Here are this week’s news and highlights for China:
China’s Expected Surge in Pet Spending Draws Disbelief, Criticism: Spending on pets is expected to rise 27% to ¥170.8 billion in 2018, up from 9.8% last year. Millennials account for three-quarters of pet consumers in China. The fact that pet owners will spend about ¥5,016 ($730) on average – 15% more than last year – has been met with a lot of criticism on China’s social media.
Automation Fails to Win China Convenience Store War: Jian24 opened its first staffless shop in Shanghai last October, but following much hype has recently closed. JD.com announced it would open 500 unmanned stores this year, but it has struggled to implement the concept on a larger scale. Only about 20 locations are operating so far. Nevertheless, innovations are likely to continue in the convenience channel as stores look at ways to stand out. The number of convenience stores in mainland China rose by 12,000 last year to 106,000, while the market expanded 23% to ¥190.5 billion ($27.8 billion) according to chain store association data.
China Brand Relevance Index Reveals Evolving Ways that Consumers Interact with Brands: The top-10 most relevant brands for Chinese consumers are all in tech: Alipay, Android, WeChat, Huawei, Microsoft, Taobao, Intel, Meituan, QQ, and Tmall according to a Prophet study. In the past 12 months, Apple fell from the 5th spot to 11, Nike 6 to 44, BMW 8 to 46 and Marriott from 9 to out of the top 50 (which wouldn’t have been helped by the Taiwan/Tibet saga in January). Some of key take outs were: 1. Home-grown brands fuelled growth with meaningful and tangible innovations; 2. Brands that enhance a liberated lifestyle are on the rise; 3. User experience is enriched through curated content; 4. Home is evolving into the hub for better living; and 5. Outbound travellers seek authentic yet familiar experiences beyond borders. Global brands still play a leading role in ‘distinctive inspiration’ and ‘customer obsession’.
40 Years Since Reform and Opening-Up: Changes in Transportation: Infographic illustrating the remarkable growth of China’s transport infrastructure connecting the provinces over the past 40 years, which has played a big part in growing China’s economy and enabling the growth of ecommerce and general consumerism.
Infographic: Fascinating Douyin Facts: The mouth-watering numbers behind China’s hottest app and the impact its videos are having on growing things such as tourism.
Apple Finally Gets How to Play the China Market: The iPhone X illustrated that there’s a strong market for high-priced devices, as long as value for money is demonstrated. In short, cheap won’t wash for an Apple in China, and two phone numbers are better than one. Not all the media has been so positive, with the new iPhone’s “most advanced” features now commonplace in China.
Two Million Fall Prey to Scam Involving Fake Huawei Products: Numbers are big in China, including the number who fall victim to scams such as one which offered free (fake) Huawei products, only to have to pay excessive fees for delivery and handling. The Harbin-based scammers made ¥80 million ($11.6 million) from the scam. The number of telecom fraud cases grew 89% between 2017 Q4 and 2018 Q1 according to Tencent.
Austin and the Midnight Pitch: Building Export Business with China: A great initiative between the city of Austin and Alibaba, providing a couple of late-night livestreams allowing smaller Texan businesses seven minutes to pitch their products from Austin to consumers in China on the Taobao app.
Chinese Officials Seize Hundreds of Kilos of Expired Meat and Unlabelled Fish in Latest Food Safety Crackdown: Surprise inspections across Chongqing discovered hundreds of kilograms of beef at a market that was four months past its expiry date, and tilapia fish in unmarked boxes among other breaches providing yet another reminder why Chinese consumers have little faith in food safety in the country.
How Education Can Help Consumers Warm to Frozen Products: The preference for frozen meat is highest in Beijing at 11%, followed by Guangzhou and Chengdu at 9%, and Shanghai – 8% according to research with 840 consumers in the four cities. Respondents believed that imported pork is “less fresh and had inferior taste and texture” due to the long transportation period involved, however after receiving information on the benefits of chilled and frozen pork backed by scientific evidence, their preferences shift and they become willing to pay a higher price for it.
China Will Need 7,690 New Airplanes by 2037, Boeing Predicts: China’s booming leisure and business travel markets has seen Boeing increase its forecasts to 7,690 new planes required by China by 2038 – 6.2% more than last year’s predictions. 75% of the total are expected to be for single-aisle aircraft typically used for short- and medium-haul flights. The new planes are estimated to be worth $1.2 trillion over the 20 years – over 135 countries have a GDP less than 1/20th of the forecasted value of the jets.
Legoland to See How Tropics Stack Up With Hainan Island Plan: Merlin Entertainment has partnered with CMC to develop a Legoland Park in Sanya combining elements of traditional Legolands along with tropical elements of Hainan. China is expected to surpass the US as the world’s largest theme-park market by 2020, when the country’s attractions will host an estimated 221 million people a year.
China’s Made-Up Men are Redefining Gender Aesthetics in the Country: With 1 million followers on his Weibo account, male makeup blogger Liang Jinheng is one of a growing number of men who think cosmetic products aren’t exclusively for women anymore. Retail sales of the men’s beauty market in China will see nearly 7% growth in 2018, to reach about $2 billion. Overall, the global male grooming market is expected to hit $166 billion in sales by 2022, marking a compound annual growth rate of 5.4% from 2016.
China’s Luxury Market is Exploding, Fueled by Tesla, Apple: China’s luxury Consumer Price Index (CPI), which tracks the prices of luxury goods marketed to the country’s 1.47 million high net worth individuals, rose 4.1% for the year ending June 2018 compared to 3.6% a year earlier. Luxury travel was a major contributor to the rising index, with prices up 8.5% following a decline the year before. Education prices saw the highest growth in 10 years. Yet it was the prices of baijiu and other high-end spirits that saw the most change from the year before, leaping by 12%, led by the 40% increase in the price of a 500 ml bottle Kweichow Moutai aged 30 years.