Arrangement le bâton chinois d'hockey
Par Paul Denlinger
Un de l'expérience antérieure de choses m'a enseigné que tandis qu'il est possible de deviner que quelques affaires décolleront en Chine, il est impossible presque à dire quand. Le scénario le plus commun est celui pendant beaucoup d'années, des affaires occidentales consacrera ses personnes et des ressources à rendre ses affaires populaires avec le Chinois, il ne montrera pas des résultats. Frustré, il partira la Chine avec rien à montrer pour son travail dur et investissement. (Ceci s'est produit fréquemment dans les années '80 et les années '90 ; maintenant il est beaucoup plus rare.)
Cette règle ne s'applique pas simplement aux affaires ; il s'applique même à la politique chinoise de gouvernement. Pendant des années, le gouvernement chinois a activement invité les chinois à voyager davantage ; il a même augmenté le nombre de jours fériés, créant les vacances d'or de semaine autour des vacances de jour de mai vers la fin de 90s pour obliger le Chinois à voyager davantage, et dépense une partie de leur épargne. Pendant des années, la politique n'a donné aucun résultat de solide.
Mais plus tard cela a fonctionné, et commençant cette année, les vacances d'or de semaine de mai ont été supprimées. Mis simplement, il n'est nécessaire plus. Les Chinois voyagent maintenant librement, sont disposés à dépenser leur épargne, et l'incitation n'est nécessaire maintenant plus.
Le même phénomène s'est produit dans l'industrie automatique. Pendant des années, les constructeurs d'automobiles chinois locaux ne pouvaient pas obliger le Chinois à dépenser l'argent en automobiles ; la majeure partie de leur production est allée aux taxis et aux ministères chinois et aux fonctionnaires de gouvernement. Ces habitudes ont changé soudainement avec la crise de SRAS en 2003. Toute la soudain, Chinois avait peur pour prendre le transport en commun et commencé à acheter des voitures. 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
August 25th, 2008 at 1:39 pm
This is a very good article and is applicable not only to the Chinese consumer but also with Chinese businesses. Yet, many foreign companies do not realize this and do not budget properly when it comes to being able to stay long enough to reap the benefits of their hard work. Some also stay but only after trimming down their office to a skeleton crew, making it more difficult to execute when the opportunities they have been waiting for finally arise.
You must spend like a Chinese company and act like one as well. Overpaying employees, renting the more expensive apartments and office space, buying the most expensive equipment, etc… all lead to higher unnecessary overhead. In the end you look like a fool in front of the frugal Chinese companies you are trying to sell into. And no Chinese company appreciates the western companies who are raising the salaries of the Chinese employees at an unprecedented rate.
As you have pointed out “Chinese entrepreneurs stand in the wings, just waiting to swoop in at just the right moment”. Foreign companies must be aggressive but not overly aggressive in their attack and as I have pointed out in their expenses as well. Standing in the wings while the looking for or making the right opportunity is a good strategy for foreign companies to adopt.
I was part of the dotcom boom in the US. There were many companies at that time who felt that having a good idea was enough to make it. I called them the “ta da”(Magician’s words when performing a trick) businesses. Have a good idea, get someone to fund you, and “ta da”; you are rich overnight. Western companies that apply this same business mentality in China are bound to do their own magic act by disappearing overnight.