Mark Tanner
Mark Tanner
11 July 2018 0 Comments

Here are this week’s news and highlights for China:

Overall Health & Beauty

A $6 Billion China Startup Wants to Be the Amazon of Health Care: As soon as you’re diagnosed as diabetic, ads for treatments show up on your social feeds. You get alerts on health supplements, maybe nutrition tips. Prompts on insurance policies pop up on your phone in Tencent-backed WeDoctor. Once a scrappy start-up that helped people book doctors, it’s grown into an outfit valued at $5.5 billion that operates online follow-up consultations, drug prescriptions and actual clinics staffed by physicians. It’s building AI to parse data, helping detect ailments like cervical cancer. It sells an Amazon Echo-like $600 speaker for the home that can link to fitness wearables and doubles as a doctors’ hotline. 160 million users have registered, with 27 million active monthly. It currently connects to 2,700 hospitals and 240,000 doctors.

NARS Cosmetics Faces PR Nightmare in China After Hosting Weed-Smoking Celeb: Nars Cosmetics is facing a severe backlash in China following its invitation to a Taiwanese celebrity infamous for a 2014 drug bust to the beauty brand’s recent new product launch in Taiwan. Posts on Weibo criticising and threatening to boycott the brand became a top-ten trending topic on Weibo, with an apology from the company receiving over 15,000 mostly-negative comments.

Consumers,  Chinese Consumers

More to China than Major Cities: Brands selling into China should look at second and third-tier cities as foreign brands are saturated and no longer novel the big centres like Shanghai and Beijing. Rising tourism in lower tier cities is increasing awareness to foreign lifestyles and products which is also helping consumption of imported products.

US-China Trade War Begins as Beijing Vows to Strike Back Against Tariffs on $34 Billion Worth of Chinese Goods: US goods affected are vehicles, soybeans and other food, while it is mostly Chinese industrial goods hit by US tariffs. Taiwan has the highest exposure to the tariffs – 2% of its GDP is from US demand through its value-added contributions to China’s exports, followed by Malaysia, South Korea and Singapore.

Divorce Boom After Gaokao: When Exams Are Over, Chinese Parents Finally File for Divorce: Unhappy parents in China often stay together for the sake of their child’s education and not to add additional stress to the potentially life-defining gaokao exams. The post-exam divorce boom is so common that there is a term for the phenomenon; those parents who get divorced after the gaokao are called “the gaokao divorce tribe.” In other related news, parents are divorcing in Shijiazhuang to get their children into better schools.

Flagging Consumer Growth Helps Spur China’s Equity Bear Market: In May, loans to households for consumption grew at 22% year on year, down from an expansion rate of over 30% in May 2017. This, in turn, contributed to the slowdown in retail sales to 8.4% in May from 9.4% in April. China is countering any potential slowdowns from the trade war by freeing up credit through allowing some lenders to hold less cash in reserves.

Online: Digital China

How Amazon Wants to Crack China – Starting in Alibaba’s Hometown: Amazon has been unable to get 1% of the ecommerce market in China but it hasn’t given up on the market. Just like Alibaba has been courting foreign businesses to use its platform to sell cross border, Amazon is hoping to lure Chinese manufacturers to sell to America and Europe on its platform.

The United States and China: The Current Global Innovation Landscape: Infographic comparing innovation in the US and China – the US is still quite far ahead in many areas, but China is streets ahead for patents, ecommerce, mobile payments ($790 billion versus $74 billion) and a national strategy for AI.

Alibaba Launches ‘Malaysia Week’ Amid Concerns Over China-Malaysia Relations: Alibaba’s Malaysia Week runs from July 6-12 showcasing an array of “must-see”, “must-eat” and “must-experience” Malaysian products and tourism across Alibaba’s platforms. The initiative is part of Alibaba’s continued commitment to Malaysia, its first electronic world trade platform (eWTP) hub outside of China. Over 50 Malaysian brands are being promoted as part of the festivities.

Premium Food & Beverage

Penfolds Goes from Grange to Rocket Fuel: Penfolds is entering the world’s largest alcohol category, baijiu, putting it in competition with Kweichow Maotai. Treasury Wines insists that stretching of the brand would not harm the iconic wine label but it does confirm the company has just one globally recognised brand and it is planning to stretch this for all it’s worth. The $155 a bottle Baijiu will be “wine enlivened,” red in colour and less than half as potent as the original. Penfolds has also announced it will produce wine in California and France – the first time it has done so outside of Australia.

Australia Drives China’s Imported Wine Growth: Australian wine exports grew 51% to $1 billion AUD ($743 million) in the 12 months to March this year, accounting for 26.7% of imported wine, second only to the French at 41%. 53% of China’s urban upper-middle class imported wine drinkers in China are aware of Australia as a wine-producing country, while 36% have drunk it in the past six months according to Wine Intelligence. Although the proportion of consumers who shop for wine online (48%) has not increased in the past year, (42%) surpassing Walmart (35%) to become the retailer with the highest proportion of wine drinkers, with Tmall at 33% according to the report.

Foreign Foods Spend Less Time Travelling to Chinese Dinner Tables: Chinese media is praising its reduced tariffs and simplifed customs clearance processes. A batch of fresh milk leaving a New Zealand farm on Monday can reach Chinese dinner tables as soon as Wednesday. At the beginning of the year, it took 8 days. Lobsters, salmon, oysters and other fresh seafood from Canada can arrive in China’s first-tier cities within 36 hours, thanks to China’s trade facilitation policies and fast growth of cold-chain transportation. The customs clearance time has been reduced to less than 2 hours in several major Chinese cities including Shanghai, Beijing and Guangzhou.

Banking, Finance

Chinese Consumers Have Now Deposited $150 Billion with Alipay and Tencent: The People’s Bank of China has changed the rules so payment firms such as Alipay and Tenpay can no longer invest money deposited by their respective customers.

Schooling and Education

Government Shuts Over 200 Chinese-Foreign Education Partnerships: The Ministry of Education has terminated 234 partnerships between Chinese and overseas institutions – more than a fifth of all Sino-foreign tertiary partnerships. The ministry said the institutions were shut for being poorly resourced or having poor teaching quality.

Autos and Cars

The Possibility of Getting a License Plate in Beijing: 1:2,031: As of June 8, a total of 2,808,047 eligible individuals had applied for license plates through the lottery system. The total plates available for the two months were 6,333. The number of cars registered in Beijing was 5.97 million as of April.

That’s the Skinny for the week! See previous newsletters hereContact China Skinny for marketing strategy, research and digital advice and implementation.

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