Innovation for local conditions
China is the focus of most companies regardless of size, industry or geography. They are all eying the tremendous size and growth in the Chinese market at a time when their home markets are faltering for any number of reasons. To succeed in China, they'll need to understand and innovate for the Chinese market. Here's an example of how China can be different and what local companies are doing.
The summer is upon the Chinese and the hot and humid weather is very interesting sights. Many of the dogs have received a grooming and seem somewhat sad about their make-over. Another is all the umbrellas that all the women are sporting to protect them from the sun, many sold with claims of UV protection. Apart from these obvious differences, there are also some hidden ones.
Chinese homes are not well insulated and often suffer from the extreme weather conditions that the country suffers from. Many Chinese families also don't have or only very sparingly use their air conditioning in the summer, making the indoor temperature of many homes to be about 15C in the winter but close to 30C in the summer .
Food very easily go bad and people have to be careful. The bread that you can buy in super markets have different expiration dates for summer and winter, 5 days and 7 days respectively, to accomodate for the difference. Another very local pecularity are the refrigerators.
Given the large difference between summer and winter and the desire to save energy, manufacturers of refrigerators have installed, in addition to the usual dial, an extra plug for setting the season. The idea is that you should be able to save energy during the winter season and have higher effect during summer. Whether there is an actual difference or not, I couldn't really tell. But the feeling of being in control and a belief that you are saving energy probably convinecd many to buy models with this function.
The Chinese are still very much in love with technology and a longer list of features, whether they will actually use it or not, might tilt the balance when in the shops. The confusion is also helpful to sales people in the market when the competition on price is so intensive.
So whenever you are thinking of conquering this new promised land, you have to understand that it is not simply about pushing the your existing products. You really do have to start by understanding the market and designing new products to match their needs. This may also help you avoid issues of cannibalization as the prices is China almost inevitably have to be cheaper than in your current markets, luxury products aside.
Your watchful eyes in the Chinese fridge.
/Y
The summer is upon the Chinese and the hot and humid weather is very interesting sights. Many of the dogs have received a grooming and seem somewhat sad about their make-over. Another is all the umbrellas that all the women are sporting to protect them from the sun, many sold with claims of UV protection. Apart from these obvious differences, there are also some hidden ones.
Chinese homes are not well insulated and often suffer from the extreme weather conditions that the country suffers from. Many Chinese families also don't have or only very sparingly use their air conditioning in the summer, making the indoor temperature of many homes to be about 15C in the winter but close to 30C in the summer .
Food very easily go bad and people have to be careful. The bread that you can buy in super markets have different expiration dates for summer and winter, 5 days and 7 days respectively, to accomodate for the difference. Another very local pecularity are the refrigerators.
Given the large difference between summer and winter and the desire to save energy, manufacturers of refrigerators have installed, in addition to the usual dial, an extra plug for setting the season. The idea is that you should be able to save energy during the winter season and have higher effect during summer. Whether there is an actual difference or not, I couldn't really tell. But the feeling of being in control and a belief that you are saving energy probably convinecd many to buy models with this function.
The Chinese are still very much in love with technology and a longer list of features, whether they will actually use it or not, might tilt the balance when in the shops. The confusion is also helpful to sales people in the market when the competition on price is so intensive.
So whenever you are thinking of conquering this new promised land, you have to understand that it is not simply about pushing the your existing products. You really do have to start by understanding the market and designing new products to match their needs. This may also help you avoid issues of cannibalization as the prices is China almost inevitably have to be cheaper than in your current markets, luxury products aside.
Your watchful eyes in the Chinese fridge.
/Y
The 80/20 rules of everyday life
This posting is not strictly about China but I thought it has some interesting aspects and wanted to share this with you.
In management literature, you often come across the 80/20 rule or the Pareto principle after the Italian economist Vilfredo Pareto. It is not so much a rule as an observation that many things tend to show this kind of pattern. It is not necessarily the exact numbers but could be 70-90/10-30.
An example would be that a 80% of a company's revenue is to 20% of it's customers or 80% of profit comes from 20% of the products. Outside business, this has also been observed in anything from computer sciences to taxations.
Even in everyday life, people have suggested that the Pareto principle holds true. Someone had looked at a women's wardrobe and found out that they use about 20% of their garments 80% of the time. I don't know if this also true for men, perhaps you guys out there can go home and have a look. Anyway, next time you hear someone complain about having a too small closet, you now have the answer to that problem.
My own personal addition to this is that you get roughly 80% of your drunkeness from the last 20% of the alcohol you drink. I don't know if that is always true, perhaps I should test it imperically.
I guess what this teaches us is to focus on the important things and don't get bothered by the rest that is not important. I wish I knew this when I was at University. Then, I could have read 20% of the book and got 80% on the exam.
Your watchful eyes, not only in China but also in management theory.
/Y
In management literature, you often come across the 80/20 rule or the Pareto principle after the Italian economist Vilfredo Pareto. It is not so much a rule as an observation that many things tend to show this kind of pattern. It is not necessarily the exact numbers but could be 70-90/10-30.
An example would be that a 80% of a company's revenue is to 20% of it's customers or 80% of profit comes from 20% of the products. Outside business, this has also been observed in anything from computer sciences to taxations.
Even in everyday life, people have suggested that the Pareto principle holds true. Someone had looked at a women's wardrobe and found out that they use about 20% of their garments 80% of the time. I don't know if this also true for men, perhaps you guys out there can go home and have a look. Anyway, next time you hear someone complain about having a too small closet, you now have the answer to that problem.
My own personal addition to this is that you get roughly 80% of your drunkeness from the last 20% of the alcohol you drink. I don't know if that is always true, perhaps I should test it imperically.
I guess what this teaches us is to focus on the important things and don't get bothered by the rest that is not important. I wish I knew this when I was at University. Then, I could have read 20% of the book and got 80% on the exam.
Your watchful eyes, not only in China but also in management theory.
/Y
