Mark Tanner
24 April 2019 0 Comments

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

Consumers,  Chinese Consumers

Chinese Women in Video Games Levelling Up: Women now account for nearly half of all players in China’s $16.4 billion mobile gaming industry. Game developers are increasingly catering to females, including the two most popular mobile games among Chinese women Travel Frog and mobile virtual dating game Love and Producer. Tencent’s top-grossing battle-arena mobile game Honour of Kings logs more than 200 million active users, with about half of all players being female.

Millennials: China’s New Economic Force: Chinese under the age of 35 account for 65% of consumption growth and two thirds of passport holders, 25% hold a bachelor’s degree or higher, while 90% have a smartphone and account for more than half of luxury purchases.

China Has an Industry for Flaunting Fake Wealth: For as little as ¥6 ($0.90) per video, online merchants will add your voice-over to a first-person video showing a fanned-out stack of bank notes, a decadent mansion, a tropical vacation, a hunky celebrity, an exotic pet, or a tricked-out supercar. Other services on offer include videos of sales receipts for luxury cars with the names and dates altered, as well as geotagged social media posts in placed like Dubai or Bali.

Many Chinese Suffer Discrimination Based on their Regional Origin: Life is often hard for internal migrants in China, especially those from Henan and the north-east. This was illustrated when a kindergarten teacher in Henan was detained—accused of adding sodium nitrite to the meal boxes of at least 23 pupils late last month. Most comments online focused on the evil of the act and have expressed sympathy for the parents, but a surprising number noted the teacher’s home province with comments like “I’m not surprised. Henan people would stoop to anything,” and “Apart from wicked, I can’t think of another word to describe Henan people.” [paywall]

China Economy: First Quarter Growth Beats Expectations at 6.4%: China’s economy expanded by 6.4% year-on-year in the first quarter, beating economists’ forecasts of 6.3%. Retail sales for March rose 8.7% on a year earlier.

Online: Digital China

Amazon Ends its China Marketplace: Amazon plans to close its domestic marketplace business in China on July 18, focusing efforts on its more lucrative divisions selling cross border goods and cloud services in the country. The company struggled to gain a foothold against Alibaba and JD, accounting for less than 1% of sales, after failing to adapt to the local market and the preferences of Chinese consumers and taking too long to make changes.

iQIYI Named World’s Fastest-Growing Brand of 2019: Online video platform iQIYI was the world’s fastest growing brand in Brand Finance’s Global 500 2019 ranking. The brand’s value climbed 103 places to rank in 76th place overall in the past 12 months.

Premium Food & Beverage

Diageo Targets China’s Huge Spirits Market with New Venture: Johnnie Walker has linked up with China’s third-largest Baijiu distiller Jiangsu Yanghe to launch a “new to world whisky,” made by maturing Scotch whisky in ceramic Chinese pots, a process said to soften the spirit to make it combine well with food. 80% of alcohol is consumed in China with meals.

From a Burger Slice to a $20 Billion Industry: How China Can Stay Stocked With Cheese: China’s cheese sales are valued at $12 billion today and are expected to grow by $4 billion over the next year according to Mintel. Since 2017, the number of cheese eaters has grown from 15% to 17% with almost half under 30. Cheeseburgers, pizzas, sandwiches and salads are the main sources of cheese consumption. Mozzarella and blue are the most recognised varieties and cheesecake the most preferred cheese-based product, ahead of sliced cheese. 91% of consumers believe cheese is healthy and can deliver the required nutrition for the body. The kids’ cheese market takes a 55% share of consumption and children-targeted products accounted for 42% of the 113 new cheese products launched in the past three years.

Farmers Attract Sales With Live Broadcasts: Over 100,000 farmers are selling their produce on Taobao, holding a total of more than 60,000 livestreaming broadcasts every month with some making as much as ¥50,000 ($7,500) a day.

New Zealand Food Consortium Opens Flagship Store on Tmall: A joint venture between Tmall Fresh and the New Zealand Food Basket has launched, comprising of 18 of the country’s most-reputable and beloved food and beverage brands.

Overseas Chinese Tourists

Club Med Launches Super Brand Day With Fliggy To Highlight Transformative Holidays: Club Med’s Sanya resort’s new branding hopes to tap into the trending topic of “Dad taking care of the kids” and the “role that dad plays in a family,” encouraging guests to maximise their “me time”, “you time” and “we time.” The branding pushes the themes of confidence, togetherness, new tastes, new friends and independence. The experiences to be had at Club Med are promoted as allowing guests to discover a different self, strengthen family bonds, indulge in the realm of senses, make new friends, learn to think independently and embrace a brand new self after the holiday.

Overall Beauty

Slowing Chinese Economy Can’t Stop L’Oreal’s Lipstick Index Surge: L’Oreal’s Q1 earnings exceeded expectations, largely on the back of China and other Asian growth. L’Oreal CEO Jean-Paul Agon said on the earnings call that the luxury market in China is still growing at around 40%. L’Oreal’s ecommerce sales increased 43.7% year-on-year and its travel retail division continues to see rapid growth after surpassing the $2.26 billion (€2 billion) mark last year.

Designers and Fashion

Gucci and Calvin Klein: Luxury Italian brand Ermenegildo Zegna recently declared that it is moving its test market to China. Gucci, Calvin Klein, Levi Strauss, Tod’s and Burberry are launching China-tailored ad campaigns and innovations in China, before later adapting them for an international audience. Driven by the evolution of China’s own market, manufacturing strategies, technologies and spending power, China is increasingly setting standards in the world of fashion.

Autos and Cars

Mercedes-Benz Apologises After China Consumer’s Gripe Goes Viral: A woman in Xi’an purchased a new Mercedes from an authorised dealer only to discover afterwards that it was leaking oil on the showroom floor. A video was posted showing her sitting on the hood of a car in the showroom and angrily accusing sales staff of dodging her demands for a refund, which went viral. She also said she originally wanted to pay cash for the car but was pressured by the dealership into taking out a loan that came with high fees.

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

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