Here are this week’s news and highlights for China:
The Two Most Innovative Companies in the World Today are Changing how Hundreds of Millions of Asian Consumers Buy Food, Book Hotels, and (A Lot) More: US-Based magazine Fast Company, who has picked the winners from the Silicon Valley and America’s other tech centres for the more than two decades has named China’s Meituan Dianping as the world’s most innovative company. Singapore’s Grab came it at number two.
Beijing Begins Introducing Measures to Protect Gig-Economy Workers, Starting with Delivery Drivers: Beijing’s municipal government announced today nine measures to support the development of the delivery industry, including designated courier accommodations. The set of policies aims to enhance the working conditions for delivery people, while also encouraging the development of the industry, in this vitally important – and increasingly expensive – component of ecommerce, food delivery and New Retail.
Bright Dairy Accused of “Trademark Infringement”: A Legal Perspective of the Case: With mystique surrounding China’s trademark laws, there are some good lessons from Bright Dairy’s successful defence of its use of “85°C” on its milk cartons, when challenged by bakery chain 85°C. In short, an exclusive right holder of a registered trademark shall hold no right to prohibit other parties from legally using the description of a generic name, quality, function, quantity, weight, raw materials, place name, among other characteristics of a product, even if those are explicitly defined in its registered trademark.
Celebrity Strategies: 7 KOL Marketing Tactics to Know in 2019: The content may be great, the key opinion leader (KOL) is an effective communicator, and the brand has considered its target audience across multiple apps, but performance can be poor. High level tactics to increase KOL effectiveness include: Search Engine Optimisation on Little Red Book; Ecommerce KOLs; Utilising location-based features; Smart product seeding; Experiential marketing; KOLs who get personal; and grassroots KOLs.
Are Chinese Consumers Getting Cautious about Data Privacy?: China has issued new privacy laws barring apps from collecting information that is unrelated to the service offered without consent. According to the China Consumer Association’s study of data privacy, 91 out of 100 popular mobile apps reviewed collect too much personal data, including user location, contact lists, and mobile numbers. Apps in the navigation, travel and hotel booking, cloud storage, and wealth management space were among those that collected the most data.
Amazon’s China Unit in Merger Talks with NetEase’s Kaola: Kaola is China’s largest cross border site according to iiMedia, and a merger could be a path for Amazon to finally make some headway in the China market. The company currently holds less than a 1% market share. Kaola buys goods directly from overseas manufacturers and last year it imported more than 5,000 brands from 80 countries, which would be further optimised and expanded if it partnered with Amazon.
Chinese Shoppers Can Get iPhone for Less than $30 a Month: Apple is hoping to claw back some market share by teaming up with Alipay’s lending service, Huabei, which aptly translates to “just spend.” The company is offering shoppers in China to pay for an iPhone in instalments over 24 months. They can avoid interest payments on loans used to purchase Apple products that cost over ¥4,000 ($595).
China Regulator Stops Accepting New Video Game Applications to Clear Backlog: China’s top content regulator isn’t accepting any further game applications at present. 9,651 games were approved in 2017, with just 1,982 domestic and foreign online games approved between January-March last year before the freeze which ended in December. Only 2,000-3,000 titles are expected to be approved this year, with at least 5,000 games estimated to be awaiting approval last December.
Health Overtaking Flavour: Food Companies Ride on Rising Salt Reduction and Clean Label Trends in China: Over the last six months 94% of urban Chinese consumers have opted to reduce their salt intake according to Mintel, a significant departure from many local cooking styles where flavour is derived from high salt and seasoning content. Clean labels have been driven by focus on whether the product contains GMO ingredients and MSG, and salt content.
Revolutionising Food Wrapping: Whilst a lot of Chinese packaging seems over the top, particularly with gift packs, there are some positive signs of consumer sentiment shifting towards sustainable packaging with the youth. Good, secure packaging that gives reassurance and confidence about the lack of tampering are important. While packaging in some countries focuses on extending shelf life, more and more Chinese consumers are wanting products based on better quality, freshness or more natural.
Successful Brand Structure and Promotion are Key to Market Success: China imports about $5.5 billion of fruit, however this accounts for just 3%-5% of the volume in China’s fruit market, highlighting the further opportunities for fruit imports. The two greatest influencing factors in the competitive fruit trade are price and brand. The continuous increase in living standards in China mean that some previously high-end, expensive fruits have become relatively common products and price sensitive, such as Red Globe grapes and Royal Gala apples. Some other fruits brands’ novelty continues to command a premium such as imported Muscat grapes, and Rockit apples.
Chinese Tourists Won’t Be Weapons Much Longer: As Chinese tourists become wealthier, more sophisticated and more confident, the prospects for this economic weapon are decidedly dim. The longtime preference for government-approved group tours is naturally eroding in favour of independent travel that’s not – for now – subject to government restrictions. In the first half of 2018 independent travel accounted for 50% of all travel, up from 37% in 2013. In Australia it was 58% and the US it was 78% in Q2 last year, hence the limited impact on US tourism from the trade war to date.
China’s Economic Shift Awakening Huge Consumption Potential: The National Forestry and Grassland Administration has recently released a guideline on promoting the forestry industry, vowing to expand forest tourism while conserving natural resources. In 2018, trips to forests grew by 15% year on year to account for nearly 30% of total domestic travel in China – that seems tall, but an interesting stat nevertheless. Services such as tourism accounted for 49.5% of total consumer expenditure in China.
Why Chinese Luxury Consumers are Spending More at Home: The are regular reports of Chinese tourists spending less on luxury goods in traditional hotspots such as Japan and Hong Kong. The Chinese are still buying luxury, but where they are buying is changing due to changes in Government policy spanning everything from lower tariffs, higher personal exemptions and regulation on daigou. The weakening RMB, more ecommerce options and better physical touchpoints including in the lower tier cities is also driving the shift.
Top Chinese Model Li Jingwen Bares her Freckles for Zara and all Hell Breaks Loose: Zara has been accused of ‘uglifying China’ by showing one of the country’s most successful models without make-up by social media users on Weibo. Comparisons were drawn with last year’s Dolce & Gabbana scandal. Other online commenters, supported by state media, urged the public not to be too sensitive.