Chinese is a nation of gambling addicts, besides mahjong and various poker games, football gambling has grown significantly in the Chinese market in recent years. It originated in Cantonese-speaking cities such as Guangzhou and Hong Kong. Initially they only gambled on the England Premier League, but providing improvements on broadcast channels, gambling enthusiasts started placing bets on any games that would be shown on TV.

In brief, the gambling process in China starts with overseas gambling companies based in Indonesia, Macau and Singapore. They offer the odds, which are then distributed to the big bookie, the big bookie separates the odds for the smaller bookies, gamblers then communicate with the small bookies to place their bets (see image above). Bookies never gamble, they profit by taking commissions from the winning money. Chinese usually gamble on the score, for example, in the recent Spanish game, Spain beats Honduras by 2:0, the odds the gambling company offered was that Spain would win by 3 goals, but David Villa unfortunately missed the penalty shot on the second half, causing many gambling loss.

Speaking as an avid World Cup gambler, I have noticed that only several of my peers place bets on every game, most of them only bet on ones they have interest or confidence in; but ultimately we all gamble for the same purpose: to stimulate our football watching experience. I’m sure there are others out there who live to gamble, but not us, we are only doing it as an entertainment.

A mutual friend happens to be a small bookie, so all of my friends, including me, place bets through him. One friend has regrettably lost 50,000 RMB, while others are more lucky with their wins, but the World Cup still has a long way to go, so anyone could be the final winner.

Those who forget to place pregame bets just end up casually gambling with friends throughout the game. The betting is simple if your friend supports a different team, but you can also bet on a draw. If your friend supports the same team as you, then you need to bet on the number of winning goals. The prize can be 100-200 RMB in cash, tomorrow’s lunch, or a midnight snack after the game. It doesn’t hurt as much for losers and it’s a more friendly way to gamble.

However, gambling is ultimately precarious, especially if it becomes excessive. So be careful to keep self control, and remember that it is just a game.

World Cup Doctor's Note

Speaking as someone who has played with and against Chinese football players, I know that’s its not skill or knowledge of the game that they lack (although they can be prone to the odd bit of petulance). However, the expectation that China should have a national team, inline with the rapid growth of their economy and overall size of their population, is an argument that is shortsighted.

Rowan Simmons is a long serving British expatriate in China who has dedicated himself to building a culture for football to thrive in China. In his book Bamboo Goalposts he reiterates the idea that the sport must be built from the bottom up. This means, establishing youth leagues and the amateur game which all in turn feed into professional development and at the top of this, a world class National team. I agree with him to a point but this is all based on a very Euro-centric view.





Building a passion for playing football should be first and foremost. Why? This desire to play is something that is in the very roots of most European and South American cultures; the youth in these countries are seemingly born into worlds where football is life and life is football. In a Euro-centric football pyramid structure, where youth football is at the bottom, leading up to development leagues, and finally the professional level, there is no need to build any awareness or instill passion in the youth. It already exists. However in China, this step is actually the first step needed to build a Chinese youth football army. And where does this start? Passionate kids.

In our research we’ve met kids who are passionate about so many things and these passions become all encompassing, even life changing. It can be the reason people move to new cities, meet their husband or wife and start families. When you have people who often strive to dedicate their lives to something; this is when it transcends beyond being a hobby or pastime. Football can be one of these passions。

We talked about photography as a gateway hobby, but is there footballing equivalent? Five-a-side football and in particular its South American counterpart, futsal, has established itself as it’s own sporting entity in Asian countries such as Japan in the past decade.





Futsal, is a smaller, faster and more skill filled mutation of football. The game is played with 5 instead of 11 and the ball is slightly heavier and smaller, to emphasize close control and fast-passing as opposed to long high lobs from end to end. Futsal has its origins in the South American streets but as is often the case with passionate Japanese hobbyist, they have reappropriated and repackaged this activity for more efficient and wholesome consumption. Rooftop futsal stadiums with late night schedules better cater to drab urban environments and have more flexible opening hours for those with unrelenting work schedules.

Furthermore, brands such as Nike have tried to capture the peripheral lifestyle elements of this offshoot sport, giving the sport a more cool street element. Rounding out these lifestyle elements is a further way to help build a sense of culture and identity around the activity and helps ensure more long term commitment. It serves as an initial draw for those maybe put off by more traditional notions of the sport.





Despite very little publicity, China’s national futsal team has already qualified for 3 FIFA world tournaments and the official futsal online community has over 6000 members. The basis for growth is there. This is where brands can do something to really invest and help build a football culture. If they can help bring attention to these fostering activities and sow the seeds to help turn these hobbies into full blown passions then I fully expect football to blossom.

We recently also mentioned how Chinese parents are slowly starting to see merit in letting their children follow their passions to find success. Football player could be one of these careers.

I have faith in Chinese football, now if only brands and the rest of China would.

Charm Café is a youth focused creative centre located in Zhongshan Bei Lu, the creative street of Hangzhou. They provide a platform for Chinese artists and designers to present and sell their artwork, as well as regularly hosting offline activities to encourage creative thinking amongst Chinese youth. Some of their main activities include monthly West Lake Idea Mart (DIY Mart) and weekly Charm Café creative class and exhibition. They also help with organizing China Hangzhou Cultural & Creative Industry Expo in every October and China International Cartoon and Animation Festival in every May.

Creative class in Charm Cafe

Shu Chang

Shu Chang is co-founder and manager of Chame café. He is 26 years old and studied Finance at Zhejiang University of Finance and Economics. He used to work for Hunan TV station as a TV host for one year, later he worked at a user generated content website for two years. Since he cannot give up his strong passion for youth cultural as well as design, in September 2009 he decided to start Charm café with the Hangzhou government’s support and investment from his partner. His dream is to promote creative culture and encourage creative thinking by educating Chinese youth and providing a platform for creatives from all around China to share and market their products.

Interview

During our weekend trip to Hangzhou, we sat down with Shu Chang and chatted over a few cups of joe. Here are some highlights from the conversation:

How do you describe the current youth culture in Hangzhou?

There is a phrase called “Hang’ Er Feng” which describes a trend following phenomenon in Hangzhou. A lot of young people are following and copying trends from outside of China, but I think it’s good, we can learn by following and copying, at the end we will discover our own style.
Hangzhou is more conservative than Shanghai in terms of accepting new things since we have a very deep and distinctive culture, but I think right now it’s the time for innovation and development based on our original culture.

What is the future outlook of youth culture in Hangzhou?

I think we will still be in the process of learning and copying within the next 3 to 5 years, but you can see there are more and more creative activities and parties in town amongst local youth. In 5 years, you will see much more youth focused indie brands as well as opinion leaders. Local culture will be the key influence and I think we will have our own and distinctive style by then.

The other day I was asked, “what are the 5 most popular cars among your peers?” But it turns out that question is too tough to answer. We all like such different cars. However, I think a lot of us agree on necessary features.

Feature 1: MP3/iPod/AUX Interface

No music, No journey. Headphones are out of the question when driving, and a CD player just doesn’t cut it. So new models are starting to add a MP3/iPod/AUX interface.

Feature 2: Cupholders strategically placed infront of AC vents

This one might surprise you, but it really is important to us Chinese youth. Shanghai Summers get hot. Real hot. So there’s nothing better than sitting inside of a cold car and having a cold drink. Nowadays, most automakers have caught onto this, making my summers much more tolerable.

Feature 3: Sunroof

A Sunroof is a must. It’s can offer a good view, and when the weather ‘s right, provides a nice breeze. Plus it adds to a cars “cool factor.”

Feature 4: Multi-function steering wheel

A lot of cars are starting to boast this feature now. For an urban 80′s Chinese kid, it’s essential to have control of the entire car from his steering wheel: volume, radio, cruise control, GPS and Bluetooth cellphone system.

The car’s performance and speed comes into play once you look at mid-high prices. But for an urban kid trying to conveniently get around, these are some of the key features they’ll be looking at in mid-low price cars.

Hangzhou

Hangzhou is one of the cities the central government has chosen to lead the charge in greener traffic. Various policies have been enacted to this end. $14.6 million has gone into expanding the number of electric cars on the road. Electricity prices for recharging cars has been lowered. Parking spots have even been designated as “electric vehicle only.” Similar initiatives are being seen in 13 other cities. China Daily reports that Beijing authorities have rolled out a bold plan to start running thousands of electric vehicles later this year. In order to sustain this plan, the chairman of North China Grid stated that up to 450 recharge stations were planned for the influx of electric cars in the capital. Expect to see these initiatives spread to other cities in coming years.

(Photo Credit: 赛安德)

BYD, Co.

Yet China’s ambition certainly goes far beyond filling its streets with electric cars. It also aspires to be the global industry leader in their production. And from the looks of it, that may not be too far off. Having come to terms with its general disadvantage in traditional internal-combustion cars, and accepting pollution as a serious threat to sustainable development, the CCP understands it is in its best interest to pursue alternative energies for transportation. Consequently, the CCP has committed to pledging $1.5 billion in grants to help China’s auto industry innovate.

It’s therefore little surprise that Chinese companies are making large strides in such technologies. A shining example being BYD, Co. The Chinese battery and auto-maker has been dominating local headlines for years, and is fast becoming known to the rest of the world. For one, celebrity businessman Warren Buffett bought a 10% stake in the company for $230 million in December 2008, stating he believed they could become the world’s largest auto-maker by making electric cars. Later in May 2009, BYD signed a contract with the world’s largest automaker, Volkswagen, to cooperate over hybrid cars and lithium-battery powered vehicles. Then just a couple weeks ago, BYD and Daimler Ag, the world’s second largest producer of luxury cars, signed an agreement to enter a “comprehensive technology partnership” in order to develop electric vehicles for sale in the Chinese market. There’s also talk of BYD exporting electric cars to Europe and the U.S. by 2011, which doesn’t seem a long-shot for a company with 11,000 engineers and technicians working to advance their battery technology. They’re now the fastest growing Chinese automaker. Not bad for an 8 year old company.

(BYD’s e6 – one of the models to be introduced to Europe)

BYD shows promise, but it’s just one of many such Chinese companies.

Advantages

Much of China’s competitive advantage in this industry comes out of the CCP’s deep coffers and undisputed efficiency in enacting policy. Having identified electric cars as a corner stone for China’s auto industry the central government is willing to invest a small fortune to modernize it. Meanwhile many foreign auto-makers deal with a laundry-list of problems.

Electric cars may also be an easier sell for Chinese consumers. The local auto-market is still relatively young, which could potentially translate into Chinese car-buyers being less attached to gas-powered cars compared to Americans and Europeans. Analysts also cite China’s traffic as more suitable for electric cars due to its predominantly urban, short-journey nature. Since electric cars are limited to 100 – 200 kilometers per charge, they are a less tempting option for North-American drivers who tend to travel longer distances.

Our research also indicates Chinese consumers are growing increasingly weary of environmental issues such as pollution.* Those who have traveled or lived in Chinese cities can understand just how bad the pollution is. There’s no ignoring it. It’s a tangible, everyday part of a Chinese urban resident’s life. A constant reminder that something has to change. If electric cars are positioned as an integral part of cleaning up cities, people have even more incentive to invest in one.

Barriers

But just as in any auto-market, there are significant barriers for electric cars. First and foremost, price is a serious concern for the Chinese consumer. Electric cars still cost about 30% more than gas-powered. This is mostly due to the battery, which alone costs RMB 60,000 (about $9,000). Fortunately, as electric car sales increase, and production cost for batteries decrease,battery prices will go down.

Another barrier is the newness of this technology. Battery technology still needs to improve. Battery life is short, which means range of transportation is equally short.

Electric cars require additional infrastructure. Beijing is set to build many recharge stations, but this needs to be implemented nationwide before people can seriously consider buying an electric car.

Chinese Youth

So how do Chinese Youth feel about electric cars? They are, after all, the world’s biggest potential market for these cars. Many of those we’ve spoken to have expressed an interest in electric cars, but are still weary of making the switch. They are well aware of the long term savings an electric car offers (100 km on RMB 5, versus RMB 50 with petrol), but the hefty price tag is still very much an issue.

The Chinese youth we have spoken to unanimously acknowledged electric cars as the “vehicle of tomorrow.” But therein lies a problem: “the vehicle of tomorrow.” Chinese youth don’t think electric cars are worth buying today. Companies like BYD may find it difficult to convince the emerging consumer they should invest in electric cars now.

We’ve also heard young male consumers express concern that electric cars lag behind gas-powered in terms of speed. Electric cars lack the thrill associated  with faster, gas-powered cars. Performance aside, this demographic also expressed dissatisfaction with the design of electric cars. For the young, first-time car buyer, getting a car is a momentous occasion. Many aspire to luxury or speedier sports models.

The thrill seeking consumer and the electric car may be mismatched, but we’ve heard from an entirely different segment of youth consumers, who place environmental concerns far higher than speed or looks. Some have made it clear they want these cars and their necessary infrastructure to prevail nationwide as soon as possible.

As this industry matures, it seems electric cars are set to revolutionize China’s urban traffic. Moreover, we’re seeing a drastic shift as China’s domestic auto industry seems poised to influence international automakers.

* For more on Chinese youth and green values, get the joint enovate & Greenovate report.

Shike (试客) means “testing customer,” and is now a registered trademark and a new business model launched just a few days ago in Beijing. It’s a website, a market research company, and a franchise with 4 shops in Beijing with a plan to expand the network city-wide.

For one yuan a day, you join the Shike club and receive 3 product samples a day. You might receive a drink, a box of tissues, and a sample of luxury skincare. Definitely a good deal. Once people receive the sample, they’re incentivized to give feedback on the product. The more they comment on products, the more points they receive, which translates into discount coupons and more prestigious samples.

The formula is smart and simple. The possibility of testing new products satisfies consumer curiosity while inflicting minimal damage to one’s bank account. Secondly, it gives brands meaningful feedback on their product, and may even create a buzz if the sample impresses Shike members.

Lets not forget the growing popularity of online shopping amongst China’s urban youths. Thanks to websites like Taobao.com, online shopping and product reviews have become a staple for much of China’s internet users. In 2009, 87million people purchased goods online, most of them students aged 18-30. This tendancy will grow exponentially as new youths turn to the internet for all their shopping needs.

Will Shike be the “future of shopping” as the website says? Of course the business is new and only time will tell, but tryvertising and massclusivity are very certainly useful cards to attract young Chinese “taobuyers” generation.

For more from Alessandro De Toni, check out his website.

With Chinese New Year’s approaching, unemployed Chinese youth are buzzing with excitement. Not only do they get treated to a delicious New Year’s meal and fireworks, they also get a generous “hong bao” (红包). Simply put, a hong bao is a red envelope filled with cash that relatives give to kids. The tradition dates back to days of old, when hong baos were believed to exorcise evil spirits in children. Today, it’s given as a present from elders wishing the best for young relatives. It’s generally given to kids when visiting family elders. Being paid to spend time with the gramps? Not bad! Parents will also leave hong baos on their children’s pillows. No matter if you’re giving or receiving, it’s a joyful occasion.

Hong baos generally contain much more money than kids are accustomed to having throughout the year. So how do kids spend their New Year’s money? Education Online held a poll asking this very question.  32% of the respondents received RMB500-1000 and 28% of them get up to 1000-2000. This is a lot of money for youngsters. How do they handle it? Data shows that 37.06% of the respondents make a compromise, allowing mom and dad to take care of part of the cash. Only 18% manage their own money, while 26% don’t have any say as to how their hong bao, money gets spent. Among those who manage their own money, they admit to spending about half on books and school supplies. Other options include toys, entertainment, clothing, courses, and even donations.

By allowing Children to manage large sums of hong bao cash, parents tend to believe that they are cultivating their child’s ability to manage their finances. However, problems arise. There even comes the news that a 17-year-old buying ketamine with his gift money. Some children still cannot totally control themselves and they will easily develop a sense of greed with lot of money. Therefore, parents have to guide their children how to deal with their pocket money. In response, The Shenyang Daily made some suggestions to parents as New Years approaches: 1. Send useful cards like library cards or gym membership card instead of real money. 2. Buy insurance for children. 3. Establish an education fund. I like toys and candy better.

My eyes shifted, darting back and forth, spotting feather-less chickens, pieces of pig, bloody beef being chopped into digestible meat. I was lost in the heart of an outdoor meat market in the middle of Panjin, a tier three city in northern China. My sneakers traced mud across the cold, hard concrete and I covered my face from both the obtrusive airborne particles, as well as the unbearable meat-locker like conditions.

I walked into Panjin’s most affluent food shopping market in the center of the city, pried my hands out of my pockets, and slid through the plastic door sliders supposedly protecting the inside from the outside. This market represented a food shopping destination for Panjin’s elite. Delicate slices of tender beef were marked at unaffordable prices, a special Japanese import section was carefully displayed behind velvet ropes, and a row of JIF Peanut Butter shined like gold at the bottom of a dark mine.

Panjin’s City Center

Alas, I was buying Peanut Butter at this upscale shopping center. However a typical Chinese tier three city food shopper is most likely not purchasing peanut butter, instead spending around 200 to 300RMB per month at outdoor fresh markets such as the outdoor meat market mentioned earlier. However, as the income levels of these tier three cities continue to rise, and Chinese people seek safer, sanitary, and convenient food shopping methods, the amount of wet markets in small (and large) Chinese cities will continue to diminish. The unpackaged meat industry (aka meat markets) alone in China is set to drop below 10% of all accounted purchases by 2016.

Tier 2 and Tier 3 Supermarket Expansion

The recent global economic crisis in 2009 also makes these second and third tier Chinese cities ripe for foreign supermarket expansion. Wal-Mart, playing catch-up mode to Carrefour’s strong presence and brand image, opened 17 new supermarkets in China, most in second and third tier cities including Yancheng, Jiangsu, Xiangfan, Hubei, and Changde.

However, Walmart, Carrefour, and Tesco are not alone in Chinese supermarket expansion. They may have set the standard for all local supermarkets to follow but local Chinese supermarket chains such as Lianhua (controlled by the state-owned group Bailian Group) intend to go head to head with Walmart in 2010 and beyond. In 2008, Lianhua set targets to open 15 hypermarkets per year and at that time controlled over 120 plus-sized supermarkets across China. In Xi’an a tier two city located in central China, the supermarket scene is dominated by a local Guangdong controlled retailer named Vanguard which has 22 supermarket locations, compared to one Carrefour and three Wal-Mart’s.

There are signs however of supermarket saturation, Japanese supermarket retailer, Aeon Co Ltd. is likely to miss its target of opening 70 supermarkets in China by the end of February 2011 due to local delays. Another supermarket in Beijing, “C-Mart” uprooted and disapearred overnight last year, leaving behind unpaid bills and taxes. This leads me back to the small city of Panjin. It does not represent China’s wealthiest tier three city, however as of my count there were around 5 to 7 “super” wet markets and 3 supermarket style food shopping centers. None of these supermarkets were owned by international food retailers, yet most contained similar service and products. Much like the former Wal-Mart force outs of local food retailers in America, we may yet see a similar type of supermarket strong arming occur in China’s second and third tier cities.

Shopping Habits of Chinese Youth and the Future of the Food Shopping Industry

The presence of grocery stores in large and small cities in China does not mean that young Chinese are shopping at these locations. Convenience stores, online shopping, parental reliance, and well, no shopping at all, represents more typical shopping habits of Chinese youth. Leon Ni, a 23 year old Shanghai resident claims to only use his kitchen for instant noodles, seaweed soup, or for cutting fruit.

So if Chinese youth aren’t shopping anymore, then this diminishes all hope for future growth in the industry correct? Well no. Food shopping is not going anywhere. What’s changing most amongst Chinese youth in the food shopping industry is the habits and overall shopping experience. As Leon states, he and his friends enjoying shopping at Carrefour because it’s wide aisles and excellent selection make food shopping interesting as well as having the ability to “quarrel and fight with friends.” Enhancing the overall shopping experience is a huge opportunity for food retailers to tap into the Chinese youth market.

Also look for a growth in convenience stores in first, second, and third tier cities. In addition to the myriad of convenience store options that already exist in China, Wal-Mart entered this competitive market by opening three shops in Shenzhen last year. Convenient stores represent an opportunity to “hyper-localize” both experiences and products. Chinese college students looking for a study boost find more of these types of products, working individuals find more lunch options and so on.

We start this theme with an article by new enoVate team member, Nicolas Peden. He takes a look at the evolving dynamic between this new generation of parents, their children, and Western influences.

Recent tendencies in parenting beg the question: are young Chinese parents Westernizing their kids? The two most noticeable portals through which Western culture is being siphoned into these unsuspecting toddlers are baby-products and leisure activities. Gerber and baseball, the great Western forces.

Little Emperor

China’s typical family structure — one baby, two parents, and four grandparents — means those little toddlers get a lot of attention. It’s arguable whether or not the new generation of parents will continue the Little Emperor tradition, but the fact remains: Chinese parents spend a lot on their children. Up to 50% of a family’s income goes into baby-food, schools, piano lessons, clothes, and various other infant products and services. (Euromonitor.com)  And due to a constant stream of scandals regarding baby-formulas, kids’ toys, and clothes, product safety is a tremendous concern for today’s parents. A large majority of mothers across 15 cities expressed a willingness to spend 20% or more for baby products if they felt they could trust it was safe. (Forbes.com)

Western brands are benefitting. The ’80s babies are now the highest-earning age group in China. As they become parents, they want nothing but the best (and safest) for their children. Being that Western brands are perceived as much safer, a new generation of parents are willing to fork over the extra cash for them.  Lisa Zheng, a recent mother, says she prefers to buy Western when it comes to her baby because “I know there is a very strict standard for baby food, baby clothes, and toys in some Western countries.” She adds that she also likes the design of western products. Some wealthy parents go so far as flying to Hong Kong or Korea just to buy foreign baby formula.

Homeruns and Homework

Obviously, wearing American Apparel and eating American baby formula won’t make you American. But this tendency of “westernizing” kids goes beyond brands. For parents with the means, it’s becoming common to immerse their children in non-traditional Chinese activities. Besides the stereotypical learning of an instrument like piano or violin, young parents are opting to push their kids towards various foreign pass-times.

Sam Maurey, a former coach in Pudong, says more and more young parents are eager for their kids to play Western sports. He’s coached kids as young as 4 in baseball and tennis, and states: “despite parents not understanding a thing about baseball, they’re still pushing their kids to play it because its Western and therefore seems beneficial for children.”

And of course, who can forget the abundant english language schools that employ all my career-impaired friends. Parents are enrolling their kids earlier on; sometimes as young 3. Ian Steinmo, another foreigner living in Shanghai, is paid by a wealthy young couple to just hang out with their 4 year old son so he can pick up on Western culture.

Down the Road

So will the next generation be less Chinese? We won’t dare try to answer that question. It’s a fact that Chinese youth will have even more contact with Western influences. But that alone does not precipitate a loss of domestic culture and values. We can, however, propose two possible outcomes. One, unless China’s brands don’t change their image by avoiding scandals, consumption trends in infant products could increasingly lean towards foreign products. Two, as more Chinese children get accustomed to Western goods during their formative years, they may be more inclined to buy Western in later years.

Mainstream consciousness

With a government backed push on creativity and a generation of young Chinese now raised on the offerings of local bands and designers or artists, we have already seen the emergence of alternative lifestyle choices.

LOHAS(乐活) or “Lifestyle of Health and Stability” emerged globally in the last ten years and in China, only in the past few years yet it has became a household term in larger cities, reffering to those wanting to live more ‘green’ lives. Whilst not a youth (sub)cultural movement specifically, it shows the rate in which certain lifestyles can be reapropriated and introduced into the Chinese mainstream consciousness.

A vanguard of artists/musicians from the past decade such as PK14 or have helped show that more traditional youth subcultural pursuits aren’t solely the domain of the foreigner. With shows like Pepsi: Battle of the Bands – alternatives in music are already seeping into mainstream culture. As these ‘alternatives’ seep into mainstream then it secures further participation of future generations who can then build on or adapt these subcultural lifestyles and ideas.

Fragmenting Subcultures

As new scenes appear with more and more participants Chinese youth will no doubt strive to one up each other and further set themselves apart in their commitment to their lifestyle choice. Groups such as Fei Zhu Liu have already begun to fragment as certain elements of the “counter cultural” style are adopted by mainstream Chinese youths. Soon it won’t be a case of mainstream or subcultural but shades of grey, ranging from those committing all aspects of their lifestyle choices to those completely unaware or uninterested.

I believe that much like their Asian peers in Japan, Chinese youth are a ‘digging’ society. Those young who are captivated by a sport, a game, a music, an art form lust to know it in it’s entirety. As the initial introduction to these interests may now come easier to the forthcoming generations of young Chinese new, interesting youth lifestyles outside of the Taiwan/HK pop culture mould are set for massive growth.