It’s the Unpredictable That is Likely
Sometimes the most unusual things occur right in front of our eyes and pretend to be normal. Apple announced that forward orders for iPhone 6 dramatically exceed their capability to deliver. Do they still have the magic? Google’s unparalleled success identifying new business opportunity by sculpting new industry out of empty space is now being challenged by the German finance minster in Brussels as monopolistic. Hello? China, as you’ll see in our September RedBag Insightissue, has a new brand strategy - it seems to very specifically target creating challenges for foreign brands while benefits accrue to indigenous brands. Yin and Yang. It seems we have tremendous forward looking forces in the global economy but at the same time tremendous resistance. This is a major dichotomy underway.
At the same time, from Scotland to Catalonia to China, Balkans to Kazakhstan, and on and on around the world, we have politicians who think the solution to their economic problems is to separate and others who think it’s to integrate. Likely much of this frustration comes from anemic global growth particularly in the western world. So rather than foster policies of growth and job creation, many politicians are busy finding someone else to blame. Meanwhile, right under our eyes we do, touch, feel, consume and experience enormous improvement in the capability, durability, economic sustainably of just about everything we encounter.
Yin and Yang. Makes you wonder what would happen if there were concerted effort by the next generation of political leadership to understand their job is to foster growth and economic opportunity of all the citizens. If they get it right?
As the world has largely exhausted the benefits of fiscal and monetary stimulus which were so powerful in the past few decades, we have to think what will unleash that next new chapter of gains. And I think it’s got to focus on increased productivity. Monetary policy even at these historically low interest rates is not enough. This month's inSIGHT talks about how this is played out in one market, China. It’s interesting to compare the conclusions of this insight with the earlier chapter in China’s growth when they understood it was selling to foreign consumers that will drive domestic economy.
Revlon announced back in December that it was leaving China and letting go of 1,100 staff, including 940 beauty advisers. Bosideng, a Chinese company unknown to most Western investors, built the most expensive fashion retail store in London in 2012, at a cost of over £30 million. Meanwhile, in January, Nu Skin Enterprises learned that the Chinese government would investigate its operations, after a report in the state-run People’s Daily claimed that the skin-care and nutrition company operated as a “Suspected illegal pyramid scheme.” Are any of these related? Evidence is mounting that China has a very specific consumer brand strategy, and is intentionally creating challenges for foreign brands while benefits accrue to indigenous companies. How will foreign companies decide to respond?