 This is Think Tech Hawaii. Community matters here. You guessed it, we're back. We're here on Think Tech Global, Think Tech Asia with Russell Yu. Russell, Russell, you came back from China. Did you have something to do with Donald Trump or what? Why are you back? Well, Donald Trump arrived. I just left the night before Donald Trump arrived, so I decided that I got to be back in Hawaii. I prefer back in Hawaii. He'll be here again soon. Anyway, yeah, so last time we had a really fabulous show with you. That was by Skype. You had this footage of life on the street in Beijing with a subway's transportation. It was great. It was a great show. It opened my mind to the fact that China is a real place. Real people happening, it's progressive, it's making traction in every way. You hear the diplomatic statements and insults and what have you, and it distracts us from the reality. The reality is China is really booming, and you're a great witness to that. So today I want to continue that discussion with you, Russell. I want to talk about Singles Day, which she told me about a little bit, and what it means. It's November 11th, which is coming up actually only in November. We just passed it. We just passed it. Okay. It was Saturday. And what in the world is 11-11? What is Singles Day, and what does it mean to China? Well, Jay, it's 11-11 is a special day in China because it's the anti-Valentine's Day. Anti-Valentines. Why? It's because back in the 90s, we're in these love anyway. Well, love yourself. That's what it's all about, 11-11. So it came up as an idea when there were university students in Nanjing, I believe is Nanjing, who were lonely, and they organized the event, 11-11 Singles Day. What that was is they were demoting that they didn't have any significant relationships, and they were lonely. So they said, well, we're going to do something special. That day is we go out and we go and spend money for ourselves. We buy something for ourselves to make us feel better. When the tough get going, something to go in goes shopping. Yes, and Jack Ma of Alibaba, when he founded the company, 1999, with 17 other individuals, they took up on that message, that theme, 11-11. And so now— This existed that long, didn't it? That long. And so 11-11 has been started off as only in China, but today it's not only in China. We're talking many countries in Southeast Asia are actually tied in, and you can buy things. 11-11. Is it a day for sales? Is that what it is? Are you going to get bargains? Well, it's reinventing the platform of how retail has been conducted using the Internet, e-commerce, and using the smartphone. All these things have made it accessible to millions of people in Asia, not only China but Asia. And it doesn't matter where you are, because as long as you have the platform, you get on to your smartphone, you get on the Internet, you can make yours. So you buy stuff. And you buy stuff. And it's a 24-hour pit. And the thing about Singles Day is that it has smashed all records. If you combine Black Friday and Cyber Monday in the U.S., you combine both of them. Singles Day smashes all records this year. Visions and billions of retail. This year, a 24-hour period, $25.4 billion. Oh, jeez. So it's phenomenal. It's changing not only consumer behavior, but it's changing merchant behavior. And it's big because it's not only in China now. And Alibaba has spread its wings outside of China, Russia, Southeast Asia. So people ordering it, it's incredible. Statistics are incredible. 15 million products are offered for sale. And there's about 140,000 brands on sale through that period. And it's more than just domestic because it's global because of the 140,000 brands, 60,000 are actually global brands like Nike and other brands from Germany, from England. It's a global thing now. So it's quite a feat. Well, so let's examine, you know, first the psychology of it. I mean, it's brilliant. Jack Ma's brilliant. Whatever he does is brilliant. Look what he's done. He's not only caught up to the U.S. and to Amazon, he's exceeded them. In daily, he's exceeding them more in terms of the products offered for sale, the way he sells them, where he sells them, his market is global now. I mean, he will exceed Amazon. And Amazon is doing well too. The whole world in the 21st century is about retail online, isn't it? So, you know, I guess what I come out with is what makes people do this? Why do you wake up on 11-11 one morning? On Saturday, for example, and say, oh, I think I'll buy something for myself. I mean, what is it? Jack Ma is telling the Chinese, or 1.4 billion of them, that they have a pass, that he's emancipating them on 11-11, go buy yourself, treat yourself nice, and they take that message. Isn't that the most interesting psychology? What's interesting because, you know, Jack Ma, his words, what is it about single estate that makes it successful? And he says, it's not about making money for him, Alibaba, it's about love and happiness. Love and happiness. And think about it. What's happening in China when it started in China? More mills that can't find relationships. And there are many females now who are very successful in their 30s can't find relationships. Is that because of cultural barrier or something? What is that? That's another whole new issue for us to discuss. How come they can't find a relationship? Well, because of the demographics now, because people are into the professions, their jobs, their work, their marriage, they're working hard. And there's a cultural pressure where they're expected to marry in their early 20s, have a child. The full circle, like the Ohana concept, well, Ohana really comes from the Asian concept and it comes from the Chinese concept of the circle. That's why the circle in the Chinese world, culture, it means full happiness, the full circle of life, you know, birth, grandparents, there's a harmony about the circle. The whole family stays together. So along this cycle, things are delayed. If you don't get married, no kids. And you get pressure from the parents and grandparents. So what do the kids do now? They have money, they're in the early 30s or late 20s. They go out and say, I'm going to buy something special for us. I'm going to buy something expensive for myself. And they wait for the singles day. And big discounts, big discounts, big discounts, big discounts. And you know, there's a cultural thing, the difference between Western culture and Asian culture and the Chinese especially, shopping to Westerners for many times, it's a chore. You go out to buy things, but for the Chinese, it's a sport. It's fun and entertainment. So that's why singles day, they kick it off with this gala celebration. They have LeBron James, I believe. You were there. I wish they had him. I wish they had him. You were there when you came back. Jack Ma, can you hear me? I want to get invited. I want to do a show for Think Tank. Jack Ma, I hope you'll listen to Russell, you. We'll do that next year. And it's fantastic. So I heard that this year, the kickoff celebration, the musicians, Pharrell Williams, they had a basketball star, LeBron James, they had Maria Shapirova. They also, Jack Ma, he is a Kung Fu martial arts aficionado. So he had unveiled a short film starring himself, along with Donnie Yen. Donnie Yen was a Kung Fu master who's breaking the Hollywood now. Did they pay for this movie? They paid for it. And Thailand, I've seen Tony Ja, the martial artist. So he was in the short film. But it's fantastic. It's entertainment. It's sport. So it's a different culture. But again, it's made retailing exciting. It's a festive thing. It sounds very festive. Very festive. And also, China doesn't have Christmas like we do here. So this is a Chinese kind of Christmas. Yes. And I'm going to talk a little bit about how Hawaii we should capitalize on Singles Day. Oh yeah. But first, let's talk about how you spend your Singles Day. Now, the Jack Ma world is really online. It's not brick and mortar. But other companies would probably want to get on his coattails and offer you discounts in brick and mortar stores, of which there are plenty in China. So how do you spend your day if you want to celebrate and love yourself and go buy something expensive? And incidentally, how expensive is expensive? Well, you get up at 11 o'clock in the night, the night before 11, 10, and you wait till 12 o' one at 11, 11, and you read the first call, the first on the internet. And I think in the first hour, they already do $1 billion or in the first few minutes if I'm not mistaken. And just think about this. This is the new China for sure. Well, the new China is setting new business platforms. And what I'm more concerned about is that because it's a different curve, it's a different model that we have here in the U.S., these are cell phone accessibility. That means people from all levels of society will be able to participate. You don't have to spend money to buy a computer and sit at a desktop. You can be in the office, you can be out somewhere, just get in a phone anywhere and do your online order. No, you're not doing it for yourself only and for love, let me say. You're doing it for China. You're involved in this mass festival, this all around China festival. And there's a gratification in that that you're doing it for the community. Well, you know, interestingly you say that, that's maybe a Western thought because I don't sense it that way. I think that if I were to talk to a Western living in China full time for 15 years, there's not really this nationalistic thing, I'm doing it for China. It really is not like that. It's like I want to be cool. I want to be hip. I want to be myself. I want to be individual. I'm going to buy myself something cool. I want to be liberated so I can go out there and spend money. Remember the society where it's turning so quickly, so fast that sometimes you don't take time for yourself. This is where they take time for themselves. I want to buy something special myself. Okay, so you wait until midnight and then you look at the web and you see all these discounts and bargains and whatever, trying to sell you stuff, and you buy. And you buy a lot right there at midnight. And you buy midnight. What happens after that? Well, you know, it's very interesting when the orders are processed are very quick and what Jack Ma has a brilliant strategy. He doesn't tie the money up in expensive distributors, middlemen. He goes out months before and it works as small retail stores or small mom pubs where they will house the inventory and they will get it out locally in the community a lot faster. So it's ready to go. It's ready to go. It's ready to go. And the cost is almost nothing. It's very low. So in other words, the brand can offer greater discounts and we'll get greater margins back. But it's a new concept. So let's think about this way. It's as though that we have a Costco that buys everything cheap, good price. They sell it out to retail. So Alibaba is actually the store. And it margins. It doesn't need a fix. It doesn't need brick and motors. It doesn't need a huge warehouse. It's a different concept. So what's quick? I mean, if I order it at midnight, when am I going to get it? Well, I think I've heard that the first package came out a few hours later. Really? Yes. It was out. Hand delivery. Yes. Well, it's amazing because in China, they do things a little differently. For example, where I live, all I have to do is say, send it to this university from the university. And so in the university, every day, there's about 15 to 20 different great companies. And they come in with small bikes all continuing to the day. They break out from small warehouses and they pop it there. Some guy sits on a sidewalk. And all you do is you get your cell phone, show them the number, track them and boom, scan it and out. There you go. You've got it. So it comes very quickly. I mean, the logistics system has been designing China very quick. For example, if I wanted to eat seafood, the closest port is Tianjin. I can order it today for tomorrow delivery. And they'll deliver that to my doorsteps. And if I want to order, I've got a dinner tonight and I've got to get that German chocolate, well, a forest cake, you know? I can order it. It can be done in two hours. And they'll deliver to me in three hours in Beijing. So the logistics, they've got it down there. This is new, isn't it? This wasn't the case five or ten years ago. It wasn't the case, well, not five, ten years. China has done a lot along to building up the roads, the capability to do things. And again, that's important. Building capacity, building capability. So if you talk about comparing to our model, I think we've fallen behind here in the West in many ways. Our thinking is a little different. It's structured. It has to be like this. And I think the problem is that, I don't know if it's a problem. I don't know it quite well, but the phone comes. We're locked in. You buy a phone. You've got to have service with it. You've got to buy a plan. And so it doesn't allow a lot of freedom and innovation using the phone to make it innovation. There's a driver. There's going to be Apple, maybe, with the apps that it provides, but there's no way chat out there. There's no super app that's going to do a lot of things like this. Let's take a minute just so I can integrate all that you've said, let it seep into my brain, and then when we come back, we'll talk some more about what kinds of things are popular on Singles Day, 1111, same day as Veterans Day in this country. We'll be right back. You'll see. This is Russell Liu. He's fresh from China. This is Think Tech Hawaii, Raising Public Awareness. Aloha, I'm Kaui Lucas, host of Hawaii is My Mainland. Think Tech is important to our community because instead of the usual 30 second soundbite, we have enough time to have the discussions to come up with real solutions. And for the first time, Think Tech Hawaii is participating in an online web-based fundraising campaign to raise $40,000. Give thanks to Think Tech will run only during the month of November and you can help. Please donate what you can so that Think Tech Hawaii can continue to raise public awareness and promote civic engagement through free programming like mine. I've already made my donation and look forward to yours. Please send in your tax-deductible contribution by going to this website. It's for thinktech.causvox.com. On behalf of the community enriched by Think Tech Hawaii's 30 plus weekly shows, mahalo. Okay, we're back. We're live with Russell Liu. He's fresh back from China and he's here so excited as he always is this time about retail on 1111, which is our Veterans Day and it's their what, singles day where Jack Ma almost 20 years ago sort of jinned up this whole idea of give yourself a treat on 1111 and it's kind of a Chinese Christmas. So I guess the question is, what kinds of things do people buy? Is it everything? Is it little and big? Is it, you know, somewhat expensive, more expensive? Is it food? Do I go out to a restaurant? Do I treat myself at a spa or a hotel? What do I do? You know, the products that they're offered, there's over 140,000 brands. They can be anything from Nike shoes, they can be athletic equipment, they could be a vacuum cleaner, it could be anything what you can imagine, everything's there. I haven't looked through the catalog, I think I'll be spending days and days, maybe next year we'll do that, we'll order something online to show it coming in. See if they can get it to us before the end of the show. He has an existing Taobao team all and these have already been set up already and people can order, for example, I believe now you can order something, I saw a video where somebody from California ordered something, came directly from China out of their site. People can now import things in. Likewise, people buy daily necessities, they buy food, they buy seafood, they buy all kinds of things that you can imagine. So everything that you can think it's a delight, shoppers' world. It sounds like different strokes of different folks. That's right. It's not like you always go buy flowers or something, or you always go buy a wristwatch or an Apple phone or something, it's all over the lot. It's all over the lot, with 140,000 brands, you can imagine how many things. But I buy more than one thing though, that's what it sounds like if you run billions in an hour. I'm probably buying up a storm, I'm not limiting myself to one object, I just keep on buying all day long, right? You can buy all day long and you can sit there doing the 24 hour period and you could just be ordering everything that you need and it helps for a year. It's just big people are doing that, they're buying things, products that they can use for a year and they're just stockpiling it because why, it's a fun time, it's a big retail. Everybody's doing it. And also, there's luxury goods that you buy. Do people buy more than they afford to buy? Well, it's an interesting question because in China, when payment is made, it's not like we have a charge card, it comes out of your debit card kind of system. You have to have the money. You have to have the money. It comes automatically right out there, right off the top from your bank. Talking about what you can buy, they offer even luxury goods, I understand that there's some British retailers in there that have used that to actually sell their luxury goods. So it is consumer goods, luxury goods. And in fact, the latest strategy now that Audit Bob will talk about is a lot of these luxury good retailers are trying to get into not only Cinco's day but the whole network of how things are done through the e-commerce. If I was a retailer, I'd want to capitalize on that too. But I mean, what's interesting is the cultural expansion of these two borders outside of China's borders. I mean, how do you do that if you're Xi Jinping or Jack Ma? How do you expand this whole notion to dozens of countries around it and well over a hundred countries outside of China? How do you do that? That's not easy. Well, that's not easy because they do actually have partnerships, I believe in Southeast Asia, a group called Lazada, where they will help the distribution of things. So they're actually selling Chinese goods. So it could be Chinese or it could be international brands directly that are coming from other countries that are participating in it and will be sent directly. Remember, it's all through the flick of the computer, boom, boom, boom. Where's this going? Well, we're the manufacturer, we're in the U.S. It's going to go here, it's going to go to Indonesia, somebody ordered through this. So I could just go on Jack Ma's, what is it again? His company. It's called Alibaba. Alibaba. Yes. And I can buy anything that I want in any of those countries, outside of China. Outside of China. And I'll have fulfillment in a day or so. It's 210 countries that are participating. Incredible. And it's incredible because remember this, it's 256,000 transactions per second. That's a number, okay? They're buying everything. Okay. Everything they need. Did they go to brick and mortar anymore? Well, that's why you don't need brick and mortar. And in fact, in last year, 2016, 467 million packages were generated within 15 hours. 467 million packages are generated in 15 hours. Let me see if I got that right. 30 million an hour. Can you count that out? 30 million an hour. In fact, that one day, that 24-hour period last year, was equivalent to Spain's e-commerce sales for 2016, just that 24-hour period. So we're talking... So what can we learn from this, Russell? I mean, this is a remarkable phenomenon that you identified. I'm so glad you're there and you can tell us about it because we didn't know about it. I didn't know about this. I guess you had to be there. Be there. Be there. And next year, I will get an invitation from Jack Mon. I'll tell him what we want to film this out. We want to be at the show. This year, LeBron James. I will hold the seat for him here. That's right. But what can we learn from this for Hawaii? Because it sounds like it's so happening and it's all action. It's all energy. It's all vitality, what you're talking about. Here's the thing to it that I think that maybe we need to learn. We need to capitalize on some of the things, for example, how to get tourists out here. Tourists. But why can't we work in Jack Ma to make it as a fun spend, a singles week extension outside of it for Jack Ma. And we create at the Hawaii Convention Center a 24-hour period or a couple of days. And we bring in luxury brands, remember they save 50% because of tax in China for the luxury goods and have them online for a week here and bring in tourist packages. Again, that's a big promotion just to get travelers to come and see this place. Let's work with the Hawaiian Airlines, Air China. We have the transportation. Look at that transition. And remember, November is a slow period for this month, I believe. So it'd be a great time to fill up the rooms. And it'd be a great way to put Hawaii in the map. And you know, we have a Honolulu Festival here. That's a primary Japanese culture. Why can't we do a singles week and bring in the Chinese world? Retail, spend. So take a big space and have them bring their goods in and expose them. And bring all the American retailers, all the high end. We have them here. Work the Retail Merch Association. How do we create a new platform? I can see a resistance on that. If I have to pay rent for brick and mortar apparition and staff and all that stuff and I'm not really dedicated to online, I would resist that, wouldn't I? Well that would be actually a day really where you don't, there's no brick and mortar at the Hawaii Convention Center with a gala show. We're being named stars. Everything's done online on computers. Get the university involved, Hawaii involved, they're high tech. We start getting high tech business, start working in the industry. And it goes both to this chain. You ask me what we need to do. I think we need to think about this. Jack Maus says correctly, we don't fear artificial intelligence, first of all. Second of all, the world has changed. It is not heavy manufacturing. We need to educate the next generation of the different world. It's a service industry, high technology. And if we're in the state of Hawaii, in the city, what we need to do is we need to think about how we can do that. We don't need to be in Ohio. We don't need to be young somehow. What does Amazon say? I mean Amazon, formidable, foamy-dab all over this country and probably over Europe too and maybe to some extent elsewhere. They also sell a lot of stuff online. What are they going to say? This is direct competition, isn't it? Well maybe we can make peace and bring both of them here. Maybe they should be working together. And the biggest global thing. And I can't see why not. Think like a business, why not? But how does the American Christmas integrate with this 11-11? I mean, if this is the Chinese 11-11, do we celebrate the shopping spree twice? Well we have 11-11 and they don't really celebrate Christmas. But they have a break and then they go back to the Spring Festival in the years. And that's another big retail holiday that we can create here. Again, to bring people in, to market, a lot of travelers to build capacity. We've got time to work with the Hawaiian Airlines, to work with the infrastructure here and to bring in the tourists but to bring in the shoppers and all the online sales where they don't have to fly in but they can see that we have this whole production here. Now would you do that, I mean, in this model that we're building here, say at the Convention Center, the Exposition Hall, whatever it is, large amount of space. A lot of people exhibiting stuff. Would you have them bring their goods, all those goods here? Not necessarily. Maybe a little monitor here, a little monitor there and explain it to them. Problem is with Amazon, for example, you can't ask any questions. You're stuck. What about Alibaba, can you ask questions? Well, again, think about this, in 2016, I don't know if they had it this year but you could actually visit Macy's in New York, in China, online, through virtual reality. So what I'm saying is why can't we create a festival that's retelling a virtual reality, bringing people, tying people and again, that's a different way of retelling again. You've got to start thinking out of the box because, again, this is a different age, technology is there, we need to apply it. But we need to be ahead of other states, we have to be ahead of Las Vegas and all the other places. Again, and that goes to maybe a different show, Jay, talking about what are the steps we need to take. You're going to ask me that question and the steps are very simple. We need to have relationships with the Chinese world of Jack Ma. He's been here two or three times, loves the place, I don't understand. We need to also build capability capacity. We need to have University of Hawaii to bring in a lot of these Chinese tech students that would not go to MIT, but they're smart enough, bring them here, create a mass nucleus where our local kids can work together with them and learn how they do things in Asia and China. It's a big driver, you have to do it. It's like when Japan was big, now it's China. And the difference is that the Chinese students in the university all speak English. So bring them here, and then all of a sudden we start to build capacity, bringing language. We need language. We need capability capacity. And then create logistic centers and create R&D centers. The first step for this is to bring in Intel, to partner up with the Chinese company because we have all these high tech people here from China and the U.S. Okay, but what I hear you saying, it's not so much the retailer of the 1111 or the single stay, it's less just engage with the Chinese. I think we have to. Where are their culture and their activity, their energy, if you will, and let them appreciate more what we do and spend some time together, which is not exactly the same thing as what our government or the federal government is doing right now in terms of negotiating with China and finding pathways to alliances and partnerships and the like. I think the reality is there, Jay. Just looking at the numbers of single stay. Look at the technology that's employed. Look at all of this. It's a new platform and it's going global. And again, we have to look and revaluate where can we add value to this chain because for many years everybody's in follow America. But now, being in China, I see everybody around the world following China in many ways. And we have to integrate more. And it's probably global. I mean, if you don't do it, you're sunk. This is a culmination of things. It's good for him, good for Alibaba, good for China for thinking of it. I mean, so you have brick and mortar. You have online. You have social media driving online and brick and mortar for that matter. And now you have this kind of celebration of retail with the emancipation of the individual consumer telling him, giving him a pass. Yes, go buy stuff today. This is a good day. This is a buying holiday. And that goes beyond either brick and mortar really or online because everybody gets involved on every level. So yeah, we can learn some stuff from them. And I'd like to go back to China with you sometime and experience it myself. I'll even buy you something small. Thanks, we'll go online and we'll order something. Yeah, just to celebrate. Thank you, Russell. Thank you, Jake. Think Tech Global right here in Honolulu, Aloha. Aloha.