Losing Chinese Business Because of 2 Simple Mistakes

This is not an article about the market condition in China but more of a practical reality that I think most people and businesses have not considered. If you read the news you’ll feel the first impediment to business in China is going to be regulations or that your website may be blocked by the GFW (Great Firewall of China). However in practical terms this is something you’ll almost never encounter. There are however 2 simple but huge, crucial and critical mistakes that most businesses make when trying to attract prospective Chinese customers for overseas or cross-border e-Commerce.

#1 Common Mistake That Guarantees No Customers From China Will Ever Reach Your Site
Everyone knows Google has extensive reach in various online services and platforms including search but their reach goes farther in a very harmful way for anyone trying to get Chinese visitors to their website. This issue applies to almost any user in China whether they are a local or foreigner and whether you are hosting in China, Hong Kong or anywhere outside. This problem can only be resolved by an experienced web developer or team and is a mistake MOST developers unknowingly make.

This little mistake comes from the fonts specified in CSS (Cascading Style Sheets) that are used to style and/or layout all websites on the internet. CSS itself is not the problem, but what is the problem is that a lot of designers use “Google Font APIs” from googleapis.com. This is a bad idea in my opinion aside from the main reason which is that you rely on a third outside party to make sure your website loads. If the remotely hosted fonts cannot be loaded due to a change in location or the server goes down, your website will not load. In the case of China on virtually all consumer grade connections “googleapis.com” is blocked, this means the third party font server is as good as down and your website WILL not load in China because of it.

Essentially what this means is that any website using Google Font APIs will not work in China no matter where it is hosted. The solution is to edit your CSS code and use alternative fonts, or to manually download the .ttf and edit your .css files.

#2 Hosting your site outside of Mainland China or Hong Kong is too slow
For those who have ever visited China, loading sites abroad such as in the US or even worse in Europe is a very difficult hit and miss experience. While most sites are actually not blocked by the GFW, a good portion of sites and services are unusable due to poor connectivity between China and a lot of ISPs. This can be solved somewhat with premium bandwidth that we use in China but really the best solution is to host your site in Mainland China or Hong Kong.

For those familiar with China, you will know that you need an ICP license from the Ministry of IT. This is not a problem if you have a presence in China or a friend who can help. But really the only legal way is to get a proper ICP license which means based on your business and not a personal ICP (we have seen these revoked for misuse). To make it short, if you don’t have an ICP in China your site will not work and will be blocked. So hosting your website in China is only an option if you have an ICP license.

The next best thing is Premium bandwidth from Hong Kong with direct China connectivity which is almost as good as being in Mainland China. But note the “Premium Bandwidth” and “Direct China Connectivity” because only some providers have this. Bandwidth is very expensive in Hong Kong and the only way providers can save money is by buying non-premium bandwidth that routes all China traffic through the USA. For cost it makes sense for those providers, but for you the end user and business who wants to have Chinese customers it doesn’t make sense unless you have direct China peering/connectivity. If you have a good connection to China from Hong Kong then users can essentially expect your site to perform as if it’s in Mainland China, in fact most users will probably feel it is located in China because of the low latency and fast response. In Hong Kong there is no requirement for an ICP license so this is really the best method for those who can’t the ICP license in China.

Don’t Lose Out
For companies who have targeted the Chinese market and have attempted to drive traffic to their own website or third party portal if you haven’t received the response you’ve expected the above could very well be why you have no Chinese customers. In another blog post I will show a few technical examples of how to fix it and still use Google Font APIs although the easiest, quickest fix is to stop using them.

Is China Still A Hot Economy?

In the past 10 years I’ve spent a lot of time in China doing business. It depends how you quantify things but I can speak anecdotally and from experience.

China’s GDP growth is no longer double digit

China’s GDP has dropped from the double digit miracle of 10.1% in 2010 to 6.1% in 2016. In terms of numbers there is no doubt China is slowing down but still 6% growth is nothing to complain about. Why so? Because the miracle that is between 10-15 years behind China in Southeast Asia for example is showing similar growth.
Malaysia in 2016 was 4.2% which is a fair drop compared to 2010’s 7.5%. Indonesia follows a similar trend with 2016 being 5.0% and 2010 being 6.4%. We can see a general trend in Asia especially that China is following with moderating GDP but the hype would have you believe otherwise. Don’t get me wrong Southeast is undoubtedly poised for huge growth, it’s just that the hype would have you believe there is double digit growth that hasn’t arrived just yet.

Changes Have Happened
Of course this is no surprise, the Chinese government itself planned for this and stated that double digit GDP is not sustainable into the future. China’s stated goal has essentially been to transform themselves from a labor based economy to a knowledge based economy with internal consumption largely sustaining this. To the credit of China I think they’ve largely achieved this. The evidence is everywhere with constantly rising wages, Chinese citizens are becoming more affluent, buying more expensive items and high end goods have flooded the Mainland and they are intended for the locals. This presents a huge opportunity for companies who have such items on offer.

Missing from the above picture are things I’ve heard from friends and colleagues. A lot of manufacturing companies have packed up shop due to rising costs including labor and moved to Southeast Asian locations. In turn there are less jobs for expatriates than in previous times and with rising living costs in China it has been less attractive to some business sectors and expatriates alike. With less production from the labor force in China, it’s only inevitable that the GDP has moderated.

It’s not all bad
A lot of people have said that some companies entered the Chinese market because it was so lucrative and with less competition. Today that’s no longer true as China’s economy has matured and the country itself has been modernizing and changing at break-neck pace. The one unintended impact is that this also created an environment of uncertainty for some businesses and sectors.

However, it’s not all bad depending on who you ask. China’s ecommerce market is thriving, in fact part of the reason why some companies are no longer there is because just like the West (but even moreso in China) the digital economy and internet have literally transformed and revolutionized the country. What worked yesterday is no longer valid or effective today and this is a general statement for how things are done in China (things move fast!).

Stats in China showed the ecommerce grew by 26.2% in 2016 for a whopping 5.16Trillion RMB/CNY! In fact ecommerce in China is said to represent 15% of ALL retail sales in China and of course these numbers are only expected to increase.

So is China still hot?
It depends from who’s perspective, internal consumption is rising, so are wages, GDP is still fairly high and eCommerce continues to be a huge factor in China. If someone wanted to get into eCommerce in China or offer goods to the growing middle and affluent class in China I would say it’s still hot. As always it is best to diversify and not rely on a single economy.

Countries where cryptocurrency, coins, tokens and ICOs are banned

There has been a lot of activity lately in the world with governments banning cryptocurrency and ICOs but this should come as no surprise as there has been strongly worded messaging about this for some time.

China bans ICOs and shuts down Exchanges
This had a massive impact on the valuations of coins such as Bitcoin, Litecoin, Etherum, Dash etc.. but things have since recovered since the 2017/09/04 law passed in China but serves as a warning and example of what government intervention can and cannot do.

http://en.people.cn/n3/2017/0904/c90000-9264331.html

Chinese authorities on Monday ordered a ban on Initial Coin Offerings (ICOs), a nascent form of fundraising in which technology start-ups issue their own digital coins, or “tokens”, to investors to access funds as the rapidly expanding market spawned concerns over financial risks.

Starting Monday, ICO activities should be halted, and ICO platforms should not engage in exchange services between fiat currencies, virtual coins and tokens, said a statement from the People’s Bank of China.

South Korea Bans ICOs

The good news is that while ICOs are banned it does not appear that trading in the currencies themselves is banned.
http://www.nasdaq.com/article/south-koreas-ico-ban-a-reaction-to-serious-concerns-over-cryptocurrency-investment-practices-cm854236

In fact it appears South Korea plans to allow trading but wants more regulation and safeguards:

South Korea Makes it Legal to Transfer Cryptocurrencies Internationally

Singapore

Although not by law, many companies in Singapore dealing in cryptocurrency have had their accounts closed:

https://www.out-law.com/en/articles/2017/september/singapore-banks-closing-accounts-of-cryptocurrency-firms/

Countries subject to strict or promising strict regulations

Nearly every country has taken a similar line where they are making a legal framework and claiming that ICOs are subject to the same laws and rules as IPOs. However this doesn’t appear to have been translated into law. It also doesn’t address the question of how holders on the coins will be impacted but one would guess that in the future they may be subject to capital gains tax and treated like traditional stock investments.

This list of countries includes:
EU, Hong Kong, Canada, Singapore and many other countries around the world.

Hong Kong Regulators Warn ICO Tokens May be Securities Under the Law

SEC: ICO Tokens Like Those of The DAO are Securities Subject to Regulations

Canadian Regulators Say Cryptocurrency ICO/ITO May be Subject to Securities Law

Is the regulation valid, practical and legal?

This is a hard call for me to understand in the sense that these cryptocurrencies are just that, digital currency and currently people are not taxed or penalized for simply exchanging, buying and/or holding different currencies.

It may also be interesting to see what the large exchanges, businesses and users do in response such as unprecedented regulation and laws. It may be that some of the regulations and laws imposed around the world may be found invalid or unenforceable in the end.

What are your thoughts and as always please let me know if I’ve missed any new developments around the laws of cryptocurrency.

Google Pixel 2 for Business Use?

Source http://areebyasir.com/?p=218

I have to start off by saying I am surprised at the specs or lack of them right out of the box I wouldn’t buy because there is no value there and no compelling features over the average phone. The entry level 5″ model comes in at $899 and the XL 6″ at $1159 USD. What is especially disappointing is the lackluster 4GB of RAM in both models this is quite shocking for a flagship phone I would say it is a low-end phone in terms of RAM which is a big deal to me and I think most people. If you don’t have enough RAM your apps will slow down and start swapping. There is also nothing that I see is groundbreaking in this phone compared to the iPhone-X.

If this phone came in at a budget price I’d say it would be a good value but like many, I am comparing it against flagship Chinese phones such as my OnePlus 5 that I recently bought. In comparison my One Plus 5 came in at $540 USD has 8GB of RAM, 128GB of storage and dual-SIM slot (very hand when traveling abroad/on business).

I think Google is going to be creating more work for itself and it needs to decide if it’s competing against the OnePlus or Apple because both are very different types of market segments and this phone fits into the middle of the pack in terms of specs but at a premium price. It just doesn’t make sense because these phones don’t carry any prestige that say a Samsung or Apple would.

I’m sorry for not going into more depth but for the way I purchase I had to stop at the 4GB of RAM I cannot believe any 2017 flagship phone would have such little memory.
The Pixel 2 looks like a good phone but it is overpiced and underspec’d and usually I say specs are not an issue but at that price point it certainly is and I’d say the iPhone-X is the better value. Think of it this way though you could almost buy 2 OnePlus 5’s with 8GB of RAM for the price of one Pixel 2.

My New Phone – OnePlus 5 8GB RAM/128GB Storage

Around the time I posted my thoughts on the iPhone-X I finally decided on a Chinese phone like the post hinted after a few hiccups with sellers in China. I’ve searched for several weeks and almost bought a Xiaomi (there are so many to choose from) but I felt the OnePlus 5 even though it has increased in cost was the best value. One big issue with a lot of other Chinese phones is if you look at the bands or frequency of LTE, they often only support only 1 or 2 common bands in North America. This is a big problem of course and phones like the OnePlus tend to support the same or more bands than phones from our local market. However Xiaomi is making phones like the M1 which are not as high spec’d but with most of the same bands so things are changing, but still many other Chinese phones are lagging in terms of LTE bands and this should be a big factor if you check the bands supported do not match with your local carrier.

Why did I choose the OnePlus 5?
The specs are high and so is the value with 8GB of RAM and 128GB of storage space even though some have complained that the value is not as great as previous models I still consider it a smart buy at $540 USD (I originally purchased it for $519.99 but it turned out to be a bait and switch scam-more on that later). The camera is also great on this phone and it is another alternative for capturing business and family moments on the go when I don’t have a dedicated camera with me.

In short it’s basically a quality, flagship, superphone at a reasonable price. There’s no need to pay more for less such as Google’s Pixel2 with only 4GB of RAM for $899 USD. Samsung S8 was on my list but not so much after a string of quality issues and my previous Note not working as well as I expected (I will say for its time the camera was fantastic though).

I think this is a fantastic business phone and nothing out there really beats it. I could spend more but why bother when the OnePlus offers top end specs and reliability?

What factors made me almost not-choose it?
Not having a SD card slot and removable battery are some things I really tend to stay away from. Either of those issues made it hard for me to Choose the OnePlus5 I do hope they will change this in future models.

Why haven’t I reviewed the phone more?
I’m still waiting for it, I wasted several days after buying it on sale at GeekBuying.com only to be told I had to pay $25 more (essentially they didn’t honor their own sale price) and it took time to get a refund from them. Apparently they do this a lot after searching about the same issue. I then purchased from another place called GearBest at a higher price $539.99.

The most difficult thing about this phone has been dealing with the companies in China. Some of the most recommended sellers based on internet forums/blogs which I suspect some of the praise is not authentic suggest “GeekBuying” and “GearBest”. Part of this motivation is of course because they have affiliate programs but there are slew of complaints similar or worse than mine. Customer service at these sorts of companies is usually not helpful when they’ve made a mistake or they’re asking you for more money.

I wanted to buy from OnePlus.net directly but they won’t allow Canadians to pay in USD (because this works out to be cheaper at the moment) and they didn’t seem to understand why someone would want to pay in a different currency. Their system forces you to pay by only the currency of the shipping destination.

Has anyone else bought a OnePlus or other Chinese phone and can you recommend more trustworthy, honest and reliable sellers in China? Please let me know in the comments section.

I’ll have the full review once I have the phone but shipping has been a bit slower than I expected from Singapore Post (normally it is much quicker).

Why Don’t I/We Use RHEL Red Hat Enterprise Linux Instead of Centos?

This a question one of our good client’s asked me one day and I have to admit I wasn’t prepared for this one, it’s something we’ve never put active thought in but was rather a matter of instinct. While we do use various OS’s for different platforms including our own in-house Linux, Cloud, Hosting Control Panel, applications and clients including BSD based OS’s such as FreeBSD, this is something we’ve never been asked.

RHEL (Red Hat Enterprise Linux) has been a clear leader since the early days of providing a standardized, mission critical platform for business applications in the Linux/Unix environment. It was actually my first Linux install back when I was in highschool and I’ve personally maintained Unix/Linux systems for over 16 years now. In that time I have found the strengths and weaknesses of RHEL in terms of our business and clients. However, the Centos project is a legal clone of RHEL with the only difference being artwork and the name Centos it functions identically as RHEL and is completely Open Source.

Since our team of experts does everything in-house we don’t really on Vendor support, it means when something is going on with a server we can solve the problem on our own very quickly with our own team. We don’t have the need to call a third party and ask how-to fix the problem and in fact it’s quicker for us to just do it ourselves whereas I’ve learned many organizations heavily rely on this type of third-party support. The goal with my ventures has always been that our teams should be self-sufficient for both security and efficiency.

Centos being Open Source is a huge advantage for us, we can customize and redistribute OS’s and deploy them on servers without having to touch a button or connect to monitor or KVM (yes I do realize RHEL can be installed headless/kickstart but not in the way we deploy our custom OS images-possibly for another blog). The only con with Centos is that there is a small delay in updates since it depends on the upstream source which is RHEL but this is a minor issue and all major updates are done to Centos almost instantly.

To conclude, my hats off to Linus Torvalds for inventing the Linux Kernel, the RHEL team and especially the CentOS team and I hope this explains why CentOS for my company’s is the best fit for our needs at the moment.