Postcard from Shanghai

…and interesting insights about China

The first thing I noticed when I emerged from the underground was the calmness of the city. At first, I thought it might be due to the electric-only cars passing by, but my friend explained that honking is also prohibited. The subdued atmosphere that struck me on my last visit was still very much present.

China is not just a different country—it’s a different world. It amazes me that people think they can export their business models and products to China without adapting them to local realities. Everything we know, every habit we take for granted, can be left at the border. It starts with your phone: the apps we use hundreds of times a day are practically useless here. To get information or solve a problem, you need to think differently. Even payment methods are entirely distinct.

For Westerners, one app serves one need. WhatsApp is for messaging, Instagram and Facebook for photos, Google for internet searches, and LinkedIn for professional networking. In China, everything revolves around “super apps.” Within these apps, you use mini-programs to access information or services, all interconnected in a seamless ecosystem. No standalone websites—just layers of apps within apps. Even for professional purposes, everything goes through WeChat, making processes more efficient, faster, and more dynamic. China operates on a whole different level of efficiency. But for the uninitiated, it can be a serious challenge. Mental models are so different here that it could take years to truly understand them.

In some ways, China feels like another planet. It has its own systems, its own stars, its own TV shows. Yet, I find the Chinese remarkably humble about their place in the world. Quietly, steadily, they’ve influenced the entire globe. They’re highly selective about the businesses, strategies, and technologies they adopt, ensuring that if they choose something, they’ll master it in no time. While the West brags about the relics of its past, China grows silently and confidently.

Here, discipline matters more than freedom. You can do almost anything, especially if it serves the country, but you must play by the rules. Yet, the younger generation seems to be pushing back. Take the two fashionable but loud teenagers sitting across from me on the subway—they seemed less willing to conform to the traditional rules and conservatism.

Many young people educated in the West are returning with fresh ideas about how systems, teams, and companies should function. As expected, these younger generations will have a significant influence on the country’s future. Yet one thing is certain: China will remain unique for a very, very long time.

Thinking back to when I used to cover Chinese stocks early in my career, I can’t help but laugh at how naïve I was. I truly believe that only Chinese people—or those deeply immersed in the local environment—can have a real edge here. The ecosystem moves too quickly and is too nuanced for outsiders to fully grasp.

It always amazes me how people can claim to understand China, let alone do business here, without ever setting foot in the country. While Western countries have welcomed an army of Chinese nationals, the reverse cannot be said. In a world that’s changing so rapidly, perhaps the greatest strength is the ability to adapt, to listen, and to learn from those who truly understand their own terrain.

Still, I can share some pieces of information I collected these past few weeks:

• Locals seem less into luxury than they used to be, and the fancy, 360°-view restaurant I had the pleasure of discovering on Thursday evening was almost empty.
• Streetwear is again the dominant fashion trend you see on the streets—much more than in Hong Kong, for example.
• Morale is not at its best, but shops don’t close down for too long. Besides, Chinese people are still hungry for success. Competition is brutal, and whenever there is an opportunity to do business, they seize it!
• Meituan scooters were all over the streets, with plenty waiting to collect groceries for delivery.
• K Coffee (KFC’s coffee corner) seems to be doing well, but as I’ve discussed with a few (too many) people lately, it seems difficult to predict who will emerge as the long-term winner among coffee chains in China. Chinese consumers tend to opt for the cheapest coffee available, occasionally trying a trendy one (with unique flavors) but almost never sitting in the lounge areas offered by Starbucks. Coffee and food habits here differ significantly from the West, where we pay for the location or atmosphere. Chinese consumers prioritize value for money, especially when it comes to commodities, and brand loyalty for coffee is almost nonexistent.
• I saw very few internationals during my time here. The expats who left during and after COVID don’t seem to have returned.
• Many international businesses are pulling out of China and returning to their home countries. This might be a generational shift, with people in their 40s and 50s who benefited the most from the expansion moving back, or it could be due to fears of political instability and restrictions on capital flows.
• A friend who freelances in the automotive sector told me it was the first time since 2016 that he hadn’t been called for a job. In his view, Chinese car manufacturers are increasingly self-reliant, with a skilled local workforce that reduces the need for Western perspectives. However, it’s also a sign that the industry as a whole isn’t doing well.

Until next time.

Yours faithfully,
Marie