Ashley Dudarenok is a Chinese serial entrepreneur, award-winning digital marketing professional and author. Recognised as a “guru on digital marketing and fast-evolving trends in China’’ by Thinkers50, Ashley is the founder of the China-focused digital marketing agency Alarice and China digital consultancy ChoZan. She’s also author of 10 books about digital China, including her latest, “Innovation Factory: China’s Digital Playbook for Global Brands,” co-written with Ron Wardle. In this conversation, we discuss the Chinese digital landscape, what are some of the salient trends, what can Western brands learn from Chinese corporations, the place for ‘purpose’ in China, the sense of trust that Chinese citizens have with the Chinese companies, leadership challenges and management styles… and much more.
Please send me your questions — as an audio file if you’d like — to email@example.com. Otherwise, below, you’ll find the show notes and, of course, you are invited to comment. If you liked the podcast, please take a moment to rate it here.
- Mandate of Heaven: https://en.wikipedia.org/wiki/Mandate_of_Heaven
- Digitally Enhanced Directed Autonomy (DEDA) – How DEDA makes Chinese companies more agile
- Ashley’s previous appearance on the Minter Dialogue show (episode #338)
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Music credit: The jingle at the beginning of the show is courtesy of my friend, Pierre Journel, author of the Guitar Channel. And, the new sign-off music is “A Convinced Man,” a song I co-wrote and recorded with Stephanie Singer back in the late 1980s (please excuse the quality of the sound!).
Full transcript via Otter.ai
SUMMARY KEYWORDS: China, chinese, people, companies, app, platform, wechat, year, world, books, ashley, alibaba, ultimately, feel, regulate, digital, west, introduce, customer, trust
SPEAKERS: Ashley Dudarenok, Minter Dial
Minter Dial 00:05
Hello, welcome to Minter Dialogue, episode number 541. My name is Minter Dial and I’m your host for this podcast. I’m most proud member of the Evergreen Podcast Network. For more information or to check out other shows on this wonderful network, go to visit evergreenpodcasts.com. So, this week’s interview is with Ashley Dudarenok. Ashley has been on my show before. She’s a Chinese serial entrepreneur, award-winning digital marketing professional and multiple time author recognized as a guru on digital marketing and fast-evolving trends in China by Thinkers50. Ashley is the founder of the China focused digital marketing agency Alarice and China Digital consultancy ChoZan. She’s also the author of 10 books about digital China, including her latest, “Innovation Factory, China’s digital playbook for global brands,” which was co-written with Ron Wardle. In this conversation with Ashley, we discussed the Chinese digital landscape. What are some of the salient trends? What can Western brands learn from Chinese corporations, the place for purpose in China, the sense of trust that Chinese citizens have with Chinese companies, the leadership challenges and management styles, and a whole lot more, you’ll find all the show notes on Minter dial.com. And if you have a weak moment, go over and drop in a rating and review and don’t forget to subscribe to catch all the future episodes. Now for the show. Righty Ho! Ashley Dudarenok. Lovely to have you on my show! You are a beacon of energy, an expert on China and so productive on books. In your own words, who is Ashley?
Ashley Dudarenok 01:55
Ashley is a Chinese serial entrepreneur. That’s what she is and working with digital and reinventing the future of retail, I think that would be the best way to describe it. And I’m so so so happy to be here on your show. Thank you so much for bringing me on.
Minter Dial 02:09
Well, you certainly are a charismatic individual and you lead by example. Your LinkedIn profile is a treasure trove for anyone interested in working on China or doing anything in China. So, tell us, what is your business actually.
Ashley Dudarenok 02:28
I’ve got three main businesses all related to China, and my teams are in Hong Kong and Shanghai and Shenzhen. And basically the first business is more on the training and consulting side where we train global companies how to be more successful in China with the relation to their marketing, commerce, and also bridging their global team and local China teams together. So, it could be anything from operating a particular platform like T-mall, how to operate T-mall better, how to understand the consumer better how to map a customer journey. And apart from training, we also do quite a lot of consulting in that space. The second business is from the digital marketing side. That’s where we come in and we ultimately audit the brand. How is our brand doing in the China market? Where is the benchmark? What does good look like? And how do we get there. So, in other words, we help big brands yearly to reinvent their China Digital Strategy. And then the third component to all that we also do a lot of learn from China episodes, where global tech giants look at China’s digitalization and they say wow, this is typically incredible. There were some mistakes, but there were a lot of successes. How do I take those lessons and implementing them in the home market and hopefully shorten my learning curve. So, if it’s a platform that looks into social commerce, or live streaming, or community retail or you know on-demand, let’s say entertainment, they come and they learn from China. So, we deliver that in the form of keynote presentations, or you know, training courses, consulting projects, etc. So, that’s why it’s mostly digital and mostly learn from China or learn for China.
Minter Dial 04:20
I feel like there’s a new acronym WFC, or you know LFC coming! So you you’re you have written many books, I don’t know how many books you’re up to, but I do want to get to talk about your the book that I think is your last “Innovation Factory, China’s digital playbook for global brands” that you co-wrote with Ron Wardle, but how many books have you actually written actually you have your stunning 11 days and love it. Congratulations and you know, in between the time that it took us to get this interview up and running, you also just published meta versus for business.
Ashley Dudarenok 05:01
But I must say, it’s very flattering, thank you so much. But I must say these are called mini books. And for those that are watching us through a video medium channel, they will see that these are tiny little books, and they are 140 or 150 pages. So, what I call one-hour book, right, you get on the flight, and you basically are through with this book before the meal comes. So, that’s the outcome that you get the condensed knowledge. And it’s easy and simple to understand, because you can go as deep or as light on China as you want, right. So, what we are ultimately trying to do is I’ve got three bigger books, they’re much bigger, they are deeper on the topic of Chinese consumer, then there’s one deep on the topic of China’s new retail. And there’s one deep book about the bloggers, how do influencers and all these MCN (multi-channel networks) operate in China? So, these are bigger books, but everything else are small mini books, introduction into the topic, be it PR crisis, or Metaverses, because everybody was talking about this extended reality and Metaverse we were looking into Okay, so how do we actually use them for businesses? What’s happening in China? What’s happening in the rest of the world? And right now, “Innovation Factory,” it’s also a small book that is tapping into the topic of what can we learn from the China Digital Transformation recently in three areas, right, which is the community ultimately retail and social commerce. It is the leadership models, and of course, it is building of tech ecosystem. So, these are the three major topics covered in that last one.
Minter Dial 06:40
Indeed. And so last time, you were on my show was in 2019. And we were talking about new retail, and it’s fascinating. And I do want to get into this idea of what can Western companies possibly extract from the way Chinese companies operate in the good way? Maybe a little less, but we’ll talk, maybe according to time allowed, on how to approach China if you’re if you want to do that. But let’s just sort of lay the scene in terms of where is China today? In terms of the big the penetration of internet, online, the penetration of smartphones, because we get a lot of, I would say conflicting information. In terms of the way the foreign press will portray China depending on their angle and their worry beads. But give us the lay of the land in terms of the tech and how are we doing with all the big companies, such as Baidu, Alibaba, Tencent, and all that, versus any Western companies actually penetrating into China in any significant way?
A very broad question, but I’ll try to enter with the with a couple of numbers and facts. So, when it comes to China, China has the highest penetration rate of smartphones in the world, and the penetration rate is 82.8%, nearly 83%. So, that’s around 1 billion people. When it comes to the internet. Obviously, nearly everyone has an internet unless they are below six-years-old, and they just do not own a phone. A good friend of mine’s grandmother is 93 years old. She owns a smartphone, she ordered her own DiDi (her own Uber), right, to pick her up and she orders her own groceries online. So, when it comes to China as a digital environment, it is very unique because first of all, China up until recently was a rather young country, where people have undergone through multiple rounds of transformation and re-inventing themselves. So, if you look at lift changed index, which is the index that tracks the way your life has improved on your parent’s life. So, if my grandmother went to the bathroom outside of the house that my mother had a toilet kind of in-suite, and I have a Jacuzzi at home. So, things like that. China is 30 times number one in the world, the second closest country is basically eight times and the US is very, very low on the list. It’s only two or three times basically in the last 30 years. So, China has gone through a lot of change over a very short period of time. So, people were back then when the digitalization was just initiated, let’s say 30, 20 years ago, very young, interested, excited, they were given a try to that technology. They did not have those legacy systems like credit cards, right? They did not have to go through a laptop or through a PC computer in order to get to mobile, etc. So, that is why the transformation was happening really, really fast. And that has also birthed very demanding consumer, very excited consumer, the consumer that is digitally connected. And of course, we have companies that are serving those consumers that have both shaped them, and right now serving them. So, these companies evolved into really strong ecosystems. And that’s what we did not really have in the West that much, while many firms, big companies are right now basically acquiring each other and try to tap into similar services. And they are trying to build super apps, for instance, and expand into broader spheres of influence. In China, that transformation was very organic. So, take Tencent as an example. They started from games and then doing social networking, and then opening a super app WeChat, which was a horrible copy of WhatsApp back in the day, but evolved very, very quickly into a super app that right now famously, Elon Musk says that this is the most comprehensive app in the world, and everybody should kind of copy and move towards that thing. So, then they integrated payments, they integrated peer-to-peer transfers, ultimately acting as a bank later on opening up their IP, and IPI for many programs. So, encouraging developers to develop apps within the app, etc. Right? So China went into ecosystems where a company is trying to dominate the portion of life of a customer and provides a variety of services. And then China obviously went into super apps and beyond WeChat. We have AliPay, we have Meituan Dianping. We have DiDi. Even Gaode, it’s basically a map app also has their own kind of super app features, by dances, program programs, and many programs and apps also have those features. So, this is where China is today. It is definitely a unique Galapagos like a digital Galapagos because we have unique animals, we have unique landscape. And it is very isolated, because your question was also saw what’s happening with the Western companies in China. Back in the day when I was still living in Chongqing, I went to school in Toronto and studied Business and Economics. The Facebook was still in China, Google was in China, all these companies were operating and competing together with their Chinese counterparts. Later on the regulations were introduced that if you would like to operate a digital business in China, you need to store data about the users on mainland Chinese servers. And that is when Google and you know right now matter, but then Facebook and others decided to ultimately move their businesses out. There were a couple of platforms, for example, LinkedIn, probably one of the best-known ones, that actually continued the battle up until very, very end. But then last year, they also earlier this year, I think it was they also decided to exit social networking side of business. LinkedIn is still in China as a recruitment platform, but they are no longer operating as a networking app, because they were basically saying that it is not sustainable to maintain service just for China. It’s basically a business decision. So, at least this is the official reason. And of course, my personal interpretation of all that is, in the past, let’s say 5-10 years, the speed of innovation, and the demands of that market are just way too much for whatever we have in the West. So, even if today’s version of X, IG, Facebook or YouTube were accessible in China, they would very likely be a lot less successful than the local counterparts.
Minter Dial 14:11
Yeah, because the mood the market has moved on so much in Turkey about the Chinese situation. I was also interested I can’t remember I didn’t check my facts. But it seemed that there is some limitation of usage for the young people who are in the effort of keeping education stronger. What is what is that about? And how controlled is that actually?
Ashley Dudarenok 14:39
Right. So, that’s all about the games. If you are gaming, and you’re below 18 years old, then there is a government requirement that you own the game a certain number of hours a week, and you are not allowed to game during like work week, on weekends or public holidays and that is actually done in order to? Well, official reason is yes, in order to prevent children from being addicted. China is a huge gaming market number one in the world. And Chinese companies actually are publishing a lot of games and developing a lot of games. And yeah, there’s a lot of fans in China that basically cannot get their hands off of those streams. I’m just looking at some data. And the number of approved games by China’s regulators this year, was already more than 500. And last year, they approved only 666 games. So, what does it mean? It was not just about restricting the user access as of young user access to the games, but Chinese regulators also looked at what kind of games are being published and introduced into the market. As we all have heard in the past three, four years, China has been going through a very big wave of regulation, they will regulate in tech. And that’s also a very different approach. Compared to the West in the West, we typically a technology is barely burst, and we stand around it. And we talk about how do we regulate it, so it doesn’t get out of control? In China, typically, if a technology is burst, be it blockchain, be it gaming being whatever, we let it flourish, let’s see where it takes us. And once it becomes big and important, and it’s we already understand what’s its direction, or some of the dangers or some of the potential applications. That’s when the regulator’s come in and start introducing rules that they think makes sense. So, that is why Yeah, this time, it was basically very few games were allowed to be published, plus young user controls were introduced. But already starting from this year, it looks a lot a lot better compared to before.
Minter Dial 17:01
Well, if we just stick with this notion for the youth, I have to imagine that they some of these youngsters are quite savvy, and know what a very private network is, and figure out ways around it. But is that is that something that is unadvisable for them? And will there be crackdowns on that kind of a thing? Or is it sort of somewhat loose?
Ashley Dudarenok 17:26
I do not know what you mean by the private network, but ultimately, VPN? Right? So VPN is in China officially banned. But of course, everybody’s using it. So, it’s not it’s not a half of the people that I know, in mainland China are on Instagram, Instagram has not officially again in the market, right? So people access videos from YouTube, people listen to the songs that we listen offline, people watch the movies that are not being released in cinemas, a friend of mine is working for a Chinese company called ITE. And ITE is like a Chinese sort of kind of YouTube plus Netflix. And they produce a lot of movies and you know, shows and all that not only for China, but also they have presence in the Southeast Asian market. So, a lot of the in-demand content is actually BL, is Boys Love. So, it is very often a homosexual story that is both appealing to heterosexual women, and let’s say homosexual communities. So, what do you think? Who do you think access is that content not only the Thai audience right outside of China, but also the mainland Chinese through VPN, get access to it. So, it is very, very interesting. Chinese digital, let’s call them netizens, they’re very digitally savvy, they do have access to paid VPN services. But of course, when we talk about them, it is typically wealthier Gen Z as these are typically more educated Gen Z’s that are typically people that traveled abroad, that have interest in what’s happening the rest of the world, etc. They have hobbies and connections all around the world. That is also a very big majority in China. That is very, very local. And we shall not forget that talking about China. Anything you say is a generalization. It is such a big country. You think about China as Europe people in Germany are not, are not the same as people in the south of France, or in Finland or in, let’s say anywhere else, right. So, I’m Chinese in the north south sent a very different plus. Where do you come from? What’s your educational background, sir? It’s a huge country. 1.4 billion people. So, of course, there are a lot of young also Gen Z’s that live in smaller towns. They are gaming they are very much proud of the country of the rise of Chinese brands, they are voting local, and they have their own completely different pace. And maybe these are the people that unless they have a very strong reason, like they need to access the game that cannot be accessed in China, they would really not have any interest in getting the VPN and accessing anything outside of the country. But the ones that have such a need or desire, definitely can get it quite easily. And, yeah, I think this will continue. And actually, interestingly, right now we have a former politician, I forgot which one so I don’t want to lie to you, but one very prominent former politician, who is calling in China to introduce free internet in certain zones, to encourage international companies basically setting up offices, etc. So, they, there is talk at the highest level about introducing those zones, which would be very, very cool. And, of course, that will introduce even more freedom when it comes to internet access to the general public, I believe.
Minter Dial 21:10
So, it’s like duty free in Shenzhen, right? Isn’t that it? So, actually talking about regulation, interesting point, you made that in China, the sort of let tech birth and flourish and then regulate, and you suggest that the West regulates as soon as it’s born, I would argue that even if in the West, they wish to regulate, the regulators don’t know what on earth is going on. And I would argue with anybody who thinks they know how to master artificial intelligence, and what you’re trying to do inside your company. So, even if regulators are starting early does still feel that there’s a wild west and element to the Western way that the businesses are being grown. And the and the way that is regulated by people who struggle — like senators or house representatives in America or elsewhere — to actually know. I mean, the number of times that I speak with people who are in political office who have a telephone with banners, the little red things on top of all the apps with 1000s of unread messages. I feel like they have a long way to go!
Ashley Dudarenok 22:22
No, absolutely, absolutely. Well, I attempt to regulate doesn’t mean that this is effective regulation. And of course, it is also impossible to regulate anything before you understand. So, where is this going? Am I qualified to give it direction? Or who shall be that counsel ultimately, that determines what are the important challenges? And what right now is not kind of our priority. But yeah, but ultimately, in China, up until very, very recently, it was all about, okay, something new popped up, let it let it go first. And once it becomes important, then we come in, and we basically we look into how to sort that house clean. And yeah, I’ve also watched those I think Senate hearings that we’ve all I think that you are referring to when they ask whether the app has access to Wi Fi. It’s very difficult to keep a straight face, if that’s the level of understanding.
Minter Dial 23:27
So there, I wanted to ask about, let’s say the things that are hard to replicate outside of China, because it was my understanding, this is how I view these things. That the reason for this sort of Super App, and the success of these big companies in China is related in part to the fact that you’re almost code of admission, your username is more the way you pay, as opposed to in Europe, or in the states where everything is by email. So, I open up an email address, I can attach a more or less my real name. And that gets me access. Whereas in China, it seemed to me the 10 cents and Alibaba is of the world. You start with putting in your money link, and that is your identifier, or at least that’s what I understood is part of the Chinese difference.
Ashley Dudarenok 24:30
So Chinese social media, and let’s say digital landscape is different in a few ways. First of all, in the West, back in the day, when people were still looking at Amazon and thinking that Amazon is only selling books online. China was already purchasing everything online. Because of SARS. SARS came people were scared, nobody was you know, going out to traveling. And that was a necessity, so people were forced to move to Alibaba to a platform called Taobao to purchase daily necessities. And that was a big, big push towards the digital lifestyle. Back then. Alibaba started acting as a bank. Why is a buy without a license? By the way? Why is the bank because when you purchase the product, they would not release your funds to the seller before you said that you received the product and you’re satisfied with it. So, they acted ultimately, as the intermediary saying that I’m going to hold your funds, and I will only release them later on when you are happy. So, today, Chinese consumers have enormous trust placed with the platform’s with the bloggers with the ecosystem. And in the West, we didn’t really have that. Now, up until much later, first of all, the desire to even go and purchase online, why I want to touch I want to feel I want to I want the whole process. So, they didn’t have this push towards digital consumption. Number two, they didn’t really trust because there’s so much. First of all, there was this internet bubble, right, the bubble, where people saw large platforms, becoming kind of big and famous, and then dying overnight. So, there was not much trust placed into those players. And of course, why would I send my money somewhere? I actually have credit card, why can’t I pay directly to this brand? Why should I pay to some platform with my credit card, of them to potentially suited for it was just really, really confusing and not clear. And again, trust was missing. And going forward, China was able to turn that into a whole digital identity kind of verification tool, because later on when you had, let’s say, WeChat, right, which at first was a, as I said, not a very exciting copy of, let’s say WhatsApp, right, it was just the messenger. But they, at one point introduced peer to peer payments. And they actually promoted those peer-to-peer payments during the Chinese New Year, where people send each other red packets full of money. So, if somebody if means it today sends me $100 as a gift, I actually want to withdraw this money, I want to convert it on real cash. And then I also by receiving this money, opened my wallet, and I can send it to my friends, kids or to whoever. So, that became a really, really big thing. This peer to peer transfers. Again, they acted as a bank, but they were not a bank. And later on the open payments connected, so they started with a habit first and habit always came from the need, rather than inventing the need and pushing your customer there. They said okay, SARS, right now, that’s what we need, what stopping my customers from buying, or the fear that they’re not gonna get the product, let me hold the money first. And you know, if anything goes wrong, at any point, customers always right, they will always get their money back. Same with WeChat. Same with all other apps. And today, we have a situation that because real money real economy is involved, people are a lot more encouraged to actually verify their real identity. So, you have this kind of digital clone of yourself online, and you have this unified ID. And of course, we are not at a stage yet where each person just like in physical world, we only have one copy of Ashley, in the physical world. And in the digital world, we don’t have just one basically representation of Ashley, it’s not one unified ID across all ecosystems, but within an ecosystem, there typically is one unified ID with your real name. Why because it’s also connected to your outside wallet. And you can do all sorts of transactions, you can take a loan, you can contribute to charity, you can pay your government bills you can apply for the divorce certificate with your husband or wife all in one place. So, that of course is very, very unique to China as well and a lot of people outside of China start introducing that you know, that whole black mirror of scenario saying that Okay, now the you know, there’s this social credit system and there is you know, total control and all your transactions have been traced and of course, it could go there very, very unlikely, but it could go there, but it could go there with any technology. This is just technology and ultimately in the current situation in the current 2023 scenario, it introduces extreme convenience to the customer. And it introduces a lot of level of control for the company and yes introduces some convenience also for the government. For example, in China, they’re able to catch a, let’s say, criminal, right, through facial recognition, identify where the criminal is within 35 seconds. So, of course, all of this comes together. But ultimately on the consumer level on the customer service level, I’ve just recently returned from the US. And when I compare that to mainland China experience, because I just kind of weekend, Beijing, it was just back to back New York – Beijing, I can tell you, I will take China model at this particular stage as a customer, anytime because of the convenience, because of the speed. And because of the connection. How connected all these touch points are?
Minter Dial 30:30
Well, it’s most interesting, the way you describe it, you have this very pragmatic approach to growing. And one that seems to be really focused on the problem of the customer, the desire and habits of the customer. You have the special instance of SARS, the way it impacted China and made ecommerce quicker, just like COVID and the rest of the world made work from home a reality. As you’re writing in the book, you talk about how the sort of skip some of the technological advancements and then end up with this mobile now with the credit card or at least you know, access to money. And then also you didn’t suffer the consequences of the bubble. So, that makes for quite a big soup of things, ingredients for this customer centricity and the arrival of super apps, because it just feels like the Chinese are rushing, all these companies are rushing to be the king of the pie with all the apps and do you know, like the Amazon — the book was called by Isaacson The Everything Store — it’s like everything is what the super apps are doing. And it doesn’t feel like the West is going to get anywhere near to super apps, in part because of lack of trust, in part because of not really centered around the money piece, follow the money. And three, I would also suspect that there are elements of regulation that won’t allow for that overly monopolistic Titanic size. Government probably would be scared in the West to have any more power in the hands of a Super App, Google or Alphabet or a super Facebook plus Instagram plus WhatsApp, and so on.
Ashley Dudarenok 32:26
Yes, I agree. When it comes to the Western, unique Western challenges, trust is a big issue. Because there’s so much talk also in the media on the individual level, and again, people view technology as a threat rather than as a friend. Because likely they have experienced, I don’t know, identity theft, they have experienced subscribing to a service and then just been spammed nonstop. And when it comes to also, you said follow the money right? In China, you follow the money! Absolutely. Payment is paramount important because you need to have conversion data. Through all these touch points. You as a platform you as ecosystem, you’re collecting data. But what is the most valuable data? Data is not created the same, right? It comes in levels. The most valuable data is the conversion data, when you actually make a purchase when you actually buy a product receive a product and you don’t return it back, not just interaction data, or Ashley spoke with Minter about a dog last Sunday. That’s also a data point. But if actually purchased a pen yesterday at 7pm, and it was a purple pen. This is a completely different quality of data. Yes, and apart from all that, the Western platforms are not really customer centered, as much as they would love to appear. And there’s a lot of talk about customer centricity. You only feel it and experience it when you actually go back to back as he said New York Beijing. I mean, just do that trip, do that journey. And you will see that it is not the same been customer centric is really putting the customer problem in the center and making it easy for the customer to you know, speak with your customer service to negotiate a deal to complete the purchase to refund it, return it rebuy again to recommend it to a friend, etc. So, that customer centricity and of course when it comes to regulations, yes, but regulations in the West because the collective West doesn’t actually exist. It’s all these different economies that are trying to negotiate and find some ways to collaborate on major issues, but it’s not working the collective west as a system that regulates or moves forward. It fortunately unfortunately does not exist. And there are a few companies today that are very much focusing on building a super app such as for instance WhatsApp. Yes, so Meta is very much invested in and getting WhatsApp up to speed it will take them a while. But there are markets where Meta products are dominating internet. If we look at Burma, Myanmar right, a few years ago, the whole internet was Facebook, right or Meta as a platform. And of course, they tried to introduce their own messenger, it didn’t really work, people didn’t want to move to that platform to chat with friends, they tried to introduce their own payments through Apple Pay and all that, again, it’s very limited success. They have some success with them, shops and you know, marketplaces, but you just get too much spam. And you know, you don’t really qualify your sellers. So, trust is very, very low. So, right now they’re looking at WhatsApp as an opportunity to create a curated private pool, private traffic, a community where brands and businesses can actually build a meaningful dialogue, direct to consumer conversation, CRM, etc. The app is not ready yet. But you’ve also, if anybody’s using WhatsApp here, you’ve also seen that there are a lot more features on the groups, on the privacy, you can send messages to yourself now you can encrypt the chat, etc. So, they are moving in that direction. And there’s a lot of companies already today that are on their website on their whatever apps, they actually connecting the customer service to WhatsApp back end and start operating direct to consumer a lot closer. So it’s not unimaginable that in a couple of years from now, they will be able to arrive at one point or the other at some version of the Super App.
Minter Dial 36:37
Yeah, maybe a mighty app, not the super app. Yeah, working on it. And the other thing that brings up is that as you write in the book, and I was like, Oh, wow. WeChat when I first discovered WeChat, I think it was probably because I was going to China. And I got on and I was like, Oh my gosh, it’s so much better than WhatsApp. And then you told me and I felt oh no, WeChat outside of China has nothing to do with the WeChat inside of China. And as well, it was so good. And that’s why I sort of deflated on WeChat, it doesn’t have as many bells and whistles as maybe it has inside. And you see so many of these little things that were started in WeChat, as far as I can tell. For example having images or icons or emojis fly up the screen, that was something that I remember with WeChat happening by itself, if you wrote Happy Christmas to somebody, all of a sudden, it knew that and had little Christmas trees running up the screen, not so many innovations now, well, let’s park that and move on. Because some of the things that are interesting to me are with regard to management and leadership. And so you have these huge companies now, I mean, genuinely top of the world type of companies, and building culture and management styles. And you talk about, obviously, some good, some bad in China and what other companies can bring. But I have to believe that at this scale, they are suffering from things like burnout, they are suffering things like bureaucracy, and how do you keep that, what do you call it, it’s not the you have some form of leadership, which is very cowboy…the Maverick! That’s it, the maverick leadership style. So, in China, one of the questions I wanted to ask was, what is the narrative around purpose? Is purpose a thing? Like it might be at a Patagonia? Or are we generally sort of, I would say, in a smaller level purposes, making money purposes, making customers happy. And that’s the level of purpose.
Ashley Dudarenok 39:02
Hmm, very good question. So, again, anything that I say will be a gross generalization, China’s big country, there’s a lot of different companies that have their own philosophies. And there’s a lot of people that connect with the company because they just need money or because they really want to contribute to something larger themselves, just like in you know, in any other country of the world. In general effect, we’ll talk about Chinese kind of philosophy. Very often Chinese in general, when they view any situation, they are a lot more holistic, a lot more harmonious, they look at a problem or the situation as the whole system. So, in other words, they’re looking at the forest, not a particular tree. But in the West, we typically single out the problem. We call it our mission, and we try to solve that specific problem through The company and we call it our, you know, we name it our calling or whatnot. So, looking at champion companies such as Alibaba, for instance, right up until recently, right now they’re going through their own internal mess with all the restructuring top people losing some of their posts, and of course, being divided into six different entities plus Alibaba Group. That’s a whole different story. But Alibaba for years was operating out of 100-year strategy. So, they had the big, big vision. And the same thing happens with for example, Huawei, Huawei says, It doesn’t matter whether it’s going to take me three years longer, or five years shorter. But my big vision is to become the biggest infrastructure provider for the next age of humanity. So, if this is your goal, if you look at it so big, it doesn’t matter whether somebody put sanctions on your mobile phones, right, because you just have a very, very big, long term plan and vision. So, on the one hand, Chinese companies very often have the big, holistic, let’s say, view. But at the same time, Chinese companies are also operating in a very competitive, very fast paced world, where they need to deliver results yesterday, everything had to happen yesterday. And they can only work like this through what we call DEDA, right? It is digitally enhanced direct autonomy. In other words, you need to allow your middle managers and lower managers to autonomously solve the problems. So, when I go and ask a customer service person, when I’m purchasing, let’s say, a phone case for my phone, I go and ask her, do you have that same phone case, but in orange, she will reply me within 30 seconds, typically 90% of companies reply within 30 seconds. And then she will say, No, we don’t have orange, but we have this kind, and you can order orange, but it’s going to cost five times more expensive, we’re gonna do the, let’s say palest color for you. So, she’s able to solve my problem. If I am an unhappy customer, they have, just like with Virgin Atlantic or previous disasters, right, they have certain autonomy to also make sure that I am happy and ultimately have a good experience. So, Chinese companies work through their autonomy, that puts enormous pressure on not only managers, but also teams. And this is where we have 996, right, nine 9am to 9pm, six days a week, sometimes they work 1010, seven, sometimes it’s even tougher, but ultimately, on the one hand, it’s a crazy pace of the market, and digitalization, on the other hand, is that the pressure and responsibility and accountability is on you directly, you can always push it up to your boss and think that, okay the big guys in the big room, the boardroom will handle your problem. And on the other hand, of course, there is a certain toxicity, not only in China, but in the whole, let’s say, Asian setup, when you don’t leave your office before your boss leaves the office that happens across I don’t know, Japan South Korea, and many other places here in Asia, and I’m sure you know, in many other places around the world. So, all of that comes together to create a very stressful environment. Apart from all that, as I said, China is a very competitive market. So, unless you work for somebody like Alibaba and Huawei and even those companies went through big, let’s say layoffs, right, the tech layoffs that were happening in the past year, year and a half. You Yeah, your job is on the line, and you need to deliver, like, for example Xiaomi, one famous tech company, in reality, they are an IoT platform, they have a platform for IoT devices for your home and for other places. And they are looking for all these inventors that come to them with hardware products, and they say, Okay, I’m going to take this product, and I’m going to put Xiaomi logo on it. I’m going to manufacture it in my facilities potentially. And I’m going to plug it into my ecosystem. But so this is the company where they do not have a strategy that goes on for years and years. One of my friends working for this company jokes and says, our only strategy is double every year, no matter what you do, if your department can double every year doing good job. So, invent new products, cut half of your staff, do whatever you want double every year. So, again, that creates a certain also way of operating that is very, very different from a structured top down or bottom up now numbers driven projections driven strategy, because many Chinese companies have seen again, and again, that doesn’t matter how much you project, and how much you plan, the reality hits a very often hits differently. So, there’s a lot of things we can learn because Chinese management and leadership models have proven to be innovative have proven to produce outstanding products, outstanding customer service, outstanding returns. And of course, they also have produced very tough working culture that is not balanced, and you know, definitely not sustainable long term. So, there are things that we can learn from China leadership models, and there’s a lot of things that Chinese companies for the benefit of their, for their longevity, as a business also need to learn from, let’s say collective West.
Minter Dial 45:51
Well, that was why I was excited to have my book futureproof, translated into Chinese and try to bring some of the Western thoughts into that. So, just to recap, what I heard there was that the Chinese have a very holistic approach over a much broader view, and reminds me the Japanese the same, they have that same sort of full context view, they don’t look at the individual in the painting, they say there’s a painting on a wall in a house, as you know, what do you see in that painting, and then very long term vision, which also the government of course takes, and then the funny thing you add is, it’s also very fast. So, fast, long term thinking is sort of what I felt captured at all. And then you mentioned this Dida, the digitally enhanced directed autonomy, which is very interesting. So, purpose in this regard, would in my opinion, seem to be a very low-level version of purpose, as opposed to making the world a better place, or trying to be
Ashley Dudarenok 46:56
I will say, this is the side of the question that I kind of omitted, I lost, lost in the train of thought, but I believe it is dual. First of all, the purpose is always Harmony. Harmony, it needs to be harmonious development for the majority. So, harmony is always not about an individual, it’s about the majority. So, this is very big. And for majority of people, companies, government offices, harmony is the ultimate outcome. And then the second layer, the layer on top of that is you need to add value and make money. As long as you add value to your customer and make money in the process, you’re all good. And the big direction is harmony.
Minter Dial 47:51
Fascinating. So, there are other things, which in the West, we get all excited about. Transparency is one of them. We talk about trust, authenticity, and you mentioned how everybody has to has an account that actually is real. In other words, it’s me behind the account, you can’t hide behind anonymous things. And then things like mental health, diversity inclusion, which of these are landing big in China, which, let’s say there is no real emphasis on it.
Ashley Dudarenok 48:29
Um, all the topics that you’ve mentioned, all the topics that are occupying minds of people in Namibia, Germany, the UK, Brazil, or the US are occupying the minds of people in China. So, we are ultimately all very much the same. The degree difference, for example, right now a very big topic in China is green agenda. And people really genuinely care about it. They are willing to pay for greener alternatives. They’re asking ourselves themselves, how can they be part of the solution? Or how are they being part of the problem? They are keeping companies more and more accountable, etc. So, this is, again, a global thing. Secondly,
Minter Dial 49:19
we just want to just want to say that that’s something that the West probably has a different view of, they tend to group China with pollution, fast, fast growing and so I mean, think that’s how we view it outside. So, that’s a really interesting insight.
Ashley Dudarenok 49:34
And per capita, per capita pollution in China as of let’s say household garbage in China is lower than that in the US much lower. So, the biggest polluter per watt. Like a pizza, it’s not but per What if China is the factory of the world and manufacturing is inherently polluting? Then okay, but if we Yeah, manufacturing for the world. So, this, of course, data, any data, any number can be played the way you want to play it. And I would say we should always tell human stories. And humans, like Chinese people, just like any other person in the world want to leave happily want to progress in their career, contribute beyond themselves, make money, provide better life for their children, enjoy a few holidays a year, and you know, eat nicely, and it’s very human desires. And when it comes to insecurities when it comes to their dreams, and hopes for the future, they’re all the same and green agenda, we all understand that we live on this planet, we’re not just Chinese, or American or British, or, or worldwide. And we have humans first, and we have this one planet. And you know, more and more people, young people in particular, take that stance that we are humans first, right. And that is why calling somebody you know, like you you’re contributing most of the pollution will play in the numbers, it is a very dangerous thing to do. Because we take it away, we make it less human, and make it all about make it very, very, very negative. And it’s difficult to build bridges when we make it so negative, again, because data can be so manipulated, easily, so easily manipulate. So, the second thing that Chinese obviously care for, just like people around the world do is mental health. There’s a huge mental health crisis globally, and China is not an exception, China, in fact, has probably gone through an even more dramatic shake up during this whole pandemic, the pandemic started in China, then it was sort of brought under control in the first one year, one and a half years, it was actually very properly managed. And people live almost normal life, but then the last year of the pandemic with all the lock downs, and very, I would say, severe implementation on the ground. It wasn’t the central government. But it was on the ground implementation where, of course, a lot of incidents happen, that should not have happened, right? They shook up the whole nation, people are tired, people do not see the future as optimistic as before, China was a very optimistic market, imagine this for 30 years, every single year was much better than the year before, not just a little better, but much better. And suddenly, we go through this pandemic, obviously, it is psychologically difficult, economically difficult. And people feel they’re totally out of control, that nothing that they do matters. Tomorrow, they can be locked up again, and not able to leave their house and they have to order food at eight o’clock or seven o’clock in the morning on the app in order to eat. And this is 2020-22 we’re talking about. So, of course, it was extremely difficult. And a lot of young people also lost much when it comes to social skills, right? If you are, let’s say in school, imagine you’re in high school in university for three years, you’re barely interacting with your classmates. And you’re sitting in front of a zoom call, or you know, a Chinese version of that. It’s, it’s just not nice, right? Um, so a lot of professionals, they decided to reinvent themselves and move to smaller towns, opened coffee shops, decided to take a year off and travel the country. Some people changed their attitudes to live, they do not want to be persuaded by their parents or grandparents to get married anymore. They want to be happy singles, they move in with their girlfriends or boyfriends together in a big house and just leave us friends, etc. So, a lot, a lot of things are shifting, of course, a lot of elderly Chinese an aging society, it ages very, very fast. And a lot of these older people also do not want to be the care givers to their grandchildren, right? They want to live their own life. And this is a big shift from what we had, let’s say 20, 30 years ago, they say, You know what, I am still young, I’m strong. I don’t need to take care of my grandkids I want to be against rising my friends, living in a little house fishing every day, traveling the world etc. So, psychological crisis comes with shifts in behavior in shifts, shifts in self identity. And of course, I would say 80% of people that I know that live, either foreigners live in mainland China or friends that live in first second tier cities. 80% of them have a coach or a psychologist with whom they call a talk at least once every two weeks. So, there’s also a huge industry on the rise. And, unfortunately because the industry is so young, the quality See, various Yes, sometimes it is great sometimes is just very, very bad. So, that is another thing. Um, there were a couple of other points that you’ve mentioned, apart from mental health. What was it?
Minter Dial 55:12
One of the things like transparency? How about that one?
Ashley Dudarenok 55:15
Yeah. When it comes to transparency? Are you talking about data transparency you’re talking about?
Minter Dial 55:21
Well, in general, there’s just calls for transparency. I want to know how your AI works. I want to know what you’re trying to do. What are your motivations, right?
Ashley Dudarenok 55:30
So, in general, in China, we need to understand that there is a social contract with the government. And the social contract is as long as the government delivers growth, and everybody lives better year after year, we are giving the mandate of heaven. So, Mandate of Heaven is actually a very Imperial Chinese constant, saying that if the Emperor, or the dynasty rules as well, and we continue to thrive, we as people are going to continue supporting this regime, this dynasty this emperor, so this mandate of heaven is exactly the same thing. There’s a social contract. And Chinese people understand that the access to certain information or certain platforms, or certain concepts is restricted. They know it, it’s not a surprise to them, if they really want to access different information through VPN, a portion of population can do that. But at the same time, in general, there is rather strong trust in government that government has the best, best intentions for the majority of people in mind. And that is why when it comes to, let’s say, regulating platforms, right, I want to know how exactly your AI works, or etc, people generally place in my opinion, subjective, of course, more trust in how government regulates those platforms, compared to the west, because in the West, most of the people just say, oh these guys are not qualified to regulate these tech companies. And these tech companies do whatever they want with my data, and I feel really insecure and unprotected. And if I want to be protected, I need to be the one doing that. So, I need to start my own kind of mini research, I need to opt out of everything, I need to take charge in China very often because of this social construct. And because of the environment, people still, I believe, trust the government a lot more when it comes to actually having their best interests at heart and regulating the platforms. And if something goes wrong, they can they can exit platform squid complaint, create a PR crisis for this company, on Weibo, and any other platform. So, that these are some of my thoughts when it comes to transparency. But of course, Transparency can take many different forms.
Minter Dial 57:55
And total transparency basically never exists anywhere. Actually. There are so many other questions I would have loved to plow into your font of much information, insights, great energy. And I what I do is I would recommend anybody who’s listening and still listening to go and check out your books that you have, what you write about follow you on LinkedIn, if possible. You have your great newsletter. What are the best ways what links would you like people to go to check you out? Ashley?
Ashley Dudarenok 58:25
Just check me out on LinkedIn at Ashley Dudarenok. And yes, I also have AshleyDudarenok.com, where you can see more about myself and there are two companies, one is called ChoZan.co. And the other one is Alarice.com.hk, and any of these means would lead you to connect with my team. And of course, if interested in any insights from Digital China, just follow me on any social media channels. My outcome is to give you a slightly different business news from China that are human stories that are more real, I would say unless charged and always focused on business. Because ultimately, business is great because we come together add value and make money and everybody in the world independently on whether base ultimately want to add value to something bigger than themselves and in the process make money to sustain themselves further.
Minter Dial 59:26
Ashley: spassiba bloshoi or shey shey, should I say? Thank you very much.
Ashley Dudarenok 59:32
Thank you, man. That was a pleasure.
Minter Dial 59:35
Thanks for having listened to this episode of The Minter Dialogue podcast. If you like the show and would like to support me, please consider a donation on www.patreon.com/Minterdial. You can also subscribe on your favorite podcast service. And as ever, rating and reviews are the real currency for podcasts. You’ll find the show notes with over 2000 blog posts on minterdial.com. Check out my documentary film and four books including my last one “You Lead, How being yourself makes you a better leader.” And to finish here’s a song I wrote with Stephanie Singer, “A Convinced Man.”
I like the feel of a stranger
Tucked around me
Precipitating the danger
To feel free
Trust is the reason
Still I won’t toe the line.
I sit here passively
Hope for your respect
Anticipating the thrill of your intellect
Maybe I tell myself
There’s no use in me lying.
I’m a convinced man,
Building an urge
A convinced man,
To live and die submerged.
A convinced man,
In the arms of a woman
I’m a convinced man
Challenge my fate
I’m a convinced man
A convinced man
In the arms of a woman.
And struggle to see
Live for the challenge
So life’s not incomplete
What’s wrong with challenge
I know soon we all die
I like the feel of a stranger
Tucked around me
Precipitating the danger
To feel free,
Trust in my reason
And let me show you why.
I’m a convinced man
Practicing my lines
I’m a convinced man
Here in these confines
A convinced man
In the arms of a woman.
I’m a convinced man
Put me to the test
I’m a convinced man
I’m ready for an arrest
I’m a convinced man
In the arms of a woman.
I’m a convinced man… so convinced
You convince me, yeah baby,
I’m a convinced man
In the arms of a woman…
Minter Dial is an international professional speaker, author & consultant on Leadership, Branding and Transformation. After a successful international career at L’Oréal, Minter Dial returned to his entrepreneurial roots and has spent the last twelve years helping senior management teams and Boards to adapt to the new exigencies of the digitally enhanced marketplace. He has worked with world-class organisations to help activate their brand strategies, and figure out how best to integrate new technologies, digital tools, devices and platforms. Above all, Minter works to catalyse a change in mindset and dial up transformation. Minter received his BA in Trilingual Literature from Yale University (1987) and gained his MBA at INSEAD, Fontainebleau (1993). He’s author of four award-winning books, including Heartificial Empathy, Putting Heart into Business and Artificial Intelligence (2nd edition) (2023); You Lead, How Being Yourself Makes You A Better Leader (Kogan Page 2021); co-author of Futureproof, How To Get Your Business Ready For The Next Disruption (Pearson 2017); and author of The Last Ring Home (Myndset Press 2016), a book and documentary film, both of which have won awards and critical acclaim.
👉🏼 It’s easy to inquire about booking Minter Dial here.