TED Talks Daily - The rise of China's homegrown brands — and why they matter | Roger Hu

Episode Date: April 3, 2025

A generational shift is transforming business in China, says consumer expert Roger Hu. He describes the young, ambitious entrepreneurs taking over family businesses across the country, positioning local Chinese enterprises to emerge as innovative and globally competitive giants. Hosted on Acast. See acast.com/privacy for more information.

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This episode is sponsored by Edward Jones. You know, as I talk about these big ideas that shape our world, I sometimes think about the decisions that have impact on our daily lives, like financial decisions. That's where Edward Jones comes in. Earning money is great, but true fulfillment in life isn't just about growing your wealth. It's about using your resources to achieve your personal goals. And Edward Jones gets this. Their advisors take time to understand you as an individual.

They build trusted relationships to help you develop strategies that align with your unique goals. What's special about Edward Jones is their holistic approach. They see financial health as a key part of overall wellness, just as important as physical or mental wellbeing. It's not about chasing dollars, it's about finding balance and perspective in your financial life.

That's something anyone should be able to achieve. Ready to approach your finances with a fresh perspective? Learn more at edwardjones.ca. should be able to achieve. Ready to approach your finances with a fresh perspective? Learn more at edwardjones.ca. Money's a thing, but it's not everything. You're listening to TED Talks Daily, where we bring you new ideas to spark your curiosity every day. I'm your host, Elise Hwu. Business in China is booming, and it's partially because the leaders of today and tomorrow are going beyond their parents' old playbook.

In his 2024 talk, consumer expert Roger Hwu shares why competition is growing in China, thanks to young entrepreneurs who have trained in a much more connected world, with access to education both within and beyond their home country. He shares how they're competing on a global scale like never before, and why the lessons learned from this shift to younger leadership should matter to everyone.

That's up next. Picture a ballroom in China. What do you see? Well, big changes are coming. In the next decade, you will start to see much younger faces filling up these spaces. I'm not just talking about China's international giants. I'm talking about China's small and medium-sized local businesses with $100 to $500 million US dollars in revenue.

They are local giants in beverage, snacks, or fashion. sized local businesses with $100 to $500 million in revenue. There are local giants in beverage, snacks, or fashion. As we speak, there are 50, 60, and 70-year-old founders are getting ready for a boardroom transition, and a whole new generation will rise to power. Why does this matter, you might ask? Because competition is only about to get fiercer in China, and the new masterminds behind these businesses

are also eager to take their family businesses onto the global stage. I live in China. I've spent the last 10 years consulting with Chinese companies. And I've worked with over 50 chairpersons. From my conversation with them and the broader data, I can tell you that those local players

are gradually gaining market share across many industries. So why are these local companies suddenly more competitive? One big reason is that these new leaders look nothing like their parents. They grew up with greater access to the internet. They left China to study business in the US, the UK, Australia, Canada, and Singapore. They are multilingual. They have advanced degrees. They can tap into their vast networks of professional services,

private equity, and venture capital. And now, they are coming home to take over their family businesses, catapult them onto the world stage, and change the face of business in China forever. Here is what you can expect. Number one, fewer copycats and more innovation. In the 1970s and 80s, many entrepreneurs were cash strapped. To succeed fast, let's just say imitation was the sincerest form of flattery. If you saw someone's best-selling energy drink,

you'd launch your own energy drink. However, this new generation knows that copycatting is a dead-end model. They are figuring out how to kickstart innovation in-house through competition. For example, I worked with a snack company who was struggling with sluggish sales. Their research and development process was just not working.

They developed a lot of new flavors, but nothing truly innovative. Until the second generation came up with a surprising idea. He split this large R&D team into two smaller teams to compete against each other. The team with the winning product would get a share of profits. When one of the team talked with their consumers, they realized there is an in-man need. Their beef

jerky's packaging was difficult to open, and the beef was too long and too tough. The consumer felt self-conscious eating it in public or at work. So, the team redesigned the packaging and made the jerky smaller and softer. This design won the blind test and was launched to the market, where they enjoyed great sales, especially in the company's original flavor jerky. And the winning team got 5% of all the profits that exceeded the original target. Since the new generation launched this new system, new products have generated over 40% of the company's annual sales revenue. Number two, smart investments in bold ideas.

Many first-generation entrepreneurs in China succeeded through grit, through experience, and through keen market intuition. They didn't have an MBA or professional team to fall back on. They didn't have an MBA or professional team to fall back on. When it came to make big decisions, they often went with their gut. Of course, failure wasn't a bad teacher either. But this new generation can think like an objective investor. I worked with a plant-based beverage company whose founder had always sold their drinks to restaurants, never direct to consumers. But when COVID hit the restaurants,

their sales plummeted. The second generation knew they needed a change, even if change was hard. So she first founded an investment committee and then announced open audition to fund new business ideas. The winning idea would get funding, but financial performance would be quarterly reviewed by the investment committee. One sales manager suggested switching from

large glass bottles to smaller paper-cotton packaging. They'd market them to mothers as a nutritious breakfast drink with kid-friendly flavors like sesame, like jasmine. When it launched, within three months, the new drink ranked into the top three plant-based milk on major e-commerce platforms. With this investor mindset, the new generation is helping team members become the CEO of their own ideas.

And number three, businesses will expand into the entire ecosystem. In an age of scarcity, first-generation entrepreneurs focus on doing one thing and doing it right. But new generation grew up with internet giants who have built massive digital ecosystem, vast interconnected networks of e-commerce,

logistics, social media, payment, et cetera, et cetera. They don't just do one thing, they do nearly everything. I worked with a livestock producer whose founder focused on rearing highest quality pork and poultry, and they were very successful. But the second generation is thinking way bigger than raising livestock.

It's only the first step in a very long value chain. What if they expanded downstream? They could get into meat processing and develop their own line of sliced ham, sausage, and jerky. They could even invest in companies that buy their meat products, like dumpling brands. By thinking about the entire ecosystem,

from farming to food, and even to retail, they can simplify the supply chains, spend less, earn more, and expand faster. All three of these examples show what's possible when the future second generation leaders take over Chinese businesses. They're not just looking to imitate, but to create and lead their own ecosystems

and be bullish on every growth opportunities. These new leaders don't shy away from competition. In fact, they embrace it and push change vertically and laterally. And they don't take no for an answer. To compete internationally, we might even see a new wave of major multinational companies emerge from China. So don't be surprised when China's boardroom have a lot less gray hair in the coming years. China's future has never looked more colorful.

Thank you. That was Roger Hu, recorded for TED at BCG in 2024. If you're curious about TED's curation, find out more at TED.com slash curation guidelines. And that's it for today's show. TED Talks Daily is part of the TED Audio Collective. If you're curious about Ted's curation, find out more at Ted.com slash curationguidelines. And that's it for today's show. TED Talks Daily is part of the TED Audio Collective. This episode was produced and edited by our team,

Martha Estefanos, Oliver Friedman, Brian Green, Lucy Little, Alejandra Salazar, and Tansika Sarmarnivon. It was mixed by Christopher Fazy-Bogan. Additional support from Emma Tobner and Daniella Ballarezzo. I'm Elise Hue. I'll be back tomorrow with a fresh idea for your feed. Thanks for listening. This episode is sponsored by Edward Jones.

You know, as I talk about these big ideas that shape our world, I sometimes think about the decisions that have impact on our daily lives, like financial decisions. That's where Edward Jones comes in. Earning money is great, but true fulfillment in life isn't just about growing your wealth. It's about using your resources

to achieve your personal goals. And Edward Jones gets this. Their advisors take time to understand you as an individual. They build trusted relationships to help you develop strategies that align with your unique goals. What's special about Edward Jones is their holistic approach. They see financial health as a key part of overall wellness, just as important as physical or mental well-being. It's not about chasing dollars. It's about finding balance and perspective in your financialbeing. It's not about chasing dollars, it's about finding

balance and perspective in your financial life. That's something anyone should be able to achieve. Ready to approach your finances with a fresh perspective? Learn more at edwardjones.ca. Money's a thing, but it's not everything. This episode is sponsored by Oxeo. Home isn't just a place, it's a feeling, a connection. And let's be real, in 2025, home is wherever your WiFi works best. That's where Oxio comes in, an internet provider that actually feels like home.

With Oxio, what you see is what you get. Fair fixed prices, no surprise hikes, no exhausting negotiations. They've never raised a customer's price and they never will. That means more peace of mind for your movie nights, deep dive research sessions, or endless scrolls through your favorite feeds without lag getting in the way. Plus with speeds up to 1 gigabit per second you can stream game or work without interruption. And if Oxio doesn't make your internet feel

like home, you've got 60 days to get all your money back. Visit oxio.ca if just like Oxio, you were born to be online. Use promo code TEDtalks at checkout to get your first month free. This episode is sponsored by Audible Canada. If you loved The Hunger Games or the ballad of songbirds and snakes, get ready, because the games are about to get even bigger. Sunrise on the Reaping takes us back to the 50th Hunger Games, the infamous Quarter Quell

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