My Fifth Horseman-Inditex-And Why You Will Never Catch Them

In Professor Scott Galloway’s groundbreaking book, “The Four”, he describes why and how “The Four Horsemen” are dominating global business. They are Apple, Amazon, Facebook and Google. How did all this happen? Did we all fall asleep and wake up in a Brave New World? For some of us, maybe..

After explaining why they are so dominant, Galloway explains the factors they have in common, and the elements that a potential Fifth Horseman would need to have to sit alongside the Four in global business. He calls these elements The T Algorithm, which contains eight characteristics:

– Product Differentiation
– Visionary Capital
– Global Reach
– Likability
– Vertical Integration
– AI
– Accelerant
– Geography

In case you didn’t read the book, here is a brief explanation of each:

1. Product Differentiation
The product is king- marketing a mediocre product doesn’t work anymore; Map out the entire value chain of the product.
2. Visionary Capital-
Attract cheap capital by articulating a bold vision; Cash builds your MOAT.
I should elaborate on this one. Cash is king, right? And debt kills the mighty, even the (former) Category Killers like Toys R Us. Below is a chart I compiled for my Global Marketing class:

Company	Market Cap ($B)	Sales ($B)	Cash ($B)	Debt ($B)	Debt/Cash %	Debt/Market Cap %
Amazon	692.56	177.86	90.98	44.14	48.5	6.37
Apple	886.58	238.79	77.15	122.4	158.6	13.8
Google	720.36	111.02	101.87	3.69	3.62	.5
Facebook	477.91	40.65	41.71	0.00	0.00	0.00
Macy’s	8.64	24.83	1.49	5.88	394.6	68.1
Inditex	94.53	29.30	7.99	.02	.2	.02
Nike	108.78	35.26	4.75	3.48	73	3.2
L Brands	10.08	12.63	1.53	5.79	378.4	57.5
Walmart	253.81	500.34	6.75	46.48	688.6	18.3
The Four	2777.41	568.32	311.71	170.23	54.6	6.1
United Kingdom (GBP)	2629.41 (GDP)		152.88 (National Reserve)	2271.1 (National Debt)

Company

Company

A little bit shocking when you look at it this way, right?
1. The Four combined cash position is more than the UK National Reserve;
2. The Four combined are the worlds 5th largest economy;
3. The Four combined debt (colored a bit by Apple) is 54.6% of their cash position and only 6.1% of their market cap compared to, say, Macy’s at 394.6 and 68.1%, respectively, and the UK whose debt is (gulp!) times the national reserve.

3. Global Reach-
Product appeals to people on a GLOBAL scale; Product transcends cultural boundaries; Product needs a passport at a young age.

4. Likability-
Customers want to date the Prom Queen? Company image and product strikes and keeps a positive chord; negativity is fast and destructive.

5. Vertical Integration-
Control as much of your product supply chain and the user experience as possible.

6. AI-Behavioral Targeting-
Knowing what you want based on what you do or say; much more effective than demographic targeting, social targeting, focus groups etc.; Not only know your behavior, but control it. This is the new marketing.

7. Accelerant-
Attract top talent- be a career accelerant; Drains the pool for the rest- consequences?

8. Geography-
Need to be near a technology/business center with knowledge base and knowledgeable talent; major cities will see great growth.

The candidates for the Fifth Horseman Galloway gives are (for the most part, Uber and Airbnb possibly excepted now):

1. Alibaba
2. Tesla
3. Uber
4. Walmart
5. Microsoft
6. Airbnb
7. IBM
8. Verizon/AT&T/Comcast/Time Warner

Galloway points out that none of the above are a slam dunk for the position.

For me, the best candidate was missing and what I want to propose here- Inditex. Here’s how Inditex ticks the eight boxes of the T Algorithm:

– Product Differentiation- All units have shown a great knack for moving product at just the price, just the style, just the color, just the time to have gathered a very loyal following
– Visionary Capital- Take a look again at the chart above. Inditex debt is $.02 billion, a miniscule fraction of their cash position and market cap. Virtually debt free.
– Global Reach- “The clothing retailer has more than 2,200 stores in 96 countries and is the flagship brand of the Inditex Group. Zara is renowned for its ability to develop a new product and get it to stores within two weeks, while other retailers take six months. Zara added a net of 51 stores in 2017, plus 38 Zara Home locations. Spain is the biggest market with 563 stores (including Zara Kids and Zara Home), followed by China (223 stores), France (150), Russia (144) and Italy.” https://www.forbes.com/companies/zara/
– Likability-passionate customer following,;  Amancio Ortega just an ordinary good guy
– Vertical Integration- Factory and logistics ownership setup in Spain will never be matched.
– AI- Unknown, but must be very sophisticated to monitor product and customer; I believe Inditex has digitized their supply chain to a level people are only dreaming about today.
– Accelerant- Who wouldn’t want to work for them?
– Geography-Maybe the only question mark.
– Plus-SCALE nobody will ever match- They can be imitated, but, unless somebody commits a lot of money and resources (most important human), they will not be caught.

So what is the point for the rest of us? For the companies who are not- and will never be-Inditex?

My advice would be;
1. Stop whining;
2. You have seen a formula that works. But you can’t copy it, if not only because it is too far ahead of you. So find your own formula to delight-yes, delight- the customer and dramatically collapse your supply chain.
3. Understand that the world of fashion and consumer goods is changing from a stable mass-market model to an SKU-rich, quickly changing environment.
4. If you are successful, it will chiefly be accomplished by improvements in technology-such as Blockchain for supply chains which I wrote about before in this blog. Today, there is an article per day about Blockchain or other digital technology, but mainly about the last mile-payment and logistics. In order to really collapse your supply chain, you must control the first mile- design to manufacturing- as Inditex does.

Warning- this may be a case of Creative Destruction- you probably will have to chuck out most of what you do and replace it with something better. Do you have the courage to kill the old man so the baby can grow?

Great thanks and acknowledgement of all materials quoted from (unless otherwise indicated):

The Four: The Hidden DNA of Apple, Amazon, Facebook and Google, by Scott Galloway

• Publisher: Portfolio; First Edition edition (October 3, 2017)
• Language: English
• ISBN-10: 0735213658
• ISBN-13: 978-0735213654
Available on Amazon (of course!)

Nike: Mea Culpa Youa Culpa; Whose gaffe are my shorts?

Description: Activewear shorts, zippered pockets, comfortable cotton fabric, button fly.

Wait- Button Fly? The only other place I have experienced button fly is on Levi’s 501 and some Diesel jeans. In both of those cases, I accept the button fly as an iconic jeans style feature. But on activewear shorts? How does it even make a bit of sense to have this style feature on Nike shorts which are supposed to be functional and comfortable-button fly is neither.

Not to mention, when you desperately need, you know, Number 1, it is nothing short of stupid. And, more than once I have closed the waist button as is the normal procedure and failed to close the others…

OK, I admit, this is my fault for buying the shorts in the first place. But that is what makes the story even worse-they are nice shorts.

It is pretty easy to see from the pictures that these shorts are not new, so why bring this up now?

What made me focus on this are two things: 1. The weather in New York is finally getting warmer and 2. The dysfunctional gaffe that Gap made with the China Map Tee.

I am just wondering when-or IF- these companies will recognize that they are all working in windowless silos. In this case, as in the Gap situation, when the designer offered these shorts for adoption, which manager or managers were responsible for these being adopted and manufactured and should have said, “Wait-these are great shorts and you are ruining the functionality with a feature that has no place on active shorts and which will never increase but more than probably decrease, sales of the item.”

Clearly that didn’t happen. Clearly large companies like Nike are struggling to define their future in today’s market; hence Nike’s agreement to sell their product on Amazon (bad, bad move-most especially because price and the origin of the product, from Nike or third party sellers, are both out of their control).

Clearly it doesn’t have to be this way.  Nike and these other companies are suffering from LCSS (Large Company Silo Syndrome). Good news- it can be cured!  Companies like Nike need to make structural changes in their organizations and their mentality to effect the cure. There is no doubt that major improvements can be made in the efficiency of even the largest company by doing so, and gaffes like the Gap’s China Map Tee and my shorts can be avoided.

Oh. You thought I was going to tell you what changes and how to effect them. Sorry, I stopped giving free information a while ago. Nike, Gap, other large company that wants to take down your silos, you will just have to hire me to find out.

Cross-Pollination in Healthcare; Could this work for Apparel? Let’s play The Match Game

Have you noticed all the cross-pollination in the healthcare industry? You don’t need to be an industry analyst to do so; just being a customer is enough.

Recently I went into my local Rite-Aid which proudly announced that there was a Walgreen’s pharmacy now inside (this Rite-Aid is owned by Walgreens). Rite-Aid has split the baby further in an alliance with Albertson’s, which owns multiple large supermarket chains: Safeway, Vons, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs and the New York-based meal kit company Plated (oh, I can’t resist: deliver your drugs with your dinner?). So, soon you may see Rite-Aid pharmacies or clinics or shops in your local food market.

There is more: CVS pharmacies in Target; CVS is also buying Aetna, so soon you can get your drugs and your health insurance in Target. Crazy? Walmart is teaming with Humana and has kiosks in their stores-wonder if WM can Roll Back the price of healthcare?

Above-mentioned giant Walgreens is teaming with United Health Care to open urgent care centers. Here’s an exciting possibility (really!). Once you get treated and a prescription, you get your drugs right there (in Hong Kong, China etc. dispensaries are commonly in hospitals and doctors’ offices).

I am sure the story will continue in the healthcare industry; so, wait, how crazy is it to imagine some of the same pairings in apparel?

I will offer just a few here- the point is, let’s see how crazy this is and what crazy pairings (or threesomes if that works for you) that you can come up with.

Ok, here we go:

1. Nike and Levi’s- Two icons who need help with their identity. Git yer shoes with y’alls jeans.
2. Tommy John and 7 For All Mankind- feel good about yourself.
3. American Giant and Hanes- Feel REAALLY good about yourself.
4. Everlane and Speedo- Life in the fast lane?
5. Victoria’s Secret and Buck Naked Underwear- What happens in Duluth, stays in Duluth.
6. Zara and Burberry- In case the fast fashion makes you dizzy or disoriented.
7. Old Navy and Ralph Lauren- I can’t figure this out either, but there must be something if they can have the same CEO.
8. Sears and Best Made- the hat guy with the earflaps looks like the Sears customer.
9. Macy’s and Uniqlo- In case you can’t find the style you want or that you should be wearing, and that you feel good about the value- console yourself with the discounts piled upon discounts.
10- Levi’s and Buitrago Jeans- Looking for adventure, and whatever comes our way. Jeans as establishment icon, or what they were intended to be since Woodstock?
11- Bloomingdale’s and Bergdorf-Goodman- We built this city on fashion, and now we wonder what is left of our message? Can the two old ladies of NY retail revive fashion r-e-s-p-e-c-t?
12- Macy’s and Chicxulub Crater Yucatan (where the asteroid hit)- Which is more destructive to civilization as we know it? The asteroid 66 million years ago, or Macy’s, who sanitized and neutered the American retail industry?…

Let’s have some fun with this. We need a team effort to make this really funny and provocative. GO for it! I am sure there are so many more ideas!


Thanks to source: https://www.forbes.com/sites/brucejapsen/2018/05/15/rite-aid-albertsons-well-be-top-5-health-food-and-wellness-player/2/#5ff7a30260d9

REPOST: Blockchain for Supply Chains-A single, immutable truth for our future.

(This article was originally published in April of 2018. While Blockchain is still a potential solution for supply chains, it is still far from being a viable system for some industries, such as the fashion industry and other lower-priced items. I believe my proposed solution below is still the best one, but even so, Blockchain is still at the starting line)

Today “Blockchain” is one of those words that everybody uses but few understand (until recently, count me in that group).

A paper by the Amber Road group entitled, “ Blockchain for Supply Chains: Ghost in the Machine or Breakthrough Technology?” (link below) allowed me to understand what Blockchain is (at some level) and to visualize the potential for applying the technology to supply chain management. IF I understood the author correctly, the possibilities are dazzling.

So first, what in the world is Blockchain, anyway? On a very simple level, Blockchain is the technology that empowers Bitcoin transactions. It substitutes Digital for Analog (being: paper and anything non-digital) steps in the transaction, each of which is verified by M2M (Machine to Machine) transactions.

The aggregate of these transactions is a Digital Ledger, which can be explain as:

a digital ledger is a decentralized database that is shared by network participants across any number of peer-to-peer computer connections. Somewhat analogous to a traditional accounting ledger, a user-certified, distributed ledger is where cryptographic signatures are verified, transactions are authenticated, assets are exchanged and, in the end, where blockchains are built.

So, all the individual pieces of a financial transaction can be digitized, reducing paper, hands, mistakes and time, producing a quality transaction in less time with more accuracy. Did I get that right?

IF so, let’s just imagine the impact it could have on supply chains? I will focus here on the apparel industry, as it is always the most embarrassingly arcane, slow and prone to stupid mistakes. The author talks about “Smart Contracts” as the solution-we are far from that.

The author of the essay uses an example of footwear from Vietnam. Vietnam, as recent as it is on the scene of textile powerhouses, is very progressive in its mentality and its willingness to adopt and adapt. China has distinguished itself lately in its adaptations of technology to daily life, such as the quick transition from a cash to cashless society and the millions of rented bikes running around major cities. Now let’s imagine the aggravation of trying to complete an analog transaction from Bangladesh or Myanmar…

The author also focuses on the financial and logistics element of an international supply chain transaction. Maybe this is because they are the most obvious and easily converted from analog to digital. That said, LCs and shipping paperwork such as BOL, transportation/clearance documents are not traceable and trackable until they appear, after someone’s lunch or afternoon rest or a poor soul working overtime. OMG.

Now let’s expand the view slowly until we can’t stand the anticipation anymore. How about production PO? Let’s just start with payment terms and actualizing. I remember a maddening number of spreadsheets and contradictory numbers because nobody could agree on the deposits/amount shipped/amount paid vs. balance owed. Not to mention how much time it took to resolve on the part of the factory/Shanghai office/NY office. IF this alone could be part of a digital ledger, we could all eat dinner on time.

Next step-all transactions in the supply chain that contribute to the successful completion of an order connected by a digital ledger- BOM (fabric, accessories, packaging, including verified inspection and acceptance of supplier materials), WIP (labor value added, production stages completed, quality reports), quality control inspections and results. Connect all this with logistics and financial ledger blocks and you have a transaction which requires a fraction of the effort and aggravation that exists today, even in large firms that sport the BS online as to how progressive they are (PVH comes to mind)-ask their employees- but even more in the millions of small and medium sized companies that still exist in the hope that their star will shine in the new marketplace.

One more tease- the most popular word in the apparel industry today is “sustainability.” Who can prove or confirm the chitchat that passes for proactive activity? With all due respect, I am sure a lot of  (or most) of it is BS that has been passed by someone-it is the nature of the beast in this industry.  With Blockchain technology, we get the opportunity to execute Smart Contracts that will keep feet to the fire (if you want to cheat, you can, but this will tamp down the simplicity of cheating and give much greater accountability).

What I love the most about this: A single, immutable version of the truth. Those of us who have been in industry over the past half century would salivate for this concept.

The article puts a downer on the prospects for the advancement of digital technology in a digital age to an industry that seems hopelessly analog because of various caution points, correctly assessed:

The truth is that there are a lot of smart people out there that don’t understand what blockchain really is, or what it can be used for (the author certainly had this problem, and some people may argue that he still does). Worse yet, when one adds to these misunderstandings the somewhat dubious connection blockchains have to bitcoin, a certain percentage of people will automatically write it off as pure quackery.

So what percent of the CEO’s and boards composed of ancient yahoos who have no clue about the digital age and its possibilities can we write off as clueless?

The author also worries about the lingering perception and association of Blockchain and Bitcoin. Again pandering to the uninformed and those who time has passed by and should be playing golf, not making decisions:

those blockchain professionals committed to moving beyond bitcoin have to mount a public relations campaign that dispels misconceptions while positioning the technology as a true creator of supply chain value.

Again, realistic of the decision maker’s understanding and perspective.

Are we doomed to talk about this technology until it becomes boring to do so, and accept the way things are? How can this game-changing, cost-saving, and future-insuring technology be adopted, adapted and supported in a global industry? The author contributes his suggestion:

Closely related to the above points is that of marshalling the human capital necessary to create blockchain solutions that address real-world supply chain challenges. This might sound like a pedestrian task, but experience has shown that the bane of any supply chain software project is the disconnect between the “techies” and the “operators,” and how the inability to translate needs into code produces solutions that just don’t work very well. Due to blockchain’s complexities and relative newness, finding people that know how to write the code and that understand supply chain won’t be so easy.

Bottom line: We need a company that is committed to bringing together the best minds in supply chain and in blockchain technology, who can create the processes and protocols and then sell it to some suppliers around the world. Techies and groundies together changing the world.

We don’t need consortiums and conferences to adopt protocols and standardize technology-at least not now. What we need is someone who has the guts and money to set an example.

THAT I want to be part of. Jack Ma, Jeff Bezos, are you listening? OR anyone else who wants to start this next Big Bang. Call me if you have the courage to face the future.

LINK TO PAPER: ( https://info.amberroad.com/rs/665-BWT-776/images/Amber%20Road%20-%20Blockchain%20Supply%20Chain%20-%20Ghost%20in%20the%20Machine%20or%20Breakthrough%20Technology%20White%20Paper.pdf?mkt_tok=eyJpIjoiTUdNMU56Y3pNMkpsTURkbSIsInQiOiJYYjRiVFdsRCszcjd2Z2E5RXdxYnlBcSszaDNsXC8yS0lXY3F6eUZUZlVEcjhtaEtTTVZVZVJiMUtJK2llRUJxdWtNQ1F4eDVudmNzUXVGQWV5d1k3SVwvWU90TnVSZWRmNm5odW1neHNTXC9SdmxHdkEwUzZlWjVXbWVLam5qdEtZSCJ9)

How to Trade with China and WIN (and how not to)

Wait- the biggest economy in the world should consult two of the smallest to improve its trade management?

When it comes to China, yes.

A. The Numbers

Let’s start with the numbers:

·      US- 2017 Trade with China (per US Census website): Exports: $130.4 billion; Imports: $505.6 billion. Deficit: $375.2 billion (US trade with China 2017)

·      Australia- 2016-17 Trade with China (A$m billion): Exports: 95.7; Imports 61.5; Surplus 34.2. main export commodities eg., coal

·      (Australia Exports to China growth YOY= 27.8% Imports from China growth YOY=0.0% Australia trade stats 2017)

·      New Zealand- 2016 Trade with China (NZ$ billion): Exports 12.3; Imports 10.5; Surplus 1.8

·      (2017 total trade with China NZ$26.1 billion. Exports of dairy products increased 52% in 2017 NZ trade stats 2017)

So what happened here? Does China need products from Australia and New Zealand more so than those from US? The US is the #1 agricultural importer to China, far more than either AUS or NZ. But you cannot but scratch your head when you see that Australia’s exports to China in 2017 were 73% of those from the US.

BOTTOM LINE: They MADE A DEAL. We didn’t.

B. The Art of  the Deal vs. Transcontinental Chess

President Trump wrote a book entitled, “The Art of the Deal.” And nobody can dispute that he has been successful in business by knowing how to make a deal. But, to me, Australia and New Zealand management of their trade with China looks more like the art of the deal than ours-IF judged only by the result.

So how did they do it? Easier than you might think, and logical too. Both countries have a trade deal with China which lowers tariffs and sets a path for a win-win- New Zealand since 2008, upgraded in 2016, and Australia since 2015.

To my knowledge, the relationship between the US and China has always been adversarial, and no president in the past (until Trump) has had the balls to stand up for US interests OR the smarts to say, hey, China, let’s sit down and explore common interests and come out with win-win (not Trump yet), THEN apply the leverage if China didn’t respond. So China has had an open bar for 20 years, got rich and spoiled on it, and cannot (even more than WILL not) stop the train so easily now without messing with their economy.

In fact, our business relationship with China seems like an amateur game of chess. Latest round: Little Move 1 Trump announces tariffs on China; Little Move 2 China announces tariffs on US; Little Move 3 Little Rocket Man shows up in Beijing. What will be Little Move 4? What it should be is for both countries to sit down, cut the BS and cut a trade deal. There is no doubt that China will not give up its goodies without getting something in return.

C. What Should We Do?

I believe the US has plenty to give in order to get a good deal.

First, US is China’s largest market. No fake news or propaganda can deny that.

Second, there are products that, for better or worse, are not being made in the US anymore and where China has a cost advantage; apparel is one of them, sorry y’all who had dreams of Made in America going back to the good old days. Never.

That does not mean that a viable and vibrant apparel industry cannot exist in the US-it CAN. It just has to be different than it used to be. You are not going to stop mass market clothes made in China and elsewhere from coming; In that area the two countries are codependent. And they are NOT mutually exclusive.

What’s at the core of the stasis in US? Local political interests and ethnocentric rhetoric. Shut them up for the greater good. Change the yahoo attitudes that cling to a Civil War mentality without a shred of business sense. Most important: get some dang HUMILITY.

Lower some duties on those products where we don’t compete anyway. Ask China to lower duties on items they need and that we want to sell more of.

How much difference will this make? IDK. I would love to be part of a government project to initiate and carry out this research. The results might be surprising, but in the least, we would be conducting ourselves like businesspeople rather than bombastic know-it-alls.

(Above is an extract of a lesson taught to my Global Marketing class at FIT)

Dear Macy's-Isn't this a little stupid?

Did you know that Macy's permits ads on its website that can not only provide a platform for competitors, but can clearly promote the same item for less? I didn't know this-because I never shop at macy's online and rarely shop in the store. Below is an example from the Designer Handbags page: I know I don't have the brain trust that Macy's has, but why would you do this? Whatever money Google is paying you to run this page, is it really worth sending customers somewhere else to buy the same item? Why remind YOUR customers that they need not be loyal? Hey Macy's (or anyone else), can you explain how this makes any business sense and how you think it will affect customer loyalty? You make a big deal of the Rewards program for customer loyalty-is this the Reward? Is this how to build (or rebuild) your Brand? OR is this just draining the moat and opening the castle door? If not a good business explanation, the next best thing would be the humility to admit this is stupid-at best.

The Name is Fine China, So Why is there no Chinese Brand? By Yuting Zhang

Guest post by a brilliant merchandiser and critical business thinker. Thanks, Yuting

Recently I planned to buy some dinnerware to make a nicer presentation for my dining table. After doing a lot of research from Replacements.com, I noticed that I didn't see any chinese brand. After searching Google and Baidu (Baidu is the most popular search tool in Chinese language), to find out what’s the most world famous Chinese porcelain brand, I found nothing. Of course there are always some domestic brands in China who feel good about themselves and believe they are well-known globally, but actually not.

As a Chinese and a fans of fine china, after this research, I felt very tired and sad.

China is the start and origin of porcelain, and the product is still called “China,” but now we have no signature brands and share at the higher level of the world’s dinnerware market.

What makes me feel worse is that historically, China was the first country to become involved in international trade, and the first international merchandise that exported from China to Europe was porcelain.

Nowadays, when I search some well-known porcelain brands from Amazon, like Spode, Lenox, Portmeirion, the newer products are mostly made in China, even though the brands are located in England, USA etc.. You can see by comments on Amazon that consumers expected that the products which they bought could be made in England for example, but once they received the merchandise and figured out it was made in China, they started to complain. The fine china that was made in China, becomes unwelcome and uncomfortable.

Why? What makes this happen?

Because of the actual quality issue for those made in China? I have randomly compared the Spode(Made in England) and Villeroy&Boch(Made in Germany) coffee cups with the tea cups I bought in China 10years ago: my Chinese tea cups are cheaper in price, but in reality, the porcelain is higher quality--finer, whiter, thinner, and more delicately hand drawn blue patterns.

So why are consumers still complaining?

I think the main reason is because there is no Chinese brand among the higher level market, so it is hard for consumers to pay attention to the quality of Chinese products. Even though the international brand merchandise they bought is made in China, consumers still only recognize the brands, but not the COO. The company can always change its factory; the products may be produced in different locations, but the brand is exclusive.

So brands, not production, are the key to recognition in today’s international markets.

Even thought China has been the original empire of fine porcelain, and its originator, even though she still holds the highest skill and technics, even though China is still producing a massive percentage of the world’s porcelain she depends on others’ brands. so your expertise and the fate of your business is in the hands of another master, not yourself.

Unfortunately the perception of the label Made in China still represents cheap, fake, no taste.

Historically, this shouldn’t be the case. One hundred years ago and earlier, in many ways, China and the Orient were the dream of the western world. From those discontinued china patterns, you can find the clue about people’s thinking about China at that time: the patterns are always elegant, peaceful, with vases, lanterns, and luxurious silk clothing for men and woment. If we want to further research the artisans’ imagination, then we can look at the history of the past 500 years- there were millions of tons of silk, tea, porcelain exported from China to Europe. Those products fulfilled Europeans’ dream: one kind of rich, peaceful, elegant and poetic life. I believe that the Western world started to change their mind about China from 1841 during the Opium war, which was actually a trade war: China was forced to open its doors so that Europe could import more high quality merchandise and make substantial profits without due balance of trade.

There is no doubt that China is capable of producing the best quality of porcelain, as an example of the real quality situation. The problem is that China isn’t good at building its own brands. A famous and long lasting brand not only requires good quality, but also attractive design and proper marketing—How do you attract global customers to buy your merchandise? How do you fulfill customers expectations? How do you give your customers the passion to always come back? Only after successfully doing that, then your brand starts to own its soul, and you have your business moat built. Without your own brand or moat, your destiny is not in your control, and your fate is determined by others.

But-before you can attract customers to buy your brand with your quality and design, you must positively influence their perception of the identity of the brand and gain their trust that it will fulfill its promise.

Given the still present perception of Chinese design and quality, it will be a long and tough journey for China to gain back the share of the world’s trade in fine goods it had as many as 500 years ago.; with the right design marketing and production standards, China should be a leader in fine China and other industries. It has been a long time coming, but it will never be too late.