Where do most Angelenos go for Chinese restaurant tips? Yelp, maybe? But a local Chinese residents would probably say, nah, never, except for finding certain restaurant’s address. But what’s their source? And how do hundreds of Chinese restaurants in San Gabriel Valley get their name out?

Chihuo, founded in 2011, is a Mandarin-language website sharing food reviews, restaurant news, recipes, deals, and other recreational information like travel tips and upcoming events in Los Angeles. Within three years, the website along with its several social media accounts has attracted over 180,000 followers and become the biggest online food influencer for local Chinese community.

Front page of Chihuo

Chihuo stands for foodie in Chinese. Motivated by sharing food information with other foodie friends, the founder, Amy Duan, started to post food reviews on Weibo, China’s equivalent of Twitter. On June 15th, 2011, the first Weibo was sent out and it said: “ So for the very first post, let me introduce the ‘grand old man’ of Hong Kong style tea restaurant in Los Angeles—Tasty Garden. The one located in Atlantic Times Square opens until 4 a.m. Right next to AMC Theater, it’s a great place for late supper. Main dishes include Walnut Shrimp and Chicken Curry. Porridges and noodles are also highly recommended…”

Chihuo’s First Weibo

To Duan’s surprise, credibility and popularity accumulated quickly. By late July 2011, barely six weeks after its launch, despite posting only around 50 reviews, Chihuo had already drawn a lot of attention and support. “Chihuo now has 1000 followers,” Duan posted. “I am so excited! SO EXCITED! EXCITED!”

As the fan base grows, Chihuo’s posts are also becoming more objective and formal. But what it’s doing keeps the same: sharing information.

Although Chihuo provides the similar service as Yelp does, its contents are mainly created by its own members rather than followers or fans. This feature hits home for many Chinese people. In general, Chinese people prefer to read reviews rather than generate them. That explains why many Chinese people have Yelp on their phones, but they still don’t trust it when finding a Chinese restaurant.

Chihuo’s success can partially owe to the rise of social media. Chihuo started from a Sina Weibo account and until now it still plays as a major platform to send new posts. Just like Twitter, followers can attach Chihuo in their own posts. As a result, there are a lot of interactions between Chihuo and followers and sometimes followers can contribute valuable food information.

Two year later, Chihuo had the website, Chihuo.org, where the food reviews are preserved permanently.

 Wechat, a free messaging and calling app like WhatsApp, also helps enhance Chihuo’s influence. In Wechat, Chihuo can send blog posts to every follower. As many Chinese people depend so heavily on Wechat to communication that they check the messages on Wechat every several minutes. So the posts sent via Wechat got circulated like virus.

 Within three years, Chihuo gets so influential that its food reviews can draw hundreds of customers to a restaurant, keeping them waiting in line for almost two hours only to try out the recommended dishes.

 Not only LA Chinese foodies take Chihuo as their go-to source, Jonathan Gold, the famous restaurant critic for Los Angels Times, also told Amy Duan that “I actually put your articles on Google translate.” And Gold once mentioned Chihuo and Amy Duan in one of his food reviews.

Businesses are also catching the trend. They provide sponsorship for publishing promotional food reviews on Chihuo. In 2013, Chihuo registered into a company and started to generate revenue by sharing information.

Recently, Chihuo launched another Northern California based website and started to cover food information in major cities like San Francisco.

Amy Duan, graduated from the communication management program in USC Annenberg, is now working full time as the CEO of Chihuo. Her goal is to spread the information sharing business and passion for food all over the U.S.

In Hollywood, there’s a luxurious hotel that provides three levels of modern and stylish suites, spa and wellness center, spacious playground and chauffeur service with luxurious vehicles like Ferrari, Lamborghini Gallardo, Bentley, Porsche or Rolls Royce. But it’s different from Hilton in that the customers here are all dogs.

The D Pet Hotel, opened 7 years ago, is one of the first luxurious dog hotels appeared in Los Angeles. Now it has developed into a chain hotel with two branches each locates in New York City and Scottsdale, Arizona.

The growing of luxurious dog hotel business, as an example of the pet grooming and boarding industry, is only one aspect of the overall prosperity of pet industry. According to American Pet Products Association (APPA), the total U.S. pet industry expenditures has grown continuously during the past few years. Even during the Great Recession, the sales in this section didn’t come across a decline.

Graph 1. Total U.S. Pet Industry Expenditures

Graph 2. Pet Ownership

The increasing number of pet ownership, the rise of household disposable income and pet parents’ willingness to pamper their pets, are the three main factors that drive the prosperous trend. As the second graph shows, bird, cat, dog and freshwater fish are the four main popular pets in households. The number of pets outweighs the number of households also shows that some families owns more than one pet. According to Alissa Cruz, the owner of D Pet Hotel, one of her customer has seven dogs in her family, and there are several others have 4-5 dogs.

Single-person households and aging population are the major forces to drive up the pet ownership. Gay couples and middle-aged housewives are also two demographics that tend to have a pet companion, the general manager of D Pet Hotel said. For gay couples, a pet is the perfect alternative to a kid. For middle-aged housewives, a pet can keep their life busy when their children are pursuing college education in another city. In July 2014, IBISWorld Industry Research Division released a study report on Pet Stores in the U.S., in which it predicts the number of pets ownership will increase at an average annual rate of 2.1% during the next five years, which also benefits the revenue of pet industry.

Graph 3. products and services segmentation

The same report shows that major spending in pet stores industry are made on the following sections, pet food, pet supplies, pet services, and live animals.

Live animals accounts for the smallest percentage as a pet is one-time purchase, but products in other segments will be purchased repeatedly during the whole pet’s life. In addition, more and more people choose to foster or adopt a pet instead of buying them from stores.

Although pet services only account for 13% percent of the total revenue, they “have been the fastest-growing product segment for the industry over the past five years”, says the IBIS report. Pet services include grooming, haircuts, baths, toenail trimming, tooth brushing, training, boarding, daycare and etc.

Thanks to the notion that pets are family members, pet parents are becoming increasingly indulgent. The rise of disposable income also enables pet owners to pamper their animal companions. That is how D Pet Hotel came into being.

Pet supplies include over-the-counter medicines, food bowls, collars and leashes, pet clothing, crushes and combs and various accessories for pets. According to IBISWorld report, this segment is mainly driven by the rising spending on over-the-counter medicine products, for the cost of pharmaceuticals and the standards of routine care has increased during the past five years.

As the largest segment in pet store industry, pet food has been experiencing a trend towards premium standards. All-natural and organic can no longer satisfy indulgent pet parents’ needs, various premium pet foods like raw diet food, weight-control food, specialized formulas for sensitive stomachs, and freshly baked cakes and cookies as treats have appeared in the market. The increasing number of pet numbers also contribute to the large chuck of revenue.

However, pet supplies and pet food segments are highly competitive. Supermarkets and mass merchandisers, like Walmart and Costco are selling  similar pet products  at more affordable price and offer the convenience of one-stop shopping, so customers are lured from specialty stores. IBISWorld report shows, from 2009 to 2014, due to the competition from supermarkets, and department stores and some online retailers, “the number of industry operators contracted at an average annual rate of 0.6% to an estimated 13,195 companies”.

Generally speaking, the pet store industry is mature. The estimated product saturation will be reached in 2019. But as pet owners tend to humanize their pets more and more, services will be further diversified and become premium. The estimated revenue annual growth in pet store industry will be 2.3% from 2014 to 2019.

The Advance Report on Durable Goods Manufactures’ Shipments, Inventories and Orders is a monthly report released by U.S. Census Bureau, part of which indicates dollar value of new orders of durable goods made by more than 4,000 manufacturers. These goods are expected to have a useful life of at least three years and higher prices. They include defense aircraft, automobiles, furniture, computer equipment and etc.

Businesses are not doing that purchase so often. Once paying a huge amount of money, manufacturers are expecting a long useful life from these goods and showing confidence in the economy, otherwise they will held the decision until the economy is promising enough.

The orders of durable goods placed by manufacturers can cause a chain of economic changes. Since the durable goods are often purchased to replace the old ones or as supplements, a higher efficiency and more supply can be expected. As supply produces it’s own demand, consumer purchase usually rises while manufacturers providing more goods. Workers in the supply chain will have more working hours and lead to the change of non-farm payrolls. In a long run, when the supply-and-demand balance has been affected, it will further place an influence on inflation or deflation.

Similarly, shipments of orders will increase the need for transportation businesses. In addition, the change of shipment/inventory ratio will also affect the supply-and-demand balance.

The index of durable goods orders has long been used as an important barometer of economy. As the graph below shows that the Durable Goods Orders are correlating to the changes happened to GDP.

Consumer Durable Goods New Orders and Real Gross Domestic Product

When the unemployment rate is reverted, it shows correlations to durable goods orders. It’s easy to find that durable goods orders usually drops earlier than the upcoming recessions, while the unemployment rate will lag the rise of durable goods orders after suffering from the hard times. As a result, the durable goods orders indicate the confidence in the economy and often predict significant economic changes.

Consumer Durable Goods New Orders and Unemployment (Inverted)

The data of durable goods orders are collected and released month by month, so it’s a timely feedback and indicator for many to make their right investing decisions.

Despite all the strengths, durable goods orders are volatile due to some unexpected purchases made for transportation and defense.

For example, according to the U.S. Census Bureau, orders for manufactured durable goods in July has increased $55.3 billion or 22.6 percent to $300.1 billion. But this surge mainly comes from bookings for civilian aircraft. Boeing has said that it received 324 aircraft orders in July. The following news from Bloomberg shows how the unexpected orders affected July’s Durable Goods Orders.

So “excluding transportation, new orders decreased 0.8 percent. Excluding defense, new orders increased 24.9 percent” for July.

Therefore, when making predictions, defense and transportation orders are often leave out. The graph below, contrasting durable goods orders with those excluding transportation and defense, shows the substantial volatility of transportation and defense.

Core Capital Goods New Orders (ex Transportations &Defense) Percent Change Since 2000

As a result of the constantly fluctuating and unexpected orders from transportation and defense, the number for a particular month may not wisely suggest the change for the whole market. While, the annual changes may be more worth noticing.

Annual Changes In Durable Goods Orders