Last month I flew to Shanghai to join FBIF 2019 Food and Beverage Innovation Forum in Hangzhou.
A little over 10 years since I had last been to the side of the world, I was really honored to be invited to join such a big forum (4K+ attendees) along with top-notch international speakers and I was thrilled to see what was going on in Asia since I lived for 7 months in South Korea back in 2009.
The first thing I came to the grips with a little after I landed were these simultaneous translators (AKA translating apps) that most people now use to interact with foreigners to make communication happen. Back in 2009, I was using a similar service where I was placing a phone call to a Korean and English speaking person who was serving as a translator. I have to confess, it makes quite big of a difference!
After wondering a bit around Shanghai over the weekend I made my way to Hangzhou where the conference took place. Only a few hours drive from Shanghai, Hangzhou hosted the G20 back in 2016 and since then the city has been hosting numerous international events. I did venture out to downtown and to my surprise I was presented with a metropolitan mega-city (with a population totaling close to 5M at the 2010 census) which I believe now has probably risen/increased to up to 7–8M inhabitants.
Although I could be writing about this trip for hours as it has provided me with a lot of inspiration and food for thoughts’, to cut to the chase below I’ll summarize my experience and some of my learnings:
-Tech-powering is inevitable in China (because of the size of their population) — I once sat down in a random restaurant in Shanghai and was asked to access their menu by scanning a QrCode via WeChat (the Chinese version of WhatsApp) and obviously pay using a cashless system (AliPay or WeChatPay by TenCent). I actually couldn’t pay for my bill as I didn’t have an account on any of the local payment providers they were accepting so I kindly asked the guy sitting next to me to order for me and then I paid him back with cash ;) Although I see why they use a cashless system, I had a hard time imagining how elderlies deal with it as it requires #1 owning a smartphone #2 some serious tech-savviness to make it work. Both these elements made me ponder about some issues: 1 data protection (e.g. do I want to share with food preferences with WeChat?) 2 adaptation cost to tech for elderlies (and foreigners)
-The Chinese market follows its own unique dynamics — for instance, when you look at the e-tailer landscape you realize that JD.com and Alibaba have no competitors in China as their customers are just different from the rest of the world. Why? Because I learned that in China most customers who buy good online they expect them to be delivered in the next 2hrs (read: Amazon Prime with following day delivery doesn’t make the cut in China). As crazy as it sounds I think it actually perfectly reflects the speed at which this country has been and continues to develop.
-Chinese consumers are unique and, a bit like Silicon Valley, if you try to compare what works there with the rest of the world it doesn’t really work — For instance when you look at regulation for saying data management you realize that nobody really knows (and probably cares too much about) who owns the data that each person generates every day. WeChat is used to do almost anything from browsing news, to ordering food and even exchanging contact details using a QRcode — as silly as it sounds I’ve come to the conclusion that things like data privacy become secondary when cheap/efficient tech (eg. QRcode) can enable people to do many things (e.g exchanging contact details or even paying for your restaurant bill) effortlessly. I’ve also learned that companies like Nestle had done some JVs (joint ventures) with local companies when entering the Chinese market to form Nestle Xiamen Yinlu Foods. Or event that websites like Baicaowei, a Chinese snack food retailer and e-commerce platform can crash during the rush of Chinese NewYears gifting because they can turn over up to tens of millions in revenue ($, yes you read it right) for some single products.
-It seems that most people are keen to live in big cities and it looks like this trend will continue — According to World Population review, as a whole, China has an estimated population density of 145 people per square kilometer, or 375 people per square mile. This ranks 81st, despite the country itself being one of the largest in terms of size and the largest in terms of population. The density figures change dramatically when you look at the largest urban areas, however. Shanghai, the largest city in the country and the world, has a population density of 3,800 people per square kilometer, or 9,900 people per square mile.
When I first arrived in Hangzhou I was impressed with the number of skyscrapers around my hotel and the beautiful skyline of the city. I then ventured out to downtown to realize that some of these buildings, although been completed, are actually empty…this fact made me question how this kind of phenomenon occurs? Is the Chinese government putting in place investments policies to incentivize migrations to big cities (eg. Hangzhou) by perhaps subsidizing properties development with the aim of creating jobs? If so, who will be working the land then? But also, how a city like Hangzhou was able to attract so much attention/investment to host the G20? I don’t have the answers to these questions but from what I could see I believe perhaps they seem to focus on ‘building and then figuring out who will occupy those properties' more than following a grounded infrastructure strategy that entails building new houses to accommodate current dweller’s housing needs.
Thus I want to finish up this piece with a little funny story… when I first entered my hotel room I grabbed a local newspaper (which, of courses, I couldn’t read as my Chinese goes as far as ‘Ni hao’) which had only one bit that I think I could grasp (GDP 7.5%).
I can’t really remember when I last saw any projections of GDP growth for a country to be set close to that figure (let alone if it’s related to a country of the Old Continent). I feel China is still very hungry to grow and get all the ‘wealth’ that was developed in the last two centuries in the Western World. I actually had the feeling the Chinese people might be even hungrier for even more wealth and to achieve that they’ve now started following their own development path, where they deploy their abundant money reserves and capital to build megacities like Hangzhou to attract more people to live in big cities, build new business conglomerates and further develop their existing business giants (eg. Baidu, Alibaba, and JD.com) to compete with the likes of Google or Amazon, deploy technologies (eg cashless payments) to, alledgedly, make their people lives more convenient and so forth.
In other words, I think they value GDP growth over many other economic and non-economic ‘metrics' that in the Western World may be seen with different eyes. In addition, when it comes to innovation, I do feel they don’t look at America or Europe’s development plans as a ‘benchmark’ any more…they have embarked on their own innovation journey and I assume their regulations and policies will reflect this ‘change’ in their development path.
Thus, I guess sometimes small things when repeated multiple times can make a big difference. This I how I feel about China…while in Europe we’ve developed GDPR policies to regulate consumers data management and protect their privacy (which I think it’s good for Europe) China focuses on GDP (without the R) — but at what cost? And most and for most who’s paying this toll? Time will tell but I definitely feel we’ll see lots of interesting developments coming out of China (innovation wise) and I strongly believe there is a fair bit that we can learn from them…for sure their hunger for growing and generating greater wealth! And now that I’ve also learned to say 谢谢’ (thank you), I’ll definitely come back soon to find out more…