Wednesday, January 30, 2008

perhaps it will change

There is an arrogance here.

I really enjoy Shanghai, I like this city a lot. On par with Cities that i’ll record as my favorite. It’s lacking in a couple of areas.... but so significantly makes up in others that the lack of things to see is offset by the things to do and for the time being my choice level of cultural clumsiness.

the blush of being new in China hasn’t worn off. I wake up with a grin and eat with first date anxiety. I haven’t gotten tired of not understanding anything and have picked up ‘thank you’ and ‘hello’. Got them backwards for a whole day. Learned that people like to teach me chinese if I ask. And my ear feels like it’s stuffed with marshmallows when they talk-- spelling things is the only way.

in this mess of newness and business i’ve also see one nasty consequence of the economic success that defines shanghai --

and that’s hubris. Maybe it was just surprising, and i'm sure it isn't the Rule (this is a big place after all...) But it's also not hard to find.

Someone may read this and damn the jingoist . But i’m not, don’t really care. and I genuinely like the place.

the businesses here have exploded. 5MM three years ago, 50MM this year. Again and again you hear the same story. For eons as economies ebb and flow as the fates of success roll up somewhere new-- And in China a cosmic scale lottery ticket has been cashed.

The cynical head of an old American brand? yeah. i am.

But the circumstantial success of a shanghai. did you grow the billion and pay them nothing sir? no. you happened to be in a place where you could well exploit a population, and were an able enough skipper to navigate through some chop to end with a successful business. no bitterness -- a lot of respect. respect.

But to mistake the scaled production of cheap goods with genius, or worse with brand integrity is arrogant. Of course this economy will mature and I know that some of the great brands in the 21st century -- a la GE, Coke, Apple, Ferrari, will be Chinese.

But if you’re knocking off thousands of sewing machines and think for a moment that you’ve nailed the integrity factor that builds a worldwide consumer base who trusts and invests in your product for generations. no. ain’t happening.

why? well my reaction probably sounds a little ham handed-- but is it? Name some great brands that have developed and lasted building a business on knocking things off. Brands. Not behind the scenes ‘shaws’ brand pepper. If you can, name them in the comments.

I rattled off a pile of 50 and couldn’t tag one as fitting the bill. The closest i got was Walmart. And actually this category has a couple, so maybe the whole boxstore enchilada can be assessed.

But is driving across state lines to buy cheap teeshirts and chachkis to sell cheap back home the same thing? I’ll help here. No it’s not. Because your business is predicated on customer service and low costs. People liked Sam Walton, they liked shopping at his store.... and his prices were better.

So what’s the bottom line. Shanghai has a good thing going and I'd bet there are a handful of Sam Waltons as well. But the business leaders here should be aware that good fortune is often chairman of the board. Careful to whom you lift your nose. massive economic good fortune has a tendency to not give a whole lot of warning before taking a walk.
Unknown Merrow

Merrow has manufactured sewing machines since 1838 and remains one of the most interesting companies in the textile space

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