Mark Tanner
Mark Tanner
23 April 2014 0 Comments

China’s pollution is one tough nut to crack.  Although the Government has pledged ¥1.7 trillion ($270 billion) for pollution control as part of the current Five Year Plan, it’s unlikely that more than 1% of urban Chinese will be breathing safe air any time soon.  Coal consumption grew 2.5% last year, increasingly wealthier consumers are using more electricity, and the Government is hopeful that of the 25 million+ vehicles expected to sell in 2015, 500,000 will be hybrid and electric – just 2% of all sales. 

The health effects of China’s pollution are sobering.  Lung cancer deaths grew 400% in three decades, asthma rates are up 40% in five years, and even infertility is on the rise.

Consumers are now making a stand with their wallets. 59% of Chinese consumers now consider environmental quality as important when buying food and beverages, boosting demand for imported food.  Air quality is a major factor in domestic Chinese tourists becoming increasingly less satisfied, contributing to more travellers heading abroad. And many of China’s brightest and wealthiest are leaving because of it.  When China Skinny did research into Chinese migrants in early-2013, we found education was the main reason for migrating, by far.  Just 12-months later, 80% of Chinese considering moving overseas cited pollution as the primary reason.

Big China problems such as pollution have traditionally been left to the Government to fix.  But imagine if 1.35 billion Chinese consumers really worked together to fix it as well. A good place to start would be the water given 90% of Chinese cities’ ground water is polluted, two thirds of it severely. 

Alibaba’s Jack Ma is hoping to harness the power China’s half a billion smartphone users to raise awareness of China’s water pollution, and create a massive database that can help pinpoint and ideally help fix trouble spots.  What a dude.  If anything could prompt Chinese consumers into action, smartphones would be it. Go to Page 2 to see this week’s China news and highlights.

Consumers, Chinese Consumers

A Billion Shoppers: China has about 200 buildings more than 250 metres high, more than four times America’s count. It also has the world’s biggest building, Chengdu’s Global Centre, complete with a 300-long indoor beach; a monument to the increasingly essential ingredient of China’s economic development: Consumption. The building is representative of the rising wealth in Western China. By the late 90s, GDP per capita in the West was around one-third of the fast-growing coastal Eastern China provinces, by 2012, it had recovered to more than half.

What Makes a Tier-2 City in China? Count the Starbucks: Higher-tier cities are generally considered more sophisticated and mature in their consumer tastes, but there is no set definition of what a Tier 2+ city is. Some suggest a good measure would be the number of Starbucks cafes.

No One Tops Chinese Consumers In Thirst For Brand Knowledge: Making Chinese consumers ‘curious’ about a brand can increase the likelihood of purchase by 58%, with 42% likely to talk to others about the brand. The article contains some dubious stats around Chinese smartphone and Internet usage, but the rest is interesting.

Home Shopping in China: Although they charge large commission, home shopping networks can be an effective way to reach Chinese consumers, with the industry growing 31% between 2011 and 2012 to ¥58 billion ($9.3 billion).

Almost 10,000 Divorces Each Day in China’s Breakup Boom: There were 3.1 million divorces in China in 2012, up 133% from the golden years of 2003. In bigger cities the rates are even higher, with a 65% jump in Beijing from 2011 to 2012. Extramarital affairs, domestic violence, and an inability to communicate, in addition to simplified laws are cited as the top reasons for untying the knot. No mention of the limitations on multiple home ownership as a reason, which anecdotally, is a sizeable contributor.

Pollution and Environment

Alibaba Recruits Users to Identify China’s Polluted Water: Jack Ma leads the battle against China’s water pollution calling on 500 million smartphone users for help. A great initiative using smartphones, water testing kits and some digital mapping will raise awareness, action, and possibly some eyebrows in Beijing.

Overseas Chinese Tourists

New Zealand to Vietnam: Where Chinese Tourists Feel Most Satisfied: New Zealand, United States, Canada, Australia and Singapore were rated as the destinations where Chinese tourists were most satisfied according to a survey by the Chinese Tourism Academy. Overall atmosphere, transportation and urban management in these countries got the highest marks, with travellers least satisfied with safety, poor Chinese language services and the cost of travel. Satisfaction from domestic travel is the lowest it’s been since 2009, with air quality a big factor.

A Chinese Travel Powerhouse in the Making?: China’s two online travel gorillas, Ctrip and Qunar, are in partnership talks as intensive price-based competition will require efficiencies. China’s online travel industry is expected to grow from ¥‎131.4 billion ($21 billion) in 2011 to ¥‎465 billion ($75 billion) by 2017. On the subject, WeChat adds flight booking to its feature list.

Online: Internet & Social Media

China Social Sharing Report in 2013: WeChat friends, WeChat Moments and Sina Weibo accounted for more than two thirds of social shares in China last year – 25.6%, 23.4% and 19.2% respectively.

Jesus More Popular Than Mao on Weibo: Although it isn’t always easy to talk about religion on Chinese social media, Jesus has yielded over 18 million mentions. Officially, the Government estimates that there are 25 million Christians in China, however outside observers believe the number could be closer to 60 million.

Premium Food & Beverage

Fake Duck Blood Investigation Leads to More Chinese Consumer Anger: Sacred duck blood, faked and laced with artificial additives. Yet another food scandal in China affecting consumers’ perception of local produce.

The 4Ps and Tmall’s New Zealand Seafood Promotion: Some relevant lessons about Tmall promotions, not just applicable to food.

McDonald’s to Give China Restaurants a Makeover: McDonalds is overhauling a number of its restaurants in bigger cities using a local designer. It is also launching an advertising campaign that focuses on Chinese aspirations and has signed up LeBron James for China-based commercials later this year.

Banking, Banking & Investments

China Enters a New Era of Consumption: Just 13% of Chinese have ever held a loan according to a Nielsen survey. The main reasons consumers aren’t borrowing is because they “don’t like the feeling of carrying debt” and high interest rates.

Chinese Citizens Have Their Eyes on the Bubble: Chinese consumers big purchases are often influenced by anticipated Government policy. Beijingers have been known to buy two cars to get around potential every-other-day-road-space-rationing. Investors have been buying multiple apartments in anticipation of future ownership limitations – helping to drive the per capita housing area from 9 to 32 metres in 35 years.

Premium and Luxury

Selling Luxury Online in China: 27 min vid: Chinese luxury consumers are much more aware of worldwide pricing of luxury goods through travel and the web, so the price online in China is likely to be more expensive than abroad, even when discounted.  This means discounted prices aren’t always a good option for luxury online. Finding unique and differentiated products online has strong appeal. Reverse logistics, enabling simple return of products is almost as important as normal delivery in sales.

Kooky, Weird & Wonderful

Fun With Baidu Autofill: “Eating Sperm Can Lead To What?”: Another interesting insight into Baidu’s autofill, and what appears when someone types the character for ‘eat’. Does it really make one pretty?

That’s The Skinny for the week!  We’d love to discuss how we could help with your marketing, online initiatives or research to take advantage of China’s opportunities.  Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.

If you’ve missed earlier news or need to learn more, there’s a library of information about Chinese consumers in prior China Skinny Weekly’s right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.