POP Displays, Online Retail, and More- 5 Things I learned in China This Week

Posted by Jim Hollen on May 19, 2016 2:30:00 PM

Today’s blog is brought to you from China where I am spending the week meeting with a dozen factory heads and pressing the flesh with the local people. I thought I would share 5 things I learned this week, some of which relate to POP displays and retail while other takeaways have to do with what’s going on in China more broadly. I also learned something about myself.

1) The Price of Steel in China Has Increased nearly 50% over the Last 3-4 Months- This was a surprise to me, particularly since the worldwide glut of steel has been doing a good job of keeping prices low. In April alone, steel prices increased about 30% in China. The reason for the increase is clearly not driven by a surge in demand. More likely it has to do with the increase in oil prices and perhaps some government intervention since many of the large steel companies in China are state-owned. More than a million Chinese steel industry workers lost their jobs in the last few months.

China Steels POP Displays

However, this is not a China-specific phenomenon. We have also seen a 30% increase in steel prices over the last 4 months in Mexico. Wire products have been hardest hit but sheet metal and tube have also been significantly affected.

So what does this mean for POP display costs? For Mexico it means display prices are likely to creep up over the coming months. For China, despite the relatively larger increase in raw materials, we think POP display prices will remain relatively stable. That’s pretty amazing since few manufacturing businesses can absorb a 50% material cost increase without affecting output pricing. I guess it helps to explain why factory bosses in China have been driving nice BMWs for several years now.

Stock POP Displays

2) Rapid Progress Toward Becoming a Cashless Society- I can remember just a few years ago when people rarely used credit cards in China and when you could not use credit cards online. Everything was done in cash. Now China is moving at an extraordinary pace toward becoming a cashless society. In the U.S. ApplePay has been slow to be broadly adopted, but in China it is so easy to use WeChat or AliPay (courtesy of Alibaba) that almost everyone who has a mobile phone uses it to pay for goods and services. Actually, some old people still use cash, but the younger population is all about paying on their phones with WeChat or AliPay.

One example of online mobile payment is paying for traffic tickets. The Chinese government is good at making it easy and convenient to pay them money. In China many of the main roads are equipped with radar-enabled overhead cameras so as soon as you eceed the posted speed limit, you immediately receive a text with a picture providing the evidence and the amount to pay. You can then easily pay on your phone via WeChat or AliPay and be done with the process in a matter of minutes. Contrast that to the protracted, paper-based system of handling traffic violations in the U.S.

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(As a side note, sometimes I marvel at China’s uneven progress as a society. On the one hand they can put a man on the moon and build a bullet train that goes 430 km/hr., but on the other hand the country seems so behind the times in areas such as environmental responsibility, public health, brooms, and seedless watermelon.)

3) Online Mobile Shopping is Beginning to Rule in China- Online retail has been growing at a torrid pace in China driven by Alibaba’s Taobao (TB) and TMall online consumer shopping platforms. Taobao is the place to buy cheap fake stuff and knock-offs, while TMall is where you go if you want to purchase an authentic brand. Shopping on these platforms is super easy. In most cases shipping is free, and you can return any item for no reason within 7 days. Sure, you have to pay the return shipping, but you can purchase insurance for about $5 if you want to avoid return shipping charges.



What’s perhaps more interesting than the explosion of online retail in China is the rapid rise of online mobile shopping. It’s no secret that people in China are addicted to their mobile phones so it’s pretty easy to image how online mobile shopping can be ripe for explosion. What I didn’t know was that in many cases it is cheaper to buy online using your phone than it is to shop from home using your computer.  Providing economic incentives for purchasing items using your mobile device is a great way to create habit-forming shopping patterns for consumers who are inseparable from their phones.


4)    The Rise ofDidi- In the U.S. the rise of Uber has been a phenomenal success story. In China, it’s Didi that owns the market. That helps to explain why Apple just announced a $1B investment in Didi. I never really noticed Didi on past trips to China before, but on this trip we had several Didi drivers. I found Didi to be easy and convenient. It’s a great model for a country like China where still only a small percentage of people own cars. I can see why Apple made the investment.

5) What I learned About Myself- The last thing I learned this week is that I am hopelessly addicted to the Internet and the instant access to information that most of us now take for granted. In China you can’t get Google or Youtube, and if you don’t speak Chinese it is tough to get information at your fingertips the way we have all grown accustom. I found myself suffering from serious withdrawl symptoms after just a few days.  Finally, I accepted the fact that I had grown stupid virtually overnight. I challenge you to go a week without using a search engine and see how you do.

Topics: pop displays

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  • 2-Way, 4-Way, clothing rack, shoe display

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