1) Let's talk about the generational mental model differences in China and its impact.
Rather than talking about boomers, gen x, millennials and zoomers. Chinese media segments their population by birth year ranges with monikers of post-80s generation, post-90s and post-00s.
2) This is very fine dicing of the population but highly relevant.
Given China's fast pace change, every decade saw substantial changes in living conditions and therefore massive shifts in that generation's mindsets and values.
3) China went from a state of material scarcity in the early 1980s to high variance in affluence by the 2000s. The transition to more abundance mindsets is clearly seen with each generation.
(variance across regions applies, but this holds especially true for the top cities)
4) To sum up (stereotype) each generation:
Post-80s - hardworking, loyal to organisations, consumeristic and optimistic
Post-90s - Only child/ little emperors, independent, and liberal
Post-00s - Self-expression, international, creative and yolo
5) To me it feels a little like the jump from late boomers to zoomers in three decades.
The difference in the emphasis put on the self versus organisation is quite different with each population (though of cause, there's a lot of variance in between each population)
6) It used to puzzle me how much upper management (the post-70s and post-80s) worried about communicating and managing the post-00s and post-95s.
After interacting with more folks, the culture gap is very real.
7) The old hierarchical way of management that the post-70s and post-80s are used to just don't work on the kids like they used to.
The change in generational values is causing vibration in management styles up and down the country and its fascinating to observe.
8) Bytedance's culture of 'Context, not control' has won over many among the younger generation. Its success has lead to much rethinking among tech and startups management styles.
This will continue as the post-00s keep entering the workforce
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1) Let's talk about how Xiaomi's one of the savviest and stealthiest Chinese tech investors bar none.
Their playbook involves selling mobiles close to margin to land a consumer, before upselling that customer on products they've invested in.
Almost Shopify for hardware
2) Xiaomi famously announced they would never make more than 5% in profit margin from hardware in 2018.
Because they see the phone as a distribution channel for their platform of products and services, the phones are cheap to basically acquire consumer 'traffic'.
3) Xiaomi carries over 2,000 consumer devices in their online and offline stores, of which it is only responsible for a select few, like TV, Xiaomi Pad and speakers.
The rest is made by 400 partner companies.
But Xiaomi isn't a simple retailer, they are a platform
1) Changes in the air - pulling of idol-focused community apps, wasted milk scandal, Kris Wu's arrest, government announcement condemning fan culture.
Feels like a bigger crack-down for idols or 'traffic stars' (流量明星) is imminent.
2) Idol culture, imported from Japan and Korea, has grown rapidly in China in recent years. Some reports estimate China’s idol market to be worth RMB 100 billion ($14 billion) by 2020, with YoY growth of 60%.
3) The business model harks back to 1920s' movie studios - where studios incubate stars and secure them with exclusive contracts.
But instead of studios, it's internet media platforms and their ecosystem of trainee schools these days.
If your life has been going well, all the questions facing you from late twenties onwards will be hard questions, to which there are no right answers.
All the low hanging fruit questions have been answered and you're just left with the ultimate questions of 'what kind of person do I want to be? What kind of life do I want to live? Who do I want to be with?'
These 'hard questions' are actually a sign of the blessed in many respects. Because you have the luxury of trying to answer them.
Lillian: What do you think about the new government tech and education regulations?
Almost everyone I’ve spoken to in China: About time
Chinese stock holders: 🥲, but I brought call options
It raises this unspoken perspective that we don’t really care about what Chinese people on the ground actually care about.
There’s a lot of western media narratives around how this is a play for ‘control’. But who are they taking control away from?
It’s not the Chinese consumer, who didn’t really have control over the prices they were served on platforms, or feel like they could opt their children out of marathon schooling sessions.
1) Just thinking through the ramifications of Tencent essentially being regulated to relinquish their control over blocking links on their social networks.
Tencent's core competency has been 1) Traffic 2) Money
Which has made them a de facto kingmaker for Chinese startups
2) I spoke about this at length in the battle between Alibaba and Tencent and how much of Chinese internet is now a chase for traffic.
Removing this artificial constraint on the ecosystem will be potentially huge lillianli.substack.com/p/the-shadow-w…
3) Startups may no longer be convinced to take Tencent's investment.
As @DennisHong17 pointed out, Alibaba and Bytedance will be laughing as they finally get access to the walled garden.