Women power is nothing new in China. From Empress Cixi, ruler of the Qing Dynasty to Chairman Mao proclaiming that “women hold up half the sky,” females have long contributed to all aspects of life in the Middle Kingdom. In modern day China, their influence is ever-increasing. Supporting the growth of female power, Alibaba is currently hosting their inaugural Global Conference on Women and Entrepreneurship in Hangzhou. And rightly so, unlike many male-dominated tech companies globally, 40% of Alibaba’s employees are female.
As China’s women receive more equal employment and education opportunities, the playing field is flattening. Today’s ladies have come to expect more than their predecessors. Their influence is being felt on all levels including the consumer market.
Women’s average contribution to household income jumped from 20% in 1980 to 50% in 2013. 86% of Chinese mothers believe the future holds new opportunities and financial stability for their daughters, according to Nielsen. With this blooming confidence, women now have a louder voice in financial decisions. Women have become the CFO’s of the household, handling the purchasing decisions for everyday goods like family groceries and to big ticket items such as finances, electronics and even automobiles.
Of China’s huge population, 640 million are women consumers. Not only are they shopping, but also creating change and driving China’s economy. Whether it be dancing grandmas or online entrepreneurs the “She-era” is the backbone of the China century. Capturing these women is going to take more than just being a foreign brand or feminine branding – slapping a pink label on a product doesn’t mean it will resonate with Chinese women.
Marketing to the modern woman in China is communicating with someone who is balancing work and family – which often consists of their parents and children. Women in China, as elsewhere, are looking to streamline their lives and online shopping is one example of how they’re doing this. 86% of China’s internet users access through mobiles with women browsing and buying on their way to and from work and picking up the kids.
Consumers are not the same from province to province and of course vary even more between gender. Whether you are targeting consumers from tier-1 cities or specific demographics such as young urban females, without understanding and speaking to consumer needs and desires, there is little chance of standing out in China’s fiercely competitive market.
Kudos to Alibaba for bringing women into the spotlight and raising the profile of women in China and abroad. A stronger and more confident female market in China is good for the country, and for Alibaba.
If China Skinny can assist you in understanding or reaching a specific China market whether females, or another consumer segment, be in touch today.
WeChat, the main means of communication for most online Chinese, offers a viable way to reach consumers who regularly use this application. For many, WeChat is the start and end of their phone usage. In China, 90% of smartphone users now use WeChat, with heavy daily activity.
WeChat is used both as a messaging app and a social media platform as well as evolving to be an important place for brand positioning. On 30 September 2014, there were 468 million active WeChat users – most of them in China. Due to the inclination of Chinese to discuss and research brands, products and services on social media, WeChat is an important piece of the puzzle for brands.
There are many questions regarding setting up an Official WeChat Account. One big decision is whether your brand should use a Subscription or a Service WeChat account. These two types of accounts are quite different and are mainly characterized by different functionalities and varied methods of engagement with the audience. Before making a decision about WeChat ensure that your target market can view your account. Your content must be engaging and relevant to the recipient. Below is a breakdown of the different types of WeChat accounts for companies.
A service account is allowed to send four messages per month. This is well suited for companies that want to spread brand awareness and more in-depth messaging. A service account includes custom-menu components that work as a mini-site embedded in the WeChat platform.
When using a service account your followers receive a notification in their main message feed, as if they receive a message from a friend and you are able to provide more detailed content within each message. Further options allow for payment as well as customization including games, mini-sites and much more.
Subscription accounts are less personal with less advanced functionalities. This account is a rather basic way to reach followers who receive notifications. One message can be sent every 24-hours, although large and well-known accounts can send up to 3 messages a day. A subscription account is useful for companies with daily deals or frequent updates. In addition, all subscription accounts users follow are bundled together under the ‘subscriptions’ icon, so they are not as likely to notice new messages as with Service messages.
Subscription accounts are less likely to create a deep brand impression or unique experiences that are capable through service accounts. Although subscription accounts could be useful for promoting daily deals or content that is engaging enough that followers will seek out and open your messages.
As WeChat evolves more opportunities will present themselves as they have in the past: payment options, gamification, microsites, apps within WeChat and paid advertising opportunities. Pursuing the evolvement of the app is vital to gaining the most benefits possible. Another reason to keep up is the constant development of rules and regulations in the platform such as what content is or is not permitted. As one example, WeChat accounts can get suspended for using certain language or asking too much of their followers.
With new innovations launching constantly, brands on WeChat are able to interact with their followers and drive sales in new ways. WeChat users are capable of using many different aspects and functions without ever having to leave the app. As WeChat grows it will continue to innovate and meet customer needs which is one more touch point that could be relevant for your company.
If you’re looking for a way to get deals to your followers, a subscription account could be for you. If you want more in-depth and interactive platform to connect with followers, a service account may be more beneficial. Determining your company’s WeChat account type is an important step to reach Chinese consumers in a relevant way.
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!
There’s no shortage of jaw-dropping numbers in China, however it’s the speed those numbers are changing that’s most fascinating. Since Adam first met Eve, the world has never seen changes on the scale that are currently happening in China. In 2000, just 4% of Chinese households were considered middle class. By 2022, three-quarters of China’s urban dwellers, 630 million, are expected to be middle to upper class.
In 1990, China had a total of 5.4 million vehicles on the road. Fast forward 22 years, and 19 million cars and trucks were sold in China in 2012 alone. As recently as 2010, Nokia had a 70% share of China’s smartphone market. In the first six months of 2013, 150 million smartphones sold in China and less than 5% of them were Nokias. Even with all the food scandals, Chinese consumers are eating almost three times more meat than they were in 1990, including 1.7 million pigs a day. But it is urban migration that’s really changing consumer habits. Since 1990, China’s urbanisation rate has more than doubled to 53% and there are now more than 123 Chinese cities with more people than Barcelona.
All the big numbers aside, China is still behind the USA for overall consumer spending. Nevertheless, with a growth rate of 14.3% last year, Chinese consumers are poised to take the top spot by 2018. This is obviously good to know for any business selling in China, but also relevant to consumers everywhere. Chinese consumers will have an increased influence on many of the products and services everyone consumes. We’ve already seen Hollywood blockbusters pampering to Chinese audiences, smartphone manufacturers are now developing big screen devices for Chinese tastes and many tourist spots around the world are now quite China-focused. Because of China’s growing consumer classes, fruit lovers in Arkansas may be paying more for cherries. And that’s just the start of China’s influence everywhere, so it’s best to stay abreast of this ever-changing market.
Below you’ll find a few more of those staggering statistics and growth rates, as well as the usuals. Hopefully the insights will be helpful. Enjoy!
China Will Overtake USA as World’s No. 1 Consumer: China is set to become the world’s largest consumer market in five years according to a new report by Standard & Poor. Retail sales of consumer goods in 2012 grew 14.3% to $3.29 trillion.
Will China’s Little Emperors Become Little Consumers: Balinghou- Chinese born from 1980-1990, are increasing consumption by more than 20% annually. An overview of their characteristics those of other generations.
5 Eye-Popping Numbers Behind China’s Rise : China’s staggering population numbers, consumption of steel, Internet users and car buyers.
Tesco Didn’t Understand Differences Between Chinese and Western Shoppers: Tesco failed to understand the Chinese consumer and how unsuited they are to its so-called secret weapon – the clubcard. Almost all Chinese consumers are in at least one loyalty programme and 63% had loyalty cards from four or more retailers.
China’s Crackdown on Pricing by Foreign Companies is Getting Public Support: Beijing is showing its might across industries from luxury cars, to drugs, to baby formula, which is driving down costs for consumers and slowly helping local brands build cred [paid subscription required].
Internet, Mobile & Social Media
All the Facts and Stats on China’s Web Users: An infograph showing a nice overview of China’s 591 million web users.
236 Million Users Active on WeChat Every Month : WeChat’s active monthly user count now stands at 235.8 million, up 177% in 12-months. With almost 400 million registered users, 100 million are now outside of China. From Vodka companies inviting VIPs to events, to Durex using WeChat’s unique features, WeChat has become an effective marketing tool for businesses in China.
China Emerging as ‘Mobile Only’ in Sharp Contrast to the U.S. Multiscreen Market: 32% of Chinese use their smartphones for web browsing, versus 21% of Americans. Chinese are more likely to forego TV and print media to use their mobile, with 23% using it for at least 3 hours a day. The most popular use is entertainment.
Tablet Users in China Accepting of Ads: 84% of Chinese tablet owners use their devices for watching videos, 50% read online magazines. 39% of them were open to clicking on ads on their tablets, 60% more than ads on their PCs.
Chinese Consumers Leaning Towards Samsung and Local Brands as Apple Loses its Charm: When Chinese consumers were asked which smartphone brands immediately comes to mind, 80.6% thought of Apple and 79.6% thought Samsung. However Samsung is trending up, and Apple is spiralling downwards as the “most anticipated smartphone purchase” and “most used smartphone brand”.
Over Half of Activated Android Devices Installed Wandoujia App Store: The Wandoujia app store has been installed on more than half of Chinese Android smartphones, with almost 200 million users.
Mike Tyson Joins Weibo: But Chinese sardonic sense of humour may be a little over his head.
Food and Beverage
Bottled Water Market Quickly Turning Chinese: Increasingly health conscious Chinese have seen mineral water rise to 42% of China’s soft drink market.
China Beer Market Insights 2013: China’s beer market is seeing an upturn in premium beers. Innovative packaging is also on the up due to environmental concerns, cost-saving initiatives, convenience and novelty elements. Constant investment is required to stay ahead in the market [report for purchase].
China Travel Market Gained Strength in 2012: Long haul trips by Chinese tourists are picked to top 20 million by 2015. Travel agents are still involved with 90% of Chinese long-haul trips, either through bookings (63%) or research (27%).
Auckland Airport Announces Weibo Travel App: From Weibo’s ‘540 million’ registered users, 62 million are travel enthusiasts with 2 million users daily posting 2.6 million posting about overseas travel. Auckland Airport has launched a new Weibo travel app enabling potential visitors to create their travel itineraries and share them with their followers and find travel deals.
Health & Beauty
Practical Advice for Doing Business in China: China’s dietary supplement market is worth ¥135 billion ($22 billion) supported by China’s massive aging population, rising upper middle class, poor external health conditions, and increasing levels of acceptance of western healthcare brands.
Body paint sells homes in China: Chinese property developers are using models giving away gold bars, girls scantily clad in flowers and now ladies with body paint showing floor plans to sell houses.
China Retail Trends Q2 2013: International retailers continue to expand in Shanghai as new projects come on stream, but competition for space in the best spots remains fierce. Supply in Beijing is still tight with pent up demand. Most foreign retailers are focusing on a core 12-15 cities, compared with 30 a few years ago. Developers in smaller cities are giving away space to foreign brands to fill vacancies.
Keanu Reeves Stars in VW Sponsored Chinese Microfilm: Nice creative piece of brand building to win Chinese car-buyers preference: A 16-min short film starring Keanu Reeves, Chinese singer Jing Boran and Hong Kong actor Lam Suet features VW Group’s Bentley, Audi, Lamborghini, Bugati and a Volkswagen Scirocco R.
In China’s Luxury-Auto Market, More-Affordable is in Fashion: Hopefully that can help the slowdown in high-end luxury car sales in China, with Ferrari’s growth down 12.5%, Bentley’s growth slowing 23% and Lamborghini’s growth at zero. A little further down the value chain is faring better: Audi, BMW and Jaguar-Land Rover all have growth in the teens [paid subscription required].
Only 20pc of Chinese Consumers Prefer to Buy Luxuries at Home: 44% of Chinese luxury consumers prefer shopping in HK and Macau while 15% would like to buy in the U.S. 15% prefer Europe, down from 23% last year.
Weird & Wonderful
Lyin’ zoo’s deceitful ways: A whole new class on fakes in China: Henan Zoo passes off a Tibetan Mastiff as a lion, discovered when the ‘lion’ started barking. Next time you’re at the panda enclosure, double check it’s not one of these.
That’s The Skinny for the week! China Skinny would love to discuss how we could help with your marketing, online initiatives or research to take advantage of China’s opportunities. Just email us at email@example.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.
In most countries when consumers think of milk, it’s likely they’d picture smiling kids with milk-moustaches. They may visualise families in chorus, skipping through emerald green pastures amongst big-eyed cows with bulging udders. Chinese consumer’s perceptions aren’t so rosy. Every time someone in China has a sip or a suck of the white juice sourced from Inner Mongolian paddocks, there’s a small part of them worried that they’ll be bed-bound by morning, or worse still, their precious child will be. Hence the premium consumers pay for foreign dairy products, and why foreign milk powder producers account for 60% of China’s market.
Dairy is the extreme example of everything that is wrong with China’s supply chains. Nothing has done more to raise awareness about the poor quality and safety of goods produced in China, versus those produced abroad. The melamine catastrophe of 2008 and the scandals that followed have eroded Chinese consumers’ trust – not just for milk products, but for the China-Inc brand as a whole. In a way, poisonous milk has helped any Western business selling in China who is trading on the quality of their products.
The Chinese Government knows that if it can turn local milk around and restore faith in consumers, it will be a game changer. As part of their quest to make that happen, they’ve passed new laws in hope of fixing the problems. The private players such as Nestle are coming to the party, introducing new systems to improve the safety of its locally produced milk. Danone, who recently spent $417 million buying local dairy companies, also backs itself in making local milk supply safer. Something has to happen, simply to help supply the slew of new milk-guzzling middle class consumers coming to the market every day. In addition to new systems and laws to support the local milk suppliers, the Chinese Dairy Association is singing the praises of the nutritional advantages of local milk, and the Government is back to its old games to try and sway consumers’ preferences to local brands by investigating ‘unscrupulous’ behaviour of the Western brands who are creaming it. Think how Apple’s brand has been affected by a similar Government campaign.
There’s obviously still the polluted soil and water to deal with, yet each of the initiatives can only help close the gap for local dairy – probably not immediately, but in the medium term at least. Western dairy brands may not have it so easy going forward, and the focus will need to be on smarter marketing to retain their edge. And if it happens to milk, it could happen to any industry. As always, below you’ll find some articles that will hopefully help you stay ahead of the game. Good luck!
Go to Page 2 to see this week’s China news and highlights.
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
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
- 700 cities in China have more people than Geneva
- 120 million Chinese consumers currently earn $20,000-$1m a year
- 280 million Chinese consumers will earn $20,000-$1m a year by 2020, 75% living in smaller cities
- The portion of luxury and western products bought online is higher in smaller cities than First Tier cities
Sina Weibo’s latest registered user count stands at 368 million on 30 June 2012, according to Sina’s quarterly financial report. The user numbers are well up on the last count of 324 million users at 22 May 2012, indicating that Chinese netizens seem relatively unfazed by the negative commentary about censorship, a 3-day period of blocked comments in April and some limited services thereafter. Chinese netizens realise this inconvenience is a necessary evil to receive the overwhelming benefits of sharing their voice and hearing other’s on Weibo.
Although the 368 million people account for just a little over a quarter of China’s population, they are generally the most educated, highest earning, urban dwelling opinion leaders, who represent the highly-prized Chinese consumers spending up a storm.
Sina’s Q2 report also indicated Weibo also has 36.5 million active users daily. The growth and usage further cements Weibo's position as China's number one social network.
The Weibo Facts
- 368 million registered users China’s Sina Weibo on June 30, 2012
- 36.5 million active users daily on Sina Weibo
As more and more businesses jump on the Weibo horse, the Chinese Weibo community are on the wagon following them. A study published by Sina Weibo found that 56% of users follow at least one business account on Weibo, following four businesses on average. Like social media in many parts of the world, some of those so-called 'followers' rarely use social media or are bots, with just 35% regularly accessing their Weibo accounts (‘regularly' is not defined in the research).
Although barely over 1,000 foreign businesses had a Weibo business account in March 2012, it appears western businesses are being talked about online. 55% of Chinese Internet users say they’ve contributed to an online discussion about a foreign company according to advertising & media agency OlgivyOne. 50% of Weibo users consider it a way to make customer complaints. And the number of Chinese netizens who would like to communicate with a brand on Weibo is increasing, especially in more educated demographics – who are the users most likely to purchase western products. This further reinforces the importance of using Weibo as listening post to keep abreast of business in the Chinese market.
The most followed business on Weibo, MeiliShuo, a social shopping website which now has 3.8 million followers. Many other businesses have also surpassed the million followers on Weibo.
More than two thirds of followers of businesses on Weibo are the highly desirable 18-29 age group. Males are more likely to become fans of businesses on Weibo, accounting for 56% of all fans, although females are more likely to share brand and product information.
The Weibo Facts
- The Average Weibo user follows 4 business accounts
- 56% of Weibo users follow at least 1 business account
- 35% of Weibo business account followers regularly use their account
- 55% of Chinese Internet users have contributed to online discussions about foreign companies
- Males make up 56% of all fans of Weibo business accounts
- Females are more likely share product and brand information on Weibo
Weibo has become the most trusted and one of the most popular sources for information in China, so it is no surprise that Chinese businesses are jumping over themselves to utilise the tool to reach out to customers. It’s allowing businesses in China to gather valuable customer feedback, communicate promotions and assist with damage control.
It’s also turning out to be one of the most cost effective and reliable ways to do Chinese market research. Weibo has become more trusted than the Government-controlled media in China and Chinese businesses are quickly realizing Weibo as an effective way to build relationships and a following with their customers.
According to Sina, by March 29 2012, there were 130,565 enterprise accounts with accounts on their Weibo service. Although countless foreign businesses have been allured by China’s bright lights, just 1,060 had Weibo accounts: 208 USA businesses, 178 Japanese and 194 specified simply as “overseas” businesses.
143 Fortune 500 companies had Weibo accounts at this time. We can expect to see the number of western businesses on Weibo to increase significantly, and quickly. Many are making significant investments in China, and having Weibo as part of the China strategy is a key piece of the puzzle to ensure the greatest return on that investment, if it is understood and executed well.
The Weibo Facts
- There were 130,565 business accounts on Weibo by March 29 2012
- 1,060 foreign companies had business accounts on Weibo
- 143 Fortune 500 companies had Weibo accounts
- 208 American, 178 Japanese and 194 non-specified “overseas” businesses had Weibo accounts
The growth stats for most things in China is phenomenal, but few compare to Sina Weibo. Launched less than 3 years ago in August 2009, Sina Weibo already has more users than the population of the USA – more than 324 million registered users in China as at May 16, 2012. And they’re the 324 million most educated, highest incomes and largest consumers in China – exactly the customers most western businesses are targeting. They account for more than half of China’s Internet population.
And Weibo growth rates are showing no signs of abating. As many as 20 million users, the population of Australia, join Weibo each month to post, comment and keep a tab on their interests. With a lack of trust in other sources of information, Weibo is influencing decisions in China significantly.
There are numerous theories about the growth of Weibo; many suggest it came from Sina wooing Chinese and other East Asian celebrities to share their lives. However, what has contributed more to Weibo’s growth is that every literate Chinese person with an Internet connection can now have a voice, something they were unable to do in the past.
Weibo has been called “The water cooler of China”. It’s where people spread the news, gossip and their opinions about anything from celebrities, to scandals, to which brands they love and hate. If something is being talked about in China, it’s being talking about on Weibo. As a business investing or thinking about investing in China, it would be an oversight not to stay abreast of your product, competitors and industry on Weibo.
The Weibo Facts
- 324 million people had accounts on China’s Sina Weibo on May 16, 2012
- Weibo users are growing by as much as 20 million a month