Here are this week’s news and highlights for China:
Four Reasons Why China’s Local Brands Are Outsmarting Foreign Food Companies: Foreign brands are being outsmarted by domestic brands often selling inferior products. Here are some of the reasons why.
Multinationals Losing Battle for Chinese Consumers: Foreign companies have been slow to adapt as Chinese shoppers upgrade, with growth in the premium category outstripping non-premium in every category, particularly in packaged water, yoghurt, skincare, makeup and facial tissues. According to Bain/Kantar, brands owned by multinationals lost share in 18 of 26 FMCG categories last year, gaining in just four – chewing gum, fabric softener, instant noodles and beer [paywall].
Fruitday Unveils Which American Cherry Appeals to China: Chinese consumers prefer cherry strains with a dark colour, with 68% believing the bigger the cherries, the better – smaller ones were seen as counterfeits. Heart-shaped cherries are always sought after with round shaped the least trendy. 70% of the participants preferred a cherry with the fruit stem still intact while only 4% accepted stemless ones. Chinese consumers enjoy a balance between sweetness and sourness.
The Stars of China’s Home Food Delivery Business: China’s food delivery service has grown 44% annually since 2013, with the most popular late night orders including spicy hot pot ingredients, shredded potato, preserved egg and pork congee, fried chicken, hamburgers and crawfish.
Five Profiles that Explain China’s Consumer Economy: By 2021, China will add $1.8 trillion in new consumption. That is roughly the size of Germany’s consumer economy today, and more than a quarter of all consumption growth in major economies. Consumers aged 18-35 will account for 52% of consumption by 2021 even with the ballooning aging population. By 2021, 90% of all purchases in China will involve digital at some point in the process—browsing, comparing prices, or making the actual purchase.
Why the Great Malls of China are Starting to Crumble: China accounted for more than half the malls built worldwide in each of the past three years and currently has 7 of the world’s 10 busiest cities for retail development. China now has over four times America’s 1,100 malls, with some 4,600 centres, however as many as one-third of the country’s malls could close in the next five years according to the Chinese Academy of Social Sciences.
Social Media Set to Morph into Shopping Platform: 95% say they either visit a physical store before purchasing electronics online or bought them in stores after doing online research according to a McKinsey survey, highlighting the need for integrated online and offline marketing.
Turn Off, Drop Out: Why Young Chinese Are Abandoning Ambition: As China’s economy slows and social expectations rise, youngsters are rejecting traditional notions of success and embracing a culture known as ‘sang.’
Can Alibaba Realize Its Global Ambitions?: As part of a $21 billion-acquisition spree over the past two years, Alibaba has been spending up a storm on marketplaces and payment platforms elsewhere in Asia as part of Jack Ma’s plan for global domination.
China’s Online Multimedia Sector Bans Portrayal of Homosexuality: China’s industry body for online broadcasting has passed a set of guidelines banning the depiction of vulgar and unpatriotic content including explicitly prohibiting the depiction of homosexuality, including it in the category of “abnormal sexual behavior” alongside incest and sexual violence on all online audiovisual content including videos, cartoons and livestreaming. Other banned content includes prolonged or provocative kissing scenes and the defamation of national heroes.
Tipping the Scale: Beijing Leads in Obesity Rate: Further highlighting how China varies between regions, Beijing’s obesity rate is 25.9% versus a national average of 11.9%. Following Beijing, Hebei ranked the second most obese with 22.2%, and Xinjiang in third at 21.5%.
Prepare for a Mobile Payment Revolution Among Chinese Travelling Shoppers, Says New Survey: 67% of respondents reported that they use mobile payments overseas according to a Kapronasia survey. 10-30% of their overseas shopping purchases with QR code-based mobile payment methods. One third of consumers paid over 50% of their purchases in China with mobile. The average transaction value on Alipay went from $82 in 2015 to nearly $100 in 2016, an increase of 22%.
Tech Titans in China Take Their Battle to a New Frontier: Tencent and Alibaba are capitalising on their wide-reaching investments and apps to provide a full travel experience, hoping apps such as Meituan Dianping and Fliggy can take on Ctrip.
JD.com Partners with Luxury Fashion Site Farfetch after $397m Investment: JD has invested $397 million in global luxury fashion site Farfetch which will see the two businesses partner on marketing, logistics and technology solutions to build the Farfetch brand in China. JD will be hoping to tap into the growing online luxury category which Alibaba has stumbled with.