After tasting success with book on essential China, professor focuses on country's 1 billion customers

Jeffrey Towson believes it is possible to tell people what they need to know about China in a very short time.

The Peking University professor's The One Hour China Book - written with management consultant Jonathan Woetzel - has been a minor publishing sensation.

Jeffrey Towson, a professor with Peking University, tries to tell people about China quickly through his books. Feng Yongbin / China Daily

It has been at the top of the Amazon bestselling charts for the categories of both China and international business books for the past 11 months.

Now the authors intend to repeat their success with The One Hour China Consumer Book, which looks at the major consumer trends in the world's second-largest economy and will be published next month.

Both books are designed to be read in just one hour and cost the same as the price of a latte.

"I think that is a pretty good pitch," he laughs. "You give me an hour of your time and the price of your coffee."

Towson, a friendly and effusive 44-year-old, was speaking at Peking University's Guanghua School of Management, where he has been a professor of investment for the past five years.

A former investment adviser to one of the world's richest men, Prince Al-Walid bin Talal of Saudi Arabia, he also now runs his own investment company, Towson Capital, which he runs from New York and Beijing.

He says the idea for the first book came from a chance conversation he had with a US congressman.

"He wanted to know what I could tell him about doing business in China. I asked him, 'What do you know?' and he replied, 'Nothing'," he recalls.

"What do you do if someone asks you that? You can give him a list of 10 books he should read but you know he is not going to have the time to read them."

The authors - who had both written longer books - realized that one of the problems with many China books was that they weighed in at more than 500 pages and often required some form of specialist knowledge to wade through.

"We came up with this idea that if we had a really smart and also curious person's attention who had a busy life, what would we tell them. It is based on the idea of giving someone the best 3 percent of your thinking without them having to read all of a 500-page book."

The One Hour China Book reduced that thinking to briefly analyzing six mega trends affecting China: urbanization, huge manufacturing scale, the rising Chinese consumer, money (the fact that China has lots of it), the brainpower behemoth and the Chinese Internet.

It also has a light conversational style, which they are repeating with the new book, which examines strategies to reach China's 1 billion consumers.

"We look at the mainstream consumers in urban centers, the middle class, inland consumers in the far west of China, the elderly, youth and also working moms. And we say this is awesome and that if it doesn't inspire you, nothing else will," he says.

"Everyone wants these billion consumers. Who wouldn't want a billion consumers? The flip side is that the knife fight for them is so ruthless and bloody that it should scare you to your bones."

The book is framed around five stories based on the case studies of McDonald's, Carlsberg, NBA, the auctioneers Sotheby's and Christie's as well as the funeral business in China.

"Carlsberg is one of the most interesting. They ran into problems against domestic brewers such as Tsingtao more than a decade ago and essentially lost the game.

"In response they almost closed shop and moved to Yunnan and Xinjiang (western provinces) in 2003 and they now have 60 percent of the market in western China. Even now Chongqing is considered inland so these areas were really the wild west then."

Towson, who was born in Walnut Creek in northern California, originally studied physics before being selected as a Fulbright scholar to go to the Karolinska Institute of Biotechnology in Sweden.

This led to studying medicine at Stanford, although it was more his intention to go into medical research rather than practice as a doctor.

His career eventually changed course and he became a management consultant for Booz, Allen & Hamilton in New York.

"I actually sucked at this and I hated working in management consulting," he says.

He told the firm he was quitting in 2001 but they asked him whether he would do one last job in the Middle East and this is where he made the connection with Prince Al-Walid, then the fourth richest man in the world.

This led to him working for eight years for the Kingdom Holding Company, a $30 billion investment company.

He was based in the iconic 303-meter Kingdom Centre in Riyadh, conducting deals across the Middle East, Africa and Asia. Despite the huge investment portfolio, he was one of only four people working directly for the prince.

"Our office was on the floor below the big hole in the building," he says.

It was then that he got to know China, frequently traveling twice a month from Riyadh.

"It was a time when nobody really cared what happened in emerging markets. In the West it was all about hedge finds and tech investment and suddenly before the financial crisis everyone woke up."

He left in 2009 and now combines his role at Peking University with running his own investment company, Towson Capital.

He says he would like to follow in the footsteps of Ben Graham, the Columbia Business School professor and professional investor whose disciples included Warren Buffett and Walter Schloss. Towson's first book, published in 2011, was, in fact, What Would Ben Graham Do Now?

"He is my touchstone. He was a great business guy. He did his investments in New York and then returned to Columbia Business School every week and wrote books."

Towson is now impressed by the phenomenon of many homegrown Chinese companies coming of age. He cites Chinese Internet giant Tencent, which developed the instant messaging service WeChat, which is now big in India and other markets.

"They developed this in-house, which is something Facebook failed to do. They had to pay nearly $20 billion for WhatsApp, which only had around 50 people. Couldn't they have developed a 50-person company in-house. How did they miss that?"

What concerns him about China is that no one has any recent experience of bad times, which he likened to Dubai before the property crash in 2008.

"If you ask an average real estate investor here whether things could really collapse, they say, 'Oh no, no, no. That couldn't happen'. That was Dubai in 2006."

With his new book, it is China's 1 billion consumers he is now focusing his attention on.

"With 1 billion consumers you have to look at both sides of the equation. One side is absolutely optimistic because of the opportunity. The other is absolutely terrifying because of the competition. I think though if you are not terrified, you are not paying attention because it is absolutely brutal out there."

andrewmoody@chinadaily.com.cn

( China Daily European Weekly 01/23/2015 page32)