Will they say no to that hot cuppa Joe?

Peking University professor Jeffrey Towson has a few things to say about Starbucks in China:

The amazing thing about Starbucks China is not just the consumer trend. It is that plus the absence of a major China competitor.

Starbucks is a very successful Western business that, for some reason, has no clone or serious domestic competitor in China. This is really stunning.

Try to think of another China situation like this. Nike fights against Lining. Samsung fights against Huawei and Xiaomi. KFC fights against virtually everyone. And so on.

There is no “Starbucks of China”.

Can confirm.

CEO Schulz has said they will open 500 stores a year in China, for the next five years. That would take them from about 2,600 today to 5,000 China outlets by 2021. That sounds big. It’s not for China. […]

Starbucks should be thinking in terms of +10,000 China stores.

Jeez. That’s more than the number of outlets currently in the US.

Changing consumer behavior is what Wall Street should worry about.
Chinese consumers are the most fickle group I have ever encountered. The behavioral differences between age brackets is vast. And the rate of change within each bracket is fast. Brands and products rise and fall all the time in the PRC. Take a look at the wildly swinging market shares of Samsung and Xiaomi over the past couple of years.

Starbucks is somewhat more exposed to these swings than most. [Reasons why]

Fascinating. Here’s another Towson article, from last year, about the singularity of the US coffee giant in China:

So why doesn’t Starbucks have a serious competitor in China? I’ve been asking people this for months and I still can’t get a good answer. It’s weird. […]

Explanation 3: Senior Chinese business have a blindspot for coffee. […]

What is really stopping a major company like China Resources from opening 500 stores? Why can’t Wanda take over all the coffee outlets in their +100 Wanda Plazas? They are doing exactly that in hotels and cinemas at the moment. Why aren’t the big boys of China entering this market?

Is it possible that the senior business people of China all grew up drinking tea and never really started drinking coffee? Maybe people like Wang Jianlin just don’t like coffee?

Maybe he just doesn’t like coffee

Final Explanation: It could still be a fad.

This is the explanation that worries me. There is a possibility that retail coffee in China is, to some degree, a fad. Drinking expensive coffee with friends in a nice setting is still relatively new for most of China. This has only been going on for 5 years or so for most people. It is also sort of a status thing and Chinese consumers are notoriously fickle about what is currently cool. Is this somewhat a fad? Could the retail coffee market shrink by 20%? What if millennials lose interest? Could it ultimately be limited to just a small niche of the population? I think it is definitely possible. Maybe big companies are staying out because they don’t really believe in it long-term.

The prevalence of Starbucks in major cities is one of the most visible and obvious signs of international influence in China, and the Frappuccino-sipping, iPhone-wielding yuppie in Shanghai or Beijing is a staple of dumb commentary by foreign observers like our Instant China Expert.

If coffee-drinking in China does indeed prove to be a short-lived fad, and Starbucks ultimately shrivels without being replaced by a major foreign or homegrown competitor, then that could deal a significant blow to the narrative that China is westernizing. China will seem a little more foreign and confusing to many outsiders commenting on it.

Fun fact: The average Chinese drinks about five to six cups of coffee per year, compared to about 300 in the US. (Towson says that in 2013, it was 4 cups in China vs. 441 cups in the US and, amazingly, over 1,000 cups in Norway.)

Bonus: Here’s an article I wrote about Starbucks buying out its East China joint venture.

Hilarity ensues

David Brooks makes some good points in this article. But the most revealing passage by far is this moment of inadvertent comedy:

Recently I took a friend with only a high school degree to lunch. Insensitively, I led her into a gourmet sandwich shop. Suddenly I saw her face freeze up as she was confronted with sandwiches named “Padrino” and “Pomodoro” and ingredients like soppressata, capicollo and a striata baguette. I quickly asked her if she wanted to go somewhere else and she anxiously nodded yes and we ate Mexican.

😃😄😆 A remarkable cross-section of modern American society right there. I laughed, I cried, I canceled my Netflix subscription.

Seriously, this is the sentence immediately preceding the above:

I was braced by Reeves’s book, but after speaking with him a few times about it, I’ve come to think the structural barriers he emphasizes are less important than the informal social barriers that segregate the lower 80 percent.

An excellent point. But if “informal social barriers” are the problem, why is Brooks so eager to perpetuate them by whisking his friend out of a sandwich shop that is a bit more upscale than she’s used to?

Read that paragraph again:

Suddenly I saw her face freeze up as she was confronted with sandwiches…

That sounds really awkward. A social disaster. She was reading a menu, concentrating and… her face froze up. It didn’t even move! She must have been overwhelmed by the situation. Or maybe she was just thinking for a second.

Fortunately, Brooks acted fast:

I quickly asked her if she wanted to go somewhere else and she anxiously nodded yes and we ate Mexican.

Gosh, I’m glad Brooks was sensitive enough to save the day by taking his friend to an eatery more appropriate for a person of her station. We all know the lesser-educated can’t handle sandwiches with foreign names.

Of course, if Brooks had managed to shrug off his initial five seconds of slight social discomfort, he might have considered teaching his friend what the hell “soppressata” means. (Does he know?) But what would be the point of that? Be quiet and eat your prolefeed.

In conclusion:

Hierarchy

Comment on LinkedIn by Richard (Hui) Huang, an executive at JLL in Shanghai:

A very interesting photo. The top leader of Shanghai, Mr. Han Zheng, party secretary, was leading a team ridding various kinds of shared bikes in street, showing his support to the concept. Pay attention to the riding position of every rider. You can clearly judge their rankings. As a lower ranking officer, never overtake the higher, however never be far way either. It is by no means easy to be a gov officer, at least one should have very confident bike controlling skills.

Han is riding the yellow bike in front, obviously.

Here he is in a more formal setting:

Blast from the past: Low-tech cheating

Originally posted Oct 26, 2013

China began the practice of selecting government officials through the imperial civil service exam in the early seventh century. This system lasted more or less continuously for 1,400 years. During much of that history, the exam tested candidates on their ability, among other things, to memorize insane quantities of classical texts. The stakes were daunting: success opened the door to lucrative, high-status public office; but after years of expensive test prep, the average candidate had a maybe five percent chance of passing the grueling provincial level exam.

Under these conditions, its hardly surprising that cheating flourished. In the face of strict policing and the threat of draconian punishments, dishonest examinees over the centuries tried almost every conceivable technique of trickery and fraud. The results were sometimes amazingly elaborate:

The sheer volume of knowledge required to succeed in the Imperial examinations elevated cheating to something of an art form in China. Miniature books were devised to be concealed in the palm of a hand; shirts had important passages from the Confucian Classics sewn, in miniscule lettering, to their insides; fans were constructed with pass-notes on their obverse. Other duplicities included hiring veteran scholars to sit the exams in ones stead, and the simple expedient of copying a neighbour in the exam hall. At certain times, bribery of examiners was commonplace.

– Justin Crozier, “A unique experiment.” From the Society for Anglo-Chinese Understanding’s China in Focus magazine (2002)

(Source)

In 2009, Chinese researchers discovered two tiny booklets dating from the Qing Dynasty designed to be smuggled into exam halls. One of them, slightly larger than a matchbox, contains 32 million characters of text.

It was amusing to see similar items on display in the museum under the Tengwang Pavilion in Nanchang. The labels aren’t very descriptive, but you get the idea:

Fortunately, China has put all that nonsense behind it. The imperial exam system was abolished in 1905. Today, instead of a rigorous, high-stakes national exam that holds the key to lucrative and prestigious government jobs, China has, well, a rigorous, high-stakes national exam that holds the key to social mobility.* And instead of miniature books and garments covered with hundreds of thousands of characters, the more unscrupulous exam-takers of today use wireless earpieces and pen scanners.

*Though perhaps decreasingly so.

Blast from the past: High school vice-principal sells useless cheating equipment, riot ensues

Originally posted Oct 24, 2013

This June, Malcolm Moore reported in The Telegraph on a riot that occurred at a high school in Zhongxiang, a city in central China’s Hubei Province, when school authorities cracked down on students attempting to cheat. Students at the No. 3 high school had been getting suspiciously high scores on the gaokao, China’s brutal national college entrance exam, so this year the school brought in a special team of proctors to relieve students of high-tech cheating gear. Pandemonium ensued:

For the students, and for their assembled parents waiting outside the school gates to pick them up afterwards, the new rules were an infringement too far. Outside, an angry mob of more than 2,000 people had gathered to vent its rage, smashing cars and chanting: We want fairness. There is no fairness if you do not let us cheat. Read the rest of the article here.

According to Moore, groups of students hurled rocks at school offices, trapping proctors inside, some of whom sent out calls for help on the internet. One proctor, who had confiscated a students mobile phone, was punched in the nose by the students father.

The incident is shocking enough, but I thought it worth pointing out that there is another layer to this story, apparently unreported in the English-language media. According to this article by Ye Zhu Yi in the Shenzhen Shangbao (Business Newspaper) which a Chinese friend offered to translate for me a vice-principal of the school had actually sold wireless cheating devices to thirty students through a teacher who acted as a middleman. But the students were unable to use these devices during the gaokao, as the school set up signal jammers to prevent cheating. Following the exam, the thwarted students marched to the vice-principal (who, they knew, had supplied the cheating technology) to demand a refund. The vice-principal refused, so the students reported him to the police. The resulting investigation netted two groups of cheaters.

Even more amusing, the exam had to be called off and rescheduled because angry parents barged into the classroom, argued with proctors, and even tried to switch off the jamming devices while the exam was in progress.

Extreme cases like these highlight the massive problem of cheating in Chinese schools. But the official and public reactions to them also illustrate the fact that many Chinese are disgusted by cheaters and the conditions that enable them. For example, the above-quoted author goes on to argue that (roughly):

  • Cheating is out of control at many schools, rendering gaokao scores useless as measures of ability;
  • Cracking down on cheaters is all well and good, but is not enough;
  • The basic problem is that the gaokao has far too much importance in shaping a students future prospects, leading to crazed competition which gives rise to cheating;
  • So besides punishing cheaters, we also need to reduce the importance of the gaokao and reform the whole education system and the way that students are evaluated.

Sound advice, I think.

Blast from the past: Loanwords

Originally posted June 16, 2013

Teaching business English to Japanese students in Shanghai has reminded me of one thing that I miss about South Korea, where I used to live: English loanwords. A loanword is a word from one language that gets adopted by another language. Modern-day Korean is littered with English loanwords, which often makes for curious listening; a foreigner who doesn’t understand Korean, listening to a Korean conversation, will hear a stream of completely unintelligible speech punctuated now and then by strangely pronounced English words such as “shopping” or “condition.”

As I discovered in my classes with Japanese students, the Japanese also borrow an enormous number of words from English, ranging from everyday items (konpyuuta for “computer”) to abstract concepts (moraru for “moral”). This provides Japanese ESL students with a large “built-in lexicon” of English words that they already know because they are commonly used in Japan.

In one class, I was amused to hear a student refer to a car horn as kurakushon, which I took to be a borrowing of the English word “correction” – quite an evocative way to describe a blaring horn. In fact, as I later learned, kurakushon comes from “klaxon,” the name for the electric horn that makes the classic ah-OO-gah sound of early cars and submarines.

Japanese and Koreans love to use English loanwords. But Chinese rarely use them, because the Chinese language is extremely loanword-resistant. Sometimes, in a relatively upscale venue such as Starbucks or a nice restaurant, I will hear people dropping English words, usually in a context where the speakers are working together or talking about work or business. As English is the default language of international business, its not surprising to hear actual English terms like “city manager” or “enterprise software” bandied about in China. But I generally don’t hear English loanwords at all.

Consider that in Japanese, “table” is teburu, “ice cream” is aisu kurimu, and “cheerleader” is chiagaru (“cheer girl”). In Korean, those words are rendered as te-i-beul, a-i-seu keu-rim, and chi-eo ri-deo, respectively.

In China you call them zhuozi, bingqilin, and lala duizhang – there is no borrowing from English at all.

By and large, the Chinese adopt foreign words by translating them semantically rather than transliterating them – that is, transferring the semantic information (meaning) rather than the phonetic information (sound). Thus, the Chinese word for “computer” is diannao, meaning literally, “electronic brain.” (Again, the Japanese word for “computer” is konpyuuta – a transliteration.) “Democracy” is minzhu, meaning “people rule.”

Some more examples:

  • hedonism: xiangle zhuyi (literally: “to seek pleasure” + “ideology”)
  • jeans: niuzai ku (lit: “cowboy trousers”)
  • mainstream: zhuliu (lit: “main” + “stream”)

These and similar modern coinages are fun to learn. Unlike the bland phonetic borrowings in Japanese and Korean, they are vivid, meaningful and organic expressions of the Chinese language, using native Chinese words to express new and/or foreign concepts.

But I have to say that there is something pleasing to me, as a native English speaker, about the abundance of English loanwords in Japanese and Korean. Above all, I miss the craziness of Konglish (Korean English), with its distorted borrowings of English words and phrases. Besides the simple transliterations mentioned earlier, such as shopping and ice cream, Korean also has a quirky lexicon of English loanwords with altered meanings and English words combined to form novel phrases. For instance, Koreans will routinely and unselfconsciously use expressions like these:

  • a-i syo-ping (“eye shopping”) = window shopping
  • geul-lae-meo (“glamour”) = voluptuous woman
  • mi-ting (“meeting”) = blind date
  • sa-i-deo (“cider”) = soft drink such as Coke or Pepsi
  • sel-peu kae-me-ra (“self camera”) = home/amateur video

I have also heard this one in Korea:

  • syeo-teo-maen (“shutter man”) = man who is financially dependent on his wife – thus his main job is to open and close the rolling steel door (shutter) of his wife’s shop every day

Chinglish, unfortunately, is no match for the glories of Konglish.

Update: On a related note, this is just funny.

Blast from the past: Shopping around at the Shanghai marriage market

Originally posted June 3, 2013

On a sunny Saturday afternoon a few weeks ago, I stopped by People’s Park in the center of Shanghai. There I was interested to find the famous marriage market in full swing.

A huge crowd of Shanghainese parents milled around, shopping for spouses for their absent sons and daughters in this outdoor Chinese version of Match.com. They browsed among thousands of flyers advertising single men and (mostly) women hanging personal ads with brief descriptions and requirements, for example:

Translation:

Hubei Province girl. Born in 1986. 1.60 m tall. Self-taught undergraduate degree. State-owned enterprise. Monthly salary 4500 yuan [about $733]. Delicate/graceful. Pretty.

Seeking: Height about 1.75 m. Undergraduate degree or higher. Stable job. Any area.

In China, the idea of parents literally shopping around for a match for their offspring seems almost normal, even if the sons and daughters in question – nearly all of them working adults, in some cases living overseas – may resent and be embarrassed by such heavy-handed paternalism. To be sure, the Shanghai marriage market is something of a curiosity and not by any means the main venue for people to meet their significant others in this city. I sensed an air of desperation to the place – after all, it’s hard to imagine that men and women whose parents feel compelled to sit in People’s Park like street vendors, displaying personal ads clipped to open umbrellas, are busy fending off the opposite sex.

It’s possible, though, that I’m wrong, and that many happy relationships are forged by the bustle of the marriage market. In any case, the People’s Square Blind Date Corner (its official name) seems to offer a good opportunity for parents to sit around, stroll and mingle outside, shooting the breeze with each other – an activity that aging Shanghainese tend to enjoy.

Blast from the past: Money, power, and posters

Originally posted April 15, 2013

I saw this interesting poster while jogging on Longhua Road in Shanghai:

It’s a piece of propaganda displayed by the local subdistrict government. The boy is saying “My dad has power!” (Wo ba you quan!), while the girl is saying “My dad has money!” (Wo ba you qian!). The single black character to the lower right of the image means “compare” (bi).

The figure on the far right (Money) is of course the symbol of the yuan, the Chinese currency. The figure on the left (Power) may need some explanation. It is an official stamp or seal, or, as its often called in Asia, a chop. Although largely unfamiliar to Westerners, the chop has a more than 3,000-year history in China, where it is the ultimate symbol of power.

These little wooden seals are a kind of signature, used to certify official and legal documents. Every company and government office has one. Chops confer immense power and are therefore carefully guarded by their owners. Anyone who manages to steal the official chop of, say, a company thereby acquires the legal powers of that company’s top executive.

For this reason, legal battles and even violent scuffles often break out over possession of the official chop of a company or government entity. During the Cultural Revolution, Red Guards and rebel factions seized control of local governments (including the Shanghai government, in 1967), factories, and schools by breaking into them and stealing their chops. Even today, it is not unknown for companies and government agencies to raid their rivals offices to grab the all-important chops.

Going back to the poster, it is a sort of warning to the rich and powerful not to raise their kids badly. The words “My dad has power!” evoke the infamous case of Li Qiming, who in 2010 struck two students while driving drunk at Hebei University; one of them died the next day. When security guards detained him, the 22-year-old driver shouted: “Sue me if you dare. My father is Li Gang!” Li Gang, as it turned out, was the local deputy police chief. Li Qiming was ultimately sentenced to six years behind bars, but his presumption of impunity, despite the governments efforts to quash the story, fueled a widespread perception that the powerful and well-connected are above the law, and his sneering words – Wo ba shi Li Gang! – went viral online, triggering an outpouring of satirical art and poetry.

This is extremely bad publicity for the Chinese government, and it threatens the social fabric. In that context, this poster mocking the insolence of many of China’s guan er dai and fu er dai – the progeny of privileged government officials and wealthy elites – is a subtle piece of parenting advice designed to discourage such flagrant abuses of power.

View of the road with propaganda posters on the wall to the right

“I’m gonna do…”

Barbaric

I’m hearing this all the time now, from people of all ages and stations in life:

Customer: “Yeah, uhmmmm…. I’m gonna do a 6-inch meatball sub.”

Sandwich Artist®: “And what would you like to drink, sir?”

Customer: “Yeah, I’m gonna do a Coke.”

Where does this horrible locution come from? What is its etymology? Are linguists looking into this? Google is drawing a blank.

“Can I get…” is bad enough – a shameful mutation of the traditional “May I please have…” or the more up-to-date, but still polite “Can I have… please” / “I’ll have… please.” Apparently, we’ve reached another milestone in the descent into cultural barbarism. The next stage will be to jab your finger at the thing you want while grunting ferociously.

Jeez, people. Nobody expects you to talk like the host of Masterpiece Theater… but may you please try not to sound like an absolute moron? Thanks.

Chicago in one sentence?

Paul Graham on the subtle messages that great cities send:

Great cities attract ambitious people. You can sense it when you walk around one. In a hundred subtle ways, the city sends you a message: you could do more; you should try harder.

The surprising thing is how different these messages can be. New York tells you, above all: you should make more money. There are other messages too, of course. You should be hipper. You should be better looking. But the clearest message is that you should be richer.

What I like about Boston (or rather Cambridge) is that the message there is: you should be smarter. You really should get around to reading all those books you’ve been meaning to.

When you ask what message a city sends, you sometimes get surprising answers. As much as they respect brains in Silicon Valley, the message the Valley sends is: you should be more powerful. […]

The big thing in LA seems to be fame. […]

In DC the message seems to be that the most important thing is who you know. You want to be an insider.

As a resident of Chicago, this naturally made me wonder what message the Windy City sends to people. A couple of excellent candidates are proposed on the Y Combinator message board:

Chicago: You went to the wrong fraternity

And:

Chicago: There’s nothing wrong with second place.

But seriously, folks. Chicago is a great global city, it’s just hard to sum it up in one sentence because it’s such a mixed bag of industries. Chicago is said to have the most diversified economy in the US; its “industry mix most closely matches the nation’s, with no single industry employing more than 14% of the workforce,” according to World Business Chicago. Top industries in Chicago range from finance and insurance, to food processing and manufacturing, to publishing and biotech. The city is also a major logistics and transportation hub, as well as a cultural and academic powerhouse.

Chicago has a protean quality that makes it somewhat hard to pin down. There may be no tidy way to summarize the city’s “message.” Part of the issue is that Chicago is a regional magnet for talent, but not a national one. People don’t flock to Chicago from across the country. (That has a lot to do with the weather, among other things.) Thus, while Chicago is a great city, it may not be a true hub of ambition in the way Graham is talking about.

This comment gets the last word:

As a cartoonist covering life in the Chicago area for the past 20 or so years, here is what Chicago says; “You really need to be successful here, but if not, someone just might help you.”