As some of you might already know, along with a few colleagues at Momentum Works, I have been in China for the past few weeks, visiting partners, investors and founders.


Over three weeks, we have covered 9 cities and had more than 30 meetings/visits, in sectors of investment, logistics, (cross border) ecommerce, advanced manufacturing, robotics, AI and consumer internet.


I will share more observations later, but one observation I feel very strong about is: revenge business travel.


Yes, all the airports, express railway stations and hotels we’ve been to in the last few weeks have been packed. The following picture was taken at Guangzhou airport at 5:30am this Thursday (20 April) – many who did not express hour long queues would probably miss their flights: 

The billboard ads at airports and railway stations tell you that at least a significant portion, if not most, of the travellers are for business: 

There has been a lot of talk about ‘revenge spending’ or ‘revenge travel’ after the covid restrictions in China were abruptly lifted at the end of last year. The economic indicators released by the state and the proxies by third parties are receiving mixed interpretations about the economic recovery – what is the real picture? 

Quite often, the interpretation is a mere expression of confidence by the person making that interpretation. The government has been making efforts to boost that confidence – which was severely impacted by the covid restrictions especially in 2022.


While for millions of real businesses, big or small, they have to fight for winning/retaining customers, for contracts and deals, and for survival of the businesses as well as payroll for its employees.


With excessive manufacturing and service capacity in almost every sector – people will make a lot more extra effort for reducing margin returns. Many business owners we have spoken to in the past two weeks have told us that gross margin in their sector, seen as innovative barely a couple of years ago, has plunged from 15-20% to 1-2% – razor thin.


Classic examples of 内卷 (“involution”).


Everyone is talking about global markets: Southeast Asia, Middle East, Europe, North America, Latin America. A veteran investor told us that one event on cross border ecommerce he was speaking at initially planned for 10,000 people to show up (50% of the 20,000 who registered), but saw 40,000 anxious business owners and managers packing the venue. Police had to be called in to maintain order.


Another indicator is the amount of Chinese cosmetic and skincare sellers who have rushed into selling on TikTok Shop in Indonesia – some paid lawyers hundreds of thousands of dollars to jump the queue to get various licences approved for selling.


We are also seeing not only commodity manufacturers and internet entrepreneurs, but serious deep tech teams doing autonomous driving and advanced manufacturing actively expanding teams and signing customers outside China – margins are always healthier compared to domestic markets.


It is natural that many players will look at international markets as a way to escape from the fierce domestic competition. Several challenges await businesses when venturing into new markets. Leadership faces the significant task of balancing the mental demands associated with managing existing markets while tackling the complexities of new ones. Companies must also determine the appropriate allocation of resources between exploring new markets and fostering growth in their core business at home. Moreover, comprehending and adapting to the cultural nuances of target markets is essential (but very challenging) for the successful integration and acceptance by local staff and consumers.


In my book, “Seeing the Unseen: Behind Chinese Tech Giants’ Global Venturing“, I argue that a company’s success in international markets primary relies on its leadership, people, organisation, and lastly, its product.


Although many companies may not succeed in their global ventures, the few that do will dramatically transform the competitive dynamics in the markets they enter, making it an intriguing subject for the startups in the region to learn from and compete with.


Happy to discuss about this further – just drop me a note [email protected]

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].


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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.