China Paradigm transcript #95: How one company leverages delays of Chinese outbound travel to Europe
Chinese outbound travel to Europe
Find here the China paradigm episode 95. In this interview, Sophie Sun, Founder and CEO at TravelRight tells how her company targets Chinese outbound travel to Europe and delayed flights of Chinese passengers with a unique business model.
Full transcript below:
Hello everyone. This is China Paradigm, where we, Daxue Consulting interview season entrepreneurs in China.
Matthieu David: Hello everyone. I’m Matthieu David, the founder of Daxue Consulting and its podcast, China Paradigm, and joining me today is Sophie Sun, the founder and CEO of TravelRight. TravelRight is a company that helps you to get your money back when there is a problem with your travel and we are going to try to understand how the product is built. Is it an interesting product for the delayed flights of Chinese passengers? Is it a product that helps you claim your rights toward those airlines and any travel agents or intermediaries? Let’s look at a few numbers. What I didn’t mention, but it is obvious that we are focusing on China. It is travelright.cn and we focus on China. So, let’s look at what it is to work in Chinese outbound travel to Europe. We talked about a market which is not as big as what we could think of when we think about the 1.4 billion inhabitants, but which has been growing very, very fast and very steadily. Now, we talk about 165 million outbound travels. That’s a common mistake to think of is that we very often are confused about travelers and travels. The statistic we are talking about concerns travels. So, the number of travels is much lower and the number of Chinese having a passport to travel actually is still low contrast to the population, so there is a lot of room for growth. That’s something everyone is looking at even though with the current situation. I think they are going to slow down, certainly in 2020. We talked about 35 million flight tickets bought and as a pillar of protection and I am talking about that; the protection because that’s where you are playing. It is with the protection of the consumers. So, thanks for being with us, Sophie. You started TravelRight 2 years ago if my information is right. Before starting TravelRight, you had been working at a very, very big company called Alibaba for 3 years and that’s something we will look into is what you learned from Alibaba to start your business. So, thank you, Sophie, for being with us and the first question is, what is your company doing?
Sophie Sun: Hi Matthieu. Thanks for giving the interview.
Yeah, you are perfectly right. You did very deep research. TravelRight is a bond for helping Chinese outbound travelers when they come from a very difficult situation like flight delays, flight cancellations, luggage lost and delayed flights of Chinese passengers a passenger ride is not of use. No one is aware that they were protected and even if they know, they don’t understand how to file for that. My job is to understand their difficulties and give them what they want and the solution is very easy. If the flight is delayed, the passenger just needs to come to our website travelright.cn and file their claim telling us what happened, and then they get their money back. So, the procedure is very simple. They delegate all the rights to us to talk to the airlines so they don’t need to handle the hassle by themselves and our business model is very interesting. We don’t charge anything until we get paid from the airline. So, passengers don’t need to take any risk. It is actually what we say is it is a minimal risk when you want to do a claim with the airline. A lot of passengers actually try by themselves because they want to get full compensation for the delayed flights of Chinese passengers, but finally, it comes back to us. So, I think the business is very interesting for Chinese outbound travel to Europe.
Matthieu David: Thanks for the clarification. Actually, I have got a sense initially when I read what you do. TravelRight would be an insurance company, but actually, I think it would be wrong to say that it is an insurance company. It’s about the defense of the consumer. It’s a company that actually helps consumers to apply their rights, to claim for their rights and claim for the money they can get back. So, what I understand is that people don’t have to subscribe to anything for your service. Are you taking a commission on what they get back or what is your business model?
Sophie Sun: Yes, you are right. So, because we have partnered with insurance companies; that is why they give us a word or a tip. In this product today, we only charge the service fee when we win the case for delayed flights of Chinese passengers. The customer doesn’t have to register anything.
Matthieu David: I see. So, what would be the way, how do you make money?
Sophie Sun: Yes, just a successful theme. Once a case wins, we charge 30% as our service fee; 30% of the entire compensation. So, for example, if there is a delayed flights of Chinese passengers and you file a claim. You don’t pay anything in advance and while we get money from, for example, Air France for your delay and we take 30% for us and we transfer the rest of the money. So, you are getting 70% without making any effort.
Matthieu David: I see. I understand. So, who do you define as your clients?
Sophie Sun: My clients obviously are passengers of delayed flights that do Chinese outbound travel to Europe.
Matthieu David: Okay so, the people who are paying for your service you consider people who are actually; you take the commission from your clients. The environment has a lot of players. You have OTAs, you have airlines (learn more on how Chinese airlines are reacting after the Covid-19 crisis), you have the insurance companies who are actually covering the cost, sometimes reimbursing others and that may be actually the companies you are contacting to get the money back. So, would you mind telling us a bit more about China’s travel ecosystem and how you work with this China’s travel ecosystem and the product?
Sophie Sun: Sure, so as you know in the travel industry in China, it is totally different than outside of China. That is why a lot of European people; it can come to compete with us directly in the China market, easily. The reason why is the China’s travel ecosystem is different. First of all, from the user behavior we don’t book flight tickets directly with the airlines so often. More than 70% of flights were booked online by online travel agents’ websites as we call them OTA and today actually, we partner with OTA to find delayed customers and that is our B2B2C model and this model is very light landing. So, we don’t need to invest massively for the B2C market which is very, very difficult to target a delayed customer today in China. So, the B2B2C is a faster way to reach our passengers and so obviously the insurance, in the beginning, the insurance company will really be surprised by their solution because what if they compensate the customers once the flight is delayed? It is not a lot of money because so much delay happens in China and the compensation is obviously very little. So, in China, if you buy delay insurance, it’s costing you let’s say 30 China Yen up to 200 China Yen. 200 China Yen is mostly for the national delay and that money; if you are delayed and the delay condition is very high; like more than 4 hours delayed or 5 hours delay. You only get up to 600 Euro compensation. Compared to what you get finally and with all the conditions; it just encourages passengers to protect themselves by their delay insurance, but regardless of all those, delay insurance is super popular in China because Chinese passengers will allocate it by the market and a delay happens every day. So, they have a high chance to travel out with a delayed flight. So, they must buy insurance to protect them. So, every time while we are talking to the passengers, telling them we have a solution, getting your compensation, etc. The first question they ask is, “How much do I have to pay in advance?” I tell them, “No, you don’t need to pay in advance. We are under insurance” and they say, “Oh, I am surprised.” So that’s just to explain to you what the reaction is from the passengers or the players in the market.
Matthieu David: With OTA; how are you incentivizing them? Are you sharing commission or it is an add-on for the client so they are happy to add you on their website ad talk about you and mention you? How is cooperation?
Sophie Sun: Basically, OTAs don’t want to disturb any passengers while the solution is not valuable. So, they want to minimize it and so they don’t disturb any of the people. They don’t push messages to everyone, of course. They are only targeting delayed flights of Chinese passengers and then they have a condition. Of course, we want to target more than 3 hours delay because when there is more than 3 hours delay, we have a higher chance to get compensation and the cancellation now, so there we will see in-depth if their flight is illegible or not and give them compensation for the online travel agent. So far, most of OTA didn’t ask for the money. The reason they cooperated with us was not for money, initially now so far. So, some OTA even never discusses compensation for their part while working with us. So, actually, I think Chinese OTAs have a huge competition between each other and they want to be a unique service offering and value-added service to their passengers in China’s travel ecosystem. I think that’s the reason why they work with us and plus, we have a double culture. See, both have an organization power and a proficiency. We are professional in terms of asking for compensation with the airlines and they all trust us by sending their customers to us because our customer service in travel is perfect.
Matthieu David: You say one of the first OTA you worked with is Ctrip. Would you mind sharing with us how you can work with such a huge company when you start your business if I am correct? Is it Ctrip?
Sophie Sun: Yes, well not only Ctrip. We worked actually working with most of the OTA so far, and the reason for this is…
Matthieu David: So, the ones we know are Ctrip, Sky Scanner; who else?
Sophie Sun: Sky Scanner hasn’t worked with us yet. So, if anyone knows Sky Scanner, please reach out to us. I think we are mostly working with… yeah, local-based. Let me explain to you why. I understand a lot of people are curious about that. In China, first of all, every company start-up; because digitalized life didn’t really start like decades ago. It just started ten years ago. Every company is new and because we understand every business has a day one. So, we actually are very open to all the styles, and sometimes you know, when we have start-up’s we actually focus more on the customer needs because that is why a start-up exists. We have discovered new needs and that’s why large companies actually appreciate innovation (learn more about innovation trends in China) and their service-focused startup and we are just arrived at what do they want to partner with and that’s it. I mean, a European country like in France; the start-up needs to prepare for years and then be able to sign their large company like Expedia and as you know like Expedia, they of course… our industry in China; we also are the biggest in the air service and I don’t know other ones; probably very tiny and they also take a look into our service quality; how we handle the claims with other OTA in China’s travel ecosystem. So, a lot of check-ups by the big companies, but they are convinced about our service.
Matthieu David: I see. Does it mean that for every single city traveler whose flight is delayed; they would actually be suggested to contact you or your company?
Sophie Sun: Not everyone. It is only for serious delayed flights of Chinese passengers or cancellations. So, those other customers really need us and we don’t want to disturb every passenger. When any passenger flies to Europe, they should be aware of this regulation.
Matthieu David: Good. We understand your product. You are basically helping consumers to activate their own consumer rights in Europe in case of Delayed flights of Chinese passengers. You are focusing on Chinese outbound travel to Europe and specifically for Chinese travelers. Is that correct?
Sophie Sun: Yes, that’s correct.
Matthieu David: Talking about the size of the company; would you mind sharing a bit where you are in development in terms of teams, offices, revenues if you can share, number of clients? You started two years ago. You are not part of Chinaccelerator. We’ll talk about that later on, but what about the size of the company?
Sophie Sun: So, my company; we first registered in 2018 and that is the time… five months after I resigned from Alibaba in France (learn more on how Alibaba is conquering Europe) and so I was based in France before. So, the initial team was recruiting in France and we were just coming from Hong Kong also and then we registered this company in China once SOSE decided to invest in us. So, our team; we have two teams. One is in France and another one is in Shanghai and there is a team in Shanghai because of our OTA partnership so, we have most of the people here. We have airline relation teams to make sure all the claims get welcomed and communicated with the different airlines and both in China and also in the west of Asia because we didn’t only receive a claim from China. We also receive claims from Asia and we have our customer service team, obviously. Customer service; we don’t really recruit local Chinese. We actually recruit international Chinese. So, they both understand how to handle the claim and also talk to the client directly. So, they understand and they are mostly having experience traveling abroad and so they understand the pinpoint for Chinese outbound travel to Europe. So, also customers can trust them easily. Another team is we call it the BI team is Business Intelligence and the Business Intelligence team is very important in our business because once we handle like if we hand 20 clients per day, it doesn’t require a lot of automation and data support, but once we handle more than 200 per day; then that’s something like really we need to focus our automation on and other data analysis, data support is very important for our industry. So, my BD team is only me. So, they don’t call me the CEO of the company. They call me a BD. I think since I was working for Alibaba so, I understand what is the big company needs, who they trust to work with, what type of partners they are searching for if they want to work on these surveys and so I think it is perfect to understand their situation and their concerns. That is why I can let them trust us and move the first one.
Matthieu David: So far, how many clients have you helped get a claim back?
Sophie Sun: We can’t disclose these numbers because we signed obviously there is a large hand that we don’t want to tell and it is not okay to tell because we signed an NDA for these parts.
Matthieu David: Okay got it. How many do you estimate you could reach? What is the size of the market; the number of delayed flights with Chinese passengers or claims you could get? Do you have an idea of that?
Sophie Sun: So, obviously that’s something we need to verify in day one as entrepreneurs. So, we have a team that do Chinese outbound travel to Europe and there are 1.5-2% of flights that are seriously delayed or cancelled and since between China and Europe, it is mostly in line with up to 600 Euro compensation. So, the market is actually quite big, but we need to target the right passengers because it is not every Chinese that’s going to fly to Europe. China is big and yeah; the number in China is… let’s say it’s the same number as in Spain or in Italy because we are entitled to a bigger compensation if the number of travelers is large enough and later since we can potentially be the other OTA relation such as the South Korea market and Japan market and putting South Korea and Japan market together is actually possibly half of the China market. It is quite big and also Taiwan and Hong Kong are very interesting for us.
Matthieu David: And it’s a growing market. The thing is that the numbers from China are still lower than they were saying in the beginning, but it is growing fast. It’s slow compared to the population, compared to the US. The penetration rate of traveling has… the activity is still low in China, but growing rapidly and certainly is one of the biggest markets in the coming decade. So, we talked about the product. Now, we know what you do, we know how you do it as well and we understand your business is B2B2C as you said. You go through intermediaries; you get it from the user which is using your service and gets 70% of the claim and you keep 30%. I’d like to talk more about how you discovered this opportunity? You said you were in France at the time, but how did you dig in and find out that that was something you could do and it would be relevant to do? We’re talking about Europe now. Bank one as a lawyer, for instance, to understand all of this. How did it come to you?
Sophie Sun: Yes, so I was a big traveler and I love to travel and I think the travel experience for me is the most important in my life. I want to protect it and I want to keep it pleasant and less hassle. I think it’s for my personal hobby and interest it makes 100% sense to me to work in China’s travel ecosystem. I saw a lot of things and I since I am a Chinese living abroad, I understand what a Chinese feels when they travel outside of China and what they really need and they always make me think about, “I need to go for a better startup to help people solve their pain points.” So, why Chinese outbound travel to Europe is because I was living there and I understand the ecosystem there. I can build a partnership easily there. I think while I was working at Alibaba actually, there is an interesting story. We have a lot of Chinese people traveling to Paris and everyone has a different story and I think the most hazard that is happening is air travel and lost luggage, delayed flights of Chinese passengers, cancellation of the bookings; all those are really disturbing people and it can destroy the entire journey. That’s why I think working and I was working for an Airbus project before. So, for the air business, I don’t think it is like a mystery for me. For the air business, it is very simple. We understand how they operate, how the airline operates, what is the most important thing for them etc. So, for me solving the pinpointing in air travel is quite interesting. So, all putting things together and then one day while my friend told me, “Hey Sophie, I’m thinking about one idea for a very long time.” He presented an idea to me is that there is an idea in our company, actually. I mean 60% is for like our business and then I check the competition and I talk to the OTA’s and I say, “Okay there is a market. Let’s do that” and so, that’s why our product is number one and it doesn’t mean we will stop here because I think since the Chinese outbound travel base is huge. It’s like one hundred and we have thirteen million in travel to Europe, but that is only 15% of entire flights of outbound travelers and we want to protect every passenger; their rights and we want to not only compliment them after or help them with their flight delay or cancellation. We want to change or re-schedule and we want to also help them handle their luggage hassle and those are really important for a traveler. Let’s say this is just a… in China this is just for that number one and we believe it’s amazing what we can do together with OTAs to help Chinese travellers travel with a better experience thus improving Chinese outbound travel to Europe.
Matthieu David: I see so, I understand that you have a lot of people coming from Alibaba and you found out that they were very annoyed by the delays, loss of luggage and so on and other travel that you knew you could get paid back part of it and you saw there was an opportunity. I get that. You said that you worked for Alibaba for more than 3 years. I looked at your LinkedIn profile. I found out there was like two years and in France, you had been one of the first to join Alibaba in France now which is quite well established and gets a lot of visibility. What did you learn at Alibaba that helped you to start your business? I am asking you that because I have seen so many people with a profile to write Facebook headlines ex-Alibaba or ex-Google and I am always wondering how and why is working in such a company such a statement; as much as getting a degree, as much as it is defining yourself because people use it to define themselves on LinkedIn. So, what did you learn at Alibaba which could now define yourself and change yourself to start this business?
Sophie Sun: Yes, so people gain different things from different experiences. No matter who Alibaba was and who I worked with and which lawyer I worked with; I think if you understand what you want to get, which value you want to contribute and with those objectives, people can learn better than a lot of people. So, people’s learning skills are different. I believe you agree with me and that’s why I met with you today. See, Alibaba is valuable and they taught me, it is a cultural difference and a huge difference. So, I think still Alibaba is not the best example to go abroad. Facebook is western culture. Amazon; yes, but not Alibaba yet. The reason is that the Chinese culture is very strong. We have uni-culture and that culture doesn’t seem to really work very well with European culture and another thing that I found out is that China is big enough to make Alibaba grow very focused on China. They are just the focus in China. Internal needs are already huge. So, for them like going outside of China… for me, it is not really something essential. Well, others make like Alibaba’s decisions. Ours is very unique to any other country. I see the pain points and I learn from that and I said, “I want to build a company that is different” and the culture (learn about the corporate culture in Chinese and MNCs) should be really international. That’s why I think I built a team in France. I recruit mostly Chinese people and why I built a team in Shanghai is because I recruit mostly western minded workers. My team is very international today and the culture let’s say we can both recruit in Chinese locally. We have a Chinese customer service lady who didn’t speak very well English in the beginning and finally, she got along very well with the people in the team. So, I think we have done very well. By learning from Alibaba, I will have the culture and it is really important in the business or in our day one and the second thing I learned is no matter the company; how big it is, how powerful it is. They need to understand local needs. So, local needs mean, when you want to serve people from France, how, why, what do they need? I think if you have never lived there, you will never understand. So, putting yourself in the shoes of the travelers; international travelers in the different countries is really important.
Matthieu David: So, what I understand now is that what you learned from Alibaba is that culture is actually a sizeable part of the business. So, it is a sizeable reason why you may fail or succeed in business or you may have the idea and play well with the idea; the initial idea. What you did say opened my eyes to a couple of things. I was always surprised at how people who are not technical developers would write on their LinkedIn profile ex-Google or ex-Facebook which are companies where people would find our technical people, but what they may have learned is a culture of innovation, which makes them different or like a new degree. So, give me an understanding of why people may state so much on their profile; the company they have been working with and it is especially big on Google, Facebook, Alibaba and I’d like to talk about your funding. You joined Chinaccelerator one year ago; soon one year ago. I think it’s like 9 or 10 months now and you got money from SOSV which is managed by William Bao. How does it work with Chinaccelerator and SOSV? Could you tell us more?
Sophie Sun: Okay yeah. So, first of all, my company wasn’t like especially searching for funding because we already established a big partnership in China, and obviously funding for us, isn’t a difficult subject, but we don’t necessarily need to take the money. Still, I believe founders who would be able to end their Taiwan’s team salary will be the most important sole leaders and sole foundation of the company. There are so many start-ups that need funding; continuous funding. So, founders who are working full time for funding to survive. We are not in this situation and that’s why the investors who joined us love this. So, William Bao who is the boss of SOSV in China. He liked our idea and my way to do business in Taiwan and that’s why the deal is very easy to close. The reason why we choose them, is also I can see not only because we have a huge amount of work, but it’s also because the organization of SOSV and Chinaccelerator in China are very well organized. They actually have a lot of history of servicing different start-up’s in different fields and they have strong partnerships with large companies. I think, all in all, we really built good collaboration with them and so the program is a 6-month program. Let’s say a 3-month intensive program and then another 3 months come actually earlier to stay with them to understand how they work. So, I am actually a founder who has really arrived to stay in the same office as them, even before the batch starts. We are on batch 16. When batch 15 was still there I was already in the office and brought my desk and by that time I had just moved from Paris to Shanghai and I am a lawyer and I need to find a team. Even they were servicing for their batch 15. My papers still had to still be finalized with their team. They started to help me out. I think it’s a team that is really generous to help. They do whatever they can. They understand the start-up pinpoint. They saw so many examples. So, we can avoid a lot of stupid mistakes by listening or taking their advice. Also, I think they have a luncheon every Friday with us with different founders and key members of the team. Sometimes I ask my intern to join me. So, we understand how to work with them. So, SOSV actually helped us a lot, not only helping me kick off the business but also to give me some advice as a team leader; how to train a team and also, more importantly, manage financially the risk. So, my company on day one, I actually have a founder who really saved a lot of money for the company. They keep a low bill rate in order to survive when there is a situation turning very bad. So, for example, today I was grateful for what we have realized in day one. We actually really are caring for each cent, how we spend and who we recruit and the team is also very aware of the situation today and that’s why we can go through a difficult situation together and I don’t know how long it will take for the Coronavirus to be cleared. Since China Chinese outbound travel to Europe is totally interrupted. I guess it will take at least 3 months to recover.
Matthieu David: Yes, so for people who are listening to us, later in the year we are recording today, 18 March 2020, and Europe has banned any travel; the European Union as from today. So, I believe this is impacting what you are doing because you are specifically working with Chinese outbound travel to Europe. The ban will last for one month.
Sophie Sun: I don’t think in one month we will recover. As you can see, the extension. China has managed the Coronavirus very well. It still takes us a month and a half or let’s say 2 months because it’s still continuing and it will take longer than that and that’s why I think the situation in Wuhan and Italy; probably the next step would be the US that would be really, really horrible. We are worried about that because we are exactly in that business. So, I’m a person that really hopes that Europe can manage well otherwise we can only wait and see, but I believe we are not the only ones who are worrying. No matter Chinese companies and you know, it is for the entire China’s travel ecosystem together.
Matthieu David: I think a topic that is really useful to learn from currently is the topic of crisis management. Every entrepreneur is facing a crisis. Every big company can be facing a current crisis and how to react to it and how to manage it. What is your take on that? How do you react and how do you manage it?
Sophie Sun: Yeah, actually before I started this business my fear or worry is bigger than the reality and then the Coronavirus happened. So, my company was running very well no matter from the different perspectives. We have small problems, but I fix them immediately and make us a little bit stronger each time we fix problems, but this time it is different. This time it is the industry that is interrupted. So, I think under these situations that are really special… so first of all challenge number one was the working distance and while we have a working distance, we have to deliver the project like a new website and we started. I was scheduled to start a partnership with Ctrip like just 1 February. The 1 February was off. So, all those things after February this year, it is the most important month in my life in TravelRight and under so many expectations. We were expecting them to come and we prepared and finally, we have to work from home and all these things happened. We were in shock in the beginning, but immediately we realized how important it is to be united at this moment because each team realized, “Okay, we are a small team” so everyone’s performance will affect business. So, I think this sense of responsibility under the stress, we started to train ourselves to work distancing in high efficiency. So, we succeeded with the work and even now like I didn’t realize the difference between working in the office and in distance and my team will start office work, obviously tomorrow. They will be all in the office. I just returned from France since last week so I need to stay 14 days in my apartment.
Matthieu David: We are in the same situation.
Sophie Sun: And another thing is we actually deliver good products. Let’s say if you can check our new website and compare it with our previous website; the user experience… maybe you didn’t go to our previous version so we improved ours, but regardless of distance work. So, my top leader speaks Chinese but lives a New Zealand citizen, and his team is based in Shanghai. Fortunately, we are almost working in the same time zone. So, that’s in distance work and the other challenges are you know; we promised some people to be promoted. When the crisis happened a lot of companies actually fired people. They have no choice if they want to survive, but I had to keep my promise because my team; every one for me is precious and everyone carries importance. I don’t want to miss anyone in this crisis. On day one, the Coronavirus happened and we don’t know how long it will last, but obviously at least a month and a half. So, my estimation for China is accurate. We do promote our team. We realized our promise and some of the key members to let them join us you know; a founding partner and some of them join the talent pool. So, I really managed well the employees and the crisis and the founders insisted on doing the same which was good for the team and it really cheered up a lot of people in the team. On the other hand, we have to face a reality since Europe starts to have the Coronavirus and we realize the crisis is longer than we think. So, at this moment I trust my team who also understands the situation and is willing to do temporary sacrifices in terms of their revenue in order to let the company survive. So, I think the founder needs to understand to give and take. This is very Chinese and also, I think it is a very universal philosophy. Another thing is I was grateful for insisting on global rates in the company. So, we don’t recruit…. If we can manage with one person, we do not recruit two. We only increase the number of workers when the volume really comes in. So, I am not so aggressive which is right because even before the Coronavirus the Chinese economy was slowing down and other venture capitals (read our latest article on the venture capital market in China) started investing in most of the start-ups, especially in an early stage. So, those are the things I learned and we were insisting to do the same thing, but I think now we have the capacity within the team to make a change. It’s really important. Last week during our weekly meeting, the entire team was talking about how we bring a new avenue to the company. Every person gave one or two points to think about that and I found that my team has a lot of ideas; how to pivot, to bring extra revenue, and I really appreciate that. It seems that making a change is not only me. It is the entire team together. So that is why yesterday I wrote on my WeChat, “If your cash is not enough to support you for the coming 8 months” the entire team has to make a change together and that change is not only about a company change., it is also a personal avenue change, organization change and why do you need to standby and waste the situation? It is not just the company in the situation and then you can maybe re-join the company again. So, a lot of things could have happened and we can only make the choice. Do not be afraid to talk about your fear to the team because if you don’t talk about it now and one day you realize in the last moment that you are going to hurt someone and I think sometimes we need to let people know in advance; a psychological preparation. I am not being very negative. Actually, that’s the only way to save the company or to survive and survival will be the one to welcome the next up because life has ups and down’s also. So, why stop? If you can survive, you will be the person to welcome the up. So that’s what I wanted to say.
Matthieu David: Yeah thanks for sharing your management of the crisis. What I understand is that your focus was on the team to make sure there was a team positiveness and you stand together and the second move was; which is very interesting is what kind of pivot we can do and make sure everyone is comfortable with a pivot on the product. So, you actually followed a typical crisis management program, which is to make sure that everyone is on board first and secondly, to see what can be added to the product to the current situation. It’s very interesting feedback that you gave to us. In the documents you sent to us talking about the team, you say that you are running a daily debrief meeting. Would you mind sharing a bit more about your management style? A daily debrief meeting looks very much like what entrepreneurial organizations and books are teaching entrepreneurs. So, would you mind sharing more about your principle of management?
Sophie Sun: Yes, so every person joining the team, I tell them… most of them are young people. So, I was a really lucky person to receive western-style management in day one of my careers. So, I was allocated by the western side management style, but I grew up in the Chinese… or let’s say my family is running a business so I have seen since I was young. I understand my mom allocating me and how she ran her business was very tough, but it is very real. So, I understand both the Chinese management style and the European management style, but compared to the styles; personally, I think we need to take those good styles. Let’s say western management style is mostly my company’s conduct. So, internal organization, a communication tool, we use western sides and partnerships, spirits, contribution, united when the situation is difficult. That is very Chinese because I think that on the western side, people are very self-protective. They protect themselves. They have a reason for doing that, but in China, we try to focus on the bigger picture and sometimes we sacrifice while it is necessary, but finally, will everybody do the same thing? A situation can change quickly to a positive situation and then I think we need to take it both sides. So, under the partnership, I really like the Chinese on my side. So, the region where I grew up is where Alibaba was born, where all the suppliers for Alibaba were born.
Matthieu David: Where are you from?
Sophie Sun: Taisho. So, we are like one hour and a half drive away and so, in my region, every business was running by the family and the staff is zero which means family putting money together to support their relatives to run their business and they trust that person and probably he is the most intelligent and hard worker. During the day time, you are a boss, but during the evening time, you are sleeping on the floor.
Matthieu David: Yes, for people listening to us, who may not know the difference between the different provinces, Zhejiang is on the east coast and very commercially dynamic and Wenzhou which has a very huge boo ha in France, particularly, but all over the world and they are known in China for being business people and indeed, there is this saying that I would prefer to sleep on the floor than to work for someone else. That is the mindset of the people living in Zhejiang and Wenzhou because Wenzhou is very well-known as a city of small to medium entrepreneurs in China. Is that correct?
Sophie Sun: Yes, Wenzhou is very special. Wenzhou really supports entrepreneurship. Zhejiang still has a lot of corporate life and they want to be abroad and no matter if they qualify or not. It doesn’t matter. Running a small business like opening a restaurant is even better than any corporate life. So, they were thinking of this side. The western region less, but we are very reasoned. We are kind of aversive for the entrepreneur, but we don’t really overdo it. What I want to say is like I am not the type of person who wants to take too much risk because risk; if it is manageable you should take it. So, for me, which means they want actually the news why TravelRight is insisting on lowering the bill rate. We know the money comes as a trust from the other people, my investor is my best friend and they not only understand my business but also understand me. So, I am a very lucky person to have very good investors on board and I hope I can insist on doing the same thing so that our entire organization’s funding can run in a healthy way. A lot of founders are hiring or talking to investors. Talking to investors can take the entire day and that will make rouble of yourself. So, I would rather be modest and welcome fewer investors instead of welcoming all investors. We are very cautious about that.
Matthieu David: We talked about the identity of coming from those provinces, but there is another identity you are mentioning in interviews and papers you have shared with us and this is to be a female entrepreneur in China. My feeling is that if there is a country where you can express yourself as a woman and an entrepreneur it is China because China has the highest number of a woman or female billionaires and it seems that it is has been the case for many years or decades that female entrepreneurs in China are part of the economic life and high positions, but what is your take on this? Do you feel the same as I do or do you feel China still has progress to make?
Sophie Sun: Matthieu, you understand China very well. I can see that. True, female entrepreneur in China is something. It is popular and I met a lot of female entrepreneurs in China. In Shanghai, we have a lady who supports all the ladies in the tech industry and actually, William Bao and the lady who does the events. William in believing in the female entrepreneurs in China; he is an example to invest in a woman. I think supporting a woman is that we don’t feel such huge differences between males and females. So, that is a basic understanding. In family life, the woman takes leadership. In the big cities, that is normal is that local culture; the woman takes leadership. I will tell you why and probably I can find some clues for you. A lot of language schools (learn more about China’s language schools market) back to my university life it was a woman who started English majors and French majors and so, women are good at foreign language and foreign companies recruit people who speak good languages. So, they are recruiting mostly women, and women learn very openly about their culture. They are very sensitive to culture. You can see that the Chinese woman stays in Paris more than most. So, all these things make women learn the western culture very quickly and once you understand the culture better and you know how to deal with the people and you take the lead. So, you can see that in a lot of big companies., So, women leadership in foreign companies; they have woman leadership that is super strong.
Matthieu David: That would be the last question on this topic. I feel you have spoken a lot about it. I’d like to dig a bit more. As far as I understand there are two kinds of feminism. One feminism is and I don’t know if you like the word ‘feminism’, but there are two kinds of what we call feminism. One is to say, “Male and female are the same.” So, you would need to treat them the same way. There is no difference. Another kind of feminism is to say, “Men and women are different.” We are biologically different, so we have to be treated differently, but equally. So, to have access to equal opportunities and so on in our differences because at some point, women and men may have different constraints in life which could be biological and all that, but he has to be respected and valued in the same way. What kind of feminism do you believe most China is in because again, the place of women in business has been one of the obvious successes of the development of China, but what kind of feminism it is? Is it that male and female are the same; the exact same way or male and female are different, but we make sure we have access to similar opportunities?
Sophie Sun: Oh yeah, I think another thing about that; before you ask me this question because rarely in China people ask, “Is a man and woman the same?” Your father loves you. Your parents love you and your sister more or your brother more. So, it is kind of a very remote question in China, but I do ask it a lot as a female entrepreneur in China. I am curious, probably. There is a woman who wants to catch up to me and say, “You should understand them.” I think China asks the question last today because they are almost equal, I guess. I am away for 7 years in China, probably it was not what I saw today. Maybe one year later you give me another interview and I will talk differently, but so far, I feel that woman entrepreneurs in China are mostly supported. So also, I think both men and women should access of course equal opportunities in different industries. It is encouraging the ladies in the tech business, in the tech field which is good, I think. People are different and we cannot only divide the woman and the men. All people are different so, they have different skills and we shouldn’t say, “Okay in legal teams or in tech teams, I need to recruit a man more than a woman”, but from my company, I found out that men and women are equal (learn more on gender equality at work in China). They are all excellent, but I tend to and it’s like it’s not just me that makes the choice. We all just want to recruit the best people ever, who fit with the team, who are motivated and that is very important because skills can be trained, but motivation we cannot change easily. So, always we pick the people who are most motivated.
Matthieu David: My feeling is that China is more in the family zen of ‘we are the same’ and male and female should be treated the same as in the western countries; Europe and the US may be more in the second feminism, I feel which is to say, “We need to do positive action for women because they are not elected enough in politics so we force to choose one male and one female all the time to be elected” or we push them to have access to certain things by creating regulations. That’s why I’m all the more surprised at how it has advanced and has been successful in China Simon De Bovoar, The Second Sex book is famous and well known in China. That has been one of the surprises when I arrive in China 10 years ago when I was picking this team, how popular and well known and respected she was for her feminism. So, yeah. Thanks for joining us. It was very interesting. We are talking about a time that is very challenging for you and very challenging for other people and a lot of countries and companies. As entrepreneurs, we all believe that it will all be back on track soon. Hopefully within 2 or 3 months and I wish everyone is staying safe.
Sophie Sun: Thank you, Matthieu, for the interview. I am happy to talk with you and share my experience. Hopefully, we can have another interview after the crisis is finished. I hope you are staying safe with your team.
Matthieu David: Stay safe everyone. Thanks for listening. Bye-bye, everyone.
China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.
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