Mark Tanner
17 April 2013 0 Comments

Shanghai’s carbon footprint has spiked a little lately. Car lovers have flocked to town for last weekend’s Shanghai Grand Prix and the 2013 Shanghai Motor Show, kicking off on Sunday. China is already the world’s largest vehicle market, and by 2016, will be the biggest for premium cars. With 80% of vehicles bought with hard cash, manufacturers still have the finance lever to create a few new traffic jams.

By 2030, Chinese will buy more cars than Europe and the US combined. Today, 60% of Chinese consumers consider buying a car as much a priority as buying an apartment and funding their children’s education. So it’s little surprise the world’s auto companies are falling over themselves in their quests to woo more Chinese consumers.

Car makers including Porsche, Maserati, Citroen, Honda, a new brand of supercar, and a host of other manufacturers, are choosing this year’s Shanghai Motor Show for world launches of new models and concepts – and the China-love spans far beyond this year’s show. To name a few, Ford recently announced it was China-fying its All-American Lincoln. Cadillac signed Brad Pitt up as its China brand ambassador. A little over a year ago, Toyota launched its future concept car, the self-driving Fun Vii car, with just one seat in the back there’s little question that Toyota is targeting China’s one-child families. Even if you’d rather a stroll, cycle or ride buses, there’s no disputing that China’s auto industry is a fascinating one. But as always, this week’s skinny is more than a one-show pony, with plenty of other news, views and stats on marketing to China.

If you’re in Shanghai, and looking for break from combustion engines, China Skinny’s founder Mark Tanner is speaking at an Irish Chamber of Commerce Seminar: Chinese Consumer Habits & Branding in China, tomorrow, Thursday 18 April at 7pm. Click here for more information.

Chinese consumers Chinese Consumers

Favorite Celebrities In China: From Kobe To Nicolas Cage: Kobe Bryant tops the list of foreign celebs in China, however some deceased and even a porn star rank up there. Although carefully chosen western and other Asian countries’ stars can make a big impact in China, don’t forget about the local guys – brands from Nike to Loreal to Gap are using them together.

Western Firms Rethinking China Strategy: Western businesses are changing their Chinese strategy to cater for the shift from investment-led growth to consumption. China leads the growth in almost every consumer category compared to other established and emerging economies.

Ikea In China: Turning Gawkers Into Consumers: Ikea looking at ways to convert its foot traffic into shoppers. The company’s 11 shops have as many as 6 million visitors a year each, but only turnover around $1 billion a year. Growth has been 20% per annum over the past couple, but from a small base and they’re hoping that will soar with the opening 29 new stores by 2020. Ikea are constantly bringing down prices in China to compete with the imitators and focusing on furniture that meets Chinese requirements and space, hoping to encourage more big ticket purchases.

Chinese auto Auto & Marine

The Future Of China’s Luxury Auto Market: A McKinsey survey revealed over 60% of Chinese consumers considered “buying a car” as much a priority as “buying an apartment” and “paying for children’s education”. What do they want? Affordable status. They’re not interested in luxury SUVs like Americans, more like Merc C-Class. When the price is right, they want good looking, powerful, high-tech sedans & coupes with advanced powertrain systems. China’s premium vehicle growth has been more than 4000% in the past 12 years and now accounts for 9% of the auto market, recently growing at 12% versus 8% overall autos.

Urban Middle Class Boosts China Car Sales: Chinese consumers shook off last year’s slump and are again buying cars en mass – 4.42 million vehicles, or 17% more in Q1 this year. Sales have been boosted by entry-level cars bought by every day Chinese consumers. In March alone, almost 2 million cars were sold. European and American manufacturers continue to erode Japan’s share of the market. China’s luxury car market is expected to double by 2018. Ford’s $4.9 billion investment in China looks to have paid off, with sales increasing 54% this year on the back of its small car sales, overtaking Toyota in China in units.

Shanghai Motor Show 2013 Preview: Every New Car Launch: Photos and brief descriptions of the new cars launched in Shanghai this week, with Porsche, Audi, BMW, Maserati, Citroen, Skoda, Nissan, Acura and Honda, and even a brand new supercar, hoping to tempt Chinese consumers.

Why China’s Wealthy Prefer Dry Land To Luxury Yachts: 1 in 318 high-net-worth people in China own a yacht, versus 1 in 25 in HK. Although more than 50% of individuals worth over $1.5m have shown interest in owning one, according to a Hurun survey. Vendors are finding the paperwork and authorisation required to take Chinese out on a sales trip is a hurdle. There is also a lack of support services, expertise and unglamorous marinas far from luxury shopping and hotels. And Chinese aren’t yet lovers of the sea.

Chinese Internet Internet & Social Media

Smartphone Shopping Trend Sweeps Asia/Pacific Region: Chinese consumers are most likely to shop online in the Asia-Pacific according to a Mastercard survey. Chinese consumers are feeling more confident shopping on line with just 21.4% feeling unsecure, versus 32.8% in 2011 & 35.3% in 2010. 89.5% consider it easy compared to 80.8% in 2011. Fashion is the most popular category, appealing to 54% of Chinese shoppers. 54.1% use their mobiles to shop online. 70% are interested in coupon/deal sites.

Chinese Third-Party Payments Services Allowed To Transact Online International Payments: Chinese are allowing domestic third-party, standalone payments services to process online payments for cross-border e-commerce transactions in trial cities.

Weibo’s Growing Influence For Businesses: There are 260,000 active company accounts on Weibo, 1,000 belonging to multinationals. Starbucks, one of the businesses finding a lot of success on the channel, spent $80,500 on a Weibo campaign which has lead to 95 million friend-to-friend recommendations, helping a 14% annual growth in sales. Durex, with 670,000 followers makes 10-15 posts a day and has 2-3 events a month for followers. 54.7% of online Chinese use an average of 1.45 microblog accounts, posting 2.13 tweets and forwarding 3.12 tweets. Over 70% are on their account at least once a day.

Chinese food and beverage Food and Beverage

The Continuing Evolution of “Starbucks with Chinese Characteristics”: Starbucks continues its solid strategy in China, with its ‘All-In’ policy, including establishing Yunnan Province as a major supplier of coffee beans to the company.

Nestle Accelerates Coffee Industry In China: Not sure if its related to Starbuck’s Yunnan-bean supply announcement, but Nestle is building on its 25 years in the Yunnan province to develop a grower education and consumer experience centre. Their continuing China R&D has developed the Nescafé 1+2 Original instant coffee, a richer, more aromatic taste with more balanced, milky flavours. Chinese are increasingly drinking coffee as a social drink, taking more time to savour the experience in and out of home.

China’s Top Liquor Makers Brace For Slowdown As Anti-Luxury Drive Bites: Baijiu may outsell vodka globally, but growth is being affected like never before with the corruption clampdown.

Ningxia Region In China To Produce Up To 5 Million Vines Per Year: Ningxia region, in North-Central China between Gansu and Shaanxi provinces has big wine ambitions and is building facilities to supply 3-5 million vines a year. They’re importing customized tractors and grafting kit, clippers and computers from Europe as part of the plan.

Chinese tourists Chinese Tourism

Chinese Tourists Top Spending League: China’s tourists are now officially the most valuable tourist market in the world, pipping Germany and the USA to become number 1. 2012 saw a 40% growth in spending to $102 billion. The rise is attributed to higher incomes, looser travel restrictions and a stronger RMB.

Chinese education Education

Chinese Deluge U.S. Master’s Programs: US Universities offering specialist 1-year business Master’s degrees for students just out of college, have been overwhelmingly popular with Chinese students. Companies in China’s surging finance industry generally want grads with skills beyond a college degree.

Chinese fashion Fashion

Can Foreign Brands Trust Chinese Consumers?: Lack of trust in Chinese consumers led Vera Wang Bridal House to charge triers $480 for a 90 minute slot to try on frocks, refunded if they purchased the dress. Although many consumers weren’t deterred by the fee, outbursts online led to the fee being scrapped.

Chinese banking and finance Chinese Banking & Investments

Rich Chinese May Expand 17% To 12m: 12 million Chinese are picked to have $100K-$1m of investable assets by the end of 2013 – up 17.2% from last year

Chinese luxury Luxury Goods

Chinese Luxury Shoppers Seek Home Comforts: Chinese Luxury goods need a fine balance between recognition and overexposure. Consumption is becoming increasingly lifestyle-focused, moving away from logo-driven designs, with leather preferred over canvas.

Lane Crawford Aims At Second-Tier China: Lane Crawford’s expansion plans include Chengdu, because the city doesn’t yet have a myriad of luxury boutiques.


That’s the skinny for the week!

If you’ve missed earlier news or need to learn more, there’s a library of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.