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Douban, reaching the white collar worker

Douban, reaching the white collar worker

Douban is one of the lesser known social medial platforms in China, that we first wrote about back in 2012. It’s been around since 2005 and still enjoys widespread popularity amongst white collar workers. It has about 60 million registered and about 150 million unregistered users. In fact, one of the unique features of the network is the fact that users, who are not registered, can still enjoy 90% of the site’s functionality.

 

 

Marketing on Douban offers some unique opportunities for brands targeting niche audiences and could present an interesting opportunity for certain companies. Of course, compared to Weibo, WeChat, Renren or Qzone, those are fairly small numbers but what sets Douban apart is the unique culture created by a core of dedicated users. Unlike Weibo, it appeals to white collar, sophisticated Chinese urbanites. According to Doctor Yang Bo, the founder of Douban, most of the users live in major big cities of China. They are office workers, artists, freelancers and students who share common interests in arts, culture and lifestyle.

 

 

Douban is a truly unique Chinese social media phenomenon which can be loosely described as a sophisticated hybrid of Amazon’s book reviews, IMDB.com, Blogger, MySpace, Pandora and Pinterest wrapped up into one platform.

 


The main core of the site is its communities grouped into:

  • Books section, where people review and discuss books and can buy them directly from Chinese version of Amazon. This is one of the revenue sources for Douban;
  • Movies section. This one is similar to imdb.com (which is periodically blocked in China) and is the main forum for movie reviews and latest gossip. Here users can book tickets and even book seats in cinemas nearby;
  • Music section is, perhaps, the most popular one and it provides a platform for young musicians to post and promote their works. It is somewhat similar to what MySpace is all about these days;

 

 

Another part of the site features Groups which are, in turn, categorized by interests such as fashion, entertainment, photography, technology or lifestyle.

 


The City section features various events nearby, such as festivals, exhibitions, film screenings, theater performances etc. There is a section for people willing to get together for games, group shopping, dating or any other other local activity.

 

 

Douban.FM is a music streaming service. In its structure and functionality it is similar to Pandora. It streams music that matches listener’s taste based on his/her history of favoring  or skipping tracks.

 

 

In its latest attempt to generate more revenue, Douban has added a section simply called Stuff (which is still in beta). It is all about discovering and shopping for cool things but it is quite unlike a bazaar style of Taobao. Items can be reviewed by users, favored, added to wish list or a shopping card and purchased. The Stuff section is somewhat a fresher and more sophisticated version of an online shopping site targeting buyers looking for individual style and less focused on searching for the cheapest bargains.


 

In the past, Douban has been criticized for slow user base growth as well as for failing to properly monetize its service by restricting its ads. It is true that advertising options are somewhat limited on the community pages with very little screen real estate dedicated to ads. Also, those spots tend to be quite expensive selling between 15 to 20 RMB per CPM, an order of magnitude higher than on comparable sites.

 

 

With the addition of the new Stuff section, Douban seems to have found a potentially lucrative formula to keep its distinct and sophisticated character and yet take advantage of the desire of the urban elite, its main user base, to express their individuality through buying unique things.

 

 

Douban seems to be one of the most underrated  Chinese social media sites with great potential. Besides the obvious option of promoting products thorough its new Stuff section, marketing on Douban should be an excellent option for a more sophisticated promotion campaign targeting upscale urban consumers through its communities and groups platform.

 

 

Several high visibility brands have also established what is called a brand stations on Douban. One example is of Adidas that features its collections but also actively promoting the brand through completions and events.


 

Douban, being a one of a kind social media site in China, is often overlooked by Companies as an alternative venue to appeal to increasingly sophisticated big city based users and can be effectively used to target niche sectors of the Chinese online community.


 

 

Stats for Understanding China’s e...

Stats for Understanding China’s e-commerce Market

The U.S. Department of Commerce recently provided new stats for China’s growing e-commerce market, they make for interesting reading for any company considering marketing to China:

 

 

  • China ecommerce accounted for around 15.9% of all retail sales in 2015.
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  • China e-commerce is estimated to grow to 19.6% in 2016.
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  • 53% of the 688 million internet users in China are online shoppers – more than the combined population of the United States, Russia, and Brazil.
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  • China has over 1.28 billion mobile phone users which is the preferred method of online shopping.
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  • E-Commerce sales in China totaled $672.01 billion in 2015, up 42.1% from $449.01 billion in 2014, according to the Chinese government’s National Bureau of Statistics (CNBS).
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  • By 2019, it is estimated that one out of every three of China’s retail dollars will be spent online, the highest percentage in the world. The estimate for the U.S. is one out of ten.
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  • 71% of shoppers are in cities; 82.3% are between 25-45; 55% are female.
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  • Top purchases are: apparel, food, skin care and beauty, and baby/pregnancy care.

 

 

 

Online Market Growth:

Rising disposable incomes, the increasing popularity of ecommerce and in-app purchases, coupled with a rapidly improving internet infrastructure is accelerating China’s online revenue growth potential

 

 

Internet Challenges:

Companies are presented with many technical challenges when trying to build a web presence within Mainland China. An infrastructure flawed with inefficiencies, distance and the constant monitoring of the Great Firewall imposes negative impacts on performance of foreign hosted sites trying to reach users in China. Websites hosted in the US or Europe can expect 10+ seconds of latency versus hosting within Mainland China
 

 

Customer demand:

Chinese online shoppers are willing to spend, but at the same time demand a high level of value and service. They expect to be able to return any item purchased online, and the cash-on-delivery payment method popular in China often results in a higher-than-average return rate. In particular sectors, such as luxury, expectations are especially high. At one luxury marketplace, Chinese shoppers expect 24-hour customer service, free insured two-day shipping, and the option to pay and return at their convenience.”

 

 

Mobile Commerce:

The majority of China’s 1 billion smartphone users browse for products on their mobile devices, and those with greater incomes search even more than the average on mobile devices driven by a over 60% smartphone penetration rate in China’s Tier-1 and Tier-2 cities

 

 

Social Commerce:

China’s ecommerce growth is majorly fueled by the hyper-social behaviors of it’s online shoppers. Alibaba Group Holding Ltd. owns both Taobao and its B2C online marketplace counterpart, TMall (TMall sells 70,000 Chinese and international brands from 50,000 merchants).

Chinese social network and SinaWeibo, as well as instant messaging turned ecommerce, gaming, and financial services social platform WeChat, are the top two power players bridging any gap there may have been between social media and ecommerce. To get any kind of market penetration in China, international brands must sell on social channels and keep a cyber-eye out to mine for consumer insights.

 

The Future is Made in China: An Anal...

The Future is Made in China: An Analysis of Emerging Innovation Trends in China

In December 2014, the United Nations Development Programme (UNDP) in China, using the services of Futurescaper, launched a public website survey to receive more information on innovations trends in China.

 

 

This foresight exercise was meant to examine the climate of Chinese innovation, as reported by Chinese citizens and other experts from the general public residing in China or abroad. The assumption was that although many people think that China is good in copying and adapting products, a great deal of innovation might be going on in China which the world is unaware of. This Futurescaper exercise aims to reveal that products are not only “made in China” but that at the same time are part of “the future is made in China”.

 

Futurescaper’s tools help organizations uncover and map out the drivers and dynamics that their stakeholders think are most important, understand why they think this is, and explore what their implications are for the future. By combining human insight with analytics together with a great visualization tool, they make this process faster and cheaper than traditional scenario workshops, more insightful and interactive than surveys, and more participatory and empowering than traditional expert analysis.

 

To download the full report please click here.

Mobile commerce: The App`s China uses

Mobile commerce: The App`s China uses

5G is coming and with it means the ability to use mobile devices in ways not possible today. While there are already more mobile devices than people on the planet, they will continue to have increased capacity and capability. Announcements and advertisements must now be appealing on the small screen.

 

Chinas Mobile advertising market is currently the fastest growing sector for companies involved in retail. Now exceeding PC users, the mobile internet market represents the forefront of technology and dynamism in China. In Q1 2015, the total transaction value of China e-commerce market is estimated to have exceeded RMB 3.48 trillion (USD$567.49 billion). With these sorts of numbers no company can afford to ignore the apps where potential clients spend a large proportion of their time. Mobile devices have become the customer's primary means of interaction with companies. 

 

WeChat is leading the field in app`s and is unique in both being a native mobile application and including integrated e-commerce and mobile payments: A quick referral of a product from a friend and a purchase can be made in a matter of moments while the user may never have to leave the WeChat application on their mobile phone.

 

Brands can use WeChat in a few ways to support sales growth, including setting up their own brand shops (as service accounts), working with malls (WeChat operates a couple of their own), using direct sales platforms for user-generated sales (like Weidian that has payments linked to WeChat), and using loyalty cards for location-based promotions and member offers (managed by WeChat inside the app under "QQ iCard").


 

Chinas Most populat Mobile Apps

 

 

Sohu News

Type: News

No of active users: 78,59 million

 

 

Sogo Input

Type: Chinese Pinyin input method

No of active users: 80.08 million

 

 

360 Mobile Assistant

Type: App store

No of active users: 85.91 million

 

 

Taobao

Type: Online shopping

No of active users: 98.01 million

 

 

UCWeb

Type: Mobile browser

No of active users: 98.14 million

 

 

QQ Browser

Type: Mobile browser

No of active users: 106.08 million

 

 

360 Phone Guardian

Type: Anti-virus security

No of active users: 110.33 million

 

 

QQ Music

Type: Music

No of active users: 129 million

 

 

QQ

Type: Instant messaging

No of active users: 307.33 million

Having lost ground in terms of users to Wechat, qq is now the 2nd most popular messaging app in mainland China, it allows users to write and maintain their own blog/diary, as well as photo album.

 

 

WeChat

Type: Instant messaging

No of active users: 359.87 million

Most of us are familiar with WeChat, which is now the most popular messaging app in Mainland China. In addition to messaging functions, the app allows you to search for people in your area and also allows users to maintain a blog along with some photos

 

Data source: compiled by EnfoDesk, an online research institute, Rankings are based on the number of active users as of May 2015.

The Branding Dichotomy: Trust & Pricing...

The Branding Dichotomy: Trust & Pricing point.

Chinese consumers are both brand conscious and price sensitive: the key to understanding this dichotomy is to appreciate Chinese culture, where face and social status are crucial as well as the prevailing attitude of a lack of trust in product quality. This skepticism leads Chinese shoppers do significantly more research, across many more channels, than their counterparts in the West. If a brand can signal a higher social and/or economic status, Chinese consumers are happy to pay a premium. If it doesn’t, they become very price sensitive as well as skeptical about quality.

 

 

eBay requires buyers to pay first and then wait for an item to be delivered. This model works in societies where the trust level is high. However, there is a serious lack of trust in China between consumers and manufactures, so asking buyers to pay first without seeing the product is a hard sell. That’s why eBay failed in China. Conversely Taobao came up with a different model: It introduced a third-party payment system, namely AliPay, where buyers pay to a third-party account owned by Alibaba (Taobao’s holding company), and only after they have confirmed receiving the products in good order, Alipay will transfer the money to the seller. This model effectively solved the trust issue in e-commerce.

 

Throughout China`s history companies of all sizes have consistently lied to their consumers, and this is why, even today, the Chinese are so cynical and suspicious about purchasing products, especially online. Facts that might be taken for granted by western consumers will be questioned vigorously in China, and it is necessary to cultivate trust from a low starting point. The challenge for companies is to prove to consumers that their products are rigorously inspected and tested.

 

Whilst having a natural advantage in the trust area, foreign brands now have to compete move vigorously with domestic brands, especially in budget/mass consumer products. There is also a growing sense of pride in “buying Chinese” which is being utilized to the max by a growing force of domestic brands such as Xiaomi and Anta. A spate of investigations into foreign big name brands a few years ago has eroded the unquestioning faith in western brands, who must now concentrate on the core values of integrity and honesty.

 

The Chinese may be relatively new to the consumer world, but they are far from naive. They look much deeper than colorful billboards and TV commercials. Increased foreign travel, burgeoning Social media and increased awareness of consumer rights have helped the Chinese consumer become ever more sophisticated.

 

One area in which foreign companies still outdo their Chinese counterparts is in customer service: with rising expectations amongst the growing middle classes there is still a stark difference between a walk trough an Apple store compared to a domestic computer shop with a traditional sell and forget attitude. However this is also fast changing with Private Banks and Airlines taking the lead. Consumers are becoming savvier, and insistent on, good service, and domestic producers are taking notice. In the high growth regions of 2nd and 3rd tier cities the personal touch is an incredibly effective marketing tool where the standards of customer care remain low.

 

The days of “Made in China” are now progressively being replaced by “Made for China” foreign companies have to truly understand the needs and changing characteristics of Chinese consumers, and build quality products and services to meet these needs. Crucial to the message is their utilization of social media and brining the latest in consumer services to China.

Insurance companies of China

Insurance companies of China

Having experienced rapid expansion and growth over the last decade the industry as a whole is still considered to be in its infancy even with a compound annual growth rate of 28-30% for the 2009-2013 period. FDI has played a major role in the development of the industry accounting for about half of the companies currently operating in the mainland. The market is mainly focused on two segments: auto and commercial property insurance however health insurance is becoming significantly more widespread along with emerging non-life insurance products like product liability, credit and marine insurance etc. Currently, auto insurance accounts for over 70% of the premium in the non-life insurance sector (please click here for KPMG`s latest outlook on auto sector insurance).

 

 

As a whole the industry is investing more in risk segmentation, new distribution, product innovation, and customer services. Sustained growth of the China non-life insurance market will be maintained over the next few years.

 

The list below comprises China`s top 10 Insures:

 

No.1 China Life Insurance Co Ltd

China Life Insurance Co Ltd is the largest life insurer in the People's Republic of China. The company offers individual life insurance, group life, accident insurance, and health insurance policies. China Life commands 45 percent of the market, and holds the number one position in 29 of the country's 31 major markets.

Total Assets: $321.205 billion

 

No.2 Ping An Life Insurance Company of China Ltd

Ping An Life Insurance Company of China, Ltd. is a major subsidiary of Ping An Insurance (Group) Company of China, Ltd. It was established in year 2002. For the past 10 years, Ping An Life has been growing rapidly as China's insurance industry has expanded, achieving a leading position in both scale and service quality. It is now the world's second-biggest life insurer by market value.

Total Assets: $117.795 billion

 

No.3 China Pacific Insurance (Group) Co Ltd

China Pacific Insurance (Group) Co Ltd ("CPIC") is an insurance group basically encompassing by China Pacific Insurance Company, a company established on 13 May 1991. The head office of CPIC is located in Shanghai.

Total Assets: $117.795 billion

 

No.4 New China Life Insurance Co Ltd

New China Life Insurance Co Ltd, headquartered in Beijing and founded in 1996, is an insurance company. The company primarily provides life insurance services. After the company went public in 2011, the total assets of the company reached 565.849 billion yuan.

Total Assets: $92.123 billion

 

No.5 Taikang Life Insurance Co Ltd

Taikang Life Insurance Company Limited is a Beijing-based, China-incorporated life insurance company. It is one of the largest in China and offers services ranging from life insurance to asset management. It was founded in 1996 and has branches in Beijing, Shanghai, Hubei, Shandong, and Guangdong.

Total Assets: $71.879 billion

 

No.6 Sino Life Insurance Co Ltd

Sino Life Insurance Co Ltd, incorporated in 2002, is a nationwide professional life insurance company in China currently headquartered in Shenzhen.

Total Assets: $31.888 billion

 

No.7 Taiping Life Insurance Co Ltd

China Taiping Insurance Group Ltd ("China Taiping") is a Chinese state-owned financial and insurance group whose management headquarters is located in Hong Kong. China Taiping is currently the longest standing national brand in China's insurance industry. It had already become an industry leader in the 1940s after its foundation in Shanghai in 1929.

Total Assets: $31.339 billion

 

No.8 AIA Group Ltd

The business that is now AIA was first established in Shanghai over 90 years ago. It is a market leader in the Asia-Pacific region, except for Japan, based on life insurance premiums, and holds a leading position across the majority of its markets.

Total Assets: $11,223 billion

 

No.9 CCB Life Insurance Co Ltd

CCB Life Insurance Co Ltd, headquartered in Shanghai, is an insurance company and its principle shareholder is China Construction Bank, one of China's major banks.

Total Assets:  $4.281 billion

 

No.10 Manulife-Sinochem Life Insurance Co Ltd

Manulife-Sinochem is a joint venture company between Manulife (International) Limited and Sinochem Finance Co Ltd (a member of the Sinochem Group). It was the first Chinese-foreign joint-venture life insurance company established in China.

Total Assets: $2.081 billion

The 100 most valuable Chinese brands...

The 100 most valuable Chinese brands in 2014.

During the year of China`s Economic & Social rebalancing, this report examines brand building in China. Whils the list is still dominated by SOE`s in the first 50, the next half show an interesting prominence of private companies where Chinese entrepreneurs have been developing market-driven companies and valuable brands accross many product and service categories which will only increase in value as reblancing unleashes competition.

 

 

Comparing the brand equity of Chinese brands and foreign brands in China. Chinese brands have caught up. They lag in only one crucial aspect: meaningful differentiation. That’s the missing piece for Chinese brands; it’s a critical element for the brands ranked 51 to 100 to move into the upper tier of the BrandZ™ Top 100 Chinese ranking. For the full PDF report, please click here.

China`s Commercial sector in 2014, an...

China`s Commercial sector in 2014, an Expert view

As China seeks to create the market conditions to grow the middle class and increase spending power, this report by ECCGCC highlights 10 areas in which their expert panel expect to see significant developments and market trends. Please click here to open the PDF report.

 

Chinese Luxury Consumer Survey 2014

Chinese Luxury Consumer Survey 2014

The Hurun Research Institute today released the Hurun Best of the Best Awards and Hurun Report Chinese Luxury Consumer Survey 2014. This is the tenth consecutive year that Hurun Report has published the survey, which reveals the brand preferences, consumption habits and lifestyle trends of China’s wealthiest individuals.

Please click here to view the report

 

2013: China`s top Social Media sites...

2013: China`s top Social Media sites & Brands

China has by far the most active Social Media sites in the world. Approximately 90% of the population with internet access are registered on one or more site. Understanding this trend is essential for foreign companies contemplatiing market entry and one fundamental aspect of social-media usage in China: it has a greater influence on purchasing decisions for consumers in China than for those anywhere else in the world. Chinese consumers say they are more likely to consider buying a product if they see it discussed positively on a social-media site, and more likely to actually purchase a product or service if a friend or acquaintance recommends it on a social-media site.

 

The following Inforgraphic was compiled by http://www.ciccorporate.com

Going West and Climbing Higher?

Going West and Climbing Higher?

Some recent evidence suggests that a profound transformation of the industrial landscape in China is under way. First of all, migration of mass manufacturing activities from traditional export centers in Southern and Eastern coastal cities to the inland is accelerating. The world’s largest PC makers and their contract manufacturers are establishing new factories in the Southwest: Hewlett-Packard (No.1 PC vendor by shipments), Acer (No. 2) and AsusTek (No. 6) have chosen Chongqing, while Dell (No. 2) and Lenovo (No. 4) have chosen Chengdu of Sichuan Province. When these new plants run at their full capacity, industrial analysts expect that Chongqing and Chengdu will become the world’s largest manufacturing base for notebook and tablet computers, respectively. China’s populous Chongqing and Sichuan Province, once characterized as poor and rural and the country’s major sources of migrant workers, are going to be transformed into immense industrial hubs.

The drivers of this large-scale industrial migration are a sharp rise in labor and land costs as well as labor shortages in established manufacturing centers in Eastern and Southern China. In addition, the new manufacturing locations are well-serviced by infrastructure after a decade of government investment under the campaign of “Developing the West”. This migration of mass manufacturing presents a new challenge of growth for the developed coastal cities. While shifting manufacturing to the inland, multinationals are also transferring more managerial and R&D functions to China, with some cities being better positioned than others to attract this high-end employment. Regional headquarters of multinationals in Shanghai rose to 305 in 2010, up from 224 in 2008, according to the Shanghai statistics bureau (Financial Times, May 25). Intel has just sent an executive vice-president to Beijing as chairman of its China operations, a clear sign of the expansion of higher-end activities in the country.

 

Other cities may not be so lucky. According to recent Chinese reports, eighty percent of the Shanzhai cell phone manufacturers in the Shenzhen area have gone bankrupt since the beginning of the financial crisis. Although started as local-made lookalikes of foreign brands as the Chinese characters suggested, some scholars of industry have characterized the Shanzhai cell phone makers as a “Chinese way of innovation”. Based on turnkey solutions for combined chip, platform and third-party apps (provided by Taiwanese company MTK), clusters of small cell phone suppliers had been very successful in making cheap phones with gaudy features and shiny looks that pleased low-income Chinese and foreign consumers. Some 200 million unbranded Shanzhai cell phones were sold in 2010, and a large portion went abroad. Yet the faster than expected conversion to 3G-capable smart phones has destroyed the Shanzhai business model; at this stage at least, it is difficult for chip suppliers to commoditize the sophisticated smart phone platforms. The small Shanzhai manufacturers that used to implement incremental innovations on less advanced technologies in the 2G era now have neither the capability nor the financial resources to develop 3G smart phones.

 

Whos up for a game of sponsorship?

Whos up for a game of sponsorship?

Who’s up for a game of sponsorship?

If you’ve spent the last week focused on continuing machinations behind the closed doors of Zhongnanhai - where if we believe the rumours to be true, the Party has been pulling itself apart at the seams in order to piece itself back together again - you might have missed the biggest news of the month. That was of course, Huawei’s decision to sponsor the Canberra Raiders Rugby League Team.

The decision to hand over a cool US$1.8 million to see their logo adorning the shirts of a fairly unknown team -certainly to anyone outside of Australia  - may have confused you at first. On closer inspection, however, it becomes clear that the move has everything to do with the Australian government’s decision to turn Huawei’s bid to work on the rollout of a national broadband network. Rather than having a hissy fit and storming back to the firm’s mega campus in Shenzhen, they chose instead to sponsor the Raiders.

The reason is simple. Huawei hopes to ingratiate itself with the locals and throw off its image as an instrument of the PLA, something it has repeatedly failed to do despite a string of attempts in the past and which continues to hamper its expansion into developed markets.

Disregarding Huawei Australia CEO’s outlandish claim that “with Huawei’s 140,000 staff, it’s safe to say that the Raiders have just gained 140,000 new fans around the world”, it does look like a canny piece of PR. It’s sending the right message: you turned us down but we’re not going anywhere; in fact we’re so mad about Australia we’re going to sponsor your rather mid rate rugby league team. This week a team, next week the entire League perhaps?

Foreign companies sponsoring sports teams is nothing new of course. As economic power has shifted West to East, we’ve seen a correlated increase in the number of Western teams sponsored by Eastern firms. Just look at the English premiership. The Japanese were at it in the 1980s – JVC sponsored Arsenal, Sharp sponsored Manchester Utd, and er…Crown Paints sponsored Liverpool (woops).  The Koreans, in the shape of Samsung adorn the Chelsea shirt, while Arab nations are now well represented via Emirates’ sponsorship of Arsenal and Etihad’s of Manchester City.

But up until now, we haven’t seen too many examples (at least not to China Brain’s knowledge) of Chinese companies sponsoring Western teams. In the same way Chinese demand has raised prices for assets in the past, should we expect to see a similar effect occurring in sports sponsorship?  We wouldn’t be surprised to see representatives of the many teams who are struggling financially in these times of austerity heading over to China. Much in the same way business junkets continue to arrive on a daily basis attempting to flog all and sundry to the Chinese, who’s to say that they won’t succeed where others have failed? It’s just a shame for Glasgow Rangers that Scotland’s oil has run out otherwise we would be fairly confident of seeing PetroChina’s or CNOOC’s name on the shirt and an easy way out of their insolvency crisis.

Huawei has made a bold first foray into foreign sports and it is once again blazing the trail for Chinese firms overseas. Its first task it to test whether the Raiders will really live up to the company’s vision which according to its web site is ‘To enrich life through communication’. Anyone who’s shared more than a few drinks with a representative of an Australian Rugby League team will affirm that their communication style can certainly be colourful. Enriching might be stretching it a bit though. Good on yer’ Huawei.

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