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Prof. Xie Xuanli: Venture into the Unknown for Value Creation

Apr 14-2023   



On March 25, the MBA Center of the NSD and HICOOL Business College held an event centered on business startups. Prof. Xie Xuanli delivered a keynote speech packed with insights for evaluating and selecting business directions amid uncertainties. She is PKU Bo Ya Young Scholar, Associate Research Fellow with the NSD, and Senior Research Fellow with the Institute of Digital Finance at PKU.

 

Prof. Xie advised identifying business opportunities by evaluating the changes in the core elements of major trends: politics, economy, society, and technology. The recently promulgated blueprint for digital China, for example, provides a monumental orientation for launching new businesses. In addition, from economic and social perspectives, the emergence of the Z-generation as a dominant consumer group creates a wide range of new demands; the booming pet industry is a case in point. Technically, ChatGPT is on way to revolutionize many enterprises.

 

Uncertainties abound, but they are embraced by entrepreneurs for value creation. Prof. Xie pointed out that many industries in China have been undergoing structural change: they used to be dominated by foreign companies, but domestic firms have traversed the journey from mimicking competitors to catching up and even taking the lead. In 2000, China’s diaper penetration rate was merely 2% and the market was largely occupied by foreign brands; by 2021, it had shot up to 82%, and 65% of the market share went to Chinese firms. Prof. Xie believed that an innovative material has underpinned the surge of Chinese diaper products amid consumption upgrade.

 

On a micro-level, Prof. Xie advised examining the basic needs of the consumers to unlock business opportunities: clothing, food, accommodation, transport, entertainment, and socializing. Delivering takeaway food to consumers is profitably feasible partly because of the demand of smaller-sized families who prefer to do away with the hassles of cooking, and partly because of China’s high population density, high smartphone penetration rate, and low electric bike costs.

 

Prof. said that three directions can be considered for launching ventures: applying digital technology (particularly AI) to empower industries, riding on opportunities provided by large platforms (like Amazon some years ago and Tik Tok now), and breaking down industries boundaries to integrate resources (e.g., SHEIN’s spectacular success combining e-commerce expertise, China’s industrial value chains, and data analytics).

 

After business directions are identified, appropriate methods should be applied in order to craft suitable solutions for the consumers, said Prof. Xie. That requires grasping human nature, leveraging experience, and conducting trials and adjustments. In particular, it is important to choose a suitable opportunity. Prof. Xie gave the example of ANKER, a PKU alumnus-founded manufacturer of chargers for digital devices, which toyed with the production of automatic lawnmowers, electric bikes, and swimming pool cleaning robots but dropped the ideas due to the fact that they were too far off from the company’s core competence.

 

Prof. Xie Xuanli: Venture into the Unknown for Value Creation

Apr 14-2023   



On March 25, the MBA Center of the NSD and HICOOL Business College held an event centered on business startups. Prof. Xie Xuanli delivered a keynote speech packed with insights for evaluating and selecting business directions amid uncertainties. She is PKU Bo Ya Young Scholar, Associate Research Fellow with the NSD, and Senior Research Fellow with the Institute of Digital Finance at PKU.

 

Prof. Xie advised identifying business opportunities by evaluating the changes in the core elements of major trends: politics, economy, society, and technology. The recently promulgated blueprint for digital China, for example, provides a monumental orientation for launching new businesses. In addition, from economic and social perspectives, the emergence of the Z-generation as a dominant consumer group creates a wide range of new demands; the booming pet industry is a case in point. Technically, ChatGPT is on way to revolutionize many enterprises.

 

Uncertainties abound, but they are embraced by entrepreneurs for value creation. Prof. Xie pointed out that many industries in China have been undergoing structural change: they used to be dominated by foreign companies, but domestic firms have traversed the journey from mimicking competitors to catching up and even taking the lead. In 2000, China’s diaper penetration rate was merely 2% and the market was largely occupied by foreign brands; by 2021, it had shot up to 82%, and 65% of the market share went to Chinese firms. Prof. Xie believed that an innovative material has underpinned the surge of Chinese diaper products amid consumption upgrade.

 

On a micro-level, Prof. Xie advised examining the basic needs of the consumers to unlock business opportunities: clothing, food, accommodation, transport, entertainment, and socializing. Delivering takeaway food to consumers is profitably feasible partly because of the demand of smaller-sized families who prefer to do away with the hassles of cooking, and partly because of China’s high population density, high smartphone penetration rate, and low electric bike costs.

 

Prof. said that three directions can be considered for launching ventures: applying digital technology (particularly AI) to empower industries, riding on opportunities provided by large platforms (like Amazon some years ago and Tik Tok now), and breaking down industries boundaries to integrate resources (e.g., SHEIN’s spectacular success combining e-commerce expertise, China’s industrial value chains, and data analytics).

 

After business directions are identified, appropriate methods should be applied in order to craft suitable solutions for the consumers, said Prof. Xie. That requires grasping human nature, leveraging experience, and conducting trials and adjustments. In particular, it is important to choose a suitable opportunity. Prof. Xie gave the example of ANKER, a PKU alumnus-founded manufacturer of chargers for digital devices, which toyed with the production of automatic lawnmowers, electric bikes, and swimming pool cleaning robots but dropped the ideas due to the fact that they were too far off from the company’s core competence.