Generation F - The Focus Generation - will be brought about by new economic policy in China that will shape Commerce throughout the world for the next generation.
For a quick recap, President Xi Jingping has been quite busy over the past year. Jack Ma, founder of Alibaba, went missing for some time from the public eye following State regulators putting a stop to the IPO of ANT Group. Had the deal gone forward, it would have been the largest public IPO to date, valued at $37B.
But the crackdown on Chinese tech companies didn’t end there. Since November’s rout of ANT Group, China is systematically dismantling parts of its economy, bringing greater control back into the power of regulators and State oversight. These include:
- Regulators limited online gaming to just 3 hours per week for adolescents under 18 years old, calling games “spiritual opium”.
- They limited the use of Chinese Tiktok Competitor, Douyin, to just 40 minutes per day for children 14 and under.
- This month, China banned for-profit tutors from conducting online classes.
- This past week it has outlawed Bitcoin, and all other cryptocurrencies; as well as limited operating hours for industries to as little as eight hours per day, or in some extreme cases just one day per week.
Commerce, education payments, entertainment, and industry. What the Chinese Communist Party has done is wrest back control and focus of their populace. And that populace is aging. By 2050, 40% of its citizens will be of retirement age. This explains recent reversals on the One Child policy, and crackdowns on doctor-performed abortion.
Contrast these policies with those of the West. Digital addiction is on the rise, as evidenced by a recently leaked internal deck from Instagram, which showed that teens, primarily young girls, with heavy social media usage, namely Instagram, often suffered deleterious effects. This report was made public amid Facebook’s plans to launch child-friendly versions of their popular apps. Those plans have since been shelved.
“Everything about China is a measured decision. The politburo, the decision-makers, aren’t randomly shooting from the hip based on intuition saying ‘we should ban video games for children’... there’s clearly data to support this decision” said Jason Friedberg on a recent episode of the All-In Podcast.
This generation will grow up with digital blinders, behind the great Chinese Firewall. Meanwhile, the rest of the world wrestles with China’s distraction exports (namely Zoom and Tiktok). With supply-side shortages coming due to the energy crackdown, the West will have less to buy up of Chinese exports, which might lead to more digital addiction. Commerce companies race to replicate the commerce models of Asia, including live video streaming and chat-enabled concierge services.
In eCom, as Asia goes, so goes the rest of the world. This kind of sympathetic influence, how the West influences China and vice-versa, will impact digital commerce and consumers over the next decade. The result? Generation F, the Focus generation. That generation will live in China, and China alone.
Read more on Asian shopping trends in Vision 2021.
Advertising / Roku Opens OTT to Shopify Customers. It’s never been easier to buy digital television advertising. Roku makes that even easier. The streaming set top box pioneer has announced an exclusive partnership with Shopify to allow DTC companies to drive traffic from targeted set top box advertising, aka over-the-top advertising. More in this feature from AdAge.
Payments / Paypal Launches Super App. PayPal is incorporating more of its subsidiary functionality in a new Super App. The launch will include crypto buying, integration with Venmo to consolidate balances, and a new eCom marketplace. This should serve as a new channel alert for digital brands looking to attract new customers with unspent liquidity.
Marketplaces / MIRAKL raises $555M series E. “Every brand will be a marketplace in five years” is our bold prediction. SaaS platforms like Mirakl make this prediction a reality.
Editor’s note: Mirakl has impressive street cred, but also sport a series of aged case studies (aka Jcrew) and at least one failed implementation in Albertsons. We covered Albertson’s very public rollback of Mirakl + Magento in our recent feature from Groceryshop.
Shopify / Shopify sites drew more traffic than Amazon last quarter. In the words of Michael Scott, “my how the turntables….” Shopify have famously said they were arming the Amazon rebels. The collective traffic of all sites on Shopify surpassed that of Amazon traffic for the first time last quarter. Shopify has a leading edge into insights of Amazon consumers through its SHOP app, an app that reads your email to give you delivery notifications about packages in transit, including, yes, those packages from Amazon.
Attention Economy / REI launches a podcast with BIPOC perspectives. The new podcast, “Hello, Nature.” explores National Parks through a BIPOC lens. Produced by in-house REI Content Studio, the new weekly series features stories that reframe “the great outdoors” in BIPOC and LGBTQ perspectives.
Resale / GOAT leads a funding round. Big week for resale marketplaces. GOAT has led a round of funding for Grailed, the online menswear resale marketplace, to the tune of $60M Series B. This, after raising its own Series F valuing it at $3.4B. Yowza. Here’s a handy blog with a running list of resale marketplace fundraise.
Department Stores / Amazon Four Snooze. The world’s largest retailer recently unveiled plans for their new department store concept. Their big bet on in store technology includes Magic Mirrors. “Alexa? Rebecca Minkoff called and she wants her 2014 case study back.”
Merchification / Dunkin’ Donuts is a Lifestyle Brand. Influencer collabs, eyeglass and sneaker licenses; America doesn’t just run on Dunkin’s caffeine and sugar, but its brand equity.
Dadaist Brands / MSCHF Ain’t Closed On Sunday. The experimental brand-art-studio MSCHF is at it again, this time selling Chick-Fil-A on Sundays. You can buy day-old Jesus Chicken in a bag with the Number of the Beast emblazoned on it, as well as a napkin that is fashioned to look like a Shroud of Turin (the garment that wrapped Jesus at his burial). The price for the meal? $6.66. Is this clever commentary on “sabbatarianism”? If so, why does it feel so much like a lazy half-effort?
Remote Work / Outgroups and Soft Work. The media narrative has been that the “Great Resignation” gives employees the power to exercise optionality when it comes to return-to-office. In 2021, if you don’t want to work in an office, you don’t have to. The lack of talent available in the marketplace due to digitally-enabled career shifts in the past 18 months seems to support this. In this recent piece by The Atlantic, author Derek Thompson contrasts in-office “soft work” vs at-home “hard work”, and other social dynamics, may ultimately shift this balance in favor of return-to-office.
Fast Fashion / “Dead White Men’s Clothes” polluting Ghana. This video, appearing first on TikTok, shows the effect that fast fashion is having on one West African country. 15 million items of used clothing donations arrive in Ghana weekly, with an estimated 40% of that destined for landfill. In a most egregious scene, discarded clothing finds its way into oceans before washing to shore in a tangled, rotting, mess.