"The Future is Already Here, Just Not Evenly Distributed." – William Gibson
IMAGINE a (somewhat absurd) future where a single e-commerce platform, HyperMart, dominates the world. Here, you can purchase goods from every corner of the globe, yet they bear no brand names. These products are supplied by a global supply chain network, with an artificial intelligence ‘super brain’ on the platform predicting our needs and placing timely orders with the network. The orders are produced and transported at the lowest cost and delivered to your doorstep at the fastest speed... Importaciones de China
In June of this year, I, along with a group of trendspotters, entrepreneurs, investors, and designers, organized a Future Safari. We traveled to Yiwu, Zhejiang Province, a place reachable by a 1.5-hour train ride from Shanghai.
Future Safari is a field research activity launched by FuturistCircle, where we visit various places in different countries around the world each year. Through in-depth exchanges with locals, immersive experiences, and anthropological methods, combined with Futures Studies, we understand the future possibilities of different topics.
Dear readers, if you have not lived in China for a long time or have had trade dealings with China, you may not be familiar with the city of Yiwu. However, you may already have a connection to Yiwu by purchasing Made in China label Christmas ornaments. According to statistics, Yiwu's Christmas supplies account for 80% of the national market share, and China occupies 80% of the global Christmas supplies market share.
Yiwu, Zhejiang Province, is a "small city" with a population of 1.888 million (compared to Shanghai's nearly 27 million). It is known as the "global capital of small commodities" due to the world's largest small commodity wholesale market. Today, 2.1 million kinds of goods from around the world converge here and are sold to more than 230 countries and regions worldwide. （ Wikipedia）
Here are some relevant data for reference:
In 2023, Yiwu achieved a total import and export volume of 566.05 billion yuan, with an export volume of 500.57 billion yuan.
In the Yiwu International Trade City (the largest local small commodity market), there are 16 major categories, 4,202 varieties, 33,217 sub-varieties, and 1.7 million products in total.
The "Yiwu-Xinjiang-Europe" train has opened 25 routes, covering more than 50 countries and regions and reaching 160 cities.
In 2022, Yiwu established its first overseas wholesale market in Dubai, becoming the main channel for Chinese-made small commodities to enter the Middle East, North Africa, and European markets.
Let me share three anecdotes from my travels.
Our first stop in Yiwu was not actually in Yiwu but in Zhuji City, 40 minutes away (with a population of only 1.22 million!). Here, we met Mr. Zhu, the owner of an advertising exhibition printing factory, and visited his workshop. He is developing an AI-powered supply chain platform. In his vision, future productivity can be more efficiently utilized through cloud computing for electricity, computing power, and production capacity. For example, the raw material procurement process will be free from manual supplier search and price negotiation, as AI algorithms automatically match everything. Unlike traditional manufacturing that emphasizes vertical integration of the supply chain, Mr. Zhu believes horizontal integration led by AI will be more important. AI can analyze traffic conditions, weather, and other factors to provide the best routes for delivery, reducing transportation time and costs, and improving efficiency. He also sees a future of personalized demand, where production is arranged after demand is predicted by analyzing historical sales data, market trends, and seasonal factors.
Interestingly, the AI brain plan is already in progress. In his office, a display screen shows various indicators and rankings of the supply chain in real time. Mr. Zhu's daily work involves simply operating the platform software, reminding me of simulation management games like SimCity.
In the urban area of Yiwu, we met designers from several local product design agencies. They warmly received us and shared their business success "secrets." Unlike conventional product development which relies on extensive user and market research, Yiwu designers focus more on product design to compete on efficiency and reduce costs. They often rely on their experience, observations, and creativity to design popular products. For example, a company designing toys and stationery can produce hundreds of designs in a week and quickly bring them to market. This agile development method, commonly seen in software development, is applied to hardware and pushed to its limits.
The designers proudly shared a success story: a car ornament-themed "God of Wealth." Despite its simple design, it became an online hit because it tapped into young people's desire to "make money hard." However, the lack of intellectual property protection means designs can be quickly copied, leading designers to rapidly produce new concepts and test them in the market. When I searched for "God of Wealth ornament" on Douyin, I found various similar products, illustrating this phenomenon.
We accidentally met Towel Brother in Yiwu's night market. With 340,000 followers on Douyin, China’s Tiktok, the middle-aged bald man is both a vlogger and a towel seller. He noticed that the profits of towel manufacturers and small businesses were declining due to high operating and advertising costs on e-commerce platforms. This made it difficult for them to survive. At the same time, rising unemployment led many young people to seek new ways to make money. Towel Brother created a new business model by combining offline stalls with online live casts, monetizing his social media traffic. His success attracted many followers who wanted to learn his methods. This model formed a sales channel for towel manufacturers, allowing Towel Brother to become a 'one-person unlimited company.' (We made up the term. It indicates someone self-employed is heavily collaborating with other people to run the business)
In today's Yiwu, and many cities across China, Towel Brothers’ story is not unique. It represents a growing resistance against e-commerce platform monopolies, as more individuals establish (informal) cooperative organizations. This aligns with the concept of Platform Cooperativism or Platform Co-op, introduced by Trebor Scholz of The New School in New York in 2014. Platform Co-op envisions digital platforms owned and governed by the workers themselves, ensuring fair wages, participation in decision-making, and control over personal data.
'The term "Shanzhai," which translates to "mountain fortress" or "mountain camp," has evolved to represent counterfeit, imitation, or parody products and the subculture surrounding them.' – Wikipedia.
In Yiwu's small commodity economy, "Shanzhai" has become a culture of low-profit, high-volume sales. The lack of core technology and weak copyright protection means startups focus on new product development, quickly launching products to gather feedback and identify potential "blockbusters." When faced with plagiarism, designers shift focus to the next product, avoiding price wars.
'Imagine a platform that can gather enough customers interested in a particular product, consolidate their demand into a single order for the factory, which then sells the products to these customers at prices lower than the market rate.'
– Huang Zheng, founder of Pinduoduo/Temu.
Continuing the future scenario from the beginning of this article:
When your toilet paper is running out, your smart toilet shares your usage habits and preferences with e-commerce platforms. These platforms, supported by an "AI brain," process demand forecasts, match suitable manufacturers and have your Amazon Alexa remind you to reorder. The toilet paper arrives at your doorstep in just 2-3 days.
This forecasting is inspired by insights from the Yiwu field trip. With similar products in each category, most likely from the same suppliers and factories, we see how places like the Yiwu International Trade City may be replaced by online e-commerce platforms. In extreme scenarios, small factories, wholesalers, and distributors could be replaced, leaving only super factories and e-commerce platforms with AI supply chains monitoring market trends, consumer behaviors, and inventory levels in real time.
While this extreme scenario may be unlikely, we see e-commerce platforms squeezing profit margins, leading to substandard products and the emergence of cooperative organizations like the ‘mafia of Towel Brother’.
In the future of retail consumption, will brands gradually be replaced by regional brands (e.g., 'Made in Shenzhen') and e-commerce platform brands (e.g., Taobao Factory, Amazon Basics, Costco Kirkland, Wholefoods 365)? How will the relationship between brands and consumers change?
To become a Yiwu safari adventurer? Read TripAdvisor to plan your trip.
Watch the National Geographic’s documentary on Yiwu International Trade City.
Interested in Shenzhen’s Shanzhai culture? Watch the documentary by the Wired UK. (The film was shot 8 years ago but is still worthy to watch, which gives you an authentic look at the birthplace of Shanzhai)
To understand China’s innovation culture and Shanzhai through an academic perspective? Read Prototype Nation: China and the Contested Promise of Innovation - A vivid look at China’s shifting place in the global political economy of technology production, by Silvia M. Lindtner, Princeton University Press (2020)
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