The Chinese E-Commerce Boom (How To Benefit Right Now) | Redefine Growth #3

because Elon Musk has been to China he's built his largest Tesla Factory in just in two years that that's China speed yeah and he saw every Chinese people use WeChat and Tik Tok and all the things so he know X will be a copy of WeChat or tries to be a copy of WeChat uh welcome to this super exciting episode of redefine growth we got a very special guest today we're going to talk about Chinese Innovation e-com 10 15 years ahead and what I do doing differently and what we can learn from them John Lynn John super excited to have you here uh ex strategy a bow uh expert on uh China's Innovation and Ecom uh maybe you can give a short introduction of yourself uh to explain to the listeners who you are and what you like to do yeah thanks for having me Bart uh I'm your stereotypical Dutch Born Chinese so my parents are in the restaurant business but I went on to to study here in Innovation management I worked at bcom in the strategy Department helps a lot of to build a lot of new business models set the future direction of the company or helped it with the team I'm just one of the team of course and then I developed myself into some kind of China expert because I was the crazy one in the team that told everyone like why do we always look at the us because China is 10 or 15 years ahead in Ecom why did doesn't anyone look at that uh but yeah then I noticed oh it's far away the culture is different just finding someone on the web Works different there and the language is way too different so I always started yelling like okay the Amazon is not very Innovative on this Alibaba has done this tensent has done this we should look more at the at those examples uh so I developed myself into the speaker and also in in a consultant in that area to help like Western companies learn from the Chinese ones uh and up to one year ago I left bcom to yeah go after this figure more out about what we can do to bring the East and West closer together because the Gap is large and it's getting larger because of polarization politics all the nasty things and I think it's very cool if we can bring the cultures close together to show each other about the good things because that's not something the media does quite nicely they do the opposite uh and that's how it got here nice it's well it's great to have you and there are a couple things I would love your opinion about and uh at at the point at this point I see three things which are uh of of course China is 10 15 years ahead so what can we learn from them second I've see a big Trend in platform uh economics the Kama the crfa the blocker uh they're all moving platform and I think you have an amazing Vision on uh how to deal with that as an uh midsized Ecom shop for example and third um you've been talking at some of our events and we've been we known each other for for quite a while now and I know you've got some amazing examples on how China is um also in terms of sustainability might be quite ahead because often we think they're not but uh um I'm aware of the world overshoot day of China and the Netherlands uh and I believe we're behind so uh I would love to have your opinion about about that um but first China 10 15 years ahead so uh what can every Ecom shop in the Netherlands learn from China and where should they be should they be focused on in 2024 yeah the cool thing is like if you talk to e-commerce uh shop owners who have been to China who Source from China and they have been there for business or holiday they all know oh wow what's happening there it's crazy like Mo half of the cars that got sold are electric uh everything is digital even my grandma goes into her apartment building with facial recognition and she pays with everything with her phone and I think she gets two or three packages a day I think at b.com and at Amazon you see a loyal customer gets one or two packages a week uh but my grandma in China who is not like the most savy e-commerce Shopper already gets three packages a day wow uh so that's crazy and the other thing in China is like they do a lot more with social so Tik Tok com from China but in China it's called toing so social commerce is really big I think everything that gets sold there has eight social touch points before the transaction and Tik Tok is will do the same here they add e-commerce Facebook is trying to do it Snapchat is trying to do it in Instagram of course under meta is trying to do it so they have they've all seen oh social commerce is the next big thing and that's how we can weaken Amazon because Amazon is currently the largest one in every Market they enter the nland they are not so big yet uh but in China they even retracted their business but all the other markets they are the market leader and they are trying to add social but social is like their Achilles heel where they cannot win easily so Tik Tok is adding the business it's it's not hard that easy for them yet because it's still the younger generation that's on Tik Tok wait until until they earn money so social commerce is something you should try to learn how do I reach my own audience uh on social platforms what kind of content do they like how do I sell my product in the best way possible on social and it's not very technical like the the tell cell of yesterday year but it needs to be entertaining and I think I saw it in one of your presentations uh a while ago you have like 0.2 seconds or something to between the the the thumb movement yeah on Tik Tok and it's it's funny if you look at the younger generation sitting in a bus or a train and sometimes they even swipe without looking so uh that's why you have to grab their attention and make sure that they're uh yeah go in through the story that you want to tell try to sell a product in 0.2 seconds that's the challenge or at least grabbed our attention like waving say stop scrolling I remember one ad that literally said stop scrolling because you need to listen to this um so yeah social commerce and I think we've been talking about that quite a while now where do you see social commerce uh being gred in the Netherlands because I know Tik Tok and but for me I don't really see at this point people having a transaction via social directly or it's not yet integrated maybe it soon is do you see the the the the metas or the Tik toks or Pinterest what channels are moving towards social commerce where there's actually really a conversion or or are they still being sent to a web shop yeah so they're all preparing for it so if you look at the banking license requirements uh meta has one uh so they they can do it in Facebook and Snapchat uh Uber has one but it's not really social and Tik Tok also is acquiring one and that's a matter of time because when they can integrate the transactions and they also look at like the maturity of the e-commerce landscape so how many uh e-commerce web shop owners have their Logistics created in such a way that they can easily link to different marketplaces because Tik Tok is just another Marketplace Facebook is just another Marketplace and the powerful thing about Tik Tok or Facebook or Instagram is people spend a lot of time on there I think Tik Tok has two hours a day of an average Dutch user uh and in the US it's about the same Facebook knows with Instagram and they're losing they only have 90 minutes but it's still a lot and if you compare that to an Amazon an average customer spends maybe 5 to 10 minutes a day on their platform so even if your conversion is like 10 times lower on your social platform if you convert anything it's the potential is huge yeah well that's interesting so uh also taking into account the trend that we see that there are more platforms coming the the fought dead LA and and uh we've been talking about that this morning a little bit and um should you see social as a similar platform as well where there's a potential buyer for you where you should connect with or is it different yeah so the reason why all those small traditional retailers are going into the platform model and it's like if you call it correctly they are going into a Marketplace is because they have traffic and I think they all hire the same consultant where they say you have a lot of traffic on your side you have a good brand try to skill your business and the easiest way to skill is with a Marketplace because you don't have stock someone else will provide the content uh people are on your site anyway so they can buy stuff from other people on your website and you get like 10 to$ 15 % commission that's the story every traditional retailer believes so Kama does it blocker does it Deon does it kfot starts doing it and there are companies behind that who provide the software so it's really easy to start only when you scale up at like a bcom size the software starts to limit you but then you are so big you can build something on your own yeah so they all want to open up their storefront it's actually what's happening and they say to like the the small medium Enterprise web shop owner okay hey come come to me you can sell you can put your products in my storefront and sell it and we only take 15% we do the marketing and you just do the logistics for us they're all doing it the marketplaces all the stores are opening to Marketplace but none of them are really successful because the problem in platform country or platform industry is the big get bigger and that's what Amazon did in US us they are the starting point of shopping if a customer wants a product they go to Amazon in China if a customer wants a product they go to Tabo they don't go to Google or bu only in countries where the market is segmented like the Netherlands bcom the largest one has 20 25% market share Amazon has about 10 that's the estimation there's not one big clear winner for the customer to choose and in a segmented country a customer goes to Google because Google has all the information and that's the most convenient for you and the Netherlands is quite unique in that because in the in the Germany in France you have all big platforms who in total have more than 50% of the market and for a smaller web shop owner or retailer the best option is to go to the marketplaces but not one not bcom or Amazon but all of them connect as many as you can which makes sense for your product because if you sell like pet supplies don't go to cots Marketplace because every Marketplace has their Niche customer of course yeah but just go on all of them make sure your infrastructure is very agile in connecting them and then try out what works for you uh because connecting to them is easier than ever does that also mean like thinking aloud that that if you have various places where where you where people can buy a product um it for me it sounds that it's uh you you have to have less focus on your own selling point like your own web shop because there are already a lot of places where people can buy a product does it also mean that that you should focus a little bit more on building your brand and being out there and being because there are more uh places where people can buy a product so do you agree with that yeah totally your brand will be way more important than like your skill to retail because retailing will be done by the platform and in China they say you have three type of business models in a mature platform economy one is the platform someone who connects everything mhm the other one they call it a DOT business you only are one dot in the whole uh landscape and a DOT can do one thing very well have a brand be very good in manufacturing make one skill work for them MH those are the brands who provide value and then you have the connectors and those connectors connect the dots to the different platforms there are you have to be one of those three to be successful in a platform economy if you are something in between you're doomed to fail because a platform will be better in making the connections a DOT will be better in making your product and a connector will be better in providing all the software Services you need can you can you name an example of a connector for for the people listening so in the Netherlands you have two big ones Channel engine or Channel bu uh they connect uh for instance Pet Place is someone who is very good in pet supplies and they sell on b.com on blocker and Amazon and channel engine is their conect connection provider who connects them to all these different marketplaces and petplace just just gets the orders in their ecos in their own infrastructure process the orders sends them out they still have their own web shop because that's also a good brand uh but they do what they good at and that's selling pet supplies was super interesting so looking at uh the the the the movement and the trends in platform economics and the the change that uh Ecom shops potentially have to make what does that mean in terms of running your business because uh if you have your own product your own web shop and and you get your orders in you get your data in of your clients and then you sell the product but but now it's there's a different uh journey of buying but also a different journey of maybe delivering and selling so how do you see how shops can deal with that so from a shop owner view you need to see the Platforms in the marketplace as a way to reach the end cost customer and also a way to learn from the End customer because all those marketplaces all those platforms give a lot of data back about what Search terms customers use what their profiles are what type of things they like you can use this data to increase of improve your offering and you need to be really handy to know okay at b.com we see young families with children at uh kfot we see discount Shoppers there are different type of consumer profiles on different platforms so you really need to know what which consumer is where what data can I learn from it and how can I improve my product for them so if you are just someone who sources products and sells them at a markup that's not going to work anymore in the future because a platform economy will make everything transparent because a customer can also look on AliExpress or or uh teu or another Chinese platform and find your product at a way lower price so if you didn't add any value in that you will lose that business in the end so the Drop Shipping Trend we saw uh is going to have a different direction uh is what you're saying it's exactly you cannot just buy a product anymore and and resell it or drop ship it there should be an added value there yeah so the Drop Shipping thing could exist because there was intransparency in pricing and product offering but with globalization with bigger Chinese platforms with Amazon acquiring more Chinese sellers this intransparency will disappear everything will become more transparent the price battles will go even lower and if you are just sourcing and selling it's you will lose in the end because a factory in China will put the same product directly on Amazon how can you compete with that do you like this episode do you want to learn more about redefining growth New Growth strategies and making more positive impact on the world uh please like And subscribe PR that button somewhere here I also see uh a similar thing at Albert hin where you put your product in Albert H but then they just put a similar product with their own brand a better price uh and better marketing maybe even Albert H is going big on private label because a lot of those brand factories they have a lot of capacity left over so they can yeah they can produce for anyone uh so you see the supermarkets going to those factories I want my own private label of product X or a or b and they make it for a lower price because the markup of of brand brand products is really high and the retailer can use the data albertin knows which products sell well yeah yeah so they know okay if I put a private label like 20% under this I know I will make money yeah yeah and that's I think where where there's a little bit of an unfair Advantage they have because they have all the data and you were just saying that the the the platforms provides data but it's not the data that you actually want because I think there's some data missing so like what time did they buy uh who is that person how can I build up a profile because they only give you the data that they're willing to give you but I think there's also uh they also should should be aware of the position that they have as a platform and and and probably want to keep a little bit of the data to themselves just to make sure that they don't give away too much how do you see that developing are they going to give more data available to the retailers or or less or it depends on uh when you look at what platform because Amazon has been known for making a lot of Amazon Basics based on the data on the platform uh in Europe they got a big fine and there will be regulation because that's a big unfair Advantage uh because Amazon makes a lot of money on those Basics but Amazon was a traditional retailer but if you look at Alibaba in China with their Tabo platform Alibaba never was in retail themselves they never had warehouses they never did sourcing it was always a platform so their business is selling the data that's where they earn their money so there you get everything uh where yeah to build the Next Generation product they even have the t-l Innovation Center that's like their Consulting business helping big Brands making their next offering interesting yeah and even here in the west you see Chinese companies being successful I think one of the big success stories is anchor from the power Banks and the Chargers they are a platform only brand they became big on Amazon they just at the data what do people search like if they want a power bank how much capacity which uh charging plugs do they need uh and the charges how much capacity they need which colors are nice and based on these profile data they make a power bank and their channels are extremely short so a factory produces them they put them in the Amazon warehouses they put some money on Advertising Amazon and then they go their supply chain is so short they can make a new product like every one or one month or two months there's almost no Channel inventory and and they're super agile and you see a lot of those platform brands on Amazon from Chinese uh offerings you see I think the xiaomi robots vacuums um seen that a lot of smartphones are designed this way right now from the Chinese Mak so every Chinese electronics company you see them develop their products in this way with the data they can get from Amazon interesting and I we have some Partners where we work with some some smaller Ecom Brands uh who are also think about so what how can we um get more products in our shop and obviously you want to use some data there look at search Trends and look at Trends in different countries and are you saying that you should you could potentially use the data from the platforms as well is that is that something that could be available for smaller Brands as well yeah totally you should uh and it is you have like software platforms that help you with it so for Amazon it's called they're called jungle Scout or helium 10 and if you use them in the right way you can get a lot of valueable information from it on b.com you'll have tools like Riley bolo 5x uh so they have all like ecosystem pro software providers around the big platform who create these cool software tools for like 20 to 50 a month uh and you can get going one cool example I think from the Netherlands is uh fruit fly ninja they do Pest Control they have like the small bottles you put in your kitchen it catches the fruit flies oh yeah but that's why they started but then they added a lot of more products and they rebranded themselves to super ninja because they have now like stickers you put in your uh flower pots which catch different kind of flies uh and uh ant control b control they have all different types of pest control products right now and they develop those products with the Search terms what do people search how's the offering in that category is there a clear leader in that category okay there's not uh what's the average pricing in those categories and then they just figure out what does the customer want they check out the reviews of the competitor products like what's missing in their offering and then they develop a new one and they are really successful they only sell on Amazon I think it's one of the big Dutch success stories of how a small team uh can be globally successful with just a one niche of products and they work really data driven great example uh I had an nuke Mouse here in the podcast a while ago and she said uh Google has been an AI first company for uh I believe she said eight years or since 2008 at least for a long time already I think people now since last year are aware a little bit more of AI but it's been there for quite a while longer are you saying that maybe more web shop should be platformed first or at least have their focus because now talking about it with you saying like use the search terms look at competition there use the data from reviews and and scrape that and get Insight from it it's a different game than running your own web shop uh are you saying that this is a trend they should really look into I think depending on the country you're in like the Netherlands there's still opportunity to run your own web shop because you can create customer Journeys that are not possible possible on the platform so if you are you have a really Niche product sometimes the platform is just not suitable for you but if you are in that product category you probably know already as an entrepreneur uh but for most of the categories the platforms are the way to go and in the Netherlands where the market is very segmented you just need to be on all of them and the big markets uh where one platform is the biggest you need to be on there because when you have like your own web shop you need to do your sale right you need to configure your ads I think only at bcom like their search engine optimization team is like 40 people how can you ever beat that there you use exper you designers they have like an whole Army of designers optimizing the checkout flow for conversion they have the best negotiation possibilities with poel for low shipping tariffs yeah and they're opening up those services for the entrepreneurs to use so that's something you need to keep in mind like for one of your own uer those big platforms have hundreds yeah we often advis to look at that as well and we look at that because they've been testing it so much like we can come up with EXP experiments and and sometimes things we do work very well some they don't but just by looking at the the bigger the booking the balls they've been testing it out for for forever so I think for everyone every time we go on a boulderon or Amazon there are maybe 50 to 100 AB test running in parallel yeah because they have so much traffic they can do that uh and I've even heard stories that they are doing it automated with AI so they have teams Building engines that just constantly change small things in the in in in the journey to figure out if it makes conversion or not yeah my little brother has a has a startup add up it's called uh he's in the AI checkout so he will be optimizing for where you're browsing from what device you're using what products are you buying and then it can change layout yeah change layout change checkout flow Etc so it knows so you're probably going to use PayPal to check out so this is your preferred uh checkout flow yeah and it's interesting so the podcast called redefine growth um and I know you got some great examples from from China where they're redefining their growth I think in in terms of how they do their marketing and what can we learn from them in terms of growing an Ecom uh brand what we don't see here that much but we see it there all the time and so one thing China really is ahead of is the use of data because they have the big platforms because they have the social platforms they are really extracting a lot of data to iterate their product development and even Western brands do it uh that's something we are not doing here yet so I think Timberland in China they have a whole offering of sustainable products sustainable shoes they use the data from the Chinese search engines and and the platforms okay what type of colors do customers want what materials does it need to be a light shoe a heavy shoe uh what type of shoe and just within two or three months they have a new product on the market usually where product development takes half a year to one one and a half years Chinese companies do it in two or three month and the same thing with the electronics we talked about and that's something that's really crazy there to set up a new brands and be market leader within three years like their ambition level is crazy it's interesting from a Lean Startup principle you would build something and then test it and learn from it but what what you're saying right now is you already got so much data available that that the chance of building something that works you can uh support that that with a lot of data before testing it and and see whether or not it works because you have so much data available which is super interesting it makes like the choices from leadership point of view very different I think I got approach once with uh by jd.com number two in China it's the it's it's like the cool blue of China it's it's the biggest one but they're also a Marketplace and they told me like we have connections with all the major Electronics factories in China like do you want to know where Dyson produces his their ha we can go there and they can make up make us a similar one for 60% less and then they told us yeah we can also make private labels sub brands or whatever we can develop a product Based on data we have on the western platforms and the interesting thing is they also trust their data so so what they do in China is okay we see uh this hair dryer from dyon doing really well but it's like 400 EUR so it's it's only for the the most yeah well best earning people yeah crazy but they want to make something cheaper different price points uh but which features are the most important to hit that price point and be successful and their data says then okay you need the feature ABC they put the product on the marketplace but then they say okay we add a lot of advertising because we know for sure it will sell so they also like more aggressively they put money behind their bets because it's already B Based on data uh so the whole learn measure part is yeah you only need measure at at the end the amount of money that comes in uh but they're so sure that they just build it put money behind it and then just uh let the money printing machine go yeah they and they've probably did it uh sometimes already so they they already aware of okay we got an x amount of people interested it searching for it uh and they can already forecast the sales that they're probably going to do with it um I remember some examples that you had from um user generated content and uh some examples that you had um which I believe where China is a bit different in in marketing their products where we here see a lot of uh we are Brand X and this makes us unique and this is our product feature Etc so can you can you give uh advice for the the Dutch or at least European web shops on what they can do in terms of their social strategy uh what China is already doing quite a lot yeah so China has two directions one is the extreme luxury you need this product to be part of this and that like premium luxury branding that's what they do really well that's the where they use the influencers a lot uh so you see Pro and gamble with the expensive shampoos using the influences Louis Von the prime examples and that's where you like the customer wants to be part of the of a certain type of group and you need to have the product to be part of that group that's really successful in China and the other one the other side is like the Practical things okay this product will make this part of your life easier or with this hairbrush your cat will feel better because of XY Z and then show them in those videos because China is all about social uh and they will really show the benefit uh and also have the interaction with it so customers can ask questions in live streams and then buy them immediately but the interesting part is what I saw with some of the influencers with their own brands in China like you're selling shoes and then a customer says like if enough customers in the in the comments say ah do you also have like a yellow one or a Higher One or a thicker one they will have the next iteration ready within two weeks wow so they really listen to the customer uh based on that social data and that's something that's really hard to do here but if we can succeed to put our social comments and reviews back into new product versions I think every entrepreneur will like accelerate their business like crazy and and how do they um measure the success of these influences because I think uh there there are quite some some Ecom Brands here struggling how to work with influencers so do I pay them up front do I pay them for three posts or whatever do I give them a discount code so I try to measure uh the conversion what is the model like that why is it so successful yes you have different models like if you have the big the big guys the big influencer with millions and millions of followers you pay them up front just to show the product that's enough no conversion measuring whatever because you know they are the most successful ones if you go lower you'll have like a commission fee uh affiliate links stuff like that so you can measure it uh and they will just pick it up they will do it for you you don't need to approach them there's a whole like ecosystem for it we don't have that here yet Amazon trying to do it with their Amazon affiliate links but that's how you can do the tracking but the most successful influencers they built their own Brands they bu built their own Cosmetics they built their own shoes they built their own dresses you have factories helping them do that uh so that's quite hard to get in there and for us here it's quite hard still because we see the influencers in the west as salespeople but you need to look at them okay does that person fit my brand uh you need to see them as brand ambassadors and figure out how that works for you because otherwise it becomes really transactional and that's I think limits our success here plus the people who listen to influences in the west are still quite young I think we need three to five years until they finish their studies start working start spending money they will listen to their influencers that's interesting I'm also wondering when when there's an in a LinkedIn influencer platform coming because you now see it a lot on Tik Tok and and YouTube and and meta but uh I believe uh sooner or later we're going to see it on LinkedIn as well uh influencing people with uh even B2B products right because it's now very consumer based uh strategy I guess but um I think we're going to see it in B2B as well I think x x will go there because Elon Musk has been to China he's built his largest Tesla Factory in just in two years that that's China speed yeah and he saw every Chinese people use WeChat and Tik Tok and all the things so he know X will be a copy of WeChat or tries to be a copy of weat so he will adding payment functionality he will be adding shopping functionality he will adding stock trading functionality it will go on and on but it will take a long time to have everything yeah and I hope he does not lose all the customers along the way us do you have paid account no no no no me neither so he will he will try to emul what weat has done in China because it's it's like omnipresent it's really everywhere you can use it everywhere it's it tracks the data everywhere and you also see like tensent the mother company of wiat they sell that data to so for instance Dyson Dyson comes to China I want to open 100 shops which streets are the best where do the rich people live and tenson provides you like with statistically anonymized data but go to these streets build your store there uh and we will help you with the promotion because we can reach those customers yeah that's I think Ma has mov in that direction too right because I've seen some testing with the with the marketplace that suddenly popped up in my uh in my M I'm not that often on Facebook anymore but uh I think I think they're looking uh at China as well Mark Zuckerberg his wife is Chinese he speaks almost fluent Mandarin so he is a lot there so he knows he also knows what he's doing yeah and step by step they're moving that it's funny because I think I did a LinkedIn post about uh we we build a WhatsApp Automation in the past where we didn't use the business WhatsApp because it didn't exist yet but we automatically send um WhatsApp messages so Brands could uh inform there and not like a newsletter and and but really providing value and now I think uh WhatsApp introduced channels where Brands can actually have like a newsletter I'm wondering how that's going to work but uh I think when when WhatsApp was sold they they promised not to use it in commercial and not use the data but did you believe that uh I'm quite sure that it's that they're using the data because if you talk with some about uh some product suddenly they show up at Instagram but uh yeah it's interesting to see that that Trend yeah the channels is something that's really old already in weat so you have the channels of Brands if I go to lockin coffee in China so that's the the main competitor of Starbucks uh you cannot sit there you cannot order from the store you you have to do that in their app and that's on WeChat so you scan a QR code in the store you see the product offering you paid with v chat and then you're in the channel you automatically subscribed to the channel of luing coffee I think I get spammed twice a day about new coupon codes with [Laughter] discounts I I cannot unsubscribe of I cannot find the button it's really irritating oh yeah yeah a great example how how it should not be used yeah but they are really successful I think they they have more stores right now than Starbucks in China they uh and they do delivery within 15 minutes wow so you L makiato within 50 minutes on your desk that's quite cool yeah and I think looking at some trends that I see is is finding a way to have more data coming from your CL customers and and I think this is a way or just make sure that they use uh an app where you can track everything that they order and have that data available for you or via a platform um find more effective ways to communicate with your uh uh customers so uh email has is still an okay Channel but there are ways I think the open rate of WhatsApp is like 98% not sure how that goes for the channel part and the third the thing that I heard you're saying is the the increase the time to Market so learn faster from your customers and make sure that if there's a uh big demand for a certain product that you can deliver it within weeks or months but not years because then you're you're falling behind uh yeah we always at strategy team we told ourselves what's our way quickest way to one billion because if you cannot skill quick enough someone else will take your place and you have seen it with picnic in the Netherlands albertin overtook them because their infrastructure could scale more quickly I don't think it was profitable but uh there's someone who will overtake your place if you cannot go quickly enough uh and Tik Tok is the crazy example example in China they reached 800 million users in three years wow and internationally they reached 1 billion customers in one year three years wow that's crazy speed but that's the only way to do it because if if they didn't do it in three years the 1 billion customers uh meta would integrate like the short form videos into Instagram and Facebook already and copy their behavior yeah that's what they did with Snapchat that's why Snapchat never took off they were not quick enough wondering if CAD GPT is going to beat those numbers in terms of adoption uh you think so I think chat GPT is a different it's a different utility because Tik Tok the business model is consuming your time time is their competitor so create a lot of get a lot of time from the consumer and sell ads in the time that's the end business model chat GPT is more like a competitor for Google search or Microsoft Office or it's it's a different it's not a social yeah it's not a social the adoption time is I think 100 million users in 5 days or something like that crazy they crushed the time to 100 million yeah yeah it's interesting but there you see they couldn't skill because they hit some limits in their infrastructure yeah but right now you see the hype falling off uh and it still it still has tremendous impact on the industry and on every every daily life but what Tik Tok is doing is still consuming two hours a day of every User it's it's addictive to a crazy level yeah and it's it's generally just wasting time of everyone yeah I also heard some some rumors of people saying that they changed the algorithm for countries outside of China showing just all crap and then within China they show a types of content where they should oh you should become a doctor you should become a professor I'm not sure about the truth about that Str yeah it's interesting like it's it's interesting how we look at the issue because here we see oh yeah it's the company that CHS do something but in China it's actually the regulator the regulator has rules on what type of content should be published how many hours a child should be on those platforms every day so there's a lot of Regulation is that a cap on it uh yeah for for G gaming is the one interesting thing kids under 18 in China can only game three hours a week and only on weekends and that's only the regulation for China now yeah only for China open tensent is the biggest gaming company in the world and all their games in China are regulated this way wow and I think uh two weeks ago in the last week of December there was a new regulation you cannot give incentives anymore for daily logins so no points or loot boxes uh the loot box content should be transparent so no more gambling on loot boxes the spending cap should be monitored uh and transparent to the regulators and every game needs to be approved by the regulator so they are actually trying to stop the gambling in games because it's much like gambling yeah but you actually don't get any money back so they're trying to fix gaming addiction but this is regulation this is not tensent it's it's very not beneficial for them yeah maybe they should start to regulate it here a little bit more as well yeah to protect the kids that's what they say there and it's also for social because China has quite some rules about what type of content kids can see or cannot see and they have like parental control modes and I think when you listen to the US hearing for Tik Tok they said yeah why do you do it in China not here because there are no rules in the US you need to make the rules and then we will do it because we have the technology but from a business point of view you just want everyone to spend time on it yeah as much time as possible yeah hey and this redefining growth podcast it's about um yeah redefining growth growth is often about maximizing profit and and and growing businesses which will be obviously like a lot too but it's also about making a positive impact on people on planet um China has had 10 15 years in terms of Ecom how far are they ahead in terms of sustainability and what can we learn from that yeah so China can be characterized by a lot of ambition so if you look at the leadership of the companies they are super ambitious like they set like the Harry audacious goals but they do it better and one thing that Alibaba did I think two or three years ago they said we're going to reduce our scope tree impact with 60% Alibaba does around 50 to 60% of all retail in China uh so scope 3 is like the whole retail industry and all the factories that produce stuff like for them the cars that drive around to deliver the packages uh so they want to reduce this scope tree impact by 35 by by 2035 but if you look at Western companies like if you ask Amazon or Walmart or Albert hin like do you want to reduce your scope Tre and you cannot find anything definitive about it they say yeah we will reduce it whatever but no one has sets a hard goal uh but if you look at those Chinese companies they are really starting to do it they have Ro of renting leasing models they are not afraid to disrupt their own business models uh they have like loyalty programs which award you with trees if you buy more sustainable products and Alibaba has planted 600 million trees in the last five years uh so it's it's crazy what they do for leadership on that front uh more than 50 I think more than the half of all the electric cars produced in the world are Chinese so even on electric car prod production uh and from the people side the consumer they're also changing really quickly I think last year two viral hashtags on Chinese social media were hashtag save 100% by not buying anything that one was targeted fast fashion so Zara H&M they're closing a lot of stores in China because it's not going well CH Chinese are looking for more quality uh and the other hashtag was in instead of I think two years ago you got hash revenges spending was after covid spent the money we've saved all up but now the trending hashtag is hasht rational spending so let's not spend that much more money the economy is not doing that well Earth is not going doing that well so you see a lot of Trends changing from the consumer to do something better uh and the brands see this data from the socials from the platforms so they're also changing their product offering to go on that interesting we we once did um a period of three months at Sprints and sneakers where you get you could get points uh for not buying clothes or actually like um points minus uh for buying clothes and it's actually quite interesting that if you have your period of we did three months and we then exchange clothes as well um if you don't buy clothes for three months uh you actually become aware of the fact that you don't have to buy that many clothes or at least buy higher quality clothes uh which last longer and and or secondhand clothes and and it's funny to see your colleague wearing your sweater uh a month later like hey is that my s yes it's my sweat so it's it's interesting to see and it's maybe a habit we should uh we should change a little bit more yeah and the power of the consumer here is really strong because I think in China H&M closed 300 stores wow so it's uh it has a big impact on them do you see that here happening too in the future I hope so I want I want to see it happen yeah and and and how your Brands deal with that so if you're a fashion you brand right now and and this is something I think we both see happening right now how they're supposed to deal with that I think they should start to look at fundamentally change their business um because the fast fashion thing is like it's like the gambling addiction you need something new you need that that that shot of dopamine or oxytocin one of those two when you buy something new that's that's something that's that starts to change in China uh you have like their secondhand platforms are really Next Level so if you sell something secondhand on shingu like their largest secondhand platform someone comes pick it up like if you have a nice suit someone comes comes pick it up uh then they go to the dry cleaners as an added service and then it gets delivered to the end consumer nice those things those business models don't exist here yet but those are the big opportunities if you really want to go circular cool interesting and um there probably quite some some entrepreneurs and and CMO listening right CMOS listening right now so what what are the the three things or you would recommend them to do in 2024 to become more successful with their Ecom brand dream bigger like really bigger dream China big that's and what does that mean because I know what it means but maybe for the listeners big also means more impact so not only big in numbers or or in profit or Revenue but also big on impact on society uh that's something that's that we lost here along the way so like Alibaba said we need to make business easy for everyone so a small business owner should be able to fight against a Coca-Cola a big multinational that's something quite hard to do but the plat their platform makes it possible so what's your bigger impact next to profit and revenue uh the other thing is yeah use way more data like especially in marketing how can you target someone how can you learn what they really want uh and automate a lot of those processes there you don't have to reent the wheels for that yeah what you were saying is also not only your own data but look at data at at at from different sources like platforms and uh well obviously search TRS and all that whatever yeah use more data only besides um we're already happy if a client has a segmented database and know which type of clients buy what but then they're already like a St further than most of the brands but uh yeah there are so much more to to use yeah yeah you can be really agile like actually you should organize your organization like an AI algorithm that constantly learns from itself then from a sea level you only manage that automated program cool that's how Chinese companies like steer themselves yeah I think last thing is try to be aware of the big Chinese Trends coming from coming here uh so social commerce is coming but it's it's slower to in gaining Traction in the west but we really to really need to learn how to use it in our advantage because if they are successful and the risk is really high because Tik Tok and Instagram they have 90 to 120 Minutes of your consumer per day so they will have the power they will have the access to the consumer and you want to learn what that means for you and how you can capitalize on that cool so three things and one one thing to add to the longer vision and the positive impact you once said they're looking ahead like 50 years or sometimes I ask entrepreneurs to to come up with their 100-year plan and they tell me yeah but I'm not alive anymore I said yeah exactly it's not about you it's what you leave behind and what you can contribute to to this world and to the people that living on it um so really love that using more data from not only your own source but other sources reviews hashtags platforms Etc and third um looking at Chinese examples and and do you have do you have an example of some brands that that you think are doing really well that that everybody should look at uh so the car industry is a very cool example never no one saw saw them coming uh so byd overtook Tesla as the major electric car producer last month and I think five years ago if we asked anyone like what do you think of Chinese cars everyone would be laughing uh but it really changed and the same thing is with with smartphones yeah huawai or Huawei was really big they were at the point of overtaking Samsung but then Donald Trump came around uh but you have a lot of different Chinese Brands coming on the market Oppo xiaomi OnePlus uh they have all become big names and that's something we see from the electronics side I think most of the electronics we buy are Chinese Brands without us knowing it so they are overtaking every major Electronics thing uh fashion has still a long way to go but you see in China already like Nike Adidas Puma they are struggling China has created their own brands with their own like comparable marketing strategies with ambassadors uh sports leagues that's changing really quickly so China is moving into the luxury branding stuff and that's something that will be coming here and they are really adaptive they know how the platform Game Works they know how the data Game Works they can iterate crazy quick uh so that's something we should be aware of that there are competitors on the Eastern side of the world that can move really quickly and that those guys have dreams like okay I want to be the market leader within 20 years and you see Tik Tok like getting one 1 billion users in three years time so it's not not crazy to see something change within five years yeah it's interesting is there something from these Brands xiaomi and BYOD that we can learn what they're doing very well and how they become that big Chinese like to compete on price first so that's where their long-term vision and long-term business case comes in so xiaomi famously said I only make 5% gross profit on my products but I want to earn money on services and I think some like an Electronics veteran from uh where I worked before told me we as Western consumers have learned that like buying a robot vacuum cost us around €700 like some all those Western brands have learned is that something should cost so much but then a Chinese player comes along like we can offer the same thing for €300 and then we think oh [ __ ] the quality cannot be that good for 300 but then we use it and it's actually quite quite as good or better and then we are amazed oh wait we've always overpaid for those products and the Chinese are happy to sell at 300 because they make it so they still have margin and they have scale and then things will get interesting uh because they have lower pricing good quality they have good software they're really good at the software part because everything is software these days and then they're really aggressive just they push the marketing they push the cheap product and that's very hard to compete with and the same thing is happening on the retail front with timu it's from the Chinese pink duor that's the number three in China yeah if you go on Google and search a product you see or AliExpress or teu or maybe Amazon and a bcom in a cool blue but they are spending so much on at spent because they don't need to earn money the first five or 10 years and that has to do with the long-term Vision as well right yeah just game Market first and then uh and then try to figure out how to become get the 5% and gross margin exactly so that's like building Brands they are not as good as we in the west are but building an aggressive business model that's yeah that's their game all right John uh this has been super interesting what is the one key takeaway um you'd like our listeners to remember thinking about China's Tech and that impact on redefining growth I think the most important thing to take away is to think about how the world should be different because you're here because your business was here so within 50 years how's the world a better place because you have done your thing with your team and also sit down with your team like okay what can we do tomorrow to get closer to that goal and you should be really hungry because it cannot go fast enough oh that's I think a great advice a lot of people are now working on the 2024 strategy probably maybe they thought of their three years strategy but what you're saying is uh add some more Visionary stuff to it and and really dream big how you can make a difference in the world and uh I believe that is a perfect fit with redefining growth because we should use our business as a Force for good thank you so much this was an amazing episode very interesting to learn from you from China Ecom Brands and uh I think people will love uh this episode so thank you so much again um little present from you it's a very original Sprints and sneakers hoodie is it minus one point now for me it's uh not minus one point um I hope you like it it's uh actually only for people from our team and guest from the podcast so if you see someone wearing it you know oh he was a guest and the redefine growth podcast so thank you so much awesome thank you for having me for people listening if you like this podcast please like And subscribe subscribe there will be more interesting episodes with amazing people like John lyan next up is the head of growth of easy toys Patrick who will be talking about the growth Trend easy toys went through uh they're one of the fastest growing Ecom brands in the Netherlands and he will explain you how he did it so looking forward to see you next time like And subscribe and hope to see you soon bye-bye

Channel: Sprints & Sneakers Growth Marketing Agency

Views: 1,068

Keywords: bol.com verkopen, ecommerce business, china economy, future of china economy, marketplaces, marketplaces to sell online, amazon, taobao, tiktok, future of ecommerce, ai agents, john lin, bol.com verkoop, bol.com listing

Id: zSP6Qe5NNbc

Length: 55min 27sec (3327 seconds)

Published: Wed Jan 24 2024