The Transformation of Journalism

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“Hey, have you seen the BuzzFeed video I shared on Facebook yesterday?”

Instead of saying “Hey, have you seen the headline for the newspaper yesterday?”, nowadays a daily conversation between two friends often begins with discussing the trending articles/topics on BuzzFeed and other social media sites. The Internet has been selected as one of the most important inventions in human history. It brings us convenience, provides us a chance to connect with the rest of the world at our fingertips, further accelerates the evolution of print journalism, and starts a new chapter for digital journalism.

When looking specifically at the way content is distributed to audiences, from the beginning of 1800s to the 21st century, the development of newspaper can be divided into three main eras, Push, Pull, and the combination of Push and Pull. The Push era started with the birth of traditional journalism and newspapers. The word “Push” essentially means providing content, or pushing content toward its audience. For instance, news reporters will pursue and generate stories that are assigned by their editors and the audience will become a receiver of the stories and information provided by the newspaper. In the Push era, advertisement plaid an important role in the way newspapers operated. Aside from annual subscription fees, advertisements became a major revenue source for the newspapers. Take prominent newspaper, The Huffington Post, as an example; in order to attract audiences of all types to read its newspaper, The Huffington Post delivers new stories and content on a wide variety of topics such as “Politics, business, entertainment, environment, technology, popular media, lifestyle, culture, comedy, healthy living, women’s interests, and local news” through multiple platforms. (“The Huffington Post”, 2013) Huffington Post’s online website generates huge levels of viewership, making it extremely valuable to advertisers seeking high-visibility advertising space. Its’ uncanny ability to attract viewership valued it at above 300 million at the time it was sold to its current parent company, AOL.

In 2014, according to a Pew Research Center analysis of Alliance for Audited Media (AAM) data, “both weekday and Sunday circulation of newspapers fell around 3% from the previous year.” (Barthel, 2015) With the decline of circulation, newspapers and journalists were trying to develop new ways to attract the audience. Demand Media, an Internet and content driven company based in Santa Monica, California, serves as an example of the Pull era. Owning online website eHow and Cracked, Demand Media is known for its ability to generate content based on its audiences’ needs, and enables its content creators to reach larger audiences in various categories. Demand Media’s “eHow” website owns massive amounts of articles and more than 2 million videos for its users to find answers to their questions and encourage its users to share their experiences with each other. By means of extensive research, Demand Media understands what kind of content its users need, and creates websites based on its category. The company also believes that content wouldn’t survive without community and conversation. Besides the website eHow, which focuses on topics such as cooking recipes, decorations and lifestyles, Demand Media has also created the on-line website “Cracked” in order to fulfill the needs of the younger generation and audiences who are interested in light-hearted content.

Although Demand Media and its content-driven websites have been very successfully in the first few years, critics have cast doubt on Demand Media and other similar websites’ abilities to “place search engine optimization goals over factual relevance” in order to obtain high amount of revenue in advertising. Through multiple analysis on Google search and the realization of what content is needed by the mass public, Demand Media utilizes its freelancers to create fast and cheap content. It is using the quantity over quality strategy. “No need for quality content produced by well-paid journalists: if you know how to perform search engine optimization, your low quality, rapidly-produced video or “article” will top Google’s results and dwarf playing-by-the-book regular media’s traffic.” (Decugis, 2011)

With the birth of the Internet, more and more people, especially younger generation, prefer to consume news online relative to the percentage of people who consume news via television. Nonetheless, the percentage of people who consume news on the Internet, which 40%, is still 30% lower when compared to the percentage of people who consume news on the television, which is 70%. The percentage of people who consume news on the Internet is continuing to rise, while on the other hand, the percentage of people who consume news on the television is continuing to fall throughout the years. (Grabowicz, 2014) In both the Push and Pull eras there has existed a one-way communication between newspaper and its audiences. In the Push era, reporters and newspapers possess the bargaining power between the communications. The audience accepted and received news content that was selected and being processed by the newspapers. In the Pull era, the audience retrieved the bargaining power; they have the say in what content should be produced.

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Different than the Push and the Pull era, the combination of the Push and Pull era enables two-way communication between news organizations and its audiences. Rather than one side holding the bargaining power, in the combination of the push and the pull era, both side of the communication serve as the provider and the receiver. In the combination of the Push and Pull era, BuzzFeed is one of the most successful examples. Jonah Peretti and several others co-founded BuzzFeed, a social news and entertainment company, in 2006 in New York City. Besides generating breaking news, entertainment news, and videos, BuzzFeed creates Quizzes to better engage with its audience. It currently has more than 200 million monthly unique visitors, with the number still growing rapidly. Recognizing the potential traffic its audience might bring to the website, BuzzFeed focuses on the shareable aspect in every story and ensures that each story is relatable for its audience. Creative director of BuzzFeed, Philip Byrne, once said “the company spends 50 percent of its time on creating content and 50 percent of its time thinking of how to make it shareable.” (George, 2015) Native advertising is one of the keys to BuzzFeed’s success.

“Native advertising is a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed.” Tyler James, Sharethrough’s Director, shared before his keynote presentation on native advertising. (Canarte, 2015) Take one of BuzzFeed’s quizzes as an example, “Which Donut Are You?”, in the quiz, the audience is asked a series of questions and based on those results, the audience is told in the end which kind of donut they are. It might not be hard to figure out the donut brand Dunkin Donut is the sponsor of this native advertising. Even though this native advertising is more obvious than the others, in the sub-heading, BuzzFeed put “you have to know” to encourage its audiences to click in. By incorporating native advertising to its website and capturing the important shareable aspect of its new content, BuzzFeed is able to generate content for its audience as the pusher and also as the receiver when receiving personal data from its audiences.

Tsan Chang, the general manager of ETtoday.net, one of the major online news website in Taiwan, has pointed out three future trends that carry possibility to dominate the online news and digital journalism. “ Having the experience to work in newspaper agency, witnessing the transformation of journalism from traditional, which is print journalism, to digital, which is online journalism, and currently working in an online news organization, I think the future trends for journalism as a whole is the rise of the mobile application increase dependence on social media, and the combination between data and journalism.”, Chang said.

Nowadays, people reply more and more on their cell phones. The percentage of people checking daily news using the mobile application has increased over the years. Many news organizations have developed their own mobile application in order to attract more audiences. Most of the mobile applications focus on providing as much information as it can to the mobile users in the shortest amount of time. Take the CNN mobile application as an example; when opening the application, major or breaking news content is displayed in the middle. Besides news content, the application notifies the mobile users first-hand breaking news when it happens. When asked whether social media servers as a threat to its online news organization, Chang replied, “instead of a competitor, for our online news organization, it is a plus. We have strong collaboration ties with social media such as Facebook. Many traffic of our website are brought by Facebook; when the audiences browsed through Facebook and saw our Facebook post of the news content, when wanted to know more, they would click on the picture, and that direct the users to our website.”

According to Chang, data servers as much more than an indicator of when to publish, what content to produce, where to post, and how to generate news content. Journalism has encountered a new trend of storytelling exclusively through data. More than just numbers in an excel document, data can take various forms and can be combined through a wide-variety of platforms to tell an interesting story. In the past, eye-catching and sensational content served as the key for online news websites. It attracted audiences and generated massive traffic to their website in order to create advertising revenues. Nowadays, data surpasses content as the key for online news websites.

It might be too early to judge whether the Internet has helped or destroyed the development of journalism. It certainly serves as a major factor and has pushed and accelerated the transformation of journalism from traditional to digital. Many news organizations are forced to change and adapt during the transformation; however, no matter it is pull, push, or pull and push, taker or receiver, journalism remains as an essential aspect of our lives.

 

 

Let’s do Cyber Monday!

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Besides eating turkey and gathering with your family to celebrate what you are thankful for, shopping online or in stores has become a major part of our Thanksgiving holiday. The words “Black Friday” and “Cyber Monday” quickly become the most mentioned words during a conversation between two housewives during this holiday season.

What exactly are the terms “Black Friday” and “Cyber Monday”? The term “Black Friday” usually refers to the Friday after Thanksgiving, known as the first day of Christmas shopping. On “Black Friday,” retail stores carry out good deals and promotions to attract customers in an effort to increase sales. The term “Cyber Monday” refers to the first Monday after Thanksgiving, created in 2005 by a marketing firm in order to carry on the tradition of shopping in stores on Black Friday to shopping online that following Monday.

The difference between “Black Friday” and “Cyber Monday” is more than one occurred on Friday and another occurred on Monday. “Cyber Monday” mainly focuses on online shopping and targets female in the work force. When the term “Cyber Monday” was first introduced, it was ranked as the 12th busiest online shopping day of the year. However, 10 years later, it has already become the biggest and busiest online shopping day of the year. “ This year, 2015, it is estimated to 3 billion total in sales, which is a 12% increase over 2014, surpassing “Black Friday”, which is estimated to generate 2.7 billion in online sales, according to Adobe Digital Index” (Bonewright)

When listing out the websites to visit on “Cyber Monday”, Target appeared to be the top choice of many online shoppers since the store offered 15 percent off of any items online. Shopping should always be a fun and engaging experience; however, for some shoppers who shopped on the target website, it turned out to be an unpleasant shopping experience. Due to the high traffic and demand online, the Target website stopped working for some customers when they tried to add items to their carts. When customers tried to add certain item to their carts, a message pop up on their screen indicating that there is a waiting line for that product and the customer needed to wait patiently or continue to refresh the page.

Target faced massive amounts of complaints and a new hashtag #targetfail was created on twitter. A representative told WIRE magazine, “The volume of traffic today is double the site’s previous record, set three days ago on Black Friday.” The spokeswoman said that while the site hasn’t crashed per se, the company has been “metering” the site’s traffic since 9am CST, when the company saw its biggest spike. (Greenberg)

Although the term “Cyber Monday” was originally created by a marketing firm in order to boost sales for certain retailers, it has become one of the most significant online shopping day for the United states and seen as a prominent trend for online retailing business.

 

 

 

 

 

 

 

 

 

Is “ECFA” a good idea?

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On June 26th, 2010 in Chongqing, China, a crucial trade agreement called “ECFA” was signed between the People’s Republic of China (Mainland China) and the Republic of China (Taiwan). The general public in both countries believed that this agreement carried historical significance, being that the Chinese Civil War in 1949 had strained their relationship.

“ECFA” stands for “Economic Cooperation Framework Agreement”. According to the agreement, 539 categories of Taiwanese exports to China and 267 categories of Chinese exports to Taiwan will receive tax cuts in the following year. The agreement is expected to increase Taiwan’s GDP by 1.72%, which is more than 7 billion U.S dollars, in addition to creating more than 263,000 jobs.

Another important aspect of “ECFA” is the “Three No” negotiation principle that the Taiwanese government has brought into the trade agreement. The agreements outlined in the “Three No” negotiation are as follows: saying no to downgrading Taiwan’s sovereignty, importing China’s agriculture products, and China’s labor workers. The Taiwanese government looks forward to achieving economic development between Mainland China and Taiwan under one condition- Taiwan’s benefit must be protected.

The “ECFA” trade agreement has been a controversial issue since it was introduced to the public. President Ying-Jeou Ma, current President of the Republic of China, and his administration believe that signing “ECFA” with Mainland China will provide advantages and affect Taiwan’s market in a positive way. Compared to other Asian countries, Taiwan will gain its advantages and priority to enter China’s market. Due to the tax cut on Taiwan’s exports to China, more companies in the United States and Europe tend to utilize Taiwan as its entry point to China’s market, thus helping Taiwan transform economically.

Four years have passed since the enactment of the trade agreement. Although the initial results showed that the total value of Taiwan’s exports to China increased 35%, many still cast doubts on whether “ECFA” has brought more benefits than harm to Taiwan’s market and economy. Looking at the data provided in the initial report, Taiwan’s exports to Mainland China have continued to lose their market share even when those exports received tax cuts benefits; on the other hand, Mainland China’s exports to Taiwan have increased their market share from 24% to 30%. According to the spokesperson, Ying-Chen Wang, “For the past few years, Mainland China has vastly developed its iron and steel industry and sold its products to Taiwan in a very low price.” In the years 2011 and 2012, Mainland China and Korea sold a particular stainless product that is used to produce elevators, windows, and electronics for a price that is lower than 30% of the market price.

From a BBC news article, several Taiwanese with various occupations were interviewed and gave their opinions on the trade agreement “ECFA”. Some favored the agreement and look forward to connecting with the global economy. “It’s good for Taiwan to sign trade deals with other countries because that’s the trend nowadays – economic integration, and Taiwan needs to be integrated with the global economy”, said Yao-Ting Lin, a building manager. Others cast their doubts on the actual execution of the agreement, and are concerned about intense competitions within local markets. “Chinese flowers might come here too. They say now they will keep out agricultural products, but I don’t think they will do that forever”, said Su-Chung Liu, the owner of a flower shop.

Every coin has two sides, and so does “ECFA”. Whether “ECFA” has proven itself to boost or decrease Taiwan’s competitiveness, as it relates to global economy the outcome is still a tossup. However, what can be said for sure is that “ECFA” has served as the first step in economic cooperation between Mainland China and Taiwan.

To Buy or Not to Buy

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“It all started during my semester study abroad in France”, recalled by Lai, when asked what made her choose to pursue a career as an overseas purchase agent.

Jasmine Lai is a 24 year old, recent college graduate from a prominent university in Shanghai. While studying abroad in France, during her junior year of college, she constantly found herself purchasing luxury products for her mom and shipping them back to China. It was in doing so that Lai took notice of the pricing discrepancies between these products in France and the identical ones sold back home in Shanghai. Lai clearly saw this as an opportunity for her to start her business.

“Before this trip, I was not aware that the price for the same luxury product in Europe and in China could vary so much.” Lai saw a chance for her to step in. The vast price discrepancy between the luxury product in Europe and the same luxury product in China served as the foundation to propel her career forward. “I started to ask myself. If I was able to purchase the luxury products in Europe and bring those products back with to China, even if a service fee was added, the price for the product from Europe was still lower than its retail price in China.”

“In 2012, Chinese shoppers became the largest group of luxury shoppers in the world and now account for 25% of the global revenue for luxury retailers, ahead of the Americans who account for 20%”, according to an article from Albatross global solutions. However, even though Chinese shoppers are recognized as the major source of revenue for luxury brands, more than half of their purchases are made in other countries such as France, Italy, and the United States instead of Mainland China. The price gap is the most commonly referenced reason for this phenomenon. Mainland China imposed high level of tax on imported luxury goods, which has served to further widen the price gap between other countries and its own.

According to HSBC China Luxury Tax Report, in 2010, the Chinese government raised RMB¥1.2 trillion, equivalent to US$187.9 billion, in luxury taxes. Many have argued that in order to create incentives and increase domestic spending, the Chinese government must lower the luxury tax, which consists of import duties, VAT, and consumption tax. Although the Chinese government has expressed its intent to lower the level of tax on imported luxury goods, and agreed that more domestic consumption will create several benefits to the country’s economy, it casts doubt on the direct relationship between lowering luxury tax and the decrease of the retail price of luxury goods. “Officials at the Ministry of Finance take the view that tax reductions would not translate to reduced prices for luxury goods, but would instead merely allow foreign manufacturers to increase profits”, according to the article “Luxury Tax in China” in China Briefing.

In addition to this staggering price gap, the increasing number of personal wealth in China has accounted for the increased amount of overseas purchasing. According to Credit Suisse, the wealth per adult in China more than tripled between 2000 and 2011. With more disposable income, people in China tend to spend their money on leisure activities such as traveling and shopping, especially shopping for luxury goods. In China, luxury goods are often used and purchased as a way to express a person’s social status due to its price and premium image.

For Lai, having more customers wanting to purchase luxury products is a plus to her business. When asked how to survive in a competitive environment, Lai answered, “Everyday, I am constantly thinking of ways to reinvent my business and approach it from a more financially savvy perspective. Specifically, I have worked on reducing my costs, learning how to better serve my customers, and striving to reach a more varied demographic with my target audience.”

With the advancement of technology, instead of setting up online website, Lai’s business relies entirely on two of the most used mobile applications in China, namely Sina Weibo and Wechat. Sina Weibo is a social media application that combines the functions of Facebook and Twitter. Users are able to comment, share posts from friends, and upload photos and videos. Different than Weibo, Wechat offers free messaging and focuses on interactions between the user and his or her friends. “Wechat serves as a great way for me to interact directly with my client. When my clients saw a product that they are interested in buying, they would send me the picture of the product directly through Wechat.”

Take the iconic handbag from Saint Laurent, one of the world’s best-known luxury brands, as an example. The price for the bag is £1590, which is ¥9540. The same bag in China, is £2190, which is ¥14322.6. When Lai received a photo of the bag from a customer, she asked her buyers in Europe to confirm the price. As soon as she had the Paris price nailed down, she tacked on a 30% service fee and sent it to her client via Wechat. The client agreed and so Lai dispatched her agent in Paris to purchase the bag and ship it to China.

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Although it might seem to be fun and glamorous to be an overseas purchase agent, there are many underlying difficulties and uncertainties jeopardizing Lai’s daily work. “The most challenging part of my job is going through the customs” said Jasmine, an overseas purchase agent based in China.

A big part of Lai’s career as an overseas purchase agent is to travel to Europe twice a year, during its sale season. It was easy and quick for Lai and her employees to buy the desired products for the clients. Nevertheless, bringing all the products back safely to China without custom’s suspicion is the hardest part.

“Carrying all the products with me didn’t become a problem until recent years. During my first and second year as an overseas purchase agent, I would place all the items into two large suitcases. Aside from having to pay an extra overweight fee, I never encountered problems with Chinese customs; however, the traveling climate is much different nowadays.” With an increasing numbers of overseas purchase agents, Chinese shoppers tend to purchase luxury products overseas, leading to a shrinking economy for the luxury brand market in China. As soon as the Chinese government realizes the overseas purchases are endangering the growth of its luxury brand industry domestically, it immediately enforces stricter custom policies.

“With the new custom policies, instead of leaving the price tag, boxes, and the wrap for the luxury products, we need to remove everything in order to pretend that all the products belong to personal instead of commercial use.” The updated custom policies definitely bring changes to the overseas purchase industry, but it seems that even though the risk of buying luxury products through an overseas purchase agent is higher than simply buying the product in a nearby department store, Chinese shoppers are willing to take the risk instead of paying for the retail price that include stiff taxes imposed by the government.

Aside from needing to pay increasing amounts of attention on custom policies, monitoring the foreign exchange between RMB¥ and Euro£ closely is a daily task for an overseas purchase agent’s as it often poses a potential threat to sales. When the value of the RMB¥ increases relative to that of the Euro£, the price of Chinese exports increases, making it more expensive for European to buy Chinese products and cheaper for Chinese to buy European products. On the other hand, when the value of the RMB¥ decreases comparatively relative to that of the Euro£, the price of Chinese imports increases making it cheaper for Europeans to buy Chinese goods and more expensive for Chinese to buy European products. “When RMB¥ appreciates against Euro£, our sales tend to decrease a little because our clients are more likely to pick Europe as their travel destinations”, recalled Lai.

The luxury brand industry in China is booming. An increased number of Chinese shoppers and an increased interest toward luxury products continue to pave the way for more opportunities. However, just like how happiness is often associated with the purchase of luxury products, the risks, such as custom policies and foreign exchange rate, are closely tie to the success of overseas purchase agents.

 

The Influence of a Logo

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When you hear the word “McDonald”, what is the first thing that comes to your mind? 99% of the time it will be the iconic golden arches. The logo is often the first thing customers think of or associate with a brand when the brand name is mentioned. Nonetheless, many brands often ignore or underscore the importance of their logo and economic implications it can have.

In October, 2010, Gap, a multinational clothing retailer, decided to change its signature logo from a blue square with white “Gap” in the middle, to a unfamiliar logo where the word Gap is written in black with a small blue square overlapping with the “p”.

The customers were not happy about the change. Shortly after the debut of the new logo, GAP received large amounts of negative feedback and backlash on its social media platforms, with many comments asking to bring back the original logo and stating the refusal to shop with GAP. One of the comments on Facebook wrote, “This is the worst idea Gap has ever had. I will be sad to see this change take place, if this new logo is brought into the store I will no longer be shopping with the Gap.”

The company argues that it changed its logo in order to build a stronger connection with its target audience, the millennial generation. However, considering the lack of support from its online community and unfavorable comments from its target audience GAP made the decision to return to its original logo within a week.

A brand’s logo serves as a means for the company to communicate its value and emphasize its uniqueness to its customers. “A good logo can be a synthesizer of a brand that is readily used by customers for identification, differentiation and positive associations.” According to an article from MIT Sloan Management Review, an effective corporate logo relates positively to customer’s commitment to the brand.

In September 2015, Google changed its old logo, serif typeface, to a new logo, a san serif typeface. The original logo was created in 1999 and even though Google has made minor changes to the original logo, changing the typeface is the first major move the company has made in the last 16 years. Besides the change from serif to san serif, Google transformed its logo from words to an animated symbol, with red, blue, orange, and green dots.

Why did Google decide to change its logo at this moment? Some speculate that Google is trying to change its brand image from a dull search engine to an interactive and friendly portal that is capable of leading you to anything and anywhere. According to the article ”Google’s New Logo Is Trying Really Hard to Look Friendly”, Google wants its users to see its brand as a benevolent guide to this new world, one that considers humans, not machines, argues Rhodes.

Positive and negative reviews came along with the change of Google’s logo. For some, the new logo brings positive energy and refreshes Google’s brand image. “…they’ve modernized the logo in a way that feels very true to who they are and what they stand for.”, said Debbie Millman. For others, the change is unnecessary and superficial. “It’s almost this fake, artificial intelligence, the machine trying to act like your friend. And when Google as a corporation tries to do that, they sound like an automated friend-bot.”, said Ellis.

Although it is difficult to mathematically calculate the success of a logo change and its underlying affects, one thing that we know for certain is that logos certainly play an important role in brand and its implications will, positive or negative, will trickle down.

To Buy or Not to Buy

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A bus full of Chinese tourists arrive in front of Galeries Lafayette Haussmann, a must-visit department store in Paris; it is just one of many throughout the year. Although recent policy in Chinese government has devalued its currency, RMB¥, and consequently slowed down its economy, it doesn’t seem to scare Chinese people away from traveling to Europe. Nor has it decreased the desire to purchase luxury products. According to the article “Meet The Chinese Luxury Shoppers Who Are Taking Over The World” from Business Insider, Chinese customers account for 35% of the luxury sales around the globe and their spending is 1-2 times higher than other nationalities.

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Jasmine Lai, 24, is a recent college graduate from one of the well-known universities in Shanghai, Fudan University. After graduation, she took a trip to Europe to help propel her career as an overseas purchase agent. “Before this trip, I was not aware that the price for the same luxury product in Europe and in China could varies so much.” Lai saw a chance for her to step in. The price discrepancy between luxury products priced in Euros and the same product’s price in China, gave her the idea for a brand new business model. “I started to ask myself. If I was able to purchase the luxury products in Europe and bring those products back with to China, even if a service fee is added, the price for the product from Europe is still lower than its retail price in China.”

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With the advancement of technology, instead of setting up online website, Lai created a business that relies solely on two of the most used mobile applications in China, which are Sina Weibo and Wechat. Sina Weibo is a social media application that combines the functions of Facebook and Twitter. Users are able to comment, share posts from friends, and upload photos, and videos. Contrarily, Wechat offers free messaging and focuses on interactions between the user and his/her friends. “Wechat serves as a great way for me to interact directly with my client. When my clients saw a product that they are interested in buying, they would send me the picture of the product directly through Wechat.”

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Using these graphics, I will explain how Lai’s business model works. Take this iconic handbag from Saint Laurent, one of the luxury brands in Paris. On the top, the price for the bag is £1590, which is ¥9540. On the bottom, the price for the same bag in China, is $2190, which is ¥14322.6. When a customer requests the bag, Lai would signal her buyers in Europe to confirm the price of the bag. Once the price, ¥9540, is confirmed, Lai will add thirty percent of service fee, ¥2862, to the price and report the price back to the customer on Wechat. After the client’s nod, Lai’s employee in Europe will purchase the bag and sent it back to China.

Although it might seem to be fun and glamorous to be an overseas purchase agent, there are many underlying difficulties and uncertainties jeopardizing Lai’s daily work. “The most challenging part of my job is going through customs,” Jasmine said.

A big part of Lai’s career as an overseas purchase agent is to travel to Europe twice a year, during its sale season. It was easy and quick for Lai and her employees to buy the desired products for the clients. Nevertheless, bringing all the products back safely to China without custom’s suspicion is the hardest part.

“Carrying all the products with me didn’t become a problem until recent years. During my first and second year as an overseas purchase agent, I would place all the items into two large suitcases. Except having to pay an extra overweight fee, I never encounter problems with China custom. However, the situation is different nowadays.” With an increase numbers of overseas purchase agents, Chinese shoppers tend to purchase luxury products overseas thus leading to a shrinking economy for the luxury brand market in China. As soon as the government realized the overseas purchases are endangering the growth of its luxury brand industry domestically, it immediately enforced stricter custom policies.

“With the new custom policies, instead of leaving the price tag, boxes, and the wrap for the luxury products, we need to remove everything in order to pretend that all the products are for personal instead of commercial use.” The updated custom policies definitely bring changes to the overseas purchase industry but it seems that even though the risk for buying the products through overseas purchase agents is bigger than buying the products in a nearby department store. Chinese shoppers are willing to take the risk instead of paying for the retail price, which include stiff taxes imposed by the government.

Besides the need of paying extra attention on custom policies, monitoring the foreign exchange between RMB¥ and the Euro becomes the daily task of an overseas purchase agent’s due to the fact that it might also serve as a potential threat to the sales. On one hand, when the value of the RMB¥ increases comparatively to the value of the Euro, the price of Chinese exports increased because it is more expensive for European to buy Chinese products but it is cheaper for Chinese to buy European products. On the other hand, when the value of the RMB¥ decreases comparatively to the value of the Euro, the price of Chinese imports increases, which makes it cheaper for European to buy Chinese goods but more expensive for Chinese to buy European products. “When RMB¥ appreciates against Euro, our sales tend to decrease a little because our clients are more likely to pick Europe as their travel destinations,” recalled by Lai.

The luxury brand industry in China is booming. An increased number of Chinese shoppers, combined with an increased interest toward luxury products, creates more opportunity. However, just like how happiness is often associated with the purchase of luxury products, the risks, such as custom policies and the fickle foreign exchange rate, are closely tied to the success of overseas purchase agents.

The Number Matters

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“September and October of 2008 was the worst financial crisis in global history, including the Great Depression.”, the former head of federal reserve, Ben Bernanke, said. Although seven years have passed since the country has broken out of the crisis, many companies are constantly affected by the fickle health of the economy.

Richard Martin, who is a publicly certified accountant, founded Martin & Associates in 2003. The company provides accounting and financial accounting services such as business consulting, investment review, and tax planning to individual and business clients. For example, it calculates the gross profit percentage for its customer and gives advices on whether its customer needs to adjust production quantity or the pricing. Moreover, Martin & Associates analyzes businesses from a financial perspective, often resulting in financial advisements. When their customers are in debt, Martin & Associates evaluate the financial health of the company and make adjustments necessary to return to a healthy cash flow. What differentiates Martin & Associates from other accounting firms is its commitment to establish valuable relationships with its client base customers. The company truly believes that the success of their clients impacts the success of Martin & Associates significantly.

Further, Martin correlated the state of the economy to his firm by insisting it is all a “chain effect.” The prosperity of Martin & Associates depends on the financial health of its clients. When its clients are financially healthy, there is a more rapid rate of payment and a steadier flow of consulting appointments as they seek advice with investing their surplus cash; however, during times of economic hardship, more effort is required on part of Martin & Associates to ensure that payments are made within a feasible period. If one of its customers is not performing well, it affects Martin & Associates directly because the customers do not have the means to pay the company for its financial services. When their clients file for bankruptcy and go out of business, Martin & Associates feel immense pressure d to actively seek out more clients by going through additional service providers and networking. Interestingly, a large amount of their new client base comes as a result of referrals.

Besides the broad economic environment, the movement of the federal interest rate impacts the client of Martin & Associate the most, inversely impacting them. “The lower the interest rate, the less interest expenses for my clients, resulting in more liquidity. In times of notably high liquidity, my clients seek additional financial consulting”, stated Mr. Martin. When Martin & Associate’s client owns greater amount of capital, they tend to invest in capital goods therefore demand more financial advices. For example, a client with additional cash flow for any given time period, may want to invest in additional land or equipment, and seeks advice from Martin & Associates as to what the financial return of those investments may be.

Additionally, government regulations are one of biggest challenges Martin & Associates is currently facing. Every time a new law or act is put in place, its clients must reallocate their budget breakdown to meet the needs of the change. An example of this may be additional health insurance costs as a result of the Affordable Care Act, or a change in minimum wage. In addition to these widespread regulations, there are also additional changes that vary from industry to industry (being that their client base varies from insurance brokers, to tech companies to restaurant chains). For this reason, it is important that all the employees at Martin & Associates stay up-to-date on changes within various industries and have the knowledge to respond to those changes.

Furthermore, Martin & Associates is an outstanding company because of their personal ethical decisions within their own firm. Since the 2008 global financial crisis, many businesses have made changes within the company in order to survive and remain its status within the market. Some companies offer discounts to its customer in order to maintain its competitiveness. However, instead of lowering the price, Martin & Associates decided to maintain its original price but provide added service. “Once you lower your price, you are competing with other companies on the price level instead of competing on service. Lower price may imply lower quality, and competing on price alone does not build loyalty with customers”, Martin said.

Another significant obstacle that Martin & Associates have strategically conquered is the growing popularity of the Internet. The Internet era not only affects the way people communicate with each other, but also affects the competitive landscape in the accounting field. With the convenience Internet provides, instead of seeking financial advices and services from traditional accounting firm, people turn to online software. In order to raise its company’s competitiveness, Martin suggested that his company understand the trend and further provide extra services to its clients. He mentioned, “Online software servers are able to reach a huge amount of audiences. Technology brings competition, therefore companies have to keep up with the technological innovation to provide added value services.”

Starting a business of your own might not be easy task but keeping the company running through economic hardship is certainly harder. By maintaining relationship close relationship with its clients, creating added value services, and constantly monitoring the economical trend of the market, Martin & Associates is able to withstand through the ups and downs of the economy.

The Plastic Surgery Index

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When hearing the word economy, any keyword that is related to finance, such as “GDP,” might pop into your head, but what about the phrase “plastic surgery?” A few years ago, economy was exclusively linked to plastic surgery when the American Society of Plastic Surgeons (ASPS) revealed its statistics.

In comparing the numbers from 2008 to 2009, the ASPS found that the total number of cosmetic procedures fell 1 percent and the surgical procedures fell 9 percent. These statistics created a correlation between the U.S. economy and plastic surgery, and thus the Plastic Surgery Indicator was born.

During times of economic instability, people cut down unnecessary spending as their first priority, and plastic surgery appears to be on the top of the list. The total number of plastic surgeries fell during economic hardship, but when the economy is rising, the total number of surgical procedures also rises because people have a restored confidence in the market.

In 2011, 13.8 million cosmetic plastic surgeries, including surgical and minimally- invasive, were performed in the U.S., which is a five percent increase from 2010, according to the American Society of Plastic Surgeons.

“While the rate of economic recovery in the U.S. is still uncertain, 2011 proved to be a good year for plastic surgery,” said ASPS President Malcolm Z. Roth, MD. “Consumer confidence was up, auto sales rose 10 percent, so it is not surprising that we would also see increased demand for plastic surgery procedures.”

However, if you only focus on the total number of surgical procedures that were performed each year, a large part of the indicator is being missed.

In 2011, the total number of surgical procedures was 11.5 million, 2.1 of which were invasive cosmetic surgical procedures, such as breast augmentations and facelifts. In 2013, the total number of surgical procedures was 13.8 million, and only 1.58 of which were invasive cosmetic surgical procedures.

Even though the statistics from the American Society of Plastic Surgeons show an increase in the total number of surgeries from 11.5 to 13.8 million, it shows a decrease in the number of invasive cosmetic surgery procedures from 2005-2011.

If less invasive cosmetic surgeries were performed, you may be wondering how did the total number of cosmetic surgeries increase? Minimally invasive surgical procedures are the answer.

Due to the fact that people have less discretionary income to spend, people are more willing to pay for minimally invasive cosmetic surgeries– such as botulinum toxin, which means injecting Botox and Dysport to the face in order to reduce wrinkles– as opposed to spending it all on invasive cosmetic surgeries– such as nose reshaping, which is expensive.

Overall, we know that when the economy is good, more plastic surgeries are performed, which is a good general measure of consumerism in the economy. However, looking at the number of minimally cosmetic surgeries is an even more precise way to predict the economy than the total number of cosmetic plastic surgeries in the future.