This piece in the New Yorker about how e-commerce, and in particular JD.com, is transforming rural China is worth a read.
In typical New Yorker fashion, it’s a good long-form read, but one that you can also listen to if that’s your thing.
What’s immediately fascinating are how important trust is to JD’s rural expansion strategy and how locals from these rural communities are used to penetrate the social networks.
Today, Xia oversees deliveries to more than two hundred villages around the Wuling Mountains, including his birthplace. But, in line with JD’s growth strategy, an equally important aspect of Xia’s job is to be a promoter for the company, getting the word out about its services. His income depends in part on the number of orders that come from his region. Across China, JD has made a policy of recruiting local representatives who can exploit the thick social ties of traditional communities to drum up business.
This is important because:
“Chinese people don’t easily believe the good will of strangers,” Liu told me. “Why do you think Chinese fight tooth and nail to get on the bus and subway?” He shook his head and laughed. “It doesn’t matter that it’s less efficient or unnecessary. It’s a complete reflex for them, because it’s what they’ve been taught since they were young.”
When you have some time, here is the full article.
According to the New Yorker, JD.com is the third largest tech company in the world in terms of revenue. They also have the largest drone delivery platform in the world.
Amazon released its shortlist of HQ2 cities this morning. Below are the 20 metropolitan areas. They were selected from 238 bids, so this shortlist represents 8.4% of the original pool.
Atlanta, GA
Austin, TX
Boston, MA
Chicago, IL
Columbus, OH
Dallas, TX
Denver, CO
Indianapolis, IN
Los Angeles, CA
Miami, FL
Montgomery County, MD
Nashville, TN
Newark, NJ
New York City, NY
Northern Virginia, VA
Philadelphia, PA
Pittsburgh, PA
Raleigh, NC
Toronto, ON
Washington D.C.
I saw some people on Twitter say that they were surprised to see Toronto and Miami on this list. I was not. If you remember, I publicly predicted on this blog that Toronto would be selected for Amazon HQ2.
That said, I thought it would be fun to guess at an even shorter list from Amazon’s shortlist. I have no knowledge of Amazon’s actual selections process, but if I had to guess, here is who I would cross off the list:
Atlanta, GAAustin, TXBoston, MA
Chicago, ILColumbus, OHDallas, TXDenver, COIndianapolis, INLos Angeles, CAMiami, FL
Montgomery County, MD
Nashville, TNNewark, NJ
New York City, NYNorthern Virginia, VA
Philadelphia, PAPittsburgh, PARaleigh, NCToronto, ON
Washington D.C.
That leaves us with a list that looks like this:
Boston, MA
Miami, FL
Montgomery County, MD
Newark, NJ
Northern Virginia, VA
Toronto, ON
Washington D.C.
So why this list? I’m probably wrong, but my reasons are as follows:
- I think Amazon will opt for a metro area on eastern time.
- There seems to be a predilection for areas around Washington D.C., so I left Montgomery County and Northern Virginia.
- As wonderful as it is, New York City feels too center ice for Amazon – at least in my view. But maybe Newark places them in the catchment area.
- The area needs to be of a certain scale so Amazon doesn’t overpower it and they have enough human capital to draw from.
- Miami is my sleeper bet. Most people think of it simply as a resort town, but there’s a huge percentage of foreign born residents and powerful arts/design scene.
- Talent is number one, which is why I left Boston and Toronto and why I continue to believe in Toronto. Toronto is more dynamic than Boston.
If I had to pick just three from the above shortlist, my bets would be, in alphabetical order: Boston, Toronto, and Washington D.C. What are yours?
A friend of mine was in Scottsdale last month for an ICSC conference where Garrick H. Brown (VP of Retail Research for the Americas at Cushman & Wakefield) delivered this retail presentation.
My friend flipped it to me this week and below are a couple of slides that stood out as I scanned through it.
Apparently over the last five years, a new dollar store has opened every four hours in the US. That’s how quickly this category is growing. A race to the bottom.
Food halls are hot and not just in the US. Check out: “5 huge food halls opening soon in Toronto”.
This is similar to a chart I posted a few weeks ago that pegged online grocery shopping in South Korea at closer to 20%. I’m still fascinated by this market share number and want to better understand what’s driving it.
This is an interesting chart that shows the relationship between retail square footage per capita and sales per square foot per capita. The US has lots of retail space per capita but low sales. Now look at Germany.
Finally, this is a chart that shows where household growth is expected to happen from 2016 to 2025. It follows a very clear historical trend of Americans moving from cold places to warmer/hot places.
For the full presentation, click here.