Here are this week’s news and highlights for China:
Alibaba Spends $2.2B, Looks To Connect With Shoppers In Elevators, Too: Alibaba has spent 2.23 billion for a 10.32% share of Focus Media. Focus runs digital advertising screens on streets, in subways and in elevators across 300 Chinese cities, currently reaching 200 million middle-class consumers. Focus has a medium-term goal of 5 million terminals in 500 Chinese cities reaching 500 million consumers, feeding into Alibaba’s New Retail strategy.
Many Chinese Consumers Ready to Boycott US Goods in Trade War: 54% of respondents surveyed by FT Confidential Research in 300 Chinese cities would “probably” or “definitely” stop buying US-branded goods “in the event of a trade war.” Just 13% said they would not. Those most likely to shun products are on lower middle incomes, aged 25-29, living in smaller cities. Chinese tourists to South Korea dropped 48.3% in 2017 following a spat with China. Japanese car exports tumbled 32% in the 12 months after China launched a boycott over the disputed islands in September 2012. Whilst Chinese consumers care about where something is made, American consumers do less so, with both consumer groups being a casualty of the trade war.
The New Challenge of China’s Emerging Affluent Class: Juggling It All: Traditional motivations in China to “project professional success” are being superseded by Chinese consumers’ desire to manage multi-dimensional roles in their lives, including broadening their horizons and becoming more of a “new generation individualist”. With so many competing interests and priorities, Chinese consumers are struggling to balance the demands placed on them – something marketers should aim to address.
Why Rural Officials Can’t Always Lure Millennials Back Home: China’s 400 million millennials are fuelling China’s current ecommerce boom, providing rural entrepreneurs with the opportunity to establish viable businesses and revitalize their communities, which have been left a scant supply of skilled labourers as they migrate to urban areas. But convincing young people to give up city life is easier said than done.
Renowned British Economist Says Rise of Chinese Consumers Crucial for Economic Growth: “Without doubt the rise of the Chinese consumer in my judgement is easily the single most important economic development ongoing in the world,” says former Goldman Sachs chief economist Jim O’Neill.
Taobao Leads the Charge in Livestreamed Shopping: Taobao Global has 16,000 livestreaming agents/daigou overseas. The company is planning to increase that number to 50,000 this year and incubate at least one foreign brand a day.
Demand for Crawfish Knows No Bounds: The crawfish industry grew 83% last year to reach ¥268.5 billion yuan ($40 billion) with prices doubling over the past year and demand still exceeding supply. Whilst the dish used to only be a midnight snack, it has become a formal dinner dish, with the social side of eating the seafood driving its popularity. Some suggest crawfish are so popular because they force people to stop using their phones to eat them, so they have to socialise and actually enjoy the experience.
Ten Years After China’s Infant Milk Tragedy, Parents Won’t Trust their Babies to Local Formula: In spite of the government making concerted efforts over the years to make infant formula among the most heavily regulated foods in China, a deep distrust remains in Chinese infant formula. China has a top-down regulatory method, which makes it hard for the public to engage with the process, particularly given the lack of press freedom. There is also a general perception of a “moral decline” in China, where people try to make money by whatever means it takes – farmers sometimes don’t even eat what they grow for the market. Since 2012, around 40% of Chinese consumers have felt food safety is a “very big problem” according to Pew research.
Hops in the Hutongs: China’s Craft Beer Champions: From the alleyways of Beijing to the Tibetan highlands, independent brewing is on the rise in the world’s most populous nation. China’s craft beer scene was dominated by expat American brewers just four years ago, now the vast majority of the more than 200 Chinese craft breweries belong to Chinese citizens. The country is still very much in the infant stages of craft beer development at a similar stage to the American craft beer scene in the mid-90s.
Chinese International Travel Monitor 2018: Chinese millennials born after 1990 are pushing the boundaries of international travel, increasing their travel expenditure in the past year by a staggering 80% to fund social media-influenced trips full of edgy experiences, high tech accommodation, exotic delicacies and taboo ticket-items according to this year’s Hotel.com survey. Pop-culture, film and television are a source of inspiration for 62% of millennials – the main sources of inspiration. 63% use the reverse camera angle to boost likes and build their social brand. 69% want to taste exotic local delicacies and 43% want authentic local items. Of the top-10 countries Chinese are excited to visit for the first time, New Zealand rose the most to take the third-equal spot with France, and US dropped the most slipping to number 5.
High-Tech Hotel Wars: Sleeping in China Just Got More Futuristic: IHG has teamed up with Baidu to introduce “artificial intelligence-supported Smart Rooms” in China. This will embrace voice control technology and offering guests services such as the ability to freely switch settings between work and leisure modes. Marriott is trialling facial recognition for check-in in its Hangzhou and Sanya hotels – but guests will still need a room key.
Bitter Pill: China Vaccine Scandal Sparks Online Fury, Roils Markets: Yet another scandal in China, with faked production documents related to a rabies vaccine that is given to babies as young as three months mobilising the masses of angry Chinese online. Alibaba has been quick to offer a service where vaccines can be checked by scanning the product’s barcode with the Taobao, Tmall, AliPay and AliHealth apps.
Innisfree Rejuvenates its Store Experience in China: Korean cosmetics giant Innisfree has become the latest retailer to team up with Alibaba and implement New Retail, enhancing one of its Hangzhou stores through games, entertainment, education and personalized offerings. New Retail features include the magic mirror, smart skin analyser, vending machine, smart shelf, cloud shelf, AR interactive photo both and the claw crane. Innisfree has more than 500 stores in China.
Surge in Lipsticks Sales in China Points to Influence of Internet Celebrities – Not Looming Downturn: Lipstick sales in China grew 97% last year, far outstripping FMCG’s growth of 4.3%, skincare’s 17.0% and personal care product’s 7.7%. Over three million women bought more than five lipstick products on Alibaba platforms last year.
Adidas Enlists China’s Booming Running Market to Spread Sustainability Message: Adidas is using China’s new-found passion for running to help educate consumers about the environment through its latest collaboration with Parley For The Oceans – premium products made from recycled plastics that have been removed from the ocean. Adidas recently hosted a four-week-long global running initiative, Run For The Oceans, which incorporated 13 running events in cities around the world. 555,426 runners registered in China who accounted 4.5 million of the 12.4 million kilometres run globally. While Adidas employed its AR (Adidas Running) app globally to recruit runners and log their kilometres, in China it partnered with running app Joyrun to engage runners.