Welcome To The Next Chinese Century
I’ve been talking about Alibaba and its potential impact in the US for some time now. I compared Prime Day with Singles Day and found Prime Day fell short. I predicted that this year, Alibaba is going to start to make some real waves in the US.
If Miami is any measure, this is already happening, in ways I hadn’t predicted. And it’s not stopping any time soon. AliPay and WeChat have come to Miami.
Miami and all of Florida is an interesting barometer for the state of wealth and currency valuations in the world. The climate is lovely this time of year, we have a ridiculous number of condominiums, and perhaps more importantly, this lovely climate comes without any SALT (state or local taxes). Hence we find ourselves as a really interesting melting pot.
- When the dollar was weak against the Euro, the influx of European visitors was stunning. And they bought lots of those condos
- When the Canadian dollar was strong against the US dollar, Hollywood, Florida went from a mellow, sweet hamlet to a burgeoning, somewhat overpriced market. It’s not South Beach, but it’s not the kind of laid back, easy place I used to dream of buying a bed and breakfast in
- Inflation in South America has brought us boatloads of Venezuelan, Argentinian, Brazilian and other condo buyers. Venezuelans in particular bought up a bunch before inflation went completely insane
- When you’re standing in a gas station and someone with a heavy Russian accent demands the cashier give him change for a hundred (which the cashier could not accommodate), you know there’s lots of Russian money around. And I remain fascinated by the Russian Indian restaurant that used to be my favorite.
Let’s take one beachside high rise town, Sunny Isles. Here’s what Wikipedia has to say:
“… As of 2010, the six main ancestries of the population (excluding Hispanic ancestry) were 9.4% Russian, 5.8% Italian, 5.0% Polish, 4.9% American, 2.9% Irish, and 2.7% German
…As of 2000, Spanish was the mother tongue for 40.08%, while English was spoken by 36.86% of all residents. Living up to its nickname of "Little Moscow," 7.37% of the population had Russian as their first language...”
This is all background (and the data is getting old), to help the reader see why average people generally tend to ignore the fact that with Climate Change, Miami is ground zero for potential disaster.
So let’s fast forward to today. Who is coming to Miami on vacation, who is buying and what’s happening? Well, last week I had to take a brief trip up to New York City. The first thing I noticed near my outbound gate from Miami airport was a big sign outside the Duty Free shop. “We take AliPay and WeChat.” Whoa! No mention of Apple or Samsung Pay (I have no idea if they take them or not), but explicitly inviting Chinese visitors to come on in and pay the way they’d like to pay. By the way, I did not see these same signs at JFK airport in NY. That’s interesting, right there.
Chinese cities may not be buying up our condos yet (the highest percentage of foreign purchases remains Argentina (15%) and Venezuela (11%) as of 2017), but they are clearly visiting. I would have expected to see the Alipay signs in Orlando before I saw them here, but here they were - in VERY large print.
We, in US retail helped build a middle class in China, since we make so much of our “stuff” there. That middle class is apparently coming to the US and spending their new-found money. Ever accommodating, retailers are making it easier for them to do that.
I know I’ve said this before, but it’s really imperative that we move past our US-centric view of the world. China has been around for thousands of years. We, in the US, are relative babes in the woods. We seem to be contracting into ourselves…they seem to be expanding. Cities bend over backwards to attract Amazon HQ2 (that’s a story for another day), but don’t seem to notice who is buying up their property. Alibaba (as just one example), has boatloads of upside, and retailers will add Alipay into their mix of acceptable tenders long before they’ll allow Amazon Pay. The connection has not been made yet.
I think the time has come for the US to do some serious soul-searching. What about us is unassailable? What about us is in decline? How do we create a sustainable, healthy economy? These are real questions that need to be answered in thoughtful ways. For the past few years, our industry has been kind of ostrich-like. It’s time to get our heads out of the sand, stop debating what’s real and fake news, and build something that will last. We really aren’t there yet.
Maybe Miami is a metaphor for the whole way we do things. Completely at risk to sink into the sea, yet living like there’s no piper to ever be paid. I call on our retail trade associations to provide guidance into creating a sustainable retail economy that allows for more than a few mega-retailers who source all their products from foreign lands, and keep tax breaks for stock buy-backs.
It’s time to get serious, because we have really entered the Chinese century. And what’s sad is that most of us don’t even see it.