---
title: "2018: Five Major Opportunities You Can't Miss! In-depth Analysis!"
description: "This article analyzes the five major opportunities for 2018 as discussed in New Year's speeches by Wu Xiaobo and Luo Zhenyu, including the rise of central China and second- and third-tier cities, buying good assets and investing in poor countries, a retail revolution, robots reshaping manufacturing, and 5G commercial use reviving sunset industries. It also offers four insights for entrepreneurs: shifting to super-user thinking, cooling down entrepreneurship, improving efficiency, and competing for talent and capital."
author: "罗振宇、吴晓波"
publisher: "New Distribution"
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published: "2018-01-05"
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# 2018: Five Major Opportunities You Can't Miss! In-depth Analysis!

> This article analyzes the five major opportunities for 2018 as discussed in New Year's speeches by Wu Xiaobo and Luo Zhenyu, including the rise of central China and second- and third-tier cities, buying good assets and investing in poor countries, a retail revolution, robots reshaping manufacturing, and 5G commercial use reviving sunset industries. It also offers four insights for entrepreneurs: shifting to super-user thinking, cooling down entrepreneurship, improving efficiency, and competing for talent and capital.

01
**Five Major Opportunities in 2018**
If there is one common attribute among Chinese entrepreneurs, it is anxiety. Rather than saying they are anxious, it is better to understand that they are constantly exploring, exploring where the opportunities for enterprise development lie.
In this New Year's speech, both Wu Xiaobo and Luo Zhenyu talked about trends and opportunities, which became one of the biggest themes of their speeches.
**Opportunity 1: The Rise of Central China, Huge Potential in Second- and Third-Tier Cities**
The industrial advantages, capabilities, and late-mover effects of the central region will become a very important feature of China's economic development in the coming years.
If you pay attention, you will notice that many of the hot companies in 2017 originated in second- and third-tier cities, which is undoubtedly related to China's unique national endowment.
As Luo Zhenyu said, **"China's largest population is still concentrated in second- and third-tier cities, which better represent the typical Chinese lifestyle. A consumer product, whether in terms of price, consumption habits, or supply chain maturity, can only be replicated on a larger scale after being tested and succeeding in these cities."**
Over the past four decades, we have followed a development model where the rich first help the poor, developed regions drive underdeveloped regions, coastal areas drive inland areas, first-tier cities drive second- and third-tier cities, and elites drive ordinary people.
However, with the rise of second- and third-tier cities, more and more young industries are moving to places with lower labor costs, lower land costs, and more enterprising governments. The current second- and third-tier cities are regions and spaces that are growing rapidly.
Wu Xiaobo holds the same view: **In the next 5-10 years, China will see the emergence of super city clusters based on populations of ten million or more, and many of them will come from the central region.**
With the rise of central cities, the relationship between every enterprise and the city will be redefined. The industries formed along the southeast coast and the emerging industrial advantages in the central region will form a T-level structural model.
It is reported that among the top 60 cities attracting population in China in 2017, more than half were central cities.
**Opportunity 2: Buy Good Assets, Invest in Poor Countries**
After the regulation of overseas investment in 2017, in 2018 we will see cross-border mergers and acquisitions continue to increase, but capital will become more rational.
▲ Chart of China's Outbound Investment Growth from 2002 to 2017
In the 15 years from 2002 to 2017, China's outbound investment increased nearly 20 times (a little over 18 times). Many people borrowed heavily to buy overseas properties, beaches, hotels, cinemas, and football clubs. These are non-standard assets and are bubbles.
During 2016-2017, China's outbound investment saw a sharp decline because the government brought these "fools" back.
So, what should we buy in 2018? Wu Xiaobo's direction is "buy good assets, invest in poor countries."
**Good assets are not hard to understand: "Go buy other people's robot companies, pharmaceutical companies, and buy their best assets."**
How to understand "invest in poor countries"?
In Wu Xiaobo's view, poverty can sometimes be an advantage, meaning it is a developing country with opportunities. As long as these developing countries are given peace, many of China's economic models, management experience, and industrial capabilities can be exported through the "Belt and Road" initiative.
**Opportunity 3: China is About to Experience the Most Dramatic Retail Revolution**
In 2017, an industry that had been forgotten for many years and considered at the bottom of the industrial chain, the retail industry, became the most worthwhile investment target in China's business world.
In Wu Xiaobo's view, if all offline stores, shopping malls, and supermarkets only meet the convenience of shopping, most of them will have no reason to exist in the future. There is only one possibility: to meet people's experiential needs. When people's experience, emotions, and shopping form a new adhesion, China will witness the most radical and largest-scale retail revolution in the world.
2017 was a year of tremendous change in the retail industry. New industry positioning, new retail formats, and new technologies emerged. Omni-channel operations have become industry consensus, and online-offline integration is in full swing.
▲ Chart of China's Department Store Retail Growth
2018 will be a year of accelerated online-offline integration and a year of results for cloud networking and traditional formats. The retail industry will remain in active transformation and change. Facing the challenges of new technologies and new channels, enterprises that grasp the essence of retail and closely follow changes in consumer demand will gain a development advantage.
**Opportunity 4: Robots Reshape Manufacturing**
Developing intelligent robots is the only way to build an intelligent manufacturing equipment platform.
Wu Xiaobo mentioned in his speech, **"In the past few years, the industrial 4.0 or intelligent production line revolution represented by robots will become a very vigorous scene in 2018 and 2019."**
Undoubtedly, developing intelligent robots is the only way to build an intelligent manufacturing equipment platform.
The research, development, manufacturing, and application of robots are important indicators of a country's technological innovation and high-end manufacturing level. Theoretically, robots will be "omnipotent" in the future. With the disappearance of China's demographic dividend, robots will not only replace workers on a large scale in manufacturing but also replace humans in military, service, entertainment, and other fields. Undoubtedly, the "Iron Man" from science fiction movies is entering our lives.
**Opportunity 5: 5G Commercial Use "Revives" Sunset Industries**
**In 2018, one thing is certain: the 5G commercial standard will be announced.** Our current phones use 4G, and 5G's data speed is dozens of times that of 4G.
The Ministry of Industry and Information Technology recently revealed that the third phase of 5G technology R&D trials has been launched, focusing on product development, verification, and industrial collaboration before commercialization. It is expected that 5G commercial or near-commercial products may be available by June 2018.
Undoubtedly, 2018 will be a key year for 5G advancement.
Wu Xiaobo also mentioned this in his New Year's speech: "With 5G commercialization, various new application spaces and imaginations will be rediscovered. When these things happen, what problems will we face? **Some industries that seem to have died, such as shirts, refrigerators, air conditioners, and washing machines, will be fully revived.** This is a new sign that may appear in 2018."
When 5G commercialization arrives, it will change society. For example, when transmission speed increases 20 times, watching a movie on your phone online will cost almost nothing. Voice recognition, remote video, and teleconferencing live streaming will all be no problem.
02
**Four Insights for 2018**
Opportunities and anxiety coexist. The more you look for opportunities, the more anxious you become, especially in an era where industries are deeply explored by giants. So, facing the unknown 2018, how should entrepreneurs respond calmly?
Perhaps these shares from Wu Xiaobo and Luo Zhenyu can give them some inspiration and warnings.
**Insight 1: To Counterattack, Startups Must Shift to "Super User Thinking"**
In the Chinese market, if you are a new player, how do you find your strategy? The answer is this new gameplay: super user thinking.
Luo Zhenyu said that the business thinking of the past generation was traffic thinking, but now we should shift to super user thinking. "The era of picking fruits will never return. We must shift from the hunting-gathering era (obtaining from traffic) to the farming era, fencing off a piece of land and planting a season of grain (obtaining from your own farmland)."
In the past 20 years, the internet demographic dividend exploded, and everyone thought the mainstream business strategy should be traffic thinking. A website needs more clicks, and a small shop should be located in a crowded area. But now it doesn't work anymore. Traffic is getting more expensive and has been monopolized by giants.
Many startups can't help but wonder: Where should we go? The answer is simple and rough: **To rise, you must change your gameplay, that is, "shift from traffic thinking to super user thinking, not only caring about how many users I have, but also how many super users I have."**
Super user thinking is a brand-new cognition. It is not enough to just say, "Well, I know who the super users are." You need to think about what you can truly do for them.
Enterprises focusing on super user thinking not only gain continuously rising sales but also greatly improve advertising efficiency and promotion intensity. Companies do not need to go to great lengths for large-scale marketing or distribute a large number of coupons to customers who rarely buy the product; they only need to focus on the needs of these super users.
**Insight 2: The TMT Era is Completely Over, Entrepreneurship Should Be More Calm**nWhen it comes to entrepreneurship, Wu Xiaobo has a different view on the prospects for 2018. He believes that in 2018, the entrepreneurial boom that has been burning for three years may cool down.
He gave four reasons for this conclusion:
First, professional thresholds are getting higher. Mobile internet and internet entrepreneurship based on business model innovation have completely ended, and the TMT era is completely over.
Second, traffic costs have soared. All entrepreneurship is more based on business and content production capabilities. The threshold for entrepreneurship is rising, and traffic costs are getting higher. Whether opening a retail store offline or a Taobao store online, traffic costs are unbearable.
Third, technology replaces models.
Fourth, venture capital is becoming pragmatic.
Based on these four reasons, all entrepreneurs in 2018 should be more down-to-earth. Like every industry in China's industrial economy, entrepreneurship also needs to be calm and to remove bubbles.
**Insight 3: Do Yourself Better with Higher Efficiency**
Luo Zhenyu warned everyone that no matter how the current situation changes, two trends will never change:
First, no matter how the industry evolves, it evolves toward higher efficiency. The so-called new retail is nothing more than letting more people buy richer goods at cheaper prices, in more convenient ways, and with better experiences.
Second, the division of labor will become increasingly detailed. Let professional people do professional things, and let professional people only do professional things. The more professional you are, the less likely you will be left behind by the times.
So, facing the unknown 2018, enterprises only need to be the best version of themselves, do themselves better with higher efficiency, and have nothing to worry about.
**Insight 4: Talent and Capital Will Be the Most Important Competition in 2018**
Wu Xiaobo mentioned in his speech that in the past two months, the United States has dug a big pit in its own country, wanting two things: first, talent, and second, capital. He emphasized that **this will become the most important competition between countries globally in 2018.**
Wu Xiaobo believes that in 2018, China, as the world's second-largest economy, can only do one thing: dig pits like the United States!
As important constituent units, the importance of talent and capital to enterprises needs no further elaboration.
2018 has already begun. Everyone will go their separate ways and start their own life algorithms.
Source: Zhenghe Island (ID: zhenghedao) Editor: Shisan, Ye Kaifu
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