Experience with Chinese service industry

There is something fascinating for anyone that shipped parcels from Greater China, it’s to watch the development of the homegrown carrier SF Express over the last decade. Unlike its competitors (DHL, UPS, Fedex) SF didn’t develop a powerful back end to handles the parcels, but relied a lot on manual labour, a lot of parcels are still sorted manually by the last mile delivery men. 

This reliance on manual work is pretty common for Chinese company. They also often pay employees on a commission basis (Uber before Uber), while it’s far from being ideal on the side of the employees the unexpected side effect has been an incredible service. The delivery man has to be efficient and has to know internal processes, if he wants to be well paid. In return the customer gets a very good service, especially compared with traditional career where one has to deal with multiple layers of admin to get things done. This pretty unique mix of manual labour reliance and commission-based income put the Chinese service industry on steroids. 

Unfortunately, this time is coming to an ends quickly with the development of the recent Hey Tea and Luckin Coffee, where WeChat mini programs replace the efficiency and warmth of the faces of those companies.

What is Apple strategy in China?

The updates announced at the Steve Jobs Theatre on Monday 25th of March got commentators with plenty to argue about. Once again!
Beyond new services such as Apple News+, Apple Arcade or the software updates, the keynote was a powerful signal sent to its international audiences.  

Apple is a company that has to nurture “a” global market in mind. That gets translated into one product offering for the entire world. The App Store has the same interface in Bangalore and Milano, iOS is minimally customizable, etc. It happened that some services were released in the US first (such as the iTunes Store back in 2003), but the end goal was always to get those available worldwide over time.

With the recent announcement of Apple News+, Apple Arcade, Apple Card, AppleTV+, we are observing a clear strategy around the service offerings. How sustainable will it be? 
There is little to no mention of the announcement on Apple Chinese Website. And the reason is simple:  out of the four services announced only one could have a possible existence in China (Apple Arcade).
Apple Card might eventually be available, but Chinese observers know how credits cards aren’t widely used in the country. And in countries where credit cards are marginal, Apple will have a hard time convincing the general public to use Apple Card.

What I take from the incredible show that we witnessed at the keynote is that Apple is developing a third pillar to Apple product offering: first, hardware and software. Now, hardware + software + services. Is Amazon Prime the trendsetter?
But the real challenge that I anticipate for Apple is rolling out its services outside of the US borders. How will they get broad acceptance in a country where players like Xiaomi and Huawei have deep integrations with a large number of local services. And the flexibility to roll out updates at a much faster pace.

Can we imagine Apple developing features that would be tailored for each market? The example of how China’s importance to sales got Apple to add a Dual Sim to its flagship product is an indicator of what might happen moving forward.

(Picture Credit: The Verge)

Zaozuo

Ikea meets Xiaomi, Zaozuo is offering furniture and homeware mostly online with a few flagship brick and mortar locations in Shanghai and Beijing. Next stop develop a stronger Chinese design identity, that goes beyond red and rosewood.