Thursday, May 17, 2012

Cultural Collapse

Three years ago when we had a company trip to Shanghai and Hangzhou, one of our programs was to visit a tea farm at the West Lake Xi Hu, Hangzhou. That place is famous with its unfermented Longjing green tea and after a short teatime session, most of us bought home some tealeaves.

XiHu Longjing Tea Farm
My friend in Beijing who knew our tea farm tour told me after sometimes that the tealeaves we bought must be brought over from anywhere BUT the West Lake. He explained to me that the good grade Xihu tealeaves are quite in demand and available in short supply in the country. They are normally pre-booked before harvest and regular group tourists like us who are not tea hobbyists, wouldn’t be served with the original Xihu tea.  

If his statement was true, it means that we were cheated right under our noses. Isn’t it bizarre to see the tea farm before your eyes, but later being served tealeaves planted from somewhere else? Could this really happen? But when this happened in China, I couldn’t be certain. 

And I was shocked again after reading a headline on an IT magazine of China last month. The investigative report divulged a set of unspoken rules being played and resulted in the cultural collapse in TaoBao, the largest local B2C and C2C e-commerce portal being operated in China. Founded in 2003, TaoBao is owned by a conglomerate Alibaba Group, which based its headquarters in Hangzhou, China, and also the owner of a very successful B2B portal After they ousted its rival eBay in China, TaoBao e-marketplace grew so big that any e-merchants who want to sell goods online in China have to deal with them and pay substantial fees accordingly.

Jack Ma &
However, online tenancy is just the beginning.  To prosper further, e-merchants have to gain certain privileges and that is where TaoBao managers come in to assist you, unofficially.  You would be “assisted” by the managers to jump queue when you participating in online promotion activities, and/or to make your merchandise more “noticeable” compared to other products and the list goes on.

Or for a naïve new e-merchant, you may receive a call from a stranger who tells you that your products have just been blasted with 10 bad reviews from different “customers”, and he could help you to remove the reviews with a price, specifically, USD50 per review. And for all the ten reviews, he will try to get you a quantity discount. He may further offer you to sign the credit promotion package and guarantee a Diamond for your company goodwill level by posting enough of positive reviews.

The best of all strategies was, TaoBao manager would recommend you to sign up for an agent dedicated to you; a person who has an immense experience dealing  with TaoBao, and he would be in charge for all your online matters. He will be charging a fee monthly and the best way is to cut some of your profits from TaoBao.  To prosper even more, you may consider offering some stakes or partnership in your company to TaoBao managers (of course, they will use proxy to hold the shares).

The periodical further observes, “Every evening, some luxury cars owned by e-merchants would stop by at Alibaba Group’s headquarters to pick up some managers to be entertained at nightclubs and bars in Hangzhou.” 

The unspoken rules are becoming an open secret. No matter how drastic the actions taken by Alibaba boss, Mr. Jack Ma, to fire the top and middle executives from time to time, the sleazy activities continued.

TaoBao’s problem was not exceptional, because corruption always involves two willing parties. If fraud is a norm, the entire society has to be blamed. The Biweekly concludes, TaoBao is entrapped in such a quagmire, and predict if the corruptive culture persists, it will backfire one day; but if Taobao does clean up the mess, it will jeopardize its current business.    

The Red Guard march in The Cultural Revolution 
In fact, if we study modern history of China, we would know that the decade-long Cultural Revolution from 1966 through 1976 has vastly destroyed good values of the nation. To restore the missing values in human nature, experts estimate, it takes generations.

The idea is quite absurd to the outside world. When Yahoo! new CEO Scott Thompson had to step down after a resume discrepancy scandal, we saw how the Chairman of Alibaba Group, Mr. Jack Ma still standing strong even when he span off and swallowed up the company’s payment business AliPay without the knowledge of any key shareholders, including Yahoo! Inc.  With this, we have no more doubt as to why TaoBao suffered a cultural collapse.

And for a country or a corporate that has no Cultural Revolution to blame, we have to bear in mind, a fish rots from the head down.

by Teh Hon Seng, CEO, FingerTec HQ

Wednesday, May 2, 2012

Reclaim The Truth

On 28th April 2012, in my country, Malaysia, two hundred thousand people staged a peaceful street rally to call for a clean General Election. This was the third, and the largest so far since 2007. Predictably, it ended up with police forces beating and roughing up civilians in broad daylight when chaos erupted.

On the following day, the mainstream media, mainly the major newspapers and the government-controlled TV stations, officially shared the same storyline accusing some protesters for removing the barricade the authority used to fence off the Independence Square, which had provoked the police to fire water cannons, shoot tear gas towards the mass and use excessive force on civilians. The news, supported by some photos and video footages showed some protestors pushed through the barricade, threw stones at the police squad, and even overturned and vandalized a police car.

Naturally, this was just one side of the story. The Internet media, which is more liberal, had a totally different storyline. They voiced out that the police should be targeting the provocateurs rather than at the mass majority. The Internet media also produced some evidence to prove that those provocateurs were undercover cops planted by the government to rationalize their planned-attack. The published photos and video footages showed how police had brutally beaten innocent people, and one video clip in particular showed a speeding police car rammed into a crowd, and the bystanders helping to lift and flip the car to rescue a trapped victim underneath.

The Government could claim its triumph over the mass rally by saying that they had “successfully” clamped down the protest, and spread their version of the story. But their “victory” could be followed by the loss of more support in the coming election.  

A lot of people especially strong governments and mighty corporations had underestimated the power of the social media in the digital world. For example, this peace rally in Malaysia, when two hundred thousand pairs of eyes, two hundred thousand built-in cameras in their cell phones, started telling their tales, sharing their photos and videos that was candidly captured from different angles in real-time; their beloved family would listen, their friends and relatives would listen, and the stories later would turn viral through social networking media, the whole country would listen, and eventually, the world would listen too.

Those fragmented and unorganized stories, proliferate in debris on Facebook and Twitter, at last would form a larger discourse, and eventually would right the distorted truth.

This is where the Internet is taking the news industry back to the conversational culture of the era before mass media. I quoted this statement from a topic, “Back to the coffee house” in the 7th July, 2011 issue of The Economist. 

The periodical recalled, “Three hundred years ago news traveled by word of mouth or letter, and circulated in taverns and coffee houses in the form of pamphlets, newsletters and broadsides. Everything changed in 1833 when the first mass-audience newspaper, the New York Sun, pioneered the use of advertising to reduce the cost of news, thus giving advertisers access to a wider audience.”

Nowadays, the accessibility of Internet allows readers to challenge the media elites, and the technology firms including Google, Facebook and Twitter, have become important conduit of personal news.  
The web has allowed new providers of news, from individual bloggers to personal publishers, and renewed the approaches to journalism with wider scope in lightning speed. The news agenda is no longer controlled by a few press barons and state outlets.
For big corporations, of course they still can spend big bucks to advertise false information, or to censor some bad publicity, but it is only limited to the mainstream media; the Internet social media would immediately put their accountability to test.
The Internet has abolished the unnecessary hierarchical communications; the autocracy voice from the top down has a reversal change here. In social news environment, customers or public are not the receiving ends.  They are participants. When governments or corporations can’t convert themselves to become good listeners, at least, they have to equalize the communications.
No matter how an organization actively participates in new social media era, the coffee house kinds of gossip culture is back, so changing of mindset is pivotal for organization to really gain in promoting their products, their services or even their brands by and large.

by Teh Hon Seng, CEO, FingerTec HQ