Earlier this week you might have heard about China’s incredible ‘Singles Day’ sales of not quite US $6 billion that occurred this past Monday 11-11. Alibaba (full disclosure a recent client) has promoted this ‘holiday’ since 2009. Last year on Nov. 11, Chinese online shoppers spent more in 24 hours than the $2.5 billion that Americans spent online on Black Friday and Cyber Monday combined.
The scale of China and its market potential is at times truly staggering. In addition at present there is only a 45% Internet penetration rate for Chinese consumers. While those numbers are staggering what can be forgotten is the idea of creating a day for singles to shop – an idea that smacks of marketing brilliance. Talk about an underserved customer segment!
Yet the same day there was another article in the Wall Street Journal on Beijing weighing a bigger private role in state firms. The article reported that “Reforming State-Owned Enterprises Has Been Thorny Because of Their Size, Political Clout’.
This is perhaps even a more significant item since private Chinese firms are ill equipped to compete in today’s world marketplace. Mainly due to the lack of understanding of risk – something we’ve encountered on a first-hand basis. At long last the Chinese government has been forced to acknowledge that a competitive marketplace is the only way to create enterprises that can compete on a world stage.
What’s the connection between the two stories? The Chinese are buying and ready to buy more. But the Chinese are also ready to sell more in the world marketplace. Within China creating consumer demand is a critical component to the future success of the Chinese economy. I think equally important to the future of the Chinese economy is the growth and development of Chinese brands in the world marketplace. There is a great deal of heavy lifting yet to be done as far as that is concerned.
How many Chinese companies can you name beside Alibaba and Lenovo?