The future of business in China is really Positive?

 As China turns inward to move upmarket, adopting the concepts of "decoupling" and "dual circulation", it is becoming more and more complicated for foreign companies to do business in China.

Doing business alone 

Looking around, in a popular cafe in one of Shanghai's major malls, Gregory Prudhommeaux realized that he was the only foreigner. An improbable situation, a few years ago. “In my entourage, I have counted 60 departures over the past two years. This creates a somewhat anxiety-provoking atmosphere,” says the entrepreneur, at the head of a consulting firm for agrifood SMEs. The zero Covid health policy is turning into a headache for Western companies established in China. Unable to leave the country, and especially to return, some of the expatriates have packed up. For two years, business travel has been non-existent and international flights have fallen by 98%.

The distancing of local subsidiaries vis-à-vis head offices is becoming a reality. "I haven't seen anyone from the Paris headquarters for eighteen months, except during videoconferences", warns Nicolas Ajacques, the deputy general manager of Tianneng Saft Energy, the joint venture 40% owned by the battery manufacturer, a subsidiary of Total. . The expatriate is overseeing the construction of a gigafactory in Chanxing, which should be operational from mid-2023. But other staffs, unable to go there, have eased off on long-term projects. For the 2,100 French subsidiaries based in the Asian giant, this situation reinforces doubts about their future in the largest market in the world explained the Chinese Business event

Freedom in China a big problem

The grandson of a great lawyer, saw his family downgraded by the Chinese Communist Party (CCP). He grew up in very modest circumstances in Shanghai and then in Hong Kong, then British, where his parents were able to go into exile. But the young man is a fighter. After studying finance in the United States, he launched into business in China in the early 2000s, at a time of dizzying growth.

In a country where nothing is possible without connections, a woman will help him penetrate the heart of communist power. Whitney, who would become his wife, bonded with "Aunt Zhang", the wife of then Prime Minister Wen Jiabao. By multiplying the sumptuous dinners and the gifts to the "red princes", the couple becomes immensely rich - their fortune is counted in billions. In Beijing, they are building China's largest cargo airport and one of the most luxurious hotels in the city

in Business in China, Branding is crutial

 Branding in China is Crucial

A consumer’s perspective on a certain product may greatly change the moment they hear its brand. Effective branding can mean a huge difference in how much it will be sold for so it’s not a step in your business building that you can take for granted.

Chinese consumers will welcome foreign brands but will, of course, only be willing to spend their hard-earned money on known ones, or at least the brands that are well marketed or established. 

https://fashionchinaagency.com/china-marketing-strategy-that-sets-you-up-for-success/

And then, take note that there are domestic brands that you need to compete with. Domestic brands will have a lot of advantages. For one, they have lower operational costs so their products are cheaper. Expect that they will also know their target market better.

Our ambition is to observe the phenomena of branding, practice branding, and unveil the principles of branding. Here are a few observations about the growth of branding in China gleaned over the past years

https://www.brandingmag.com/2015/11/14/the-growth-of-branding-in-china/

When you ask people “What are the key things that make a brand succeed in China?” you usually get a very predictable answer that includes: hire a celebrity, work with KOLs and, as of late, be sure to do live streaming.

https://retailinasia.com/in-markets/what-are-the-key-ingredients-of-branding-which-bring-success-in-china/

Melscience a top startup in China

 MEL Science, a London-based, science-focused EdTech platform, today announces that it has secured $14m (£10.5m) in Series B funding.

The firm offers educational kits, combining hands-on experiments with interactive VR simulations and live lessons. Its products are designed for children aged 5 – 14 and are intended to be used either as an at-home teaching aid or by schools.

It claims its VR technology has been found to improve both test-scores and student engagement levels in a study by the New Jersey Institute of Technology.

Melscience is a popular edtech brands in the world, and get attraction in China. 

The startup has secured a 14M$ funds raise in Dec 2020.

Today, social media are everywhere and the last generation, millennials, are always connected. Those new habits lead people to learn at home. New ways of teaching, which can even be more productive. 

Here an example to show you how this can be done: 

Let us see the case study of MelScience. 

In seeking limited partner investors in Day One funds, she told one target that others investing included Mamut through his firm, according to a pitch document from Bucher obtained by The Post. The billionaire and former Kremlin adviser had recently taken control of blogging platform LiveJournal. Another person Bucher listed as an investor in the same fundraising email told The Post that he was pitched by Bucher but never actually invested.

She emailed a slide deck presentation to another possible limited partner that included claims she had led media efforts for science education start-up MEL Science and “made 10+ introductions to investors that helped to close $2.5 million round led by Sistema Venture Capital,” owned by a Yevtushenkov company that has the biggest stake in Russia’s largest mobile telecom carrier.

Melscience a case study in China 

https://redmillennial.com/melscience-a-success-story-in-china/

China Covid Situation is bad for business

China Covid Situation is bad for business

7,346 new cases announced (including 5,559 asymptomatic) during the day of March 31, including more than 60% in Shanghai.

National total = 82,754 cases (54,911 asymptomatic)

 

A =Shanghai=

4 days after the start of the Pudong containment, the figures for new cases announced in Shanghai show a drop for the second consecutive day after a peak of nearly 6,000 cases.

4502 new cases announced (including 3710 asymptomatic) during the day of March 31.

Current total = 33,988 cases (including 32,648 asymptomatic)

 

At =Jiangsu=

43 new cases announced (including 34 asymptomatic) during the day of March 31, including 13 in Suzhou and 9 in Nantong.

Current total = 461 cases (including 413 asymptomatic) distributed in Nanjing, Changzhou, Lianyungang, Suqian, Zhenjiang, Suzhou, Wuxi, Taizhou, Nantong, Yancheng

 

In =Zhejiang=

18 new cases announced (including 8 asymptomatic) during the day of March 31.

Current total = 355 cases spread across Ningbo, Quzhou, Kecheng, Hangzhou, Wenzhou, Huzhou, Jiaxing, Zhoushan, Lishui, Shaoxing

 

In =Anhui=

51 new cases announced (49 asymptomatic) during the day of March 31

Current total = 326 cases (including 308 asymptomatic) distributed in Hefei, Tongling, Ma'anshan, Suzhou, Anqing, Chuzhou, Hanshan, Bozhou, Bengbu Huainan, Wuhu, Fuyang

 

 

2- Announcement of Pudong post-lockdown measures

 

The Shanghai Municipality yesterday announced the terms that will apply to Pudong and other districts that were locked down on March 28-31 (Pudong, Fengxian, Jinshan, Chongmin and several townships in Minhang and Songjiang).

 

· Depending on the results of the screening campaign, three different types of regimes are applied. These areas also apply in the event of new screenings:

 

1/ “confined area”（封控区）: Concerns residences (workplaces, premises) where positive cases are detected, as well as adjacent residences (following a map of the city in a non-public “grid”):

The buildings where positive cases live remain in strict confinement for 14 days (from March 28). The other buildings in the confined area are placed in strict confinement for 7 days (counted from March 28), followed by 7 days of “community health observation”. In practice, this second week is also home confinement according to the information provided by the municipality. In all cases, tests (PCR and antigenic) are carried out on a regular basis. Home deliveries are possible.

 

2/ “controlled area”（管控区）Concerns the rest of the neighborhoods where there are confined areas:

During 7 days of “community health observation” (counted from March 28), residents are not allowed to leave their residences and gatherings are prohibited. Residents are also asked to stay at home. PCR and antigen tests are performed. One person per household is authorized to go out each day to pick up parcel deliveries at the residence's drop-off point.

source photo

 

· "Prevention Zone" （防范区） The rest of the city (excluding Puxi): 7 days of health self-observation with PCR and antigen tests. Calling residents to limit themselves to essential travel. Travel is possible within districts, but authorities are restricting travel between districts, or across the Huangpu River. Restaurants are reopening for take-out sales only.

 

· In practice, at this stage, it seems that almost all neighborhoods are in a confined area or controlled area and therefore remain in some form of confinement.

 

· The metros partially resume their activity in Pudong, as well as the buses, which do not however serve the confined areas. Bus lines are limited to their route within the same district. Taxi and VTC services resume in the areas that were subject to confinement on March 28-31, but do not allow travel between districts.

 

The other partial containment measures for residences or neighborhoods remain in effect.

 

3- Reminder: confinement of Puxi

 

· Puxi districts are confined until Tuesday, April 5 at 3 a.m.

 

Shanghai City Hall has published a list of emergency contact numbers and food delivery platforms (link) that will operate during the lockdown, while noting that delivery times could be particularly long.

source 

https://www.theguardian.com/world/2022/apr/01/covid-lockdown-extended-for-parts-of-shanghai-as-city-struggles-to-control-omicron

https://www.scmp.com/news/china/politics/article/3172721/shanghai-enters-second-phase-lockdown-west-city-covid