Here are this week’s news and highlights for China:
Premium Products are Hot in China: Sales of premium products – goods that cost at least 20% more than the average price for the category, are growing at a rapid pace according to Nielsen. 56% of Chinese say they buy premium products in order to feel successful or show their success to others. 48% of consumers say they’re willing to pay a premium for electronics, followed by clothing (38%), cosmetics (38%), dairy products (37%), cars (32%), oral care (31%) and meat and seafood (30%).
Cultural Consumption on the Rise in China: Classes from pole dancing to ballet, oil painting and musical instruments are on the rise as Chinese consumers look beyond material possessions to acquiring more skills to enrich one’s own life. Art programs and skill training have grown from ¥6.4 billion ($0.9 billion) in 2008 to ¥46 billion ($6.7 billion) in 2015, with compound annual growth rate reaching 32%.
BrandZ Launches Top 30 Chinese Global Brand Builders 2017 Ranking: Awareness of Chinese brands is increasing globally, with Lenovo, Huawei, Alibaba, Elex Tech and Xiaomi the top-5 known brands globally according to WPP and Kantar Millward Brown. Consumers in France, Germany and Spain are more aware of and likely to consider Chinese brands than consumers in Japan, Britain or America. In a similar brand ranking study, China’s ICBC became the first non-Western bank to top the list of most valuable banking brands this year.
Chinese Consumers Shrug off Beijing’s Ban on Insurance Gimmicks: Insurance companies have been forbidden from insuring against smog, foul weather clouding the moon over the Mid Autumn Festival and teams losing in the World Cup, which were mainly marketing stunts to help build awareness for smaller insurance agencies.
Meet the Giants of Tomorrow: The Tallest Buildings Rising in 2017: China accounts for the four tallest buildings being erected this year, with tier-2 cities Wuhan, Shenyang and Tianjin taking the top-3 spots.
The Calm Before the Storm for China Inflation: It’s becoming more costly to get sick in China. The healthcare component of China’s CPI basket, comprising Western drugs, Chinese medicines, and medical services, rose to almost 5% in 2016 – a figure last seen in 1997 – after climbing steadily over the past three years.
Working it Out: New Trends in Fitness in China: China’s gym, health and fitness clubs industry was estimated to be worth $5.8 billion in 2016, having grown at an average of 11.8% annually between 2011 and 2016. The number of gym attendees across 70 cities has grown around 4-5 million a year over that period. Younger consumers are less interested in traditional slow and steady regimes such as tai chi.
Chinese Startup Invents Genius Bottle That Keeps Polluted Air From Ruining Clean Water: A Chinese company is banking on consumers thinking that pollution is so bad that they will buy a water container that prevents air from getting into the unit. 41% of Chinese have moved to bottled water, purifiers and dispensers due to the country’s tap water being contaminated with chemicals and bacteria according to the China Water Supply Services Union.
‘Digital in China is Different’: European Brands Slow to React to Online Trends, Says Report: China has the most digitally advanced consumer population outlined in a report by Exane BNP Paribas. Online apparel and footwear sales penetration in China is more than double the next major market surveyed, and is growing at a faster rate.
Apple’s Glory Days in China are Fading Fast: Dongguan’s BBK’s Oppo 78.4 million sales last year earned it China’s top-selling smartphone title, with growth of 122% from 2015. BBK’s other brand Vivo grew 97% to 69.2 million units to take the third spot, edged out by second placed Huawei’s 76.6 million units. Apple saw its first ever drop in revenue in China to take 4th spot and 5th place Xiaomi lost close to a third of its market share along with VP of International Hugo Barra who announced his resignation last month.
Chinese Consumer, Retail sector Trends Boost to Large Seafood Companies, Importers: Chinese are increasingly adopting shopping habits of their counterparts in developed countries, prioritising convenience, health and good hygiene standards when doing grocery shopping. Traditional wet markets and family-run stores, which typically sell low quality seafood, are losing market share to large hypermarket and supermarket chains, as well as e-commerce. German chain Metro has found imported food sales have grown by 20% to 30% each year.
Infographic: Foreign F&B Expansion in China: China’s strong consumer sector means F&B remains one of the country’s most active areas of growth. Foreign brands studied by JLL expanded 20% on average in 2015, with a third growing over 30%. Cafe/Tea/Ice cream was the fastest expanding store type at 31%, followed by fast food at 20% and baked goods at 19%.
Baijiu Dominates CNY Alcohol Consumption: Alibaba sold 380 million items in the week preceding the Lunar New Year, with alcohol a popular purchase. The biggest Baijiu-drinking provinces were Shandong, Jiangsu, Henan, Hunan and Zhejiang. Beer drinkers hailed from Shandong, Beijing and Inner Mongolia. Tibet, Yunnan, Guangdong and Fujian Provinces opted for imported spirits, while consumers in Chongqing, Hubei, Jiangxi and Zhejiang Provinces had a preference for wine.
Japan Dominates as Asian Travellers’ Top Spot of Interest: Japan and Australia were the top two destinations for Asian travellers according to Travelzoo research, with this year being the first time a Western European destination wasn’t in the top-5, due to safety concerns. Of the Chinese who picked Australia as a top choice, 65% cited it was safer. About 70% of Chinese consumers for the study showed interest in travelling abroad at least two times a year.