How to catch a pirate
The fight against global trade in fake goods is not just China’s problem
This story originally appeared in the February 27, 2006 edition of Business China, published by The Economist. Download a PDF version of this story here.
by DAN WASHBURN
In January when the Shanghai municipal government announced its plans to shut down Xiangyang Market—known simply as the “fake market” to locals—officials trumpeted the decision as a major victory in China’s battle against the rampant trade in pirated goods. Vice Mayor Zhou Taitong emphasised that the market was not just being “removed” but was being “abolished”. And the state media reminded readers that the Shanghai Industrial and Commercial Administrative Bureau handled 1,227 cases of trademark violation in 2005, confiscating 1.6m fake items from markets, including Xiangyang.
Another property deal?
But the government’s crackdown-on-counterfeits spin seems simply to have been a convenient byproduct of what the manoeuvre was really about: property. A few days after the Xiangyang announcement, local papers reported that Sun Hung Kai Properties, one of Hong Kong’s largest developers, was in “final talks” to purchase the market site—a prime plot on bustling Huaihai Road, in the heart of Shanghai’s commercial district—for US$450m.
A Xiangyang salesperson says the merchants have been asked to leave the market before June 30, adding that many shopkeepers will be happy with a change of venue because rents at Xiangyang are expensive, averaging about US$5,000 per month per stall. “We will continue to sell the same products, but in a different part of the city,” says the 22-year-old, who specialises in fake luxury handbags. “The government is already telling some shops to move to the Longhua area. The market will not go away.” And what if it did? Fake goods can be found stocking storefronts on nearly every street in Shanghai.
06.20.2006, 10:02 AM · Business, Politics, Stories · Comments (3)
Help offered
In a country with no tradition of classified advertising, eBay sees a bright future for an online version of it
This story originally appeared in the October 24, 2005 edition of Business China, published by The Economist. Download a PDF version of this story here.
by DAN WASHBURN
Already a multi-billion-dollar industry in the US, Internet classified advertising has arrived in China, courtesy of online-auction giant eBay. But China has no history of classifieds, online or offline. So it begs the question: can online classifieds in China make money? According to the people behind Kijiji.com, eBay’s entry into the international online-classifieds market, the answer is yes—easily. How do they plan to pull it off? By taking their online operation offline.
In August 2004 eBay purchased a 25% stake in San Francisco-based online classifieds pioneer Craigslist.com for a reported US$10m-12m. Six months later, eBay launched Kijiji (it means “village” in Swahili), a mostly non-English network of Craigslist-inspired community websites where people advertise jobs, apartments, goods, activities and services for free. After a series of acquisitions, Kijiji now has websites covering more than 150 cities in 20 countries. And Kijiji China, launched in February with the other Kijiji sites around the world, is leading the pack with more than 80,000 postings at any given time.
China’s huge population obviously provides Kijiji with a solid base from which to grow. Even with very low Internet penetration, the number of Chinese going online is estimated to be more than 100m, second only to the US. But China’s low labour costs allow Kijiji to try things there that it would think twice about in other parts of the world, especially when the operation has little or no revenue.
Still in the rough
The success of golf tournaments in China belies the tepid state of the country’s golf business
This story originally appeared in the November 21, 2005 edition of Business China, published by The Economist. Download a PDF version of this story here.
by DAN WASHBURN
Tiger Woods played in an official international golf tournament in China for the first time this month. It was a big one—the HSBC Champions tournament in Shanghai, the richest golf event ever held in Asia with a US$5m purse. This coupling of cash and the world’s top player brought the buzz surrounding the growth of golf in China to a crescendo. Zhang Lianwei, China’s most successful pro golfer, said Mr Woods’s presence “moved China golf forward by ten years.”
Hot ticket
China is emerging as a hot ticket for international golf tournaments. This year alone, the mainland and Hong Kong hosted five European Tour events—more than Scotland (four) or England (three). But golf in China is all big-money tournaments and almost no growth at the grass-roots level. Events like the HSBC tournament create great exposure for the game in China, but nearly everything about them is foreign. They include few Chinese golfers, even fewer domestic sponsors and lukewarm government support. Domestic media coverage is also perfunctory at best, though a gallery of some 5,000 people followed Mr Woods during the HSBC Champions’ final day.
“People are saying what a great year it has been for Chinese golf—I disagree,” says Nick Mould, senior vice president of Singapore-based World Sport Group. “It has been a great year for golf in China, but not for Chinese golf. This is not sustainable, because nothing is left behind.” He pointed to two high-profile tournaments in China prior to the HSBC—the BMW Asian Open and the Johnnie Walker Classic—where out of US$3.8m in prize money, less than US$50,000 ended up in the pockets of Chinese golfers.
IBM’s moronic new ad about China
If you live in a America and you have watched any television in the last couple weeks, you have likely seen some of IBM’s “help desk” commercials, the company’s attempt to, as Reuters phrases it, “put a human face on the services it offers.” In IBM’s whitewashed parallel cyber-universe, friendly, soft-spoken people sit behind desks waiting to help real people solve their real-people problems. “We wanted to show that we’re not just talking about technology for technology’s sake … but things that affect not only business but the world and society at large,” said Deirdre Bigley, IBM’s vice president of worldwide advertising.
Unfortunately, one of the ads — produced by Ogilvy & Mather — shows IBM to have a rather myopic view of the world at large, especially China. This is a common problem in corporate America, blinded by the supposed gold in them thar Chinese hills. The 30-second spot does not bode well for IBM’s future in the “world’s fastest-growing economy.” Nope, the “Big Blue” just doesn’t get China at all, it seems. Interesting for a company whose computer business was just taken over by Lenovo — a Chinese company.
01.24.2005, 2:35 PM · Business, Television, Video · Comments (18)
