Mark Tanner
Mark Tanner
18 November 2015 0 Comments

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

Consumers,  Chinese Consumers

What’s Keeping Chinese Consumers from Spending More: In recent years, Chinese household debt was about 12% of GDP compared with 95% percent in the U.S. Just 5% of Chinese over the age of 15 have mortgage debt, versus 33.4% in the US.

Give Chinese Greater Access to Foreign Consumer Goods, Premier Li Keqiang says: Beijing should “not place restrictions on their purchasing overseas or even shut out the world. We should give our consumers more options,” says Premier Li Keqiang.

FMCG Growth 4.7% in Past Year: FMCG growth slowed in Q3 to 2.7%, with most of the rise coming from smaller cities which are dominated by local brands. Tier 1 & 2 cities grew just 0.7%, with convenience stores the fastest rising offline channel at 6.5%. Hypermarkets actually declined 1.5% in big cities, while they grew 10.4% in smaller cities.

Ending China’s Currency Manipulation: Donald Trump’s views on China and his policy should he become President.

Online: Internet, Mobiles, Social Media & Ecommerce

Single’s Day Infographic: Alibaba’s shopping-mania continued with this year’s Singles’ Day reaching a stunning $14.3 billion sales, growing by 60% from last year. View China Skinny’s infograph for the top selling brands, countries and its international inclination.

Alibaba Plans New Shopping Festival: The soon-to-be-launched Spring Festival shopping event will focus on rural consumers. “We want villagers to celebrate Lunar Chinese New Year with seafood from New Zealand and wine from France,” says Alibaba VP Sun Lijun. 8,000 villages bought goods on Single’s Day, with the most expensive purchase being a ¥500,000 ($78,500) Porsche. to Close C2C Marketplace to Curb Fakes: Is it fakes or they just can’t compete with Taobao in the space? The overall share of unbranded products on Alibaba’s Tmall and Taobao marketplaces dropped 7% between 2011 and 2014, with beauty and personal care products showing the biggest decline – indicating how important trusted brands are in the categories.

Chinese Embrace Smartphone Swiping for Hair Cuts and Eels:  Even China’s wet markets and breakfast pancake vendors are accepting smartphone payments, with O2O (Online to Offline) forecast to grow 63% between now and 2017 to ¥42 billion ($6.6 billion), according to Credit Suisse.

1/4 China Smartphone Users Install Foreign Apps: The most popular foreign apps Chinese consumers are downloading are tools (31.0%), social communications (15.5%), travel (11.3%) and photography (10.1%).

Banking & Payments

Tencent’s Messaging Apps Reach 200 Million Users On Its Payments Services: Tencent’s revenue grew 32% year-on-year helped by 60% smartphone games revenue growth to ¥5.3 billion ($830 million).  Advertising revenue almost doubled to ¥4.9 billion ($769 million), with 65% coming from mobile ads. As of September, 200 million WeChat and QQ accounts have connected their bank accounts.

Premium Food & Beverage

Major Urban Centres Lead China’s Growing Demand for Meat:  China spent $605 million on imported meat and offal last year, up 27.9% from a year earlier. China is expected to consume 100 million tonnes of meat by 2020, but will only have the capacity to produce 90 million.

Sainbury’s Food is a Top Online Seller:  Following Tesco’s lack of success in the China market, Sainbury’s entered China more cautiously last month – by testing the market on Tmall. Breakfast options are their top sellers including Red Label Tea, UHT milk and granola.

Overseas Chinese Tourists

Chinese Tourists from Second-Tier Cities Love France and Thailand:  Better flight connections and looser visa policies are seeing Chinese tourists from lower tier cities increase. Proportionately, Tier-2 travellers love France, whereas Tier-1 travellers love the US, Australia and Germany.

Autos and Cars

‘Made In China’ May Be Fine For Volvo, But Not Lexus – Or Chinese Shoppers:  Lexus pays a 30% duty on importing cars into China, rather than making them in the Mainland as it doesn’t feel China has the expertise to manufacture them. Nevertheless, a recent J.D. Power study found Chinese-manufactured vehicles had fewer problems in the first few months of ownership – 105 per 100 vehicles – than American-made cars, which had 112/100.

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

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