Mark Tanner
Mark Tanner
10 October 2018 0 Comments

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

Consumers, Chinese Consumers

Fan Bingbing’s Mysterious Disappearance: What it Means for China’s Elite: Fan Bingbing has reappeared after three months in a ‘residential surveillance at a designated location’ (held in secret with no contact with the outside world), with a grovelling confession on Weibo and a whopping ¥883 million ($129 million) fine for tax evasion.

The Luxe Cream that Heals Burns… but Only in China: Beauty blogger Hao Yu – ‘Doctor Big Mouth’ has sued Estée Lauder of deceiving Chinese consumers over the ability of its Crème de la Mer to heal burn scars, adding global brands still treat the Chinese as ‘gullible sheep waiting to be killed’.

What Tourist Attractions Look Like with 700 Million Chinese on the Move: The annual post-Golden Week roundup of photos of phenomenally busy tourist sites across China. An estimated 37,000 tourists visited Badaling Great Wall on Oct 1, 39.6% more than last year. A total of 726 million Chinese tourists travelled in the country during the holiday, up 9.43% from 2017.

WeChat Report Shows Many Chinese Chose to Stay Indoors Over the October Golden Week: Over 21 million WeChat users took less than 100 steps on any single day from September 30 to October 6. Guangdong, Jiangsu, Shandong, Zhejiang and Liaoning Province topped the five spots that recorded most shut-in WeChat users.

Online: Digital China

WeChat Social Commerce Report 2018: Social commerce sales via revenue sharing are growing at a quarterly rate of 33%. The most popular items purchased via WeChat are around ¥200 ($29) with fruit, beer, supplements, t-shirts, chargers, women’s underwear, shower brushes, English classes, mouthwash and toothpaste the top selling items. Tier 1 cities share of sales dropped from 39% to 29% between June 2017 to June 2018. Just 20% of WeChat stores last longer than two years.

WeChat Updates Add Pressure to Subscription Account Content Creators: WeChat’s latest update has added a “Frequently Read” content row displaying users’ most popular content subscription accounts. The row sticks to the top of the subscription main page and will notify users of any updates from the accounts. This is expected to further marginalize accounts with declining readership and those hoping to attract readers with eye-catching images. The average browsing rate for WeChat subscription accounts is less than 5%.

Infographic: Here’s What Happens in One Minute on the Chinese Internet: ¥187 million ($27.2 million) of transactions are processed on AliPay, 416K page views happen on Zhihu and 883K shoppers are on Taobao.

Chinese are Most Positive About Digital Future: 65% of Chinese believe that emerging technologies will generate more jobs than they destroy over the next five to ten years. At 35%, France was the next most optimistic in a survey of ten countries. 68% of Chinese also think their education – secondary and tertiary – is providing them with the right level of tech skills and knowledge to help them face the digital future, by far the highest rate in the survey.

Overseas Chinese Tourists

Trade War Hurts Tourism: Chinese Flight Bookings to US ‘Down 42% for National Day Holidays’: Although last year’s Golden Week was a day longer, Skyscanner data saw a 42% drop in flight bookings to the US from China. A separate report cites a 5% decrease in Chinese tourists to the US this year, with August showing an 8.4% fall mirroring trade tensions. The US runs a $28 billion travel and tourism trade surplus with China.

Foreign Airlines to Face New Rivals on Popular China Routes as Restrictions Ease: Foreign airlines that fly on 20 popular long-haul routes to China – about 20% of Chinese long-haul daily capacity – will face fresh competitive pressure as Beijing allows more Chinese carriers to offer the service. Chinese airlines already control about 50% of the seats on the 20 routes.

Premium Food & Beverage

Fast Food Fashion: Yum China’s Plan to Get Pizza Hut Back in Vogue: Pizza Hut has spent at least $60 million in upgrading its offering since September last year adding brass trimmed lamps and Italian marble to restaurants and introducing new technologies such as those allowing customers to order food by scanning QR codes on the tables. It has removed some poorly received products – such as pizza topped with expensive abalone – and shut some concept stores, including one with robot waiters. Trendy, modern interiors, and popular dishes in China like omelet rice and Australian steak to attract younger consumers is part of a push to help make the brand “Instagram-worthy”.

In KFC’s China Ads, Nuggets Are Served With Patriotism: Last month, KFC introduced an advertising campaign in mainland China celebrating 40 years of “reform and opening up,” the catchphrase that defined the era. A two-minute TV spot that aired on state television showed two Chinese celebrities travelling back in time by railway, seeing streets filled with bicycles and bamboo scaffolding touting opening up-themed buckets of fried KFC chicken. Foreign companies in China rarely venture into the political realm in their advertising, and the ad comes at a potentially difficult time with the trade war.

Overall Health

Traditional Chinese Medicine Closes in on $50 Billion Market with Long-Awaited Nod from WHO: TCM is set to receive its first-ever official endorsement from the World Health Organisation next May at the World Health Assembly with a dedicated chapter in its 11th version of the “International Statistical Classification of Diseases and Related Health Problems.”

Autos and Cars

New Chinese SUV Has A Hot Japanese Schoolgirl For Holographic Assistance: China’s midsize SUV Bestune T77 offers a “holographic intelligent control system” that comes with three characters, and five sets of clothes for each. The assistants can perform 43 different acts, like tuning the radio, calling friends, or switching on the windshield wipers.

Premium and Luxury

The Big Surprises in Tencent/BCG’s Report on Chinese Luxury Shopping: Chinese luxury consumers will account for 40% of global buyers by 2024, driving 70% of the value growth. Key takeouts from a Tencent/BCG study into luxury purchases included: 1. Consumers take a mobile-first, yet highly fragmented, digital path; 2. Consumers exhibit “research online, purchase offline” behaviour, with just 5% of sales online; 3. Shopping on WeChat and social media is on the rise – however more than half of online luxury transactions take place on the major ecommerce platforms, almost a quarter on brand’s websites, and social commerce about 11%. The report follows a good start to 2018 for luxury brands, with Kering, the owner of Gucci and Alexander McQueen, China sales skyrocketing 30% in the first half of 2018. French fashion house Hermes credited sales in the country for record profits over the same period.

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

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