BUSINESS TECH

Entrepreneurs' Give Their Tips and Outlook for 2022

P36

Galley Gadgets P29 Take Stock P30

Galley Gadgets

With the news that Starbucks is going to raise its prices in China (page 31) and Jonas Emil Coffee Roasters’ great tips about how to brew the best cup-of-joe at home (page 56), we thought it would be best to give you our recommendations of the best coffee gadgets on the market right now. Simply scan the QR using the Taobao APP to buy these ‘galley gadgets’.

THE HERO POUR OVER COFFEE KIT

SIMELO COFFEE BEAN GRINDER S’WELL TRAVEL TUMBLER

Ranging from RMB599-899 the Hero Pour Over Coffee Kit has everything you need to make the perfect cup, every time. The standard package comes with a gooseneck kettle and thermometer, filters, two glasses and a hand-powered bean grinder (with a cleaning kit). Upgrading to the more expensive packages will give you a ceramic filter and digital scales.

Sick of grinding your beans by hand? What about when you go to use your electronic grinder and it’s out of juice? Well, this electric grinder by Simelo has got you covered. For RMB290 this grinder is a little more expensive than others on the market, but it has a battery life of 15 days and offers five different levels of coarseness for your beans. The S’well Travel Tumbler comes in two different sizes and eight different colors and ranges from RMB248-308. The stainless-steel tumbler is perfect for both hot and cold drinks, as it holds heat for four hours and keeps cold drinks cool for 11 hours. The smallest size can hold almost 295ml whereas the biggest can hold 530ml.

MIDEA S1PRO SMART SCALES

If you decide not to get your weighing scales from the Hero package, then consider buying the MIDEA Smart Scales from as little as RMB99. What makes these scales great is that when you download the scales’ APP, you can use AI intelligence to scan your food and the app will tell you the total amount of calories, fat, protein and carbohydrates. To open the APP, simply tap your phone on the scales!

HIGHS AND LOWS

Highs

• In cinema news, during the seven days of China’s Lunar New Year box office sales topped RMB6 billion, a 23% decrease from last year but still ahead of pre-pandemic levels in 2019. By day two of the Spring Festival (February 2nd) cinema tickets had already reached RMB2.3 billion. The seven-day holiday is the biggest week of the year for new movie releases in China, the world’s largest cinema market. • HeyTea, China’s popular beverage company has lowered prices and introduced a brand-new range of products. The company’s popular ‘Pure Green Tea’ now costs less than RMB10. The decision comes as a shock to some business insiders, as COVID-19-related closures, high rent and labor costs have affected the industry, causing some businesses such as Xiangpiaopiao and Sexy Tea to raise prices. • Luckin Coffee boasted net revenue of RMB3.18 billion in the first half of 2021, up 106% year-on-year and it is now looking to relist its shares in the US. The coffee company was once branded Starbuck’s biggest challenger but was hit by controversy in 2020 when claims that it raised more than USD864 million from falsified accounts. Luckin Coffee and Starbucks both announced that they would be raising prices in China this year.

Lows

• Boqii, a popular pet-focused platform in China, has lost 93% of their value since 2020 and are now trading at below USD1, which could trigger them being delisted from the market. Boqii offers users a one-stop destination for pet owners in China to buy everything pet-related. On February 14, Ying Zhang, the company’s Co-Chief Financial Officer, resigned from her position due to personal reasons. • Starbucks was handed an RMB1.36 million fine after two of their outlets in Wuxi, Jiangsu Province, were found to be using out-of-date ingredients. The Beijinger conducted an undercover operation in two stores in the city at the end of 2021. They obtained video footage of management and employees in both stores instructing workers to change the labels on expired goods so that they could be resold and reused in the future. A fine of RMB690,000 was given to one store, while RMB670,000 was given to the other. • Douyu, China’s popular video game live streaming platform has seen a 90% fall in share prices over the last 12 months and is under threat of being delisted. The Wuhan-based company could be taken over by Tencent to stay afloat, a claim Douyu says is “untrue”.

CHINA HIGHLIGHTS

China to Make 6 Human Spaceflights in 2022

China has announced that it will make six manned space flights this year to complete the building of the country’s space station.

The six space flights will also see the first launch of Long March-6A, China’s first rocket powered by a solid and liquid engine.

In 2021, China carried out the most space launches in the world, with a total of 55. The China Aerospace Science and Technology Corporation (CASC) conducted 48 of these launches, with a total of 103 aircrafts involved in the expeditions.

COVID-19 Pill Gets China Approval

On February 12, China announced that Paxlovid, an oral pill for treating COVID-19, had been approved for emergency use.

The drug is made by US manufacturer Pfizer, making it the first foreign COVID-19 treatment approved for use in China.

The National Medical Products Administration (NMPA) announced that it will be used to treat high-risk adults with mild to moderate cases of COVID-19, as reported by Sixth Tone.

The drug has been shown to reduce the risk of hospitalization and death from the respiratory disease by almost 90%.

Bilibili Employee Death From Overwork Sparks 996 Debate

Allegations that a worker at Bilibili died from a brain hemorrhage caused by overwork sparked more debate about China’s brutal 996 work culture.

The 25-year-old died in hospital after falling ill at his home on Saturday, February 5. A hashtag started by his colleagues that trended on Weibo claimed his death was related to overwork. Bilibili denies such claims. The 996 work system refers to employees who work from 9am-9pm six days a week.

Previously, Alibaba founder Jack Ma came out in support of the 996 system. The brutal work regime is common amongst China’s big technology firms.

Last year the Chinese government stepped in to regulate the 996 culture, deeming the practice illegal. According to Chinese law, a standard workday is eight hours long and the maximum number of hours one can work per week is 44. Any work beyond that constitutes over time and should be paid accordingly. However, many companies still carry out the practice.

Chinese Scientists Design 4-Minute COVID-19 Test

Chinese scientists have designed a COVID-19 test that can give a highly accurate result in less than four minutes, according to a study published in the journal Nature Biomedical Engineering.

The test uses a device that can detect the virus’ genetic material in the form of an electric signal, the study claims.

The study goes on to state that the device is easy to use and highly sensitive and specific to the coronavirus that leads to COVID-19.

Led by researchers from Shanghai’s Fudan University, the device was tested on more than 80 nasal swab samples from people infected with both COVID-19 and the flu and healthy individuals.

The device accurately detected all COVID-19 samples in between six seconds and four minutes.

Hong Kong has seen a surge in confirmed cases of COVID-19 throughout the month of February.

As of press time, the total number of confirmed cases of COVID-19 in the city has reached over 60,000 since the beginning of the pandemic. More than 50,000 of those cases have come about in the latest wave during which new daily cases have consistently been in the thousands.

In the latest wave of COVID-19, the youngest to have died is a 3-year-old girl, while the oldest is a 100-year-old female patient.

Many of the city’s hospital isolation wards are at 90% capacity, as reported by BBC News.

It is understood that the current wave of infections could be due to extended family gatherings over the Lunar New Year.

A number of other measures have also been put in place. These include public gatherings restricted to no more than two people and the closure of many businesses and public areas.

Starbucks Rise Prices in China

For the first time since 2018, Starbucks has raised the prices of their drinks. A decline in average purchases and customer transactions, paired with high operating costs and a notable store sales decrease of 14% has forced the retailer to increase some drinks by as much as RMB2.

Starbucks President and CEO Kevin Johnson expects more price hikes in 2022 due to rising inflation and an increase in supply chain and labor costs.

It remains to be seen if the price hike will trigger a decline in Starbucks customers. While the price increase may see a consumer shift towards more affordable coffee shops, Starbucks has the advantage of ubiquity and comfort, with branches strategically stationed close to office buildings or places of leisure. It’s going to be a hard habit to shake off.

On February 13, netizens expressed outrage when an employee of a Starbucks outlet in Chongqing asked four on-duty police officers to leave the premises as they were having lunch on the coffee shop’s porch, citing their presence as a bad image for the company.

WHAT’S THE BEEF?

By Joshua Cawthorpe

China consumes 28% of the world’s meat and the industry is valued at USD86 billion. In the 1960s, the country’s annual per capita volume of meat eaten was just 5 kilograms. By the era of Deng Xiaoping’s ‘opening up,’ that figure was approaching 20 kilograms. It peaked in 2015 when the average Chinese person ate 48 kilograms of meat. The following year, a plan was outlined by the government to begin reducing meat consumption and its carbon footprint. According to Statista, 2020 saw the amount reduced to 44.4 kilograms per person, lower by a kilogram compared to the year before.

All around the world, urbanization and rising income levels have been consistently paired with increased meat consumption. During the European industrial revolution, rapid urbanization initially resulted in an impossible demand for meat in growing cities while domestic production reached a plateau. However, in the spirit of industriousness, new methods of preserving and transporting meat from North America and Australia to Europe’s urban centers helped the numbers rebound. Thus, the meat industry was globalized with annual per capita consumption in Britain rising from under 40 kilograms in the 1850s to nearly 60 kilograms by 1914, as published by the British Agricultural History Society.

> You can find El Gaucho on WeChat by scanning the QR code above.

As a middle class emerges in any nation, along with it comes an insatiable appetite for meat.

The implementation of nutritional guidelines, campaigns to tackle food waste and major investment into artificial meat products seems to have curbed the rapidly rising consumption. Nevertheless, the industry is booming with 2020 boasting monthly meat imports ranging from USD2.2 to 3.2 billion. An outbreak of African Swine Fever caused pork prices to surge from 2018 to 2020, likely contributing to the steady increase in the demand for imported beef. Despite domestic pork production balancing the market by the summer of 2021, China remained the single largest importer of beef, up an additional 10% to 2.3 million metric tons.

China’s uncontested favorite meat is pork and the country produces more than 40 million tons of it each year. The United States Department of Agriculture forecasted China’s 2021 beef production to be just shy of 7 million metric tons. As is the case with other major import markets in China, the beef business is tiered to reflect a variety of consumer preferences. Most of China’s beef imports are low-cost grass-fed products from Brazil, Argentina and Uruguay. However, Reuters reports that the demand for premium grain-fed beef with more fat marbling has surged. Diplomatic tensions between Australia and China have caused exports from Down Under to fall from the number three spot. Furthermore, the discovery of two cases of mad cow disease in September led to an embargo on Brazilian beef, usually comprising the lion’s share of China’s imports, which remained in effect until December.

The resulting shift has seen US beef imports replace Australia in the high-end market with the average price for American products in April 2021 sitting at USD7.83 per kilogram compared to USD7.08 and USD4.49 for Australian and Argentinian products. The staggering American appetite for burgers has traditionally led to lowend hindquarter cuts being consumed domestically rather than being exported.

Within this hierarchy of tastes in China’s meat market exists an opportunity for foreign implants to carve out a business by sourcing high-quality products favorable to the evolving palate of Chinese consumers. One such businessman is Sebastián Tosi, an Argentinian who moved to Guangzhou in 2012 to help his father get the beef business off the ground. The two started importing the staple food of their homeland, making fresh sausages and selling them by word of mouth. Later, in 2015, they officially launched the brand El Gaucho with a storefront in Guangzhou. “Back in 2014, [the industry] was still at its very early stage,” Tosi tells us. “Now purchase managers, chefs and clients are asking more specific questions concerning feeding practices of the livestock and processing methods of the meat.” The father-son duo focused their attention on the hospitality, restaurant and catering industries, rather than the ultra-competitive wholesale market, but their retail revenue is also growing. They opened a new retail storefront in Jinzhou, Hubei province last December and have their sights set on another in Changsha, Hunan.

Tosi points out some noteworthy differences in the preferences of his local customers. “Beef in cubes, chunks of beef with fat, cartilage, and the insides of the animal, while having a low demand abroad, are the top choices here.” Beef is the pillar of Argentinian cuisine and 80% of the country’s supply is consumed domestically. The Argentinian government implemented limits on how much can be exported abroad to maintain a sturdy and affordable supply at home. China’s unfettered demand drove up the value of Argentinian beef but increased pandemic prevention measures at every step of the supply chain further inflated the price.

“There is more paperwork to do, and more controls in every step of the supply chain. From the consumer perspective though, these new measures kicked out the suppliers who were not complying with the rules, did not have the proper facilities, or were distributing products with low standards of quality.”

El Gaucho opted to absorb the additional costs and maintain their standard pricing in the retail sector to remain competitive among individual customers. The hotel and catering industry, which makes up 74% of their sales, was able to tolerate an upward adjustment in the market price.

The niche for high-end steakhouses hasn’t been overlooked in China. A wellknown American brand, Wolfgang’s Steakhouse, has been making inroads around China since 2017. Wolfgang’s has two locations in Beijing, one in Hong Kong, a recent opening in Shenzhen and plans for a restaurant in Hangzhou. The label ‘high-end’ lives up to its name in the price tag, however, with dry-aged American beef being flown in and starting at RMB580 for a 350g filet mignon, not including any vegetables or side dishes.

Another hat in the ring comes from Charlie’s in Guangzhou’s southern district of Panyu. Since 2014, Charlie Chen and Dave have been building a community and a reputation for not only sourcing high-quality retail products but also serving them with great reverence.

We visit Charlie’s restaurant on a brisk Sunday evening in January. The little room is in stark contrast to its suburban Guangzhou surroundings, with dark rustic wood and low ambient lights — the only thing missing is the crackling of wood burning in a fireplace. To say it’s comfortable would be an understatement.

Co-owner Dave, who flouts the conventions of journalism and insists we use his first name as an extension of his unparalleled hospitality, tells us that the foundation of the business is trust. “We test all the products here before we offer them, to make sure that they are the best quality for an affordable price. That’s why we opened the tasting room.”

Despite Charlie’s being the city’s number one restaurant on Trip Advisor for several years, they insist that the reason they opened it is simply to showcase the products available through their retail business. The call to action in 2014 came from their social circle insisting that they share their hospitality industry connections for high-quality imported meat products.

Before his career brought him to China, Dave pursued a Higher National Diploma in Hospitality and spent many successful years with four- and five-star Trusthouse Forte hotels in the UK. Dave cooks all the dishes at Charlie’s himself and his expertise is evident when the food arrives. Charlie’s restaurant was recently voted Contemporary Western Restaurant of the Year in the That’s Food and Drink Awards 2021 and took home a Burger of the Year title as well.

On our first visit, Chen recommends that we try the New Zealand veal. The massive bone-in shank arrives on a plank of wood with accompanying sauces and two sides. At RMB149, it’s the most expensive dish on the menu with classic fare like fish and chips or steak and ale pie available for RMB59 and RMB79. The meat of the veal shank slides away from the bone and the mash with gravy is a taste of home.

The inspiration for the business came from a frustration with the available cuts of beef at the supermarket and the exorbitant prices of restaurant steaks. Dave laments that “After you cook the beef from the supermarket, you can’t even cut it.” The two have meticulously sourced nostalgic favorites and premium cuts of meat from all corners of the globe. Their WeChat mini program lists Australian rib-eyes, Spanish pork ribs, Canadian maple bacon and Norwegian salmon filets at prices we would likely be paying in their countries of origin.

Chen tells us that the new products in development are a selection of precooked meals which they intend to launch in March. Whole-roasted duck with orange sauce is one example, which could easily provide a meal for several people without the required time or expertise of cooking it at home. Other items planned for the heat-andserve menu include their famous BBQ ribs, chili and lasagna.

This move is a sign of the times given that as many as 74% of chain restaurants in China have adopted a central-kitchen production system and more than half of those are developing ready-to-eat meals that simply require reheating, as reported by China Daily. Although this path is more labor-intensive and complex than selling uncooked ingredients, the ready-meal industry represents a worldwide trend among busy people with a lack of time, cooking ability or both.

Whether it’s a personal and handson model like Charlie’s restaurant, or a distribution and sales angle like El Gaucho, one thing is certain: meat is on the menu in China.

> The full retail selection offered by Charlie’s is available via WeChat with the QR code below.

Entrepreneurs’ Share Their Tips and Outlook for 2022

Interview By Vickie Wang

2021 was not a normal year. As much as we all shouted, “Happy New Year!” hoping we would be putting the madness and uncertainties of 2020 behind us, 2021 still kicked our butts.

Most entrepreneurs seem built for butt-kicking years. Their unique ability to roll with the punches has ensured that many of their business endeavors have not only survived but thrived in the COVID-19 era. These self-starters sell B2B software, performance-driven children’s clothes, overseas investments and even trees.

Here are some of their pearls of wisdom as we head into the Year of the Tiger.

Promotional image for YouZeeMeZee

The Future Might Look Different Than Planned, and That’s OK

For some businesses, COVID-19 completely upended the original mission. YouZeeMeZee, founded by Zoe Z Pollack, began with this tagline, “Explore the world, whenever, wherever.”

“I had 18 years of experience in women’s fashion, with customers in the 25-40 age range,” she explains. “And I’m still serving the same customers with this new brand.”

She saw that Chinese mothers were pressed for time but they also enjoy quality time with their kids and documenting it with photos. However, the kid's clothes on offer either lacked functionality or were downright unphotogenic. She set out to create a line of clothing that looks smart, is easy to pack and is weather-adaptive.

The goal was to provide high-quality, mid-range priced children’s clothing for travel.

“We had to dig deep and completely rethink our products,” says Pollack. She reconnected with weather-proof textile suppliers from her former work with umbrella brand Totes. The result is a line of super lightweight raincoats that fit over students’ backpacks, but fold down smaller than your smartphone. This perfectly responded to consumer needs, since most schools now advise against students carrying umbrellas (kids use them as play weapons, of course).

Everything is Figure-out-able

Entrepreneurs don’t have the luxury of saying “I don’t know how.” David Holvoet's business supplies plywood, hardwood and other building materials internationally. He says, “constant learning is required. We had to learn how to organize bulk shipments, what the implications are for packing, the complications of stowage onboard the ship and the legal aspects of chartering a vessel … I believe my main job today is to learn, study the market and explore new avenues to stay ahead of the game.”

When faced with logistical issues, Holvoet’s business manager “jumped in his car and drove to Poland, Romania and Bulgaria to secure new suppliers to replace our Chinese ones.” This level of agility and proactive problem-solving kept his business competitive and increased profitability during a time when the whole world seemed paralyzed by logistics issues.

Find Ways to Create Value

“Macroeconomics, investor sentiment and policy regulations are in constant change. The only thing that doesn’t change is the notion that a business must create value for its customers,” advises Kai Hong, cofounder of marketing software company JINGDigital. “All the strategies, initiatives and innovations must serve this purpose,” says Hong.

Pollack also recommends steeling your nerves and focusing on what you can offer.

“Don’t panic. Clarify your core values and understand what capabilities and resources your team has. Then take stock and react to the market. With enough data points, you can experiment and respond quickly, which will inform your next big step.”

Kai Hong, Chairman and Co-founder of JINGDigital

Communication is Key

Communication, whether with your team or your client, also has to be transparent and effective. Andy Klump is the CEO and founder of Clean Energy Associates (CEA), which provides engineering and technical support services for PV and battery storage. He found that as meetings and marketing efforts were moved online, the messaging had to be streamlined for maximum efficacy.

Klump conducts monthly meetings in two time zones to accommodate his team members. He also does one-on-one meetings with colleagues to talk about work as well as personal challenges.

“It’s extra effort for me, but I find that the communication is much more effective.” They also regularly measure internal Net Promoter Scores to see where they need to improve.

Andy Klump, CEO and co-founder of CEA

Image courtesy of Bartra

James Hartshorn, founder of Bartra and co-founder of Nomads Wild.

Build a Dream Team

James Hartshorn also had to adapt his sales and marketing efforts for Bartra Wealth, a wealth management service that focuses on investments and immigration to Ireland. It’s hard to convince clients to make the leap to a new country without having visited it. Along with testimonial content, he also recruited past clients for cozy Zoom calls with a handful of prospective clients, to allow for casual conversations that can answer customer’s questions and build trust.

COVID-19 travel restrictions also inspired Hartshorn to co-found a whole other business to capitalize on the boom in domestic travel: Nomads Wild offers high-end glamping and retreat experiences, the first of its kind in China. The consensus amongst these leaders? Your team is vital to your success. Klump considers hiring and retaining good talent his biggest mission and challenge. “I see a return to fundamentals and the importance of establishing and building a strong culture. In a changing environment, you have to invest in talent.”

In the face of uncertainty, the team’s competency determines how well and efficiently the business can pivot in times of change. “I have organized my business in highly specialized and very small business units. They act quickly, a bit like a guerilla task force,” said Holvoet, “The teams are small enough to make decisions and implement changes quickly.”

A Supportive Community Matters

Many of the leaders have said the EO community has been invaluable to their business, especially in challenging times.

“When you start a business, you often do not have sufficient funds or scale to attract experienced top talent,” said Holvoet, who credits his strong management team for their success in the last couple of years. “So we need to build the talent ourselves or grow the organization to a point where we can attract the talent.”

And once you’ve built the dream team? Learn to trust them and let go. “As long as you get your work done, it doesn’t matter when you come in,” said Pollack. Her team members are all mothers themselves, so they are their own best focus group. Their office space serves as a hub where the moms get together to connect, test products and trade stories, with completely flexible work hours.

Hartshorn, who’s currently President of EO Shanghai, said that having a global community of like-minded people has been “amazingly beneficial, and [he is] grateful to be part of it.”

“As entrepreneurs, sometimes there are things you can’t talk to your friends and family about. Some things you can’t even discuss with your staff.” EO provides a community that’s rich with real-life learnings, where entrepreneurs can learn from each other and lean on one another.

“You’re not as lonely,” says Pollack. “You see how other people push through challenges and it can be very encouraging. It helps you stay sane in the face of overwhelming challenges.”

Brighter Days Ahead?

The consensus seems to be that border closure and the accompanying travel and logistical issues will remain for most of 2022. There’s a lot of optimism for growth, but everyone’s braced for some volatility.

Pollack predicts a culture clash once borders open since the world has handled the pandemic in such drastically different manners. She also sees that foreign brands may have a harder time attracting Chinese consumers without local partnerships as local brands rise in popularity.

“Macroeconomics are likely to be challenging in 2022, especially during the first half,” says Kai Hong. “In China, a few sectors are going to be under immense pressure – consumer goods, retail and manufacturing.” “Outlook for companies will be pretty polarized,” he expands. “Companies without strong core competencies or those that are slow to react to market or policy changes will have a hard time. Agility and the ability to pivot will be key to success in 2022.”

“We can’t be naïve and assume there’s going to be an ‘end’ to the pandemic,” says Klump. He is expecting a market correction in real estate and some tech sectors.

“We’re coming out of the COVID-19 recessions with a lot of different government stimulants and we’ll see some effects of that extra liquidity in the market. We’re looking at industries that have long-term growth trends.”

Klump says he’ll be monitoring the regulatory environment as well as SinoUS relations closely.

Hartshorn is optimistic about 2022. He expects domestic tourism’s growth to continue, and believes that once the border does open, many industries will rebound quickly in China.

“Once the decision is made, it’ll be implemented swiftly,” says Hartshorn cheerfully. “I think it’s going to be a very fun year. Once people get their freedom back, they are going to want to go out and enjoy themselves.”

Let’s hope we can all approach this year with the proactive, cando attitude and resilience of these courageous entrepreneurs, whatever the year may bring.

Entrepreneurs Organization is a high-quality leadership support network for founders with over 15,000 members globally. The Shanghai chapter is now 21 years old and member companies employ approximately 8,000 people collectively. EO provides support learning and shared experiences for its members with access to the global network. EO China has chapters in Dalian, Hainan, Beijing, Taipei and Shenzhen with more coming soon.

For more information, scan the QR code.

Zoe Pollack with her directors of sales and design. Image courtesy of YouZeeMeZee