How to best speed your way to success by taking full advantage of China’s fast-evolving market

Hello and welcome to the Rich Robinson Show. I'm your host, Rich Robinson. Over the past 25 years, I've been an entrepreneur, investor, advisor, and professor here in Asia. After nearly a quarter of a century in China, I'm now based here in Bali, Indonesia, the island of the gods. Asia is my home now. 60% of the world's population also lives here, but I would contend 80% of the world's dynamism and opportunity is right here in the region. On the show, you'll hear candid and fun conversations with some of my friends and colleagues, people I've met along my journey, entrepreneurs, operators, experts. It will help you unlock actionable insights around the Asia region and the entrepreneurial agility that actually defines it. This first season, season 1 of The Rich Robinson Show, is titled At the Speed of China. Like, wait for it, at the speed of light. Things happen fast in China, and in this season 1, we're gonna take a deeper look at that. The rapid economic development over the past few decades, as well as the speed and cycles of innovation taking place all day, every day, right now.

Let's go, Jio! Mark Tanner, ladies and gentlemen. I'm gonna let my Boston accent slip since there's a little bit of R dropping where you grew up. Welcome to the pod.

Great to be here. Thanks, Rich.

Hey, I'm in Bali, Indonesia, and you're joining us today from Shanghai. And you've been there how long now?

2011 I arrived. I was in Beijing before that, just for about 6 months.

And by the way, you said the number 11, maybe people with a keen ear can understand where you grew up.

Yes, originally from New Zealand, but lived in a few places after that and ended up in China.

That's great. I've said it on the pod once before, but I have a Kiwi buddy who came to Beijing and he's like, it's a bit frenetic. And I was like, a bit frenetic. Oh, it's a bit frenetic. So it's like swap the I and the E. But tell us out in podcast land about your journey from New Zealand to China and some of the adventures you had along the way. What brought you to China, please?

Yeah.

So my first stop was actually North America and I had to speak as North American as I could. Like people thought I was from Newfoundland or similar to that. I lived in Vancouver. Worked in pornography, which would have been my dream job as a 13-year-old. It was kind of lost its gloss by the time I started.

Well, can you peel that back a little bit? What were you doing?

It was what it would have been like as a 13-year-old, but I worked for a company called Net Nanny and we were blocking porn.

Ah, okay. Okay. Oh, so you were on the other team then, you weren't?

We were the good guys at the time. We were the only people making money online were the porn companies. It was interesting. It reminded me a lot of how China is right now. It was a lot of money flowing in, a lot of people doing a lot of things, but most people really didn't have a clue what they were doing. And it was kind of learn as you go type mentality for a lot of them.

So that's great.

So that was kind of like SaaS-based startup before the word SaaS was around. And what was the origin story of the company and how did you get involved?

It was this weird university thing they were offering. It was this exchange program called ISEC, which was great. I was at one stage just going to live in India. selling, working for some rental company or something, but I ended up in Vancouver, which was just, I'd always, I'd kind of seen that movie Cool Runnings and Calgary '88 Olympics. I thought Canada would be quite a cool place to live. Always loved North America. And this job came up and I went, yeah, it was meant to be 6 months. And in the end, I stuck around for almost 2 years. And then they were moving to Seattle and I got the choice to go there or to get a severance package. And I still had the wanderlust. So I was keen to travel a little bit around North America and then go to Europe. So I, with severance package, you know, it happened to be the start of January and I wanted to see a bit of Canada and a bit of the States that I hadn't seen. So I got on my bike and I had, again, before SaaS, it was before blogs as well. I did what you call a blog these days. And I had all these random people like getting on my website and thinking, hey, I think it's great what you're doing. Crazy Kiwi riding across Canada. If you're passing through somewhere Saskatchewan, you're more than welcome to stay here. Paid for like 5 nights accommodation in 4 months. It was awesome. It was just a lovely way.

But when you say bike, you got to explain what kind of a bike it was.

Was this— Oh, that's a long story, but it was a mountain bike. It was a cheap-ass mountain bike that I won.

Yes. But some people might think motorbike, but it's January in Canada. The great white north and you're riding through all conditions, right?

I had to stick to the Trans-Canada because that's really the first road that gets plowed. Everything else is a bit— tried a few side roads and it was ugly.

But like, wow, like very few people would be, oh, I'll ride across North America in the spring or fall, perhaps, right? The dry season with the right weather. But you're like, nope, I'm going across Canada in the snow. Well, it kind of sounded a little Forrest Gump-ish where you were just like, Well, I feel like I just want to ride. And you were like a Kiwi Forrest Gump.

Well, we don't really get real winters and I was kind of naive. I thought, oh yeah, this Vancouver, this winter thing, it hadn't been too bad. I remember I was such a rank amateur. I tried everything. I had this little carrier on the back of my bike and it obviously had a lot of warm gear just in case. And I'd tried to save a bit of money buying tins of food just to buy bulk down at Costco. To save some cash. And I tried to stick it all on the back of the bike with some bungee cords and it was just ridiculous. It took me hours to get a couple of kilometers. And then one of my friends who was riding that day said, look, you're an idiot. Why don't you go and get one of these trailer things? And I'd never heard of these trailers, but I went to the bike shop. Trailer was the best thing ever. But while I was in there just sorting everything out, paying for the thing, he was helping me. Reorganize my bags and I came out and it was ghost white. And he's like, what on earth were you thinking bringing like inflatable alien? Because I, in the prairies, you have to have the inflatable alien and stuff. And I had like 70 tapes. This was the days before digital music. So I had these tapes that ended up freezing up and he's like looking at all this stuff and bringing juggling balls and dozens of cans of stew and all this. He's like, what?

What are you doing?

I'm really quite worried about you. You really have no clue. But in the end it was all right. It turned out okay. And I was—

So inflatable alien is—

We know that when they have alien sightings, it's always in the prairies or places where there's large flat areas with wheat and stuff growing and crop circles and all that kind of stuff. So I thought I've got to get some photos with green aliens in these weird places that I've never been to.

Okay. I thought this was some sort of like, because I see so many Aussies here in Bali that come up with these terms and you're Like, I don't know what that is. And they're like, oh, it's a can of beans. And you're like, oh, okay. Yeah. So I thought like inflatable aliens was some sort of like Kiwi term for like camping gear or something. So you actually had like literally like green Martians that you blew up and that you could like kind of like taking like a garden gnome around with you, like stealing somebody's.

It was way too cold. I didn't stop for many photos of it and trying to stop and blow this thing up. It's just, nah, it's not gonna happen. So I got one snack. This is special.

That's so funny. So this week is my 25th anniversary of finishing my bike trip through Africa, 5,000 kilometers, which I did from April Fool's Day until I think August 5th. And I remember being camping, quote unquote camping with these Maasai warriors. They let me into their village and I was out in the open and you're on the equator and there's literally 100 times more stars in the sky because there's no light pollution, which I'm sure you saw as well too, but there were satellites. And I'd never seen a satellite and it's a super bright, big reflecting light. And I was like, oh shit, remote place. It's an alien. So I guess we were sort of like thinking the same way. And I learned some Swahili and I was saying UFO, UFO. Like those guys didn't speak any English. And like, as if like unidentified flying object would be like 3 words that they knew, but they were more interested in my tent poles. But anyway, wow, what an amazing trip. So you made it all the way coast to coast then?

Yeah, I ended up in Newfoundland, got screeched at a place called Trapper John's in St. John's, Nudie Dipping in Gaspé. Great trip. The Canadians were really hospitable, lovely people, and it was cool.

But then that wasn't enough to soothe the savage beast inside of you. You continued doing more insane journeys after that.

Yeah, well, that whet my appetite. Like, I think the internet thing, I'm like, this whole interweb that I'd learned a little bit about in the last job, and then it made the bike trip quite like incredibly interesting because One, it gave me something to think about when I was in pretty long, boring days. And 2, it just helped me meet all these people. And I thought, well, if I was doing something interesting, I could probably use this internet thing to do this before social media and all these other funny things. Actually, my friend from Canada who came out and joined me on the last week of the ride, and he was there on day one, not the guy that was worried about the other stuff, he knew about some ancient Viking sagas from Iceland and Apparently there was some ancient treasure buried up there about 1,000 years ago. So we went up there and it was a great few weeks up in the Nords.

Treasure hunting for Viking treasure.

Viking treasure. Yeah, it was a louse holiday. We came close, I'm pretty sure, but we didn't actually find the treasure, unfortunately. But we had this website, vikingtreasure.com, and got all this interest and all these TV companies, legitimate TV companies were pretty interested in doing something to it. That's another whole story, but After that, we thought we'd do it properly. And that's like yourself. We went to Africa for— I spent a year in Africa, 6 months.

Wow.

So interestingly enough, full circle, because vikingtreasure.com is now blocked by Net Nanny as a porn site. But tell us about your trip through Africa. Where was the start and finish and what was your mode of transport?

Yes. So it was— the Nile had been something that had fascinated both myself and My friend Les, who was the guy that we organized the treasure hunt. And we found out it had never been done. It had never been paddled. So we thought, well, there's probably a good reason for that, but let's just, like everything else we do, be blissfully naive.

This story is like crazy because there is a really good reason because there's so many ways to die.

There are. When we looked into it, lots of people have tried, like more people had died on the Blue Nile. Pure attempt than Mount Everest. No one had ever done the thing in high season. There's like bandits, crocodiles, hippos, and big rapids.

Airborne, insect-borne, waterborne, I wish I was never born diseases.

There's some, there's some funny, you'd know it from your, your, your bike trip. There's lots of funny things that can— Wow.

But still, the bike trip, that was Nairobi to Cape Town, very quasi-developed and like very straightforward route. But the Nile, this is something that you'd think would've already been done in the 1700s or 1800s.

Hundreds or something, right?

Yeah.

You know, I think people had gone like, there was some, probably by a rugged canoe.

So the guys traced the river and we were keen to paddle it, self-power down there. And we really had no idea what we were doing, but we managed to recruit some guys that did know what they were doing. We got some really world-class water guys to come for that leg through the highlands of Ethiopia. And we came through there and then Sudan, which is my favorite part of the trip because I'd Lived in Sudan for 6 months prior, just trying to get permits and learn a little bit of Arabic and just try and figure out what's going on there. And that was great. And then up through Egypt to the Mediterranean. And that was the kind of adventure you dream about, much like your bike trek. It was the kind of adventure you dream about when you're a little boy. It was awesome.

So share an anecdote or two along the way of like a trial and triumph.

There's so many, but there's just quite a few crocodiles and things. And I remember We'd been attacked by crocodiles, like on the, even in the rapids in the Blue Nile in Ethiopia, these things were grabbing our oars and trying to do the death roll and shaking these big rafts full of people and supplies.

Wow.

Especially in the rapids, you're likely to go over. I've been whitewater rafting and I've dunked a bunch of times.

Right.

That was pretty eerie. You see the eye of the crocodile up close. There's not a lot of love in those eyes. Horrible things. I still shudder when I think about it, but the worst was because we had like armed guards. We, it was bandit country, so we had to have like a lot of armed guards and stuff. So you're always feeling slightly secure, but then we left everyone. There's just the two of us paddling through the Sudan. And I remember we hadn't seen crocodiles for a while because there's so many people around. There's not a lot of crocs. Then we started seeing people running along the side of the river and going, Tum-ta-tu-wali, ta-tu-wali. And I'm like, I know what tuwali means. It means up ahead. What is tum-ta? Never heard this word. And we started seeing more and more people yelling, tum-ta-tu-wali. And then they start doing this, tum-ta-tu-wali, making these crocodile things. And they were running along and started stopping in these villages. And these people were like, have you got guns? Have you got guns?

We're like, no.

And they're like, laughing to themselves. And then we started, some of the villages had like croc skulls on sitting on the top of the buildings. Like as pieces of art. And then we started seeing a few crocs and I just, I remember this one time it was a really windy day. It was this one calm spot kind of sheltered by this little island and I was paddling along. My mate Les was, God, he was a little bit ahead and I just saw this little crocodile head pop up and I was like 20 feet away. Oh, this isn't looking good. And then, and about 5 of them are all looking straight at me and I'm like, This is not that good. 'Cause I know back on the blue where there are lots of crocs, they'd always go for the auxiliary things like the oars and the paddles and tow the bow ropes and stuff. But this was just this crocodile that's like, my hand was connected to the paddle. So it was like, if he's going for the paddle, it's probably gonna be pretty close to my limbs and stuff. So I started getting a little bit, oh, what do I do here? And I'd heard that if you Lant the paddle really loud on the river. It makes a bang and it scares the crocs away. So I wound this big slam up and whacked it down on the river and it made this massive echoing thwack on the river. Didn't do a thing. They're still looking at me. I was just like, this is not looking good. They're not budging here. So I'm like, well, I'm gonna go, I'm gonna go singing. So I started singing some songs, really poorly.

Okay. If you gotta go, you mean like go, go, like check out. World.

I'm belting out really poorly. I wouldn't be able to outrun them pretty quick. Like the aquaplane across the top of the river. So I started singing and then they start ducking under the water. This is usually when they strike, but it was rainy season, so it was really murky. It looked like chocolate milk. And I'm like, oh golly, they're under the water. And I'm singing there and there's this long silence, everything but my noise. And I guess the music kind of put them off. 'Cause I never saw them, thankfully, but I was quite pecking myself. That was one of the scary moments.

Great.

So you don't have much of a karaoke following in China then?

I have it. It's funny you mention it because Les, the guy I battled on the island and stuff, he loved karaoke. I actually prefer North American style karaoke in the, with all sorts of randoms in like public bars.

You're trying to just like be bad on purpose almost.

Yeah.

That's funny.

Yeah.

When I sing karaoke, my friend asked me, what did you do with the money? And what money? The money your parents gave you for singing lessons, because you didn't use them on singing lessons. That's for sure.

But wow.

So you basically saved your life by singing.

I don't know what would have happened otherwise, but I don't think the noise that came from me did any harm.

I had a little run-in with baboons at the end of Tanzania, a game park, and they were at the edge of the park and they were very socialized because people were feeding them and I had a whole bunch of bananas hanging out of the back of my bike. This taxi came by and they kind of leaned out the side while I drafted behind them. And I had my pump, it was like a metal pump. It was like my baboon tenderizer, but you know, I could hear their claws scratching and they have like canine teeth. Right. But they were still 10 meters back. But yeah, like that was my closest call that at least that I knew of. Some scorpion, some other stuff, but mosquito, like a mosquito is probably deadlier, more likely to kill you there than a croc. But anyway, wow. Fantastic. So, so it's interesting. So I teach. a course on entrepreneurship at Peking University, and you can probably teach 20% of entrepreneurship, right? And then the rest is like jazz, or you have to kind of experience it. And Frank Zappa says, when people wrote a bad review of his album, he's like, uh, writing about music is like dancing about architecture, right? So it doesn't even matter. Like, teaching about entrepreneurship, how can you teach that? What I like to teach is I bring in entrepreneurs who talk about their trials and tribulations, which we'll get into a little bit later, but People ask me like, how can I prepare for entrepreneurship? And I often say, do a trip where you feel like, you know, you're kind of exposed, where you're super uncomfortable and you're like, have to sleep night after night in a place that's not your ideal bed spot. And you're eating food that's not— you're kind of exhausted or whatever. And that builds grit.

And perspective as well. I think when you're having a bad day as an entrepreneur, you can think that sleeping on the park bench Indeed, these clients or these partners or investors, they're not going to eat me.

That's not going to happen.

At least I don't have to sing them away.

Sing to them.

That's great. So I really, even though we've not, I've heard your name around a bunch in China, as we were saying, but not met, but I feel, you know, that there's a kind of common thread, you and I both doing trips. You're actually even crazier than mine. If there is a contest, you definitely won it. But like us getting pulled into China and the kind of chaos and adventure and opportunity and never-ending journey in China. So I think there's a common thread there. Like, tell the listeners out in podcast land about your path to the Middle Kingdom.

I was exhausted after that paddle. I got home and I, back to New Zealand and I was just going to settle down, get a picket fence and have some kids. And I was like, this is it. I've done that. I'm ready to kind of chill forever. And I met a young lady. She hadn't traveled and she's pretty adventurous. And so we both thought this place China, we both knew nothing about it, but we're hearing more and more about it. This is 2009. And we thought, well, let's go and have a look. We're both very green, but curious. And so we got married, honeymooned around India for a few months, and then went and studied Chinese up in Beijing. Yeah, it was great.

What year was that?

That was 2010. We were in Beijing. And it was just unlike anywhere I'd ever been. It was just the theme of your book. The constant change was just fascinating. Like there was just all these stories about, I think the year we were in Beijing, there were 270,000 new cars sold in the year. It was like, wow, this is crazy. They talk about Chinese years are kind of like dog years. What happens in a year in China takes 7 years in most of the rest of the world. And it's just. That for me was really interesting, particularly working in the marketing industry, just this constant change and which forces you to keep up. And if you don't, you're kind of stuff that was relevant a year ago, often not that relevant. So I found that quite alluring. So my wife was very fortunate. She was working for an American company, CBRE, one of the big property companies. She had managed to speak to some people from her old office and they hooked her up with some people in the Shanghai office and she got a job there. And so I was very lucky that it wasn't like an expat salary, but it was enough for us to live and to travel every now and then. And so I thought, well, I'm going to have a chance to do something I've always wanted to do, start a business while there's someone else earning some income. And that was how China Skinny began. A lot of it was I'd done marketing kind of between adventures. I'd done marketing jobs to pay the way. So I find marketing quite an interesting career. And I came to China and at the time I didn't think marketing was being done very well there. I was looking for information and I just couldn't find much. And so I thought, well, if I saw that as a bit of a gap, I saw China becoming more and more relevant for more and more brands. And I thought, well, I'll have a crack at filling some of those gaps that I thought needed filling.

Terrific. Yeah. And I love how you brought up how one partner or spouse pulls the sled a little bit harder so you can get out of the pull of gravity into flywheel the company. And I think that's a really beautiful symbiosis around that. I think there's a lot to be learned around that when you're starting a company, not necessarily just have to go all in. And so what was the thesis of like what your shingle providing and how long did it take you to turn that into something where you felt like it was starting to really work?

It's a good question. What had happened is I'd initially tried to do something that was quite different than we're doing now, but we've actually almost done the full circle. We're doing a bit of what had initially started. So at the time, Weibo was getting pretty popular. It was a big social media network back then. And there was no kind of Hootsuite type product or none that I was aware of that you could get really good track of what's happening on social media in China. So at the time they had all their APIs, so the feeds of information were all available for anyone. It was just free for all. I'll take that and I'll create this little tool that brands can use. And I got some developers to start developing, some little guys in a dark room in Pudong were chipping away. And I thought, while I'm waiting for that, I'll just try and create a bit of a platform just through leadership. And so I created the China Skinny and we had a newsletter that was going out and it was getting some traction and things. And then Weibo in their wisdom decided to Closed their API, so just wouldn't let anyone. They realized the valuable data they they didn't allow. I knocked on the door many times down at Cena, the company that owned Weibo, and they wouldn't. Some stupid Kiwi guy that knew nothing and knew nobody, and they were like, "I'm not going to give valuable information to you." So I thought, "Well, I've already got this marketing platform, and it's already some decent subscribers on our newsletters." And I started getting inquiries from people saying, "Hey, can you?" Help me out with some strategies, some strategic work, some branding. I thought, yeah, I can do that. Good to get some cash flow coming in. And since then we've evolved and now we work with brands like Nike, Adidas, Colgate, IKEA, and do some pretty interesting stuff.

Amazing. Yeah. And what are the kind of insights that you provide? What are they coming to you for mostly? Like what's the kind of meat?

Yeah, a lot of what we do, because a lot of the brands we work with some ETMEs, which I love, they're often dealing with decision makers and things. They're very quick in making decisions, but by China standards, a lot of them aren't. But so we work with them on this holistic strategy, really trying to understand the market and where their strengths are and how best to utilize them. And then we work with the bigger companies. They often have these global relationships with agencies. So. A lot of the work we do is quite niche. They need quite bespoke work and things that need quite blue sky thinking and just quite different approaches to things. That's where our strengths lie with those types of clients.

Yeah, it seems to me with Nike, I know PT Black over there, like they've really localized in a large way in China and that they are a lot more in the cycle of speed and innovation within China as much as an international company can be. Do you have any stories you can share about some companies who have like really maybe learned from the speed of execution in China or some of the types of things that they're doing around, say, streaming commerce or social media or mobile payments or whatever, and then kind of taking that back to the mothership?

That's a really good question. And we've actually done a few projects. From companies, and this is the type of stuff we'll often do, is big brands that are just seeing these Chinese companies that are just outsmarting them, out-innovating them, and just running circles around them. And as a result, cannibalizing their market share. And they're like, what are we doing wrong? Or what are we not doing that we need to be doing? How can we be more like these guys? So we have done a few pretty deep dive studies into it, which which was for me, some of the most interesting stuff we've done. And also some of the most like, wow, just these Chinese brands, the rate they're tracking. It's not only if you're in China, but also if you're outside of China, you're really going to have to be aware of how they operate because in this day of particularly with COVID where everything is changing at such a constant speed, I think Chinese businesses are so well set up for it. Whereas a lot of these American and European and Australasian businesses are A lot slower and a lot less adaptable.

So when you say they're set up for it, can you peel that back?

Like, what does that, what does that mean exactly? What are they doing?

Yeah. So structurally, I think initially the study, one of these big FMCG brands came to us and they were looking just from a marketing standpoint, how can we be more speedy in marketing? And when we peeled it back, it was much bigger than that. It was just structurally, these companies are not set up. To succeed. So an example would be, well, actually, I'm going to take it back another step. If you look at the way the average Chinese CEO or decision maker, and most Chinese companies are very CEO-centric. A lot of decisions are made by the big cheese at the top. And then the next layers down are just delivering on what this individual is saying. Whereas you look at a lot of Western companies, it's a lot more around Lots of different views around the table and let's discuss it and decide it, which is good in some ways, but in other ways it means things are slower. Things take longer.

So that's funny though, because you'd think centralized would be slower as opposed to decentralized.

Yeah, well, it's empowerment's important, but I'll get into it. But what happens if you look at these individuals in China, they have grown up, particularly the guys running the companies now, they're in their 30s, 40s. Some of them in their 50s, but they've grown up and they've only ever known constant change. 1979, when they were boys and girls, the place all of a sudden opened up and you went from having 6 brothers and sisters to having none. And you went from living in the countryside, which 80% did, to living in the city, which over 60% do now. And you went from having one or two pretty ordinary brands to every brand in the world trying to get a piece of you, plus all these incredible Chinese brands. And you're just bombarded with that. The internet came late to China, but it leapfrogged in many ways the internet we know in the West. It's just so rapidly changed and innovated.

That blurb right there, I can see the text attributed to you in the book right there. That's a beautiful sort of, that's exactly the meat that I'm looking for, right? Yeah, that's exactly right.

So their mindset is Really, they don't know anything but rapid change.

So they're already starting the game with a completely different mindset.

Oh, it's part of their DNA. It's inherent in everything they do. So you've got people that are prepared to adapt. And so we spoke to an awful lot of senior people in Chinese companies and then senior people in Western companies, MNCs. And the key difference was that decision-making. There was all sorts of differences, which I can get into, but Just the speed of decisions were made. And you look at Western companies, there's an awful lot of gates to make a decision. And stakeholders, in many cases, the stakeholders are based in the HQ in New York and London and Paris, wherever it is. Whereas in China, you're dealing directly with some guy that's in your office in Beijing, Shanghai, Shenzhen, wherever it is. And these guys are living, breathing China. They're seeing this change happen around them every day. And so they instinctively, they can go on their gut a lot more than people, decision makers in the West. They have all sorts of information. It's not instinctual in the way that the Chinese leaders. And so you've, and they also have not grown up with data in the way that Chinese in the last 10 years, just because people do everything on the internet. You've just got this wealth of data and privacy until recently hasn't really been an issue. So you've got So much more data than you'd have in the West.

And sometimes data can lead to that analysis paralysis, right? Where it's like, you always have limited information. So you have to just turn the card over and, oh, let's get it, turn the card over and get more information. It's like, no, you just have to double down or whatever.

You have to make a decision. Right.

And I think that's where gut comes. It's like, they may not even know the answer, but they're like, okay, now is the time to act and decide. And it's probably a much faster pace. Yeah.

Yeah. And I think a lot of it is a lot of these Chinese brands are very new. They don't have the heritage of Coca-Cola, been around 100 and something years. I remember as a boy, they launched Coke Classic, and I'm sure you remember that back in the mean streets of Boston. And that was a disaster. And as a result, I'm sure that's kind of made them a little more innovation shy, like they're less risk averse than they once were, whereas these Chinese companies, they don't have this brand to protect. So they're like, Let's just throw a whole lot of spaghetti against the wall and just see what sticks and just keep doing that. So you look at just the way they operate. A lot of them have the number of SKUs these companies have is just tremendously large. Whereas you look at the Western equivalents, they have a lot less. So they're prepared to try different things, be much more targeted. So demographic-wise, geographic-wise, they have much more targeted product. For these categories, which is really effective. Things are changing so fast that you can see what works and what doesn't. So we were talking to a Shanghainese cosmetics and beauty company, and they had launched a face mask thing. From ideation, they came up with this idea of this new face mask, to selling on the store shelves, to the screens, took them 3 days. Come up with the idea, manufacture this friggin thing, and then it's selling. You could buy it.

I'm thinking in my head, I'm jumping ahead on you. I'm like, 60 days, right? That's 2 months would be average.

60 to 90 days is what it takes for most Chinese companies.

But wow, to be able to like ideation to like cha-ching, like that's insane.

Wow.

A lot of these things are not coming up with Everything from ground one. A lot of them may be in product with some different, a few different formulations, not majorly changed, but again, it's a new product, a new thing to—

But that's like software. That's kind of like software, right? Well, let's do some maybe iterate on it, but be able to do that with a physical FMCG product. Like that's where things are moving towards now. Like, does anybody even have the ability in their competitive universe to be able to do that? Most likely not, and who are from outside of China, right? So it's probably a mess, and there's a lot of mistakes, and there's maybe some loss in brand equity along the way. But their learnings are so much richer and faster. Wow! Seventy-two hours—that's amazing.

I got to deep dive a little bit more into that.

And we spoke to another company, a Western company that made shampoo, and it took them three years to bring out the shampoo. I couldn't get my head around. I'm like China. I know in 6 months, the needs of the average shampoo customer can change. But 3 years, whatever you've produced is not going to be that relevant. So it was unreal, but that stemmed to an awful lot of things, obviously trial and error. But as far as staff go, if you're a young, ambitious Chinese person that wants to work for a cool company, back in the day, it used to be you'd work for an MNC, but now they're like, why do I want to work for this company that All my decisions have to go through all these gates and then some dude sitting in Seattle has to sign this off where I can be in the same building as this guy that's just making decisions. It's so dynamic. It's so interesting. We're winning. And I'm kind of nationalistic as well. So I'd rather work for a Chinese company and all these things. So it's like these guys are getting the best and brightest of China's stuff. I'm painting quite a grim picture here, but I think as a Western business, we need to be Really aware of just these guys are coming, and we saw it with Shein. Such a good example, which I'm sure gets a lot.

Yeah. So before, it was like you have these established Western brands in China, and they're like, okay, we can still look at how big Apple or Nike, etc., are. But they attracted more stable employee who's there because it's about optimizing the whole system rather than maybe necessarily like fully reinventing. Of course, there are stuff. On the edges where you have to innovate, right? But if you're launching something new in China, then now you're right, like getting the talent to join you and get behind you—that's a challenge. So now it's becoming less and less possible to really crush it in the China market. And then these Chinese companies are getting better and better at learning internally within the country and then launching in Japan, Korea, Indonesia, and other markets. And I was like, that's. One of the parts of my book is that kind of like Sputnik moment where you wake up and you're like, wow, like maybe we don't even necessarily want to be in China, but it doesn't matter because Chinese companies are going to start to come into your market or at least into other markets where you are already enjoying kind of a lead. And if they're able to just move so much faster and to iterate and do something in Brazil with a 3-week, 3-month turnaround when it used to be a year or 2, then That's where people are going to be caught unawares. So I love those anecdotes. That's great. You're definitely on the front lines with these companies. Can you share a little bit about that, about some of your insights, how some of these Western companies have kind of made this shift or adjustment to be able to be faster and more, more competitive?

So the big one is just having more autonomy within China. And I think a really good example, Nike is a great example. L'Oréal is a great example. They have Or the teams that just can make decisions and adapt and develop new products and everything else really quickly without having to go through Paris or Portland. So it's the companies that are doing well and most of the companies, the big companies in particular that are doing well, have a full team with the authority to make decisions and just about everything. They run like their own individual companies in the mainland. And decision makers, increasingly they're localizing, but I think personally it's important to still have a few of The guys that get the culture back in the West to be in there, just to make sure that what's really made that brand special, that DNA is, that remains there. So it doesn't just become another local Chinese company. I think it's, it's someone can understand the market. It's important to have those guys still on the ground in China.

Interesting. Yeah. I'm going to try to have PT Black from Nike on, and I know Starbucks and also SAB, because I know with Starbucks, they're really head of marketing now used to be focused on China. So now Starbucks is being kind of driven by that kind of China speed and innovation. And I know SAB did things like 3-packs because people just want to be able to get something delivered with the rise of home delivery. And I just want a few beers, right? And so it's like thinking of that's kind of informing other markets around the world. So I think I'm going to try to uncover some more actionable insights. Anything else come to mind when you think of China speed, either like, you know, personal anecdotes?

Not personal. This is not a company we've worked with, but there's a company, Shein, which was totally out of the radar until a couple of months ago. I just think is a classic example of how Chinese companies operate. Interestingly, they haven't really focused on China. This was a guy who worked for some SEO agency in Nanjing.

I'm sorry. So you're talking about the founder?

Yeah, I think he was an SEO guy. Worked for— and then he started trying to sell wedding dresses or something internationally. And I guess optimizing for Google searches.

Okay. I apologize. I thought you meant SOE, like state-owned enterprise, but you're actually talking about search engine optimization. Sorry. So he was actually already very savvy. I was like, wow, she had founded by an SOE guy. There's no hope. Yeah, he worked for the railways. Okay. SEO. I misunderstood. Thank you. Keep going. Sorry.

Sorry. I hate using acronyms. Sorry. I should have not used it.

It's a very proper and good use of an acronym. Nobody says search engine optimization anymore or state-owned enterprise.

So anyway, this guy that was making wedding dresses, I guess he looked at China and he thought, well, what is our distinct advantage that we have that no other country has? And that's the factory of the world. So he set up a base down in the Pearl River Delta, down around Shenzhen and Guangdong. And there's a lot of garment manufacturers down there. And he was sifting around all these factories and looking at them thinking, what are these trends that all these outsourced fashion leaders around the world are all manufacturing here? What are they making? What are the latest trends? So from that. He can manufacture and use these same factories in many cases to produce similar stuff. And he's also, he's a pure online, but he's got an app that gets an awful lot of data from all these different things. So he's producing tens of thousands of new garments every month. I'm sure you cover this in your book, but it's just the way that he could produce all these new clothes, that Zara model on steroids. There's just this truly fast fashion, but I don't know, whatever the next word is up from fast. And he's producing all these garments and producing them really cheap. And he's seeing what's on trend and using it, overlaying that with his data. And because China has all these factories and it's incredibly competitive. So these factories are hungry. They're really adaptable because they have to compete. And so he's producing all of these new fashions at a really cheap price that traditional fast fashion brands can't keep pace with. And as a result, he's selling billions worth and he's just come from nowhere. And I think that is the type of company that's going to become increasingly common in the world of consumerism. They're going to be harder and harder to compete with. They're also getting much more marketing savvy. And that's something I noticed when I was first in China, that the marketing Yeah, it was pretty ugly.

The TV commercial was the worst. How did it evolve?

And we work with companies, these foreign companies, and they have 15% of their revenue is spent on marketing, 20%, the generous ones. And you're getting a lot of these cashed up consumer brands that are spending upwards of 80% on their marketing. And you look at what their KPIs are as companies. In the West, it's all about revenue. It's all about being sustainable, which kind of makes sense to my logical brain, but in China, it's not. It's all about acquisition, customer acquisition. And so they are structurally set up to not really care much about making a profit because there's all the venture capital money coming in that can keep them afloat. And so they're just acquiring all these new customers and building their business that way. And as a result, they are much less risk averse. Whereas as a Western company who's spending 20% and it's all about making sure we make a profit, it's pretty hard to compete with these companies that are just focused on acquiring new customers.

Certainly. Yeah. And I think downsides to speed, and that's one of them when you're kind of ignoring the pull of gravity when it comes to basic numbers and business sense. And I think that's sort of limitation around that space in the internet consumer startup space where there's many bubbles and Many rabbit holes that are gone down with billions of dollars, but they eventually either bear fruit or invalidate a market. So there are some sort of good learnings from that. But I think certainly it's not all things around China speed are things to be emulated or even be necessarily, but they're there. And when China has largely not competed outside of China in a big way, TikTok kind of blew the wheels off of that because they were able to do things with algorithms to create consumer products. But I think there's going to be a lot more Chinese products that are going to be going around the world and be online only and be better however they're doing it. Even if it's not necessarily desirable to emulate it, it is what it is, right? And that's what is going to be the competitive landscape in the coming years and decades.

And you see that with Shein. They use a lot of key opinion leaders, which in China, that's just par for the course. Any brand with any clout in the market is using a lot of influencers. Whereas in the West, all of a sudden, all of the Katy Perrys of the world are promoting their gear. And it's like, wow, why didn't we think of that first? But there's just so many 101 stuff in China that is not really happening in the West. And so these guys, in some cases it wouldn't work, but obviously key opinion leaders, potentially live streaming could be quite successful for Western brands, even in their own markets.

Yeah. And I think what, almost 8 billion people on the planet and half of them on the internet, but now there's going to be billions more across LATAM and Asia and Africa. Who's going to mop those few new billions up, right? I mean, like those markets, that's where China's able to compete both in the tier 1 cities of Beijing, et cetera, but also in the tier 3, 4, 5 cities as well too. And it's really Fascinating how a company like Shein is flexing muscles across all of those tiers, or even companies like Pinduoduo are really focused on the lower tier cities and really well poised to take this Costco meets Disneyland model the rest of planet Earth. Tell our listeners about your life in Shanghai and where you are now, like COVID and anything you can share.

COVID has obviously came hard, fast. And then China was, for the most part, out of COVID pretty quickly. As a Westerner, there's less and less Westerners in the market now. A lot of them have been unable to get back and just people move on. But Shanghai in particular has always been very transient, but it's always been replaced. It was an international city and a lot of people, I guess, found it quite fascinating and intriguing, this China place. So I guess the allure of Shanghai was quite strong for a lot of these young adventurous kids. Yeah. Smart kids because it's less international than it was. And I don't think that helps nationalism from both within China, but also from outside of China. I think less people are aware of China. And I think the more people living in each other's countries, the better it is for that awareness. I think if you want something bad enough, just go and get it. And there's definitely opportunities in cities like Shanghai and Beijing and Shenzhen and even in the hinterlands. I think for me, it's enriched my life. China is going to become more and more relevant in this century, no matter what you feel and think about the country. There's no denying that it will become more relevant. So I think understanding it beyond what you read in the press is incredibly valuable. And I think not just understanding it from a cultural and a geopolitical standpoint, but also from the speed standpoint that obviously your book focusing on, I think, is valuable from a sheer interest, but also if you are looking to run a business or work in a business, it's really good to understand their perspective and their way of doing things. I think it can be valuable.

Terrific. Excellent. Thanks. I really appreciate your time and I look forward to meeting up sometime when I'm back there in the Middle Kingdom.

I was back last October, November.

It'd be hard to leave Denali, wouldn't it?

It is indeed. But you know, the beautiful part is it's a straight shot. Up to China, right? Same time zone and no jet lag, right? And you can get to Shanghai in four something hours. So I expect once I do these innovation tours where we bring in people to come in and sniff the medtech, fintech, edtech, other types of innovation that are happening in China and show them around. It's something that I enjoy. It keeps me relevant and fresh, learning everything that's happening on the front lines there. After 24 years, and I've been away. now for about a year plus, and I'm already— I have to paddle 3 times as hard under the water to make myself look like I'm keeping up. So anyway, real pleasure and all the best, and thanks again.

Likewise. And I really look forward to the book. I think a great read, very important.

Thanks, Mark.

All right. Thank you.

That's a wrap. Thanks for listening to this episode of The Rich Robinson Show, Season 1, At the Speed of China. Visit therichrobinson.com/show to smash that subscribe button. Please also go to iTunes or whatever platform of choice, rate and comment. And until next time, thank you very much.

Thank you.

再见。谢谢。