Mark Tanner
Mark Tanner
28 March 2018 0 Comments

Here are this week’s news and highlights for China:

Premium Food & Beverage

Why Is China Treating North Carolina Like the Developing World?: How lax regulation made it cheaper for China to outsource pork production – and all of its environmental and human costs – to the US. It’s about 50% cheaper to produce pork in North Carolina than China due to lower pig-feed prices, larger farms and loose business and environmental regulation. A mature hog in a factory farm in the US, excretes about 14 pounds (6.4kg) of manure a day.

Oh Nuts! China Shoppers Lament Tariffs on US Almonds, Pistachio and Fruit: Close to 80 fruit and nut products from the United States are at risk from higher import tariffs to China, after China declared plans to levy additional duties on up to $3 billion of U.S. imports in retaliation against President Trump’s plans to slap tariffs on up to $60 billion in Chinese goods. Discussions are still underway. American wine producers anticipate that the extra 15% charge on wine that China is planning could have disastrous effects on an increasingly important segment of their businesses. Tech and electronics companies, Boeing, soybeans and financial firms also stand to lose a lot from a possible trade war. Clearly China’s owners of American pork producers aren’t too chuffed either about the prospect of tariffs on food.

Chinese Insurer ZhongAn Plans Blockchain Chicken Coup: ZhongAn, the online insurance company that launched in 2014 and has already sold 5.3 billion policies to 432 million customers, helped by attention-grabbing products such as a ‘binge drinking’ policy that paid out if Chinese fans got drunk during football matches and suffered alcohol poisoning. The company recently launched ‘GoGo Chicken’ to utilise blockchain and AI to strengthen China’s chicken supply chain, including tracking technology and facial recognition for free range chickens. If successful, it plans to roll out the technology for other applications [FT paywall].

Platform Aims to Give Chinese Customers ‘Ownership’ of Aussie Beef, on the Hoof: A new online platform launched in Sydney this week aims to give Chinese restaurants and consumers the ability to ‘own and trace’ Australian cattle, sell or share with family and friends, and connect with top chefs and nutritionists. Members can also access recipes, conduct interactive cooking workshops with celebrity chefs from around the world and connect with nutritionists and health advisors via a smart TV platform. Sister company Borderless Healthcare owns a pre-pregnancy planning division which has attracted more than 30 million views via Weibo since launching in January this year.

Nearly 40% of Chinese Consumers Admit to Purchasing Fake Booze: A survey from Guangzhou-based newspaper Southern Metropolis Daily discovered 38.2% of respondents admitted to buying counterfeit Baijiu products, 32.1% fake wine, 16.9% beer and 17.8% imported spirits. About 70% of the respondents confessed that they don’t know how to tell fake wine or Baijiu from the real deal.

Consumers,  Chinese Consumers

China Intellectual Property Filings Soar, Hard to Judge if it Plays Fair: UN: China has gone from being a consumer of technologies to a producer. China’s patent applications at the World Intellectual Patent Organisation (WIPO) have recorded double-digit annual growth in every year since 2003, growing 36% last year to become the second biggest source of international patent applications. At current rates, it will overtake the US in three years. Huawei and ZTE were the top filers of patents globally.

Kuaishou: The Lens to a Different China: Kuaishou the video app where this singing/rapping style initially flourished has 700 million registered users of which 100 million are active daily. The app’s success can be put down to it building a community where diversity reigns, where users are given the freedom to establish their own rules, choose their own idols, and to create the type of content completely to their own tastes. It provides a view into the lives of less-educated youngsters residing in the less developed parts of the country (third-tier cities and below).

China’s Young Consumers are Snubbing Foreign Brands Amid Growing National Pride, says Credit Suisse: 87% of Chinese consumers say they would prefer to buy domestic home appliance brands in the next six to 12 months – with 91% of those aged 18-29. 19% of Chinese aged 18-65 said they would be willing to pay more for domestic sportswear brands than for international ones, up from 15% in 2010.

Chinese Imitation of Air Jordan Shoe Brand Countersues Nike for Trademark Infringement: Qiaodan Sports Company whose name phonetically imitates Air Jordan is countersuing for trademark infringement. It demanded Air Jordan’s producer, Nike, to apologize in public and pay compensation fees of ¥300,000 ($47,400) for using its “highly recognisable” Qiaodan name in Nike promotion materials. Nike has been in a copyright battle for 16 years, suing the company 10 times over that period.

New Adult-Products Channel ‘Hermones’ Launched on Hema: The new channel, dubbed “Hermones,” allows shoppers to pick from among 700 adult products, priced from RMB 10 to 700 ($1.60 to $100), including condoms, lubricants, sex toys and pregnancy-testing products and have them delivered to their homes in as fast as 30 minutes. During a three-month soft launch, Hema found that most consumers purchasing adult products on the platform were aged 40-49, with condoms, pregnancy tests and lubricants the most-popular products.

Online: Digital China

Tmall Expands Overseas With Six New Centres: Alibaba’s cross border division Tmall Global plans to open six new centres to source foreign products. The centres will be in Japan, South Korea, Hong Kong, Europe, North America and Oceania. Tmall Global plans to increase its consumer base to 200 million shoppers within three years, aiming to do so by improving the traceability of products sold on the platform.

Why (and How) China is Tying Social-Media Behavior to Credit Scores: In 2020, Alibaba, Tencent, and Baidu will be required to include all users in social-credit systems unique to their platforms. Each Chinese citizen using these networks will be given a credit score based on his or her online behaviour. Scoring high will assist with things such as borrowing money and travel, scoring low will do the opposite.

Overall Health & Beauty

China’s Lipstick Obsession: Lipstick is the fastest-growing category in China’s beauty market, taking up a 22% market share for colour cosmetics and is used by 95% of urban Chinese women. Brands are using clever marketing tactics to take advantage such as MAC’s user-generated campaign asking users to show off ‘lip art’ with the campaign generating 350 million views. The all-important KOLs are often cleverly integrated such as Estée Lauder’s teaming up with superstar actress Yang Mi for its special-edition “Color of Yang Mi” lipstick shade. “Man Slaying Colours” have been particularly popular.

Loved Pets

Starbucks Opens its First Pet-Friendly Cafés in China: Starbucks has opened two pet-friendly locations in China – one in Guangzhou and the other in Chengdu. They will include designated play areas, seating and even the secret special menus for pets including the ‘paw-sized’ Puppuccino for your dog.

Autos and Cars

Alibaba Unveils Auto Vending Machine with Ford Vehicles: 1:38 vid. Alibaba’s much anticipated car vending machine has launched in Guangzhou offering shiny Fords for test driving. Click/tap here to view on Youku.

That’s the Skinny for the week! See previous newsletters hereContact China Skinny for marketing strategy, research and digital advice and implementation.

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