Today is Tuesday, and I still did not get over the jet lag, but the nature his wake-up call about 5 AM. I took the opportunity to fully organize my my Tuesday and to plan out the next week. Using the planning methodology that I have been using, has been extremely helpful, as it helps reduce the stress and pressure of not knowing where to put your time into. It also forces you to decide on which area you will work on, in which area will have to be neglected, even if both areas are equally as urgent and important.
So, I had a number of A level priority tasks, that all should have been done on Tuesday, but, there is just no way for me to get all the, so I have to decide that some of them would have to be delayed, and that I would just have to live with the consequences of the delayed. This was a little bit different attitude for years from before, where I would pretty much kill myself, and handle all the top one priorities. So, on a personal side it was nice to be able to say NO to a Level A priority and be at peace with hit.
One of the things I focused this week, or rather I should say Tuesday, was to move forward with the e-commerce presentation that I will be doing towards the end of the month. This is one of the EO sponsored events, and I am doing a presentation on e-commerce. For this event, the board has decided, to expand depending, and have up to 150 people, including some MBA students attend the sessions, or rather, presentation. For this, I have to put together a marketing package, so that the boys looking after the event, could secure the venue, and that myself, as a communication chair for the EO, would be able to start to market the event.
Personally, I am quite looking forward to the event, and to have a large audience. It has been quite a while since I had to do large presentations, and I think this is great practice for me to not only run through my e-commerce presentation and find out the responses from the crowd, but also to spring back into the public speaking role. I think this part is going to be quite important over the next couple years, as the fund-raising efforts, for redstores will become more and more important.
There is also a huge personal fulfillment component to this, and that is my inability to share with others, what I have learned, what they can learn from what I have learned, and how they can move forward and make their businesses, their lives, better.
Tonight, I went out for drinks with a few friends, and met a new fellow, the Asian marketing director for Dell. It was great fun talking about market segments, demographics, channels to market, the volume strategy that Dell has in place, the positioning of Dell in the Asian market, and the challenges that Dell has experienced enter the Chinese market.
Klaus, the fellow from Dell, had shared a very interesting insight into the Chinese e-commerce market. At the present, there is only about 10% of the population that is online, and in his view there is a huge mistrust of sending money and not getting something back right away. Culturally, for China, this makes huge sense, since the trust between consumer and the supplier have historically not been of great quality.
Interestingly, what Dell has done in China, is that they have had to adopt their model of going direct, to accommodate local market. So, what I thought was a brilliant move, is they had set up whole number of channels to market, where the consumer is able to interact and discuss the product with a real person in the store, but that particular store does not carry or hold inventory. The purpose of the store, is to then push the consumer to order this product online, which then DELL’s direct model. So basically, from what I saw, Dell has kept their direct model, but they have supplemented it with trust builders, in the form of small shops, that guide consumers to place your order online. What this means, is that they are doing, what I would call assisted e-commerce. It makes me laugh when I think about it, but at the same time, I cannot but admire and respect the ingenuity and the depth of understanding of the market that Dell has demonstrated in Asia, and China in particular, and how well they have adapted to this environment.
This is not the first time, that I have seen people take business models from the West, and heavily heavily adapted to the Asian Chinese market, to accommodate for the cultural differences. If there is enough brainpower to be able to adopt in this way, then the stories of the eBay, could be avoided. EBay had failed in China, because they were selling used goods, which, Chinese people looked down upon. Had, the marketing person had looked at that, and adopted this model for the Chinese market, in a way that is similar to what Dell has done, with out-of-the-box thinking, eBay may still be in China, and could be a real competitor to taobao.
In point of discussion with Klause was the fact that the Chinese consumer market is getting ready for the e-commerce game, and that in a few years the e-commerce in China is going to explode. My take on e-commerce in China, has been that it will be another five years before redstores can turn inwards towards China, and be successful selling to the Chinese consumer. Klause, already seeing it from the Dell’s point of view, thinks that it is going to be faster. Regardless of the difference of opinion between us on the timing, I think the bottom line is that China is going to be buying things on the Internet, whether it is three years or five years or 10 years from now, they will be buying things on the Internet. The model on the Internet for China may be a little bit different, since trust will be of paramount importance, so it will be those players that provide huge level of trust to the consumer, as Dell has done through the contact points in the retail segment, that will be successful.
Another interesting insight that came from klause, was that the future of the Internet will be niche focused websites, and in his view, the Amazons of the world, are going to face some serious challenges in the next decade, since their model is fueled by growth, but once the growth is achieved the business model may not be sustainable. This is not to say that I was on is a bad company by any means, however. Having some echo my own vision of work e-commerce is heading, especially a person that lives in the e-commerce space, was quite interesting. It was another point of reinforcement, that my vision of the future is aligned and make sense. I think it is hard to hope for more than that.
And this, brings the launch of the discussions I have had with Mr. K., about how to move the business forward. Mr. K. has identified a few business model issues that have happened redstores, that I have been silent on demand business and overall has a strategy. We have discussed at length, the supply chain, in which place we want to play in, that is, we want to be strong in the supply-side or do we want to be a strong player in the e-commerce site. My current vision for redstores has been to be an integrated supplier, where he played in the supplier side and also the e-commerce. I knew this from before, but it was not so clear to me until we actually discussed it with Mr. K., that my vision is too broad, and takes us in disjointed path. So, basically one of the decisions that we have to make sometime soon, is, whether we are going to play in the supply chain and mastered, or play in the e-commerce marketing side, and focus on that.
In my business plan so far for redstores, I had looked at supply as a very singular simple concept, we just get your goods. However, after discussions with Klaus, and Dell’s reliance on strong supply chain, and evaluating our own supply chain issues, seems to be that we would be much better playing in the e-commerce space, and giving up the supply-side.
With that kind of decision, there is a number of interesting things that happen, in particular, it pushes the redstores model more towards the Amazon model, where the profit is made on the arbitrage between effectiveness of sale, conversion rates, marketing. In a way, giving up the supply-side, would be a great thing, and the future opportunity that I am exploring in Germany, is actually based on the fact that the supply chain would be handled by somebody else, and that redstores with purely focus on the e-commerce game.
This approach, solove some of my issues and challenges I had my RedStores business plan, and that is the huge rapid explosion of staff levels that happened near three or four, where my warehousing, my shipping and packing and purchasing, grows to something like 400 or 500 people. That was definitely very concerning point for me, as I did not want, or perhaps should I say, wish, to have such huge people based. Mr. K. and I are meeting on Sunday, and this topic, I think is one of the areas that we will discuss and try to bring clarity. Our other topics for Sunday is to look after the shareholder agreement, look at the business valuation for the fund-raising purposes, and discussed our approach and best solution for the potential opportunity in Germany.
One of the things that I have to give up yesterday, that was my top priority, was to provide a firm schedule and agenda to the German partners, to show our agenda for the meetings. Luckily, my jet lag had woken me up today at 5 AM, so I will shortly be getting back done, and then my level A priorities will be cleared, and I will be able to then strategically work on level B priorities.
Another insight, was the amount of opportunities that are showing up at my doorstep everyday. I remember when I was in Canada. One of the biggest obstacles ahead in moving out of the corporate world was the question "what do I do?". In Beijing , there seems to be a reverse conundrum, there is so many opportunities everyday, but it is not a question of, what do I do, but rather, can I stay focused on what I decided to do. I think maybe this is why being so drawn to Beijing because opportunities seem to truly be endless, and all the opportunities can lead to amazing things.