Author Archives: tyuan

One-child Policy = Incredible Resources?

According to news from Beijing Auto Show, there are millions of Chinese under 30 who are only children, a legacy of the country’s one-child policy. And these children have parents, grandparents, aunts and uncles who are eager to see them get a good start in life, says Ford Motor Co. chief of sales and marketing Jim Farley. In contrast to many Americans under 30 who are burdened with college debts or wrestling with a sluggish job market, China’s young consumers “have incredible resources,” he says.

I haven’t thought about this before! But it’s unfair to say like this! China has the largest income gap among people and ordinary people face a struggling life especially in big cities, particularly for young adults. 

According to The Atlantic: China, like the United States, has an income inequality problem: the country’s GINI coefficient, a measure which tracks economic equality, was 0.474 in 2012, making it more unequal than countries like Peru and the Philippines. Often, inequality in China is blamed on the country’s high rural population—39 percent of China’s citizens worked in the agricultural sector in 2008, a number much higher than that of developed economies. The situation isn’t lost on China, either. Prime Minister Li Keqiang has unveiled a plan to urbanize the country, betting that doing so would help balance China’s economy.

Due to unbelievable high housing price in China, Chinese cities were dominated by welfare-oriented public rental housing provided by either the government or public employers. Severe housing shortages, residential crowding, and poor housing conditions were common problems in cities. Over the last two decades, Chinese cities have experienced an unprecedented housing privatisation, as the Chinese government has sold public rental housing at deeply discounted prices, encouraged developers to provide new private housing and ended public housing provisions. Meanwhile, house prices have skyrocketed in cities, with the national average house price increasing by 250% in the decade between 2000 and 2010. The house price-income ratio classifies much of China as “severely unaffordable”. In big cities like Beijing and Shanghai, a modest apartment can cost multiple millions of yuan to purchase, and thousands of yuan to rent, making housing affordability the top concern of most low- and middle- income households.

I know it is true in US a lot of students have loan in order to go to college, But in China, poor people cannot even get educated to have the chance to go to college, let alone to have a loan from the government. Chinese people are rich, Chinese people are poor. Chinese rich people buy the luxury brands and cars but the poor cannot afford even Mcdonald’s.

Japanese Cars in China

According to WSJ Toyota Revs Up Ambitious Plans for China, it’s the first time I know sales amount of Nissan are more than Toyota. It says: Toyota is current the No. 6 auto maker in China by vehicle sales, according to the local official industry group, and among Japanese brands is No. 2 behind Nissan. I always think Toyota is the No.1!

Then I search for the sales in US, I find an article: Nissan Passes Honda in Feb, Toyota Falls.“Asian automakers showed mixed results in February, with Toyota and Honda posting declines while Nissan was up in double digits. Among the smaller Asian brands, Subaru zoomed, while Hyundai lagged and Kia was about flat.” It seems Nissan is catching up while Toyota is falling.

I become so curious about why I think Toyota is the best in my mind. According to my previous knowledge about Asian cars, they are almost the same in quality when talking about similar types of cars. While Toyota is a little bit more expensive since Toyota cars tend to keep the price higher even after purchase (like a 20K car would be 16K in 2 years when it drops to 14K on a nissan car). And in my mind, people always like Japanese cars which are cheap and economical.

However, Nissan was not the winner this Feb according to the market data showed in China. “Nissan, the largest Japanese car maker in China by sales, said Tuesday that it sold 95,200 vehicles in China last month, down 0.4% from a year earlier. Sales fell 0.8% to 75,700 units at the passenger-vehicle unit that Nissan operates as a 50-50 joint venture.”

Nissan cited as a reason the fewer working days this January, as a result of the Lunar New Year holiday. Lunar New Year observations fell in February last year. “When factoring in the number of actual working days for the month, sales were 15% better than the same month last year,” the company said in a written statement.

On the contrary, “there’s usually a sales spurt before the spring festival,” said John Zeng, a managing director at Shanghai-based consulting firm LMC Automotive. Mr. Zeng said Nissan might have shipped too many cars to its dealers in the last two months of 2013, leading to high inventories, while some companies might have held back on year-end shipments. 

It shows much uncertainty about the situation of Japanese cars in China. Based on analysis, political risks remain the biggest challenge for Japanese car makers. Tensions between the world’s second- and third-largest economies have been running high for the past 18 months over a group of disputed East China Sea islets. After Tokyo took steps to buy some of the islets from their private owners in September 2012—thereby upsetting what Beijing considered the status quo—anti-Japanese protests erupted in China, with a handful of attacks on Japanese-brand cars and their drivers.

 

Why Do People Trust Airbnb?

According to WSJ, a group led by private-equity firm TPG has finalized an agreement to invest more than $450 million in Airbnb Inc., valuing the home-rental site at $10 billion, according to people familiar with the situation. News also states that the six-year-old company, which previously raised more than $300 million in capital, is padding its coffers as it prepares to expand globally and add more services for travelers. Earlier this year, Airbnb began testing a cleaning service for hosts in certain neighborhoods of San Francisco and New York. Last fall, it hired Chip Conley, the founder of Joie de Vivre, a boutique hotel chain, to lead an effort instructing the company’s 350,000 hosts on the finer points of hospitality.

It’s really amazing for such a startup to become so popular among people all over around the world. So why is it so successful and why do people trust Airbnb?

Trust is the most important part of Airbnb I think. How could you feel if two strangers would live in your house for couple of days? How can you sleep comfortably at night knowing the home owner still has access to the room? How can you trust all of my possessions to someone I’ve emailed only twice?

To solve this problem, Airbnb tied the exchange to your real identity (Facebook Connect), with reviews and minimal online interviews (“Why are you visiting?”) to create trust (and repercussions if trust is broken) amongst buyers and sellers, adding liquidity on both sides. In addition, Airbnb requires customers to upload identification files such as passport and photo. From my personal experience, one host even asked me several questions and beliefs I hold.

Besides, Airbnb built an exceptionally user-friendly site that took the pain out of discovering and booking accommodations. No shady exchange of cash or hours spent surfing inconsistent listings on Craigslist – everything was listed in a uniform way, search/comparison is intuitive/simple, and payment is handled online.

Most importantly, likely none of the above would have mattered if Airbnb rentals weren’t generally 30-80% lower than available hotels. They could have built an interesting business renting niche properties like treehouses, but it wouldn’t be the darling of Silicon Valley had the listings not made financial sense for most users.

Let’s look at the hotels’ side for a further understanding. For decades, hotel brands have been riding the inertia that was built by big demand, lack of options, and brand loyalty. But Airbnb is just starting. In today’s travel marketplace, brand transparency powered by innovative technology is what the people want. Give travelers the experience they are looking for: value, service, a great user interface, personal global connections, and social sharing. Mix these together, and you have a success story called Airbnb. We have to acknowledge that Airbnb is rapidly becoming the biggest hospitality brand in the world.

 

 

 

How Much Have People Changed of Reading Habit?

According to What’s Barnes & Noble’s Survival Plan, Barnes & Noble is making its last stand in towns just like Chestnut Hill. Its 663 stores still stretch across all 50 states, but there are 63 fewer than five years ago. Stores in Georgetown and the heart of Greenwich Village have closed. Gone, too, is the rambling college store in Manhattan’s Flatiron district that was the sole Barnes & Noble retail property when Leonard Riggio bought that business in 1971.

Barnes & Noble has widened its offerings to include educational toys, games and other nonbook categories, which carry higher profit margins. Revenue for that category jumped 12% in the recent Christmas quarter. At the same time, the retailer has cut back on its book inventory: Its stores, depending on size, carried about 21,000 to 170,000 titles in 2013, down from 60,000 to 200,000 titles in 2004, according to Securities and Exchange Commission filings.

But it seems it’s still hard for Barnes & Noble to have a revenue.

B&N

Another news is about the famous Shakespeare & Co. in New York City. Shakespeare & Co.’s lease has already expired, and the bookseller will move out as soon a new tenant has been found. “That part of Broadway has changed,” he blithely told the Observer. “The fact of the matter is that along with many bookstores, they are having trouble paying rents that were affordable 10 years ago when they signed these leases.” Though there is some hope—EV Grieve’s tipster noted some local residents may try to get the store back on its feet via a fundraiser, a la the St. Mark’s Bookshop. If the NoHo store is gone for good, it’ll join the dearly departed Upper West Side and Gramercy Shakespeare & Co. locations, not to mention fellow Manhattan shop Rizzoli Bookstore, which is stated to close this week. Shakespeare & Co. still maintains two New York stores, one on the Upper East Side near Hunter College and one in Brooklyn.

Based on the situation of bookstores, I cannot help myself stop thinking about how much have people changed of their reading habit? According to Why I Love My Kindle Even More Than Books, she gave seven reasons including: portable, cheaper, unobtrusive, shareable, better selection, clutter-free and convenience.

I believe there are still people especially for older generations who would like the old style. But after their time passes, I’m worried about the future of the bookstores. Young people have smartphones, ipads and laptops every day around with them. The habit of reading real books are disappearing.

 

(Revised) Why No HR Department?

After I read Companies Say No to Having an HR Department, one point in this article really impresses me. That is: “I just have a hard time understanding how somebody in an office two or four states away can do a better job of solving an employee problem than someone who has a vested interest in the employee,” one person responded to this question like this.

I can’t agree more in this point. Statistics shows that in 2012, U.S. employers had a median of 1.54 HR professionals for every 100 employees, up slightly from a low of 1.24 in the recession year of 2009, according to the Society for Human Resource Management. They earn a median annualized wage of about $51,000, government statistics show. I begin to think about: might it be a waste of money in this way? Especially for large companies which cover lots of fields have branches all over the world.

From my personal experience, I’ve got several interviews from human resource department. Sometimes HR representatives knew almost nothing about the job which I was applying for. They could only understand some basic concepts during the conversation. How could they hire people in this way? It seems the only thing they could see is whether they like your talking style or not. I don’t think it fair for someone who knows little about your field to judge you by “feeling”.

Theoritically, HR departments are trying to serve two masters – which, in most cases, is not very successful. On the one hand, they are there to provide support for the employees and, on the other hand, they are there for the company and the senior management to help manage (and monitor, discipline, appraise, etc.) employees. This conflict of interest can cause friction and in many instances HR departments swing to the ‘support the company’ side, rather than the ‘support the employees’ side.

However, from the ratio provided by the government, how could one HR understands 100 employees? Regardless of their specialized roles in the company. It’s very hard to know the employee according to the ratio, let alone “studying” their performance.

Another article which strongly suggesting having the HR department talks about: “Human Resources” is definitely an old-fashioned term (coined back in the day when human resources were compared with financial and physical resources), the need for HR today is greater than ever. Then it gives several examples, for example: a large well known manufacturer of office products has shifted its business toward services, completely transforming its operations and driving higher margins. The CHRO and CLO drove a new “culture of learning” in the company which has been responsible for retraining technical and service professionals at all levels. This company is now regarded a “Growth Play” by Wall Street.

While I believe in this example, “culture of learning” might be created by HR department, the successful transaction from manufacturer has nothing to do with HR department, right? In addition, “culture of learning” may not be built thanks to HR department, team leaders, managers and CEOs are more powerful to build up such values I think.

Why don’t we give up HR department to save a large sum of money?

Walmart is Fighting Back in China

Walmart is fighting back against Chinese regulatory authorities after facing continuous investigations. The world’s largest retailer has been forced to pay roughly $10 million over the last three years for violating Chinese food and safety standards. These fines have not only impacted the company’s profitability, they have also hurt its long-term growth prospects by driving traffic away from Walmart stores.

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Although Walmart has taken the initiative to rectify these problems, they will not bear fruit until the real problem is solved. The issue does not lie at the retailers’ end only, but at the end of suppliers and manufacturers as well. It is the latter’s responsibility to ensure quality and deliver what they have promised to the retailer. Consequently, Walmart thinks these manufacturers need to be investigated by regulatory authorities as well.

Food safety has been one of the biggest issues in China, as thousands of Chinese have fallen ill after consuming unsafe products. However, Chinese regulators do not investigate or fine local manufacturers or supermarket chains with the same frequency they regulate and fine international retailers. In 2012 Chinese media said a Carrefour store in central Henan province had sold expired chicken and had mislabeled ordinary chicken as a more expensive organic variety. Carrefour responded by closing the store and apologized to consumers.

Personally, I think some of the fines are not reasonable, at least it’s not worthy such large amount of money. But it’s true for most international companies, getting ahead in China means playing by Chinese rules. However, Walmart has taken the unusual step of asking Beijing to rewrite them. It shocked me. Walmart express that it wants manufacturers to bear more responsibility. Executives at the Arkansas retailer have urged China’s Food and Drug Administration to carry out inspections of all companies which handle food, not just retailers, and to make manufacturers responsible for their own breaches.

That might seem a reasonable position to take, but tackling the problem in this fashion amounted to a major breach of Chinese protocol that may come to be viewed as a watershed moment. International companies are still tightly controlled in China, and have historically made much more commercial headway when they have gone along with Beijing’s rules.

Will Walmart win? Will China be unhappy with the actions Walmart is taking?

I would say no in most cases but considering Walmart is in a different position, however. Not only is it a major employer in China, its international operations mean it is also the largest American buyer of Chinese-manufactured goods, and its eighth-largest trading partner worldwide – ahead of most countries.

Let’s wait and see.

A Rising Dollar, A Falling Yuan

According to a recent news from WSJ a sharp and sudden slide in China’s yuan is forcing investors to rethink one of the most reliable trades in financial markets over the past four years: betting on gains in the Chinese currency.

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Since China resumed efforts to move the yuan higher in 2010, traders have piled into bets that profited as the currency has staged a seemingly relentless advance. But after hitting a record against the dollar in mid-January, the currency has dropped over 1%, reaching a six-month low on Tuesday.

China hasn’t intervened much in the market lately while the direction of the yuan has headed downward due to market pressures. A broad range of economic indicators—from trade to consumer spending to industrial production—have showed a slowing Chinese economy, which has reduced demand for the yuan. On April 16, China plans to report its first-quarter gross domestic product numbers and it is widely expected to show a slowdown to somewhere around 7% year-over-year, from 7.7% in the last quarter of 2013.

Most market analysts expect the yuan to reverse course over the year and finish with modest appreciation. That is because of a combination of factors: China’s economy is likely to pick up somewhat later in the year as Beijing makes moves to stimulate its economy. At the same time, its leaders realize that a steadily depreciating currency is bound to cause friction with the U.S. and other trading partners.

However, according to U.S. Treasury Looking Closely as Weaker Chinese Yuan: the U.S. put China on notice that it is looking closely at whether Beijing’s efforts to devalue the yuan represent a shift in policy that could start a round of competitive devaluations. A senior official at the Treasury Department said it would “raise serious concerns” if Beijing is moving away from plans to allow market forces to have a greater impact on the yuan’s exchange rate, especially if Chinese officials are at the same time citing greater flexibility in the currency’s movements.

Is it good for Chinese people as Yuan is falling? The answer is positive for China but negative for the United States. This is why USA doesn’t want Yuan to fall. Firstly, falling Yuan will decrease imports since the price of imports will become higher under weaker Yuan. Secondly, exports will increase due to the same reason. Thus, there will be an increase in the labor market in China since China needs to produce more. In this way, falling Yuan will definitely benefits China but hurts US economy. So will China take any actions because of the warning from U.S.? Let’s wait and just keep an eye on the exchange market.

 

Why HR Department?

 

After I read Companies Say No to Having an HR Department, one point in this article really impresses me. That is: ”I just have a hard time understanding how somebody in an office two or four states away can do a better job of solving an employee problem than someone who has a vested interest in the employee,” one person responded to this question like this.

I cannot agree more in this issue. In 2012, U.S. employers had a median of 1.54 HR professionals for every 100 employees, up slightly from a low of 1.24 in the recession year of 2009, according to the Society for Human Resource Management. They earn a median annualized wage of about $51,000, government statistics show. I began to think about: might it be a waste of money in this way? Especially for large companies worldwide.

HR departments are trying to serve two masters – which, in most cases, is not very successful. On the one hand, they are there to provide support for the employees and, on the other hand, they are there for the company and the senior management to help manage (and monitor, discipline, appraise, etc.) employees. This conflict of interest can cause friction and in many instances HR departments swing to the ‘support the company’ side, rather than the ‘support the employees’ side.

However, from the ratio provided by the government, how could one HR understands 100 employees? Regardless of their specialized roles in the company. It’s very hard to know the employee according to the ratio, let alone “studying” their performance.

Another article which strongly suggesting having the HR department talks about: “Human Resources” is definitely an old-fashioned term (coined back in the day when human resources were compared with financial and physical resources), the need for HR today is greater than ever. Then it gives several examples, for example: a large well known manufacturer of office products has shifted its business toward services, completely transforming its operations and driving higher margins. The CHRO and CLO drove a new “culture of learning” in the company which has been responsible for retraining technical and service professionals at all levels. This company is now regarded a “Growth Play” by Wall Street.

While I believe in this example, “culture of learning” might be created by HR department, the successful transaction from manufacturer has nothing to do with HR department, right? In addition, “culture of learning” may not be built thanks to HR department, team leaders, managers and CEOs are more powerful to build up such values I think.

Why don’t we give up HR department to save a large sum of money?

Why Young Teachers Quit?

According to story from WSJ: Young Teachers Stick Around, Bringing Tech SavvyMayra Lara has been laid off three times and bounced among high schools during her seven-year teaching career in the Los Angeles school district. Concerned about once again losing her job, she moved in with a friend and hunted for work outside of teaching two years ago.

New research shows that in the 1987-88 school year, the most common experience level for teachers was 15 years, according to a periodic survey by the U.S. Education Department, as fewer novices entered classrooms. By the 2007-08 year, that experience level—the “mode” in mathematical terms—had shrunk to one year, setting off concern about the skills of this large group of inexperienced teachers.

But research to be released Tuesday by Richard Ingersoll, a professor in the Graduate School of Education at the University of Pennsylvania, shows the most common experience level jumped to five years in the 2011-12 school year, suggesting many of the 2007 hires remained.

Why do teachers quit?

According to the interview from The Atlantic “One of the big reasons I quit was sort of intangible,” Ingersoll says. “But it’s very real: It’s just a lack of respect,” he says. “Teachers in schools do not call the shots. They have very little say. They’re told what to do; it’s a very disempowered line of work.”

Other teachers—especially the younger ones—are also leaving the classroom for seemingly nebulous reasons. “We are held up to a really high standard for everything,” says Emma, a 26-year-old former teacher at a public school in Kansas who now works for a music education non-profit. “It stems from this sense that teachers aren’t real people, and the only thing that came close to [making me stay] was the kids.”

Another study done by the National Charter School Research Project suggests lack of job security is a factor in teachers’ decision to leave public charters. Most teachers sounded simply frustrated, overworked and underpaid—sentiments that are certainly echoed in the research. The teacher-turnover problem has a flip side, of course: If 40 to 50 percent of teachers leave the classroom within the first five years their career, that means that 50 to 60 percent of teachers stay.

A range of factors influences teacher retention, according to Ingersoll’s research, but he tells me that the way administration deals with both students and teachers has a “huge effect” on teacher satisfaction. He cites this as being one of the potential ways to keep teachers without spending billions of dollars increasing salaries.

It’s really amazing for the results so far, teachers leave because of salary but stay just because of kids themselves.

Will Yahoo be Successful in TV Programing Game?

Yahoo is raising its ambitions in online video, with plans to acquire the kind of programming that typically winds up on high-end cable TV networks or streaming services like Netflix, people briefed on the company’s plans say.

The programming push is part of a broader strategy by Ms Mayer to focus on video. The Wall Street Journal reported at the end of March that the company was in preliminary talks to acquire online video service News Distribution Network Inc. Yahoo also struck partnerships with TV news journalist Katie Couric and former New York Times tech columnist David Pogue.

But I’m wondering will it be successful if Yahoo launches similar services like Netflix and Amazon? Netflix has already got a success in this area and Amazon is making its progress with its huge customer basis. How about Yahoo? I really doubt its current situation as it’s failure in mailing services. It might seem as a promising direction for Yahoo, but is it really possible?

Ms. Mayer has made online video a centerpiece of her strategy to get users to spend more time on Yahoo pages and watching ads. NDN, a video syndication service that supplies newspapers and other Web publishers with clips about news, sports, politics and other topics, would help Yahoo expand its video offering to thousands of new sites and potentially create lucrative opportunities for marketers to work with Yahoo.

According to Yahoo Could Finally Bring Local TV News to Internet: the only hitch is that station owners might not want to get into bed with Yahoo. After seeing local print news squeezed by large internet aggregators and cable television under attack from the likes of Netflix, their first instinct may be to protect their profit margins. “It’s not known yet how many or how few station groups will be eager to share content with outside aggregators,” says Serena Cha, who has led the television news and multimedia program at the University of Southern California’s Annenberg journalism school.

Actually I really cannot agree with Marissa Mayer’s “big movement” action like this. I believe Yahoo is experiencing its recovery process. It’s an old saying says if you are the first to try something you will have success but you are the second, the third, it’s unknown. Why not have something they are the first but copying Netflix and Amazon? She is a little bit wasting Yahoo’s remaining dollars and reputation in my point of view on trying to buy whatever has worked for someone else.