Mark Tanner
6 August 2014 0 Comments

A poor environment, unsafe food and unhealthy urban lifestyles are only partly to blame for Chinese consumers’ soaring health concerns. One of their most pressing worries is the state health system.

The Chinese Government’s contribution to health has been historically low compared to many countries. Even after spending more than ¥2.3 trillion ($372 billion) on health reforms between 2009 and 2013, Chinese consumers remain generally dissatisfied with public health. Much of the motivation behind China’s high saving rates is to pay for future health care.  It’s also been the main factor in Chinese consumers’ long history of preventative self care, which is driving demand for consumer-focused health products and services.

China’s elderly stand to be most affected by the limited health system. There are currently just 25 care beds for every 1,000 Chinese aged over 60.  And with the elderly population set to double by 2030, many aging Chinese aren’t putting too much faith in the public system.

Whilst the Government is continually changing policy to encourage more private businesses to invest in China’s healthcare, it is likely that China’s wealthy will be the biggest recipients of this investment. 

One of the best chances for improving China’s health system for everyday consumers will be through technology, and not just in the traditional health-tech sense. An example of this is the cooperation between several hospitals and Alipay, which allows patients to cut red tape with their smartphone. 

Health is one of the areas which will continue to see soaring growth in China, whether it is related to technology, medical equipment or just healthy food.  It is not always an easy sector to navigate, but for those who do, there’s plenty of willing customers.

We hope you enjoy this week’s Skinny.

Consumers,: Chinese Consumers

1% Of Chinese Own One-Third Of National WealthChinese households had an average net worth of ¥439,000 yuan ($71,000) in 2012, up 17% from 2010. 75% of Chinese household wealth came from owning real estate.  Meanwhile, the top 1% in the US control 40% of the country’s wealth and the top 0.1% control over 20%.

Overall Health

China’s Aging Millions Look Forward To Bleak Future1 in 4 Chinese will be aged over 60 by 2030, double the rate it is today. Currently there are only 25 care beds for every 1,000 senior citizens.

China Hospitals Adopting Alipay Mobile Tech to Improve EfficiencyIn the land of overcrowded hospital waiting rooms and long queues, Alipay is cooperating with several Chinese hospitals to allowing patients to book doctors’ appointments, make payments and receive diagnostic results using their smartphones. Further services are planned. Meanwhile, doctors in Guangzhou aren’t happy about patients being asked to rate medics on websites and social media.

The Smart Money is on Shopping via SmartphonesIn 2008, domestic consumption made up about 35% of China’s growth, today it accounts for half. 64% of Chinese consumers are actively saving to pay for future health costs according to Neilsen.

Online: Internet, eCommerce & Social Media

Chinese Provinces with the Fastest Growing Internet UseChina’s inner and central provinces had the fastest Internet user growth in 2013, but also the lowest penetration. Just five coastal provinces, Beijing, Shanghai and Tianjin had penetration above 50% in 2013, with Beijing leading the pack at 75.2%.

China’s Online Sales Surge to $176.1 Billion in H1Chinese consumers spent ¥1.1 trillion ($176.1 billion) on goods online in the first half of 2014, up 33.4% from last year.  Ecommerce now accounts for 8.4% of China’s retail market, up from 7.8% in 2013.  150 million shoppers now use UnionPay’s online and mobile payment services.

What Do Chinese Online Consumers Want To Buy From The U.S.? It’s Not What You Think: Tmall Global is the HK-based version of Tmall. Although the division is tight-lipped about the number of Chinese consumers who have taken the additional registration steps enabling purchases on the cross-border platform, those who have are buying quite differently than on Mainland-based stores. Whilst apparel and electronics are the top online sellers domestically in China, on Tmall Global’s platform, beauty accounts for 31% of sales versus 5% domestically. Baby care products are 17% versus 5% and food is 11% versus 2%. Overall, cross-border shoppers are seeking quality and authenticity.

China’s Popular WeChat Messenger Tests Facebook-Esque “Like” button, And It Looks Strangely Familiar: No doubt you’ll be able to buy fake WeChat Likes on Taobao before too long.

LinkedIn China New Daily Users Up 80%: LinkedIn’s new daily users in China has increased 80% since officially launching in China in February, helped by the WeChat integration.  There were more than 5 million users in China at the end of May with 60% of users live in Tier 1 cities and 42% holding manager positions or above. More than 31 million Chinese were using business social media at the end of last year, up from 3.7 million in 2008.

Premium Food & Beverage

China Brands Beat Global Rivals With Tea Toothpaste & Pickled PlumsSnow pear and pickled plum drinks, green tea and jasmine flavoured toothpaste, and smaller packaging are examples of how understanding Chinese consumers’ unique tastes is helping some local businesses get ahead in the hyper-competitive market.

China To Become Largest Beer Market By 2017Euromonitor predicts China’s spending on beer will grow 45% between 2013 and 2017 to overtake the USA, becoming the world’s most valuable market. Cheap brews account for 82% of volume, although premium beer is rising 2.5 times faster. Snow remains the top selling brand, followed by Tsingtao. 

Diageo Net Profit Hit by China SlowdownMeanwhile, sales of premium liquor are sinking like a stone in China.  Diageo, the world’s largest spirits company has seen profits dive with China sales dropping 33% in the past year.  Johnnie Walker Black Label consumption fell 30%, with scotch dropping 20% overall.  Premium baijiu brand Shui Jing Fang sales declined 78%.

Melamine Found In Milk Candies Produced In GuangdongA factory operator in Guangdong has been arrested for adding melamine to a milk candy mix. The confectionery is believed to be sold in 12 provinces.

Overseas Chinese Tourists

Beyond Slippers and Tea Kettles: What Chinese Travellers Want In A Boutique Hotel65% of Chinese want free WiFi in their hotel room and 29% want an iPhone dock according to a survey by The Small Luxury Hotels of the World. 7% want amenities for their pets.

Cars and Auto

Tier 1 City Auto Consumption Survey41% of Chinese consumers in Tier 1 cities see a car as a symbol of status and success. Safety, performance, quality and durability are the top purchase considerations.

Kooky, Weird & Wonderful

Look: Ladies’ ‘Armpit Hair Selfies’ Take Over Chinese WebChinese women are taking selfies of their underarm hair, posting thousands of photos on Weibo in a competition that has no prize – it is just said to be challenging social norms and encouraging ‘natural beauty’. 28.5 million users viewed the contest in 5 days. Warning: photos may offend. In other strange beauty news from China, an increasing number of Chinese graduates are wearing wedding frocks to their graduation.

That wraps up this week’s Skinny!  On the to-dos this week, why not contact China Skinny to discuss how we could help with your marketing, online initiatives or research to take advantage of China’s opportunities.  Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.

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