Mark Tanner
Mark Tanner
30 March 2016 0 Comments

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

Consumers,  Chinese Consumers

Charting China’s Rising Individualism in Names, Songs, and Attitudes: Interesting analysis illustrating how Chinese are becoming more individualistic and leisure-focused based on studies by the Chinese Academy of Sciences and London Business School.

A Tycoon’s Vision for Chinese Consumers: A not-so-favourable review of Wanda Group’s chairman Wang Jianlin’s book bundling a collection of his speeches and Q&A sessions. Some nuggets in the prose include Wang’s admission that operating a private company in China involves a complex dance with state power, even for a party loyalist with his impressive credentials. Wang’s book highlights his focus on capturing the Chinese consumers’ shift to entertainment and recreation, and how he aims to change many of China’s ‘smaller’ cities from the current “conurbation of buildings with covered in blue glass and bathroom tiles with little in the way of entertainment.”

These are the 15 Western Brands Chinese People Love the Most: The Reputation Institute’s 2016 China RepTrak 100 believes the brands that Chinese consumers rate the highest are: 15. P&G; 14. Gucci; 13. GM; 12. Giorgio Armani; 11. Nestle; 10. Microsoft; 9. BMW; 8. Amazon; 7. Dell; 6. Michelin; 5. Siemens; 4. Mercedes-Benz; 3. Rolls Royce Aerospace; 2. Rolex; and 1. Intel. No Apple, Adidas, Nike or Starbucks?

Mastering New Customer Acquisition is Key to Success in China: The average Chinese consumer is prepared to spend 17% of their income on a smartphone and 28% on a handbag according to Sedgwick Richardson.

Hurdles to Merging ‘Swiss Made’ with ‘Made in China’: A Swiss perspective on its 70 local companies who have been subject to mergers and acquisitions by Chinese investors. Japan’s wave of acquisitions of Swiss brands in the 1970s and 1980s saw a survival rate of less than 10%.

Online: Internet & Ecommerce

China to Place New Taxes on Foreign Goods Bought via Ecommerce: Buyers of all imported goods purchased online must pay a 17% value-added tax and a consumption tax from 8 April. Mum and baby products, food, healthcare products and cosmetics will all cost more.

Premium Food & Beverage

Chinese Winery Changyu Hunting for More Foreign Purchases: After buying a 75% stake in Spain’s Marques del Atrio winery in 2015, Chengyu is thirsty to acquire more overseas wineries in Australia, Chile and France to tap into growing demand for imports in China.

Overseas Chinese Tourists

Chinese Tourism Spending Leaps 53% in a Year: Chinese tourists spent $215 billion outside Mainland China in 2015 according to World Travel & Tourism Council – a significantly faster growth than any year in the previous decade. Macau, South Korea and Hong Kong all experienced declines however.

Ctrip Profit Soars Tenfold as Discounts, Deals Fuel Revenue: Ctrip’s share-swap deal with Qunar and majority purchase of Elong have seen the companies take an estimated 80% of China’s hotel and air ticket markets – a market share comparable to Alibaba’s dominance in ecommerce. The position helped sales rise 48% to ¥10.9 billion ($1.7 billion) last year with profits soaring ten-fold.

Marriott Wins Over Starwood With Bid: Marriott Hotels has upped its offer for Starwood to more than $14.4 billion, after the Chinese insurance company Anbang’s outbid the group. Anbang acquired Waldorf Astoria in New York for almost $2 billion two years ago.

Overall Health

China Vaccine Scandal Prompts Angry Backlash From Parents and Doctors: A mother and daughter used a network of 300 suppliers to distribute $90 million of improperly stored and potentially fatal vaccines across two-thirds of China over the past five years.

An Invention That Took 80 Years to Seem Like a Good Idea in China: The Tampon: Although 70% of American women use tampons, Chinese manufacturers produced 85 billion sanitary napkins last year and not a single tampon. A lack of sex education means many young Chinese women know little about their body parts and fear that tampons will rob them of their virginity. Meanwhile, China’s media regulator has banned advertisements of feminine hygiene products on TV at lunchtime and during prime time.

Chinese Consumers Going Online for International Beauty: 58% of Chinese consumers bought foreign products on a domestic shopping website between May and November according to Mintel. South Korea (47%), Japan (29%) and France (27%) were the top countries of origin for beauty products. Cross border commerce grew at 63.3% last year, versus 48.8% for overall online shopping. The quality of products (63%) and prices (38%) were the top concerns for Chinese shopping for imported goods online.

Investments & Banking

Measuring Credit: How Baidu, Alibaba And Tencent May Succeed Where Facebook Failed: Just as Facebook announced that it was closing its credit rating and reporting pilot, China’s online giants are gathering momentum. China is expected to lead the West in the area due to traditionally poor credit scoring and reporting methods, limited borrowing opportunities for SMEs and consumers and favourable privacy and protection conditions.

Autos and Cars

China’s Love of Cruise Control Gives Some Car Makers An Easy Ride: Chinese drivers’ preference for advanced driving systems such as cruise control, parking assistance and collision warning systems has seen lines such as Mercedes S-Class and BMW 7-Series now come with more electronics in China than in the US.

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

 

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