Here are this week’s news and highlights for China:
ECargo and China Skinny to Partner on China Market Entry Education Program: Workshops will encompass deep and thoughtful insights, utilising real world case studies and examples to offer the best possible advisory and strategic outcomes.
Chinese Consumers are Doing ‘Extremely Well’: Economist: China’s strength of consumption is being reflected by strong import data. Chinese consumers, particularly young ones, are doing extremely well. Young consumers can live with parents and leverage their wealth much more so than Western parents, according to Deloitte China’s chief economist.
China’s First-Tier Cities Sold 30% More Homes in First Quarter: The number of houses sold in China’s first-tier cities from January through March rose 30 percent annually as new top-rank metropolises issued preferential policies to lure in talent. Confidence in the market increased, with two thirds surveyed believing house prices in first- and second-tier cities will remain stable in the short term and rise in future.
China Home Sales Rebound in March: One of the big influencers in Chinese consumer sentiment – property prices – is looking a little rosier again assisted by stimulus from Beijing, which has helped stabilize the economy and re-ignite home buyers’ enthusiasm. After contracting in the first two months of 2019, the project sales of nine major developers rose 20% in March from a year earlier.
Chinese Women Enter Property Market: In 2014, women only accounted for 30% of homebuyers. Last year 47.9% of homebuyers were female, according Chinese real estate platform Beike as young female homeowners seek security in real estate, not marriage. About 47% of single women over the age of 30 have bought apartments. In 2019, about 24.7% of working women purchased their first homes independently, up 12% from 2018.
Chinese Love Vietnam Property for All the Wrong Reasons: Move over Vancouver, Los Angeles, Sydney, Melbourne and Auckland, Ho Chi Min is the new cool kid for Chinese property speculation abroad. Chinese accounted purchased 30% of luxury condos in the city in 2018 versus just 23% of Vietnamese.
China’s ‘Funds by Phone’ Culture Leads the World: Back in 2012, Chinese people made just a handful of fund purchases online; most transactions were carried out using banks or fund managers in person. Today, more than two-thirds of investors subscribe to funds via mobile phone apps. Yu’E Bao – which overtook JPMorgan to become the world’s largest money market fund two years ago – and a host of other online money market funds have lured consumers with the prospect of decent returns at relatively low risk with virtually no barriers to entry. Nevertheless, returns have slowed, with the annualised seven-day yield on the Yu’E Bao fund falling from a peak of 4.37% at the start of 2018 to 2.6% at the end of the year [paywall].
WeChat Official Account Report 2019 Reveals Importance of Cross-Promotion & Social Shopping: 57.2% of WeChat Official Account followers are male, versus 53.3% of WeChat users overall. 53.4% are aged between 25-35 with less than 15% aged over 40. 49.8% live in Tier 3 cities or smaller. The top-6 ways followers discover new accounts are 1. Recommendations from other official accounts; 2. Search; 3. Friend recommendations; 4. WeChat Moments; 5. WeChat groups; and 6. Offline, with Tier 3 cities or smaller more likely to discover accounts via friend recommendations (direct recommendation, groups or moments) or via offline conversion. Almost half of the users follow 10 to 20 accounts with 26.7% following more than 20, with females making up the largest share of the group following more than 30 accounts. 53.7% of users spend between 10-30 minutes on them each day, and 22% of users spending between 30 minutes to an hour. Male users are more likely to be interested in finance, while female users are more likely to follow shopping-related accounts, although this is popular with both genders.
JD Targets Deep Job Cuts as Morale Sags: JD.com Inc. is preparing deep cuts to its workforce – slashing some teams by as much as 50% – and rescinding some job offers as the Chinese ecommerce giant struggles to revive dwindling morale and rein in losses.
Hubei Bestore: International Demand for Chinese Snacks: Post-90s and post-00 generations and female groups are becoming the mainstay of casual snacks. Brand and quality are essentials for this group, with increasing needs for customisation, self-realization of social identity, and emotional connections with a brand and product. In China, consumers refer to snacks as “fourth meal” – food equivalent to “staple meals”, although non-essential allowing for impulsive consumption. 70 million Chinese buy food online with snacks accounting for 30% sold. Natural, whole grains, sugar-free, and additive-free have become the popular labels for snacks.
China’s Coffee Craze Gains Pace: While coffee sales by value are thriving, the number of on-premise coffee house outlets shrank by 2% last year as fewer new stores opened than closed according to Mintel. 52% of Chinese consumers buy coffee at convenience stores compared to just 44% who purchase it from a traditional coffee-house chain. 23% of consumers who drink on-premise coffee at least once a month have done so at new retail coffee houses. More than half of on-premise coffee consumers order lattes (54%) or cappuccinos (52%), followed by mocha (45%), Americano (38%), flavoured coffee (36%), espresso (26%) and cold-brew coffee (23%). A relatively new concept in China is coffee mixed with plant-protein milk, with 22% of on-premise coffee consumers ordering it.
First Italian-Chinese Wine Dictionary Launched in Verona: The world’s largest wine producer hopes its Italian-Chinese Bilingual Dictionary of Wines and Vines will help its poor wine sales in China. Italian wine sales were just $158 million in China in 2018 versus $818 million from Australia, with just 7% of urban Chinese able to recognise an Italian wine. The dictionary includes explanations of some 600 commercial grape varieties grown in Italy and standardizes the way specific wine names are written in Chinese.
Red Tourism Booms During Qingming Holidays: During the three-day Qingming Festival holiday earlier this month, China’s tourism sector recorded revenue of ¥47.9 billion yuan ($7.1 billion), up 13.7% year-on-year. Online ticket booking for red tourism (traditional Revolutionary sites) grew by 55.2%.
China’s First-Quarter Box Office Drops 8%: Sagging performance by local films and a modest Chinese New Year haul left the Chinese box office down 8% in the first quarter of this year, particularly bad given 8,000 new screens came on board in the past 12 months and ticket prices have increased. New releases during the quarter dropped from 116 to 102. This year’s Spring Festival produced an unexpected winner in Chinese-made sci-fi film “The Wandering Earth,” although Chinese language films’ overall share dropped from 74% in 2018 to 71% in 2019.
The American Education Disadvantage?: New research finds that graduates from US universities are 18% less likely to get a call back from Chinese employers than their counterparts with degrees from Chinese universities. Even graduates from top-ranking US universities were 7% less likely to receive a call. The gap was smaller for higher-wage jobs and positions in foreign-owned firms but the inclusion of US work experience had no impact. The evidence supports two main hypotheses: Employers believe, correctly or not, that applicants from US institutions have better options, making them harder to attract and retain than those educated in China; and firms in China know less about an American education.