Here are this week’s news and highlights for China:
The Incredible Rise of Pinduoduo, China’s Newest Force in Ecommerce: In just three years Pinduoduo has racked up 343.6 million active buyers in China’s hotly-contested ecommerce market. Last week’s IPO valued the company at $23.8 billion, making its founder, former Google engineer Colin (Zheng) Huang, China’s 12th wealthiest individual. The platform has clocked up 4.6 billion annual orders from its shopper base of 70% are women. More than 1 million merchants sell on the platform.
How Consumers Will be Affected by the U.S.-China Trade War: American families are likely to pay upwards of $500 more a year on clothing, shoes, fashion accessories and travel goods due to the trade war. But even more damaging are the negative perceptions and awareness that will result from less trade and tourism connections. Meanwhile, late last week the US Senate voted quietly to cut or eliminate tariffs on 1,660 items from industries which no longer exist in America, half of which aremade in China.
China Can’t Count on Consumers to Get Through Trade War: One million credit cards are issued in China every 4.5 days, with outstanding card balances expanding at three times the rate of American balances between September 2015 and last March to reach $870 billion. The author has grave concerns with household debt growing at 20% while disposable income is growing at 9%, and now reaching 120% of incomes (versus 108% in the US). However just looking at official incomes will give a misleading picture of the ability to service debts. Many Chinese have ‘grey’ income sources, allowing for a much higher ratio of assets to debt than Americans. Six adults often support one ‘child’ resulting in a greater means to service debts – that‘s how people earning $1,000/month can be driving European cars, sporting expensive handbags and smartphones, and taking a couple of long haul trips a year.
AmCham Shanghai 2018 China Business Report: 77% of companies surveyed in the AmCham Shanghai 2018 China Business Report were profitable, and 80% were either optimistic or slightly optimistic about the future – rates akin to 2017. 69% of respondents were opposed to the use of retaliatory tariffs; 42% favoured using investment reciprocity as a tool to gain greater market access to China.
Parallel Traders, Beware: New Facial Recognition System Installed at Hong Kong-Shenzhen Border: Brands selling in China by bringing goods through Hong Kong may want to rethink their strategy as facial recognition may soon catch parallel traders passing through the checkpoint. Facial profiles are checked against the database, meaning if there is any suspicion theprofile matches that of a parallel trader the system will send an alert to the customs officials. There are currently 640,000 crossings at the Shenzhen border every day.
10 State Media Cartoons on China’s Social Credit Implementation: With the nationwide Social Credit System to be rolled out by 2020, media coverage is growing monthly. Cartoon comparisons between Western media and Chinese state media depict harmony for those who abide, and punishment for those who don’t.
Chinese City Crusades Against Fake Bus Stop shelters: 45 bus stop shelters that have stood for years in Hefei, Anhui Province are slated for destruction after it was discovered they were not approved by the city. It is believed a large portion ofthem were built by companies that are profiting from adverts, although commuters are still using them!
Imported Food Gains Popularity in China: China’s total food imports amounted to $58.28 billion dollars last year, up 25% year-on-year, while the annual average growth rate over the previous five years was 5.7% according to China’s General Administration of Customs. The European Union remained China’s largest supplier of food, followed by the United States, New Zealand, Indonesia and Canada. Meat, oil, dairy, and seafood were among the most popular food imports in China.
A Chinese Coffee Startup Has Starbucks Sweating: Luckin Coffee is likely to have impacted Starbucks’ decision to offer delivery through Alibaba’s Ele.me from next month. Comparable store sales for Starbucks in China declined 2% last quarter. Somewhat worryingly, the drop comes amid a broad expansion in China which will see a new store open every 15 hours.
China’s Growing Snacking Segment Needs Some Spicing Up to Raise the Bar: 67% of sports or exercise lovers in China have consumed protein or energy bars as sports nutrition, with format and nutritional value as important considerations. 46% ofconsumers want snacks they can share. 40.5% of Chinese consumers love spicy flavours according to Alibaba, which lead tothe creation of Snickers’ spicy bar.
80,000 Shops & Nothing in Them: Hipac brings products such as empty tins of infant formula to 80,000 stores in tier 3 and 4 cities. This allows shoppers to hold and feel products before ordering them via cross border commerce. It also enables brands to have a physical presence in China without the necessarily certifications.
Study Finds Weight, Vision, Sleep Problems Among China’s Schoolchildren: China’s Ministry of education 572,314 fourth- and eighth-graders across 31 provincial-level regions from 2015 to 2017, and found that the vast majority of students performed satisfactorily or better in language, mathematics, and science, but many showed weaknesses in areas that require more critical thinking and creativity, like data analysis and scientific inquiry. Just over 17% of boys and 13% of girls in thefourth grade are overweight or obese. Over 53% of boys and 63% of girls have moderately to severely impaired vision by eighth grade, and a whopping 83.4% of children get fewer than the nine hours of sleep a day recommended for middle schoolers.
From Volcano Lava to Love Scams, Five Risks for China’s Growing Band of Overseas Tourists: Chinese embassies andconsulates around the world have are issuing travel warnings such as lava in Hawaii, Taiwan-based kidnappers andscammers, snorkelling deaths in Australia, fake romancers in Japan, and false promises of VIP access in New Zealand.
Chinese Consumers to Get WebMD Content via WeChat: Tencent has struck a deal to provide WebMD’s health-care content to WeChat and QQ users, translating and adapting articles, videos and slideshows for Chinese audiences, as well as focus on diseases that are more prevalent in China, such as lung cancer.
After Making His Owner Rich, this Border Collie Gets to Live in a $500000 Pet Mansion in Beijing: Photos of the extravagant pet mansion and pool an owner made for his pooch Sylar after becoming famous showing off tricks to Lady Gaga music on video site Meipai and opening a dog food and toy store on Taobao utilising Sylar’s 800,000 social media followers. Chinese consumers’ expenditure on pets is forecast to grow from $2.6 billion last year to $7 billion by 2022.