Por Paul Denlinger

Uno de la experiencia previa de las cosas me tiene enseñado que mientras que es posible conjeturar que un cierto negocio sacará en China, es casi imposible decir cuando. El panorama más común es ése por muchos años, un negocio occidental dedicará a su gente y los recursos a hacer su negocio popular entre el chino, no demostrará resultados. Frustrado, saldrá China con nada demostrar para su trabajo duro e inversión. (Esto sucedió con frecuencia en los años ochenta y los an'os noventa; es mucho más raro ahora.)

Esta regla apenas no se aplica al negocio; incluso se aplica a la política china del gobierno. Por años, el gobierno chino impulsó activamente a gente china viajar más; incluso aumentó el número de días festivos, creando el día de fiesta de oro de la semana alrededor del día de fiesta del día de mayo en el último 90s para conseguir a chino viajar más, y pasa algunos de sus ahorros. Por años, la política no rindió ningún resultado del sólido.

Pero trabajó más adelante, y comenzando este año, el día de fiesta de oro de la semana de mayo fue suprimido. Puesto simplemente, se necesita no más. Los chinos ahora viajan libremente, están dispuestos a pasar sus ahorros, y el incentivo ahora se necesita no más.

El mismo fenómeno ocurrió en la industria auto. For years, local Chinese automakers were unable to get Chinese to spend money on automobiles; most of their production went to taxis and to Chinese government ministries and officials. These habits changed suddenly with the SARS crisis in 2003. All of a sudden, Chinese were afraid to take public transport and started buying cars. And unlike in the west, they paid for their cars in cash.

This trend, which started in 2003, has continued to this day. Now, if a young man in China’s cities wants to get married, more and more young brides are expecting an apartment and car to go with their husband-to-be. Today, in Beijing, 1,000 new cars are being added daily to the city’s traffic woes.

This creates a phenomenon which I call the “Chinese hockey stick”. In simple terms, this means that “It is likely that a new business/service/product will take off in China, but it is hard to say when.” This can be endlessly frustrating for businesses which need to plan their expenditures on an annual or quarterly basis. When are they going to see some of their investment money come back? Country heads need to tell their head offices when the hockey stick will finally take off, and more often than not, it is very hard, if not impossible, to tell.

Part of my rationale for the Chinese hockey stick is that Chinese consumer spending patterns will track more closely to the spending habits of their Asian neighbors in South Korea, Japan, Hong Kong and Taiwan, than to the west, as Chinese society becomes more prosperous. If you want to understand how Chinese spending habits are likely to develop, take a close look at these places. You will learn a lot. In culture and language, these places are closer to how Chinese think, act and behave than the societies of North American and the EU.

Most frequently, the businesses which are able to time the rise of the hockey stick are local Chinese entrepreneurs. Unlike western companies which try to sell their foreign-designed products in China; these Chinese entrepreneurs stand in the wings, just waiting to swoop in at just the right moment. Unlike western corporations, these companies do not have the big budgets of western companies, but their knowledge of their countrymen’s thinking and spending habits more than compensates for this. This is why many leading Chinese Internet companies such as Tencent, Baidu and Sohu have been able to prosper, while their much larger and richer western competitors have been unable to gain traction.

With the dramatic growth of the Chinese consumer market in the past five years, you would think that western observers would learn to be quiet instead of sticking their necks out and betting against the spending power of Chinese consumers.

Apparently not
David Wolf’s Silicon Hutong  has pointed to an article by Donald dePalma in which he claims that China’s buyers account for only 1.1% of what he calls “online GDP”. Unfortunately, he does not explain his methodology as to how he gathered his numbers.

In the west, the Internet led to the creation of some whole new businesses, with Amazon and Google being the best examples. In China, many Internet companies are front-ends for established brick and mortar businesses. For many Chinese consumers, the Internet is like a shop window; when they buy, they still prefer to buy from a person in a store.

These fundamental differences in consumer spending habits make me question the value of even measuring something like “online GDP”. And as David Wolf alludes to, the eGDP is a static number; it does not capture or reflect trends. It is like trying to understand a movie storyline from a still photo.

That’s why I’ll stick with my analogy for the Chinese hockey stick, at least for the time being.

Paul Denlinger, The China Vortex, Owner at China Business Strategy