East to West and Back Again: A Shift in the World’s Economic Center of Gravity
The striking map below shows how the world’s economic “center of gravity” has shifted since AD 1. A “dizzying acceleration” (as described by The Guardian) took place from 2000 – 2010 when the center lunged back to Asia, reversing almost 2,000 years of steady movement west.
This eastward momentum illustrates the forthcoming “Asian Century” frequently discussed in books, the press and cultural conversations. While opinions about the particulars vary, experts agree that Asia will be the key region for global trade in next several decades.
Rapid urbanization and rising incomes mean increased purchasing power for Asian consumers. Further, there are more of these consumers than ever. The Brookings Institute estimates that 88% of the next 1 billion people to enter the global middle class will live in Asia, with 350 million to come from China alone. This large population with growing purchasing power will drive a significant portion of the world’s future economic growth.
Asia May Provide a Peek at the Future For Us All
A year into my move from North America to Asia, it is clear Asia’s economic growth will create two flows of goods and ideas. Undoubtedly, western products will pour IN (as they already are) to satisfy the needs and wants of a growing middle class. Alibaba, for example, recently said the company expects to import $200 billion in goods from 120 countries over the next 5 years.
Asian goods and ideas will also flow OUT, influencing the world in new and interesting ways. Over the past year, my frequent travels between LGA and PVG have given me a vantage point to see the ways Chinese culture in particular is shaping the West.
As aptly noted by PSFK, China provides the unique opportunity to peek into the “near-term future” of global business. Keep an eye on these five spheres of influence to see how they develop in 2019 and beyond…
1. New Approaches to Feeding the Planet
China’s middle class is increasingly health-conscious and interested in safer, more nutritious, more sustainable fare. Their growing purchasing power is fueling a search for new solutions. The country’s first food accelerator, Bits x Bites is exploring innovative ideas like authentic tasting lab-grown meat, alternative protein sources and “smart” versions of foods like white rice with lower, healthier glycemic indexes.
As part of the quest for health, ancient eastern medicinal foods, like Kombucha, are finding their way into mainstream cooking in China and abroad. Start-up Papp’s tea, for example, touts a “Tea Lab” with researchers devoted to designing functional tea blends to improve a wide range of health conditions.
China’s large and savvy group of online food shoppers provides a critical mass for models that have struggled to scale in the West. Meal-Kit Delivery Startup 321 Cooking delivers fresh, pre-packaged ready to cook ingredients to eager shoppers in China’s metro areas. And, digital innovations like facial recognition checkout, scan-and-go through WeChat, and free 1-hour delivery are de rigeur in the country’s grocery stores.
Few doubt that the future of growing, buying and preparing food will be tech-enabled. Asia, and China in particular, are at the forefront of this movement.
2. New Definitions of “Luxury”
In the West, luxury is most often defined by the physical retail experience. Think: elaborate stores, exquisite packaging, and a high level of personal customer service. In China, companies are being challenged to create luxury experiences for mobile-first shoppers who often prefer a digital environment, and this is driving novel solutions.
A few great examples include:
Gamified retail experiences like Dior’s online treasure hunt where players redeem points to purchase and unlock access to exclusive collections, Chanel’s beauty arcade pop-up created specifically to appeal in gamehall-crazy Hong Kong, and JD’s white glove delivery service, which sends smartly-dressed butlers in suits to deliver high-ticket items, immediately imparting status on their recipients.
Worldwide, the very definition of “luxury” is changing, and China is pushing that envelope.
3. Fusion of Physical and Digital Retail
Luxury isn’t the only area of disruption. China’s, young and mobile-first shoppers are inspiring innovation in mainstream retail as well.
Companies of all sizes are experimenting with corner stores transformed by digital apps and AI-personalization, self-service “box store” concepts, shoppable livestreams on social media, and robot-run restaurants – just to name a few.
The world over, the boundaries of physical and online are morphing to create a seamless, always-on retail experience. True, some of these innovations can be found in the West, but I agree with Forbes that China offers an unrivaled speed of innovation, scale, and variety of new retail formats.
4. A New Center For Tech Innovation
Chinese companies are no longer content with making components or cheap copies, and many are emerging as innovators in their own right. (See: my blog on the rise Shenzhen maker culture).
Asian tech companies, in particular, have made bold moves to claim a presence on the world’s stage. For the first time ever, the global Cannes Festival had an entire day devoted to China tech, where tech giants attended en masse to share an array of cutting-edge case studies.
And, Chinese manufacturers like Xiaomi, One Plus, and Huawei have recently introduced new products with splashy launches and flagship stores in global cities including London and NYC.
Increasingly, Chinese tech offerings are not iterative but bring wholly new innovations like 5G, sophisticated AI systems, and design inspired by collaboration with Western influences like Porsche.
Chinese cities are bustling with new ideas and tech-driven innovation, and I expect the pace will only increase in the year ahead.
5. New Ideas for the Global Culturescape
China will be the world’s most visited country by 2030, with the largest number of inbound and outbound travelers. As Chinese consumers circle the globe and receive international visitors, new ideas abound. A few great examples include language, celebrations, and shopping culture.
The “Chinglish” language is challenging conventions of common speech, creating new phrases and expressions. For example, the term “add Oil” the translation of a popular Chinese expression of encouragement, incitement or support was recently added to Webster’s Dictionary.
Eastern holidays like Chinese New Year are increasingly celebrated across the West, creating new cultural traditions, not to mention new consumption moments. This year, it was interesting to see U.S. companies launching their own Single’s Day sales with a uniquely American emphasis on self-care, and I look for the momentum around new shopping moments to continue.
Asia Adding to the Bricolage of Global Commerce
When I think of the new flows of ideas emanating from Asia – China in particular, I think of the word bricolage. This term was coined by social scientist Claude Lévi-Strauss to describe something new that is constructed from a diverse range of available things.
In that spirit of innovation, I am excited to think about what will be inspired by new infusions from Asian culture in the year ahead.