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MADE BETTER IN CHINA Brands and innovations from China are going global. You ain’t seen nothing yet! trendwatching.com’s free Monthly Trend Briefing June 2012 trendwatching.com/trends/madebetterinchina/
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China still faces many potential obstacles in its attempts to foster a deep and lasting culture of innovation and creativity. However an avalanche of Chinese brands are already catering to an increasingly large and sophisticated internal market, and competing with and even beating established incumbents from all over the world at their own game. Just think what the future will hold when China is truly unleashed!

Transcript of trendwatching.com's MADE BETTER IN CHINA

Page 1: trendwatching.com's MADE BETTER IN CHINA

MADE BETTER IN CHINABrands and innovations from China are going global. You ain’t seen nothing yet!

trendwatching.com’s free Monthly Trend BriefingJune 2012

trendwatching.com/trends/madebetterinchina/

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No wonder then that examples of top quality, innovative Chinese* products

and services brands are easier to find than ever. And if Chinese creativity ever

gets truly unleashed, well, then we ain’t seen nothing yet! Hyper competition

may need a new definition, as MADE IN CHINA is traded in for MADE BETTER

IN CHINA.

* In this Trend Briefing, Chinese means mainland Chinese. We’ve filtered out

many excellent examples from Hong Kong and Taiwan, as well as American

Chinese entrepreneurs, powerful Western brands intensely partnering with Chi-

nese ventures, and so on.

DefinitionChina still faces many potential obstacles in its attempts to foster a deep and lasting culture of innovation and creativity (State economics! Politics! Demographics! The environment! Intellectual property!).

However an avalanche of Chinese brands are  already  catering to an increasingly large and sophisticated internal market,  and  competing with and even beating established incumbents from all over the world at their own game. Just think what the future will hold when China is  truly  unleashed.

DESIGNED BETTER IN CHINA /

MADE BETTER BY CHINA FOR ALL /

MADE GREENER IN CHINA /

MADE ONLINE IN CHINA /

MADE STRANGER IN CHINA /

MADE TOGETHER IN CHINA /

MADE BIGGER IN CHINA /

MADE EASIER IN CHINA /

MADE FASTER IN CHINA /

MADE MORE LUXURIOUS IN CHINA /

MADE BETTER IN CHINA FOR A WHILE NOW /

Watch out for the following sub-trends:

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1.URBAN BOOM

DRIvERSThe lure of rapid riches is drawing Chinese to urban areas in droves. Just two recent stats to illustrate

the mind-blowing scale of China’s urban consumption boom:

Urban household disposable income is expected to double between 2010 and 2020 (Source:

McKinsey, March 2012).

In 2010, China had 18 million households with an annual income above USD 16,000. By

2020, this number will be 167 million households. That’s nearly 400 million people (Source:

McKinsey, March 2012).

The outcome? A massive, sophisticated urban Chinese class of CITYSUMERS, with a massive

demand for high quality goods and services.

Here are just three forces driving the MADE BETTER IN CHINA phenomenon:

The demand for high quality goods and services has been met (more often than not) by Western

brands trading on the status that comes with their heritage. Indeed, Western brands have

scrambled to not only sell to Chinese consumers, but to pay homage to them. With special

ranges or products that are MADE FOR CHINA, or by rolling out the RED CARPET to Chinese

consumers around the world.

Both of which have set the expectations of Chinese consumers, and given Chinese brands and

entrepreneurs the inspiration and confidence to step forward, while still remaining mindful

of the need to match – or exceed – the standards of quality set by the very best of their Western

counterparts.

2. BEST OF THE WEST IN THE EAST

The impact of the Great Firewall of China is well-documented, but China is connected. With over

513 million Internet users (compared to 245 million Americans online)*, Chinese entrepreneurs and

consumers are part of the GLOBAL BRAIN: frantically feeding off (and adding to) global

consumer culture and creativity. * Source: www.worldinternetstats.com, December 2011

3. GLOBAL BRAIN

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DESIGNED BETTER IN CHINA

You know you’ve truly arrived as an economy

when local art, architecture and design move

from functional to desirable:

Chinese architect Wang Shu was awarded

the 2012 Pritzker Architecture Prize in May 2012

in Beijing, the first Chinese architect to win the

prize for work on the Chinese mainland.

Wang Shu: Wins 2012 Pritzker Architecture Prize

The Brand New China Store, situated in Beijing,

is a fashion and lifestyle store that focuses

exclusively on Chinese designers. Selling clothes,

accessories, furniture, home décor items and

paintings at a wide variety of prices. It’s owned

by Hong Huang, a major celebrity (media figure,

blogger, television host and publisher) in China.

Brand New China Store: A design store for and by modern China

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Due to be completed in 2013, the Sinosteel

International Plaza in Tianjin, China, was designed

by Chinese architect Ma Yansong, of MAD

Architects. The Plaza’s steel façade ensures

that no internal columns are needed within the

structure, meaning more space can be used within

the building.

MAD Architects

DESIGNED BETTER IN CHINA

Hexagonal windows of various sizes create a

pattern across the surface of the Plaza, and

also improve energy efficiency. Their strategic

positioning will help to preserve heat during the

winter, and keep residents cool during the summer. 

Above: a global selection of designs from Beijing-

based MAD Architects. These designs are all

under construction or completed.

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MADE BETTER BY CHINA FOR ALL

Despite China’s growing economic power,

there are still hundreds of millions of Chinese

with relatively modest incomes. And alongside

this huge domestic market, there are billions of

In December 2011, China Unicom announced that

they would distribute Xiaomi’s MI-ONE, featuring

a 1.5GHz processor, a four inch display, and an 8

megapixel camera. Designed to capitalize on the

growing domestic demand for reasonably priced

smartphones, the MI-ONE costs CNY 1,999, less

than half what comparable smartphones from

Apple or Samsung usually cost.

other emerging market consumers, making the

rewards for Chinese brands which bring high

quality, yet low cost products to market almost

endless.

China Unicom: Low cost smartphones

At the end of 2011, China’s state owned JAC

Motors announced an investment of USD 500

million in Brazil, the world’s fourth largest car

market. The company’s first overseas factory is

expected to produce 100,000 cars per year.

JAC Motors: First overseas factory in Brazil

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MADE BETTER BY CHINA FOR ALL

Operating around 1,800 stores across mainland

China and catering to the country’s increasingly

fashion-conscious youth, retailer Meters/

bonwe has proved very popular. The brand

offers reasonable prices and an international feel;

indeed it’s often assumed not to be Chinese by

consumers.

Meters/bonwe: Chinese fashion with an international feel

The sneaker brand Warrior (‘Hui Li’ in Mandarin),

originally created for Chinese athletes, has

been a household name in the country since

the 1950s. The brand keeps its designs simple

and unpretentious, maintaining its status as ‘the

everyman’s shoe’. While the footwear retails for

EUR 50-120 overseas (and features in publications

such as GQ and Vogue), it is still affordable in the

domestic market.

Warrior Shoes: The everyman’s shoe everywhere

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MADE GREENER IN CHINA

With the Chinese government pushing the green

agenda hard (for both reasons of economics

and national pride), and both urban and rural

populations mindful of increasingly visible

The city of Shenzhen boasts a fleet of electric taxis.

The fleet was supplied by Chinese automobile

manufacturer BYD, and the pilot project has seen

50 electric taxis take to the streets. There are plans

to add a further 250 vehicles to the fleet during

2012, as well as 200 electric buses.

BYD: Electric taxis take to the streets of Shenzhen

At the end of 2011, China ENFI Engineering

Corp completed work on the world’s largest

solar tracking station in Ningxia. The plant’s

solar tracking systems deliver a 25% increase in

capacity over traditional solar power stations.

ENFI: World’s largest solar tracking station

environmental degradation, expect to see

a steady stream of Chinese planet-saving

innovations and initiatives:

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MADE GREENER IN CHINA

The Tianjin Eco City, a joint initiative from the

Chinese and Singaporean governments, has

invited brands from around the world to help solve

pressing environmental issues. In the next 10

years, 350,000 people are expected to move to the

city, trialing new systems and technologies. The

government hopes that many of these will have the

potential to solve the environmental issues facing

China’s huge cities.

Tianjin: Eco-city experiments with practical solutions for greener living

Chinese Suntech Power is the world’s largest

producer of solar panels, now totalling over 20

million panels in over 80 countries. In early 2012,

the company was named one of the world’s 50

most innovative companies by MIT, partly due to its

Pluto cell processing technology, which has since

achieved a world record 20.3% efficiency.

Suntech Power leads global solar panel market

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MADE ONLINE IN CHINA

Driven by a massive online population and

the censorship of key Western online brands,

Chinese services are not simply imitating

the Googles, Facebooks and Twitters of the

O.cn is a stylized online mapping service that

covers 38 of China’s largest cities. The 3D maps

interface with social networks, and users can click

on individual buildings and areas to access user-

created and curated content.

O.cn: Maps China’s cities in illustrated 3D

In 2011, Sina, the Chinese web portal, launched

a check-in service called WeiLingDi via their

resident Twitter-like website Weibo. Users are able

to check-in at locations using WeiLingDi, earn

badges, write reviews about local businesses, and

connect with 60,000 verified Chinese celebrities.

WeiLingDi: Check-in and review local businesses

world. Instead they are often showing their

better-known counterparts the way forward by

integrating, if not adding to and enhancing,

popular online services.

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In early 2012, Chinese social network Renren

launched a travel journal service, available online

or as an app. The Fengche service allows users

to create image-rich ‘sets’ detailing their travels,

ready to share with friends and family.

Renren: Networking site launches social travel app

Chinese group buying site Yikuair is tapping

into the microblogging service Sina Weibo.

The service carefully curates daily deals, and

then lets Weibo users place a small deposit to

secure the offer. Deposits can even be made

using Weibo’s own virtual currency.

Yikuair: Daily deals site offers micro group buying

MADE ONLINE IN CHINA

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IIn April 2012, the latest version of

Tencent’s Weixin instant messaging app

introduced users to its English-language name:

WeChat. The app offers login via the vast QQ

messaging network, which boasts over 700

million users, and a range of additional features.

These include recent features familiar to

Facebook and Google+ users, such as Timeline

and Circles, as well as QR tags, location-based

services, voice messaging and a ‘Game Center’.

Pinterest–inspired Buykee launched in China in

April 2012. The pinboard-style site differentiates

itself from its predecessor, by focusing

exclusively on luxury products and offering users

the ability to buy what they are seeing.

Tencent: Weixin app offers QQ instant messaging and more

Buykee: Pinboards and purchasing power

MADE ONLINE IN CHINA

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MADE STRANGER IN CHINA

The rise of consumer culture in China

has inevitably led to the creation of some

‘remarkable’ products and services. However

unusual consumers’ tastes, they are being met

by Chinese brands.

In 2011, former Soviet aircraft carrier, the Kiev,

was converted into a luxury hotel by its new

Chinese owners. The ship has 137 standard hotel

rooms, three VIP guest rooms, two presidential

suites, and a luxury restaurant.

The Kiev: Former Soviet aircraft carrier transformed into luxury hotel

China Post offers a service enabling individuals

to send letters from space, with a ‘Space City 1′

postmark. Users send an email to Tiangong-1, a

Chinese spacecraft orbiting the earth, which is

then rerouted to a special China Space Post Office

branch in Beijing. The emails are printed, placed in

space-themed envelopes, stamped with a ‘galactic

postmark’, and sent in the mail.

China Post: Letters routed via spacecraft with ‘galactic postmark’

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MADE STRANGER IN CHINA

Offering a memorable learning experience, the

conspicuously named Sexy Mandarin is an online

service that teaches users to speak Mandarin

via YouTube and YouKu (the former’s Chinese

equivalent) videos, for free. The twist? All the

teachers are attractive, sexily dressed women.

Learn Mandarin the sexy way

Chinese online shopping platform Taobao 

(commonly referred to as the Chinese eBay or

Amazon), is reportedly working on an unusual

initiative to spice up e-commerce – Tao Girls.

Customers will be able to choose (at a slightly

higher cost) attractive women living in their city, to

deliver their web purchases to the door.

Tao Girls deliver

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MADE TOGETHER IN CHINA

As the most populous country in the world,

and one with a strong collectivist culture, it’s no

surprise to see a wave of innovative Chinese

products and services that bring consumers

together.

Handsup.cn aims to hand power over to the

consumer by asking them to recommend products

and services they want to buy, as well as the price

tag. The more users that want a particular product,

the higher the chance of it being available, and the

lower the price.

Handsup.cn: Hands stock and pricing suggestions over to customers

In late 2011, Chinese P2P lending

site CreditEase secured a round of funding,

while founder Tang Ning was honored by the

Communist party. Both achievements signal the

dramatic impact of P2P lending in China, where

there are now over 100 sites offering services.

CreditEase has become one of the country’s

largest independent financial service providers,

with more than 5,000 workers.

CreditEase: P2P lending

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MADE BIGGER IN CHINA

Whether it’s the size of the population, the

cities, or the economy, China means ‘big’, if

not ‘biggest’. Just three consumer-focused

examples to illustrate:

The Youngman JNP6250G is believed to be the

largest bus in the world, capable of transporting

up to 300 passengers. The first of the buses will

be deployed in Beijing and Hangzhou, using

dedicated highway lanes.

Beijing & Hangzhou: ‘World’s largest bus’

Construction of Beijing Daxing International

Airport is due to begin in late 2012. By the time

it’s completed in 2017, the airport’s planned

capacity is 200 million passengers per year. It will

be connected to Beijing via a new high-speed rail

link.

Beijing Daxing: ‘World’s largest airport’

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MADE BIGGER IN CHINA

2013 will see the opening of the world’s largest

freestanding shopping mall in the Chinese city

of Tianjin, which is just 30 minutes from Beijing

by high-speed train. The SM Tianjin Shopping

Center will cover 530,000 square meters, an area

larger than 74 football fields.

SM Tianjin: World’s largest shopping mall opening 2013

“Chinese brands are already catering to

demanding consumers, both at home and

increasingly abroad. Including yours.”

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MADE EASIER IN CHINA

All of the pressures that lead global consumers

to seek convenience are amplified in Chinese

cities. A couple of Chinese innovations

leading the way when it comes to ease and

convenience:

The Ubox mobile app for Android, iPhone and

Java-based phones enables users to select and

pay for snacks using their mobile device. It also

includes a discount on the cash price for users.

Ubox: App enables mobile payments at vending machines

In September 2011, Sichuan hotpot chain Hai

Di Lao and Chinese technology firm Huawei

announced a partnership to install telepresence

screens in restaurants across China. Thanks to

the screens, customers can enjoy their meal with

faraway friends and family – via a video link.

Hai Di Lao: video links for connected dining

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MADE FASTER IN CHINA

The Huawei Ascend D Quad was launched in

early 2012, claiming to be the world’s fastest

smartphone. The company’s first quad-core

smartphone features a 720p HD touchscreen and

an 8 megapixel camera.

Huawei: ‘World’s fastest smartphone’

In 15 days at the end of 2011, Chinese

manufacturing and construction firm Broad

Group built a 30-storey hotel in China’s

Hunan Province. The aim of the project was to

demonstrate the company’s Broad Sustainable

Building technology. Needless to say we hope we

can file this example under ‘MADE STRONGER

IN CHINA’ too.

Broad Group: Builds 30-story building in 15 days

Everything is going, has to be and can be

done faster, worldwide. Something Chinese

companies are very much aware of.

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China’s National Supercomputing Center in

Tianjin is home to the Tianhe-1A supercomputer,

which held the position of the world’s fastest until

mid-2011. The country now has 61 machines in

the TOP500, second only to the US.

Chinese supercomputing takes on the world

MADE FASTER IN CHINA

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MADE MORE LUXURIOUS IN CHINA

Of course, luxury is a key part of the China

story, and one that could take up many future

Trend Briefings ;-). From ‘Chinese’ sub-

brands (e.g. Hermes’ Shang Xia) to Chinese

brands being made in Italy (e.g. China

Garments’ Sorgere) Chinese consumers’

Originally launched in Shanghai in 1898, cosmetics

brand Shanghai Vive was recently re-launched

to appeal to luxury consumers in China and the

West. The brand hopes to tap into its heritage and

China’s growing global cultural identity.

Shanghai vive: Heritage, relaunched

China Railways Group has created the world’s

longest high-speed rail network with about 7055

km of routes in China, and trains topping speeds

of 350 km/h. The Beijing – Shanghai route was

opened in 2011 with business class travelers

being waited on by uniformed stewardesses, and

enjoying LCD TVs.

China Railways: Business class beds on Beijing – Shanghai ‘Harmony Express’

cravings for luxury goods shows no sign

of slowing. Relevant here: wealthy Chinese

splurging on an increasing number of home-

grown Chinese luxury brands and services.

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China’s NE-TIGER is a leading luxury brand that

has found global success. The brand hosted

the opening show of China International Fashion

Week in late 2011, showcasing designs reflecting

Chinese tradition and heritage.

NE-TIGER: Chinese luxury fashion house

MADE MORE LUXURIOUS IN CHINA

“Spending on personal luxury goods on the

Chinese mainland rose from EUR 7.1

billion in 2009 to EUR 12.9 billion in 2011”

(Source: Bain, December 2011).

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P1.cn is an invitation-only social network for well-

connected or fashionable Chinese, that claims to

have over 1.2 million members. Invitations can only

be obtained by knowing five existing members, or

by being approached by one of the site’s staff.

P1.cn: Invitation-only social network

In early 2012, Chinese travel website Ctrip

launched their new site, HHtravel. The site is

designed to offer packages to Chinese tycoons

with disposable assets of more than RMB 10

million. A typical trip includes business class

travel, Michelin-starred dining, and award

winning hotels and attractions.

Ctrip: Travel service for the very wealthy

MADE MORE LUXURIOUS IN CHINA

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Personal care brand Ba Yan Ka offers Chinese

consumers totally natural skin, body and hair

care products. Formulas are free of chemicals,

not tested on animals, and all packing is

biodegradable.

Ba Yan Ka: ‘Pure water. Natural elements. Chinese Wisdom’

Swiss watch brand Swatch invited Chinese

fashion designer Uma Wang to create two

limited edition wristwatches. One is plastic and

branded with Uma Wang’s name, while the other

uses traditional Yunnan Province embroidered

print and coloring. Both designs retail for GBP

44.50.

Swatch and Uma Wang

MADE MORE LUXURIOUS IN CHINA

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MADE BETTER IN CHINA FOR A WHILE NOW

While many of the brands in this Trend Briefing

have only relatively recently made waves, there

are of course plenty of established Chinese

brands already operating comfortably on a

global scale:

Sportswear brand Li Ning launched its US retail

site in March 2012, heavily branded with the

slogan ‘Straight Out of New China’ and featuring a

number of high-profile endorsements. A promotion

at the end of the month for special-edition ‘Year of

the Dragon’ shoes caused the site to crash due to

demand.

Li Ning: Straight Out of New China

In January 2012, Chinese consumer electronics

giant Haier demonstrated their ‘Brain Wave TV’,

which allows users to control the action on their

TV sets using their minds. The experimental

technology was showcased alongside consumer-

ready innovations such as 3D TVs with 2D to 3D

conversion.

Haier: Brain Wave Tv

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MADE BETTER IN CHINA FOR A WHILE NOW

Personal care brand Herborist incorporates

traditional Chinese medicine with contemporary

cosmetic science to create its range of products.

The brand has been expanding global distribution,

and is now available in Paris, and across a range

of European retailers.

Herborist: Takes Chinese cosmetics global

In February 2012, French luxury giant LVMH

purchased a 10% stake in one of China’s top

luxury fashion brands, Ochirly. The deal values

the brand at over USD 2 billion, as it considers an

IPO.

Ochirly: LvMH Investment

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MADE BETTER IN CHINA FOR A WHILE NOW

Following Li Ning’s creation of a US headquarters

and retail operation, fellow Chinese sports

brand PEAK opened a US headquarters in 2011,

and its first US store in Los Angeles in early 2012.

The brand ranks third in NBA endorsements, and

has over 6,000 authorized retailers globally.

PEAK: Opens first US sports store

In early 2012, Chinese computer

manufacturer Lenovo announced the Yoga.

The device is a hybrid laptop/tablet which uses

a 360 degree dual hinge design to allow for

use in four different configurations. Meanwhile,

the company’s shipments grew by 43.7% over

the first quarter of 2011, extending Lenovo’s

lead over Dell as the world’s second-largest PC

manufacturer.

Lenovo: Yoga laptop/tablet hybrid

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MADE BETTER IN CHINA FOR A WHILE NOW

Aspiring to represent the ideals of China’s

Generation-Y (members born between 1980-

89), Hi Panda is a fashionable clothing and

accessories brand that has breached the confines

of its native country and spread to Japan, Korea

and Europe, including retail stores in London and

Paris. There is also talk of entering North America

later this year.

Hi Panda represents Chinese youth, globally

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Forget the ‘Made in China’ stigma. It should be clear by now that ambitious

and confident Chinese brands are already catering to demanding

consumers, both at home and increasingly abroad. Including yours.

And if you’re a non-Chinese entrepreneur, why not get in touch with some of

these brands to see if you can help them roll out globally even faster?

Again, these brands and innovations are just the start. Fuelled by constantly

improving technologies, a higher quality workforce and booming domestic

consumption, Chinese brands are just warming up.

Which is why all brands need to keep both eyes firmly on China, a market

that will increasingly define consumer culture. With Chinese brands

exporting goods and services to the rest of the world (not to mention Western

brands rolling out the RED CARPET for Chinese consumers around the

world), expect to see Chinese tastes and preferences exert ever-

greater influence on consumer products and services, and on a global

scale too (yes, that’s a Trend Briefing in itself!).

Of course, we’ve said it before and we’ll say it again: the rise of Chinese

brands does not signal the end for more traditional brands from

Western economies. Brilliance and heritage, from whatever corner of

the world, will continue to have a global appeal. Things will ‘just’ get more

competitive, meaning you will have to work even harder and smarter. Hey,

c’est la vie ;-)

Oh, and while you’re busy preparing for the globally hyper-competitive future,

we’re hard at work on our next Trend Briefing. Make sure you’re subscribed! 

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