The Many Different Faces of China

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I could make a case that I know China pretty well. I was born and raised in Beijing, spent each summer in my hometown except the year SARS ran wild, and came back to live here right after I graduated from college. I then spent most of my time living here, with two stints of living in Tianjin and Shanghai. I also voluntarily and involuntarily travel around the country. The first trip was to Shandong when I was 6 years old; the last trip was to get married in a city by the sea this August.

I speak the Chinese language fluently, consumes tons of books (both ancient and new), magazines, newspapers, and blogs. English affords me an addition venue to get to know China from a foreign perspective, and I also read a lot about China this way.

Yet I dare not to claim to know China. Case in point, I have no idea that Chinese people who study abroad is a rarity. Out of 1.3 billion people, about 1.5 million Chinese have studied abroad since 1978. Yet somehow people around me are going abroad left and right. Just in the last couple of years, my friends have landed in Great Britain, Italy, Ukraine, Australia, New Zealand, Canada, the United States, South Korea, Japan, Hong Kong, and Malaysia.

Just from that fact alone, I know I am not seeing China as a whole. My socio-economic background and destined me to meet people with similar background. Furthermore, since I have a tendency to the so called first tier cities in China, even though I have visited some of the second and third tier cities, I have no idea how people live over there, let alone the lifestyle of people residing in fourth tier cities and the country side.

Similar case could be made of my wife. She grew up in the South, including a stint in Hangzhou right before college, and then spent four years in Beijing in college before eventually moving to New Jersey for her graduate studies. Upon graduation, she moved back to Beijing. But I seriously doubt she know her hometown and the people living there that well. Otherwise, she wouldn’t assume her cousin, who works in a bank and, along with her husband, owns a house and a car in one of China’s most expensive cities, is living “below average”.

Even when the subject is Beijing, I seriously doubt I know much about people’s existential state. The city is enormous and diverse. Some could afford to crash their Ferraris (unless they died in it, that is), while others collect trash for a living.

All of these people, of course, have different lifestyles, tendencies and needs. But the paradox is, people who want to prosper by fulfilling their needs are very homogenous as a group. Most of the entrepreneurs are highly educated, most likely have studied in an elite institution in China or have studied abroad. They are tech-savvy and relatively affluent, either by their own striving or being a luck beneficiary of hard working parents. They also live in a first tier cosmopolitan or a high developed second tier city.

These traits mean the entrepreneurs are often more in tune with the inclinations of the citizens of San Francisco than their less fortunate neighbors next door. It also means that they are ignoring or are oblivious to a great opportunity. After all, only less than 10% of the Chinese people live in first tier cities.

Duowan YY’s success shows that there is money to be made by serving consumers who are less well off. Many in the game industry are recognizing this fact and are following their customers by moving to second and third tier cities.

One of the truly remarkable feats accomplished by the Chinese language is that, by unifying the written characters, a country this big and this different somehow remained unified throughout history. In fact, the language is one of the main reasons why we all recognize China as one nation. However, this motion is misconceived when it is applied to the market. Beyond the basic necessities of life, there is no such thing as a “Chinese market”. There are many different segments, and everyone is equally worthy. After all, even if you only capture 1/20 of the people, that’s already the same as having 100% of the U.K. market.

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