 2020, putting together some of our favorite moments for you into one single episode of goodness. The guests featured in this special episode are William Bao Bean, episode 22 released on January 7th; Scott Silverman, episode 28 released on January 31st; Scott Laprise, episode 34 released on March 6th; Dr. Julie Klinger, episode 42 released on April 13th; Gen Kanai, episode 54 released on July 17th; Wei Liang, episode 55 released on July 28th; James McGregor, episode 57 released on August 17th; Anne Stephenson Yang, episodes 58 & 59 released on August 25th and September 1st; Aynne Kokas, episode 61 released on September 16th; Kevin Xu, episodes 66 & 67 released October 27th and November 3rd; and Matthew Brennan, episodes 72 & 73 released December 8th and 15th.

Topics Discussed and Key Points:●      What is the “middle platform” and how does it benefit ByteDance?●      Other innovations by ByteDance that other companies are trying to imitate●      TikTok versus Snapchat, and why the former is thriving while the latter is dying●      Up-and-coming tech companies to keep an eye on●      Why Oracle attempted to partner with TikTok●      The future of TikTok in the U.S. with a Biden administration in place●      Why America is seen as a high-risk market in China●      The ramifications of Jack Ma’s speech on the Ant IPO Episode Summary:Today on The Negotiation, we continue our conversation with Matthew Brennan, a highly sought-after speaker on Chinese internet and tech innovation, with a particular focus on WeChat and ByteDance. He is also the author of Attention Factory: The Story of TikTok and China's ByteDance (2020).Matthew is the Co-Founder of China Channel, which “provides digital marketing services for brands wishing to perform better on WeChat and China's digital ecosystem.” China Channel also organizes “China’s largest WeChat marketing conference series for international companies, China Channel delivers regular presentations, workshops, trainings and events globally about WeChat.”The “middle platform”, first conceptualized by Jack Ma and Alibaba, is a third-party group that does the “heavy lifting” in terms of technology and resource management. ByteDance’s apps can all plug into this central service called the middle platform, allowing these resources to be shared and ensuring no overlap between different teams.ByteDance has risen to prominence in the China tech space—and that of the world, by extension—through a myriad of innovations, from launching their unique internal tools as a product, selling their recommendation algorithm ala “recommendation as a service”, and their various avenues for growth hacking.Listen in as Matthew goes on to discuss the importance of how psychology can inform the potential success (or failure) of a social platform, other tech companies in China set to explode soon as ByteDance did, make sense of Oracle’s decision to partner with TikTok, and what a Biden administration (as well as current, strained U.S.-China relations) would mean for the future of TikTok and ByteDance as a whole. Key Quotes:“It wasn’t always obvious that TikTok would be so successful because they almost ruined it in the early days.” “When it comes to apps such as TikTok or Snapchat, it’s really important to understand the psychology behind these applications. It says so much about them and where the opportunity is in terms of business.” “When you speak to entrepreneurs and VCs on the ground in China, nobody really wants to invest in America anymore. It’s too risky. They don’t want to launch apps there. They just see it as a high-risk market.”

Topics Discussed and Key Points:●      How Matthew built a fascination for WeChat and digital innovation in China●      Writing objectively about big tech brands in a country known for heavy censorship●      The huge potential of sharing short videos via these newest social media platforms●      What is ByteDance, exactly?●      How ByteDance compares to the other tech giants in China●      What makes TikTok unique?●      Localizing TikTok’s content in other markets Episode Summary:Today on The Negotiation, we speak with Matthew Brennan, a highly sought-after speaker on the Chinese internet and tech innovation space, with a particular focus on WeChat and ByteDance. He is also the author of Attention Factory: The Story of TikTok and China's ByteDance (2020).Matthew is the Co-Founder of China Channel, which “provides digital marketing services for brands wishing to perform better on WeChat and China's digital ecosystem.” China Channel also organizes “China’s largest WeChat marketing conference series for international companies, China Channel delivers regular presentations, workshops, training, and events globally about WeChat.”Matthew says that his interest in digital innovation in China transcends geopolitics. Since writing his book, there has been a swell of controversy around TikTok as the U.S. and India worked to ban the popular social media app. Matthew, however, would rather focus on the bigger picture that is the trajectory this opens up for internet usage, globally. Short video is changing the way we use the internet, we are only in the early stages of this new trend.Listen in as Matthew goes on to share how ByteDance and TikTok came to be and how they sparked massive innovation in the mobile landscape, as well as how ByteDance compares to China’s other tech giants today and what the future holds. Key Quotes:“I do believe that short video is a very important trend for internet usage, globally. What TikTok provides is a new way that people are using the internet, and it’s not going away.” “China is all about mobile. It’s an app economy. People don’t tend to use browsers that much. Browser usage is very low in China.” “ByteDance has the potential to be a viable option to the Facebook and Google duopoly around online advertising globally.”

Topics Discussed and Key Points:●      Commercial and residential real estate trends in China from 2008 to 2011●      How real estate investors tend to operate in the China market●      Where the real estate industry is going in the next ten years●      Why China’s economic future may mirror that of Japan’s●      China in the new normal●      Property Passbook’s mission●      Running a global business based in Shanghai●      How COVID-19 has changed real estate planning in China Episode Summary:Today on The Negotiation, we speak with Colin Bogar, CEO and Head of Product Development at Property Passbook. His 12-year journey in China also saw him as Chairman on the Board of Advisors for The Canadian Chamber of Commerce in Shanghai, an Associate Professor at Shanghai Jiaotong University, the Managing Director of MGI Pacific, and Head of Research at Colliers International.Colin discusses his observations on both the commercial and residential real estate markets in China over his decade-long career. With regards to urbanization today, he touches on how bigger cities tend to have a much greater influx of new residents looking for opportunity as opposed to the country. Anecdotally, the first-tier cities of Shanghai, Beijing, and Shenzhen have seen the most growth during Colin’s time. Second Tier cities and below are not expected to see growth anywhere near the same pace as populations and wages stagnate.Listen in as Colin goes on to share how COVID-19 affected the real estate market both financially and around health and sanitation, projected reductions in investments toward office spaces in a post-COVID world, the aim of his startup Property Passbook, the advantages of doing business as an expat in the melting pot that is Shanghai, and whether or not megacities are soon going to be a thing of the past. Key Quotes:“Real estate developers in China today are less concerned with green as much as they are with health.” “People in Western countries tend to want to be green and do the right things to fight global warming, but sometimes their solutions are not the most practical.” “By doing business in Shanghai, you have a pulse on the direction in which the world is going.” “COVID-19 and tensions with the U.S. aside, it’s hard not to be extremely optimistic about China’s economic future.” “Soon, travel to China is going to bounce back in a bigger way than most people would imagine.”

Today on The Negotiation, we are taking aim at trying to understand the housing bubble in China, by speaking with Professor Simon Zhao, Former Director at the International Centre for China Development Studies, University of Hong Kong. Simon has recently published an article on the housing bubble in China, so we thought he would be an excellent place to start our conversation.Simon tells us that it has only been in the last 40 years that its citizens could actually purchase property and homes; before then it belonged to the government, and the government provided housing to the people. Therefore, land and property had no value. However, China was quite interested in the Hong Kong model, and soon adopted the method of allowing private citizens to purchase and own land. Soon the government was pouring resources into land development in order to create a marketplace where it could tax purchases and development and grow its GDP. As Simon mentions, the government “did not allow the market price to go down”, which has contributed to the problem it has today.We ask Simon about the famous ghost towns, rather ghost cities, the massive developments that could house tens of thousands of people, seemingly built with the knowledge it was purely a surplus where no one needed to live. Simon tells us that the government would enable the banks to lend with protection against defaults so that demand stayed high and development would continue, allowing the country to artificially inflate GDP and collect taxes on 30% to 50% of the development and sale costs.When we asked Simon if China has a housing bubble, he said not in Tier 1 cities, there are so many people still moving to these cities the demand is still high and the value is true. Where the issue lies is where there is no liquidity in the market. In smaller cities to the North and to the West, there is shrinking demand, and those that own property is unable to get out from under their mortgages. Simon points to some major milestones to recognize as important dates in history that impacted the housing sector greatly. The first was entering the WTO in 2001, and the other was the Olympics in 2008. They coincided with tremendous growth in the manufacturing sector and China’s economic growth spurt overall. However the “financial tsunami” of 2009 drew $4 Trillion in aid from the government that was largely injected into the housing sector as well, which overcooked the economy in general, but the housing sector felt it the most. From that point to now the government has been doing everything it can to try and cool the housing sector without causing a drastic deflation in the RMB.

Today on The Negotiation, we speak with Jacob Cooke, co-founder of WPIC Marketing and Technologies, and his experiences since returning to China recently.Jacob notes the huge amount of digitization efforts since his last time in China. eCommerce is booming. What was once a convenience has now become a necessity. Digitization now encompasses all parts of society and users now include people of all ages, not just the youth.Masks have always been normal in China. Today, 90% of people continue to wear them despite no reported COVID-19 cases since Jacob’s return. However, contact tracing has become widespread and apps are incredibly efficient, which is especially necessary for a country that cannot realistically maintain social distancing measures due to its population size.Unlike in the West, big companies in China often were not given bailouts. In fact, many were allowed to fail. Instead, the government had begun to invest in smaller businesses. This is how unemployment is being addressed. The country is seeing shifts around the prominence of certain industries. Industries that were dependent upon export markets have suffered, but those who have adapted to the current needs of society have seen a good amount of growth. Namely, the technology and biomedical sectors are thriving. Businesses that cater to the needs of the home, including home exercise solutions, are also doing well this year.There may be a collapse in the commercial real estate market as many organizations have learned that a work-from-home setup yields virtually the same amount of productivity as an office-based one.Companies who do business in both the U.S. and China should not worry about any drastic shifts regarding trade between the two countries. Even in spite of the pandemic, trade has been continuing at practically the same pace as before, and higher taxes should not deter imports into an “already-high-tax environment”.Listen in as Jacob goes to share WPIC’s own investments in China, and what he sees in the future of the Ant Financial IPO, cryptocurrency, the hemp industry, and battery technology in China.

Today on The Negotiation, we speak with fashion designer and entrepreneur Bruno Schiavi. With a background in the retail industry spanning 25 years, he has launched many brands internationally with some of the biggest companies and names in the world. His latest brand is Uncle Bud’s Hemp and CBD, which focuses on topicals that cover everything from pain relief to anti-aging to bath and body. Uncle Bud’s products are exclusively manufactured in the U.S. and are sold in over 15,000 stories locally. As of today, Uncle Bud’s is available in Australia and is about to launch in China in partnership with Tmall and Alibaba.Bruno decided to expand into China knowing that the Chinese love exploring new brands and are always curious when it comes to new ingredients. Hemp and CBD are, in fact, still novelty ingredients in the Chinese market and the industry itself is seen as the fastest-growing category in the world today (projected to be at $25 billion globally by the end of 2025). For these reasons and more, Bruno believes that the various challenges in doing business in China are worth overcoming.Listen in as Bruno shares the key differences between Chinese consumers and their American and European counterparts, how to find the right brand ambassadors for your product, and tips for building a local team in China when you are based overseas.

Today on The Negotiation, we continue our conversation with Kevin Xu, founder and author at Interconnected, “a publication that analyzes businesses and trends from the lens of builders (entrepreneurs & engineers), operators (business managers), investors (capitalists), regulators (politicians and government officials), and how they are all connected.” He is also a contributor for and the co-creator of COSS Media, a knowledge media platform aimed at helping Commercial Open Source Software (COSS) founders build lasting companies. Finally, Kevin is an investor and EIR at the venture capital firm OSS Capital, L.P.Unlike the U.S., the Chinese government can make decisions “that could impact your pocketbook tomorrow”. Entrepreneurs in China are, as a result, much more politically astute, as the only way to get ahead in business is to align your vision for your business with the government’s vision for the country for the next several years. Americans, on the other hand, have the freedom to influence outcomes in ways the Chinese cannot; but at the same time, this has paved the way for more ignorance regarding Americans’ knowledge about their own government, simply because they have less to worry about concerning the government's power to control their lives. This difference in worldviews and level of political knowledge between the citizens of these two countries serves as the theme underlying the rest of the topics which Kevin covers.Listen in as Kevin explains his perspective on the countless developments currently taking place between the U.S. and China, from each country’s competitive edge in business to the long-term consequences of decoupling, and whether more Chinese companies will delist from the U.S. stock exchange. He then ties these issues together, explaining just how all of these unfolding events between these two superpowers are, in fact, interconnected.

Today on The Negotiation, we speak with Kevin Xu, Founder, and Author of Interconnected.blog, a publication that analyzes businesses and trends from the lens of builders, operators, investors, and regulators, and how they are all interconnected globally. Kevin received his Bachelor of Arts in International Relations from Brown University before studying both Law and Computer Science at Stanford. He then spent a couple of years at the White House in the Obama administration before becoming an entrepreneur in e-commerce and then design strategy. He then became very interested in open source projects, something he invests his money in to this day. His blog is bilingual in both English and Chinese, and he also podcasts.When asked about China’s stance on open-source technology, Kevin says that due to sanctions on technologies from the US, by the US, there has been an official attitude shift towards embracing open-source technology, saying they now know there is always some sort of open-source alternative available instead of relying on the proprietary solution that one would normally buy or license. Kevin goes on to say that he believes open-source is “eating a lot of different parts of the entire technology stack.”Given Kevin’s time at the White House, the conversation inevitably took a turn to politics, and wrapping up part 1 we delved into a discussion around whether Facebook and Twitter should be moderating political ads, which Kevin says no but maybe not for the reason you might think, then discussing why it seemed earlier in the conversation he was perhaps surprised to find so many Chinese that come from a Communist country background seemingly eager to be involved in politics in the US. 

Today on The Negotiation, we speak with Tom Parker, Head of China with the Australian Football League (AFL) and Vice President for the Australia China Business Council. Tom shares his journey in the Chinese business world, beginning in 2007 with the founding of Red Tape Consulting, “a China Advisory business that helped stage the first AFL exhibition match as part of the Shanghai World Expo.” Since 2018, Tom continues to serve a prominent role in the AFL. As Head of China, Tom “drive[s] commercial outcomes from the ongoing engagement and games being played in Shanghai.”Before COVID-19, Tom’s role as Head of China at the AFL was to serve as the bridge between Australian and Chinese brands. As the pandemic reared its head just before the beginning of 2020, Tom had been looking to boost the organization’s social media presence and build on its branding. With both countries currently occupied with their respective challenges heading into the new normal, Tom is optimistic, but at the same time sees the future of the AFL as uncertain. At this point in time, the most they can do is to “ride the ship” onwards and continuously adapt to the situation at hand.Tom describes Australian sports as being a “bottom-up, grassroots”-led part of the culture, while Chinese sports is a “top-down” affair dictated by the state. Traditionally, the Chinese have generally focused on professional sports that are less team-oriented such as diving or table tennis. In recent years where globalization has become more prevalent than ever, ball sports, and the culture of fandom for teams and players have sprung up among the Chinese.

Today on The Negotiation, we speak with Bertrand Schmitt, tech entrepreneur, Co-Founder, and Chairman of App Annie, and co-host of the Tech DECIPHERED podcast alongside Strive Capital’s Nuno Goncalves Pedro.Bertrand has been involved in the mobile industry in China since 1999, through what he refers to as its period of “growing pains”. When the iPhone and the App Store came out in 2007 and 2008, respectively, Bertrand quickly saw that they solved, in one go, three big issues in China’s mobile world: discovery, distribution, and monetization. Bertrand was inspired to bring something to market that could contribute to the industry. This led to the creation of App Annie, which aimed to provide tools to business developers to better understand developments in the mobile space via data and analytics.Mobile-only recently boomed as an industry in the Chinese market following the release of the iPhone (considered a luxury item when it first came out). Up until that point, the Chinese communicated through text, and tech giant Tencent was known for its online gaming services. The past decade has seen much innovation and the rise of new giants like Pinduoduo and ByteDance that were built on a mobile-first foundation.Bertrand shares his experience working as a French entrepreneur in China, how the VC “culture” in China has evolved and how it differs from that of America or Europe, China’s unique mobile-related innovations, and what to expect from Bertrand’s podcast, Tech DECIPHERED. 

Today on The Negotiation, we speak with Jesse Chester, Category Leadership Director at Mars who leads the category leadership organization in Guangdong, China, and in Arkansas, USA. Jesse’s role was to create strategic plans around category growth by working with retailers to help grow the marketplace as a whole. He also contributed to the reinvention of Mars’ innovation strategy.The snack industry in China “runs the full gamut” compared to that of North America. According to Jesse, the Chinese see food such as corn or bread rolls in the same category that they do chocolate bars or gum. Also, the health angle towards confectioneries and sweets in China is not as prevalent as it is in North America simply because consumption is much lower among the Chinese.It is clear that what works for the sweets industry in the west does not work the same in the east. Marketing is much more reliant on Key Opinion Leaders and capitalizing on events to sell these sorts of products. Also to be taken into account are cultural differences in the presentation and experience of sweets. For the Chinese, it is important to hone in on popular flavors unique to the country, but attention should also be put on the texture and packaging of the sweets.Jesse relates his experience working in China as a foreigner and having to adapt not only to the business environment but the cultural environment as well. His greatest strengths were his determination to focus on key tasks, but he also came to appreciate the power of taking initiative rather than leaving his Chinese business partners to take the lead every step of the way. He also was able to gain trust in an environment known to be rather impersonal and emotion-free by making it a point to build relationships with his partners, many times over baijiu.

Today on The Negotiation, we speak with Kimberly Kirkendall, founder and President at International Resource Development, on adjusting to the business environment in China as a Westerner.Kimberly discusses the foundational cultural differences in doing business with the Chinese as opposed to Westerners. She had an advantage getting her start in China when she was in her early 20s, as she was able to quickly adapt to the implicit and analogous manner of speech that is characteristic of the locals. She and Todd both agree that a foreign professional in their 30s would have a much more difficult time making this adjustment as they would already be hardwired to interact with others in a particular way according to their own cultural norms.In the early 2000s, Kimberly was told that the China she had experienced in the late 1980s had completely changed and that the culture she had so familiarized herself with no longer existed. Her reply was that the so-called new, modern, Capitalist China was just an observation “at the veneer level”. Beneath this, China was still fundamentally the same as it was in the 1970s and 1980s, with the Communist Party apparatus completely intact. However, in the last five years, some of the veneer had begun to crack and is being replaced by a new one, namely, a “more muscular Communist Party engagement in the world and in business.” To Kimberly, this is simply proof that China’s attitude and worldview as a country never really changed.“China and many high-context language countries are relationship-driven,” says Kimberly. The first thing to understand in any negotiation is that the Chinese are looking to you as a partner, even if you do not yet see it that way yourself. That is, to the Chinese, you are perceived as someone who is either selling or buying, and this perception will remain throughout the negotiation. It is a relationship that is rooted in human nature, taking the emotionality and relative unpredictability of human beings seriously. They do not simply look at a company as a soulless, paint-by-numbers entity.

Today on The Negotiation, we speak with Aynne Kokas, Associate Professor of Media Studies at the University of Virginia, where she teaches students about U.S.-China media and technology relations. She is also a Senior Faculty Fellow at the Miller Center for Public Affairs at the University of Virginia where she does work related to U.S.-China policy, particularly around how corporations and the governments of the U.S. and China interact in the space of media and tech.Aynne is the author of the award-winning book Hollywood Made in China. The big studios in China include the China Film Group, the Shanghai Film Group, Alibaba Pictures, and Tencent Pictures. These studios are “getting into the cinema game” in much the same way that tech companies in the U.S. are. That is, by producing a large amount of high-budget content, these cash-rich companies are able to drive traffic to their platforms.Netflix’s China strategy is to enter the market in any way it can. While it has been difficult for them to enter as a platform, they have been able to distribute content more successfully. These shows are streamed on Chinese platforms such as Iqiyi. By improving the content on these platforms, they can pull in more subscribers.Analysis has shown “clear colorism” in both Chinese and Western films released in China. Aynne suggests that this might be due to “a lack of great roles for people of color” in Hollywood. That being said, a lot of Indian films have done well in China. So have many Korean and Japanese productions. A lot of the gatekeeping decisions regarding the distribution of foreign media have very much to do with the geopolitical relationships that China has with these different countries.

Today on The Negotiation, we speak with Hendrick Laubscher on current and future developments around shipping, warehousing, and logistics networks in China.At first glance, distribution in China may appear more or less similar to the networks and processes of other countries, particularly in the West. However, Hendrick explains that China, by virtue of its 1.3 billion-strong population and well-known penchant for speed, operates at a scale unrivaled by other markets. He points to eCommerce giants JD and Tmall as prime examples of companies that embody this level of speed and scale.Another reality that sets China’s economy apart from much of the West is the same level of respect that people give to every worker, regardless of whether they are a street cleaner, delivery truck driver, or C-suite executive. This is because the country is so reliant on eCommerce that they understand that every person who contributes to the process is someone to be equally valued. It is a unique culture that helped China to become a $1.3 trillion market. “There’s nothing that you can’t buy on the internet in China,” says Hendrick. “You can find repossessed ships, airplanes, flats, and cars. Think about that and compare that to what we see in the West.”China’s speed is unmatched due to the speed of innovation and the demand of Chinese consumers for lightning-fast speeds to be the norm. Also, the Chinese “have almost no influence from outside logistics companies”, with JD, Alibaba and the like having built themselves from the ground-up and, therefore, have only their own data to rely on and learn from.In the near future, Hendrick sees more warehouses using 5G technology so that the data transferences between various parts of the business will be made quicker. This means movement between 15% to 25% quicker among these warehouses compared to warehouses relying solely on human beings to manage them. There will also be more usage of blockchain as consumers demand more security when making purchases. Other investments will be made to bolster distribution, from autonomous vehicles, planes, logistics partners, and international facilities.

Today on The Negotiation, we speak with Xin Yi Lim, Senior Director of Corporate Development at Pinduoduo and former Technology Analyst for GIC in Singapore and New York.Xin Yi discusses some of PD’s latest developments, including founder Colin Huang Zheng’s recent move into an executive chairman role and news on the company’s agritech initiatives, which include its Smart Agriculture Competition to encourage innovation in both AI and traditional strawberry planting methods. She then goes into the role of live streaming in PDD’s marketing efforts and defines the relationship that the company has with its various types of vendors and other strategic partners.“Live streaming is probably the number one industry buzzword this year as well as last year,” says Xin Yi. COVID-19, of course, had a big impact on the popularity (and necessity) of live streaming. For Pinduoduo, the key was to find the value in a live streaming product as opposed to releasing one for the sake of having a product. In particular, one of the goals in using live streaming is to drive conversion which, at its root, is a matter of building trust. According to Xin Yi, “Live streaming should be part of the shopping experience and not a distraction from it.”An MCN is a third-party service provider that has a collection of content providers, akin to such platforms as YouTube. These are intermediaries that brands turn to if they need ready-made solutions for content since every content creator has their own following or fanbase.C2M shortens the distance between consumers and manufacturers. “In essence,” says Xin Yi, “it is a differentiated way of thinking about how products are designed, made, and sold to consumers.” Traditionally, manufacturers do not have a direct connection to consumers and have inefficient systems for getting feedback on their products. Usually, focus groups are used when creating new products, and this process oftentimes causes quite a bit of delay. The concept of C2M takes advantage of the fact that much of the retail world has gone digital in the form of eCommerce, allowing for that direct interaction between consumers and manufacturers.“Longer-term, the momentum behind eCommerce penetration is still very strong. In terms of PDD’s strategy, it has always been squarely focused on, ‘What do our users need and how can we provide the right products that they need for each category? How can we provide value as well as an interactive shopping experience to our 600+ million users?’”

Today on The Negotiation, we speak with Wei Liang, Professor of International Policy Studies at Middlebury Institute of International Studies at Monterey. She discusses the current state of the Belt and Road Initiative in-depth, as well as China’s current reputation on the world stage amid a variety of crises, not least of which are COVID-19 and the country’s strained relationship with Hong Kong.The Belt and Road Initiative was first announced in 2013 by President Xi Jinping with the ambitious (and ever-evolving) plan to connect Asia, Europe, the Middle East, and Africa. The belt begins in the northwest part of China and connects to Central Asia through to Europe. The road refers to the 21st Century Maritime Silk Road which connects China to Southeast Asia, the South China Sea, the Indian Ocean, all the way through to the Middle East and Africa.China’s goal is to connect with regions that it never had much economic influence in previously, while at the same time trying to bypass the influence of the United States by going through the “backyard” of Russia and India. China is intentionally keeping the BRI a “vague concept” striving to make it “open and inclusive”. One thing that has remained constant since its inception is that the United States has not been included thus far and does not seem likely to participate in any capacity any time soon.China’s relations with other powerful countries has been unsteady for a variety of reasons. China’s exponential rise as a global exporter in Asia is one factor. The language and cultural barriers are others. Recently, certain issues have influenced China’s image for the worse, two of the biggest being the impact of COVID-19 and the country’s turbulent relationship with Hong Kong.China’s focus is on infrastructure investments, which is why it put a tremendous amount of resources into the BRI. Its current relationship to the US, particularly after the trade war and the COVID-19 outbreak, is a confirmation to many scholars who have been following the unique relationship between the two countries: China has always sought to remain prepared with alternative markets to do business in.Regardless of which party wins the US presidential election in November, China will continue to have to deal with the profound mistrust between the two countries. Economic issues are one thing. Geopolitical and security considerations are another, and the two nations have continually stoked the embers of conflict throughout the past few years.

Today on The Negotiation, we speak with Gen Kanai, Director of Strategic Partnerships at Animoca Brands and Mentor at Chinaccelerator.Regarding the challenges of entering the Japanese market, Gen says that Japanese customers generally do not pirate software and content. Japan “can be a very profitable market if you can crack the market.” At the same time, it is a challenging market, with many non-Japanese companies having failed in Japan. eBay is a prime example of a failure, while Google, Twitter, and Snapchat fared better due to a number of factors that Gen enumerates.Sales cycles and establishing stakeholder trust are generally much longer processes in Japan, but the payoff is the incredible loyalty that Japanese consumers have for successful companies in the country. On the other hand, during his five years working in China, Gen has found that it is particularly difficult for foreign entities to enter the consumer segment “for a whole host of reasons”.Asked about his experience working with Mozilla and expanding to other markets, Gen says that the best part about his involvement was interacting with users. Community is incredibly important for Mozilla since it is a non-profit organization with a fraction of the budgets of Google, Apple, Microsoft, and other companies that provide competing browsers. Mozilla enjoys a user base made up of Firefox fans who not only love the product, but also the company’s non-profit mission and the fact that Mozilla does not make money off of its users directly.On the other hand, the most challenging part of Gen’s job was dealing with countries that were completely closed to Firefox such as South Korea, thanks to technical decisions made by the Korean government around internet banking, stock trading, and any other kinds of secure transactions. During Gen’s time, online technologies in Korea only worked with Internet Explorer.Mozilla’s open-source, non-profit business model can still be emulated today, with some caveats. Mozilla rose “out of the ashes of Netscape” when the latter company failed. Sergey Brin struck a deal to feature Google as the default search engine with a fraction of the ads from its search results being paid to Mozilla. Things changed when Google opted for more ownership with the creation of Chrome, but Firefox remains a lucrative product that is able to make “north of $100 million a year” for as long as it can navigate the ever-evolving trends and standards established by the top internet companies of the day.

Today on The Negotiation, we speak with Benjamin Qiu, Partner at Loeb & Loeb LLP. Benjamin is an “attorney focused on the capital market, venture financing, corporate governance, IP asset development, and technology protection & licensing.” He discusses the legal side of startup financing in China, of which he first developed expertise during his time at Innovation Works (China’s answer to Y Combinator), where he served as both fund director and a key member of its legal team.Benjamin had the opportunity to join Innovation Works in 2009, an interesting time in the startup world. With his background in international property law, this was his first time stepping into the venture capital space. 2009-2010 saw quite a bit of liquidity due to a lot of government stimulus around the world at the time. The first iPhone came out in 2007 and mobile was on the rise exponentially. Early-stage funding was focused on mobile startups.While Y Combinator used a more “cookie-cutter” deal structure, Innovation Works created the groundwork for new technologies before scouting the market for visionary entrepreneurs to lead innovation and form a startup based on the fresh technology.The legal framework in China, as drawn up by the National Venture Capital Association (NVCA), essentially borrows from that of Silicon Valley. In the past, it heavily favored the investor, but with the high number of options startup entrepreneurs have today, the law has approached a “middle ground” structure that protects both investors and entrepreneurs.Asked about similarities between the discovery process in China versus that of Silicon Valley, Benjamin says that “80%-90%” of startup investors look for the same things in a founder, the most important being a firm grasp of industry knowledge. The biggest difference is that local entrepreneurs are the preferred choice, as opposed to Silicon Valley whose many resident founders hail from different cultural backgrounds.A foreign tech startup looking to get funding in China would “find it useful to have outside investors who, on top of the money, also provide local knowledge and guidance.” They can also potentially help the founder in finding the best staff and leadership for the company, and even facilitate deals. Benjamin notes that startups that deal with content such as Google and Facebook will have a significantly tougher time getting off the ground in China compared to an Uber or an Airbnb.M&A and IPO opportunities in China have seen a lot of convergence with Silicon Valley’s own realities. Until several years ago, a lot of the large tech companies (i.e. Alibaba, Tencent, etc.) were not known to willingly acquire younger startups. But, as is characteristic of the Chinese market, things drastically changed. In more recent years, many acquisitions took place. Also, in spite of current tensions between the U.S. and China, the U.S. is still the number one place that publicly lists rising Chinese companies.

Today on The Negotiation, we speak with Shanshan Tang, Global Business Lead for Canada at Alibaba. Alibaba’s Vancouver office was opened in 2018 with two main goals: to help Canadian brands (especially smaller ones) sell to China using their eCommerce platform, and to promote cross-border tourism and online and in-store enablement of Alipay.Alibaba was founded as an eCommerce company 20 years ago. Today, it has evolved well beyond that. According to Shanshan, today the platform provides “a marketplace, logistics, payment services, marketing, call computing, big data, lifestyle, entertainment, and health.”With the many unique challenges presented by COVID-19 in 2020, some interesting trends have emerged on Tmall’s platform. For one, online tools such as live streaming have become much more popular. In line with this, there has been a closer integration of Tmall’s online and offline stores. Shanshan shares that amid the complete shutdown in China during the pandemic, department store associates took advantage of their tools by live streaming promotional videos right “from their counters”.The future of Alibaba’s eCommerce ecosystem sees the ever-closer integration of online and offline resources. There will also be an increase in the implementation of AI to Alibaba’s online tools to help merchants better customize the buying experience for individual consumers. Tmall has also put a focus on improving its brand loyalty forums in order to foster a greater sense of community among its customers.As the first step for companies looking to capitalize on Alibaba’s many sales and marketing channels, Shanshan recommends that they enter the platform with their hero products initially, using content marketing via social media to promote their brand and value proposition.

Today on The Negotiation, we speak with Barbara Finamore, Senior Strategic Director for Asia at the Natural Resources Defense Council and the author of Will China Save the Planet (2018). She started her career with the NRDC as an environmental litigator, a position she left after getting married to a U.S. diplomat in the 1980s. Her husband took her to China in 1990, when the country was considering its earliest initiatives for sustainable development.Barbara was there to witness first-hand the country’s signing of the Framework Convention on Climate Change, as well as the drafting of the world’s first sustainable development blueprint for the 21st century, known as Agenda 21. Since the mid-1990s, Barbara has been heading the NRDC’s energy program in China.Says Barbara: “I got hooked on the challenges that China faced and getting to know the people who were working to address those challenges, many of whom became leaders in China’s energy and climate policy.”China’s environmental problems took off alongside its rapid economic growth in 2001 when the country joined the WTO. Its performance during that decade would earn China the moniker of being the world’s “economic miracle”.China’s most valuable commodity during this period? Coal: the world’s dirtiest fossil fuel and the leading source of CO2 emissions in the world, as well as the source of China’s devastating air pollution. Coal was the cause of 2013’s “airpocalypse”, during which time the Chinese citizens were breathing in an equivalent of one-and-a-half cigarettes per hour every day. In 2018, China launched its Air Pollution Prevention and Control Action Plan which intends to cut down coal use.COVID-19 has had a tremendous impact on China’s energy and environmental sectors. Chinese citizens have become less willing to take public transit due to crowding. There is a greater interest in private vehicles (which will have negative effects on climate change in the long run). The government has increased its focus on electric vehicles as essential to its long-term industrial transformation—a major element in its “new infrastructure” initiative (other elements include 5G and artificial intelligence).In the short-term, the Chinese government is taking steps to ease its environmental controls on gasoline-powered engines since the automotive industry as a whole is a pillar industry in China, being responsible for some 10% of jobs and nearly 10% of all retail sales.

Today on The Negotiation, we speak with Xin Yi Lim, Senior Director of Corporate Development at Pinduoduo and former Technology Analyst for GIC in Singapore and New York.Xin Yi discusses interactive eCommerce, a relatively new term that aims to reproduce the experience of offline shopping by “trying to understand human needs through the community that surrounds each and every one of us.” Pinduoduo has created a team purchase model on a mobile-first, mobile-only platform where, if you buy something with a friend or anybody else in your social network, you enjoy lower prices.According to Xin Yi, traditional eCommerce is “a targeted, solitary shopping behavior that is also ultimately efficiency-driven.” When we shop offline (i.e. at a mall), we typically have conversations with our companions when considering a purchase. This type of interaction and feedback is essentially absent when we shop online on a conventional eCommerce platform—no algorithm can match this element of human touch.Pinduoduo differentiates itself from other eCommerce platforms with their fundamental understanding that “people’s needs can be very dynamic, and they can be influenced by those around them.” The company’s goal is to create true value for money, both for consumers and merchants, by creating a platform that mimics the offline experience and quite literally takes the term “sharing economy” to a new level.Using data gathered from Pinduoduo’s interactive eCommerce platform, certain trends emerged. There is now a tendency towards “rational consumption”, which means that consumers are ultimately looking for value-for-money goods. Xin Yi discusses the trend known as C2M or Consumer to Manufacturer. China, known for decades as having an export-driven economy, is now beginning to focus on manufacturing products that appeal to an increasingly savvy domestic market. Pinduoduo allows its brands to collect anonymous consumer feedback, and from this create better, more marketable products that expand existing markets, and even create new markets.COVID-19 has caused the sale of agricultural goods to skyrocket. These goods have always been available through Chinese eCommerce platforms, but they were “rediscovered” through necessity, by consumers. To further encourage and comfort online shoppers of agricultural goods, Pinduoduo began to conduct livestreams with farmers and other stakeholders demonstrating the quality of their products. Other newly popular verticals include fitness and culinary brands.

Today on The Negotiation, we speak with TR Harrington, Co-Program Director at Mobile Only Accelerator and Program Director at SOSV. He is also a Startup Mentor at Antler, Mucker Capital, and Chinaccelerator.TR discusses the mindset and strategies he used to run a Shanghai-based marketing agency in China, and gracefully enact an exit strategy after over a decade of serving as CEO. He says that the key to his success as a foreigner was his ability to adapt to the culture and expectations of the local market.By extension, TR encouraged foreign brands, who approached him for his services, to adopt that same attitude if they expected to maximize their investment in China. In addition to being willing to do their marketing the way the Chinese do, they should also be prepared to move at the speed that the Chinese are known for. Finally, foreign brands should not underestimate the power of utilizing social media to reach customers and clients—such as tapping into WeChat’s customer service capabilities.TR believes that continuous process improvement is a big factor in helping foreign brands stand out in the vast and turbulent sea that is the Chinese market. The key is to go big or go home: TR says that a relatively small company that only makes a 3x improvement will have almost zero impact on their revenue and bottom line. He also says that it is possible to go “too far” or “too deep” with metrics that do not count. Instead, brands should make it a point to prioritize the “500-foot view” metrics.Asked about which behavioral traits startup founders must have, TR says that it is not enough to follow through with the advice given by investors and mentors. It is equally as important for them to ask why they are being given that advice in order to learn how to make consistently sound decisions in the long-term.

Today on The Negotiation, Todd speaks with author, speaker, university professor, and serial entrepreneur James Lalonde. He shares decades of experiences working in Asia, comparing and contrasting the social, cultural, and political characteristics of Japan, China, and North America to illustrate how these similarities and differences impact each country’s influence on the world stage.James believes that building a business in China as a foreigner does not present any more challenges than building a business anywhere else does. Having worked in multiple countries, James does not see any particularly unique barriers for outsiders looking to start a business in China. “It’s really about how you approach getting your idea to market, and those things are really not specific to any culture. Being a successful entrepreneur is not necessarily a cultural thing.”Different startup ecosystems exist in different regions of China. According to James, “Beijing is not really good at marketing itself” to foreign investors and entrepreneurs by virtue of having more than enough internal demand. Regardless, if your company specializes in software, IT, or AI, it is best to have a base in Beijing. If you are a manufacturer, Shenzhen is the place to be. Places like Shanghai and the surrounding areas deal best with consumer brands, which include lifestyle and fashion products. Other provinces may specialize in data centers or medical tourism. It all depends on what industry the government wishes to promote in the particular locale.James asserts that the higher education system does not prepare students for the future of work. Advanced degrees are not often earned through practical experience, which means that the primary endeavor young people are preparing for while taking these courses is, in fact, the rat race. “You do not get credit for what you know, in a lot of organizations,” James reminds us. For his own companies, he prefers to hire individuals with a thirst for knowledge and an aptitude for creativity, rather than those who are “book smart” in business.Asked his opinion on the Belt and Road Initiative, James questions the long-term ramifications of connecting several dozen countries with this particular infrastructure network. For instance, once the “bridge” is built, China has minimal, if any, control over how individual countries will make use of it. Will these countries truly use the network to improve trade relations with China, or take advantage of this resource and leave China in the dust?

Today on The Negotiation, Todd speaks with Justin Mallen, Founder, and CEO of Silk Road Telecommunication. He shares what it is like being one of the few successful foreign entrepreneurs in China, having entered the market during a time when it was far from the economic powerhouse that it is today.Justin says, “China’s telecom infrastructure is owned and operated by three incredibly large, state-owned enterprises: China Telecom, China Unicom, and China Mobile. Back then, they had the one key resource which you needed: networking; and they did not want people in their space.”Justin defines success, at least in the early days, simply as “being able to create a business that had staying power”. SRT is a capital intensive venture that was founded in 2000. It is a  thriving operation today, but the road to get to this point was fraught with scores of challenges in the beginning. Primarily, it was a matter of turning these carriers—and other gatekeepers—from competitors into partners. Justin’s prediction that the internet would take the world by storm in the near future was a driving force that paid off in spades.As a data center business, SRT began with infrastructure as a service as its sole focus: they build, operate, maintain, and own the buildings that house all the servers for the internet. Today, these sites serve as the “heartbeat” for tech companies such as Alibaba, Tencent, and JD.com. Because of recent, rapid advancements in technology, today, SRT also offers platforms as a service (cloud, data, and big data analytics vendors) as a necessary additional layer atop infrastructure.Information traveled incredibly slowly in the early 1990s China. Justin’s initial goal was to simply speed things up. The biggest strength he saw in the country’s carriers was that they were very eager to invest in building up the infrastructure and capabilities of the internet. The goal of SRT was to develop the infrastructure so that the cost of delivery to consumers could be minimized. Over time, this grew the number of internet users in China to over 900 million in the first quarter of 2020.5G takes the latency—the time it takes for data to move between a device and the servers—down to zero. It makes connectivity much smoother and effectively instant. Driverless cars are incredibly prone to accidents if they use 4G, with its latency of 40 milliseconds. 5G removes this barrier, as well as those of many other industries, which allows for further innovations such as telemedicine and remote surgery.

Today on The Negotiation, Todd speaks with Andrea Fenn, a sinologist and journalist who regularly publishes articles and conducts lectures on China’s fast-paced, ever-evolving digital ecosystem. Andrea is also the founder and CEO at Fireworks, which he refers to as a “post-digital agency”. This is due to his belief that brand growth in today’s digital landscape should go beyond vanity metrics such as likes and followers. Instead, Fireworks focuses on actual conversions.Andrea sheds light on how luxury fashion marketing has changed dramatically in China when the advent of the “new rich” coincided with the rise of social media and eCommerce solutions. Now that there is less exclusivity in the market and more transparency among buyers, improving one’s sense of style is less about showing off one’s status and more about expressing one’s unique personality.Much like in other parts of the world, influencer marketing is also on the rise. Todd points out a few outrageous internet personalities who sell millions of dollars worth of product on a daily basis by the sheer power of their personal brands. Andrea replies that “there is a constant need for reassurance; a constant need for establishing trust in Chinese consumers.” He goes on to quote a certain Chinese scholar who said that “the Chinese are suspicious yet gullible.” This attitude, says Andrea, applies to both published news and consumption choices among the Chinese.There is no “standard marketing protocol” in China. Digital trends are always changing depending on whichever direction the largest eCommerce companies (ex. Alibaba, Tencent, etc.) choose to take. In the West, brands build their audiences from scratch using their unique, individual platforms, Chinese businesses, on the other hand, are beholden to established third-party platforms.

Today on The Negotiation, Todd speaks with author and educator Mark Greeven. He is a former Associate Professor at Zhejiang University’s School of Management in Hangzhou, China. Today, Mark serves as Professor of Innovation and Strategy at IMD Business School in Lausanne, Switzerland.The biggest difference between teaching at Zhejiang and at IMD is that the former “has all the features of a bureaucracy that you could imagine when it comes to state-run public institutions.” Despite the limitations imposed on Mark during his time at Zhejiang, he found it refreshing that the students were nevertheless eager to learn anything that Mark was willing to teach.If a foreigner is considering doing business in China, it pays to know the culture and the ecosystems that are unique to the country. Mark says that it will help greatly to familiarize oneself with all the eCommerce and social media platforms that essentially run the modern Chinese economy.In China, Mark classifies four types of innovators who help shape the country’s business landscape on a cyclical basis. The first type is the pioneers: usually large, well-known business entities who kickstart or capitalize on new systems or technologies that will continue to evolve, such as manufacturing (in the 1980s) and the internet (in the 2000s). The second group is the hidden champions: lesser-known companies who are proficient when it comes to one specific technology, application, or industrial product. The third type is the technology underdogs: mostly younger companies founded by overseas returnees with newfound prestigious academic accolades. The fourth and final group is the changemakers: digital-driven ventures who believe in rapid iterations and offer disruptive new ideas for traditional industries.Everything in China is always moving. In fact, Mark considers 2015 as having occurred “eons ago”. Countless waves of creativity and innovation have come and gone since. The Chinese, in times past, were not known to be inventors of new technologies as much as they were known to be able to adapt and mass-produce products that come from these technologies. Today, things have changed. When it comes to software engineering, AI, and biotechnology, China is now at the forefront of many breakthrough technologies.

Today on The Negotiation, Michael Zakkour returns to discuss the impact of COVID-19 on the state of retail in China and the rest of the world.Setting the context for the discussion, Michael says that it is not a question of which retailers are doing well, but which integrated systems are. One of the factors that held China together during the worst of the crisis was the “ecosystems for retail, commerce, and communication that Alibaba, JD, Tencent, Pinduoduo, and Kaola had built.” These ecosystems reliably put products into the hands of consumers regardless of distance and are made even more seamless via technologies such as contactless delivery.Michael warns that the tail end of the COVID-19 crisis will only hasten the demise of those companies who are “just hanging on”, along with physical retail in general. Specifically, malls and department stores were already in decline before the outbreak—their future does not look any better.The eCommerce landscape, on the other hand, will experience both positive and negative developments. “The difference between eCommerce, digital commerce, and the New Retail,” says Michael, “is that, in the New Retail, physical retail actually matters.” The clicks will not spell the demise of the bricks. Rather, the key is in how a brand will integrate their physical and digital presence. To stay in the race, digital should directly influence physical.Some consumer behaviors in China have been permanently altered. Ecommerce solutions will obviously be on the rise. A “stay-at-home culture” will also emerge as more people realize how efficiently they can continue to live and work in the comfort of their own living spaces, solely using the power of the internet.Even as lockdowns around the world are lifted, the way we do business will be completely different in the new normal. In order to thrive in this upcoming reality, brands will be wise to “rethink how they make, move, sell, and buy” by reevaluating their business model from the perspective of four different Cs: consumer-centricity, customization, convenience, and contribution.

Today on The Negotiation, Todd speaks with Bay McLaughlin, Co-Founder, and COO at Brinc.io, an early-stage venture accelerator. He describes his partnership with fellow Co-Founder Manav Gupta as unorthodox in that they were not wholly familiar with each other’s backgrounds when they first met. What they did have individually, however, was the self-confidence needed to dive headfirst into a new venture. This attitude of purpose over profit drives many of Brinc’s thoughts on the IoT startup space.The founding of Brinc goes against the grain of conventional startup journeys. For one, Bay and Manav invested their own money in the business, having had no institutional backers for their first three-and-a-half years. They also decided to focus on and establish bases exclusively in developing countries as they foresaw immense growth in these locations in the coming decades.When it comes to the modern-day investor’s thought process, Bay notes that physical products that require longer and more complex R&D cycles will almost always receive more funding. Investors are also becoming more vertically-focused. That is, they will look at specific problems that businesses are looking to solve within specific industries.Historically, traditional software companies take around 7 to 10 years to go public. IoT companies go through a long life cycle: around 10 to 12 years, according to Bay. However, he does not see a good reason for any business (IoT or otherwise), who is vying to be a market leader, to go public too quickly. The fork-in-the-road decision is whether a founder intends to grow on its own effort (i.e. via fundraising) or to seek outside corporate aid in solving its problems.COVID-19 negatively impacted the IoT startup world from both the supply chain and investment perspectives. The least affected parties are those consumer IoT teams that strive to stay as lean as possible with their inventory. From an investment standpoint, companies now need to consider how wide their nets are with their LPs. This goes back to Bay’s previous point that businesses who play the long game—instead of looking only at their valuation—not only have the best chance for survival but may very well thrive in the new normal.

Today on The Negotiation, Todd speaks with Dr. Julie Klinger, an expert on the rare earth elements industry whose research focuses on finding solutions for current and potential sustainability issues.Rare earth metals are, in fact, not actually rare. They are as common as copper or lead in terms of their occurrence on the Earth’s crust. The term refers to a family of elements located in the lanthanide series, which makes up the top bar of the “island” found south of the periodic table.Each rare earth element is distinct and unique, but what they have in common are magnetic and conductive properties. It is these properties that make certain technologies possible, particularly any type of technology that requires energy generation. These include fossil fuels, nuclear, and renewable energy. Drastic innovations and increased demand for such technologies naturally contributed to increased demand for rare earth metals in the last 30 years.Since the 1980s, China has been the primary source of rare earth elements worldwide, with over 100,000 people employed in the industry. However, just about every country in the world has sufficient rare earth deposits that could, in theory, be mined. The primary reason they stay untouched is that it is expensive to mine them safely: The geological conditions under which they coalesce happen to be exactly the same as those of radioactive materials. This means that, quite often, rare earth mining creates a radioactive waste management situation.China has a huge influence on global rare earth research and development, as well as applications. Julie divides China’s role in the rare earth metals world into roughly three phases. The first phase took place during the height of the Cold War in the 1950s, where tremendous amounts of research were put into potential rare earth applications. The second phase was post-1978 with Deng Xiaoping’s economic reforms, when other countries were encouraged to relocate their industries to China, effectively making the country “the industrial platform of the world”. The third phase started in 2003 when China’s central government started to impose quotas on the export of rare earth oxides. This is because the country had begun to turn its focus to value-added processing and environmental cleanliness.

Today on The Negotiation, Todd speaks with Rick Watson, founder, and CEO at RMW Commerce Consulting. With over 20 years of experience in the eCommerce industry, Rick shares his thoughts on industry giants in China and the U.S.Asked how different Alibaba is from Amazon, Rick starts off by addressing the Western notion that these two eCommerce companies essentially share the same business model—the only difference being that they were founded in different countries. It is inaccurate to assume that Alibaba is simply “China’s Amazon”. Relating Alibaba to the West, he refers to the company as a combination of Facebook, Google, and Amazon. Even then, this would only be an approximation of Alibaba’s true scale.Not only is Alibaba a more “expansive” e-commerce company than Amazon, but it is also “pure to the marketplace model as opposed to Amazon who is developing its own products and buying inventory.” Alibaba considers it a huge risk to buy inventory. The fact is that third-party sellers are taking home more profit than the platform provided to them by Amazon—a fact acknowledged by Jeff Bezos himself.Different eCommerce platforms offer different experiences for both buyers and sellers. Customers need to be particularly cautious on Alibaba as buyer protections are said to be lacking. Tmall is described as the “eyes closed experience” since there is very little chance of being defrauded on the platform. You are also expected to invest in your brand on Tmall. On the other hand, sellers on Amazon are basically “paying rent” to host their products on the platform, which means that you are Amazon’s customer, not the seller’s.“You are replaceable.” This is an unspoken motto that Amazon abides by. Since Amazon sellers have few options in the way of marketing, their products may be buried by the search engine, which is wholly influenced by customer activity at any point in time. “Sellers are lucky to be there, at the blessing and bidding of Amazon,” says Rick.

Today on The Negotiation, Todd speaks with Joshua Eisenman, an Associate Professor of Global Affairs at the University of Notre Dame and a senior fellow for China studies at the American Foreign Policy Council.Joshua goes over his four published books on the topic of China and the developing world: China and the Developing World: Beijing’s Strategy for the Twenty-First Century (2007), China and Africa: A Century of Engagement (2012), China Steps Out: Beijing’s Major Power Engagement with the Developing World (2018), and Red China's Green Revolution: Technological Innovation, Institutional Change, and Economic Development Under the Commune (2018).Joshua describes China’s relationship with the developing world as “emerging and reemerging.” In explaining these relations with African countries, as well as almost all developing countries (with the exception of India), Joshua uses the term “comprehensive asymmetry.”Having an asymmetric advantage means that China has power over these developing countries on three measures: the international level (or comprehensive national strength), the state level, and the working (or human) level. Taken together, these three measures shed light on imbalances in trade, capital aid, and the resources available to policymakers. In a nutshell, the importance that China places on developing countries is evidenced by investing in their ability to rise as a major power in today’s world.Another important factor is that China views its connections in terms of “relational power”. This means that China expands its network of contacts because, the larger and stronger that network is, the greater China’s influence is. The goal of the Communist Party of China is to develop relationships with as many high-quality parties as possible in order to enhance this relational power and, by extension, its comprehensive national strength.The One Belt One Road initiative has evolved from a debt-driven finance strategy to enhance infrastructure development throughout the developing world, into a powerful means to push its overall power on the world stage. That is, One Belt One Road initially did not include countries such as Africa or Latin America as it was an entirely Asia-based strategy. Today, beyond the construction of roads and other lines of communication, the initiative now forwards the development of high-tech infrastructure to create Smart Cities. These include 5G networks, facial recognition software, security.In short, One Belt One Road is China’s strategy for the developing world.

Today on The Negotiation, Todd speaks with Sarah Weyman, Chief Growth Officer at Dentsu Aegis Network. She discusses the impact of COVID-19 on Chinese businesses and the future of marketing as the whole world marches on towards the new normal.The outbreak of Coronavirus at the beginning of 2020 fundamentally changed the business world. A few months into the pandemic, those who continue to not only stay afloat but thrive are those companies that, according to Sarah, are the most authentic. These are the brands that have managed to keep consumer needs at the forefront of their strategy moving forward.Sarah names the sportswear brand Lululemon as an example of a brand who focused on its customers first since the outbreak. Seeing that people wanted to continue exercising even while staying indoors, Lululemon provided a list of trainers who livestreamed workouts. Another example is Microsoft who, not long after the outbreak, announced a package for Enterprise users that gives free access to Office for six months.From a long-term perspective, “preference should not be presumed” when it comes to foreign brands in China. Being a western company used to be an advantage as such brands were usually associated with high-quality. This is no longer true since there is a greater diversity of choice in today’s market. Many modern brands in China are not only at the cutting edge of quality but are able to maintain that cutting edge due to the speed of their operations. To thrive in China today, any brand, local or foreign, must now match this speed.Asked how companies should tackle the remainder of 2020 in the wake of now-outdated marketing plans and budgets, Sarah says that short-term action should include shifts in messaging and platform selection. Long-term, companies should closely monitor how consumer behavior continues to evolve in the following months, which means that CRMs will be more important than ever before. Also, eCommerce solutions—and social commerce in general—will undergo rapid developments throughout the year.Food, beverage, and entertainment will see the fastest rebound once the dust settles because consumers will crave social interaction as soon as the new normal emerges. The travel industry will be one of the slowest to get back on track due to the massive losses that such companies are currently suffering. However, it is predicted that family destinations (Sarah cites Disneyland Shanghai as an example) will have the fastest rebound, also because of the aforementioned social factor.

Today on The Negotiation, Todd speaks with Ben Robinson, Merchant Success Manager at Shopify Plus. He shares his experience working with a growing number of large Asia-Pacific brands on the ecommerce platform, with a focus on the Japanese market.Many of the brands Ben works with today are generally “high-growth, high-volume stores that are looking to increase their presence in different markets.” Ben and his team evaluate each company’s business model and operational capability in order to help them maximize the platform’s features. Two examples of brands who have successfully gone global are Koala Mattress and Allbirds.To successfully localize products for the Japanese market, Ben says that it all comes down to three factors: trust, presentation, and knowing what is important to the Japanese consumer by region. Regarded as one of the most insular and protective markets globally, consumers generally prefer Japanese-made products and brands. He explains that the three consumer trends unique to Japan today are cost, space-saving, luxury, and eco-friendliness and sustainability. Ben recommends foreign brands to work with local influencers through social media to help grow their level of trust and relatability.Foreign brands should research the already-established ecommerce ecosystem that is unique to Japan. They must then tailor their marketing, copy, and brand message accordingly, with a focus on describing your product’s features, since the Japanese tend to do extensive research on new brands before making a single purchase. It will also greatly help to tailor your SEO per region by understanding different writing systems and styles. Ben notes that Yahoo is as prevalent in Japan as Google is; so SEO must be optimized for both search engines.To build brand loyalty using social media, it is important to first understand that the Japanese use social media differently to Westerners. Line is more widely used over Facebook. Twitter and YouTube also have a large presence, and Instagram is slowly catching on as well. It helps to drive consumer interactions post-purchase. After a sale is made, the brand can encourage consumers—even incentivize them—to leave positive reviews or share their experiences either through writing or video. This can go a long way in nurturing loyalty.

Today on The Negotiation, Todd speaks with Ann Lee, author of What the U.S. Can Learn from China (2012) and Will China’s Economy Collapse? (2017). Having risen to fame for predicting the market crash of 2008, today she is a leading authority on international finance and economics.Ann worked on Wall Street soon after graduating from business school, but made the transition to academia in 2006 once she foresaw the credit crisis. In 2008, she was invited to teach on credit markets and credit derivatives as a visiting professor at Peking University in Beijing. Chinese policymakers quickly caught wind of Ann’s expertise in this area once the market crashed, and she was subsequently approached to help them navigate the financial crisis which followed. She published her first book a few years later, which received worldwide acclaim and instantly gave Ann a global following.When asked what readers can expect to learn from What the U.S. Can Learn from China, Ann says the message is to “stop demonizing [China]. As wonderful and as powerful as the U.S. is, it does not have a monopoly on good ideas.” She adds that the book is not meant to endorse one country as being better than the other. Rather, it is meant to help readers open their mind to cultural nuances present in the way each country approaches different issues.Ann was able to predict the global financial crisis thanks to her experience working on Wall Street. To her, the biggest problem was that there was too much power in the hands of the federal reserve, big banks, and other prominent financial institutions of the time. In other words, innovation was nowhere near as important as money. China, on the other hand, approached finance as a tool for nation-building, similar to the attitude displayed by the Founding Fathers of the United States.“Doing business in China is like doing business anywhere else.” The important thing is to do your due diligence before making any sort of investment or negotiating with a local business. China is actually ranked as one of the most open countries to do business with. Hypercompetitiveness is the only factor that Ann highlights—there is a lot of ambition in the country. At the same time, there are fewer regulations in China than there are in many Western countries. Ann goes as far as saying that “it is almost too capitalistic in China.”Ann also touches on the attention-grabbing title of her second book, Will China’s Economy Collapse?. In 2015, many on Wall Street believed that China was on the verge of collapse due to a highly volatile stock market and rapidly shrinking currency reserves.

Today on The Negotiation, Todd speaks with Marian Danko, founder of the tech innovation platform weHustle; and TECOM, a conference for tech entrepreneurs. A native of Ukraine, Marian experienced culture shock upon arriving in China, particularly when it came to the rapid speed that defines the nation’s startup ecosystem.Speaking on Shanghai’s tech startup landscape, Marian says that “the ceiling is very high and the floor is very low”. That is, while Shanghai can be regarded as “an expensive city”, from an entrepreneur’s perspective, it can actually be a wellspring of highly lucrative investment opportunities compared to Silicon Valley, London, Dubai, or Singapore.Secondly, if a business owner wishes to put together an international team, the visa process is easier in China versus in the US. This means fewer costs and hurdles to have an international team based in one location.Asked about the investment landscape in China, Marian notes that a distinction should first be made between local and foreign early-stage startups as each has very different challenges to the other. Foreign companies will not be able to avail of bank loans as easily as local ones, simply because they cannot be trusted to remain in the country after a few years.With this context in mind, Marian says that venture capitalists are beginning to experience a “capital winter” in the country. He attributes this to the market becoming more mature. In the early days of tech startups in China, investors would actually lose money by banking on every trend that came their way. Having learned the hard way, they are now more savvy to the types of startups that are worth investing in. In other words, today’s investment landscape is defined not by quantity, but by quality.Next, Marian discusses “mobile-first, mobile-only”. 90% of startups in China create apps and mini-programs. Some startups do not even have websites; instead, their first and primary focus is mobile solutions. He adds that there is also a lot of reliance on WeChat nowadays, adding to this culture of “mobile-first, mobile-only”.China will lead the way when it comes to VR and AR. A lot of startups today are focused purely on VR and AR solutions. More than one startup is incorporating these technologies into marketing and advertising, and they have already created successful and cost-effective campaigns as a result.Likewise, a lot of Chinese startups are focusing on AI. Much of that influence can be attributed to the government. This is because, in order to dominate the market, China’s government is pouring funds (i.e. for grants, incubators, etc.) into AI-related ventures, giving startups the opportunity to constantly innovate in this industry.

Today on The Negotiation, Scott Laprise discusses his transition from a career in diagnostic medicine to a financial analyst and researcher for emerging markets specifically within China.Scott considers Chinese languages the most important to study because of the country’s position as a key player in world business. Additionally, it is not enough to converse in English because the Chinese express themselves in a way that is fundamentally different from how Westerners communicate. Scott, therefore, always seeks to understand the Chinese point-of-view on any given topic before negotiating or simply engaging in conversation with them.Asked whether China can still be considered a “communist” country, Scott brings context by explaining that, at one point, China (specifically Mao Zedong) sought to partner with Russia, adopting elements of their political philosophy as a result. Today, however, Scott actually thinks of China as the most capitalist country today: While there are semblances of a planned economy, the Chinese themselves are very business-oriented and are masterful negotiators.Scott also touches on the term guanxi as a cultural aspect that is uniquely Chinese. “The more you know people, the more you can ask things of them, and the more they can ask things of you.” He also notes that time also plays a big role, considering the long-term worldview of China. That is, the longer you have known someone in China, the stronger the reciprocal dynamic present in the relationship.Scott goes on to talk about the ever-growing consumer culture in China. The speed and bottom-line-oriented nature of the economy mean less customer loyalty and a higher amount of unregulated pollution, but all of it speaks to China’s ability to pivot and become a dominant player in the market with relative ease.On that note, Scott states that China is not actually innovative but adaptive. The Chinese do not care all that much about patents because they do not focus on novelty. He believes that countries that impose patent laws “are the rich countries that have a lot to lose”. China’s point of view, on the other hand, is to simply “catch up”.Scott shares his point of view on the complicated situation around the US-China “Phase 1” trade deal, as well as what gives him an edge as a financial analyst. His viewpoints on these subjects are obviously influenced by the fact that Scott is a Westerner who lives locally—boots on the ground—in China, with business experience in both cultures.

Today on The Negotiation, Olivia Plotnick talks about her entry into China as an entrepreneur from the United States. She shares how she was able to grow WeChat accounts at a massive rate in a fast-paced marketplace whose consumer culture is so different from her home country’s. She also explains how brands can capitalize on certain WeChat features, such as Top Stories, the “Wow” function, and WeChat groups.When asked how companies should look at WeChat in 2020, Olivia recalls how WeChat gradually transitioned from a purely consumer-based social media platform to a brand-building tool. Before, you could only receive messages from friends and family. Now, Nike and Under Armor can reach out to you. Olivia calls this a “sacred space” in that brands can now develop personal relationships with consumers. This is why it is important for brands to put out relevant content, or risk being unfollowed.In China, there are a large number of social platforms—or what Olivia likes to refer to as “ecosystems”. Olivia prefers to divide these platforms into two different categories. There are eCommerce platforms such as Tmall.com and JD.com, social media platforms such as WeChat, Weibo, and Douyin (the Chinese version of TikTok). Each of these two categories serves a different purpose.How does WeChat stand out in this sea of platforms? According to Olivia, while Douyin is an “awareness-building platform”, WeChat is more of a “relationship-building platform”. Many brands use WeChat to educate their audience and provide loyalty programs. Ecommerce platforms like Taobao, on the other hand, are where “you push to sell”. Ultimately, you need to be aware of what most people use the platform for and produce content appropriate to user activity.

Today on The Negotiation, Kevin Johannes Wörner discusses his background in venture capital and the startup space in China. The German-born entrepreneur developed an “appetite” for the Chinese market at an early age. He studied at Tongji University before working for some time in Germany as a management consultant. Following this, he founded the business accelerator Properas in Berlin.It was around this point, however, that he decided it was time he made the move to China. He got in touch with Wei Zhou, founder of XNode, and today Kevin works on the company’s startup acceleration practice. XNode does three things: 1) coworking spaces, 2) corporate innovation, and 3) startup acceleration (with a focus on cross-border acceleration).One distinguishing feature of XNode’s two-month acceleration program is that the company works closely with governments. It is by building trust with these governments that XNode is able to bring in a steady flow of international startups to work with. Not only does this make working relationships easier, but it also allows XNode to leverage this worldwide network to find even more startups and entrepreneurs to partner with. The ultimate goal that XNode has for each and every one of its startups is a tangible business impact.When asked about the difference between how Chinese and Western startups scale their businesses, Kevin says that the Chinese practice the Lean Startup methodology, which makes them practical, incredibly fast, and highly responsive to the market. This was the source of much cultural shock during Kevin’s first month working in China, having been so used to the more gradual speed of German business.If Western companies wish to catch up to China’s speed, Kevin encourages cultural exchange. It is not enough to simply preach speed, pragmatism, or innovation—this will change nothing. Instead, Kevin wishes to have more Western companies and governments working together by “building bridges”. This involves reaching out to those already working in China—which include Westerners such as Todd and Kevin themselves who have developed a deep understanding and appreciation of the market over time.On the topic of “mobile-first, mobile-only”, Kevin likes to differentiate between B2B and B2C. For B2C startups, it is difficult to create applications for Chinese consumers. Instead, it is better to use existing platforms to do sales and marketing. On the other hand, it is easier for B2B startups to create new mobile solutions simply due to their smaller ecosystems—there is no need to change a consumer culture shared by millions (if not billions) of people.

Today on The Negotiation, Cyril Ebersweiler shares 20 years of business experience working with various brands in China.Cyril began his career as an eCommerce project manager for Carrefour, launching China’s first online retail platform. From there, he worked with Adidas for four months before making the switch to Air France, where he would work for the next three years. Air France at the time was taking major steps to invest and promote greater relationships in China.From Air France, Cyril joined TBWA and became heavily involved in the company’s marketing efforts. Initially, Cyril intended to work with TBWA because he wanted to go to the country in the pre-iPhone days when Japan was the leader in mobile technology. Cyril believes that this experience gave him great insight into the future of mobile marketing and eCommerce capabilities. Cyril’s work eventually brought him back to China, in Dalian, where he met investor Sean O’Sullivan. The two worked together with technology startups in China.When it comes to the difference between American and Chinese entrepreneurs, Cyril says that while the Chinese are incredibly efficient in their workflow, their marketing in other countries could improve. Foreigners looking to invest in China, on the other hand, sometimes have trouble adapting to the local culture.In 2011, Cyril founded the venture capital corporation HAX in Shenzhen. When asked why he decided for the company to be based in Shenzhen, Cyril says that “just by being [in a specific location], [companies] are automatically augmented by the ecosystem around them.” Since Shenzhen is known as the “Silicon Valley of Hardware”, Cyril intends to tap into local resources—from large brands down to mom-and-pop stores—that would maximize his company’s capabilities. 

For the past 7 months, this show has been all about China and the amazing opportunities that lie in wait for companies willing to put in the work to be successful there. China’s business landscape and culture have been our bread and butter, it’s what this show has been built upon, and because of that, we need to talk about the tragic events that have been happening there over the last month due to the outbreak of the Coronavirus. The past month has been a difficult one for China and those impacted by the Coronavirus. We at The Negotiation and WPIC Marketing + Technologies have been impacted as well, and our hearts go out to our colleagues, friends, and loved ones that are suffering from the impact of this terrible virus. Our prayers go out to all of you and anyone listening who may have a loved one who has contracted the virus and we wish them and everyone a speedy recovery. Our thoughts are with you now and will be with you through every subsequent episode until this tragedy has been put behind us.That said the show must go on, as they say, so with a heavy heart we’ve asked our helmsman Jacob Cooke, CoFounder, and CEO of WPIC Marketing + Technologies, if he would be kind enough to jump on for a quick discussion about the online and offline commercial landscape due to the Coronavirus outbreak, what the data is showing us given much of the country is shut-in or closed for the time being, and what companies can be doing in the meantime to be prepared for the chapter that follows this one.Again, to everyone impacted by the Coronavirus outbreak out thoughts and prayers are with you.

Today on The Negotiation, Sarah Kutulakos talks about her experiences working for the Canada China Business Council (CCBC) for twelve years, and how doing business between both countries has changed over the last decade.Sarah talks about the evolution of the “depth of companies’ activities in China”. She highlights eCommerce as a big game-changer for the consumer market, as well as brands’ bolder attitude as a whole towards the creation of IPs.Sarah says that if you do not figure out how to compete in China, you will not know how to beat Chinese competitors in your own core markets. It is not that going to China is a must; but if you have a product or service “that aligns with China’s consumption trends or five-year plan,” then it may be worth entering the market. However, she highly recommends tooling and partnering up before even considering an expansion. Those who try to impose their brand in China without the proper partners or support group will fizzle out fast.The rise of the middle class in China was a key factor in achieving the unmatched speed of its economy today. “The capacity to accomplish is unfathomable,” says Sarah. At the same time, it is much harder to integrate as a foreigner today compared to as recently as 2011 due to changes in technology. “They used to roll out the red carpet for foreigners,” says Todd.Sarah specifically points to April 2019 as a turning point that gave foreigners “second class status”, when, unless one had a local bank account, they would be unable to use digital payment systems. “We are not the shiny new thing,” concludes Todd. “They know now that they are the shiny new thing.”Regarding how CCBC has impacted her home market, Sarah says that their incubation function has greatly expanded. The decision to enter China is not a light one, but Sarah is now confident that the team she is working with can help serve as the bridge between the two countries.

Today on The Negotiation, Scott Silverman emphasizes efficiency and localizing new technologies as the two keys to brand success.When it comes to promoting your product, your service, or even your company, you must influence the perception around the thing you intend to bring exposure to. As to “what’s in the soup”, the most sacrosanct are 1) the product, and 2) the key benefit. The brand must be aware of the sensibilities of its target consumer and market accordingly.Scott brings up Lenovo’s ThinkPad as an example. Instead of simply translating the copy into Chinese word-for-word, the better approach would be to “calibrate” the benefits to better resonate with the Chinese buyer, which may include the tone and manner of the promotional material. “Content is not key,” says Scott. “Context is key.”Scott works in multiple markets in Asia. To thrive as a marketer in these countries, especially as a Westerner, he says that you must “be like a comedian: You have to know your audience.” For instance, he likens Hong Kong to Shanghai (and even Germany), wherein they simply want the hard facts listed out, sans an abundance of visual metaphors.Specifically, they want to know these three things: “What is it? How much does it cost? Why should we care?” In fact, Scott does not like to use the term “Asian market” as they are all different, to the point that he now focuses on marketing to individual cities.Scott believes that direct response campaigns are the best way to measure consumer insights. These are incredibly valuable in that, for a specific product, a brand may decide on different calls to action or rearranging the list of benefits depending on the city.Measuring data was “very basic” in the 2000s compared to today’s market. This was partly due to changes in communication—back then we had direct mail; now we have email and social media. This allows for more clarity of consumer realities in real-time. “Almost 100% of what I do now is digital,” says Scott.The recent “tsunami” of mobile solutions has completely revamped the economy. This led to brands opting for more experiential marketing that is uniquely mobile native. The immediacy of mobile is its defining trait. People became less patient, and the longer it took for them to receive something, the higher their expectations for it. “This is what brought creative and media together. It forced a relationship that before was a little tenuous.”“In order to succeed in China, you need to be willing to fail many, many times. The speed to fail is the speed to success.”

Today on The Negotiation, marketing specialist Lauren Hallanan talks about all things digital marketing, influencers, and social media for brands in China. Lauren shares her insights on what platforms are on top and which are soon to be left in the past by consumers and brands alike. Listen in to learn what tactics are being used by domestic Chinese brands and why studying their approach could be the key to attracting superfans for a brand or product in China. We kick off this episode by asking Lauren for a breakdown of the social media landscape in China. WeChat, described by Lauren as a “super app” that is well on its way to simply becoming an operating system, has become the dominant social media platform in China. Its rich offerings simplify life for consumers, meeting all their needs in one synergized ecosystem. It also offers brands the freedom and tools they need to reach and interact with their customers in new ways. Other popular platforms discussed are Weibo, a platform that has become a part of the fabric that is Chinese social media; Douyin, the local parent of TikTop, is a short video platform has taken off in China; and Xiaohongshu aka Little Red Book, a fusion of Instagram, Pinterest & a blogging platform like Medium or Reddit. We also talk about the shift away from Baidu for product searches in the buying lifecycle. In recent years Baidu has taken major hits to its credibility by not clearly separating ads from search results. Their handling of advertised post promotion amongst other mistakes has led to a significant loss of trust.             We discuss the tactics frequently used by successful brands in China, specifically using KOCs (key opinion customers) like the cosmetic brand Perfect Diary. Brands are also collaborating with thousands of very micro-influencers to get customers talking and reach beyond first-tier cities where physical retail is less available. We also discuss the issue around private traffic, the traffic to a brand’s website that is considered owned by them and not available to any other company. China’s heavy use of social media by brands, where more and more brands are creating hundreds of chat groups on social platforms to get closer to their fan base and even perform customer service, means the traffic is technically owned by the social media platform, not the brand which has its own potential complications.Lastly, we talk about a new movement in China that points to a shift in culture; Idle Fish, an Alibaba platform for buying and selling second-hand goods, has become very popular thanks in part to influencers. We discuss several reasons Chinese consumers are starting to shift their opinion on buying used goods, including environmental and economic reasons. What are western brands missing when they try to enter the market in China? If you ask Lauren, it could be any number of the things mentioned above as well as a lack of perspective. She urges brands to start thinking of WeChat as their core engagement platform for their audience. She also suggests that they humble themselves in order and look to domestic Chinese competition, as they’re often “more agile, deeply understand the target audience and are unafraid of experimenting with the social media platforms that China runs on.WygTFJ5bf83BvIKRpTrf