If you read the news today, you will see Chinese consumers are really dominating the headlines.
- Recently they were talking about Hong Kong billionaire, Ronnie Chan, who donated $350 million to Harvard. It’s the single largest donation to Harvard Business School, ever. He gets his wealth from Hang Lung Group which he owns. Hang Lung Group has the largest luxury shopping center in Shanghai, among many, many other real estate holdings.
- In April this year, a Chinese collector paid a record $36 million to buy an ancient Chinese ceramic cup at auction from Sotheby’s, Hong Kong. Mr. Liu, who is the number one Chinese collector of art, not only bought this expensive artifact, but the story is, he paid for the cup with his American Express card. Have you ever heard of anybody who buys $36 million in one purchase on American Express? (We should mention that this humongous purchase coincidentally earned him 421,860,000 American Express points. That’s about about 28 million frequent flier miles.)
- The Alibaba initial public offering (IPO) is the perfect manifestation of the power and influence of China’s super consumers. Alibaba is roughly about twice the size of Amazon and three times the size of eBay. It just happened that our book, China’s Super Consumers: What 1 Billion Customers Want and How to Sell it to Them was released in the same month as the Alibaba IPO. It’s almost like we are doing it in tandem, but it’s not planned, just a lucky coincidence. I think the IPO will put Alibaba front and center on the world stage.
I think we are ushering in a period where the dominance of the US e-commerce companies in the e-commerce worlds will be challenged by major players who are not US based. Players such as Alibaba in China. What makes Alibaba more unique than Amazon and eBay is the ability to serve a combination of business to business (B2B), consumer to consumer (C2C), and business to consumer (B2C). All of these entities have different variables or components.
For consumers, it’s like gravity. Despite the economy, despite the political landscape in China, it doesn’t really matter. Consumers are here to stay. They are like a train or a tsunami, whose power is poised to hit us. We know the Russians are consuming, and our US billionaires are consuming, but the Chinese are so different, in terms of the culture and background, they do things a little bit differently. Why are Chinese consumers different, and how do we communicate and deal with them?
For us, who are doing business in America, who are US consumers and companies, I think it’s very important to really understand where Chinese consumers are coming from. If we have a better understanding of their motivations, their culture, their behavior, and why they are doing certain things, then we can really serve them well.
And if we serve them well, we can design products and services that cater to them. We can make them our BFF, our best friends forever. Alibaba, the largest IPO in the history of America, is a perfect manifestation of that phenomenon, China’s Super Consumers.
schan@uschinapartners.com
www.saviochan.com
212-984-0788
U.S. China Partners
100 Park Avenue, Suite 1600
New York, NY, 10017
Blog by Savio Chan 