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China Skinny recently attended the Asia Pacific Business Outlook conference in Los Angeles. As an agency servicing brands in both China and abroad, we find it valuable to hear perspectives about China from businesses who are both close to the market, and an ocean apart.  The conference was full of enlightening details regarding the Mainland China market. Below are five key takeaways from the conference.

 

  1. China is becoming more competitive as both domestic and foreign companies focus on expanding their offerings in the “Middle Kingdom”.

The opportunities in China, particularly among China’s middle class, were detailed throughout the conference. China’s economy is growing at 6.5% per year, which is the equivalent of adding Switzerland to its economy each and every year. With this growth, China’s upper middle-income group is projected to expand from 7.1% of the population in 2015 to 19.7% in 2030. This means a new consumer class of more than a hundred million strong, eager for products and services for their new lifestyle.

The increased opportunities presented by China’s growing middle class is attracting its share of suitors; more companies than ever are looking to sell to Chinese consumers. One particularly interesting group is manufacturers who were once simply concerned with production. They are now heavily investing in the China market and developing brands to sell in China. Some examples of recently successful China brands include phone makers Xiaomi and Oppo, cosmetic brand Proya and snack brands Three Squirrels and Bestore. Foreign companies who once relied on their ‘foreignness’ to sell can no longer rest on their laurels as it there is now a battle of the brands between “national consumer champions” and global premium brands.
While foreign products typically do hold a higher status than domestic products this doesn’t mean foreign brands are assured of success. Often domestic players have better distribution, deeper insight to their target market, and are quicker in adapting. A great example of this is the dairy industry where despite the lack of trust in local brands domestic milk is sold for 38% more per litre than imported milk.

 

  1. Don’t rush into China

The massive opportunities in China might make it easy to think that your brand needs to be there tomorrow. But don’t make the mistake of rushing in and making fatal missteps such as Marks & Spencer’s, Home Depot or even slight blunders such as Nike.

Go slowly, conduct due diligence on specific categories, product size, packaging, price and branding in order to make educated moves. Fully research and get to know your partners to avoid being burned. Get covered legally, protect your IP, and minimise the unpleasant company of trademark squatters. One thing you should do now is to register your IP even if you aren’t thinking about entering China just yet. A middle term to-do list should include investing in research and trips to fully understand the market. This brings us to point three.

 

  1. Know your customer

Taking time to know the China market means deeply understanding your target market. Too often we talk about selling to China in vague terms. Instead of ambiguous thoughts of who the target market is, you need to discover who they are, what they like, and where and how they shop. Maybe more so than anywhere, the customer journey in China is unique. Don’t just sell to the ‘China market’ but rather a carefully crafted segment. Dig deep to understand the people in the country, and they will be drawn to dig deep about you and your brand.

Drilling down to understand your target consumer, different segments, and their unique requirements will save you time and energy in the long run. Additionally, make sure you’re doing business in the right part of China. With dozens of Chinese cities’ GDP topping GDP topping ¥1 trillion ($145 billion) there are many opportunities outside of Tier one, two or even three cities. Get to know where these are and what the unique characteristics of each place are and how this affects citizens (and their buying habits) in the area.

 

  1. China’s Millennials are the growth engine driving China’s economy

When discussing who the Chinese consumer is, millennials were brought up again and again. Nearly as big as the entire population of the U.S., this group cannot be ignored. It’s not only the size of the group but also their expendable income, desire to shop, and international mindset. This group of Chinese consumers is unique even within itself with those born in the 80’s and 90’s exhibiting different characteristics, with notable variances geographically. This group is extremely aware that Chinese products may not perfect, but they are also extremely proud of China. They are more independent and identify with brands that understand them and cater to their needs and desires.

 

  1. Business is still moving forward despite the uncertainty brought on by Trump administration.

Lastly, in today’s world one cannot go to a conference about doing business abroad without mention of the U.S. president and his administration. There are a lot of uncertainties and unknowns with the Trump administration. The key direction is not yet set, and there is much left to be determined. While calamity is a possibility there is also a chance that business opportunities may increase at a rate never seen before. While negative sentiment among Chinese consumers is understandable, the full effect of the Trump show is yet to be seen and there are reasons for optimism. Stayed tuned.

Whilst U.S. brands exporting to China have their own sets of challenges, many of the opportunities are within grasp for brands with the right approaches.

Alibaba’s growth has been remarkable over the past few years, cementing its position the central pillar of China’s ecommerce industry. With Tmall and Taobao, Alibaba is successfully furnishing the market needs in China by providing B2C and C2C platforms.

The infograph below illustrates Alibaba’s near-monopoly.

Alibaba's monopoly

Contact China Skinny to find out more about tapping into the ecommerce opportunities in China, or find out more about our services here.

With 55.2% of its 549 million monthly active users opening WeChat at least 10 times a day, the app is China’s most popular social network. Being perceived as the “Chinese Whatsapp”, WeChat offers far more features and many opportunities for brands to interact with their target market. Besides the regular user accounts, businesses can register official brand accounts to promote their products. Additionally, there are a number of functions that effectively support marketing to Chinese consumers. If you want to know more about how to effectively leverage those services, be in touch.

WeChat Marketing Functions for China

For our infographic about WeChat user demographics and habits, tap here.  To find out more about the day-to-day lifestyles of WeChat users, tap here for the infographic.

There’s obviously plenty more to WeChat, which we’d love to share with you.  Contact China Skinny today for WeChat and overall digital strategies and execution for China.

520 – a special day in China and a special day for China Skinny. Attending the Global Conference on Women and Entrepreneurship hosted by Alibaba in Hangzhou, our team is part of the 800 participants. With 640 million female consumers in China, bringing female entrepreneurs together shows the importance of women’s power for China’s economy.

Excited to be here, we will find out shortly what Jack Ma has to say about Alibaba’s role in this century’s She Era. The room is filled to the roof with a few of the 231 million female customers that shop on Taobao and Tmall.

jack-ma-in-spotlight

Arianna Huffington spoke of the importance of women finding their inner self to prevent burnout. With 100 million Chinese suffering from stress and mental diseases, Huffington points out that success lies in staying focused and gives tips and advice how to reach this goal.

discussion-with-huffington

Actress and Entrepreneur Jessica Alba emphasized to the importance of understanding your target market and how to reach themthe right way. Producing safe and healthy baby products and detergents, Alba plans to launch on the China market in the near future. With more than 9 out of 10 of Chinese moms having absolute control over what their babies are consuming and 86.5% of spending on children going towards healthy, safe and foreign products, women are the driving spending power in the Chinese baby and toddler market.

jessica-alba-honest-company

Short snack in between: a decorative reminder of the event’s host.

alibaba-cake

Along with these celebrities, the audience discussed the role of women in China with Chinese stars like Chinese actress Zhang Ziyi, Su Mang, UK Ambassador Barbara Woodward, and Goldman Sachs Vice Chairman Mark Schwartz. Marriage was a topic of discussion – a big concern for many of China’s “left-over women”, often ambitious women who remain single after 30. With women contributing to just 10% of global GDP growth, there is room for improvement across all industries and countries.

su-mang-alibaba

All speakers consistently stated that mind-sets have to change as there is no country worldwide with gender equality. Given the status quo, it will take 81 years to reach economical gender equality. Women are 9% less likely to have saving accounts, assets or take out loans, and building the right infrastructure is one of the Jack Ma’s objectives for leading China into the She Era Economy of the 21st century.

discussion-with-jack-ma

Two interesting days with dozens of speeches, hundreds of questions and hot discussions. With this event pointing out discrepancies and bringing entrepreneurs from all over the world together, the trends towards the independent, strong business women in China is on the rise. China Skinny can help you play your part in reaching and appealing to this large and powerful consumer group.

China Skinny wishes you a happy 2015; we hope you saw it in with a bang!  The beginning of the year is often a time to plan ahead for the following 12-months. Whether you are already in China, or entering this year, here are a few points to keep in mind:

1. Strive to Understand Chinese Consumers

Understand who your consumers are. Where do they shop? What will catch their attention? How have businesses been successful with similar products and target markets? In addition to the answers to these questions, understand that Chinese consumers are becoming more sophisticated and diverse each day. Just because a foreign business is present in China does not mean they will succeed, especially with the growing competition – not only from foreign brands but also from homegrown brands

2. Be Bold

Entering China with an online-only strategy has worked nicely for some but it is not going to work for everyone, especially those with low to moderate brand recognition. How are you going to make a splash and get noticed? Chinese consumers are not limited in their options as more imported goods and services attempt to attract their wallets. How will you stand out? Not every organisation or company may have the means to open a store, but how about a pop-up store? Or can you join a road show to exhibit your goods? Combining offline efforts with digital efforts is one way to smartly and efficiently capitalise on opportunities in China. There are ways to make a buzz beyond store openings, one just has to be smart about it.

3. Venture Out

First and second tier cities are fun and exciting, with their bright lights and big malls, but they’re becoming very crowded. Is there a place for your goods or services outside of the major cities – the most landlocked province in China was the number one seller of bikinis online per capita!  Provinces in China differ enormously so trying to tackle a population as large as China’s with a single countrywide strategy can be difficult, if not impossible. Geographical differentiation needs to be taken into account and regional strategies should to be considered to maximise available opportunities and provide consumers with relevant products, services and messaging.

4. Be Committed and Flexible

China changes fast. Entering China and getting setting up is only the first step to tackling China. To succeed in China you must not only be committed but also informed on the constant changes that happen in China. A long-term strategy that is flexible is fundamental when entering China. 

5. Keep it Real!

Stay true to your brand. In a low-trust society such as China it is vital to stick to your foundation. Attempting to change your brand to satisfy someone’s notion of what appeals to Chinese shoppers often backfires in the medium term. Understand your market, the available opportunities, and how your products or services best fit into that market. There are ways to localise and appeal to Chinese consumers while still remaining true to your brand. Presenting your brand as authentic and retaining your roots while taking a China-fied approach has a more sustainable chance of success than changing your brand’s identity.

 

China isn’t easy by any measure, but keeping these five points in mind will ensure your business is well placed to maximise the opportunities that China presents. All the best for 2015 in China!

 

House prices in China are continuing their seemingly never-ending rise.  Prices in 69 of China’s 70 main cities are up from last year.  In most countries when house prices are on the up, consumers feel wealthier and spend more.  Not so in China. Although slowing GDP growth is affecting confidence, climbing house prices aren’t helping things either.  Just over one in four Chinese consumers plan to spend more this year, 29% less than last year.  That in itself marks one of the biggest differences between Chinese and Western consumers.

As house prices rise in the West, many consumers who’ve only put down less than 20% of their own money, gain 100% of the rise, and businesses hear cash registers ringing.  With each piece of news on rising prices, they’re out taking full advantage on spending binges.  To the prudent Chinese, rising house prices point to increasing costs of living and pricier retirements, higher costs to trade up their dwelling and a more expensive apartment so their son can marry.  So they save.   Home ownership in China is reportedly as high as 90% (it’s 65% in the USA), meaning a good portion of consumers are on the gravy train, nevertheless, household savings hit a historical high of 38% of disposable income in 2012 as prices continued to rise. 

Fortunately, the increased savings aren’t all doom and gloom for businesses selling in China; it’s just a case of continually needing to adapt.  Although more consumers are looking to cut spending, many are trading up, buying fewer, but higher quality items.  They are looking for value, spending more of their income shopping online and at outlet malls.  42 cars a minute are still selling in China. 

For those businesses offering suitable investments, with one-year bank deposits in China paying around 3.25%, Chinese are increasingly looking to divert their savings for better yields – just ask the one million customers who signed up to Alibaba’s ‘Yu E Bao’ in its first week, or anyone who has enjoyed a share the $64.4 billion China invested overseas last year.  There are plenty of opportunities both within and outside of China, and hopefully some of the articles below may provide some insights to tap into them.  Enjoy!

Chinese consumers Chinese Consumers

Chinese Consumers Less Optimistic About The Economy And Fewer Plan To Increase Spending In Coming Year: 27% of Chinese consumers plan to spend more this year, down from 38% last year, and almost half in 2011. Although, it’s still three times higher than consumers in the US, Europe and Japan. Just 22% of Chinese feel their savings meet their expectations. Those in small cities, especially 18-34 year olds, remain the best driver for population and consumption growth. Long term optimism is high, with just 11% believing the economy will not improve over the next few years. 

Women: The CFO of the Chinese Household: Since 1980 in China, women’s average contribution to household income has grown from 20% to 50%. They’re seeking at least an equal footing on purchasing decisions for big ticket items including insurance, electronics, finance and cars. An integrated marketing approach is the best way to reach women. TV is important, but online is critical. Just 10% of social media ads target women, although 27% of women follow their favourite celebs on social media every day, and 54% trust what they read on social media.

Study Will Value Chinese Celebrities: A 2011 survey found excessive use of celebrity advertising and poor matches between celebs and products had caused likability of such ads to drop by 4% and brand linkage to slide 6%. Just 35% of celebrity TV ads achieve satisfactory results. The new FUSE Celebrity Index aims to help assess the value of 700 Chinese celebrities in entertainment, sport and the arts.

Chinese property Property

China Home-Price Gains Add To Dilemma On Cash Crunch: Economy: House prices in China grew in 69 out of 70 tracked cities from a year ago, despite efforts to cool the market. Wenzhou was the only cities to see prices fall at -3.6%. Guangzhou topped the charts with 15% growth, Beijing at 12% and Shanghai, 10%. Chinese home prices had the biggest gains globally of 55 countries for Q1 of this year.

Outlet Malls Draw Chinese Shoppers: Chinese consumers are becoming more sophisticated with bargain hunting, shifting towards outlet stores. Value Retail’s nine outlet stores in Europe have seen Chinese shoppers increase 49% in Q1 2013, spending $455 each, 12% more than the average shopper. AWE Talisman’s North American outlet stores have seen 140K Chinese tourists through in the first half of 2013, compared to 106K for all of 2012, and are estimated to spend 50% than other international visitors.  They’ve started building Chinese buffets.

Chinese Investors Now Have Easier Way To Tap U.S. Property Market: Chinese investors can get a piece of US real estate for as little as ¥1,000 ($163) by investing in US real estate investment funds. “I hope those fund managers bold the word ‘Detroit’ in the fine print” – Ernie Diaz.

Business 2 Business & Investment

Passing Down The Business: 85.4% of the China’s private sector companies are classified as family businesses. In the next 5-10 years, 75% of them are set to enter a period of management transition with the kids.

Alipay’s Investment Service Attracts 1 Million Users In A Week: Alibaba is at it again, this time with its ‘Yu E Bao’, where customers can buy money market funds or other financial products using idle money in their Alipay accounts.  With better returns than bank deposits, there’s little wonder 1 million users signed up in its first week. Although shortly after launching, authorities announced the service didn’t comply with regulations and may face penalties.

Western Groups Wary Of Chinese Buyers: China’s outbound investment hit $64.4b last year, the second highest total in over a decade.  However sellers aren’t so keen on selling to Chinese, charging them a premium of up to 20%.

Chinese Internet Internet, Mobile & Social Media

A Look At China Cache’s China Internet Report For Q1 2013: If you’re hoping to attract inland Chinese consumers to your website, hold back on slow-loading bells and whistles – average connection speeds get worse away from the coast.

Kaifu Lee On What Tech Companies Should Do To Make Things Work In China: Internet Guru Kaifu Lee’s take on foreign firms hoping to enter the Chinese online space. Any company hoping to succeed in China needs to take more care and be prepared to compromise, rather than just treating it as another international market. The biggest differences are (1) the user structure; (2) industry landscape; and (3) fast-growing startups.

Price War Between E-Commerce Firms Hotter: June was a good month to be shopping online in China. Competition between China’s eCommerce platforms heated up, with JD.com offering discounts on millions of products to celebrate its 10th birthday. Tmall gave an estimated ¥200 million ($32.6m) in discounts and Tencent’s 51Buy and Sunning followed suit.

Lenovo Playing Games in China to Challenge Samsung Phones: Mobile game users are expected to grow by 30% to 280 million users this year, with sales up 55% to ¥9.6 billion ($1.56b). Lenovo is adding a gaming service which includes social media features, reviews and tips, in hope of becoming number 1 in China’s smartphone market.

Chinese food and beverage Food and Beverage

GM Influx A Dilemma For Consumers, Farmers: China has another food dilemma on its hands with GM. Large scale production of GM crops are still not approved in China, however imports of GM food is making it hard for local farmers to compete.

Chinese Wine Consumers Prefer Traditional Packaging: Chinese wine distributors consider the country of origin as the most important criteria for choosing wine, followed by price, taste and region/vineyard. The shape of a wine bottle is the 5th most important, more-so than the label and colour of wine according to a study by UbiFrance.

How To Satisfy China’s Insatiable Demand For Cookies: The Chinese market for cookies is worth $24 billion, and is growing at 20% a year. However the most successful Western brands in China have modified their flavours to local tastes; take Oreo and Hershey’s, who’ve just launched their non-chocolate milk candy, their first new product developed just for a foreign market.

Thanks To A New Trade Deal, China Could Up Its Tequila Intake By 2400% In Five Years: Da-da-da-da-da-da-da-da Da-da-da-da-da-da-da Lóng Shé Lán! A new trade agreement with Mexico allows its 100% agave tequilas to be imported into China. Some are picking China’s tequila consumption could grow 2400% in five years. 65% of China’s alcohol consumption is hard liquor, with Baijiu accounting for 95% of that.

Chinese fashion Fashion

Apparel Dominates E-commerce Sales In China: China leads globally in the A.T. Kearney Retail Apparel Index for its compelling opportunities due to its market size and growth. Three trends shaping the apparel market – the rise in eCommerce, a boom in fast fashion and the evolution of the luxury market.

Chinese auto Auto

Honda’s ‘China Dream’: Honda is hoping to turn around declining sales in China by launching 12 new models by 2015, better technology and localised production & features. They’re also hoping to win some of Germany’s 80% share of the luxury car market with Acura by focusing on advanced power trains, fuel efficiency and lower-priced premium models.

Chinese Consumers Don’t Want Electric Vehicles Just Yet: Although Chinese consumers see the effects of carbon monoxide every day, they haven’t taken to Electric Vehicles yet. 80% of China’s 39,800 electric cars on the road are used for public transport.

GM Says China Luxury Vehicle Demand Slower Than Expected: GM picks sales of premium cars in China to rise just 4% this year, with the total auto industry predicted to be up 7-8%.

Counting Cars: Rising Private Automobile Ownership in Chinese Cities: 93m, or 80% of cars in China are privately owned. Beijing with it’s four million+ cars, now has more cars than car-crazy Houston. Three Chinese cities now have more private cars than New York City’s 1.8m. That’s a lot of cars, and no doubt a boon for anyone the auto industry from car sales, to servicing, to parking, to road construction, to fuzzy dice and those wobbling toy dogs in the rear window. Car purchases are motivated by a mix of practical concerns and to reflect social status.

Can China Spend Itself Richer: 2,500 vehicles are sold in China every hour – that’s 42 a minute. In the time it took to read this, another few hundred more sold.

That’s The Skinny for the week!  China Skinny would love to help with your marketing, online initiatives or research to take advantage of China’s opportunities.  Just email us at info@chinaskinny.com or call us at  +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.

If you’ve missed earlier news or need to learn more, there’s a library of information about Chinese consumers in prior China Skinny Weekly’s right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.

Shanghai, Beijing and China’s other first tier cities probably spring to mind when you’re thinking about opportunities in China. Their consumers have more western tastes, buy more western goods and are generally easier to reach than consumers in China’s ‘smaller’ cities. The megapolies also have better networks, infrastructure and facilities for western businesses. However, China’s smaller cities, most you’ve probably never heard of yet, often hold much more opportunity for western businesses with Chinese aspirations, here’s why:

1. Most Chinese urbanites live in the ‘smaller’cities

Shanghai and Beijing have a combined population of around 44 million people.  Not to be sneezed at, but given more than half of China’s 1.34 billion people live in cities, there are about 650 million urbanites living in other Chinese cities.  China’s has about 700 cities with more people than Geneva, so there are plenty potential markets.

2. There are more rich consumers in China’s ‘smaller cities’ than the larger cities

The most relevant measure of perspective customers for most western businesses are the affluent consumers.  Those earning between $20,000 to $1m a year; enough to have some income left over to make discretionary purchases. There are currently 120 million affluent consumers in China, expected to grow to 280 million by 2020 – 75% whom will live in the ‘smaller’ cities.

3. China’s smaller cities are less competitive

There aren’t many well known businesses who don’t have a presence in China these days, but the most common path into China is through the biggest cities more accustomed to western brands and products.  That’s made those cities some of the most competitive markets in the world.  Many brands are yet to venture into the smaller cities.

The seaside city of Qingdao with almost 9 million residents is a potential gold mine for western businesses
The Seaside city of Qingdao with almost 9 million residents is a potential gold mine for western businesses

4. Consumers in China’s smaller cities generally have lower expectations

With all the brands competing in China’s bigger cities, their consumers realise how valuable they are and are often more assertive than western consumers.  Many cities don’t have the big-name western stores, and have lower expectations as consumers.  They still work hard for their money and expect value.

5. Most first time buyers in China are in smaller cities

Chinese consumers in first tier cities have been consuming for over a decade now and many of them are not buying product categories for the first time and are more likely to have developed brand preferences.  The majority of first time purchasers in China are in the smaller cities and they’re more open to new brands.

6. Selling online is a great way to reach smaller city consumers

Chinese consumers are increasingly buying their wares online, especially in smaller cities where many goods aren’t available in stores in their city.  In categories such as luxury and western goods, the portion bought online is much higher in smaller cities than First Tier cities. With the high price of well-located retail in China, online sales can be a cost effective way to reach the masses. 

If you’re not already targeting China’s smaller cities, you should be thinking about it.  A word of caution though, marketing landscapes differ considerably from province to province, even city to city.  Make sure you’re aware of this and do you homework in whatever market you’re targeting.

Facts about China’s Smaller Cities’ Consumers

Welcome to this week's skinny on China. And what a week it is. With the process to determine the leaders of the world's two largest economies both beginning this week, the outcomes could have a bearing on all of us. There's been no shortage of talk about China in the lead up on both sides of the Pacific. With 46% of Americans believing that China's growth will have a negative impact on the US economy, there was a lot of anti-China hot air to win cheap votes. Fortunately, there were also some intelligent articles written about how Americans can benefit from the rise of China, which I have little doubt both Obama and Mitt are well aware of.  See our first link below.

The less glitzy change of leadership in China is something we've been watching with interest. All signs are pointing to policy in China continuing on it's path of reducing China's dependence on exports and investment and encouraging domestic consumption – great news for any business selling to Chinese consumers. Below are the usual news and views to help you take advantage of that. Happy reading.

Chinese consumers Chinese Consumers

The Most Dangerous Thing About China: Americans' Attitudes: Some good sense on how Americans will benefit from the largest expansion of a consumer market in history, many whom will want US (and other foreign) brands.

Why Barbie Stumbled in China and How She Could Re-invent Herself: Was it because no Chinese girl could relate to the freakish 39"-18"-33" dimensions? Why Barbie flopped in China and lessons that apply to many businesses selling to Chinese consumers.

Fast Food Chinese Business Strategies Difficult: Some good examples of the challenges western brands entering China have had. “Good brands will succeed and weak brands will not succeed, Chinese consumers are bright and they’re picky”.

Early Foothold in China Pays Off: Procter & Gamble's success in China – 16% growth in the last fiscal year attributed to early investment, insight driven marketing and product innovation – fairly basic rules for marketing anywhere aren't they? Product innovations included skin whitening cream, green tea tooth paste (I've been fooled into buying that before) and increasing awareness of their detergent with first-time washing machine buyers by bundling a free pack.

China & India: Hey, Big Spenders!: More on the huge potential of the rising Asian giants.  Particularly interesting was the 2011 BCG survey which showed that 39 per cent of those polled in China intended to spend more on quality, notably in electronics, clothes and home decoration. 70% of Chinese consumers cite brand as a reason for trading up, higher than any other market surveyed.

Chinese advertising Advertising

Why Is Advertising Way Up in China With Consumer Spending Way Down?: Great analysis on why spending on advertising in China has grown at 14.5%, almost double the rate of GDP.

Chinese retail Retail

China Retailer CRE Adopts Rivals' Western Ways: Big Chinese retailers are learning from, and even outfoxing, their western megastore competitors in the China market.

Chinese food and beverage Food & Beverage

The Battle for Breakfast: It appears to be proving harder to woo Chinese away from their rice porridge breakfast, than it is from their lunchtime noodles. Although Starbucks isn't sitting on their hands trying to convince Chinese consumers to buy their breakfast (they did it with coffee).

Growth in Organic Products in China as Consumers Adopt Multiple Self Protection Strategies: 80% of Urban Chinese claim organics are worth paying more for, and 56% say they've bought organics in the past year. I'm curious how organic are 'organics' are in China? Red tape on imports certainly isn't helping the offering, just compare HK to Shanghai.

Chinese Internet Internet & Technology

Weibo User Demographics: Our infographic to give you a good understanding of just who's using one of China's most influential media channels.

Momotech Tells the Secret of Hooking up Strangers : Some of the philosophies and experience Momo used to get 10m Chinese users on it's smartphone social networking service.

Chinese Luxury Consumers yet to take to Online Shopping: If you're hoping to sell luxury goods to Chinese consumers online, you'll want to give tangible benefits strong enough to substitute the in-store luxury shopping experience.

Lenovo's Path to the Peak of PC Production and Sales: The Chinese brands are coming … Lenovo takes top spot for PC sales globally.

Chinese cars Auto

Auto Manufacturing in China: The Chinese auto industry still shows huge potential given there is currently just one vehicle for every 17 people. Can China's 48 domestic auto brands up their game to gain more than the 30% share they currently have?

Weird and wonderful in Chian Weird & Wonderful

Exotic Animal Trade Thrives in China: Another favourite with Chinese consumers – weird exotic pets.

That's the skinny for the week!

If you've missed earlier news or need to learn more, there's a library of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.

Welcome to this week's skinny on China.  Legend has it, about 1200 years ago, a goat herder in the Ethiopian Highlands noticed his animals getting frisky after eating berries from a coffee plant. Intrigued, the herder picked some fruit and took them to a nearby holy man, who wanted nothing of it, tossing the berries into a fire.  But the sweet scent of the roasting coffee soon became irresistible, and the men raked up the embers, grounded and dissolved them in hot water, creating the first cup of coffee.  By the 17th century, the good drink had spread up the Nile to north Africa and across to the Arabian Peninsula, before making it’s way to Europe and then much of the world.  But not to China.  

China has long been a steadfast nation of tea drinkers.  But over the past few years that has changed with Chinese increasingly drinking coffee.  Starbucks are picking China to be the 2nd largest coffee market outside of the US in two years.  That’s great for the coffee industry, but it also represents a shift in Chinese attitudes towards western lifestyles and products that were not even considered a generation ago.  Below you’ll find a few articles about how coffee and cafes have been adapted to appeal to Chinese tastes as well as the usual spread of news and views on how to woo more Chinese consumers. 

If you have any friends or colleagues looking to grow their coffee business, tourism revenue or exporting anything to China, please lend them a helping hand and pass this newsletter onto them. After that, grab yourself a coffee and enjoy the news…

Chinese consumers Understanding Chinese Consumers

A Letter to China, from America: How Starbucks, KFC & McDonalds represent the first step for Chinese consumers into western products and the opportunities it brings for exporters. Some good data on American exports to China.

China's Middle Class Muscles In On Luxury Class: What Chinese consumers are spending their money on these days.

Social Responsibility Could Be Key To Deeper Connections With Chinese Consumers : Will social responsibility be the key for brands to evolve in China as consumers get over their bling fixation and become a bit more sophisticated?

Chinese food Food & Beverage – Coffee

Nestle to Battle Starbucks Over Chinese Portioned Coffee Market: The average Chinese consumer drinks just three cups of coffee a year, less than 1/200 of the cups the French do, but its growing 19% p.a. and Nestle hoping to tap into that.

China’s Coffee Industry is Starting to Stir: How Coffee's big boys (& girls) Starbucks and Nestle have made big bucks in China. Getting China's tea drinkers to sip coffee has many their lessons for other industries pioneering in China.

Chinese tourism Tourism

Tips for Marketing to Affluent Chinese Consumers: Great article with advice to woo the 60m Chinese travelling overseas annually, much which can be applied to other industries.

How Can Brands Use China’s Media Landscape To Their Advantage?: Some advice on tapping into the media in China to attract Chinese tourists, students, investors and shoppers.

Chinese Internet Internet & Mobiles

Chinese Consumers Favor HTC Smartphones Less in September: Chinese mobile brands eroding the territory of some of the more established smartphone manufacturers in China – further signs that Chinese brands are becoming acceptable to Chinese consumers for certain categories.

How Luxury Brands Can Reach The Online Shopper in China: Good summary of Forrester research on online purchasing habits by Chinese consumers. An interesting outtake is that 79% of low income online consumers claim to buy some sort of luxury good on the Internet. It doesn't elaborate whether that includes fakes, however one third of online Chinese consumers are very concerned about buying fake goods online.

Chinese luxury goods
Luxury Goods

Chinese Shoppers Power Global Luxury Sales: Insights into the global market for luxury goods: Tourists account for 40% of luxury purchases with Chinese tourists making one-third of purchases in Europe. Overall, China accounts for 25% of the global market.

Luxury Goods to Slow as Chinese Spend Less: Carrying on from the last article, Mainland China growth on luxury goods is expected to be 18% this year – not bad until you compare it with the 30% and 35% over the past two years

Chinese retail Fashion

Hidden European Fashion Billionaires Undressed on China: In the middle of dire economic times in their own countries, a few European fashion manufacturers are doing very well out of China's appetite for their rags.

Chinese banking Wealth Management

Growing Popularity of Wealth Management Products in China: China's high savings are increasingly being invested in wealth management products – up 15.7% for the 1st half of 2012 from a year earlier, although nothing like the 123% growth in the 12 months before.

 

That's the skinny for the week!

If you've missed earlier news or need to learn more, there's a trove of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.

Sina Weibo's 368 million registered users represent the most educated and highest earning portion of China's population, and the consumers who are most likely to buy western exports. Given 95% of Chinese consumers trust a brand more if they've seen it on Weibo, it's a good idea to understand Weibo user demographics when marketing to them. 

The infograph below should help you understand the profiles of the Weibo faithful.  Note that 60% of Weibo users live in 1st and 2nd Tier cities and almost two thirds have a University degree of higher…

China's Sina Weibo user demographics

Here's another of our infographics on how Weibo users compare to other social media in China.

 

Welcome to this week's skinny on China. Below you'll find a couple of articles about less mainstream and customizable products making headway in China. It's another signal that Chinese consumers are maturing and becoming increasingly adventurous, with a bigger appetite to deviate from the conformists. That's great news for niche products, especially online. It's still not easy, but it's getting easier for smaller businesses with unique products hoping to make inroads in China. Following are the usual insights into China's consumers and the Chinese market. Enjoy!

Chinese consumers Chinese Consumers

Consumers Go Online For Unique, Custom-Made Products: Chinese consumers aren't just shopping online for bargains, they're increasingly catching on to products they can customize online.

Younger Chinese Get Feel For Debt: Are the national of savers becoming more like the rest of us? Credit card borrowing in China increased 23% from last year.

In China, Little Happiness Matters: If you do something wrong in the eyes of Chinese consumers, it takes a little more than a new slogan to turn a brand around.

Chinese luxury goods Luxury Products

Niche High-End Products Beat Established Brands: It seems lesser known luxury brands are getting more of a shot in China as Chinese strive to look less like everyone else.

86% Of Chinese Consumers Refuse To Buy Products Labeled "Made in China": Further good news for exporters to China and further evidence to emphasise your foreignness and quality, especially for luxury goods.

What Luxury Turndown? Chinese Still Shopping, Brands Still Bullish On China: Although there's grim news on China's slowing growth, luxury brands are still getting on with it in China.

Chinese health and beauty Health & Beauty

Beauty, Personal Care Market To Keep Growing: 2011 saw an 84% increase of online sales for beauty and personal care products in China – do you need more proof to get online in China?

Can Chinese Consumers Tell Real Or Pretended Premium Baby Care Brand From Europe?: Further evidence to be wary of fake brands competing with you in China.

Chinese Internet Internet, eCommerce and Social Media

How To Compete In China’s E-Commerce Market: Why so many of the online giants failed in China and advice on not falling into the same trap.

French Fashion Brand Sparks Social Media Firestorm With 'No Chinese' Rule: Ouch, it appears some of the French aren't as appreciative of all the French luxury sales to China as one might expect.

Chinese cars Cars

BMW’s Chinese Sales Jump, Reducing Concerns of Slowdown: Great news on China's car front (unless you're Japanese) – BMW, Audi and Mercedes all posted growth in September. A good sign.

 

That's the skinny for the week!

If you've missed earlier news or need to learn more, there's a trove of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.

Welcome to this week's skinny on China. With most Chinese having returned from holiday and back to the normal routine, we're starting to see the data for one of China's most important periods. Golden September and Silver October are traditionally China’s strongest months for residential real estate, yet sales have been subdued so far this year. While the property folk may be grieving, the travel agents are thrilled – China’s consumers spent 44% more than last year on tourism during October’s Golden Week holiday, with a 41% increase in visitors to the nation’s top attractions. For those travelling overseas, transactions increased by 33% on Union Pay, China’s bank card payment system. Although the numbers were boosted by combining Mid-Autumn Festival and October National Day, it's not bad growth, even by China’s standards.

In other news, inflation for the year to September clocked in at 1.9%, much more manageable than last year's 6.1%, bringing good news to consumers and signs of an increasingly realistic Chinese market. Following are the usual news and views on China's consumers. Enjoy!

Chinese consumers Chinese Consumers

Chinese Consumers Increasingly Divided: Worth noting is the increasing emotional purchases by the young and affluent (earning more than $16K p.a.). They're expected to make up more than 50% of the market by 2020, so watch them closely.

McKinsey: China's Consumer Habits Approaching Rich Nations: Another view on increasingly emotional purchasing behaviour from China's youths' and how it's becoming more like developed countries.

From Mass To Mainstream: Keeping Pace With China’s Rapidly Changing Consumers: Chinese consumers are more positive than elsewhere in the world. Insights into the changhing consumers from McKinsey.

China: Bored With Window Shopping?: Are Chinese consumer's preferences changing from window shopping to other forms of entertainment and convenience?

Chinese Consumers Set To Fuel Growth: 40% of Chinese expect to increase their spending on consumer goods next year. Up from 36% last year and 23% in 2010.

Chinese Consumers Are Becoming More Self-Indulgent (i.e. more like everyone else): Chinese consumer's lifetime spending up 3,800% since 1960 – some interesting statistics.

Chinese Internet Internet

How China's Internet Is Going Mobile, and Why That Could Be A Problem: Good article on the Chinese who only use mobiles to surf the net – they're the younger and poorer demographics.

Chinese food and beverage Food and Beverage

Chinese Demand For Chicken and Fish Will Increase: A food marketing professor is picking China will eat a lower percentage of pork and demand for white meat will increase as Chinese consumers become more health-conscious.

Chinese jewelry Jewelry

All That Glitters Is Sold: The Chinese market for jewelry was $6.3 billion in 2011 and growing strong, driving domestic makers to up their game and compete internationally.

Chinese luxury goods Luxury Goods

Prada Defies Luxury Brand Hand-Wringing In China: Prada believes all the talk about reduced demand for luxury goods in China is a little hysterical, it is a case of having to adapt to changing Chinese consumers preferences.

Louis Vuitton Risks Logo Fatigue As Chinese Tastes Mature: Chinese consumers are still spending on luxury goods, they're just making more discerning purchases.

Bye Bye Bling – China’s Consumers Move On From Logos: Another report reiterating the reduction in bling on luxury goods in China.

That's the skinny for the week!

If you've missed earlier news or need to learn more, there's a trove of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.

Welcome to this week's skinny on China. The holiday that started on Monday is one of the biggest of the year in China – the Mid-Autumn Festival and October National Day rolled into one long week. Unlike Chinese New Year when billions of trips are made as Chinese return home to their families, this week is often for pleasure travel. 660 million Chinese are picked to travel, up 8.8% from last year. So wherever you are, whether it's Shanghai or Sydney, it's likely you'll see more Chinese tourists than usual – including an increasing number of independent Chinese travellers. Hopefully those tourists are buying what you're selling. Enjoy this week's skinny…

Chinese consumers Chinese Consumers

A Fast Boat To China: How U.S. Companies Are Navigating the Marketing Waters: A survey of US Chief Marketing Officers found 21.5% believe China presents the highest revenue growth for international markets, with an average of 51.5% growth over the past 12-months. Here's 12 pieces of advice on what's working for them in marketing in China.

Home Depot Learns Chinese Prefer 'Do-It-for-Me: Do Chinese like DIY? Why get dirty when there's a plethora of labour who'll do it for cheap. Lessons from Home Depot and other companies not picking differences in the Chinese market.

Lessons From Home Depot's China Failure: Another take on Home Depot's failure in China including Lessons from western businesses in China – those who've misread it like Home Depot & Mattel versus those who've done their due diligence like Yum!Brands.

The Number: $10 Trillion: A five minute video about Michael Silverstein's new book, the $10 Trillion Prize emphasising the importance of engaging Chinese & Indian consumers. Although I'd dispute that Chinese are "much more brand loyal than US consumers" and India's population is 1.4 billion?

Chinese Internet Internet & Social Media

Air France-KLM To Develop Chinese Social Media Products: Air France-KLM is investing significantly in Chinese social media as part of it's several-hundred million Euro plan to increase it's competitiveness. No specifics, but they're in talks with Sina Weibo to offer the service abroad

Chinese market The China Market

Growth In China’s Own Emerging Markets: Growth in China's own emerging markets – some perspective on China's sheer scale.

Chinese mobile Mobile Phones

Samsung Retains Top Spot In China's Smartphone Market: If you're developing smartphone apps or optimising your site for Chinese consumers, it's good to know what they're using. Samsung remains the top seller in the Chinese smartphone market with 20.4% of sales last month, Apple picked up a bit from 5.6% to 7.5% and Chinese brands ZTE, Lenovo and Huawei upped their share from 11.8% to 14.3%.

Mobile Industry In China To Evolve As Consumers Crave iPhone 5′s 4G: On the subject of mobile share, some pundits are picking 4G will be the iPhone 5's silver bullet for wooing Chinese consumers – article also includes some good 3G mobile stats for China.

Online Mobile Phone Sales Soar: 10% of Chinese mobiles now sold online. That's 30 million mobiles, up 68% in a year and further emphasizing the importance of the web for Chinese consumers.

Chinese auto Auto

Thanks to Automotive Body Painting, China Auto Shows Are Now Peep Shows: The lengths car dealers are going to in hope of getting the attention of Chinese consumers. Especially curious given pornography is banned in China or maybe because of it.

'Good Enough' Cars At $7K Each Keeps Chinese Consumers Happy: Chinese car manufacturers are cutting costs and lead times – developed in half the time as the established manufacturers abroad. The increasing demand signals some Chinese consumers are more concerned about price than the number of crash tests.

That's the skinny for the week!

If you've missed earlier news or need to learn more, there's a trove of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.

There's been a lot of talk this week, and for many weeks now, about China's slowing economy and how it translates to doom and gloom for businesses exporting to China.  While a number of brands have lowered sales forecasts in China, there are still many businesses seeing runaway growth in China.   To name a few, Nestle sales grew 20% last year, and they're expecting double-digit growth in 2013, Pernod Ricard's sales of wine and spirits have increased 15% in Asia for the year, with China being the shining star for the region, and General Motors had a record August in China, growing 7.3% from last year. 

Like every market, China will have boom and bust cycles.  But with many product segments and geographies still relatively untapped, a well planned and executed strategy presents significant opportunities for growth in China, even when overall spending slows.   This week has the usual Chinese marketing news, insights and opinions that may contribute to that strategy.  Hopefully some of it helps you…

Chinese consumers Chinese Consumers

In Chinese Culture, Consumers Seek Brands That Allow Them To Stand Out By Fitting In: More insights and a video with What Chinese Want author Tom Doctoroff and his take on China's Confucian society and how it translates for marketing.

Gap Campaign's New 'Thought-Provoking Pairing' May Not Sync With Chinese Consumers : Let's Gap Together – analysis of Gap's latest advertising campaign in China. They may need a little more to change their fortunes in the Middle Kingdom.

Chinese Internet Internet & Mobile

China's Low-Trust Ethos May Slowly Be Changing: The creation of globally trusted business frameworks like Alibaba is giving a trustworthy environment online for Chinese consumers and enabling a new generation of Chinese innovators.

Chinese Internet Lukewarm On iPhone 5: Does the iPhone 5 have enough new bells & whistles to help Apple gain ground on Samsung in the smartphone market in China? Posts of Weibo have been lukewarm.

Chinese food and beverage Food & Beverage

China Beer Market Insights 2012: Ganbei! The Chinese Beer Market Insights report is out. A short overview of the 188 page, $12K report with highlights and key market issues.

Chinese entertainment Entertainment

Chinese Pay For Product Placement In Hollywood Movies: Chinese firms use product placement in Hollywood movies to woo Chinese consumers.

Chinese art Art

Fires Dim On Chinese Art Market: Although the slowdown is accompanied with increasing sophistication.

Chinese travel Travel

ACP Leverages Chinese Consumers With Chinese Harper's Bazaar: Sydney launches a magazine targeted solely at the more than 500K Chinese tourists visiting the city a year.

Chinese luxury goods Luxury Goods

Let’s Be Real: This Is Not The End Of China’s Luxury Market: Burberry's slowdown in China doesn't mean the end of China's luxury market- its another sign to tone down the bling Burberry.

Chinese shoppers make more than half their luxury purchases outside of China: Chinese consumers buy more luxury goods outside of China than within it according to HSBC. Why? It's cheaper, increasingly easier to travel and the prestige that comes with buying something abroad.

Chinese Market Slowdown Impacts Global Brands: A roundup of news about sliding fortunes for global luxury brands in China.

That's the skinny for the week!

If you've missed earlier news or need to learn more, there's a trove of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.

Anti-Japanese sentiment has been all over China this week.  The 81st anniversary of Japan’s invasion into China, coupled with the poorly-timed Japanese Government purchase of the disputed Diaoyu/Senkaku Islands, has seen tempers flare on the mainland.  Street protests in more than 80 Chinese cities, burning Japanese flags and the odd trashed car has seen many Japanese companies halt business in China and kept expats barricading themselves indoors.

Nowhere has the anti-Japanese discussion been more prevalent than on Weibo.  Bloggers are calling for all Chinese consumers to steer clear of Japanese products, with some even suggesting that if China stopped buying them, 50% of Japanese would lose their jobs.  A gross exaggeration even with China accounting for 21% of Japan's trade, but a sign that Chinese are becoming increasingly aware of their importance in the world as consumers (sometimes over-inflated) and the influence they have through social media.

A few street demonstrations won’t do much to temper Chinese consumers' appetites, so rather than worry if your sushi's been poisoned, it's time to focus on how to get more Chinese to buy your wares. Happy reading…

Chinese consumers Chinese Consumers

Chinese Marketers Give Tips On Expanding Beyond Big Cities: Tips from the marketers who have successfully expanded into China's less competitive 'smaller' cities.

Creative Challenge: A long, but well worth reading article about the advertising industry in China with some good stats.

Starbucks Delves Into Local Culture To Reach Chinese: Another case study on Starbucks success in China, showcasing localization of restaurants.

Nike: Leveraging Online Video To Attract Female Chinese Consumers: Case study how Nike has attracted Chinese women consumers contributing to revenue doubling in 2-years. Endorsements are probably out of most businesses' budgets, but some good lessons in there for using online video.

Chinese Internet Web & eCommerce

8 Mistakes Too Many Businesses Make On Their Chinese Websites: Have a website in China? It's vital to get it right to win in China. Here's our view on what you need to be checking for and how to fix it.

China's Export Slump Drives Vendors Online: As Alibaba sales look to hit 1 Trillion RMB, things may get even bigger as export slump drives Chinese vendors online.

Chinese food and beverage Food and Beverage

Going Hungry: A report on the impact China's slowing economy is having on restaurant owners.

Chinese mobiles Mobile Phones

Leveraging Mobile Apps To Connect To Chinese Consumers: How to use mobile applications to connect to Chinese consumers – some good examples and statistics in there, including the increasing relevance of Weibo.

Chinese luxury products Luxury Products

Chinese Make 25% Of The World's Luxury Buys: China's global share of the luxury market has increased 500% in 6 years to 25% of the world market. CNN's views on the market.

Chinese Consumers Tighten Grip On Luxury Market: More views on China's luxury market which is "not even close to being mature".

Toning Down The Bling Factor: Yep, further confirmation that bling's days in China may be numbered… I think I'll miss it.

That's the skinny for the week!

If you've missed earlier news or need to learn more, there's a trove of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.