Tag Archives: business

Slow Internet Speeds In China

I recently came upon an article by writer Frank Hersey on Technode which presented a study made by Cable.co.uk comparing 189 countries internet speeds in Mbps. According to this study of 189 countries, Singapore has the fastest internet in the world, while Yemen has the slowest.

Upon finishing the article, I was somewhat taken aback. I had always thought of South Korea as being the country with the fastest internet speeds. However, it did not even place among the top ten, ranking 16th at 22.9 Mbps.

But what about China’s internet speed? Certainly that is what we should be focusing on here, given the nature of the blog. 

There are so many things I love about China. The crazy English sayings people wear on their shirts, rich and diverse cuisine, a challenging language, the list goes on and on.

However all countries have problems, and China is definitely not the exception. Pollution, corruption, and irksome crowds are all examples of what people have to put up with here. But aside from these hardships, there is another, slightly more insidious problem: internet speed.

Internet Speed in China Is a Serious Problem

According to the study by Cable.co.uk, China ranked 134th out of 189 countries at 1.55 Mbps.

Yes, China’s internet is incredibly slow.

Now, I could give you anecdotal evidence all day of me, bashing my head against my router while fiddling with my VPN in hopes of increasing download speeds. The startling frequency in which I switch to 4G on my phone because a landline simply won’t load the web page fast enough.

When you consider just how “developed” and “sophisticated” people talk about China is, especially in terms of it’s technology, this becomes slightly shocking. Of course, for Chinese and people that work on Mainland China, it’s not shocking at all. We have been struggling with slow internet speeds the whole time.

As someone who works on his computer from 9-5 everyday, usually employing some type of internet service, this is a massive problem. It also affects areas outside of my professional life (such as this blog- hello upload times).

The Deeper Implications of Slow Internet

While I can complain all day about how long it takes for me to boot up a VPN to get through the firewall, then sit through the slow download speeds on my favorite Youtube music video, there are perhaps larger, more important things that we can take away from this study.

The impact of slow internet creates ripples of negative effects in China as a whole. First, it effects workers in the knowledge sector, who rely heavily on IT and network connections to exchange information and use web-based services. Second, it limits a company’s potential to develop internationally, lessening their appeal to international talent and handicapping their headquarters on the mainland. Of course, these two problems are intertwined, but still different enough that they deserve their own individual mention.

Internet Speed Impacts Knowledge Worker Efficiency 

There is no doubt that sluggish Mbps drastically reduces worker efficiency in the knowledge sector. For those of my readers who aren’t clear about how internet speed could negatively impact one’s work, I thought up a metaphor using construction tools.

Think of it this way, when you are building a house, you often can employ power tools such as nail guns and drills to conserve energy while increasing your speed of production. Now, you can do the same job with hammers and screwdrivers, but it will take much more time and energy than if you had the power tools.

For people that rely heavily on the web, using quality power tools is a lot like having a lightning fast connection to the internet. It makes their work more efficient and allows them to focus their effort in the areas where problems really lay.

So, at the micro-level, slow internet really hampers a knowledge workers performance. 

But who cares about that right? A lot of us on the web are old enough to remember the times of dial-up internet connections. We all turned out fine, didn’t we?

Slow Internet Weakens A Firm’s International Competitiveness 

It’s actually a very big deal. Most jobs today, outside of IT purists, rely on using the web in some way. Moreover, some of today’s most profitable and dynamic companies employ strong technology strategies.

Knowledge workers with slow internet speeds become bogged down, and this negatively effects a company’s bottom line. Whether it means the employee needs to work harder, or a department needs to push back it’s deadline, slower internet hinders a teams ability to complete tasks.

Here is important to make the distinction between domestic and international organizations. Competitively speaking, ranking low in this survey is not as important for domestic firms because they are all working in similar conditions and the playing field is level. However, in the international space, this becomes a major disadvantage.

Not only will international companies have this problem, but they will also find it increasingly hard to attract international talent. While this is important in all sectors, it is particularly important in companies that hope to use new technology, as those with expertise often come from outside of the country.

Final Thoughts

While not necessarily a “deal breaker”, internet speed is certainly a big factor for individuals and larger corporations alike. While we could all probably do with less time in front of the internet, it’s important that when we need it to work, it works.

Sidenote: Domestically hosted sites inside of the firewall are significantly faster than those coming from outside. Not really an Eisenstein-like comment, but something you might not appreciate fully unless you have spent some time in China. 

Original Study: https://www.cable.co.uk/blogs/2017/08/09/cable-co-uk-worldwide-broadband-speed-league/

Technode Article: http://technode.com/2017/08/10/chinas-internet-speed-comes-in-at-134th/

What Makes IKEA Successful In China?

IKEA’s success in China shows that it is possible to succeed and even thrive in China as an foreign company.

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IKEA in Beijing

Many business people see entering the Chinese market as a very difficult, almost impossible task. To these people, the idea seems incredibly exotic and shrouded in mystery. The very idea of “entering China” becomes akin to starting an opium war or engaging in some political espionage worthy of Henry Kissinger.

While there is plenty of ammunition for such claims, (certainly mainstream media is not helping), the model for succeeding in China is quite simple. Successful businesses in China possess strong business acumen and take the long term view. One example of understanding these principles and succeeding in China is the Scandinavian furniture retailer, IKEA.

Refurbishing My Apartment

My own personal connection to the topic comes by way of living in Beijing and recently wanting to refurbish my apartment. Whereas in America there are plenty of decent options for furniture on a middle class salary, these options dwindle abroad. In many ways, my time spent living and working in Beijing over the past four years has effectively turned me into a Chinese consumer (with cultural caveats, of course).

This past Sunday I traveled by bus across the fourth ring road, from Wudaokou to Wangjing in order to visit one of the two IKEA stores in Beijing. Again, I was reminded by the hordes just how dominant IKEA is in Beijing. My original goal was to purchase a sofa, but the crowds inside the store were so much that it was nearly impossible to actually inspect them.

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On the Fourth Ring Road

When I got back home from shopping, I couldn’t get the thought out of my head. Just why was IKEA so popular with the Chinese? Upon further online investigation I found some interesting points about the company.

What Makes IKEA Successful in China?

IKEA has taken a long view of doing business in China. They have done a spectacular job of monitoring and adapting their business in alignment with new information.  One such adaption that has undoubtedly helped them is their price point reduction in 2003 which led to 35 percent raise in sales (China Business Review).

IKEA has a strong tradition of creating product catalogs which focus on the culture of target customers in a given country. This focus on adapting to cultural differences has helped them do well in many international markets where others often fail.

IKEA has also invested significantly in an online business model. This will be crucial as e-commerce becomes more and more popular.

IKEA’s proactive attitude and subsequent success shows that, yes, it is possible to run a successful operation in China. Of course, IKEA also has deep pockets and experience in international markets which has made their ride smoother than many others who looked on jealously.

I want to make a point of IKEA’s large capital reserves here. It’s important to note that doing international business is inherently more capital intensive than setting up shop in domestic markets. You need to hire lawyers and buy plane tickets if you want to be more than a simple cog in the supply chain. A lot of the time it doesn’t make sense for companies to try and make the leap until they have a strong base at home.

Wrapping Up              

Some other companies that I have been particularly impressed with in terms of adapting to the Chinese business landscape are Starbucks, Apple, and Coach. They are also very useful to look at as case studies.

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My IKEA Bounty

Sources:

https://www.chinabusinessreview.com/ikea-with-chinese-characteristics/

Additional Reading:

http://www.chinalawblog.com/?s=setting+up+in+china

Chinese Markets

Don’t be confused by the architecture or the language or the way others look. We are all actually a lot similar than we might like to think. We all need the basics; food, shelter, water, love. We all worry about the future and the past.

But, sometimes, the color of one’s flag tends to confuse people. It can make us think that we are a lot more different than we actually are.

American exceptionalism.

Chinese copy-cats.

It’s all hot air.

In reality, the differences between our achievements come from how our societies are constructed and the resources which are available to us at a given time.

Americans aren’t necessarily “better” than everyone else. We have just consciously cultivated a place where cooperation, learning, and meaningful work are encouraged.

Chinese aren’t copy-cats by nature. It’s just that their educational system and this particular model suits their country at this point in time. And as the saying goes, “if it ain’t broke, don’t fix it”.

Throughout past four years living in China and coming to understand it, I have fluctuated between wildly outlandish, racist notions, and a more realistic grasp of how basic societal differences shape the people. 

The best way to understand China as a market is to understand the details, while at the same time not letting these perceived differences intimidate or deter you. Yes, living and doing business here is very different from many other places. But, no, it’s not impossible.