Here are this week’s news and highlights for China:
Chinese Police Seize Fake Penfolds, Swisse, Blackmores in Multi-Million-Dollar Counterfeiting Crackdown: Guangdong police ‘destroyed’ four counterfeiting groups and seized more than ¥30 million ($4.7 million) worth of fake products, including large hauls of popular Australian-branded wines, vitamins, foods, and cosmetics. The gangs used terms such as “overseas direct sales” and “direct postage from overseas and franchise stores” to attract customers and reportedly made as much as 1,000% margin, although they were selling at a 50% discount to the real products.
8 Ways Brands Can Fight Counterfeits in China: Although counterfeits are impossible to completely suppress, here are eight ways to start: 1. Register your trademark in China at once; 2. Get a good local lawyer; 3. Open your own official web store supported by Chinese online payment tools; 4. Join forces with the government and ecommerce firms; 5. Invest in anti-counterfeit technology; 6. Update your model fast—every month if you can; 7. Repay counterfeiters in kind; and 8. Remember that counterfeiting is a luxury problem for successful brands.
Alibaba Triples Size of Industry-Leading IP Alliance: Alibaba’s Anti-Counterfeiting Alliance (AACA) has climbed from 30 when it was founded in January 2017 to 105 today. Its members include Bose, Honda, Samsung, Mars, Adobe, Danone, Hasbro, Penfolds, Proctor & Gamble and L’Oreal.
Could You Resist the Plea of this Poor Chinese Fruit Farmer? Clue: You Probably Should: Chinese authorities have launched an investigation after image of ‘Overstock Grandpa’ – an old weather-beaten man with an emotional plea along the lines of “I’m a poor farmer with an oversupply of fruit. Please buy some.” The advertisements have been used by vendors selling everything from lemons to pineapples. The ads have even affected the price of apples in Linyi.
Emboldened China – and its Webizens – Telling Foreign Firms to Fall In Line: Over the past several months, China’s growing economic and geopolitical influence has seen it on the offensive against foreign companies that have contravened the government’s position on long-standing territorial disputes. For Mercedes-Benz, it was for quoting the Dalai Lama in an Instagram post. For Marriott, it was for referring to Tibet and Taiwan as countries in an online customer survey. And for 36 international airlines, it was listing Taiwan, Hong Kong, and Macau as separate from China on the companies’ websites – something that caused the White House to accuse Beijing of “Orwellian nonsense” in a recent statement. Just 30% of Chinese Internet users are estimated to know about the Great Firewall and 5% have “jumped the firewall” using a VPN.
How Brands Can Succeed Amid China’s ‘New Era’ of Political Correctness: The recent disappearance of cartoon character Peppa Pig on video platform Douyin is just another example in China’s long history of strict censorship, rooted in Confucian values. In Xi Jinping’s “New Era” of political correctness, multinational brands can still thrive by forging a culturally-meaningful brand purpose that defines the long-term relationship between consumer and brand and offering experience – not just product — that signals respect for Chinese consumers.
China’s E-tail Giants Aren’t the Only Answer for Cross-Border Sales: Only one-third of retailers with an online-only approach in China are satisfied with their sales results, compared to about three-quarters who also have a physical presence in China. ‘Higher quality and more reliable’ is the top reason consumers shop cross border, cited by 67% of shoppers, with 45% believing it has a lower risk of fakes, and 35% for lower price.
How Chinese Tech Start-Ups are Cashing in on Country Bumpkins: Apps targeting lower-tier city folk such as Pinduoduo and Qutoutiao pay users and give free products to incentivise usage. Despite their success, Chinese media have accused them of taking advantage of people with lower incomes and education levels. Some media commentators have labelled the companies as examples of “consumption degrade”, accusing Pinduoduo of providing poor-quality goods and Qutoutiao of feeding people content in poor taste.
JD.com Posts 44% Stronger Q1 Revenue: JD had 301.8 million active customer accounts by the end of March – up 28% from a year ago. Sales on the platform grew 31% over the same period. Profits were lower than expected due to investment in infrastructure which saw 29 new warehouses opened in the past three months.
Missile Scientists Create Meat-Sniffer for Chinese Shoppers: Technology developed as part of China’s secretive missile programme to detect gas leaks in space will soon be incorporated into a hand-held gadget that will help untrusting consumers detect meat that has gone bad.
Chinese Restaurant Offers Discounts to ‘Skinny Customers’ by Asking Them to Squeeze Through Metal Bars: In a novel, un-PC way to get publicity a restaurant in Jinan, Shandong known for its popular spicy crayfish dish and other large-portioned seafood dishes is offering free meals and drinks for the entire table for customers skinny enough to squeeze between a 15cm gap, or five free beers for getting through the 18cm hole. The promotion follows another restaurant in Jinan that had previously offered discounts to women who wore short skirts.
Top Countries for Chinese Tourists: The Impact of China’s Tourism on the Globe: Last year Chinese made 145 million trips outside of Mainland China. The most popular destinations were: 1. Hong Kong; 2. Macau; 3. Taiwan; 4. Thailand; 5. Japan; 6. Vietnam; 7. South Korea; 8. Singapore; 9. USA; and 10. Italy. Not too much change from last year – Italy entered the list at the expense of France, Taiwan appears to be more in favour moving up a few places and South Korea and the US dropped places likely to be due to geopolitical issues. Overall, travellers are becoming more adventurous.
Hotelier IHG doubles Down on China, Targets High-End Hotel Brands:
IHG is increasing its focus on luxury hotels in China – currently a $60 billion segment that’s expected to grow by half over the next decade. The company opened 43 hotels in China last year. Since 2011, it has added 62,000 rooms, with a further 75,000 hotel rooms in the pipeline. China will soon account for a third of the group’s global portfolio.
China Quarterly Box Office Tops North America for First Time: China’s busiest movie-going period has seen Chinese theatre earnings exceed North American takings by 42% – the first time it has surpassed North America over a quarter. The top-5 films contributing to the $3.14 billion spending were all domestic movies, led by Operation Red Sea. Only Chinese films can be shown over the busy Lunar New Year period.
Ou Chen’s Good Run: The number of Chinese cities hosting large-scale road and cross-country races grew from 133 in 2016 to 234 last year, staging more than 1,000 races. While China still has far fewer competitive runners than the U.S. (where almost 17 million people finished road races in 2016), the number of Chinese racers has grown from 400,000 in 2011 to 4.98 million in 2017.
With D-Alliance, Didi Plans to Overturn Car Ownership and Manufacturing Worldwide: The world’s biggest transport provider Didi Chuxing is launching a program it hopes will alter the very nature of car ownership and shake up the automobile manufacturing supply chain in China. According to the figures, the D-Alliance would let Didi control 50% of the transport needs of 2 billion people. Didi is also working with BYD to launch the first vehicle designed specifically for car-sharing, a market they believe will service a predicted market of 10 million units in 10 years time.