Talking Headways Podcast: Emotional Consumption in China

This week, we’re joined by Olivia Plotnick, founder of Wai Social in Shanghai. She spent the summer visiting more than 30 Chinese cities to experience different retail, the impacts of high speed rail, and the social e-commerce ecosystem. And she learned that competition has made Chinese retail sharper, the transportation space is becoming saturated with electric vehicle, and there is such a thing as “emotional consumption.”

To listen, click the player below. Or read the full transcript (with typos!) here. Below the player is a crucial excerpt.

Partially edited section:

Jeff Wood: When I took the train from Beijing to Taiyuan, I noticed that on the platforms, there were lots of people with shopping bags, like they’d gone to Beijing maybe for a day trip or something to go shopping.

So I’m wondering about that impact about the high-speed rail being able to take people from some smaller cities that are surrounding maybe a larger city and maybe taking them in for the day and then coming back out again. What does that do for the retail of the smaller-tier cities versus the larger cities?

Olivia Plotnick: It’s fascinating because for all the discussion around high-speed rail in China it’s actually not profitable. And so there’s a lot of discussion going on around should they have built this high speed rail as they did, and so much of it.

But as a consumer of it, it is an absolutely incredible to think about what it has done for the country and how good it works. I went to almost every single province in China — China is roughly the same size of the U.S — I took 25 trains to get to all of those cities. I only had to take six flights so I could get to the majority of places around the entire country by high-speed rail.

Trains were never late. There were never any issues with them. There was never any overbooking. They were all on time. That is just incredible to think about, right? That you are transporting millions and millions of people per day on a system that runs almost flawlessly. It has really transformed all of these cities.

But when I talk to people in third- and fourth-tier cities, they brought up, on their own unprompted, the impact of the high-speed rail. A lot of these places have only gotten the high-speed rail within the past five to 10 years, so it’s still relatively new. This has opened up, obviously, tourism, but a lot of economic opportunity. There’s a lot of people that will work in larger cities like Shenzhen and Guangzhou who live in cities that are maybe an hour away by high-speed rail in a completely different province. And they’ll every day take the high speed rail for an hour, which isn’t that big.

A lot of people sit in traffic for an hour or two hours in the United States. So getting on the high-speed rail for one hour and then you’re in the city has opened up a lot of economic opportunities, allowing people who can’t afford to live in Shenzhen, but still able to work there and get that salary, then bring it back.

Regarding shopping, I don’t know if that necessarily has a huge negative or positive impact because e-commerce is so advanced in China that you could get anything online delivered within one day or, in these smaller cities, maybe two or three days.

Just having the ability for jobs or to visit people, the high-speed rail has completely transformed the country and what people are able to do and the potential for people.