“Time travelers” in Vietnam

Despite China’s increasingly deep presence in the developing world, when it comes to the topic of “China overseas”, Chinese audiences tend to remain very much obsessed with the relationship with the West. The government’s emphasis on developing world brotherhood along the Belt and Road is abstract Party talk for the general public. Impressions of the Belt and Road are also largely dominated by state owned companies’ big ticket infrastructure projects around the world.

Against this backdrop, the recent Tencent documentary series “Chasing the Tide” (出海) offers an interesting perspective on real-world Belt and Road exchanges by pointing the lens at Chinese entrepreneurs in Vietnam. The group of entrepreneurs are trying to transplant a successful and quintessentially 21st century Chinese business model to the Southeast Asian neighbor: Tiktok live-stream retail.

Chinese entrepreneurs have entered Vietnam’s burgeoning livestream retail scene with the knowhow from China’s overcrowded market

The documentary was produced by Weibo celebrity Huazong, who made his name years ago identifying luxury watches in the online pictures of corrupt officials. In Chasing the Tide, he has not strayed far from his familiar terrain. The documentary features the makers of influencers, the men and women that run so-called Multi-Channel Networks (MCNs) that train Tiktok broadcasters to sell everything from cosmetics to toilet paper, receiving a share of the revenues for their investment. In China, such MCNs have created the likes of Weiya and Li Jiaqi, who, at their peak, could gross tens of millions RMB on a single night, surpassing entire shopping malls in sales revenue.

Outside of China, the idea that you can sell stuff through live streaming on Tiktok is still very much a novelty. At least in Vietnam, the platform is still predominantly used for entertainment. So when entrepreneurs set out to make Tiktok retail a serious business in Vietnam, the audience is in for a drama of personal struggles and cultural shocks.

Over the past decade, Global China stories have been dominated by portrayals of debt-financed mega infrastructure projects and earth-moving extractive endeavors. Chasing the Tide’s tale of retail and commerce illustrates another facet of Chinese overseas investments: opportunity-driven and privately-financed. A new set of players are involved in this “lane of competition” (as the insiders describe their field): Chinese venture capitalists, Chinese tech platforms, Chinese entrepreneurs and their Vietnamese partners, and local aspiring influencers. As the post-pandemic, debt-distressed world shows less and less appetite for mega-projects, the Chinese overseas investment story is set to evolve and change. While the offshoring of Chinese supply chains as a hedge to the new geopolitical reality is emerging quickly as the next Global China story, Chasing the Tide shows that the export of China’s mobile internet miracle is another dynamic storyline that is unfolding in unexpected ways.

Time travelers

The documentary’s main protagonists are Wang, Li and Tu. While Li and Tu are both directly involved in running MCN startups that cultivate Vietnamese influencers, Wang is higher up in the food chain. He is an investment banker whose securities firm is already listed in Vietnam’s stock market, with a net worth of about RMB 270 million. Huazong’s crew shadowed them for three months at the end of last year, capturing the dramatic ups and downs in their careers, aptly reflecting the turbulent environment of an emerging market.

In front of the camera, Wang explained his reason for coming to Vietnam. “We are all believers of the time machine theory,” he said. “Vietnam is like China 20 years ago. If you have missed the money-making train in China, you can still catch it here.” His comments echo the “flying geese” paradigm of global trade and development which shaped China’s own development story and is advocated by influential Chinese economists such as Justin Lin Yifu.

Wang moved to Vietnam after China’s spectacular stock market meltdown in 2015 dampened money making prospects. In Vietnam, the burgeoning stock market offered the veteran investor a fresh start for discovering promising companies, many of them run by Chinese business people, to invest in. MCNs were one emerging sector Wang took an interest in. The whole business was made possible by TikTok’s addition of a “shopping cart” function into its Vietnamese edition in 2019. Li and Tu, both weathered hands in China’s highly competitive mobile retail scene, immediately sensed the new opportunity. For them, the Chinese market was too crowded and “involuting”, a term popular in China to describe the ever intensifying work culture for ever less marginal gains common in Chinese business.

Vietnam, they believed, was a different story. The country had barely warmed up to the idea of Tiktok retailing. For the Chinese veterans, it was almost an open field asking to be plowed. They brought to Vietnam a whole set of well-tested tools and methodologies to quickly get a live streaming sales operation in motion, including merchandise selection, hosting techniques and a whole range of metrics that measure a host’s effectiveness. Equipped with such knowhow, Li and Tu’s companies introduced local clients to brand new possibilities for the distribution of their products. Li’s MCN quickly produced the country’s equivalent of Weiya, a young former airline stewardess with the online alias of Yaying, who could gross USD 300,000 in a single month, an impressive figure by the standard of Vietnam’s young market. In less than 2 years she was already one of the top 5 live-stream retailers of Tiktok Vietnam.

This is the kind of growth stories that Chinese venture capitalists understand. Both Li and Tu got some of their seed money from Wang and, just as the documentary was filming, Li’s company was undergoing a round of rapid expansion. As Yaying’s success story drew more aspiring youngsters to the company, Li and his Vietnamese partner Pei Qingping began to check out fancy office spaces in central Ho Chi Minh city in preparation to host more live-streamers in more studio rooms. Some of the big name venture capitalists from China dropped by the city to learn more about their adventure in this neighboring country. He was already “on the map.”

Yaying, a former airline stewardess, has become one of Vietnam’s top influencers on Tiktok.

E-commerce with local characteristics

That optimism would be complicated by probably the biggest crisis in Li’s Vietnam career, showing vividly the risks in bringing a new business to a new country. In one of her daily live-streaming sessions, Yayin pushed a line of Estée Lauder products provided by a supplier recommended by Tiktok Shop Vietnam. The supplier was believed to be associated with duty free retailers in a third country, therefore could give Yaying products at discounted prices. But Estée Lauder’s official Vietnam distributor came out publicly to challenge the authenticity of Yaying’s products, putting her under serious allegation of selling fakes. The live-streaming “barbarians at the gate” had clearly threatened some of the existing power structures of commerce in Vietnam and Li’s company was to bear the brunt of that confrontation. Yaying was personally trolled on her social media channels and her live streaming sessions were disrupted by users pressing her for an explanation. TikTok Shop Vietnam was reluctant in getting into a public battle with Estée Lauder Vietnam on the authenticity of the product, leaving the company on its own. As Yaying’s reputation tanked, revenues plummeted and new recruits to Li’s MCN frozen.

Such testing moments call for determination and resilience. “We will fight it till the end!” Li’s Vietnamese business partner Pei Qingping told Huazong on camera. A fluent Chinese speaker, Pei had an impressive track record in Vietnam’s telecom sector before joining hands with Li. It is a pity that the documentary did not spend more time portraying her perspective on the business operations. Similarly, Tu’s charismatic Vietnamese partner Meiying, another woman in the story, only got a passing mention. These local women were probably added to the management team pertaining to Vietnam’s rules for registering companies, a common practice in Southeast Asian countries that requires local personnel in a company’s governance structure. Despite their limited appearances, it is evident that they must have played central roles in stabilizing the startups in their home country. In Li’s case, Pei was instrumental in translating the best practices in China’s advanced e-commerce market to the company’s Vietnamese staff, playing an indispensable bridging role. In Tu’s case, when the company faced serious financing troubles, Meiying served as the team’s morale booster. Her barbecue shop, a side business that she ran, became a gathering space for the team to relieve the tremendous pressure built up at work.

Pei Qingping (left) is Li’s business partner and indispensable bridge to the company’s Vietnamese staff.

Also pushed to the background are the local political, legal and cultural elements that enable or inhibit the Chinese entrepreneurs’ business ambitions. The documentary covers the months immediately after Vietnam’s high-profile arrest of the wildly successful Chinese-Vietnamese businesswoman Truong My Lan for financial frauds, an event that sent shockwaves through the country’s business circles. Wang referred to the incident in interviews but the documentary did not explore its implications for his portfolio made up of businesses owned by ethnic Chinese in Vietnam. The larger context of Vietnam’s MCN sector, an ecosystem symbiotic with TikTok’s expansion in the country, is also given little mention in the documentary. In Tu’s interviews, we learned that dozens of MCNs were active at the end of 2022. His and Li’s companies were the only two Chinese-run by that point, as the pandemic had killed off many of their earlier peers. We also learned that both companies were facing fierce competition from local MCNs, to the extent that Tu’s failure in securing another round of financing risked his company being completely knocked off the market. But we do not get a glimpse of how those Vietnamese MCNs work and how they managed to crowd out the Chinese companies supposed to be more skillful in running such operations.

Cultural sensitivity

The key difference might be culture. Li comments that running an MCN in Vietnam is like trying to transplant a branch of a fruit tree to another trunk. Whether the new plant flourishes or dies depends not so much on the brilliance of the original branch, but how the receiving tree embraces and accepts it as part of its own, indicating the two-way complexities of international business and cultural interactions. In this regard, Li’s observations serve as important corrections to Wang’s “time machine theory”. Development and market conditions do not operate in simplistic stage-like fashion.

The two Chinese companies hire many Vietnamese employees. From the interviews of their bosses, we get a glimpse of the cultural differences that the Chinese managers have to deal with. Both Li and Tu comment on the “carpe diem” mentality of their staff members, which are so different from the “suffer today, enjoy tomorrow” work ethics that they are used to in China. With a sense of amusement Li would comment on how the Vietnamese employees would automatically wrap up work at 5:30pm and leave the office en masse on scooters. For Li and Tu, this poses a challenge to the live-streaming retail business which, as it developed in China, requires hosts to be online for extended periods of time, sometimes late into the evening, to maximize sales revenue. The contrast could not have been starker in the lifestyles of Li himself and his local employees. The hard-working Chinese boss left his family back at home for what he considered a “now or never” chance of personal success in a foreign country. In the documentary, there are multiple scenes of him staring at computers with knitted brows, dining on instant noodles at the desk and alone in the office late at night. The burning ambitions of the lonely Chinese internet entrepreneur are sharply juxtaposed with images of the colorful and relaxing night life of Ho Chi Minh city. Similar themes can be found in other Chinese overseas stories, most notably the cultural clashes in Netflix’s award-winning documentary American Factory.

Chinese and Vietnamese employees of Tu’s MCN celebrating the 2023 new year together

By putting this contrast so vividly on screen, the documentary provides a rare opportunity for self-reflection and dialogue. For Chinese viewers, the fact that Vietnamese young people refused to accept the toxic overworking culture of China’s e-economy is refreshing. Through Li’s account, they find a neighboring country driven by a different set of motivations for life and wonder how that would affect China’s offshoring of industries. For the Vietnamese viewers (the documentary was quickly translated and put on to Facebook), it was a source of pride that reinforced their commitment to not allowing work to encroach too much into personal life. Contrary to the stereotypes of “Chinese bosses” overseas, both Li and Tu made efforts to understand and adapt to the culture and customs of their local staff. Even though Li was presented as a typical “no-life” manager on screen, he showed genuine appreciation of the wholesome lifestyle of his staff and tried (albeit awkwardly) to blend in. In a parallel scene, Tu’s Vietnam staff sang and danced joyfully with their Chinese colleagues at the new year party 2023.

In a world where China-Vietnam stories are often framed as a zero-sum jostling for a share of the global supply chains, a documentary series that shows real people of the two countries working alongside each other, sharing tears and laughters, is in itself a step toward re-owning a part of the narrative. Perhaps such a narrative can help guide a higher cultural self-awareness in future Chinese overseas ventures.

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