The Rich Robinson Show - Season 1 - At the Speed of China

Mark Tanner on how to best speed your way to success by taking full advantage of China’s fast-evolving market

• Rich Robinson

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Mark Tanner started one of China's best-known marketing, branding, research, and martech firms, China Skinny.

In this episode, Mark Tanner recalls his travels from Vancouver to Africa to his native New Zealand before deciding to uproot his family and start over in China. He also outlines how the Chinese market is constantly innovating.

Key Takeaway:
-Net Nanny is software for parents that blocks pornographic websites.
-270,000 new cars were sold in China in 2010.
-Chinese companies keep outsmarting big brands around them.
-Chinese internet leapfrogged rapidly and innovatively.
-China's market was influenced by a variety of factors.

Best Moments:
-Mark brought a green inflatable alien during his motorbike ride in Trans-Canada.
oAnd he's like, "What on earth where you're thinking bringing, like, inflatable aliens?" Because I like in the prairies, you have to have the inflatable alien and stuff. And I had like 70 tapes. This was the days before digital music. So, I had these tapes that ended up freezing up, and he is like, looking at all this stuff and bringing juggling balls and dozens of cans of stew and all this. He's like, "What are you doing?" Like, "I'm really quite worried about you. You really have no clue. But in the end, it was alright. It turned out okay,
(00:04:47.62-00:05:14.69)

-Mark shares one of his scary moments while traveling in Africa.
oI'm belting out this really poorly. I wouldn't be able to out run them now pretty quick. They're like the aqua plane across the top of the river. So I started singing, and then they started ducking under the water, and I'm like... this is usually when they strike. It was rainy season, so it was really murky. It looked like chocolate milk, and I'm like, "Oh golly, they're under the water." And I'm singing there and there's this long silence, everything but my noise, and I guess the music kind of put them off because I never saw them, thankfully, but I was quite kayaking myself. myself. was one of the scary moments.
(00:13:30.29-00:14:01.53)

-Rich shares how he had a little run with baboons at a game park in Tanzania.
oI had a little running with baboons at the end of Tanzania, a game park. And they were at the edge of the park, and they were very socialized because people were feeding them. And they kind of, I had a whole bunch of bananas hanging out the back of my bike. This taxi came by, and they kinda leaned out the side while I drafted behind them. And I had my pump. It was like a metal pump. It was like my baboon tenderizer. But you know, I could hear their claws scratching and they have like canine teeth, right? But they were still 10 meters back. But yeah, like that was my closest call that at least that I knew of.
(00:14:41.21-00:15:08.57)



XCD: Post-production, transcript & show notes

Rich Robinson:

Mark Tanner, ladies and gentlemen, I'm up on my Boston accent slip since there's a little bit of "r" dropping where you grew up. Welcome to the pod.

Mark Tanner:

Great to be here. Thanks, Rich.

Rich Robinson:

Hey, I'm in Bali, Indonesia, and you're joining us today from?

Mark Tanner:

Shanghai.

Rich Robinson:

And you've been there for how long now?

Mark Tanner:

2011. I arrived, I was in Beijing before that just for about six months.

Rich Robinson:

And by the way, you said the number 11. Maybe people with a keen ear can understand where you grew up.

Mark Tanner:

Yeah, so originally from New Zealand, but lived in a few places after that and ended up in China.

Rich Robinson:

That's great. I've said it on the pod once before, but I have a Kiwi buddy who came to Beijing, and he is like, "It's a bet frenetic." And I was like, "A bet frenetic? Oh, it's a bit frenetic." So it's like swapped the "i" in the "e." But tell us out in podcast land about your journey from New Zealand to China and some of the adventures you had along the way. What brought you to China, please?

Mark Tanner:

Yeah, so my first stop was actually North America, and I had to speak as North American as I could, like people thought I was from New Finland or something like that. I lived in Vancouver. Worked in pornography, which would've been my dream job as a 13-year-old, but it was kinda lost its gloss by the time I started.

Rich Robinson:

Well, can you peel that back a little bit? What were you doing?

Mark Tanner:

It was what I would've been like as a 13-year-old. But I worked for a company called "Net Nanny," and we were blocking porn.

Rich Robinson:

Ah, okay. Okay. Oh, so you were on the other team. Then you weren't..

Mark Tanner:

We were the good guys. That time, were the only people making money online. Were the porn companies. It was interesting. It reminded me a lot of how China is right now. It was a lot of money flowing in, a lot of people doing a lot of things, but most people really didn't have a clue what they were doing. It was kind of learn as you go type mentality for a while.

Rich Robinson:

So that's great. So that was kind of like SaaS-based startup before the word "SaaS" was around. And what was the or origin story of the company, and how did you get involved?

Mark Tanner:

It was this weird university thing, and they were offering, it was this exchange program called "ISEC," which is great. I was at one stage, I was gonna live in India. So I'm working for some Linkel company or something, but I ended up in Vancouver. Which was just I'd always, I'd kind of seen that movie "Cool Runnings" and "Calgary '88 Olympics." I thought Canada would be quite a cool place to live. Always loved North America. And this job came out and went, yeah, it was meant to be six months, and in the end I stuck around for almost two years, and then they were moving to Seattle, and I got the choice to go there or to get a severance package. And I still had the wonderlust. So, I was keen to travel a little bit around North America and then go to Europe. So, I took the severance package, and it happened to be the start of January, and I wanted to see a bit of Canada and a bit of the States that I hadn't seen. So I got on my bike, and I had, again, before SaaS, it was before blogs as well. I did what you call a blog these days. And I had all these random people like getting on my website and think,"Hey, I think it's great what you're doing, crazy Kiwi riding across Canada. If you're passing through somewhere Saskatchewan, you're more than welcome to stay here." So I paid for like five nights accommodation, and in four months it was awesome. It was just a lovely way.

Rich Robinson:

But when you say bike, you've gotta explain what kind of a bike it was.

Mark Tanner:

It was this,"Oh, that's a long story. But it was a motorbike. It was a cheap ass motorbike that I bought on.

Rich Robinson:

Yes. But some people might think, "motorbike." But you, it's January in Canada, the great white North, and you were riding through all conditions, right?

Mark Tanner:

I had to stick to the Trans-Canada because that's really the first road that gets plowed. Everything else is about I tried a few side roads, and it was ugly.

Rich Robinson:

But, like, wow, like very few people would be, "Oh, I'll ride across North America in the spring or fall perhaps," right. The dry season with the right weather. But you're like, "Nope, I'm going across Canada in the snow." Well, it kinda sounded a little Forest Gump-ish where you were just like,"Well, I feel like I'm just wanna ride." And you were like a Kiwi Forest Gump.

Mark Tanner:

Well, we don't really get real winters, and I was kind of naive. I thought, "Oh yeah, this Vancouver, this winter thing. It hadn't been too bad." I remember I was such a rank amateur. I tried everything. I had this little carrier on the back of my bike, and it obviously had a lot of warm gear just in case. And I'd tried to save a bit of money buying tons of food. Just to buy bulk out at Costco to save some cash. And I tried to stick it all on the back of the bike with some bungee cords, and it was just ridiculous. It took me hours to get a couple of kilometers. And then, one of my friends who was riding that day said, " Look, you're an idiot. Why don't you go and get one of these trailer things?" And I'd never heard of these trailers, but I went to the bike shop, got the trailer, was the best thing ever. But while I was in there just sorting everything out, paying for the thing, he was helping me reorganize my bags. And I came out, and it was ghost white. And he's like, "What on earth where you're thinking bringing, like, inflatable aliens?" Because I like in the prairies, you have to have the inflatable alien and stuff. And I had like 70 tapes. This was the days before digital music. So, I had these tapes that ended up freezing up, and he is like, looking at all this stuff and bringing juggling balls and dozens of cans of stew and all this. He's like, "What are you doing?" Like, "I'm really quite worried about you. You really have no clue. But in the end, it was alright. It turned out okay, and I was..

Rich Robinson:

So, inflatable alien is?

Mark Tanner:

We know that when they have alien sightings, it's always in the prairies or places where there's large flat areas with wheat and stuff growing and crop circles and all that kind of stuff. So I thought, "I've gotta get some photos with green aliens in these weird places that I've never been to."

Rich Robinson:

Okay. I thought this was some sort of like, because I see so many Aussies here in Bali that come up with these terms and you're like, "I don't know what that is." And they're like, "Oh, it's a can of beans." And you're like, "Oh, okay." Yeah, so I thought like inflatable aliens was some sort of like Kiwi term for like, camping here or something. So you actually had like literally like green martians that you blew up and that you could like, kind of like taking like a garden gnome around with you like stealing somebody. end

Mark Tanner:

It was way too cold. I didn't stop for many photos of it, and trying to stop and blow this thing up is just, "Nah, it's not gonna happen." So I got one snap in Saskatchewan.

Rich Robinson:

So funny. So this week is my 25th anniversary of finishing my bike trip through Africa 5,000 kilometers which I did from April Fool's Day until, I think, August 5th. And I remember being camping, "Kungkung camping," with these Maasai warriors. They let me into their village, and I was out in the open, and you're on the equator. And there's literally a hundred times more stars in the sky because there's no light pollution, which I'm sure you saw as well too. But there were satellites, and I'd never seen a satellite, and it's a super-bright, big reflecting light. And I was like, "Oh shit. Remote place. It's an alien." So I guess, we were sort of like thinking the same way. And I learned some Swahili and I was saying "UFO, UFO," like, those guys didn't speak any English and like, as if like unidentified flying object would be like, three words that they knew. But they were more interested in my tent poles. But anyway. Wow. What an amazing trip. So you made it all the way coast to coast, then?

Mark Tanner:

Yeah, I ended up in New Finland, got screeched in a place called "Trapper John's" in St. John's for a nudey dip in the icebergs. And a great trip. The Canadians were really hospitable, lovely people, and it was cool.

Rich Robinson:

But then that wasn't enough to soothe the savage beast inside of you. You continued doing more insane journeys after that?

Mark Tanner:

Yeah. Well that wet my appetite, like I think the internet thing, I'm like this whole into web that I'd learn a little bit about in the last job. And then it had made the bike trek quite like incredibly interesting because one, it gave me something to think about when I was in pretty long, boring days. And two, it just helped me meet all these people, and I thought, well, if I was doing something interesting, I could probably use this internet thing to do this back before social media and all these other funny things. Actually, my friend from Canada who came out and joined me on the last week of the ride and who was there on day one, not the guy that was worried about the other stuff. He knew about some ancient Viking sagas from Iceland, and apparently there was some ancient treasure buried up there about a thousand years ago. So we went up there, and it was a great few weeks up in the Nords.

Rich Robinson:

Treasure hunting for Viking treasure.

Mark Tanner:

Viking Treasure. Yeah, it was lots of holiday. We came close, I'm pretty sure, but we didn't actually find the treasure, unfortunately. But we had this website, vikingtreasure.com. And got all this interest and all these TV companies, like legitimate TV companies were pretty interested in doing something. So that's another whole story. But after that we thought we'd do it properly. And that's like yourself, we went to Africa for... I spent a year in Africa six months.

Rich Robinson:

Wow. So, interestingly enough, full circle, because vikingtreasure.com is now blocked by Net Nanny as a porn site, but tell us about your trip to Africa. Where was the start and finish, and what was your mode of transport?

Mark Tanner:

Yeah, so it was the Nile had been. Something that had fascinated both myself and my friend Les, who was the guy that we organized the treasure hunt and we found out it had never been done. It had never been paddled. So we thought, "Well, it's probably a good reason for that, but let's just, much like everything else we do be blissfully naive.

Rich Robinson:

I mean, this story is like crazy because there is a really good reason because there's so many ways to die.

Mark Tanner:

There are many when we looked into, lots of people have tried, like more people had died on the Blue Nile per attempt than Mount Everest. No one had ever done the thing. And high season, and there's like bandits, crocodiles, hippos and big rapids.

Rich Robinson:

And airborne insect borne waterborne. I wish I was never born diseases, right.

Mark Tanner:

Some days you're funny. You'd know from your bike. There's lots of funny things that can.

Rich Robinson:

Wow. But still the bike trip that was Nairobi to Cave Town, a very quasi developed and like very straightforward route. But the Nile, this is something that you think would've already been done in the 17 or 18 hundreds or something right?

Mark Tanner:

You know I think people had gone like, there was some..

Rich Robinson:

Probably by a rugged team.

Mark Tanner:

Some guys tracing the river, and we were keen to paddle it. Self paddle down there. And we really, had no idea what we were doing, but we managed to recruit some guys that did know what they were doing. We got some really world-class whitewater guys to come for that lead through the Highlands of Ethiopia, and we came through there. And then Sudan, which is my favorite part of the trip because I'd lived in Sudan for six months prior, just trying to get permits and learn a little bit about Arabic and just try and figure out what's going on, and that was great. And then up through Egypt to the Mediterranean and that was the kind of adventure you dream about, much like your bike track. It was the kind of adventure you dream about when you're a little boy. It was awesome.

Rich Robinson:

So, share an anecdote or two along the way of like a trial and triumph.

Mark Tanner:

God, there's so many. But there's just quite a few crocodiles and things. And I remember, we'd been attacked by crocodiles like on the... even in the rapids in the Blue Nile, in Ethiopia. These things were grabbing our oars and trying to do the death row and shaking these big rafts full of people and supplies for a month.

Rich Robinson:

Wow, especially on the rapids, you're likely to go over. I've been whitewater rafting, and I've dunked.

Mark Tanner:

Yeah.

Rich Robinson:

A bunch of times, right?

Mark Tanner:

It was pretty hairy. You see the eye of the crocodile. What close? There's not a lot of love in those eyes. They're horrible things. I still get shut when I think about it. But the worst was because we had like armed guards. It was bandit countries, so we had to have like a lot of armed guards and stuff. So you are always feeling slightly secure but then we left everyone. It's just the two of us paddling through the Sudan. And I remember we hadn't seen crocodiles for a while because there's so many people around. There's not a lot of croc. Then we started seeing people running along the side of the river and going, "Tum tuwa tuwali tutuwali." And I'm like, I know what "tuwali" means. That means "up head," but what does tombs are? I've never heard this word. And we started seeing more and more people, "Ya tum tuwa tuwali." And then they start doing this: "Tum tuwa tuwali." They're making these crocodile things, and they're running along. We started stopping in these villages, and these people were like, "Have you got guns? Have you got guns?" We're like, "Nah." And they're like laughing themselves. And then we started, some of the villagers had like croc scales on sitting on the top of buildings and that like as pieces of art. And then we started seeing a few crocs and I just remember this one time, it's a really windy day. It was this one calm spot, kind of sheltered by this little island and I was paddling along. My mate Les, was, God he was a little bit ahead, and I just saw this little crocodile head pop up, and I was like 20 feet away, I'm like, "This isn't looking good." And then, "boo," and about five of them were all looking straight at me, and I'm like, " This is not that good." Because I know back on the Blue where there are lots crocs, they'd always go for the auxiliary things like the oars and the paddles and toward the bow ropes and stuff. But this was just this crocodile that's like, my hand was connected to the paddle. So, it was like, if he's going for the paddle, it's probably gonna be pretty close to my limbs and stuff. So I started getting a little bit, "Oh, what do I'm doing here?" And I'd heard that if you slap the paddle really loud on the river, it makes a bang and it scares the crocs away. So I wound this big slam up and whacked it down on the river, and it made this massive echoing slap on the river, didn't do a thing. They still looking. I was just like, "This is not looking good. They're not budging here." So I'm like, "Look, I'm gonna go." I'm gonna go singing. So I started singing some songs really poorly.

Rich Robinson:

Okay. If you gonna go, you mean like, "Go, go." Like, "Check out this world."

Mark Tanner:

I'm belting out this really poorly. I wouldn't be able to out run them now pretty quick. They're like the aqua plane across the top of the river. So I started singing, and then they started ducking under the water, and this is usually when they strike. It was rainy season, so it was really murky. It looked like chocolate milk, and I'm like, "Oh golly, they're under the water." And I'm singing there and there's this long silence, everything but my noise, and I guess the music kind of put them off because I never saw them, thankfully, but I was quite kayaking myself. was one of the scary moments.

Rich Robinson:

So you don't have much of a karaoke following in China then?

Mark Tanner:

I haven't, it's funny you mentioned it because Les, the guy I've battled the Nile stuff. He loved karaoke. I actually prefer North American style karaoke and, with all sorts of randoms and like public bars.

Rich Robinson:

You're trying to, like, be bad on purpose almost. Yeah. That's funny. Yeah. When I sang karaoke, my friend asked me, "What did you do with the money?" And "What money?""The money your parents gave you for singing lessons because, you didn't use them on singing lessons." That's for sure. But wow, so you basically saved your life by singing?

Mark Tanner:

I don't know what would've happened otherwise, but amazing. I don't think that the noise that came from me did any harm.

Rich Robinson:

I had a little running with baboons at the end of Tanzania, a game park. And they were at the edge of the park, and they were very socialized because people were feeding them. And I had a whole bunch of bananas hanging out the back of my bike. This taxi came by, and they kinda leaned out the side while I drafted behind them. And I had my pump. It was like a metal pump. It was like my baboon tenderizer. But you know, I could hear their claws scratching and they have like canine teeth, right? But they were still 10 meters back. But yeah, like that was my closest call that at least that I knew of. Some scorpion, some other stuff. But a mosquito, like a mosquito, is probably deadlier. More likely to kill you there than a croc. But anyway. Wow, fantastic. So, so, it's interesting, so I teach, of course, on entrepreneurship at Peking University. And you can probably teach 20% of entrepreneurship, right? And then the rest is like jazz, or you have to kind of experience it. And Frank Zappa's says, when people wrote a bad review of his album, he's like, "Oh, writing about music is like, dancing about architecture," right? So, it doesn't even matter, like teaching about entrepreneurship. How can you teach that? And what I like to teach is, I bring in entrepreneurs who talk about their trials and tribulations, which we'll get into a little bit later. But people ask me, like, "How can I prepare for entrepreneurship?" And I often say, "Do a trip where you feel like you know you are kind of exposed. Where you're super uncomfortable and you're like, have to sleep night after night in a place that's, not your ideal bed spot and you're eating food that's, it's not you're kind of exhausted, whatever." And that builds grit.

Mark Tanner:

And perspective as well. I think when you're having a bad day as an entrepreneur, you can think back to sleeping on the pipebin.

Rich Robinson:

Indeed these clients or these partners or investors they're not gonna eat me. That's not gonna happen. At least, I don't have to sing them away.

Mark Tanner:

I can sing to them.

Rich Robinson:

So that's great. So I really, even though we've not, I've heard your name around a bunch in China, as we were saying, but not met, but I feel you know that there's a kind of common thread. You and I both, doing trips you're, actually even crazier than mine. If there is a contest, you definitely want it. But the us getting pulled into China and the kind of chaos and adventure and opportunity and never ending journey in China. So, I think there's a common thread there, like tell the listeners out in podcast land about your path to the Middle Kingdom.

Mark Tanner:

Yes, I was exhausted after that paddle. I got home and I back to New Zealand and I was just, I'm gonna settle down, get a picket fence and have some kids. And I was like, "This is heck, I've done that. I'm ready to kind of chill for a bit." And I met a young lady. She hadn't traveled, and she's pretty adventurous. And so we both thought this place,"China," we both knew nothing about it but we're hearing more and more about it. This is 2009. And we thought, "Well, let's go and have a look." We're both very green but curious. And so we got married, honeymooned around India for a few months, and then went and studied Chinese up in Beijing. And yeah, it was great.

Rich Robinson:

What year is that?

Mark Tanner:

That was 2010, we were in Beijing. And it was just unlike anywhere I'd ever been. It was just the theme of your book — the constant change was just fascinating. Like, there was just all these stories about, like, I think the year we were in Beijing, there were 270,000 new cars sold in a year. It was like, "Wow, this is crazy." And they talk about Chinese years are kind of like dog years. What happens in a year in China takes seven years in most of the rest of the world. It's just that for me was really interesting, particularly working in the marketing industry, just this constant change and which forces you to keep up. And if you don't, you're gonna... stuff that was relevant a year ago is often not that relevant. So, I found that quite alluring. So my wife was very fortunate. She was working for an American company the CBRE, one of the big property companies. She had managed to speak to some people from her old office, and they hooked her up with some people in the Shanghai office, and she got a job there. And so I was very lucky that it wasn't like an expat salary, but it was enough for us to live and to travel every now and then. And so I thought, "Well, I'm gonna have a chance to do something. I've always wanted to start a business while there's someone else earning some income." And that was somehow "China Skinny" began. A lot of it was I'd done marketing kind of between adventures. I'd done marketing jobs to pay the way, and just I find marketing quite an career. And I came to China, and at the time I didn't think marketing was being done very well. There I was looking for information, and I just couldn't find much. And so I thought, well, if I saw that as a bit of a gap, I saw China becoming more and more relevant for more and more brands. And I thought, "Well, I'll have a crack at filling some of those gaps that I thought needed filling."

Rich Robinson:

Terrific. And I love how you brought up how one partner or spouse pulls the sled a little bit harder so you can get out of the pull of gravity into flywheel of the company. And I think that's a really beautiful symbiosis around that. I think there's a lot to be learned around that when you're starting a company. Not necessarily just have to go all in. And so what was the thesis of, like, what your shingle providing and how long did it take you to turn that into something where you felt like it was starting to really work?

Mark Tanner:

Yeah, it's a good question. What had happened is I'd initially tried to do something that was quite different than we are doing now, but we've eventually almost done the full circle. We're doing a bit of what had initially started. So, at the time, Weibo was getting pretty popular. It was the big social media network back then, and there was no kind of hoot suite type product or none that I was aware of that you could get really good track of what's happening on social media in China. So at the time, they had all their APIs, so the feeds of information were all available for anyone. It was just free for all. I'll take that, and I'll create this little tool that, brands can use. And I got some developers to start developing some little guys in a dark room in Pudong were chipping away. And I thought while I'm waiting for that, I'll just try and create a bit of a platform just through leadership. And so I created just the China Skinny, and we had a news letter that was going out and was getting some traction and things, and then Weibo, in their wisdom, decided to close their APIs. So, just wouldn't let anyone. They realized they're valuable data they had and they didn't allow it. So I knocked on the door many times down at senior of the company that owned Weibo, and they wouldn't, some stupid Kiwi guy that knew nothing and knew nobody, and they were like, "I'm not gonna give this valuable information to you." So I thought, "Well, I've already got this marketing platform and there's already some decent subscribers on our newsletter," and I started getting inquiries from people saying, "Hey, can you help me out with some strategies, some strategic work, some branding?" I thought, "Yeah. I can do that. Good to get some cash flow coming in." And since then, we've evolved, and now we work with brands like Nike, Adidas, Colgate, and iCare, and do some pretty interesting stuff.

Rich Robinson:

Amazing. Yeah. And what are the kind of insights that you provide? What are they coming to you for most, like what's the kind of meat?

Mark Tanner:

Yeah, a lot of what we do. because a lot of the brands we work with some SMEs, which I love that they're often dealing with decision makers and things, and they're very quick in making decisions, but not by China standards. A lot of them aren't. But, so we work with them on like this holistic strategy and really trying to understand the market and where their strengths are and how best to utilize them. And then, we work with the bigger companies they often have these global relationships with agencies. So, a lot of the work we do is quite niche. They need quite bespoke work and thing that needs quite blue sky thinking and just quite different approaches to things. That's where our strengths lie with those types of clients.

Rich Robinson:

Yeah. It seems to me with Nike — I know PT Black over there — like they've really localized in a large way in China and that they are a lot more in the cycle of speed and innovation within China as much as a international company can be. Do you have any stories you can share about some companies who have, like, really maybe learned from the speed of execution in China or some of the types of things that they're doing around, say, streaming commerce or social media or mobile payments or whatever, and then kind of taking that back to the mothership?

Mark Tanner:

That's a really good question. And we've actually done a few projects from companies, and this is the type of stuff we'll often do is big brands that are just seeing these Chinese companies that are just outsmarting them out, innovating them, and just running circles around them. And as a result, cannibalizing their market share. And they're like, "What are we doing wrong?" Or "What are we not doing that we need to be doing?""How can we be more like these guys?" So we have done a few pretty deep dive studies into it, which was for me, some of the most interesting stuff we've done and also some of the most like,"Wow, just these Chinese brands that rate that tracking it's not only if you're in China, but also if you're outside of China, you're really gonna have to be aware of how they operate." Because in this day of particularly with COVID, where everything is changing at such a constant speed, I think Chinese businesses are so well set up for it, whereas a lot of these American, European, and Australasian businesses are a lot slower and a lot less adaptable.

Rich Robinson:

So when you say they're set up for it, can you peel that back? Like what does that what does that mean exactly? What are they doing?

Mark Tanner:

Yeah, so structurally, I think initially the study, one of these big FMCG brands came to us and they were looking just from a marketing standpoint. How can we be more speedy and marketing, and when we peeled it back, it was much bigger than that. It was just structurally, these companies are not set up to succeed. So an example would be, "Well, actually, I'm gonna take it back another step." If you look at the way the average Chinese CEO or decision maker and most Chinese companies are very CEO-centric, a lot of decisions are made by the Big Gs at the top, and then the next layers down are just delivering on what this individual is saying. Whereas you look at a lot of Western companies, it's a lot more around, lots of different views around the table and let's discuss it and decide. which is good in some ways, but in other ways it means things are slower. Things take longer.

Rich Robinson:

So that's funny, though, because you'd think centralized would be slower as opposed to decentralized.

Mark Tanner:

Yeah, well, it's empowerment, that's important, but I'll get into it, but what happens if you look at these individuals in China, they have grown up, particularly the guys running the companies. Now they're in their thirties, forties, some of them in their fifties, but they have grown up. And they've only ever known constant change. 1979, when they were boys and girls, this place all of a sudden opened up, and you went from having six brothers and sisters to having none, and you went from living in the countryside, which 80% did, to living in the city, which over 60% do now. And you went from having one or two pretty ordinary brands to every brand in the world trying to get a piece of you, plus all these incredible Chinese brands, and you're just bombarded with that. The internet came late to China, but it's leapfrogged in many ways the internet. We know in the West. It's just so rapidly changed and innovative.

Rich Robinson:

That blurb right there I can see the text attributed to you in the book right there. That's a beautiful. So, that's exactly the meat that I'm looking for, right? Yeah, that's exactly right. So their mindset is really, they don't know anything but rapid change. So they're already starting the game with a completely different mindset.

Mark Tanner:

Oh, it's part of their DNA, it's inherent in everything they do. So, you've got people that are prepared to adapt. And so we spoke to an awful lot of senior people in Chinese companies, and then senior people in Western companies, MNCs. And the key difference was getting to that decision-making. There was all sorts of differences, which I can get into but just the speed of decisions were made. And you look at Western companies, there's an awful lot of gates to make a decision. And stakeholders. In many cases, the stakeholders are based in the HQ in New York and London and Paris, wherever it is. Whereas in China, you are dealing directly with some guy that's in your office in Beijing, Shanghai, Shenzhen wherever it is. And these guys are living, breathing China. They're seeing this change happen around them every day. And so they instinctively they can go on their gut a lot more than people decision makers in the West. They have all sorts of information, but it's not instinctual in the way that the Chinese leaders. And so you've, and they also have not grown up with data in the way that Chinese in the last 10 years. It's just because people do everything on the internet. You've just got this wealth of data, and privacy, until recently, hasn't really been an issue. So you've got so much more data than you'd have in the West.

Rich Robinson:

And sometimes, data can lead to that analysis paralysis, right? Where it's like, you always have limited information, so you have to just turn the card over and "Oh, let's get it, turn the card over and get more information." It's like, "No, you just have to double down or whatever. You have to make a decision," right. And I think that's where gut comes. It's like they may not even know the answer, but they're like, "Okay, now is the time to act and decide." And it's probably a much faster case than, yeah.

Mark Tanner:

Yeah, and I think a lot of it is a lot of these Chinese brands are very new, they don't have the heritage. Coca-Cola been around a hundred and something years. I remember as a boy, they launched "Coke Classic," and I'm sure you remember that back in the mean streets of Boston. And that was a disaster. And as a result, I'm sure that's kind of made them a little more innovation shy, like they're less risk-averse than they once were. Whereas these Chinese companies, don't have this brand to protect, so they're like, "Let's just throw a whole lot of spaghetti against the wall and just see what sticks and just keep doing that." So, you look at just the way they operate. A lot of them have the number of SKUs these companies have is just tremendously large. Whereas you look at the Western equivalents, they have a lot less. So they're prepared to try different things, be much more targeted. So demographic wise, geographic wise, they have much more targeted products for this category, which is really effective when things are changing so fast that you can see what works and what doesn't. So, we were talking to a Shanghainese cosmetics and beauty company, and they had launched a face mask thing. From ideation, they came up with this idea of this new face mask to selling on the stores shelves to the screens. Took them three days to come up with the idea. It's actually springing thing and then it's selling. You could buy it.

Rich Robinson:

Shit. I'm thinking in my head. I'm jumping ahead on you. I'm like 60 days, right? That's two months of a deal.

Mark Tanner:

Three days. It's about average 16 to 90 days is what it takes for most Chinese companies.

Rich Robinson:

But Wow. Be able to like ideation to like "Cha ching!" Like, that's insane. Wow.

Mark Tanner:

A lot of these things are not coming up with everything from ground one. A lot of them, it may be a new product with some different packaging, a few different formulations or something, not majorly changed. But again, it's a new product, a new things that...

Rich Robinson:

But that new software, that's kind of like software, right? Let's do maybe get totally on it, but be able to do that with a physical FMCG product. Like, that's where things are moving towards now. Like, "Does anybody even have the ability in their competitive universe to be able to do that?" Most likely not. And who are from outside of China, right? So it's probably a mess, and there's a lot of mistakes, and there's maybe some loss in brand equity along the way, but their learnings are so much richer and faster. Wow. 72 hours. That's amazing. I gotta deep dive a little bit more into that.

Mark Tanner:

And we spoke to another company, a western company that made shampoo. And it took them three years to bring out this shampoo. I'm like, I couldn't get my head around. I'm like, "China. I know in six months the needs of the average shampoo customer can change, but three years, whatever you produce is not gonna be that relevant." So, it was unreal. But that stemmed to an awful lot of things. Obviously, trial and error, but as far as staff go, if you're a young, ambitious Chinese person that wants to work for a cool company back in the day, it used to be you'd work for an MNC, but now they're like, "Why do I wanna walk for this company that all my decisions have to go through all these gates, and then some dude sitting in Seattle has to sign this off where I can be in the same building as this guy that's just making decisions. It's so dynamic. It's so interesting. We're winning. And I'm kind of nationalistic as well, so I'd rather work for a Chinese company and all these things." So it's like these guys are getting the best and brightest of China's stuff. I'm painting quite a grim pitch here, but I think as a Western business, we need to be really aware of just these guys are coming, and we saw it with Shein, is

Rich Robinson:

real.

Mark Tanner:

a good example, which I'm sure it sell.

Rich Robinson:

Yes. So before I was like you have these established Western brands in China, and they're like, "Okay, we can still look at how big Apple or Nike, et cetera, are." But they attract a more stable employee who's there because it's about optimizing the whole system rather than maybe necessarily, like, fully reinventing. Of course, there are stuff on the edges where you have to innovate, right? But if you're launching something new in China, then now you're right, like getting the talent to join you and get behind you. That's a challenge. So now it's becoming less and less possible to really crush it in the China market. And then these Chinese companies are getting better and better at. Learning internally within the country and then launching in Japan, Korea, Indonesia, and other markets and I was like, "That's one of the parts of my book

is:

that kind of like Sputnik moment where you wake up and you're like, "Wow, like maybe we don't even necessarily want to be in China," but it doesn't matter because Chinese companies are gonna start to come into your market or at least into other markets where you are already, enjoying a kind of a lead, and if they're able to just move so much faster and to iterate and do something in Brazil within a three-weeks, three-month turnaround when it used to be a year or two, then that's where people are gonna be caught unawares. So, I love those anecdotes. That's great. You're definitely on the front lines with these companies. Can you share a little bit about that? About some of your insights, like how some of these Western companies have kind of made this shift or adjustment to be able to be faster and...

Mark Tanner:

Yeah.

Rich Robinson:

More competitive?

Mark Tanner:

So, the big one is just having more autonomy within China. And I think a really good example, Nike's a great example. L'Oreal's a great example. They have all of the teams that just can make decisions, and adapt, and develop new products, and everything else really quickly without having to go through Paris or Portland. So, it's the companies that are doing well. And most of the companies are the big companies in particular that are doing well, have a full team with the authority to make decisions and just about everything. They'll run like their own individual companies in the mainland, and decision makers, increasingly they're localizing. But I think personally it's important to still have a few of the guys that get the culture back in the West to be in there just to make sure that what's really made that brand special, that DNA is, that remains here. So, it doesn't just become another local Chinese company. I think it's just someone that can understand the market. It's important to have those guys still on the ground in China.

Rich Robinson:

Interesting. Yeah, I'm gonna try to have PT Black from Nike on. And I know Starbucks and also SAP, because I know that with Starbucks, they're really ahead of marketing now. Used to be focused on China. So now, Starbucks is being kind of driven by that kind of China speed and innovation. And I know SAP did things like three packs. Because people just want to be able to get something delivered, with the rise of home delivery, and I just want few beers, right? And so it's like thinking of, that's kind of informing other markets around the world. So, I think I'm gonna try to uncover some more actionable insights around that. Anything else come to mind when you think of China's speed? Either like, you know, personal anecdote?

Mark Tanner:

My personal, this is not a company we've worked with, but there's a company, Shein which was totally under the radar until a couple of months ago. I just think is a classic example of how Chinese companies operate. Interestingly they haven't really focused on China. This was a guy who worked for some SEO agency in Nanjing.

Rich Robinson:

I'm sorry, so you're talking about the founder?

Mark Tanner:

Yeah, I think he was an SEO guy who worked for, and then he started trying to sell wedding dresses or something internationally and, I guess, optimizing for Google searches.

Rich Robinson:

Oh, okay. I apologize. I thought you meant SOE, like"State-Owned Enterprise," but you're actually talking...

Mark Tanner:

"Search Engine Optimization," sorry.

Rich Robinson:

So he was actually already very savvy. I was like, "Wow, Shein have founded by an SOE guy." There's no hope.

Mark Tanner:

Yeah, it worked the railways.

Rich Robinson:

Okay. SEO. I misunderstood. Thank you. Keep going. Sorry.

Mark Tanner:

Sorry, I hate using acronyms. Sorry. I should have not used that.

Rich Robinson:

It's a very proper and good use of an acronym. Nobody says, "Search engine optimization" anymore or "State-Owned Enterprise."

Mark Tanner:

So anyway, this guy that was making wedding dresses, I guess he looked at China and he thought,"What is our distinct advantage that we have that no other country has? And this that factory of the world. So he set up a base down in the Pearl River Delta down, around Shenzhen and Guangdong. And there's a lot of garment manufacturers down there. And he was sifting around all these factories and looking at them, thinking,"What are these trends that all these outsourced fashion leaders around the world are all manufacturing here? What are they making? What are the latest trends?" So from that, he can manufacture and use these same factories in many cases to produce similar stuff. And he's also, he's a pure online outfit. He's got an app that gets an awful lot of data from all these different things. So he's producing, I think, tens of thousands of new garments every month. I'm sure you'll cover this in your book. But it's just the way that he could produce all these new clothes that Zara model on steroids, that there's just this truly fast fashion. But I don't know, whatever the next word is, up from fast. And he's producing all these garments and producing them really cheap, and he's seeing what's on trend, and using it, overlaying that with his data. And because China has all these factories, and it's incredibly competitive. So these factories are hungry. They're really adaptable because they have to compete. And so he's producing all of these new fashions at a really cheap price that the traditional fast fashion brands can't keep pace with, and as a result he's selling billions worth and you just come from nowhere. And I think that is the type of company that's gonna become increasingly common in the world of consumerism that are gonna be harder and harder to compete. And they're all straight. They're also getting much more marketing savvy. And that's something I noticed when I was first in China — that the marketing here was pretty ugly,

Rich Robinson:

TV commercial is worse. That's how it evolve.

Mark Tanner:

And we work with companies, these foreign companies, and they have 15% of their revenue is spent on marketing, 20% the generous ones. And you're getting a lot of these cashed-up consumer brands that are spending upwards of 80% on their marketing. And you look at what their KPIs are as companies, and in the West, it's all about revenue. It's all about being sustainable, which kind of makes sense to my logical brain but in China it's not. It's all about acquisition, customer acquisition, and so they are structurally set up to not really care much about making a profit, because there's all this venture capital money coming in that can keep them afloat, and so they're just acquiring all these new customers and building their business that way, and as a result, they are much less risk-averse. Whereas as a Western company who's spending 20% and it's all about making sure we make a profit, it's pretty hard to compete with these companies that are just focused on acquiring new customers.

Rich Robinson:

Certainly. Yeah. And I think downsides to speed and that's one of them, when you're kind of ignoring the pull of gravity when it comes to basic numbers and business sense. And I think that's, a lot of limitations around that space, in the internet consumer startup space where there's many bubbles and many rabbit holes that are gone down with billions of dollars, but they eventually either bear fruit or invalidate a market. So, there are some sort of good learnings from that. But I think, certainly, it's not all things around China speed or things to be emulated or even be necessarily but they're there. And when, China's largely not competed outside of China in a big way. TikTok kind of, blew the wheels off of that because they were able to do things with algorithms to create consumer products. But I think there's gonna be a lot more Chinese products that are gonna be going, around the world and be online only, and be better however they're doing it even if it's not necessarily desirable to emulate it. It is what it is, right. And that's what is going to be the competitive landscape in the coming years and decades.

Mark Tanner:

And you see that with, Shein, and they use a lot of key opinion leaders, which, in China, that's just half of course, any brand with any clout in the market is using a lot of influences. Whereas in the West, all of a sudden all of these Cape Perrys of the world are promoting their gear, and it's like,"Wow, why didn't we think of that first?" But there's just so many 101 stuff in China that is not really happening in the West. And so these guys — in some cases, it wouldn't work — but obviously key opinion leaders potentially live streaming could be quite successful for Western brands, even in their own markets.

Rich Robinson:

Yeah, and I think, what almost 8 billion people on the planet and half of them on the internet. But now there's gonna be billions more across LatAm, and Asia, and Africa, who's gonna mop those few new billions up, right? I mean, like those markets, that's where China's able to compete, both in the tier-one cities of Beijing, et cetera. But, also in the tier 3, 4, 5 cities as well too. And, it's really fascinating how a company like Shein is flexing muscles across, all of those tiers or even, companies like Pindoudou are really focused on the lower tier cities, and really well poised to take this Costco meets Disneyland model for the rest of the planet Earth. Tell our listeners about your life in Shanghai, where you are now? Like COVID and anything you can share?

Mark Tanner:

COVID has obviously came hard and fast. And then China was, for the most part, out of COVID pretty quickly. As a westerner there's less and less Westerners in the market now. A lot of them haven't been unable to get back. And just people move on. But Shanghai in particularly has been, always been very transient, but it's always been replaced. It was an international city, and a lot of people I guess, found it quite fascinating and intriguing. This China place. So I guess the allure of Shanghai was quite strong for a lot of these young, adventurous kids, smart kids because it's less international than it was, and I don't think that helps nationalism from both within China but also from outside of China. I think less people are aware of China. And I think the more people living in each other's countries, the better it is, that awareness. I think, If you want something bad enough, just go and get it. And there's definitely opportunities in cities like Shanghai, and Beijing, and Shenzhen, and even in the Hinterlands. I think, for me, it's enriched my life. China is gonna become more and more relevant in the century. No matter what you feel and think about the country, there's no denying that it will become more relevant. So I think understanding it beyond what you read in the press is incredibly valuable. I think not just understanding it from a cultural and a geopolitical standpoint, but also from the speed standpoint that obviously your book is focusing on, I think is valuable. From a sheer interest, but also if you were looking to run a business or work in a business, it's really good to understand that perspective and that way of doing things. I think it can be valuable.

Rich Robinson:

Terrific. Excellent. Thanks. I really appreciate your time, and I look forward to meeting up some time when I'm back there in the Middle Kingdom. I was back last October, November.

Mark Tanner:

I think it'd be hard to leave Bali, wouldn't it?

Rich Robinson:

It is indeed. But you know, the beautiful part is, it's a straight shot up to China, right? Same time zone and no jet lag, right. And you can get to Shanghai in four something hours. So I expect once I do these innovation tours where we bring in people to come in and sniff the MedTech, FinTech, EdTech, other types of innovation that are happening in China, and show them around. It's something that I enjoy. It keeps me relevant and fresh learning everything that's happening on the front lines there. After 24 years, and I've been away now for about a year, plus, and I'm already, I have to paddle three times as hard under the water to make myself look like I'm keeping up. So, anyway real pleasure and all the best. And thanks again.

Mark Tanner:

Likewise. And I really look forward to the book. I think it'll be a great read. Very important.

Rich Robinson:

Thanks, Mark.

Mark Tanner:

Alright, thank you.