Here are this week’s news and highlights for China:
Top-100 Chinese Brands Boost Value: The 100 most valuable Chinese brands boasted a combined brand value of US$557.1 billion last year, up 6% from 2015 as consumers focused more on premium instead of price, according to the latest Brand Z study. The penguin-logoed Tencent (WeChat’s parent) remained China’s most valuable brand, growing its brand value 29% to US$106 billion. Tech, banks and telcos were the most valuable categories, with education and travel the fastest growing sectors, up 46%.
China to see Robust Consumer Spending Driven by Lifestyle Upgrades: China leads emerging countries in expectations for robust real wage growth in the next six months, while average consumer confidence scores 64%, compared with just 49% last year according to Credit Suisse. About 40% of Chinese consumers intend to increase the time spent on playing sports, while almost 80% have started to eat more healthily. When asked how they intend to spend incremental disposable income, 41% of consumers expect to spend it on their children and 40% on their parents.
Put us on the Map, Please: China’s Smaller Cities Go Wild For Starchitecture: From mountain-shaped apartment blocks to the centre of braised chicken reinventing itself as ‘Solar Valley’, China’s second (and third) tier cities are hiring big-name architects to help get them noticed.
Cash Giveaways for Free Service: Inside China’s Bike-Sharing Battleground: 30 companies now vie for market share in China’s fiercely contested bike sharing space, with cash-flushed apps dishing out subsidies, free rides, gifts and lucky draws.
Secretive Billionaire Reveals How He Toppled Apple in China: In his first interview in 10 years, reclusive billionaire Duan Yongping told Bloomberg that his two brands Oppo and Vivo knocked the iPhone from China’s top-3 selling smartphones because Apple didn’t adapt to local competition. Oppo and Vivo together shipped more than 147 million smartphones in China in 2016, dwarfing Huawei’s 76.6 million, Apple’s 44.9 million and Xiaomi’s 41.5 million.
Chinese Consumers Are Fed Up With Online Platforms, Complaints Filed Against Didi Chuxing, Ctrip: Last year, 15% of all consumer complaints in China were directed at Chinese online transactional platforms with lifestyle, group buy sites and travel retailers the top offenders: Dianping, Didi, Ctrip were the top-3.
Cross-Border Ecommerce Pursues Dramatic Growth, But Can It Continue?: Almost three quarters of Chinese consumers have bought imported products online in the last six months compared with 56% purchasing items in-store according to Mintel. 1 in 3 Chinese consumers who have bought foreign goods online have bought food from Australia and NZ, with a similar rate for baby products. 36% have bought French alcoholic beverages, 45% have bought Korean beauty and personal care products and 28% have bought Japanese electronics.
Chinese Baijiu brands Overtake Whiskey as Most Valuable Spirit: Baijiu accounted for 37.5% of the top 50 most valuable spirits brands this year, up from 23% in 2016 according to Brand Finance Drinks 50. Whiskey brands fell from 37% to 28% in the past 12 months.
High Acidity Not the Reason for Champagne’s Slow Progress in China: Chinese consumers drank 1.3 million bottles of Champagne in 2015 versus Japan’s 11.8 million. Comité Champagne believes the slow growth comes around to a lack of education about diversity, with little awareness of sweeter, less acidic styles.
Alibaba to Use Blockchain to Fight China’s Fake Food: Alibaba is experimenting with blockchain, the tech behind bitcoin to create a digital ledger system that’s a sort of giant global spreadsheet, to track genuine food products through the supply chain. The system will be piloted in Australia and New Zealand, due to their popularity for food products on Alibaba’s consumer platforms.
China’s Consumers Hate Airbnb’s New Chinese Name so Much That They are Brainstorming a New One: Airbnb announced their new Chinese brand name 爱彼迎 (ài bǐ yíng) meaning “welcome each other with love.” The name has not been well received by the Chinese public who say it is hard to pronounce and sounds a bit like a love shop or a brand of sex pills. Of its 3 million worldwide listings, Airbnb has 80,000 listings in China, way behind its biggest Chinese rival Tujia. It will double investment and triple the size of its staffers in China this year.
Travel Brands Climb on List of China’s Most Valuable Brands: Chinese travel brands are among the biggest winners in year-over-year change in brand value. Ctrip’s brand value grew 32% to 38th on the list ahead of well-known Chinese brands such as ZTE, Tsingtao Beer, and Sina, but less than Air China, China Eastern and China Southern Airlines. Outbound tourism-focused company Caissa broke into the top-100 leapfrogging China International Travel Service (CITS) according to Brand-Z.
China’s Fitness Boom Energises Sportswear Brands: Adidas reported 28% growth in China in 2016, with Nike maintaining “double digit” growth in its most recent quarter. Together they account for about a third of China’s $27 billion sportswear market which grew 11% last year versus 5% for apparel overall according to Euromonitor. [FT Paywall]
What Luxury Slowdown? Premium Children’s Clothing Sales Trend Higher in China: Credit Suisse forecasts sales of children’s clothing in China will grow 10% annually in the coming two years, outperforming 7% annual growth expected for the entire apparel sector. The childrenswear market is currently mainly made up of many low-end local brands, signalling plenty of opportunities up for grabs.
Alienation 101: There were hopes that the flood of Chinese students into America would bring the countries closer. But a week at the University of Iowa suggested to Brook Larmer that the opposite may have happened. A long but interesting insight into Chinese students in the US.
How High-End Brands Leverage Chinese Social Media During Fashion Week: Best practice social media for luxury brands is 1. Using WeChat as a presentation platform that allows your audience to search for fashion collection photos and information; 2. Incorporating more celebrities/KOLs in your WeChat content, with exclusive interviews, Q&A sessions and lucky draws to increase exposure and consumer loyalty; 3. Using Weibo for a mass audience, broadcast oriented, and suited to fashion show previews, live streams, backstage photos and KOL for promos of big events; and 4. Live fashion shows on platforms like Yizhibo, Meipai, and Tencent.