Another year, another huge hit for Alibaba!
By 4pm Alibaba announced it had already surpassed 2017 Singles’ Day. By midnight, it had sold 27% more than the enormous record set last year. We can see below that beauty and wellness products are still the top selling products in the festival of shopping. South Korea climbed from the 5th to the 3rd top-selling country, illustrating that the country is again in favour with Chinese consumers. So far, the US-China Trade War seems to have had little impact on sentiment towards US products, with America retaining its number 2 spot.
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In April 2016, pundits were predicting the demise of China’s cross border ecommerce channel after hefty new taxes were suddenly introduced on all online cross border trade. Fortunately, some slick lobbying from Alibaba and JD saw the new tax rates ‘postponed’ the following month and good old cross border was soon back on track.
Shaking off the scare of ’16, eMarketer estimated China’s online consumers spent $100.2 billion on buying products cross border last year. This is more than ten times China’s General Administration of Customs’ value, which announced last month that cross border imports growth rocketed 116.4% in 2017 to ¥59.6 billion ($9.4 billion).
A 2017 Tmall Global Annual Consumers Report published last week (in Chinese) by Tmall Global and CBNData, forecasted the 2017 figure at around $68 billion. Enormous data disparities are not unusual in China, which is why China Skinny typically cross-references a number of sources. From what we’ve seen, the cross border figure is around the $60-75 billion mark. Custom’s low numbers are likely to indicate that many products could be slipping through customs unnoticed, values may be fudged by exporters, or there is some dubious bookkeeping at the borders.
Getting back to Tmall Global’s report, an interesting insight was consumers born in the 1990s are the biggest spenders on cross border products. Last year they accounted for nearly 50% of Tmall Global users and 40% of total sales. The three biggest motivations driving them to buy imported products are trying new things, aspiring to own luxury items and anxiety over aging.
Beauty products, food & supplements and mother and baby products were the top selling categories on Tmall Global, helped by the 60% of households – and almost 70% in high tier cities – who purchased FMCG products online last year.
The top countries selling products on Tmall Global were Japan (baby & beauty products), USA (health, baby, bags), Australia (health, baby, milk powder), Germany (milk powder, dietary & nutrition, cups & kettles) and Korea (beauty). One positive development is that shoppers are becoming more adventurous, with the purchases from outside the top-3 countries breaking 50% for the first time. In 2017 there were 16,400 products from 68 countries on Tmall Global alone.
Yet behind the pomp and pageantry from ecommerce platforms, not everything smells quite so sweet. Cross border is heralded as providing certainty of authentic products direct from a trusted overseas source, but 40% of cosmetics products purchased from cross border platforms on Singles’ Day were fake according to a consumer association report. The issue is clearly real given Alibaba’s recent announcement to push into Blockchain for the channel.
On the subject of ecommerce, for our Shanghai-based readers China Skinny’s Mark Tanner will be joining an esteemed line-up of speakers at the Clavis Insight 2018 APAC eCommerce Accelerator Summit on March 28. The event is for brands currently selling online in China and looking to up their game, it is a complementary full-day event with limited spaces remaining. More information here. Go to Page 2 to see this week’s China news and highlights.
A doctor flying from Chicago to Louisville last week had only morning appointments on his mind. Yet within hours, his pre-flight plight would reverberate around the world. Bloody, bruised and manhandled by United Airlines, Dr David Dao’s treatment was followed by what has become a case study in PR mismanagement. Resulting effect; a despised brand devalued by hundreds of millions of dollars. China’s role in the matter is not insignificant.
The man’s Asian ethnicity clearly struck a nerve with Chinese consumers. On Weibo, it was the top-trending topic, viewed nearly 700 million times over hundreds of thousands of ferocious posts, with the original video watched 750 million times in two days. On WeChat, searches for ‘United Airlines’ grew from 14,920 on April 10 to 35,631,015 the next day. Even state-media was all over it, condemning the ‘arrogant and cold-blooded’ airline.
Mega-celebrities in China but completely unrecognizable to a US flight attendant, China’s all-important KOLs were quick to share their personal anecdotes: JD.com CEO Richard Liu announced it reminded him of the “three times” he’d experienced a “nightmare” with United, musician Gao Xiaosong spoke of a couple of horrific experiences and arrogant staff, and Hong Kong action star Donnie Yen was vocal in announcing that United Airlines is now on his personal blacklist.
Quantifying China’s effect in this saga is telling. A report on Bloomberg noted that United’s stock price was largely unaffected for the day following the forcible removal; it wasn’t until the following morning’s reports that the social media storm had spread to China that the stock price took a significant hit. With 135 million outbound Chinese travellers last year, it’s best not to anger the horde. United runs more non-stop flights to Chinese cities than any other US airline and carries around 20% of Chinese-US traffic – accounting for an estimated $2 billion share of its revenue.
Among many things, the episode illustrates that poorly managed crises in your domestic market can often flow on to China with a vengeance. Whilst China’s Internet may appear cut off from the rest of the world, there are few things that don’t get noticed – be it through VPNs, millions of Chinese living, studying and travelling abroad, and even state media.
The level of detail Chinese consumers knew about the incident was impressive – right down to the terms and conditions of the lousy compensation offered to passengers if they left the flight and how it fell short of what regulations demanded. When Chinese consumers get a bee in their bonnet, it’s not unusual for hundreds of millions to jump on the bandwagon. Whereas this case can seem a bit doom and gloom, this en masse social engine can equally engage in a positive light.
Little can prepare any brand in China for a United Airlines-scale backlash, however a basic understanding of Chinese consumers and the market can be the difference between costly blunders and happy customers. For that reason China Skinny has put together a free 5-day email course, with concise advice summarizing the key things to know and look out for when selling in China – find out more here and spread the word! Go to Page 2 to see this week’s China news and highlights.
“Fresh Food” has become the main theme on Chinese tables as consumers are increasingly attracted to a healthy lifestyle.
Newly released insights from Alibaba’s 2017 China Household Table Consumption Trends Report outline Chinese consumers’ preferences and considerations when buying fresh products online. 60.5% of all fresh food available in China is sold online, increasing 26% from 2014-2016.
With quality, diversity, nutrition and convenience being important criteria, foreign brands that cater to busy urban lifestyles and customers’ needs are preferred. Fruit, meat and seafood from Australasia, South-East Asia and South America are among the most popular goods with categories like beef and shrimp rising 6-fold.
These trends show great opportunities for quality food brands, but it is crucial to be aware of the differences in customer segments and regions, and knowing how to cater to them in a discerning market like Mainland China.
The average day in China sees no less than 500 new products launched. With this in mind it’s easy to understand why its consumers are among the most promiscuous on the planet. Furthering this trait, modern concepts of a ‘brand’ have only recently taken hold in China; China’s consumers have traditionally lacked the inherent connection to brands that characterize those of the West.
Yet some brands are fighting against the tide of consumer disloyalty. Those leading the way often employ a well-considered loyalty programme at the heart of their strategy. Successful programmes are built upon many values, but those that carry the most sway with consumers ensure to be personally gratifying and bring their members a source of social currency through rewards and association. Even with organic growth slowing in China – particularly in higher tier cities – most brands are still focusing on acquiring new customers as opposed to retaining existing ones.
Building loyalty should not be undervalued as 77% of Chinese consumers claim to spend more on brands they love. That being said China’s increasingly discerning consumer base is fuelling growing expectations around loyalty programmes. 24% of consumers say their expectations around loyalty have changed in the past three years, with 75% quicker to retract loyalty. A third of consumers say they have a negative or non-existent reaction to companies trying to earn their loyalty, according to a study from Accenture.
Like any discipline in marketing, understanding what resonates with consumers is the key to developing successful loyalty initiatives. The study found that small tokens of affection hold a lot of appeal in addition to understanding them and providing personalised products, services and communications. Part of this is supporting causes such as charities and campaigns that are important to them. Partnering with relevant brands also endears consumers, such as the all-important celebrity and influencer endorsements.
WeChat’s all-encompassing ecosystem and innovative features provides one of the most powerful platforms for loyalty. By nature, it also encourages seamless advocacy, appealing to the 63% of Chinese who are loyal to brands which friends and family buy.
Developing a loyalty programme also comes with the responsibility of protecting members’ personal information. Four out of five of consumers are loyal to brands that safeguard and protect privacy and this will only grow as data becomes more comprehensive and privacy breaches increase.
Whilst it isn’t easy to develop a loyalty programme that touches Chinese consumers at an emotional level, those who do stand to be rewarded in China’s ever-more competitive market. Agencies such as China Skinny can help develop them. Go to Page 2 to see this week’s China news and highlights.
Every day this year, an average of more than 120,000 new Chinese consumers signed up to the Internet. Most of them on their smartphones, and many of them using it to run a big part of their lives.
Growth in internet users coupled with an evermore online savvy population has contributed to an impressive rise of Chinese who are active online. In the past year, 18% more consumers shopped on Alibaba platforms, 65% more bought on JD and Weibo’s active social media users surged by 36%. Yet the most interesting growth story is the convergence of commerce and social media on WeChat.
Although WeChat sales are small relative to traditional ecommerce channels, its growth potential is enormous. Every official and personal account has the ability to sell to their followers and friends. This has prompted tens of millions of enterprising WeChat users to try and pry a few bucks out of their WeChat networks – a subtle version of Amway if you like.
There are now more than five times more stores on WeChat than there are on Taobao, Tmall and JD combined. Although individuals make up the majority of stores, brands such as Dior – who don’t even have their own ecommerce store yet – are dipping their toes into social commerce. WeChat’s all-in-one nature is creating a whole new level of commerce-related sharing opportunities that is unrivalled globally.
On top of trading products on WeChat, app usage rates for services such as ride sharing, food delivery, cinema, massage booking and health, to name a few, are among the highest globally.
The phenomenal uptake and usage rates of smartphone commerce has been driven by massive sweeteners – for example Meituan Dianping was estimated to have provided ¥58 billion ($9 billion) worth of discounts and subsidies for restaurants and movies in 2015. Such incentives have been enabled by countless sums of investment cash utilised to grow users, often with little regard for profits. Last year over $20 billion dollars was invested in Chinese internet businesses – quadruple that of 2012.
A result of the investments are some significant mergers and consolidations, including ride hailing apps Didi-Kuaidi-Uber, group buying and food apps Meituan-Dianping, classified ads Ganji-58.com and online travel Ctrip-Qunar. The mergers have created virtual monopolies and, by proxy, less incentives to subsidise and discount. The most recent example is the Didi-Uber merger which has seen a typical ride that cost ¥8 in May, now costing ¥13.
Fewer subsidies may slightly slow down the adoption rate of many apps, but Chinese consumers will continue their deeply-embedded habits of using smartphone apps in most facets of life. Brands should factor this into their marketing strategies and creative tactics as a powerful way to engage Chinese consumers. China Skinny can assist with that. Go to Page 2 to see this week’s China news and highlights.
Many have pondered what would happen if everyone in China jumped at the same time. There’s been talk of the earth being thrown from its axis, mass earthquakes, volcanic eruptions and other catastrophic events.
Although China’s 1.4 billion people are unlikely to ever synchronise the world’s greatest leap, many of them are stamping their feet and making businesses take notice.
Until recently, Chinese consumers had very few channels of recourse. Then the Internet became mainstream. Chinese consumers finally had a channel to make a public stand when things weren’t up to scratch. In 2011, after Weibo had reached a critical mass, a businessman in Qingdao was so disappointed with the service he received with his Lamborghini, he hired nine men wearing blue suits and hard hats to destroy the $650,000 supercar with sledgehammers. He captured the spectacle on film and it went viral. The stunt spurned countless copycats in China, who resorted to equally dramatic social media posts to share their poor experiences – to the horror of many poorly-prepared brands.
Another high profile example of Chinese consumers’ displeasure has arisen again, this time with Ikea, writing off much of the goodwill that the furniture giant had earned by providing public sleeping, dating and dining facilities. Following Ikea’s decision not to recall furniture in China as it did in the US and Canada following the death of at least six children in North America, the predictable PR-nightmare ensued. Consumers in Ikea’s fastest growing market expressed their anger on WeChat, Weibo and other online forums about China’s exclusion from recall. 69% of respondents accused Ikea of prejudice against Chinese consumers according to one survey. After the damage was done, Ikea backpedalled, offering refunds or assistance to anchor the deadly dressers and chests.
Where practical, keeping Chinese consumers happy is vital to success in the market. They are the world’s most avid social media contributors and a poor product experience, particularly from a foreign brand, will often spread like wildfire. They write more online reviews than any other country in the world – just look at the average ecommerce storefront. Chinese tourists write 42% of luxury travel reviews globally. China’s inherent lack of trust and research habits means other consumers read and take notice of those reviews more than their peers in any other country.
Providing effective customer service, and relevant responses to crises are often overlooked when developing marketing strategies for China, but one misstep can undo all of the other good work a brand has done. Understanding the Chinese consumer and how they respond to such events should be an important part of planning. China Skinny can assist with that. Go to Page 2 to see this week’s China news and highlights.
Education is a major concern for Chinese parents who are eager to see their child excel in multiple disciplines. From an early age on, kids in China are attending English classes, practice calligraphy and learn instruments in order to be able to compete with millions of others. It is a rigid system that focuses on theories and teacher-centred learning with the primary goal being the big exams for the next higher school level such as the university admission exam gaokao. The pressure on the 9 million attendees is enormous with schools installing anti-suicide barriers to prevent students from taking their lives ahead of the exam.
In order to modernise the learning process, many parents are signing their children up for creative leaning courses such as Lego classes. As parents are becoming aware that creativity boosts inventiveness, sales of Lego rose by more than 50% between 2013 and 2015. In addition, alternative learning methods are becoming increasingly popular for subjects like English language.
Shanghai is one of the hubs for innovative education with many incentives for extracurricular learning. This not only entails subjects, but also communication and the learning process itself. “Chinese students are very limited in their way of learning – there is a skill gap that needs to be filled and many don’t recognise at the beginning that soft skills are as important to employers as is knowledge,” says Brian Heger, Content Development Director of TOK English, a program by Telford Education Group that combines traditional learning with interactive classes and online elements.
Cooperating with universities and companies in China, Heger also sees a need to change the way educators think in order to make an impact with Chinese students. “A lot feel threatened by online learning,” he explains. Rather than using online and interactive tools to compliment their traditional teaching, “educators wait to be told what to do instead of just doing something and taking initiative.”
New incentives are increasingly pushed by Beijing where a strong need for creative learning is seen in order to replace China’s image of a country of factories, to being perceived as an innovation hub and that can compete internationally. One of these initiatives is the Incubation Centre at Shanghai’s Donghua University which aims to connect students with companies and enhance innovations and entrepreneurship. “This trend already started five to six years ago, with the government as the main driver. Now companies are increasingly investing in students with good ideas and potential,” says Prof. Anselm Vermeulen, who is leading the program for Entrepreneurship and Innovation together with his colleague Dr. Nikola Zivlak. In a similar program, Prof. Vermeulen initiated at Shanghai Business School and cooperation with Rotterdam Business School, Chinese students are encouraged to create a business based on ideas developed during their studies.
“China’s private sector is the most welcoming ecosystem for innovations in the world.”, explains Dr. Zivlak, and names educational barriers as the biggest challenge to the development of creative thinking. “90% of our Chinese teachers are not willing to change their ways of teaching even though Donghua University is China’s 9th most international university,” states Prof. Vermeulen. Innovative minds are redirected to an exam-focused curriculum that leaves little room for trials.
But the change towards creative learning and thinking is underway in China, even within the country’s large enterprises. Training sessions with selected staff members has established new ways of managing and handling affairs that facilitate communication processes and enhance productivity. The demand for independent and inspiring graduates is increasing, offering multiple opportunities for foreign education companies and other businesses that are eager to train promising candidates into qualified staff. Contact us today to learn how.
The act of shopping has spread across different countries in unique ways, and each market has adopted its own local habits, trends, influences and behaviours. China is a country where shopping plays a huge role in daily life, as consumers regard shopping a higher priority in their lives compared to other markets. The graphic below illustrates to what extent shopping shapes Chinese’ lifestyles.
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.
Unless you’re selling Zimmer frames or denture adhesives in China, there’s a good chance you’ll be targeting China’s Millennials – the single most important consumer group on the planet.
The 318 million Chinese aged 15-29 are the shoppers, travellers and hedonists who contributed most to China’s retail sales growth of 11.3% in 2015. Having only ever known a prosperous China, they are relatively free spenders, without the frugal predispositions of their older peers – they actually feel they have less in common with them than with Westerners their own age.
China’s Millennials are seven times more likely to have a university degree than those born in the 70s, which has helped make them the highest earning age group in China. Two-thirds are estimated to be in the ‘high income bracket’.
With higher educations and incomes, they have the curiosity and means to travel, and travel they do. The 14-year age bracket accounted for 50% of the Chinese travelling abroad last year.
With their average income set to double in the next decade, Chinese Millennials will not only travel more, but consume more of the world’s brands in almost every category.
Understanding this group, what pushes their buttons and where they seek information is important for almost every organisation trying to engage Chinese consumers. To help with that, China Skinny has whipped up an infographic which should give some interesting insights that you won’t have seen before. Go to Page 2 to see this week’s China news and highlights.
Last week, Peking University released a report announcing that one-third of Communist China’s wealth is owned by the top 1% of households, while the poorest 25% account for just 1%. The study also found that China’s income inequality is now among the worst in the world. China’s inequality spans beyond consumers’ incomes, to their health, environment and access to education, travel and culture.
There is also inequality between brands trying to sell to those consumers – a widening gap between the companies who understand and adapt to Chinese consumers’ changing needs, and those who get left behind. As China’s growth slows and its consumers become more sophisticated, marketers need smarter, insight-based strategies to continue to win consumers.
The inequities span even the largest brands in China. In the auto industry, Mercedes’ sales grew 33% last year, whereas Audi dropped 1.5%. Burberry’s sales are growing in Mainland China, while other luxury brands’ sales drop. Apple continues to fly as Samsung’s market share sinks.
Arguably the most interesting brand inequality is the once-cool-kid KFC – who is unable to recover its mojo, while the fortunes of fellow American hospitality giant Starbucks just keep improving. The chain plans to open 500 stores a year in China for the next five years – more than doubling its current 2,000. “People are looking for reasons not to believe. I’m on the ground and I see firsthand. I am bullish,” so says Starbucks CEO Howard Schultz.
Starbucks is an inspiration to foreign brands; it has helped pioneer a category that was almost nonexistent in China before 2000. Convincing consumers to choose coffee over tea was no easy feat. It is also bringing tangible ‘Western culture’ to consumers in the 100 cities it is already in, influencing mindsets and making Chinese consumers more open to foreign brands and culture overall.
Whether or not we’re fans of their coffee, we can be thankful for brands like Starbucks. We can learn from their approach to China – taking the time to understand the market, constantly adapting to it, placing a strong focus on digital and being prepared to try new things. China Skinny can assist with that. See page 2 for this week’s news and updates.
Christmas is not a tradition normally associated with China. However, despite the seemingly irreconcilable contradictions between a highly commercialised Christian holiday and the world’s largest Atheist and Communist state, Christmas in China is growing to become big business. So can a Chinese Christmas be boiled down to a purely commercial phenomenon, or does the increased eagerness of Chinese consumers to celebrate Christmas indicate something deeper? Read on to get the festive skinny!
Celebrating Chinese Style
Apples wrapped in colourful paper carved with the characters for Christmas Eve – Ping’ānyè 平安夜, the unsolvable riddle of Santa – shèng dàn lǎo rén 圣诞老人 – playing a saxophone, towering Christmas trees fashioned out of yarn, shoes or handbags, malls dripping with tinsel and glitter and populated by a brigade of Santas – Christmas in China has its own unique flavour. The tradition is going from strength to strength and is particularly popular among young Chinese (aged 15-45) who tend to be more open-minded about foreign traditions than the older generation. Christmas traditions in China are often propagated by Sea Turtles who have returned home from studies abroad, and bring back with them a fondness for the tradition.
In China, Christmas is perceived as an event to be celebrated among friends rather than family, and although Chinese workers receive no official holiday, Christmas is often used as an excuse to kick-back and relax. In this sense Christmas amongst Chinese consumers is often perceived akin to how those in the West treat Valentine’s or St Patrick’s Day – as a more informal and unstructured holiday. The occasion even carries romantic connotations, with some couples evoking the mantra ‘Silent Night, First Night’ to take their relationship to the “next level”. Finally, and most importantly, Christmas is a great excuse for Chinese consumers to shop until they drop, with tempting new Christmas themed sales springing up year after year. Sales remain modest in comparison to major holidays such as Chinese New Year and Single’s Day, however they continue to rise. For example, luxury shoppers spend an average of US $221 over the Christmas period.
So far, Christmas spirit has been largely confined to China’s first and second Tier cities, and it remains to be seen whether Santa’s sleigh will reach the Mainland’s rural frontiers.
With 668 million sophisticated internet users, getting to grips with China’s complex online environment is the silver bullet for cracking the Chinese market. In recent years, Christmas has become an increasingly hot theme used by digital platforms and apps. WeChat – China’s most popular social media channel – has launched a number of creative features designed to whip up festive spirit amongst Chinese users, including the option to send WeChat Christmas cards and share ‘festive sights’ with friends. Upon typing ‘Christmas’ into the popular app, users will be rewarded with a flurry of tiny Christmas trees descending across their screen – if that’s not enough to get anyone into the festive spirit I don’t know what is.
International brands wishing to tap into China’s Christmas market via digital channels can take inspiration from brands such as Harrods. One of the UK’s oldest and most iconic department stores, Harrods has been particularly forward-thinking when it comes to targeting Chinese consumers via digital channels. The store was the first British retailer to launch an official WeChat account, and has implemented a variety of creative campaigns to target Chinese shoppers, including the store’s highly successful ‘Harrods’ Christmas Treasure Hunt’ campaign on Weibo. Harrods’ sensitivity and attention to detail when it comes to engaging Chinese consumers via digital channels has paid off, enabling the store to soak up an astonishing 20% of Chinese Mainland shoppers’ spending in the UK.
Known as the world’s factory, if Chinese consumers aren’t celebrating Christmas there is a good chance they are making it. With one single city in China, Yiwu 义乌, producing 60% of the world’s Christmas decorations, China is the largest exporter of Christmas supplies, producing Christmas goods galore for almost 200 counties around the globe. However, for the migrant workers earning between $200 and $300 a month, and notching up 12-hour-plus shifts, 6 days a week in the run up to Christmas, the festive season is not so merry.
Festive outlets linked to factories such as those in Yiwu are facing stiff competition from China’s ecommerce giants, who have become increasingly invested in pushing Christmas sales in the period which typically sees a drop-off of retail sales following Singles Day in November. In the lead up to the festive period online browsers can see the logo on Alibaba’s online shopping mall to have donned a Santa hat with campaigns such as a Christmas lottery promoted to Alibaba’s 367 million active users.
Following the troubling slump in manufacturing production and exports that followed Europe’s financial crisis, factory production in China has finally started to pick up, with exports of festive products from China’s Southern powerhouse provinces rising 30% to reach $1.13 billion by the close of 2014. For these factories, Christmas is not only a huge economic opportunity, but for the millions of workers they employ, the festive season is a lifeline for supporting themselves and their families. A great excuse to overspend on tinsel this year.
Christmas with Chinese Characteristics
So is Christmas just an excuse for Chinese consumers to enjoy a shopping blow out, or does it symbolise something deeper? Undoubtedly, Christmas in China has a strong commercial edge, however Christmas celebrations also demonstrate the extent to which China’s once closed-off culture has become increasingly open and receptive to global trends and concepts. The Chinese, instead of consuming a pure distillation of Western Christmas traditions, have adapted these norms to their tastes and cultural customs – and so Christmas (with Chinese characteristics) has metamorphosed.
To many (although not all) Chinese, it simply no longer matters whether a tradition is Western or Chinese. Christmas is even viewed by some Chinese as a benchmark of progress in this rapidly-developing country; with for many, the opportunity for Chinese of all backgrounds to enjoy increasingly mainstream international celebrations being symbolic of China’s increasingly prominent position in the world.
…and that’s something that all of the team members at China Skinny wish for our loyal readers around the world too! Merry Christmas – Shèngdàn jié kuàilè 圣诞节快乐!
China’s online shoppers are showing the stamina of Ironmen. Less than three weeks after the Single’s Day frenzy, they were tapping and clicking up a storm for America’s Black Friday. Shopper’s Fatigue? Not the Chinese.
A recent Nielsen survey found 38% of shoppers in Tier 1 cities, and 27% in Tier 2 currently make cross border purchases online. This was confirmed on Single’s Day, when a third of all shoppers bought goods from an international brand or merchant. 88% of respondents are interested in buying from overseas next year according to Nielsen.
It’s hard for Chinese shoppers to miss America’s version for Single’s Day. Black Friday ads have been sprouting up across the major online platforms including QQ, Baidu, Taobao, Alipay and even Ctrip.
The #2015BlackFriday# hashtag on Weibo inspired 150,000 discussions and 450 million views by yesterday. Over 50,000 articles bombarded WeChat users covering deals and purchasing guides. In the week leading up to Black Friday, there were around 90,000 searches a day on Taobao for Black Friday, many looking for dàigòu – shopping agents, who could buy the discounted goods in the U.S.
Yet just having discounted goods is no sure way to attract Chinese shoppers. For a start, they need to be able to pay using the systems they like, such as Alipay. By far the fastest-growing Black Friday related search terms on Baidu were ‘Alipay Black Friday’ which grew 41,400% in the week and ‘Black Friday Alipay’ which grew 6,700%. Transactions through Alipay grew 700% on last year.
Cross border commerce is a great way to test if Chinese consumers want your goods before investing in a market entry. For example, boutique NY fashion house Otte opened a store in Shanghai after discovering China’s hearty appetite for their clothes, with over 50% of their export sales going to the Mainland. It’s a low-risk approach to test the market. As a starting point, contact China Skinny for a site audit to ensure your store and site are optimised to reach Chinese. Go to Page 2 to see this week’s China news and highlights.
If you’d bought the broadcast rights for the 2015 China’s football league, it would have cost you $13 million. If you’d done the same for the next five years, you’d be looking at $260 million a year. It follows similar deals such as Baidu’s $269 million five-year agreement to stream Spain’s La Liga football matches and the estimated $500 million Tencent paid for five-years of NBA games.
Spending big bucks on broadcast rights for sports is happening everywhere. As traditional TV advertising models wrangle with on-demand viewing, the nature of live sport means viewers can’t fast-forward commercials. That’s seen sport account for almost 40% of broadcast TV advertising in the U.S. alone.
The massive broadcasting deals are an indicator of the growing value of sport in China. The Government realises the health, productivity, diplomatic and general happiness benefits that come with sports, and have vowed to create a sports industry worth $800 billion by 2025. This will account for 1% of the GDP, up from 0.6% today.
Chinese parents are also increasingly encouraging their kids to participate in sports as they focus on giving them a more balanced upbringing, teamwork skills for only-children and preparation for the growing number studying overseas.
China’s youth – independent of their parent’s encouragement – are also looking at sport as a release from competitive academic environments and as a way to demonstrate their individuality.
Ping pong and badminton are losing favour to Western sports with basketball and football are leading the gains in exposure. Tennis has been helped by the now-retired Li Na’s success, and golf is a sport Chinese shows a lot of promise on the world circuit, although it took a hit after being singled out in the anti-corruption component the latest 13th Five Year plan.
As Chinese seek more niche offerings with almost everything they do, NFL’s long term investment in China is likely to drive a passionate following, helped by the much-anticipated China NFL movie. Although rugby is still tiny in China, work from committed expat coaches, its inclusion in the Rio Olympics and the Japan’s hosting of the 2019 World Cup could help the sport, particularly for women.
The growth of sport in China is likely to bring prospects for many segments from tourism, to food & beverage, to fashion. China Skinny can help to realise those opportunities. Go to Page 2 to see this week’s China news and highlights.