"In China, believe the statistics," said Duncan Clark, founder of BDA China Limited, an Internet investment firm based in Hong Kong and Beijing, and a participant on the Harvard Asia Business Conference panel "How E-Business Will Impact Asia."
"We're just at the beginning," he continued. "It's hard to see any fixed patterns because we're just getting off the ground. Capital is coming in a big way to mainland China, and while there are occasional flashes of lightning from strange problems, you have to have faith that the sun will come up."
Clark's sun metaphor and fervent optimism were echoed by all four other panelists as they told the audience about their experiences and plans in e-commerce. One panelist, Dave Chang, MBA '97, as president of eTang, said he has even adopted the color yellow as his firm's official color, and dubbed the audience his company aims to serve as "Generation Yellow."
Asked by a member of audience why her generation is called yellow and not red or green, Chang replied, "Generation Yellow is Asian people aged 18 to 35; they are well educated, high income people. We are building a brand for these kinds of people who are relatively wealthy or will be wealthy.
"Yellow represents idealism. Our brand is to identify an emotional attachment: early morning, rising sun, very bright yellow.
"In China there have been a lot of uncertainties based on the legal infrastructure," Chang said. "For us, it's a question of how to realize the benefits despite instability along the way. But take a three-month perspective and a six-month perspective, and you'll feel a lot better. The sun will shine through eventually.
Clouds and Hurdles
"We do not consider ourselves a pure Internet company," he continued, "but rather we look at the long-term perspective of this market. If you look at the short term there will always be clouds and hurdles."
Most of those clouds and hurdles, panelists said, should be acknowledged but in their view can be generally discounted as obstacles. These include a system of regulations favoring state-owned enterprises (SOEs), for example, and the clunky financial infrastructure for consumers in Asia, which means that debit cards - which are increasingly in use have yet to be overtaken by credit cards.
SOEs are a smaller problem every year, Clark asserted. And while the mechanics of online payment are still to be worked out, there are ways around the obstacle of fulfillment: "EMS [the express delivery service] accepts cash on delivery," he said.
"The governments in Asia realize they can't insulate themselves," noted Sean Clifford, a partner in the East Asia financial services office of Deloitte Consulting, who specializes in information-technology consulting to multinationals and local firms. "We will see a lot of transparency come into the market. You will see a much more aggressive push on business fronts. The speed and pace of Asia is just starting to affect traditional and entrenched businesses."
The technical infrastructure should also not be a hindrance, panelists agreed. According to Yong Yao, CEO of ec-T.com, an online shopping network, the fact that some of Asia lacks telephone lines means that companies can go directly to local communities and provide the services that the community needs. Said Clark, "Fiber optics will cut through a whole level of investments. As far as the technology invasion, there's been tremendous growth; China is pretty well set."
"There are now over 300 Internet service providers in China," he continued. "China Telecom will still be formidable, but there is now enough oxygen for others to breathe and grow."
In answer to a question from a member of the audience about how China will deliver on time if Toys'R'Us can't, Clark replied, "Well, the toys are all made in China."
"This Is About Speed"
The most dramatic change for e-business in Asia, as elsewhere, according to Clifford and other panelists, is the incredible speed of the decision making process it requires. "Speed kills because you're moving too slowly," said Clifford. "This is about speed. And in Asia, it's not about strategy so much as execution."
Panelists also foresee a change in social life due to the Internet and other electronic forms of communication. "Mobile karaoke" was cited by one as the next "killer app," and Clifford predicted that online stock trading will even become a social problem in Hong Kong, "like having a slot machine in your pocket."
"You're either going to be glued to it or not," he said. "People will quit their jobs" for online hobbies, he said.
E-businesses are already initiating a sea change in corporate culture, panelists said.
Anthony Cheng, the Hong Kong-based CEO of a community website, renren.com, says electronic business is bringing the spirit of Silicon Valley to Asia. His company has an open office atmosphere, which he said is creating a lot of shock. "All senior management is out there in the open too," Cheng said.
"But the office culture is a lot more fun than your typical bank or law firm or factory," he said. "We do what U.S. companies do, which includes having parties every Friday and playing laser tag."
One of the highlights of this transformation, Cheng assured the audience, "has been to see our 60-year-old tea lady playing laser tag."