lunch was with some reps from the american chamber of commerce in shanghai who reminded us that everything is negotiable in china: contracts, taxes, everything. they also emphasized the need for american companies to tailor their business and products to the chinese market by following the “6 Ds”: due diligence, due diligence, due diligence. some interesting, but unverified, stats they quoted: 65% of US congressmen don’t have a passport or have never left the country, coke has over 355 flavors of fanta across the world (a sign that they do their due diligence in local markets), and 85% of the software used by the chinese government is pirated.
it just started snowing when we arrived at GE’s china technology center.
after a showroom tour, there was a presentation that definitely won the award for best closing slide (that’s the technology center in the background):
for dinner, we were fortunate to have an 11-course meal at the one of the nicest restaurants in shanghai, villa du lac.
dinner was organized by the husband of one of our trip leaders – we already recognized him when joined us for dinner since we’d seen his photo on the wall of the stock exchange earlier in the day. dinner was exquisite (though i politely refused the shark’s fin soup, much to the chagrin of the confounded wait staff), and the conversation was even better. our host was clearly a sharp guy with lots of great insight into china’s development and a keen interest in learning more about american politics. he was very straightforward about china’s weaknesses – pollution, human rights record, and government’s rule-by-fear. i asked him about the upside: is a one-party government better able to make the hard, long-term policy decisions needed to confront challenges like climate change? he said yes and pointed to the governments required energy reduction goals for cities.
we had two birthdays in the group. highlighting our diversity, we followed the cake with renditions of the “happy birthday” song in almost a dozen languages. the crew finished off the evening at muse2, a nightclub where johnny walker and green tea was the house drink.
unsuspecting tourists who tried to snap photos of the hourly burlesque show were greeted with a green laser pointer to the eyeball.
after the night degraded into a ice cube fight and several unsuccessful attempts by a few of our young men to engage with the russian models at the next table, we were asked to leave the club. after a long wait at coat check, my friend maria and i employed a “facilitating payment,” secured our group’s belongings, and headed back to the hotel.
day two started at bain capital, where it seemed that fear of “losing respect in the cafeteria” drove employees to close good deals. we learned that “everyone in china is doing PE,” so much so that a developer in beijing was only granted his class A zoning license after he agreed to name the area PE plaza. after the bain meeting, we walked across the street to the shanghai world financial center for spectacular views from the highest observation deck in the world.
we had lunch near the base of the oriental pearl tower.
our afternoon visit to a steel plant was baller. after a corporate video (“enjoy your wonderful life with steel!”) and some comments, through an interpreter, by the president of their talent development initiative, we all put on hard hats and got to walk through the plant where they made steel sheeting for everything from cars to 1 yuan coins.
we finished the night with a dumpling making competition in which, despite having our hands tied (literally), my team won a free round of drinks. score.
|photo by mia mabanta|
my favorite item was definitely this plate, which including fluffy kittens under plexiglass. the usage of such an item boggles the mind.
we had lunch at herbal legend, a restaurant promising a perfect balance between yin and yang in all its dishes. i ate some ginko nuts, which were supposed to make me beautiful.
our afternoon meeting at SNDA was one of the best of the trip. the presenter shared really interesting information about the differences between chinese and western consumers, notably an eye tracking study that called out the chinese tendency to scan the entire page instead of just the top corner.
the company rep suggested that this dates back to a time when page loading speeds were slow and users demanded more content all on one page – helps to explain the chinese online aesthetic that so many westerners find cluttered and overwhelming (e.g., this is screenshot of a popular chinese homepage). SNDA made its name with online social gaming, particularly with micropayments, and it designed its product with the chinese user in mind. these products have spurred second markets in which some gamers play only to resell the rewards of their achievements. since the topic was innovation, our host spent a lot of time talking about SNDA's innovative product that allows readers to purchase books one chapter at a time and even pay the author to write customized endings. super interesting model. during our office tour, we saw what looked like a farm behind the building. turns out there are some squatting farmers who refused to give up their land when the office park was built. instead they’re waiting for it to appreciate. in the mean time, they sell organic veggies to the local offices.
after a quick whirlwind through the copy market, the group had dinner with local alums. i sat next to an ’07 GSB grad who runs the feminine care line in china for a consumer products company. fascinating to hear about how the chinese market is different. i also got a lot of great insider perspective on media and internet censorship.
we finished the night at the bund.
surrounded by beautiful views at a rooftop lounge called bar rouge, we watched one of our trip leaders order a flaming cocktail that sent flames roaring down the bar.
our final day in shanghai started at the historic okura garden hotel in the former french club for a meeting with an executive from LVMH. “china is the land of fakes,” he said, “fake milk, fake medicine, fake cigarettes.” pointing out the generational distance in china, he noted the recent turning point: china licensed the show “china’s got talent” – the country’s first legitimate copy show. he talked about starting the luxury goods business in china and building aspirational brands in a country where brands traditionally mean very little. probably because they make up a fair amount of LVMH business, he also talked about the growing nouveau riche in china whose consumption habits are driving all sorts of interesting spending trends.
after lunch in the yuyuan garden, we had a little shopping time. demand side increasing returns kicked into gear big time as the entire group quickly bought up all the panda hats in the market. as we strolled back to the bus, we were quite the spectacle for all the tourists.
by the time our panda pack got to the airport, it was clear the panda hats were here to stay – they made it especially easy to find each other when traveling through crowds.
|photo by mia mabanta|