Internet and the murmurs of post-modernity in China

Translated extracts from a thesis

In parts, China is a society rushed into modernity. In parts, China is leapfrogging from pre-modernity to post-modernity without the legibility demanded by modernity. Before the thoughts coalesced for me, I saw them written by someone else.

The work is called “Internet and the murmurs of post-modernity in China” and it is humbling. Humbling not just because it was a piece that I couldn’t have written, but it was a roaring thesis at 75,000-words that covered everything from communist state of UBI to the online personas as digital twins to the stratified cultural views and consumption practices in China.

So I did the next best thing - I tracked down the author and got their permission to translate extracts from the thought-provoking piece. The author is 评论尸 (Pinglunshi), a Chinese internet analyst who has a day job working in a big tech company. I hope it gives you food for thought as it did for me.

Premium subscribers will be getting a piece from me about how the current Covid-19 situation, big tech redundancies and VC sentiments are the results of a changed narrative soon. (And yes, still answers to the gnarly questions)

The following extract has been translated and edited for clarity

• What does Simba get right about cyber apprenticeships?

• The relationship between the 'person' as a commodity and the company

• The digital twin of the live streaming family

• Is Pinduoduo consumption upgrading?

• Buying from livestreaming or from e-commerce - who is the dumb one?

Blue Spring by Nakatani Suisen

What does Simba get right about cyber apprenticeships?

In March 2021, after being banned from the platform for 90 days, Simba, one of Kuaishou’s top livestreamers, sent out a teaser for his comeback.

In the teaser video, Simba kneels in front of the camera with his team and vows to "take users home." The video’s style, corny as it may be to first-tier city dwellers, has a vast market in lower-tier Chinese cities.

This is not a localised video style but localised business logic, and it started with how Simba caught mainstream attention, which in many ways paralleled the way Kuaishou came to media prominence. 

The Chinese mainstream first heard about Kuaishou in a blogger’s article "Brutal Underclass Story: A Video App for Rural China".City dwellers heard about a short video app with 100m DAU that wasn’t Douyin for the first time in 2016. 

Simba's breakthrough came on August 18, 2019 when he held the "wedding of the century" in the Beijing Bird's Nest stadium. With a price tag of 70 million RMB, the event had celebrities such as Jackie Chan, Wang Lihong, Deng Ziqi and Zhang Liang perform. Hu Haiquan acted as the wedding's master of ceremonies, Cecilia Cheung personally presented gifts, and countless celebrities expressed their blessing in recordings. Far from just some overpriced extravaganza, Simba also live-streamed the entire event and netted 100m RMB in under two hours. The wedding paid for itself and then some. 

Like pre-2016 Kuaishou, Simba was non-existent in mainstream coverage pre-2019, even though his ability to sell was on par with Viya and Li Jiaqi. The public (former) queen and king of livestreaming on Taobao have been publicised to no end. But in 2019, Simba alone generated 13.3 billion RMB. Simba also isn't a one-man band; he has a family.

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The reason why mainstream media only skims the surface with its coverage is clear. During livestreams, livestreamers from the same clan would kneel down and call Simba ‘dad’. The behaviour, reminiscent of feudalism, is uncomfortable to the city folks who are a paragon of modernity. 

This misses a fundamental question: If Simba and other livestream clans use feudal structures to organise, how can they compete on a level playing field with the rational and entrepreneurial likes of Li Jiaqi and Viya? Can the model be backward if it held water until the latter half of 2020?

The relationship between the 'person' as a commodity and the company

The draw here isn’t so much the yokel style as it is the yokel product method. If it was purely about yokel style there would be plenty of yokel content made by slick content machines who churn out piece after piece of content. 

However, this is not the case. The feudal relationship model has gripped the production model - the apprentice kowtowing to the master, calling him ‘father’, granting him absolute power. This is actually because this master-apprentice system solves a problem that has always existed in the livestreaming, short-form video, and even celebrity industries - the conflict between people and companies.

When livestreamers become popular, they often want to go solo. The agency that incubates them cannot keep them. This isn’t just a China or internet problem but is also prevalent among celebrities. The economic value comes from being a saleable commodity, with the person being the most uncontrollable part of this supply chain. 

If we are to take a celebrity, livestreamer or blogger as a ‘product,’ what are the factors of production in this ‘product’? 

What are the factors of production that make a star?

While it is true that an essential factor of production is the stars themselves, they are not the main ingredient in the commodity’s factor of production. Instead, the agency can get the star to appear on talent shows and variety shows, collaborate with more famous stars, land adverts, take on investments and find good scripts. For a famous livestreamer and their corresponding MCN (similar to agencies), a factor of production includes buying traffic, connecting them to popular livestreamers, planning scripts and professional videography.

We often hear how celebrities worked so hard before their big break, but countless people work hard in entertainment or livestreaming, and only a minority achieved success. It’s therefore difficult to know how much of a livestreamer’s or a star’s rise is attributable to the individual’s hard work and how much is attributable to other factors.  

The MCN companies that nurture stars have a meagre yield rate. It is widely acknowledged that without them, there would be no saleable commodity such as a celebrity or a livestreamer. So the tension between the company and the star arises.

The livestreamers think the early ideas, planning and execution were their own. In this view, the MCNs only swooped in with some operational and business support at the last minute. Why should they take the lion’s share of the profits if a livestreamer becomes popular?

For the MCNs, it’s essentially an early-stage VC investment. If it incubates 100 livestreamers simultaneously and only one becomes a breakout, then MCNs need to capitalise on that success. The MCN needs to recoup the cost of the other 99 livestreamers from the sole success to keep the business afloat. The reality is that no company wants to be in a breakeven state, so when it has a hit, it wants to fleece them as much as possible. This is why we see so many celebrities clash with their management companies following a short period of success.  

The successful livestreamers or celebrities think it’s unfair that management companies want 100%. The management thinks it’s reasonable to take a cut when they’ve pitched in a hundred percent to the business. This is the root of the conflict between stars and their MNCs / agencies.

To solve this problem, the live-streaming world has explored another business model in recent years: the husband-and-wife team. When the livestreamer becomes famous, they get married to the MCN owner. 

Leaving aside the moral aspects of this model, we can see that the economic contract between the livestreamer and the MCN organisation is transformed into a social agreement between two people. Social control changes the relationship to move beyond economics and returns humanity to the saleable commodity of celebrity. 

Since marriage in the traditional sense means complete ownership of each other, this creates synergy. The livestreamer works hard in their livestreams, and the MCN boss works hard to make them more successful for mutual happiness. 

However, this isn’t always a successful transformation. It still feels like it contains dimensions of an ‘arranged marriage’ and sometimes that means the couple doesn't live happily ever after. Take, for instance, the example of the failed nuptials between Hangzhou-based livestreamer Xiang Sicheng and MCN owner Zhang Ke Feng. Zhang thought they would get married when the time came, while Xiang thought the relationship was a working dynamic between work superior and subordinates. The split was acrimonious and public with Zhang accusing Xiang of being a philanderer and Xiang accusing Zhang of sexual harassment. 

In a modern society that prizes the pursuit of love, anything that affects a marriage outside of emotions is condemned. Even though the husband and wife coupling is the best business model for the livestreaming world, it is not the best business model for marriage. In contrast, Simba’s clan model has many advantages. 

The digital twin of the live streaming family

Before talking about master-apprentice production relations, let's take a detour to explore digital twins. Digital twins are an internet concept that refers to the use of technologies such as the Internet of Things, sensors and big data to shape a digital production line in the cloud. Through this digital world mirror, we can better observe and adjust the entire factory operation.

Our social media accounts can be seen as a digital twin for individuals. We actively share and post to create a simulation of life. But our digital twin, similar to the factory’s digital twin, is not quite us. The notion of ‘persona collapse’ in common netizen lingo refers to when a person’s digital twin is revealed to deviate significantly from their real-time counterparts. 

Simba's master-apprentice system is a mechanism for creating a digital twin.

Generally speaking, our personal digital twin or ‘persona,’ despite being influenced by consumerism and mass interaction in its development, is still closely linked to our physical selves. But this is not the case for Simba's apprentices.

The livestreamers in the Simba clan had virtually non-existent digital twins before they became Simba's protégés; some of them weren’t even livestreamers but simply wayward youth drifting through places. A media source claimed, “in Simba’s apprentices were marginalised people without family support. Only Simba treated them seriously, and without him, they would be nothing.” These young livestreamers were able to gain hundreds of thousands of followers overnight and interact with other big-name livestreamers on an equal footing solely because of their affiliation with Simba.

The process of kneeling, worshipping and calling Simba their father, despite the patriarchal and feudal overtones that are so distasteful in modern times, is a form of a "digital twin birth" process. After being introduced to Simba's fans, Simba became the literal "father" of their "digital twin", and the anchors became "siblings" overnight.

For most of Simba's protégés, their fans come directly from Simba (the father) or Simba's previous protégés (siblings). The online recognition of being Simba's apprentice is very similar to a debutante ball, where children of specific lineage are introduced to a broader social scene when they come of age. "This is my acknowledged heir" - and is a process of inheritance confirmation. The sense of process participation is heightened because all the new livestreamers refer to the audience as 'family'.

The process has two significant competitive advantages. The first is that it significantly reduces the cost of incubating a new livestreamer relative to the MCN production model. This is one of the reasons why short-form video platforms are loathe to adopt the master-apprentice model since its intergenerational spread of influence (in terms of traffic and followers) is not mediated by the platform. The second is that it solves the conflicts of interests between livestreamers and MCN companies to a certain extent. The relationship between livestreamers and their agencies is now based on social connections rather than economic resource exchange. Therefore the ‘newborn’ owes an “emotional debt” to their own family rather than a “capital debt.” Capital debts can be calculated and paid off, but emotional debts cannot. 

A livestreamer who signed a contract with an MCN may terminate the agreement based on a cost-benefit analysis, but the apprentice has no such opportunity. The cultural legacy of “once a teacher, always a father” means that the apprentice’s influence often diminishes when they leave the master. As the fanbase is derived from the authority from the master, the sentiment is "I only followed you because of your master. Now that you've betrayed your master, how can I still help you?"

Once we clarify the essence of the livestreaming family system, it’s clear it solves the essential contradictions of a livestreaming business better than a corporate agreement. 

It uses a virtual family relationship to circle the capitalist (the father), the person (the son), and the consumer (the family in front of the screen) into a community of interest (the family). Within the community of interest, the distribution efficiency is not reduced. Still, the fairness of the distribution is superior to the free market, and thus it is a more robust setup. Allowing it to flourish on exploiting external capital (the platform).

Of course, there are also downsides. One of the strengths of modern business is risk control. In the master-apprentice model, losing everything is very easy because of the close dynamics in the community of interest. For example, the "fake bird's nest" incident that led to Simba's ban was caused by one of Simba's apprentices. However, "a son’s mistake is his father's fault" and "a teacher for life" are philosophies embedded in the mentorship system. Simba was unable to "apologise and fire" as other livestreamers did with their team’s mishaps. He had to defend his apprentice and lose his reputation. 

But this isn’t a fundamental flaw in the mentor-apprentice model. It’s easily avoided with more modern governance.

We should acknowledge that in livestreaming, a business model based on the traditional master-apprentice dynamic is far more efficient than the so-called 'modern corporate management model'. The cyber family system is still based on the highly modernised and digitalised world, and therefore it is a development of pre-modernity rather than a reversion to it. It is part of post-modern rather than pre-modern.

Is Pinduoduo consumption upgrading?

When talking about consumption upgrading, some people might be puzzled about why I’m talking about Miniso, Pinduoduo (PDD) and livestreaming? Let’s consider a question, is PDD consumption upgrading or downgrading?

My answer is: for the vast majority of PDD’s majority base, PDD is upgrading consumption. This isn’t obvious because the so-called public is often a different reference group to PDD’s user base. 

If Tmall, JD.com, and other premium e-commerce platforms are replacing the upscale shopping mall in town, PDD is replacing the wholesale and open markets. In these open markets, many daily necessities are sold unbranded and untraceable to manufacturers. There are no quality assurances. 

These items were once sold on Taobao, but with the cleanup of low-end goods and merchants in 2015, Taobao effectively abandoned this segment of buyers and sellers. It is interesting to note that at the beginning of 2015 when many analysts believed the e-commerce market was saturated, there were only 360 million e-commerce users in China. PDD was officially launched in September of that year. By mid-2021, the number of e-commerce users rose to 812 million. Many of the lower market and older consumers that analysts had dismissed learnt how to shop online through social commerce from their friend group. 

But it’s hard to imagine third-tier city consumers who brought 3 yuan socks start buying 16 RMB pairs of socks after Taobao cleared out the low-end merchants. It takes time to upgrade industry chains and consumption levels, and it's not done in such a giant leap forward. 

Urban consumers anchor prices to income, i.e., wages rise from $5,000 to $10,000. Consumers will naturally recognise that prices will also double. As rural consumers are also workers who are closest to the production of agricultural and industrial products, their anchor for prices is the cost of the product.

Given the decrease in input materials costs and improvement in production technology, socks of the same quality should be cheaper than be more expensive. In other words, their benchmark for consumer upgrading is not that they bought socks for 3 RMB ten years ago and now buy socks for 15 RMB. Instead, they purchased socks for 3 RMB ten years ago, and now they can buy better quality socks for 3 RMB. 

PDD onboarded white-label manufacturers persuaded them to register their brands in the early days, making them dependent on PDD by showering them with traffic. Once hooked, the manufacturers were required to meet specific product quality standards. Thus manufacturers gradually changed their mindset from being fly by night brands to one where they are improving quality without increasing prices. This is what I call the deflationary consumer upgrade. 

Deflation is considered more harmful than inflation in traditional economics as it is often linked with unemployment. But in the long term, communism envisages a form of extreme deflation. Material production is so abundant that every worker works for their interest (i.e. universal unemployment or non-essential labour) because basic or even above-medium subsistence means are no longer scarce. In a communist society, a dollar should be able to buy everything you need for the rest of your life, but you no longer need to do that because the whole of society belongs to everyone in the first place.

We need to fear not deflation but the stagnation and unemployment that come with deflation in the course of development. Within the traditional economics framework, the harm caused by deflation is often impossible since the market is often over-emphasised.

But this is not necessarily the case in a post-modern society with Chinese characteristics. If we can keep the cost of necessities to very low levels, then a universal basic wage will no longer be a dream. And when that happens, there will be even more people "lying flat". Of course, some people will stop working when they have enough to eat and drink, but many will start pursuing spiritual and cultural "labour". This will probably be achieved in 100 or even 200 years. But we are already confronted at this point with the question of lying flat, consumerism and the involution work ethic, 

To return to the above, deflationary consumer upgrading is closer to the universal consumer desire of value for money. This is more in line with human nature than the economic assumption of “if you earn more, you want to buy better, and if you spend more, everyone earns more".

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Deflationary consumption upgrading can help transform China's manufacturing light industries in the short term. At the same time, it lays the foundation for the commodity market stratification and cultural stratification by extension. As we have mentioned countless times before, commodities are essential for cultural expression in modern society. The relationship between culture and product, or the economy, is unlikely to be a one-way transmission.

Deflationary consumer upgrading and the rise of lower-tier markets are bound to trigger entirely new changes in the cultural sphere. In China, this, in turn, is closely linked to postmodern thinking.

Buying from livestreaming or from e-commerce - who is the dumb one?

Social e-commerce is a failure of reason, but this is a good thing. 

I conducted a small scale survey in my friend circle and asked why they would prefer to buy products from livestream e-commerce or catalogue (static) e-commerce. The results weren’t statistically significant but inspired further thinking. 

There were two schools of thought. One fraction is from friends who worked in internet companies or media and have lived in big cities for a while. They are used to catalogue-based e-commerce platforms like Taobao and JD.com. Their answers were in line with expectations: livestreaming encouraged impulse spending, time-limited count downs reduced distractions, and people who buy on livestreams are stupid. 

The other fraction is friends who work in non-internet or media-related industries or have lived in second or third-tier cities. They don’t shop very often on catalogue-based e-commerce platforms and gave surprising answers for buying from livestreams: “Catalogue-style e-commerce seems like a scam, with livestream, you can at least buy from a real person,” “if you got cheated, you don’t even know who cheated you" and "Livestream is more credible."

The result meant that the audience for livestream e-commerce and catalogue e-commerce looked at each other with contempt. The reasons for the mutual contempt are rarely dissected.

Catalogue e-commerce, a product of complete decontextualisation, is filled with symbols and expert systems. When we open any product page on Taobao or JD, the first thing that comes to mind is ‘information.’ A written list of marketing words highlights the product’s features and benefits. These messages are the ‘symbols.’ If a person appears on a product page, the person is either an expert or a celebrity endorser.

Thus, the catalogue e-commerce consumer who prides themselves on being rational in their shopping process makes their decisions through two dimensions: symbols and expert systems. However, relying on these two dimensions doesn’t mean they are not being deceived.

Many young consumers are “ingredients obsessed” when it comes to skincare. No matter how good the advertising is, they want to know what is in the products. Most cosmetic articles are written from this perspective. They mention that SK-II is just fermented bifid yeast, face masks contain hyaluronic acid, and niacinamide is the main ingredient for blemish-fighting serums. However, consumers don’t know why Hyaluronic acid is suitable as a moisturising ingredient. How the process works, what journals the research was published in, and how easily the results have been replicated. A purely rational consumer has to deal with a myriad of these questions. To eat food, you have to understand the nutritional effect of each ingredient. To take medicine, you need to understand its chemical properties. To buy an air conditioner, you need to understand the power consumption of different compressors. To buy a mobile phone, you need to distinguish between good and bad chips and basebands. 

I do not mean to question the effects of hyaluronic acid, only to show the limitation of this thinking line. A consumer with a scientific outlook will not thoroughly apply it when shopping. Mobilising the facility of reason in everyday decisions is a very draining activity on two levels. The first is the emotional energy level we need to mobilise or suppress various impulses as emotional creatures. The second is the amount of time it would take if we were to trace every strange thing we encounter every day to its origins. Live e-commerce and social e-commerce are recontextualisation. 

There are other behavioural aspects to shopping. People’s belief about whether an item is good or affordable does not depend on the item’s principles or the recommendation from an authoritative expert. Instead, it comes from the person's trust who sent the link. That person may recommend the product without rational thinking, only because they used it and like it. Because they are a credible person to you, you give up the complexity of rational thought in this mode of shopping. 

This irrational way is the more ‘rational’ choice in many ways. Many items in our lives should involve rational decision-making to come to a decision. To do so would be a failure of modern society. If a pair of slippers takes more than five minutes to research before purchase, no matter how good the material or the ergonomics are, time wasted researching is more costly. 

Even if a great deal of modern craftsmanship has been used to create a pair of slippers from the merchant side, the best strategy isn’t to litter the product page with scientific and technical details. But instead, hire a livestreamer with exaggerated facial expressions to demonstrate the foot-orgasm process live.  

Since no shopping decision is necessarily optimal in any way, this explains consumers' "mutual disdain" that set off this whole experiment.

1. Unlike other platforms, the top livestreamers on Kuaishou are divided into power clans or ‘families’ - Simba 818, Scattered Family, 716 Card Family, the Donkey Family and so on

2. Once a failed economist, always a failed economist - this is known as monotonicity of preferences. This implies any increase in consumption will be welcomed, regardless of the reference consumption bundle.