Once I got back to the United States after my week in China, the firewalls came tumbling down and I got tons of email on a wide variety of subjects…
Responding to our coverage about China and the CIES World Food Business Summit, MNB user Roy Fossum wrote:
Very interesting article! I just returned from working as the CMO for a Chinese owned Hypermarket called the Homeworld, based in Tianjin. I think all your observations are correct.
However, since you were in Shanghai, I think you also got the market that is the most “westernized”. Other areas such as Tianjin, Xi’An and others have not progressed quite as far, although they are moving in that direction.
I have continued to be involved in China on a consulting basis. What is very clear is that the Chinese are very interested in learning the more developed “western’ business practices. However, they are in a much better position to learn those methods, while still capitalizing on their local cultural knowledge, as compared to the internationals. The internationals, while they do bring very big improvements in business practices, all have different levels of challenge when it comes to figuring out the culture. One thing is for certain, China is different today than it was two years ago, and it will be quite different two years from now!
MNB user Jim Hawley wrote:
I was reading your article on China and had to comment since I have experienced China for most of my business career and have been working in the midst of the awesome country and have been witness to their growth into a more pure capitalistic economy. I have been doing business in China for 15+ years and just opened our company's first sales and marketing office in China in Shanghai this January. We are very optimistic on China.
What many people do not realize is that China runs their government with a communist bias, but the economy is more and more capitalistic. The history of China saw this change dramatically. Traditional Marxist communism holds that the government also runs the economy and owns many of the major industries. History also shows that this did not work in Russia, old EEC countries and in early 20th century China, where they tried and failed to run profitable enterprises. The reality is that bureaucrats make bad business people and in a communist system, there is no incentive to compete nor improve the business, so they fail at pretty much everything. What the Chinese have learned is that the free market system provides all of the necessary components for a great economy and all they need to do is find the right entrepreneurs, provide the capital, adopt more free market policies and to follow the Hong Kong model which they have done in the free trade zones of Shanghai and Shenzhen along with a few other areas. More and more, state enterprises are being scuttled or sold private. Another interesting fact is that China is creating more millionaires every year than any economy in history. The free market capitalism is alive, well and healthy in China.
The Chinese leaders are some of the smartest in the world and they know what they are doing. Are they heading for a bubble burst? Sure. They cannot sustain the 8%, 12% or 17% (chose which number you believe) growth but the free market will take care of this and self correct it. It will happen. It will hurt, but they will survive it as a country but many investors will take the hit on real estate and business capital for which they will lose or not get their return.
One other question that people always ask: Why doesn't China turn to a democratic government or model the US with a democratic republic? Because it would not work. Our government was born via a revolution and separation from the Brits, sort of like Taiwan is to China, but way different. The feeling is that a democratic republic will not work anywhere else in the world but the US and that all our efforts to try to implant our ideals to this effect around the world (Iraq comes to mind), will fail since the scenario is difficult to repeat on why the system works in the US.
Anyway, great article on China. Hope my perspective helps further sort out what's going on there.
Thanks.
MNB user Peggy Long wrote:
In discussion of the ‘wet markets’ it also links back to a case study about Wal-Mart selling “dead” fish. In my experience, all Chinese buy fish live at the stores. Wal-Mart didn’t bother to find this out before opening stores … or they choose to ignore it. Talk about ethnocentrism!
In talking about being conflicted about finding brands from home … all travelers should remember that just because it’s a familiar brand doesn’t mean it tastes the same. Nabisco wheat crackers and Coke Cola taste significantly different than how they taste at home. Part of a cultural experience for an American traveler is to NOT EXPECT U.S. products to be the same in other countries, even though they recognize the brand.
Finally, in KC’s View, think about, or at least consider how much is still available in China today. So much different than in Mao’s time!
Kevin, I still continue to find the most value from Morning News Beat feeds than any other I’m currently receiving. Keep up the pertinent insights!
We’ll try.
One MNB user thought that our comments about the pollution in China reflected an unacceptable bias:
It is evident from reading your comments you have bought into the whole "Global Warming" thing. I am not denying that the earth's temperature doesn't fluctuate but putting the blame on man's activity seem to buy into the misinformation that man is to blame and only man can fix the problem.
It was interesting to hear that they have seen similar fluctuation in temperatures on Mars. I am sure the GW advocates will find a way to blame that on SUVs too.
Yes, I believe in global warming.
I believe that the people who don’t think that man’s abuse of the environment – unintended in many or most cases – are essentially making the same argument as the people who said that cigarettes won’t kill you, and that the proof of this is that some people who don’t smoke die of lung cancer.
And I would agree that only man can fix the problem. Mostly because as far as I know, there’s nobody else available.
We did a commentary last week about US retailers who attended CIES, and one Food Lion staffer and MNB user responded:
I guess you probably won't read this until you get home, but I was pleased to see that I was ably represented there. RIck Anicetti is one of the few executives for whom I have worked in my too-many years that has inspired me and, more importantly, instilled in me a feeling of company loyalty and pride. I've had many one-on-one conversations with him (poor guy!) and have always walked away feeling that he LISTENED. I'm one of those IT guys. Not a decision maker. Not an executive type by any stretch of the imagination. Just an associate that enjoys what he does and where he works and is interested in making the company 'just THAT much better’.
That's the kind of enthusiasm I've seen in this company. And a lot of it comes down from Rick. So, I'm not surprised to find him there, looking and learning and I hope we will have the opportunity to hear about the trip.
You’ve got Rick absolutely right. Kudos to him and all the US retailers – and the US manufacturers who understand the value of learning from the global marketplace and sharing their learnings with their customers – who attended CIES.
In writing about Albertsons deciding to jettison its loyalty card program, we said last week that “I’m not a big fan of card programs when they are not used to track shopper habits and market specifically to their proven and implied needs and wants…and we gather that Albertsons’ program, like so many, was just another way of giving out discounts and coupons.
“Which means that it is silly to even think of such an initiative as a loyalty program, because it is never about loyalty. Just about price. And that’s why you see so many people with multiple loyalty cards or key fobs. They aren’t loyal to anything at all.
“I’ve said it before and I’ll say it again. Most retailers have little chance of engendering loyalty among their consumers unless they start recasting such programs in new and innovative ways. The really effective loyalty program will be one that proves the store’s loyalty to the shopper, as opposed to trying to buy loyalty with discounts.”
MNB user Dan Onishuk wrote:
My idea of a loyalty program is simple, all customers have the opportunity to shop and take advantage of all items on sale or featured-the loyalty card is not locked into price discounts. When the customer gets to the checkout, they have the option of giving the cashier a loyalty card or their designated phone number which would already be in the system. Their orders would be filed into the loyalty program to be disseminated. The chain gains information, the reward for the customers on the loyalty program could be anywhere from gift certificate awards, bonus store coupons, store events, cookbooks, etc....keep it painless...make it easy...
Another MNB user wrote:
I can’t agree with you more on Albertsons discontinuing the loyalty program. As a prior loyalty analyst at Albertsons, I found that the company not only wasn’t using the data as they should, but that the incentive to use the loyalty program wasn’t the right one. I personally think of the best programs is here in the Northwest with Fred Meyer, which is similar to a lot of European programs. The card carrier has no incentive to carry the card other than receiving a rebate at the end of the quarter. No discounts, just cash back. Of course I’m going to use my card, otherwise I’m giving someone else my $$.
Now if you looked at Albertsons card database for accuracy and bad data versus Fred Meyer, I’ll be Fred Meyer’s database is much more accurate and being used for the right purposes. Also probably helps that Dummhumby is helping them with their data.
MNB user Tim Grimes wrote:
Great Comment! Loyalty card programs as they are now executed are meaningless. I have 4 cards to prove it...all for stores within about 3 miles of each other. Each of these stores are collecting my buying habits and information, yet none of them has ever offered me anything SPECIAL......JUST FOR ME!! How can they even call these programs "loyalty" programs, when they simply input a customer number if I don't have one of their store cards or have forgotten to bring mine to the store? Hey everybody, it's called relevant, 1 to 1 marketing and if you don't get it right, the customer knows that its just another come-on.
On the subject on the Southern California labor situation, which seems as if it could devolve into a strike or lockout, one MNB user wrote:
Don't believe everything you read in the press. My money is on no strike and a contract very soon.
Another MNB user wrote:
Expect to see Raleys look for room in this market. With their stores in Las Vegas, it makes sense to back fill into the LA basin.
Still another MNB user chimed in:
While the big chains are not going to get wiped out by the Big Boxes and Tesco, they can plan to lose 10-15% of their business or more on a short-term basis. That converts to maybe 15-20% temporary cuts in labor expense and those will be UFCW members and the stores are likely to be very stingy on re-staffing. The UFCW is likely to lose 5-8% of their members permanently, that's lots of dues.
Not looking realistically at healthcare expenses and containment is ridiculous. Not paying anything for healthcare coverage is a big win, but when you don't have a job what is smart about that?
And the stores have the same problem. Even if you are anti-union, who wants the hassle of crossing a picket line, even if it's only every few years. You just switch to a non-union store and not have the hassle.
MNB user Mike Griswold sees a likely consequence of the strife:
Seeing all this, I become more convinced there is no way Tesco will be unionized and be held hostage by the UFCW.
MNB user Len Abeyta had a strong opinion about my coverage of health care and the ongoing negotiations between management and labor in many places over this issue:
In your Monday commentary about Steve Burd suggesting better responsibility by employees for their own health care. Seems like a pretty simplistic view by a multi millionaire that doesn't have to worry about when his next paycheck is coming or how to pay for his medical benefits.
Again, the companies continue to pass the buck and anti union MorningNewsBeat.com continues to join them in backing big business. Great unbiased coverage as usual KC...NOT!
First of all, if you want unbiased, vanilla coverage you probably shouldn’t be depending just on MNB … because that’s not in the mission statement. (Or wouldn’t be, if I actually had a mission statement. I sort of have “mission doodles” scribbled on the back of a cocktail napkin. When he comes on, Sansolo may demand a more rigorous approach.)
Second, I’m not anti-union. Mrs. Content Guy is a member of a teachers union (one that, by the way, I think does a fairly mediocre and unaggressive job of representing its members’ interests). And I depend on the benefits she gets as a teacher and member of that union to get medical coverage as I descend into middle age. (Some would say I’m already wallowing there…)
I actually don’t believe that employees ought to be responsible for their own health care as much as they should be responsible for their own health. Health care benefits, it seems to me, ought to be structured so that people who try to behave responsibly and in a healthy manner are rewarded, and so people who behave irresponsibly aren’t able to drive up costs for everyone else. This doesn’t mean not taking care of people with critical and chronic illnesses. Far from it. But health care costs in this country are way out of whack, and if management and labor don’t start working together to find a solution, it will hurt everyone.
In a story about Julie Roehm last week, we mentioned that we were surprised that the deposed Wal-Mart executive still had a house in rural Arkansas because she had expressed a fair amount of contempt for anyplace that “ends in -ville.”
One MNB user took exception to our characterization:
Northwest Arkansas, where Ms. Roehm apparently still resides, is not really "rural." It has 400,000 people, a major university with a big-time athletic program, and an airport with non-stops to many major metros including New York, Chicago, Los Angeles, Atlanta and Dallas. It attracts regional theater, and gets a professional double-A baseball franchise next summer.
Plus, it's physically beautiful. Every one of the many corporate types I ever talked to who lived there (as I did for nine years, before corporate relocation dragged me away) loved the area. So, I'm not shocked that Ms. Roehm might still be there, especially if she is taking time to plan her next move, and despite what she might have said earlier.
I actually wrote “rural Arkansas” with tongue firmly in cheek. But fair enough…as someone who was born in New York’s Greenwich Village, I may have a somewhat imprecise view of what rural is.
Responding to our coverage about China and the CIES World Food Business Summit, MNB user Roy Fossum wrote:
Very interesting article! I just returned from working as the CMO for a Chinese owned Hypermarket called the Homeworld, based in Tianjin. I think all your observations are correct.
However, since you were in Shanghai, I think you also got the market that is the most “westernized”. Other areas such as Tianjin, Xi’An and others have not progressed quite as far, although they are moving in that direction.
I have continued to be involved in China on a consulting basis. What is very clear is that the Chinese are very interested in learning the more developed “western’ business practices. However, they are in a much better position to learn those methods, while still capitalizing on their local cultural knowledge, as compared to the internationals. The internationals, while they do bring very big improvements in business practices, all have different levels of challenge when it comes to figuring out the culture. One thing is for certain, China is different today than it was two years ago, and it will be quite different two years from now!
MNB user Jim Hawley wrote:
I was reading your article on China and had to comment since I have experienced China for most of my business career and have been working in the midst of the awesome country and have been witness to their growth into a more pure capitalistic economy. I have been doing business in China for 15+ years and just opened our company's first sales and marketing office in China in Shanghai this January. We are very optimistic on China.
What many people do not realize is that China runs their government with a communist bias, but the economy is more and more capitalistic. The history of China saw this change dramatically. Traditional Marxist communism holds that the government also runs the economy and owns many of the major industries. History also shows that this did not work in Russia, old EEC countries and in early 20th century China, where they tried and failed to run profitable enterprises. The reality is that bureaucrats make bad business people and in a communist system, there is no incentive to compete nor improve the business, so they fail at pretty much everything. What the Chinese have learned is that the free market system provides all of the necessary components for a great economy and all they need to do is find the right entrepreneurs, provide the capital, adopt more free market policies and to follow the Hong Kong model which they have done in the free trade zones of Shanghai and Shenzhen along with a few other areas. More and more, state enterprises are being scuttled or sold private. Another interesting fact is that China is creating more millionaires every year than any economy in history. The free market capitalism is alive, well and healthy in China.
The Chinese leaders are some of the smartest in the world and they know what they are doing. Are they heading for a bubble burst? Sure. They cannot sustain the 8%, 12% or 17% (chose which number you believe) growth but the free market will take care of this and self correct it. It will happen. It will hurt, but they will survive it as a country but many investors will take the hit on real estate and business capital for which they will lose or not get their return.
One other question that people always ask: Why doesn't China turn to a democratic government or model the US with a democratic republic? Because it would not work. Our government was born via a revolution and separation from the Brits, sort of like Taiwan is to China, but way different. The feeling is that a democratic republic will not work anywhere else in the world but the US and that all our efforts to try to implant our ideals to this effect around the world (Iraq comes to mind), will fail since the scenario is difficult to repeat on why the system works in the US.
Anyway, great article on China. Hope my perspective helps further sort out what's going on there.
Thanks.
MNB user Peggy Long wrote:
In discussion of the ‘wet markets’ it also links back to a case study about Wal-Mart selling “dead” fish. In my experience, all Chinese buy fish live at the stores. Wal-Mart didn’t bother to find this out before opening stores … or they choose to ignore it. Talk about ethnocentrism!
In talking about being conflicted about finding brands from home … all travelers should remember that just because it’s a familiar brand doesn’t mean it tastes the same. Nabisco wheat crackers and Coke Cola taste significantly different than how they taste at home. Part of a cultural experience for an American traveler is to NOT EXPECT U.S. products to be the same in other countries, even though they recognize the brand.
Finally, in KC’s View, think about, or at least consider how much is still available in China today. So much different than in Mao’s time!
Kevin, I still continue to find the most value from Morning News Beat feeds than any other I’m currently receiving. Keep up the pertinent insights!
We’ll try.
One MNB user thought that our comments about the pollution in China reflected an unacceptable bias:
It is evident from reading your comments you have bought into the whole "Global Warming" thing. I am not denying that the earth's temperature doesn't fluctuate but putting the blame on man's activity seem to buy into the misinformation that man is to blame and only man can fix the problem.
It was interesting to hear that they have seen similar fluctuation in temperatures on Mars. I am sure the GW advocates will find a way to blame that on SUVs too.
Yes, I believe in global warming.
I believe that the people who don’t think that man’s abuse of the environment – unintended in many or most cases – are essentially making the same argument as the people who said that cigarettes won’t kill you, and that the proof of this is that some people who don’t smoke die of lung cancer.
And I would agree that only man can fix the problem. Mostly because as far as I know, there’s nobody else available.
We did a commentary last week about US retailers who attended CIES, and one Food Lion staffer and MNB user responded:
I guess you probably won't read this until you get home, but I was pleased to see that I was ably represented there. RIck Anicetti is one of the few executives for whom I have worked in my too-many years that has inspired me and, more importantly, instilled in me a feeling of company loyalty and pride. I've had many one-on-one conversations with him (poor guy!) and have always walked away feeling that he LISTENED. I'm one of those IT guys. Not a decision maker. Not an executive type by any stretch of the imagination. Just an associate that enjoys what he does and where he works and is interested in making the company 'just THAT much better’.
That's the kind of enthusiasm I've seen in this company. And a lot of it comes down from Rick. So, I'm not surprised to find him there, looking and learning and I hope we will have the opportunity to hear about the trip.
You’ve got Rick absolutely right. Kudos to him and all the US retailers – and the US manufacturers who understand the value of learning from the global marketplace and sharing their learnings with their customers – who attended CIES.
In writing about Albertsons deciding to jettison its loyalty card program, we said last week that “I’m not a big fan of card programs when they are not used to track shopper habits and market specifically to their proven and implied needs and wants…and we gather that Albertsons’ program, like so many, was just another way of giving out discounts and coupons.
“Which means that it is silly to even think of such an initiative as a loyalty program, because it is never about loyalty. Just about price. And that’s why you see so many people with multiple loyalty cards or key fobs. They aren’t loyal to anything at all.
“I’ve said it before and I’ll say it again. Most retailers have little chance of engendering loyalty among their consumers unless they start recasting such programs in new and innovative ways. The really effective loyalty program will be one that proves the store’s loyalty to the shopper, as opposed to trying to buy loyalty with discounts.”
MNB user Dan Onishuk wrote:
My idea of a loyalty program is simple, all customers have the opportunity to shop and take advantage of all items on sale or featured-the loyalty card is not locked into price discounts. When the customer gets to the checkout, they have the option of giving the cashier a loyalty card or their designated phone number which would already be in the system. Their orders would be filed into the loyalty program to be disseminated. The chain gains information, the reward for the customers on the loyalty program could be anywhere from gift certificate awards, bonus store coupons, store events, cookbooks, etc....keep it painless...make it easy...
Another MNB user wrote:
I can’t agree with you more on Albertsons discontinuing the loyalty program. As a prior loyalty analyst at Albertsons, I found that the company not only wasn’t using the data as they should, but that the incentive to use the loyalty program wasn’t the right one. I personally think of the best programs is here in the Northwest with Fred Meyer, which is similar to a lot of European programs. The card carrier has no incentive to carry the card other than receiving a rebate at the end of the quarter. No discounts, just cash back. Of course I’m going to use my card, otherwise I’m giving someone else my $$.
Now if you looked at Albertsons card database for accuracy and bad data versus Fred Meyer, I’ll be Fred Meyer’s database is much more accurate and being used for the right purposes. Also probably helps that Dummhumby is helping them with their data.
MNB user Tim Grimes wrote:
Great Comment! Loyalty card programs as they are now executed are meaningless. I have 4 cards to prove it...all for stores within about 3 miles of each other. Each of these stores are collecting my buying habits and information, yet none of them has ever offered me anything SPECIAL......JUST FOR ME!! How can they even call these programs "loyalty" programs, when they simply input a customer number if I don't have one of their store cards or have forgotten to bring mine to the store? Hey everybody, it's called relevant, 1 to 1 marketing and if you don't get it right, the customer knows that its just another come-on.
On the subject on the Southern California labor situation, which seems as if it could devolve into a strike or lockout, one MNB user wrote:
Don't believe everything you read in the press. My money is on no strike and a contract very soon.
Another MNB user wrote:
Expect to see Raleys look for room in this market. With their stores in Las Vegas, it makes sense to back fill into the LA basin.
Still another MNB user chimed in:
While the big chains are not going to get wiped out by the Big Boxes and Tesco, they can plan to lose 10-15% of their business or more on a short-term basis. That converts to maybe 15-20% temporary cuts in labor expense and those will be UFCW members and the stores are likely to be very stingy on re-staffing. The UFCW is likely to lose 5-8% of their members permanently, that's lots of dues.
Not looking realistically at healthcare expenses and containment is ridiculous. Not paying anything for healthcare coverage is a big win, but when you don't have a job what is smart about that?
And the stores have the same problem. Even if you are anti-union, who wants the hassle of crossing a picket line, even if it's only every few years. You just switch to a non-union store and not have the hassle.
MNB user Mike Griswold sees a likely consequence of the strife:
Seeing all this, I become more convinced there is no way Tesco will be unionized and be held hostage by the UFCW.
MNB user Len Abeyta had a strong opinion about my coverage of health care and the ongoing negotiations between management and labor in many places over this issue:
In your Monday commentary about Steve Burd suggesting better responsibility by employees for their own health care. Seems like a pretty simplistic view by a multi millionaire that doesn't have to worry about when his next paycheck is coming or how to pay for his medical benefits.
Again, the companies continue to pass the buck and anti union MorningNewsBeat.com continues to join them in backing big business. Great unbiased coverage as usual KC...NOT!
First of all, if you want unbiased, vanilla coverage you probably shouldn’t be depending just on MNB … because that’s not in the mission statement. (Or wouldn’t be, if I actually had a mission statement. I sort of have “mission doodles” scribbled on the back of a cocktail napkin. When he comes on, Sansolo may demand a more rigorous approach.)
Second, I’m not anti-union. Mrs. Content Guy is a member of a teachers union (one that, by the way, I think does a fairly mediocre and unaggressive job of representing its members’ interests). And I depend on the benefits she gets as a teacher and member of that union to get medical coverage as I descend into middle age. (Some would say I’m already wallowing there…)
I actually don’t believe that employees ought to be responsible for their own health care as much as they should be responsible for their own health. Health care benefits, it seems to me, ought to be structured so that people who try to behave responsibly and in a healthy manner are rewarded, and so people who behave irresponsibly aren’t able to drive up costs for everyone else. This doesn’t mean not taking care of people with critical and chronic illnesses. Far from it. But health care costs in this country are way out of whack, and if management and labor don’t start working together to find a solution, it will hurt everyone.
In a story about Julie Roehm last week, we mentioned that we were surprised that the deposed Wal-Mart executive still had a house in rural Arkansas because she had expressed a fair amount of contempt for anyplace that “ends in -ville.”
One MNB user took exception to our characterization:
Northwest Arkansas, where Ms. Roehm apparently still resides, is not really "rural." It has 400,000 people, a major university with a big-time athletic program, and an airport with non-stops to many major metros including New York, Chicago, Los Angeles, Atlanta and Dallas. It attracts regional theater, and gets a professional double-A baseball franchise next summer.
Plus, it's physically beautiful. Every one of the many corporate types I ever talked to who lived there (as I did for nine years, before corporate relocation dragged me away) loved the area. So, I'm not shocked that Ms. Roehm might still be there, especially if she is taking time to plan her next move, and despite what she might have said earlier.
I actually wrote “rural Arkansas” with tongue firmly in cheek. But fair enough…as someone who was born in New York’s Greenwich Village, I may have a somewhat imprecise view of what rural is.
- KC's View:
