INDEX

A Audi, 8 Advertising, 155–156 Australia, 197 Affinity , 111, 180–181 Affluent consumers, 149–150 B Affordable-luxury sector, 183–186 Baccardi, 172 Age of Discovery, 44, 45, 50 Badge brands, 108 Age of Exploration, 42 Bali, 198 Aging population, 151–152 Bang & Olufson, 185 Agriculture, 37, 58, 66, 122 Barry, Max, 53 Agriculture Industry Commerce Baskin-Robbins, 18 Association (AIC), 94 Baudelaire, Charles, 49 Alcohol consumption, 9 BDA China, 69 Alibaba, 125, 130–132, 204–205 Beard, Mary Ritter, 191 Ali Pay, 132 Bedding, 31 Ali Wang Wang, 132 Beer, 9 Amazon, 131, 132, 204 Beijing: American brands, 183, 185 Galleries Lafayette in, 127 American Century, 80–85 Lenovo in, 157 American Dream, 3, 6, 83–85, 118 as part of Coastal China, 8, 92 American products, preference for, retail outlets in, 18 135 7-Eleven in, 121 Americans, individualism of, 173 Beijing Olympics, 73, 74 Amsterdam: The Story of the World’s Beijing Snowflake, 96 MostCOPYRIGHTED Liberal City (Shorto), 50 Belstaff, MATERIAL 185 Amway, 207 Best Buy, 127 Ancestor worship, 38 BesTV, 206 Annan, Kofi, 41 Biederman, Paul, 191 Anticorruption drives, 107 Billboards, 155 Apparel, 18, 70, 71, 118, 127, 140, Billionaires, 9 151, 164–168 BMW, 183 Apple, 204 Bohai Bay, 8 Appliance market, 95–96, 163 Boston Consulting Group, 135, Asia, as Chinese travel destination, 197 163

213 214 Index

Brands: hypermarkets, 119–120 in broadcast media, 172 lifestyle stores, 126–127 in department stores, 115 malls, 116–118 and travel, 198 multibrand retail, 127 Brand advertising, 169–170 specialty retailers, 127 Brand halo effect, 150 street-level stores, 115–116 Brennan, Sage, 69–70, 72–75, 188, Chen, Frank, 114 198 Chengdu, 121, 182 Brian, Wei, 161–164 Chen Yi, 162 BRICS nations, 9, 19 Cheung Kong Graduate School of British Empire, 34, 53–55 Business (CKSB), 177 Broadcast media, 170–173 Chiang Kai Shek, 86 Brooks Brothers, 182–183 Chi ku, 186 Brown, Kevin, 195–196 China: Buddhism, 38 contradictions in modern, 30–31 Bush, George W., 85 as historical superpower, 13–14, 16 Business culture, Chinese vs. Western learning about, 21–24, 209–210 approaches to, 27 as market, 91–92 Business strategy, 144–145 population of, 7–8 Business travel, 194 as self-contained empire, 33–39 Buying, in supply chain, 142 unique quality of growth in, 18–20 (CCTV), C 155, 167, 172 Candles, 22 The China Dream (Liu Mingfu), 3 Canton, 86. See also Guangzhou “China-fy,” 96, 98, 100 Canton Fair, 130 China Global Demographic, 103–111, Car culture, 74–75, 82 157, 210 Carmosky, Janet, 19, 25, 26 China Global Demographic Market Car ownership, 17 (CGDM), 103–111 Carrefour, 137 China Horizon Investment Group, Castro, Fidel, 64 121, 124–125 CBRE Research China, 114, 118 China Law Blog, 136 CGDM (China Global Demographic China Luxury Advisors, 70, 73–74, Market), 103–111 188 Chanel, 9, 170 China Post, 121–126 Changchun-Harbin, 151 China Resources Enterprise, 120 Changzhou, 92 Chinese culture, 19, 21–32 Channels, 113–127. See also and Chinese mindset, 24–30 e-commerce importance of familiarity with, China Post/Post Mart, 121–126 21–24 convenience stores, 120–121 Chinese Dream, 118, 194 department stores, 114–115 “The Chinese Dream,” 3–6 grocery stores and supermarkets, Chinese language, 22, 23, 29, 37, 91, 118–119 129 Index 215

Chinese Miracle, 207 Deng Xiaoping, 1–2, 16, 63, 65–67, Chongqing, 121, 151 87, 117 Chopard, 105 Department stores, 98, 114–115 Chow Tai Fook, 116 Detroit, Michigan, 82 City clusters, 150–151 Digital Mall, 132 Civil War, 86 Discretionary income, 156 Clingman, Alan, 121–125 Disposable income, 99–100, 149 Cloud computing, 204–205 Distribution, and supply chain, Coach, 9, 116, 184, 187 143–144 Coastal China, 92 Distribution channels, see Channels Coca-Cola, 22, 87, 94 Domino’s, 96–97 Coffee, 9 Dongguan, 8, 92 Cold War, 81 Dong Mingzhu, 163 Colgate-Palmolive, 87 Dubai, 198 Collectivization, 58 Dutch East India Company, 50 Colors, 23 Columbus, Christopher, 44, 45 E Communists, 56, 86 East and West Designs, 26 Communist Party, 1, 2–3, 58 Design and Energy Confucianism, 38, 71 Company for the Confucius, 33 Environment, 164 Conspicuous consumption, 200 EBay, 131, 132 Consumer boom, 71–75 E-commerce, 129–138, 152, 153, Consumer culture, 16, 49–50 168. See also Alibaba Consumerism, 70, 82 Edelman, 134 Convenience stores, 120–121 Educational travel, 195 Converse, 127 E! Entertainment Television, 170 Copyrights, 136 Eisenhower, Dwight D., 82 Corelle, 98 Elliman, Douglas, 174 CorningWare, 98 Emporio Armani, 183 Corruption, 107, 167, 186 Empress Dowager, 55, 59 Cosmetics, 162–163 English language, 29 Cost, total delivered, 141–142 eno footwear, 70 Crusades, 41–42 Entertainment, shopping as, 152 Cuba, 64 Environmental concerns, 195 Cultural Revolution, 59, 62–63 Ermenegildo Zegna, 18, 87, Culture, see Chinese culture 140–141 C-Wonder, 185 Estée Lauder, 163 Etsy, 132 D Europe, as Chinese travel destination, Dalian, 8 197 Daoism, 38 European Dream, 6 Decollectivization, 66 Europeans, 38, 44–45, 50 Delorme, 185 Export Now, 134–135 216 Index

F Germany, 83 Facebook, 174, 204 Gernert, Douglas, 135 Family Mart, 121 G.I. Bill, 81 Fast moving consumer goods (FMCG), Gifts, 36 5, 87, 179 Gifting, luxury, 181 Federal Interstate Highway System, 82 Giordano, 18 FICEs (foreign invested corporate Globalization: entities), 101 and China Global Demographic, First Emperor, 36 103–111 First globalization, 41–42 first, 41–42 FITs (fully independent travelers), Globalization 1.0, 15 193–194 Globalization 2.0, 15 Five-Year Plan (FYP), 3–4 GM (General Motors), 8 FMCG, see Fast moving consumer GM Building (New York), 163 goods Gome, 127 Focus Money magazine, 134 Google, 204 Ford,Henry,16 Gossip Girl, 171 Foreign invested corporate entities Gotta-have-it mindset, 156 (FICEs), 101 Goverment rules and regulations, Foreign real estate buyers, 195–196 113 Formosa, see Taiwan Graff, Roy, 192–194 Forrester Research, 130 Great Depression, 81 Fortune, 163 Greater China, 35 Four Modernizations, 1 Great Leap Forward, 59, 63 Fred Myer, 119 “The Great Pizza Wars,” 96–97 Freedom, 4–5 Appliances, 163 Free Trade Zone (Shanghai), 206 Greek Empire, 35 Fujian province, 8, 92 Gretzky, Wayne, 97 Fully independent travelers (FITs), Grocery stores, 118–119 193–194 Gross, Dave, 187, 188 Fuzhou, 8 Group dynamics, 27 Fuzhou-Xiamen, 151 province, 92, 121 FYP (Five-Year Plan), 3–4 Guangxu, Prince, 55 Guangzhou, 94, 130, 133 G as city cluster, 151 Galleries Lafayette, 127 and colonial exploitation, 53–54 Gandhi, Mohandas, 21 as part of Coastal China, 8, 92 Gang of Four, 62–63 Post Mart in, 124 Ganster, Steve, 93–95, 97–98, 101 Guanxi, 134, 186 Gates, Bill, 91 Gucci, 9, 187 Gellman, Richard, 106–107 General Motors (GM), 8 H Genghis Khan, 43 Häagen Dazs, 74 George III, King, 53 Haier, 96 Index 217

Halo effect, brand, 150 I Han Dynasty, 36 IBM, 157–159 Han ethnic group, 61, 91 IGD, 118 Hangzhou, 8, 92, 131, 166 Implementation, supply chain, 145 Hao, Emma, 174–176 Impulse buying, 152 Harmonious Society, 3 India, 64 Harris, Dan, 136 Individualism, 173 Harry Winston, 116 Industrialization, 58–59 Hartmann, Renee, 69–75 Ingrao, Tony, 175 Heilongjiang Province, 100 Initial public offerings (IPOs), 131 Heineken, 74 Inner China, 36 Hello Hollywood! (television show), Insider trading, 69 171 Intellectual property (IP), 136, 204 Henan province, 124 Internet, 205 Hershey, 9 Interstate Highway System, 82 Hierarchies, 27 Inventions, Chinese, 37–38, 49 Hirohito, Emperor, 56 IPOs (initial public offerings), 131 History, Chinese, 21–24, 209 iQiyi, 171 H&M, 116, 184 Hollywood, 81 J Home Depot, 127 Home Shopping Network (HSN), Japan, 55–57, 67, 80, 83, 86, 196–197 161–163 JD.com, 135–137 Homonyms, 22, 29 Jerry Maguire (film), 93 Hongbao, 167, 186 Jiang Qing, 62–63 Hong Kong: province, 8, 92 and colonial exploitation, 53, 54 Jiangxi province, 124 Emporio Armani in, 183 Jiang Zemin, 2 Lenovo in, 157–158 Joint ventures, 94–95, 101 as part of Coastal China, 8, 92 Joyce Beauty, 163 and , 66–67 Technomic Consultants in, 94 K as tourist destination, 193 Kate Spade, 184 HSN (Home Shopping Network), Kate Zhou Handbags, 116 161–163 Kennedy, John F., 203 Hu, Mark, 95 KFC, 74 Hua Guofeng, 65 Kmart, 119 Hua Hai Zhong Lu, 115–116 KMPG, 105 Hubei province, 161 Korea, 80 Hublot, 116 Kraft, 87 Huizhou, 8 Kublai Khan, 43–44 Hunan TV, 164 Kunming, 151 Husband daycares, 118 Kuomintang Party (KMT), 55, 86 Hypermarkets, 119–120 Kutcher, Ashton, 159 218 Index

L McKinsey & Company, 9, 147–153 Lancôme, 163 McKinsey Technology Institute, 148 Land reform, 58 Magnes Sisters, 116 Lane Crawford, 116, 127 Mainstream consumers, 149–150 Las Vegas, Nevada, 197 Makeup, 79 Lavazza Coffee, 172 Maldives, 197 Lavin, Frank, 134 Malls, 116–118 Lawson, 121 Manchuria, 56 Lee, Ann, 85 Mandarin Chinese, 29, 129 LeeJeans,172 Mandarins (civil servants), 16 Lenovo, 157–161 Manufacturing, 67, 142–143 Lew, Andy, 182–183 Maoism, 64 Liao Central South, 151 MaoZedong,2,6,57,63 Lifestyle experience, travel as, 194–195 Market clusters, 92 Lifestyle stores, 126–127 Marketing, 155–178 Li & Fung, 106 and brand advertising, 169–170 Li Ning, 116, 127 and consumer impulses/desires, 156 Literacy, 59 by Lenovo, 157–161 Liu Chuanzhi, 157, 158 and made for China TV, 170–173 Liu Mingfu, 3 by O.C.T. Mami, 164–168 London, England, 197 via promotions, 177 Longines, 105 via social media, 173–177 L’Oréal, 163 by WeiEast, 161–164 Los Angeles, California, 197 Market segmentation, 147–153 Louis Vuitton, 9, 87, 185 Markman, Scott, 156, 169–170 Lu, Christine, 111, 180–181, 198 Marx, Karl, 71 Luxury goods and brands, 179–189 Marxism, 64 affordable-luxury sector, 183–186 Maternity wear, 164–168 and corruption, 107 Maurizi, Cynthia, 84 downturn in, 186–189 Maxim’s, 18 expansion of, 9, 14, 70, 74 Medicine, traditional, 37 and gifting group, 181 Megaprocesses, supply chain, 140–141 and middle-class consumers,182–183 Meiji Restoration, 55–56 and nouveau riche, 180–181 Meitan Me You, 170 Tourneau, 104–107 Melnitsky, Ira, 104–107 and travel, 200 Metan Development, 170–173 LVMH, 179 Mexico, 143 Michael Kors, 184, 187 M Microsoft, 203–207 Ma, Jack, 130, 131 Middle class, 114 Macao, 54 American, 81 McCartney, Lord George, 53 creation of, 4 McDonald’s, 74 and luxury market, 182–183 McGregor, James, 14 Middle Kingdom, 34, 61 Index 219

Mindset, Chinese, 24–30 Nouveau riche, 180–181, 187 Ming Dynasty, 36, 45–46 Novelty value, 152 Ministop, 121 Mobile purchases, 137 O Modern Life, 171 Oceania, as Chinese travel destination, Mongols, 34 197 Mongolia, 35 O.C.T. Mami, 164–168 The Monogram Group, 156 Office 365 (software), 205 Morris,Ian,37 Ogilvy and Mather, 69 Morrison, Van, 43 Olympic games, 73, 74 Multibranding, 72 Omega, 105 Multibrand retail, 127 One Billion Customers (McGregor), Musical instruments, 9 14 Online shopping, 134. See also N e-commerce Nagel, Jeffrey, 208 Opening and Reform, 73, 193 Namer, Larry, 170–172 Operations strategy, 144–145 , 8, 92, 151 Opium, 54 Nanning, 151 Opium War, 72 National Basketball Association (NBA), Orient (corporation), 114 133 Orr, Gordon, 147–153 National Football League (NFL), Outbound China, 184–185 132–135 Nationalist government, 55 P Nationalists, 56 Paris, France, 197 NBA (National Basketball Association), Parkson, 114 133 Patek Phillip, 105 NBTY, 208 Patience, 210–211 Nestlé, 94, 100 PayPal, 132 Networks, 27–28 Pearl River Delta, 8 New China, 58–59 Peer recommendations, 178 New World, 34, 50, 114 People’s Republic, founding and early New York City, 197 days of, 57–59, 87 NFL (National Football League), Pepsi, 22, 87 132–135 Per-capita disposable income, 149 Nike, 18, 71–73, 127 Personal computer market, 157–161 Nike China, 70 P&G, see Procter & Gamble 99 Reforms, 55 Pizza Hut, 96 Ningbo, 8, 92 Planet Homebuddies (Internet television Nintendo, 206 series), 171 Nomads, 35 Planning, supply chain, 141–142 Nordstrom, 127 Pollution, 195 North America, as Chinese travel Polo, Maffeo, 43 destination, 197 Polo, Marco, 43–44 220 Index

Polo, Niccolo, 43 S Pompadur, Larry, 170 Sales channels, see Channels Porsche, 8 Salo, Paul, 195 Ports (brand), 18 Salo Homes, 195 Post Mart, 123–125 “Scientific Development,” 3 PPTV, 171 Segmentation, 147–153 Prada, 9, 179, 187 Self-confidence, 38, 156 PricewaterhouseCoopers, 120 Self-expression, 28–30 Problem solving, 28 Self-image, 24 Proclamation 13 (State Council), Selling, in supply chain, 144 71, 73 Senior market, 151 Procter & Gamble (P&G), 87, Sephora, 79–80, 116, 127, 163 94, 97 Sequoia Capital, 168 Promotions, 177 7-Eleven, 120–121 Pyrex, 98 SEZs (special economic zones), 66–67 Shaanxi province, 107 Q Shandong province, 124 Shanghai: Qianlong, 53 as city cluster, 151 Qingdao, 8, 54, 86, 121 and colonial exploitation, 54 Qing Dynasty, 34, 38, 54–55, 61, and Deng’s Southern Tour, 117 86–87 as first-tier city, 73 Hua Hai Zhong Lu in, 115–116 R Microsoft in, 205, 206 Ralph Lauren, 126, 185 as part of Coastal China, 8, 92 Real estate, foreign, 195–196 as “Pearl of the Orient,” 86 Rebecca Minkoff, 116 Post Mart in, 124 “Red Computer,” 160 retail outlets in, 18 Reform and Opening, 1, 22, 65–68, Sephora in, 79–80 79, 165 7-Eleven in, 121 Relationships, cultivating, 210 Tompkins International in, 140 Renaissance, 42, 45 Shanghai #1 Bedding store, 116 Returnees, 25 Shanghai Media Group, 206 Return to Da Fu Tsun (television show), Shanghai Plaza 66 (shopping mall), 172 185 Roaring Twenties, 81 Shanghai Tang, 116, 184 Rolex, 105, 116 Shenyang, 182 Roman Empire, 35 Shenzhen: Rome, Italy, 197 as city cluster, 151 Roosevelt Island, 175 Hong Kong investment in, 66–67 Rude Chinese tourists, 199 multinationals and, 124 Rudin, Melanie, 106–107 as part of Coastal China, 8, 92 Russia, Soviet, see Soviet Union retail outlets in, 18 Russo-Japanese war, 55–56 Whirlpool in, 95 Index 221

Shopping: Super consumption: as entertainment, 152 American, 81–82 and travel, 194 globalization of, 82–83 Shorto, Russell, 50 origins of Chinese, 85–89 Shuangcheng, 100 Supermarkets, 118–119 Silk Road, 42 Supply chains, 139–145 Silk Road Era, 34 and alignment of strategy/structure/ Sina Weibo, 171, 174 implementation, 144–145 Skincare products, 162–163 and buying, 142 Slogans, 1 and distribution, 143–144 Socialism with Chinese and manufacturing, 142–143 Characteristics, 1–2 megaprocesses in, 140–141 Social media, marketing via, and planning, 141–142 173–177 and selling, 144 SOEs (state-owned enterprises), 121 Surplus Labor Value, 71 Softbank, 130 Suzhou, 8, 73, 92, 108, 124, 184 Software, 204–205 Sydney, Australia, 197 Soho China, 163 Song Dynasty, 36, 37 T Sony, 206 T-4 strategy (Whirlpool), 95 Sophisticated consumers, 126 TAG Heuer, 105 Sotheby’s, 195 Taiping Rebellion, 55 Southern Tour, 87, 117 Taiwan, 35, 53, 165, 197 Soviet Union, 59, 62, 64, 80 Tang Dynasty, 34, 36 SpaceNK, 163 “Tang” family, 107–111 Special Administrative Region, Tao Bao, 125, 132, 137 see Hong Kong Target, 119 Special economic zones (SEZs), Technology market, 204 66–67 Technomic Consultants, 93–94 Specialty retailers, 127 Tencent, 174, 204–205 Starbucks, 9, 18, 72–74 The Three Represents, 2–3 State Council, 71, 73 360buy.com, 135–136 State-owned enterprises (SOEs), Thrift, 36 121 Thunderbird School, 93 State-owned shops, 113 Tiangshan earthquake, 62–63 Staying the course, 98–100 Tianjin, 8, 86 Strategy, operations, 144–145 Tibet, 35 Street-level stores, 115–116 Tier-one cities, 70, 117, 124, 150, 151, Structure, supply chain, 145 182, 184 Subscription-as-a-service (SaaS), Tier-two cities, 70, 117, 124, 150, 182, 204–205 184 Sun Baohong, 67–68, 86, 177 Tiffany’s, 183 Suning, 127 Tingler, Brion, 158–161 Sun Yat Sen, 55, 85 Tmall, 132–135, 137 222 Index

“Toddler” consumers, 99 University Flag Football League, 133 “To get rich is glorious,” 2, 67 Urban, Pope, 41–42 Tompkins Asia, 5 Urbanization, 187–188 Tompkins International, 139–140 U.S. China Partners, 5 Tompkins, Jim, 140 U.S. Postal Service, 125 Tony Burch, 171, 187 Total delivered cost, 141–142 V Totes Isotoner Corporation, 135 Value consumers, 149–150 Tourneau, 104–107, 188 Value systems, Chinese vs. American/ Trade, 35, 49–50, 71, 208 Wester n, 25 – 26 Trademarks, 136 Vans (brand), 126–127 Trade society, China as, 68 Video games, 205–206 Traditional medicine, 37 Vitamins and supplements, 208 Transportation, 143 Travel and tourism, 82, 191–201 W and brands, 198 Walmart, 119, 137 and China Global Demographic, Wanamaker, John, 155 103–111 Wang Xiuli, 124 destinations for, 196–198 War of Resistance, 57 and foreign real estate buyers, WeChat, 106, 174–176 195–196 Wei East, 161–164 increase in, 191–194 Wenxhoi, 92 key motivators for, 194–195 What America Can Learn from China rude Chinese tourists, 199 (Lee), 85 strategizing tips for, 198, 200–201 Whirlpool, 95–96 Treaty Ports, 54 – 55 Wenzhou, 8 Tudou/Youku, 171 Wholly foreign owned enterprises Tusk, 116 (WOFEs), 101 TV stations, 170–172 Why the West Rules—for Now (Morris), 21Vianet Group, 205 37 Twitter, 174, 204 Windows Azure, 205 Two-Dollar-a-Day project (Procter & Wine, 9 Gamble), 97 WOFEs (wholly foreign owned enterprises), 101 U Women: “Ugly American,” 82 fashion-conscious, 161, 166 Unilever, 94 richest, 163–164 Uniqlo, 116 status of, 59, 79 United Kingdom, 152 World Kitchen, 98 United States: World Trade Organization (WTO), 2, and American Century, 80–85 38, 72–74, 191 China as viewed by, 33–34 World War II, 57, 80 as Chinese travel destination, 197 Wuhan, 161 population of, 8 Wuxi,8,92 Index 223

X Yuan Dynasty, 34, 45, 61 Xanadu, 43 Yum! brands, 87 XBox One, 205–206 Xiamen, 8 Z Xi’an, 25, 182 Zakkour, Hal, 84 Xi Jinping, 1, 3–5, 107, Zakkour, Michael, 84–85 186 Zara, 116, 184 Xinhai revolution, 55 Zegna, 116 Xinjiang, 35 Zhang Ronglin, 124 Xiu.com, 137 Zhang Xin, 163 Zhang Yaqin, 204–206 Y Zhao, Paul, 164–168 Yahoo!, 130 Zhao Wenhong, 164 Yang Liu, 26, 29 Zhejiang province, 8, 92, 165 Yangtze River, 36 Zheng He, 45–46 “Yan Wu,” 14–15, 17 Zhou Enlai, 63 Yellow River, 36 Zhu Di, 46–47 Yoga 2 tablet, 159 Zhu Rongji, 2