min-myinnersoul

Which is the biggest ecommerce company in the world ? Take a guess. Amazon ? E Bay ? You would be wrong if you guessed either of them. The biggest e commerce company in the world is Alibaba. Its portals handled a sales volume of some $ 170 bn. That is more than the volumes handled by Amazon and E Bay combined. No, this is not some elaborate hoax dreamed up from 1001 Nights. Alibaba is indeed the largest e commerce company in the world. The reason you may have never heard about it is that it operates almost exclusively in China. It started life as simply Alibaba.com , a business to business portal. It then added Taobao - a consumer to consumer portal, whose similarity to E Bay is, of course, entirely coincidental. Now it has started Tmall , a business to consumer portal, which again, bears a completely coincidental similarity to Amazon. All this in just fourteen years. The last two, if you click on the link, you will see are entirely in Chinese. And therein lies the issue. Can Alibaba

So says Huawei. Really ?? No, not really. They are very interested in the US. Its just that they have realised that the doors to the US are simply shut for them. There has been a spat going on between the US politicians and Huawei for some time. It looks like the politicians have won.  And it begs the bigger question - can any company in the world be exclusively in one country or region (however big that might be) and hope to be a major player in the world. Huawei is a telecoms company. They sell networking equipment significantly cheaper than say Cisco. They used to be crappy ( Cisco would snigger at the mention of their name). Not any longer. Same quality, half the price. In an uncomplicated world, companies  should be falling over themselves to buy from them.  But then, the world is not an uncomplicated place. Huawei is a Chinese company. So what, you might ask ? Huawei's founder and leader was formerly in the Chinese army. Still so what ? Well, the ties with the Chinese governm

Kentucky Fried Chicken is owned, by a company with a distinctively “uncorporate” name – Yum! Brands, complete with the exclamation mark.   This blogger is a vegetarian and therefore has not really sampled its wares. But I am reliably told that its fried chicken, is fairly delicious.   But these days, alas, KFC is not sounding very yummy. The problem is in China. KFC is everywhere in China. I mean everywhere. Sometimes I wonder if the icon of Americanism in China is not McDonald’s or Coca Cola, but KFC. Every street corner seems to have one.   The Chinese were happily munching or chewing or licking, or whatever you do with fried chicken. All that changed in December of last year. CCTV, that great bastion of broadcasting   and China’s answer to Doordarshan,   aired a program that claimed that local suppliers to KFC had given its chicken excessive amounts of antibiotics.   CCTV is more renowned for informing the world that Xi Jinping had a good night’s sleep rather than do investigative

As is often the case, the seemingly trivial turns out to be a giant event. I suspect this is the case with Huawei's announcement , buried in the back pages of financial newspapers that it would no longer pursue new business in Iran. So what , you might ask.  Read on. One of the fundamental principles in China is the total separation of politics  & economics. It has one of the freest of capitalist systems (at least for Chinese) and one of the most controlled of political systems. In foreign affairs, China has diligently pursued a policy of complete non interference in political matters. Its policy in Africa is unique in history. It is rapidly colonising economically, but scrupulously keeping away from interference in local politics. It will do business with anybody - God, Archangel Gabriel, Satan, Devil whoever, as long as there is business to be done. Before you denounce it, consider that there is some merit in this approach - the Chinese say political matters are for the citiz

If you are a Sinophile, this is old news and you don't want to read about this anymore; if you are not, this may be new to you. Little Wang Yue, affectionately called Yueyue is dead. She was only 2. Yueyue, a toddler, wandered on to a road in Foshan, a southern Chinese city and was hit by a vehicle. A security camera filmed the whole scene. 18 passerbys saw her lying in a pool of blood, but walked on and did nothing to help her. The driver who hit her, drove on. Yet another vehicle hit her as she was lying injured. Finally a noble lady, a rag picker, Chen Xianmei, came to help her. Yueyue was taken to hospital. But she slipped into a coma and died. China is going through a bout of soul searching. The security video that filmed the whole grisly thing has gone on the Net. Weibo, the Chinese equivalent of Twitter (Twitter is still banned in China), has millions of messages bemoaning what happened. China is asking itself the question - has materialism and money become so domineering th

Vanity thy name is Chinese Internet Company, went the title of an earlier post of mine here . I should correct this now to Vanity thy name is Chinese Internet Company. How else can you explain the rush of Chinese non Internet companies who want to list in the US ? There are 900 companies with businesses mainly, or only, in China listed in the US. Compared to that there are only some 2000 odd companies listed on the Chinese mainland. Does this make any sense ? Why are Chinese companies falling over each other to list in the US ? Usual reasons - Greed and Vanity. Greed first. Anything beginning with the letter C is now hot in the US. Never mind that the investor does not know, or care, whether China is to the East or West of Topeka KS. Anything even remotely related to China must be leading to a pot of gold. Hence the stampede towards China stocks. A scene reminiscent of the wildebeest crossing the Mara river. The expert analysts, investors, fund managers all seem to possess exactly the

Why does a Chinese internet company wish to get listed in the US ? I can't fathom the logic. Hence this post. The Chinese internet landscape is a strange one. Almost every one of the global majors is blocked. Facebook, YouTube, Twitter, Blogger, you name it and it is blocked. Instead there is a carbon copy of each one of them locally in Chinese. For Google, read Baidu . For Facebook, read Renren , for YouTube read Youku or Tudou , for Twitter read Sina Weibo or the dozens of similar clones. These are the ones that are wildly popular, having millions of users, only in Chinese and therefore almost exclusively used by Chinese. Never mind that these  are all censored , watched, bullied, etc etc by the jīndùn gōngchéng (The Great Firewall). This post is not about that cursed censorship. These sites are all by entrepreneur led start up companies , similar to the American originals.  And they all want to list and make huge money. Fair enough. But they seem to want to list in the US. Qi

When Hu Jintao, the leader of China, visited Washington recently, there was a flurry of deals signed. Predictably, most were economic. One tiny deal, lost from the public glare may be far more important than most of the bigger ones signed amidst much fanfare. This was the acquisition by ICBC, the world's most valuable bank from China, of the tiny retail network of the Bank of East Asia in New York and California. All bank takeovers in the US need regulatory approval. Given the circumstances under which this deal was signed, its expected that it would be approved. And therein lies the breakthrough. The regulatory approval is given only if the US believes that the regulatory mechanism in the home country of the bank is "sound". This is classical American overreach of dictating to the world. Now if this deal is to be approved, that is a tacit endorsement of China's banking system, which is entirely state controlled and , to even the most neutral of observers, dodgy. Ame

Prada, the Italian fashion group, is reportedly going to seek a listing in the Hong Kong Stock Exchange. Nothing electric about this, except that you would have thought that they would list in Milan. European fashion houses are ,well, snootishly European. So the move to list in Hong Kong does raise eyebrows. This is the magic of China. As even a casual visitor to China knows, every brand is ruthlessly copied and pirated on a big scale. You can easily buy any fashion brand, indistinguishable from the original, perhaps even made in the same factory as the original, at one hundredth the price. Despite this, every fashion house's fortunes these days are driven by demand in Asia, chiefly from China. The nouveau riche in China like to spend. And spend on outrageously priced brands which you can then flaunt. There's a certain pleasure into walking into a room of Prada wearers and knowing that everybody elses is a fake and yours is the real thing. Flaunt your original. But if your main

Comparisons between China and India are sure to provoke a yawn . Its an overwritten about topic . However, when I saw a report in the Wall Street Journal comparing the Indian and Chinese entrepreneur, I could not, but help, write a post. The report says both sets of entrepreneurs are extremely bullish about the future. Both don't think the recession has not really affected their future prospects. Both believe their lives will be dramatically improved in the years to come. All very good. Everybody knows that optimism is in short supply in the West and in excess in the East. The differences are also predictable. Indian entrepreneurs start out to "be their own boss". Chinese entrepreneurs start out to make money. Indians seem to be motivated to go down this route by the family and by role models. Chinese seem to be motivated by the government. Indians rely more on family financing or known investors. Chinese rely more on banks. Indians seem to rely on creativity to launch a

Goodbye China, goes the title of this post. For this will be my last post from China as I wind up here and head back to India. For nearly three years, Guangzhou has been my home and you’ll perhaps forgive me for a misty eyed long farewell post. One of the first things that struck me when I decided to come here was how little, we in India, know about China. We study a lot about European history and culture, the Pharaohs of Egypt, the Incas and Aztecs of South America, everything about the US. But we know very little about China – most Indians can’t even name a city after Beijing and Shanghai, let alone know about China’s rich history. The reverse is equally true – very few Chinese know anything about India at all. I came to China as a newbie, quite ignorant of this country. I leave China, equally ignorant, but perhaps with a greater understanding of my ignorance. China is a complex, fascinating country rich in culture, diversity, history and tradition. It is changing at such a rapid rat

China’s bosses sometimes find it difficult to understand the world; especially as seen through their own lenses, which are admittedly very thick. What can you make out of the following news report – “The western rating agencies are politicised and highly ideological and they do not adhere to objective standards,” Guan Jianzhong, chairman of Dagong Global Credit Rating, told the Financial Times in an interview . “China is the biggest creditor nation in the world and with the rise and national rejuvenation of China we should have our say in how the credit risks of states are judged.” China likes to develop everything by itself. It doesn’t like Google; it has Baidu instead. Doesn’t like Facebook, YouTube, Blogger, …….., I can go on and on. Every one of them has a local equivalent. It’s not just in IT. Take Credit rating. It wants its own credit rating agency. Enter Dagong Global Credit Rating. It has about a quarter of China’s own fledgling credit rating market, and of course zilch of th

The financial markets have gone gaga over the Chinese central bank’s announcement over the weekend that they would allow the Yuan to rise gradually. There has been almost unanimous international pressure on Beijing to let this happen for sometime. But then Beijing does not like others telling it what to do (after all, who does ?). It will do what it wants, when it wants. But Chinese reluctance has little to do with foot dragging in international diplomacy. It is caught in an almighty quandary. If the Chinese central bank does not intervene as it does daily, the Yuan would have surely risen a fair bit by now. And probably suddenly. That would be disastrous for China. China is an export led economy. It’s export operating model is huge scale, low costs and wafer thin margins. Costs are under pressure as wage costs rise and general inflation bites. It can only be partly offset by moving factories to the interior where costs are lower than the coastal provinces. Firstly factories are not so

Readers of this blog may be forgiven for not being familiar with the late Dr Datta Samant. He was a fiery trade unionist in Bombay in the 1980s who changed the industrial relations scene in India. His style was extremely confrontational ; he specialized in making demands of 700% wage increases, going on strikes invariably and was prepared for an agreement only upwards of a 100% wage hike. The textile industry in Mumbai was virtually destroyed by him . A few workers benefited when managements caved in to his demands ; but on the whole most, and especially Bombay, lost. Not as dramatic, but something on those lines is happening in China. There has been a coordinated strike in Honda’s manufacturing plants in southern China demanding wage hikes. Honda increased wages by 24%. Foxconn, the company at the heart of the unfortunate suicides in its plant in Shenzhen , has increased wages by upwards of 30% to reportedly 100% for some. Guangdong Province, the factory to the world, increased its m

The press coverage of the worker suicides at Foxconn is throwing open the debate on China’s challenges as it seeks to continue its economic miracle. If you have not followed the events, last week was the eleventh time this year that one of its workers , at its factory in Shenzhen, committed suicide by jumping from his dormitory. Li Hai was only 19 years old and had worked only 42 days in the factory before he died. Foxconn is a giant electronics assembling company. Taiwanese owned, its largest factory is in Shenzhen in China. The Shenzhen plant assembles phones for Apple, Nokia, etc etc. It is typical of the industrial might of China – the factory employs some 400,000 workers at its site in Shenzhen and they all live in the factory premises in large dormitories.Its a virtual city by itself. This is the model in China. Migrant workers come from the west to the coastal cities to work and factory complexes are in effect self contained townships. Foxconn is not typical – its huge. Most ot

“This house believes that GDP growth is a poor measure of improving living standards”. That’s the proposition in the live online debate being currently run by The Economist. You can access this debate here . At the time of writing this post 68% of the online voters agree with this proposition. It seems rather the in thing to agree with the proposition. You can plausibly argue that there’s more to life than GDP. Gross National Happiness, first conceived by Bhutan the world leader in this concept, sounds appealing. Climate Change, Civil society, reduction in inequality – all seem to be nice concepts equally important to “living standards”. You can almost visualize the wrinkling of the nose at GDP, a very base and mercenary measure. An opinionated blogger, such as this one, has a view, obviously ! And the view is largely based on the marvelous example of China. The answer in China would be very clear. There is only one measure. GDP. Or rather growth in GDP. Full stop. Nothing else matters

Where there is a human need; there will be a business. Welcome to the highly specialized world of wedding photography. Not the Indian variety. The Indian wedding has now become a video occasion of the silliest sort. Bright lights are shone at all and sundry, and in the hot Indian clime, it is a virtual torture. Most people are unused to being videoed ; so they put on their most solemn expression and look fairly miserable – a smile is not to be seen within a million miles. I wonder who watches these videos ; I bet certainly not the bride and the groom. The market leaders, by far, in wedding photography are the Chinese. The whole wedding photography business is a fine art, unlike any other. Firstly wedding photography has been completely separated from the wedding itself – it could take place weeks before. These photos are always shot in fancy places – parks, beaches, gardens, whatever , depending on how much you can afford. Both the bride and groom are dressed in elaborate western costu

The word business is nowadays accompanied by a metaphorical holding of the nose. Post the financial crisis, businessmen would probably rank just above bankers and below more traditional last placers like real estate agents, in the list of reputable professions. Readers of this blog would know that the author is a staunch defender of business and advocates the view that the profession is unfairly maligned. An earlier post had touched on this subject. It was gratifying to read The Economist’s Schumpeter column, The Silence of Mammon , which argues that business people should stand up for themselves. The article recounts the two arguments it says proponents have put forth in defence of business – that many firms are devoted to good works and that businessmen have done more than any other institution to advance prosperity. It opines that these are not enough and puts forth three more arguments to counter the critics of business who have dominated the discussion on corporate morality –

China places an enormous value on education – both the society and the government are, rightly, obsessed with it. As a nation it has done a fantastic job of educating huge chunks of its population and providing them with job opportunities. But it’s a massive task and sometimes education and jobs are not always in tandem. This was brought out to me in vivid detail when I read the book review of Ants (Yizu) , a book in Chinese by Lian Si, a post doctoral student in Beijing. Considering the scale of the task, China has been immensely successful in educating its population. In fact, so successful, that it has become a problem. In 2009, China produced more than 6 million college graduates. That gives it the headache of creating 6 million additional jobs every year. Not factory worker jobs, but skilled jobs befitting university graduates. How on earth do you add 6 million jobs year after year ? Just for appreciating the scale, the entire outsourcing industry in India, an undoubted success st

There’s a spat going on between the US and China that is threatening to become a trade battle, if not a war. The US imposed tariffs of 35% on Chinese automobile tyres on the grounds that imports were surging and that the domestic industry had to be protected “temporarily”. China immediately appealed to the WTO and there the matter stands now. But China is a prickly nation. It is quick to take offence. It announced last week that its launching an investigation in American “chicken parts” being dumped in China and putting Chinese poultry farmers out of business. Of course, this was entirely unrelated to America’s action on its tyres. Reading this made me sit up. Is America capable of exporting something that undercuts China ?? How on earth was that possible ? But it indeed does seem to be the case. The “chicken parts” in question are wings and legs. Apparently these have no use in the US – they are virtually worthless and go for 2 cents a pound. But these are delicacies in China – one of