Here are this week’s news and highlights for China:
Australian Businesses in China Forgoing Profits by Missing the Digital Opportunity: Just one in six Australian businesses have a digital or ecommerce strategy in place in China, with most having limited diversity in online channels used.
American Companies in China Shouldn’t Fear Tariffs. They Should Fear a Boycott.: US companies benefit greatly from the goodwill the Chinese feel toward Americans and American products. Unlike imposing tariffs or dumping US Treasurys, a boycott from Chinese consumers gives Beijing deniability, even if it is stoking it behind the scenes. It would help China retain their angelic image of global trade, further hurting the US image globally and helping China’s ‘greatness’ aspirations, and have a much longer-term impact than tariffs that can be removed swiftly.
Jack Ma: Trade War Kills Jobs, Opportunity and Hope: Like many in the business community, Jack Ma is struggling to understand why a trade war with China would be good for the US economy. He explains how he believes China’s rise has helped the US economy and how Apple’s $48 billion profit didn’t make it into the balance-of-trade calculation. China’s transition from the world’s largest exporter to the world’s largest consumer will see the country import $8 trillion of goods over the next five years.
China Puts IP Rights in Sight as World’s Factory Evolves from Bootleg Hub to Top Patent Owner: China has restructured the State Intellectual Property Office and empowered it to crack down on violations, taking the boldest step in decades to strengthen the country’s protection of intellectual property rights. The mandate comes right from President Xi who first announced it at last month’s annual meetings of China’s legislature and reemphasised it in his keynote speech at the Boao Forum for Asia. China’s patent filings grew 4.8% last year to see it hold 42.8% of global filings, more than double the US, four times Japan and eight times Europe.
Chinese Companies Launch Big Branding Campaign on Overseas Social Media: Some Chinese entrepreneurs call on the Chinese government to open “green channels” to freely access foreign websites for promotional purposes as China moves up the value curve. Many businesses in China are utterly unfamiliar with foreign social media. Experts caution that Chinese companies promoting products overseas must be more sensitive to cultural differences – sound familiar?
Chinese Consumers Most Likely to Use Sharing Economy, Least Likely to Buy Insurance, Survey Finds: Chinese consumers are more willing to use the sharing economy platform to hire holiday homes or rental cars than their counterparts in the US and UK, but they are the least willing to get insurance cover when using these services according to a Lloyds of London survey. 68% of Chinese customers believe the benefits of using the sharing economy are greater than the risks, compared with 58% of US customers. 71% of Chinese thought it was the responsibility of the sharing platform to protect the customer, versus 43% in the US and 39% in Britain.
After Outcry, Weibo Does U-Turn on Gay Content Ban: Sina Weibo has removed gay content from the list of material it is cleansing from its platform after millions protested online and official media outlets endorsed tolerance. Weibo’s ban now only applies to pornographic and violent comics and games.
How to Sell Your Products on WeChat: 6% of users on WeChat spend $620 per month on the platform. The most common ways to sell on the platform are 1. Develop HTML5 landing pages; 2. Connect your JD store and WeChat; 3. Integrate your ecommerce website via APIs; and 4. Build your own WeChat store.
WeChat Mini-Programs are Getting Traction in China: Time spent on WeChat Mini-programs daily went from 1.6 minutes per day to 9.8 minutes per day in a year. Over half of WeChat mini-program users spend more than ¥500 ($80) per month through them, with 87% spending over ¥200 ($32). 54% of users open Mini-programs four or more times a week, but programs retain an average of just 3% of users after a week. Clothes & shoes and fresh fruit & veges are the two most common items sold on Mini-programs accounting for 47% of ecommerce-enabled Mini-programs.
China Sees the Rise of Web Video Commerce: Livestreaming will drive $4.4 billion in direct revenue in China this year, an increase of 37% over 2017, and reach 456 million viewers according to Deloitte.
Mars and Hershey Lose Share to Premium Chocolates in China: Mass produced chocolate brands such as Mars and Hershey are losing market share to imported premium chocolate brands in China primarily due to lack of innovation. Using less artificial additives is the top change consumers would like to see according to Mintel. Whilst about 5.7% of the chocolate products launched globally between 2014 and 2016 have the ‘no additives/preservatives’ claim, nearly zero products launched in China carry this claim.
Brazilians and Chinese Find a Use for Millions of Redundant Donkeys: With motorcycles replacing the humble donkey in Brazil’s northeast, enterprising locals are building abattoirs hoping to capitalise on Chinese demand to turn the unwanted into wealth. Soaring demand for protein has more and more donkey meat on the menu in China. They also have a growing craving for ejiao from boiled donkey hides, which is said to boost health, reverse ageing and serve as an aphrodisiac. There is also research underway into the viability of using highly nutritional donkey milk and its pleasant flavour to help infants with special nutritional needs and children who have trouble digesting cow’s milk [paywall].
China Central Bank Fines Ant Financial’s Alipay: Alipay has been fined ¥180,000 ($28,535) for inadequate customer rights protection, publishing misleading advertising and improper data protection. It wouldn’t even be a rounding error in a small Alipay department, but progress in recognition of the issue in China.
Chinese International Students Are the New Brand Champions: With access to the latest international trends, Chinese students abroad have become unofficial opinion leaders for their friends and peers back home. 31% of Chinese students in New York and Boston escort friends and family on shopping trips at least once every three months and 34% purchased luxury goods to take back to China at a similar frequency.
LVMH Sets Upbeat Tone for Luxury Brands as China Demand Rolls On: With more than 4,000 stores from Paris’s Avenue Montaigne to Los Angeles’s Rodeo Drive, LVMH has been boosted by a rising Chinese middle class that is travelling more than ever. It’s also gaining from a push into ecommerce and new products to entice young consumers – like luxury sneakers and iPhone cases styled like Louis Vuitton trunks.
NIO Opens its First Electric Car Service Centre Right Next to Tesla’s: Tencent-backed NIO, which is emerging as one of the most well-funded new Chinese EV startups, is bringing its first production vehicle to market – the NIO ES8, a seven-seater SUV which retails for about half the price of the Tesla and a battery-renting structure similar to Renault’s ZOE battery scheme. If they can get production sorted, it is one of the brightest hopes for bringing EVs mainstream in China and taking Chinese brands to a new level of desirability.