Monthly Archives: November 2013

Although the prices of Gold had bottomed out at a very low price at the very beginning of this year, the ethusiastic of buying gold,the most precious metal, hasn’t abated among Chinese consumers. Conversely, approximately 798 tonnes of precious metal has been purchased by Chinese consumers compared to the second largest market India (715 tonnes). There are two reasons: traditional spending habits and an increasing family income.

Rising disposable income, which had caused a growth in the amount of middle class family, has already induced an increasing demand of precious metals. In the other words, people would like to invest more money on purchasing the precious metal with their increasing income at that time. Therefore, China is recently become the top gold buyer in the world.

However, what is more important is that Chinese people always make a purchase based on their traditional spending habits. To be more specific,as golds is often seen by people as a safe haven, the decreasing of trading volume in international market didn’t really affect their inherent ideas. Thus, China’s consumption of gold was more than the second large market India.

Everything has two sides, as we can see, purchasing a great volume of gold could easily represent an increasing purchasing power ; however, it can also indicate that customers are unawareness of market change.

URL:   http://money.cnn.com/2013/11/15/news/economy/china-gold/index.html?iid=SF_BN_River

 XiaoMi, a brand new smartphone with a new nickname “China Apple”, has achieve a great sucess in China’s smartphones market. Based on the advertisement which says “1.5 times as functional as iPhone and one fifth of iPhone’s price”, an increasing number of customers show their increasing interests in such a new product. In my opinion, there are two main reason that induced the sucess of XiaoMi: good implement of a new technology platform and an constantly technology inputs for all of their generations.

Unlike Apple, XiaoMi does not have its own store, which will directly decrese their fixed cost during the production process. Therefore, they decieded to sell their products online based on their new platform named Sina Weibo, and then switching their expenses to the promotional activities, i.e. powerful advertisement.Thereafter, with help of the new platform, XiaoMi hit the highest selling record of smartphones in first 24 hours. 

Rather than the great application of new technology platform, an increasing number of technology inputs is another important reason. To be more specific, other than inventing advanced smartphones, they are continuing providing and improving the free Apps for all of their smartphones. Compared to iPhone, which customers would have to spend a lot of money on obtaining Apps from Apple store, people only need to buy a cheaper XiaoMi without any additional payments.  Therefore,Xiaomi is so popular in China with such competitive advantages. 

As XiaoMi has already taken a large market share in China,the leaders of Xiaomi start to expand their business in international market recently.

Previous blog:  https://blogs.ubc.ca/ DIMU/

 Foxconn, the world’s biggest contract electronics maker, has experience a 1.5% increase of profits compared to the very beginning of this fiscal year. Based on the central company in Taipei, Foxconn has already set up lots of factories in China, where could reduce their fixed cost by offering cheap source of plant and labor. They are basically offer the assembling business for the their partner companies I.e. Apple. In the other word, the majority of their revenue is coming from their partners who are also their core consumers.

However, Hon Hai, who is the leader of Foxconn recently, decided to shift their original business model. To be more specific, rather than being used by most of the big technology giants around the world, Foxcoon start to be more consumers driven and establish their own brand of accessories.

In terms of customer driven, Foxconn plan to invent a typical “Foxconn” products in order to meet the special demand of diversity of customers. Therefore, they are recently bought fourth-generation mobile licenses, which are regarded as a sunrise industry in recent year. As we all know, a company could not survive without their own value proposition in such a competitive market. Thus, the shifting from assembling other brand products to inventing identical products could provide Foxconn with a better opportunity to success, more importantly, reaching out a great number of customers and maximizing their profits constantly.

What is more important is that they could establish their own brand of accessories. In other words, they are no longer connecting their revenue with the partner companies, which is quite risky for the further extension of a company.

 With more identical products and stronger customer base, Foxconn will be on the right track of achieving their goals of shifting their business model.  

URL:  http://www.bbc.co.uk/news/business-24936278

         As the third-largest economy in the world, Japan’s economy has experienced a slightly decrease over the short period from July to September this year. In spite of the decline of economy, councilor of the cabinet secretariat still insists that Japan’s economy is on the right track of growth rather than the negative growth in last year.

         As we all know, Japan was used to be the strongest economic entity in Asian countries; however, Japanese economy tends to be less prosperous in recent years. The typical economic policy, which is known as three arrows—Abenomics, is being processed by Japan’s government lead by Prime Minister shinzo Abe. However, in my opinion, there are still several problems about so call economic policies.

The first arrow, monetary policy, is aimed at ending Japan’s almost two decades of falling prices, or deflation. The truth is that if the measures work and prices start to rise, then interest rates will increase at the same time. This would substantially increase government’s interest, which will aggregate the depression in Japan.

Moreover, the second arrow was assigned to increase the government purchase by spending more money on buying infrastructure. However, the biggest fear is that if the increased spending fails to trigger economic growth, Japan may find it even tougher to rein in its debt levels. Therefore, it is a little bit risky for Japanese people to take these measurements.

Lastly, the third arrow, which named key sector reform, is aimed at encouraging private investment in the country. Indeed, an increasing number of investment will directly lead an increase in economic; nevertheless, more and more legally investment will also enlarge the gap between the rich and the poor. Thereafter, the implement of social fairness cannot be successfully achieved.

In conclusion, although it is risky to take such three arrows, those three arrows did have achieved some goals for Japanese government. Thus, the related department should continue following the instruction of central government, and make some changes to ensure a better implement of those policies for further developments.

URL:   http://www.cbc.ca/news/business/japanese-economy-falters-in-second-quarter-1.870733

           In Canada, wealthiest 1% earns 10 times more than the social average earnings. One of the most interesting thing is that they are mostly married white male.  However, the componets of wealth people begins to change with the increasing number of immigrants.

As a historical leftover problem, the gap between the poor and the wealth has undergone a even badly expansion in both developed countries and developing countries recent years. In my opinion, there are two main reason: the educational degree and the ethusiasm in pursuing success.

According to the research, immigrants who graduate with higher educational degree are far more probably to earn the majority of social wealth.  Indeed, higher education background can provide them with comprehensive knowledge and practical experience in the area that they are working in. However, Other than the knowledge, high moral standard that is normally come with their degree can help them get in a stable common-law relationships, which is an basic requirement of achieving success.

More importantly, the ethusiam in working place is the other reason. Compared to the local citizens, the new type of citizens—immigrant, tend to be more active in getting in the wealthiest population, which has already directly increase the diversity of wealthiest population. The truth that the desire of getting higher social standard are far more pressing in immigrants. Thereafter, With a higher education degree and much more enthusiastic in workplace, they could easily earn more money than median population.

In conclusion, in order to eliminate the gap between the poor and the wealthiest, government should put more effort in improving the educational level as well as sitmulating the ethusiastic for citizens. More importantly, they should also take more advantages of immigrant to reach a even better degree in economy.

URL:  http://www.cbc.ca/news/business/wealthiest-1-earn-10-times-more-than-average-canadian-1.1703017

           CBC news indicates that the percentage of visitors to Canada has undergone a 20% decrease since 2000. Compared to its competitors such as china, American, and Korean, depreciation in Canadian tourism has already caused the international trading barriers, which directly affect the Canadian economy these years.

From the standpoint of profitably, local firms should provide their customers with typical value proposition. To be more specific, other than maintaining the high-quality and high costs tour, they should focus more on specializing the tour route and declining the tour expenses in order to reaching out for the potential middle-class consumers. For example, they can put more effort on decreasing the price of air ticket, which could be easily implemented in the competitive market of Airline Company. Thereafter, with the increasing number of tourists, the great profits would be easily achieved even with lower revenue per unit.

Moreover, the speed of processing passport is the other reason that causes the decreasing number of tourists. From the standpoint of authority, it would take couple of months to issuing passports based on the strict entering policy. Therefore, it is rational that customers would switch their tastes to those countries, which are easily to get in. Thus, the related function department should contribute more in establishing and implementing an appropriate system with an increasing speed at this time.

In conclusion, Canada should concern more about whether the value provided for their customers are directly benefit their customers or not. More importantly, authority should also facilitate the processing of passport with higher speed in an appropriate system.

URL:  http://www.cbc.ca/news/business/canadian-tourism-declines-despite-world-travel-boom-1.2426675