Heard on the Conference

I was at a regional advertising and marketing conference last week and learned a few things about the newest developed in the world in the industry. And here are the few things I remembered from it:

1. Neural scan on the head in order to actually "see" consumer behavior with real, hard, visible, colorful scientific evidence, looks really cool and finally provided evidence of the importance of brand, e.g. when tasting a can of Coke unbranded, certain part of the brain lighted up and when tasting a can of Coke branded, different part of the brain lighted up! This is cool stuff, but how to make apply it in practical marketing remains to be seen.

2. "Fear and Guilt" are the big words to touch consumer phyche in economic recession. It is said that one brand of hand sanitizer increased its sales by more than 100% by playing to the "fear" factor with an advertising tagline "It takes 15 second to catch a deadly virus" as well as the "guilt" factor with another line "Do you dare to let your children leave home without it?" This is particularly amusing to me as I look around and decide that here and now in China, people have very little fear and absolutely no guilt.

3. A lot of talk on ROI and marketing effectiveness. Some ten years back, when I was working in advertising, it's all about "Big ideas". Now with the crunch of recession, the cutting of budget and the increasing scrutiny of the marketing spender, even the most flamboyant advertising people are now humbled and even invited their long-fighting foe on the table: the corporate procurement people who always try to cut the agency fee.

4. Do people really hate China now? This is my personal question which they didn't really discuss on the stage. I just got this impression reading the recent Wall Street Journal and Economist and it seems there is a growing negative sentiment on the part of the West, towards China. So I raised this question at the lunch table to a senior executive at a major advertising firm, a British one by the way. And he's been based in Beijing in the past four years. So the informal Q&A went as this:

Q: Is there indeed a growing negative sentiment against China now?

A: I think it's just in the media

Q: Then where did the media pick this up?

A: I think it's just the American… I'm a huge fan of China and I have lived here only four years… it's the Americans who never travel… and the Americans are blaming China for currency manipulation, if they would just save more and spend less…

Q: Yeah, actually I won't be surprised if the Western companies are sometimes unhappy about our government, but still you need to make your money here. We are unhappy all the time too! Still we need to make our living and try to make a better life out from here…

New KPI for Shanghai Gov.?

I'm not a person who read the local newspapers. I trust the city retains its hyper pace and tremendous volume of reality when I wake up every morning. It sure will catch up the gear to continue from where it's left at the end of yesterday - surer than my own wake-up.

But this headline caught my eyes "Playdown GDP, Set New Measures for Economic Development" on today's paper.

With the little economic knowledge I have, I always have a mistrust on the city or the country's GDP figures, and since most of technology and industrial development is out sight of my everyday life which confines within a small zone in downtown Shanghai where the only economic activity to be seen is shopping, since all I see on the spending of infrastructure is the continuous digging up of the old streets, brushing up on the same old walls of the same old buildings in this zone, I naturally grow a bias believing much of our GDP comes from such 0-value activity.

Hence I take the down-play of the GDP as good news.

What's more amusing is that while the beginning of the year is usually a time for us who work in corporates to "set objectives" and put down the measurements, it never occurred to me that the government also need to set their own "objectives" and look at the measurement. Sure, it's a good thing they do.

Now the paper says the gov stresses on the "change of structure" of the economy, the gov will no longer encourage the various districts to compete on GDP growth figure, but set some new measures such as "service industry development", "innovative industry development", "green economy development" - while the details are not clear here, the concepts sounds good, and I guess that's the first step.

A few colleagues were having a chat over lunch as usual, and talked about the issue of corruption, and one of us said brilliantly "a bureaucratic structure must have some corruption as a lubricant, it's fine as long as they're also doing some real work". He also cited that the Ming Dynasty, being famous on the ruthless crack-down on corruption (the emperor got the convict corrupted gov officials skinned - and made scarecrow out of the skins to warn the rest of gov officials), was also the Dynasty of most corruption… well, my history knowledge failed me here…

Well, I guess what I'm saying here is that I think it's a progressive sign that the city gov are setting new KPIs, I guess we coming so far indicated some people are really working and even learning.

Hope to look at their year-end report on these new measures!

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Short China, I don't think so

In this age of media, we average consumers frequently turn into our own opinion leaders in many a topics, including world economy, American politics and with more involvement as well as self-assurance, local economy. So I read from a popular Chinese magazine some recent discussion in the global media, if there is such a thing, about new debates of China economy.

James Chanos said short China, eh, but I don’t think so. Could an economist, or, a hedge-fund manager, in this case, really be able to read, understand and even predict an economy without going into the field? Jim Rogers is known for pro-China economy, but he really fly in here and he really wait in a bank to find out if it’s worth investing. I remember watching the news clip of this incident and was highly amused – the famous investor was just another short, balding, mid-aged man, lining up in a queue, frustrated with the slow-moving line and baffled by the complicated requirements on the part of the customer for a simple request. He couldn’t get his requested service on that day in that bank branch, in fact, in that city – an experience all too familiar for the millions of customers of China’s powerful stated-owned (and now stock market-listed) banks.

Jim Rogers thumps down on the Chinese banks, but not the China economy, at least, not yet. In fact, if you have been to Hong Kong over the Christmas holiday and seen the lines outside LV and Gucci stores; if you have recently tried to book a 5-star hotel room in Sanya for the coming Chinese New Year holiday, you wouldn’t think China economy is going to a flake, anytime soon.

My friend stayed in Shenzhen for two months and took a lot of taxis. He likes to chat with taxi-drivers, asking them where are they from, how’re their folks doing back in the inland towns and villages, what’s their plan for the kids. Then he said China economy is going to be fine for the foreseeable future. All the taxi drivers are hopeful and feeling generally good about their lives, there has been many changes back at home, a lot of development, and they’re all going to send their kids to university.

Back in Shanghai, there has been some highly-publicized over-the-new-year promotion in many competing department stores. It drew hundreds of thousands of shoppers over the New Year ’s Eve and one of the stores scored over one hundred million USD turn-over within 48 hours. While it’s a game requires too much physical and psychological stamina that beyond my own approach, I do find two of my colleagues, not surprisingly, two sales girls (who will never pass any opportunity of a price-off) had bravely participated in that big event and one of them bought one flat-panel TV and one new air-con as well as a bar of gold, the other was the real killer, however, she actually bought eight flat-panel TVs and ten air-cons for the three new homes of her own, her mother’s and her aunt’s!

Bravo my beloved Chinese consumer. With your hard work and high aspiration about life, let the huge ship of China economy keep steaming on, hopefully nobody would be smart or stupid enough, to screw us up.

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