Among Chinese entrepreneurs and investors, "fengkou" is one of the buzzwords that are ever popular. The word literally means an opening through which wind blows, like an air vent, and is sometimes translated as "hyped". Figuratively, it means investment opportunities emerged suddenly that have huge profit potential. A "hyped industry", in the Chinese context, is one that experiences rapid growth, high demand, and favorable policies.
These industries attract a frenzy of investment and entrepreneurial activities and are considered promising areas for potential profits. Those in key positions can showcase their achievements and include them in their reports without facing accountability in case of issues, to the point that it has become a common practice, driven by leadership directives.
In the past decade, O2O (online-to-offline), artificial intelligence, new retail, live streaming, and others have been highly promising hyped industries. They are not only the focus of venture capital investment, but also strategic development directions in various regions. Many have placed their bets on these conceptual industries as the pillars of economic prosperity. Among these hyped industries, O2O has seen the largest scale and magnitude, with a total of 4,387 financing deals and a financing amount of RMB 690.7 billion over the past 10 years. The second largest hyped industry is artificial intelligence, with a total of 3,364 financing deals and a financing amount of RMB 374.1 billion. Both of these are top-tier hyped industries that transcend sectors, with O2O being particularly diverse and encompassing, and the trillion-yuan market keeps capital flowing incessantly.
Additionally, integrated circuits and biopharmaceuticals stand out as prominent hyped industries. Integrated circuits, driven by advancements in artificial intelligence and semiconductor technology, are high-tech industries with vast potential for applications and monopolistic features. Similarly, biotechnology and pharmaceuticals, being integral to the medical industry chain, represent highly coveted hyped industries with substantial intrinsic value and significant market scale.
Apart from these, there are many other sectors that have the potential to become hyped industries. For instance, with a massive consumer base of people who love to shop, China has an unparalleled and enormous retail consumer market, making new retail and live-streaming incredible efficiency tools. One can, for instance, transform from a hooligan to a martial art master online overnight, or an ordinary pork seller in a rural area becoming a social media sensation known for culinary skills. These are examples of cases that have been validated by the market and have become samples of major hyped industries.
There are also smaller hyped opportunities in established industries, such as second-hand trading, K12 education, shared mobility, and new energy vehicles. These are niche segments within vertical industries, with relatively smaller overall financing scales, but often concentrated in top-performing flagship projects. Indeed, there are plenty of hyped industries, but the key is how to turn an industry that has been around for decades or even generations into one, just like what Elon Musk did to electric vehicles.
Building a prominent hyped industry is not impossible if considering the key elements:
1. The construction of a hyped industry can be achieved through supportive legislation, government funding, or strategic planning. When an industry is politicized and aligned with political correctness, it can garner significant support, even if its products or the ideals behind it might not be entirely feasible.
2. One way to build a prominent hyped industry is by attracting special talent and heavyweight shareholders, which can boost credibility. There are abundant resources in this regard, often related to human factors. For instance, individuals with unique university degrees that are unobtainable by most people can contribute to credibility. Additionally, investors with special, enigmatic backgrounds can also lend credibility to the industry, making it more believable.
3. In the market, when there is a lack of investment opportunities, it can be a good time to create new industries or opportunities. During a bull market, there would be fewer chances to create a hyped trend. However, during times when investment options collapse and risks are high, it can be a good opportunity to introduce a new industry or seize a trend. Therefore, timing is essential, and opportunities can emerge from industries that were previously overlooked.
4. It is crucial to acknowledge that the success of others can potentially lead to the success of their imitators, as clearly seen in many success stories in China. Baidu, Didi, and the sharing economy are all imitations that emerged after the success of others. To determine if there is potential to become a hyped trend, it is necessary to observe whether others have succeeded in this, as their success can be duplicated.
5. Hyped industries must have profound depths that are beyond the general populace's complete understanding. If the industry is comprehensible, while it can provide significant opportunities, it is unlikely to become a hyped industry.
6. Hyped industries often gain widespread coverage in news and online media. Such industries are not typically the responsibility of scientific and academic institutions but rather fall under the domain of media influencers. It is often these influencers who play a significant role in promoting and elevating these industries, including some academics who prioritize marketing over teaching or research.
Establishing hyped industries is the desire of many, yet it is anything but easy. What is mentioned above only highlights some key experiences. However, there are constant opportunities for the creation of such industries. For instance, when the R&D of batteries is rebranded as the "energy storage industry", it has immediately become hyped. All in all, to build a hyped industry, one must be bold in thinking and daring in taking action, with the thinking part being of utmost importance.
