Mark Tanner
Mark Tanner
7 September 2016 0 Comments

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

Consumers,  Chinese Consumers

China’s Government Wants to Make it Illegal for Celebrities to Misbehave: After a string of high-profile incidents of prostitution and drug use in China’s showbiz world, the government has announced a new draft law to legislate against celebs behaving badly. There’s already a ban on screenings involving anybody who has engaged in criminal activity, and shows promoting “Western lifestyles” face being censored.

China Remains Largest Contributor to Global Growth, US Expert Says: China is expected to contribute 39% of overall global growth this year – four times America’s contribution and more than the combined amount from ‘advanced’ economies according to Stephen Roach, a senior fellow at Yale University and former chairman of Morgan Stanley Asia.

Meeting China’s Productivity Challenge: Shifting to a productivity-led model could add more than $5 trillion to China’s economy according to McKinsey. Whilst some sectors are efficient, Chinese productivity is 15–30% of the OECD average. Just 10-15% of Chinese SMEs are estimated to have any sort of web enablement.

Development of Human Capital Could Turn Out to be the Most Pivotal Challenge for Foreign Businesses Engaging with the Chinese Market: China has an abundance of industrial workers.  With the economy’s shift into the services sector and push for innovation, Beijing sees the need to attract foreign talent to help with the transition. China is setting up its first immigration office to recruit overseas talent in hope of alleviating the problem.

Midea, Haier Boost Profit as Chinese Adopt Smart Appliances: Millions of Chinese families are adopting higher-priced smart appliances such as refrigerators that connect to the Internet, driving big local manufacturers’ profit growth well into double digits. Meanwhile, China’s largest household appliances retailer Gome, posted an 82% plunge in net profit for the first half of the year as customers go online – sales of China’s top 100 home appliance retailers contracted 4-5% in the first half of the year.

Online: Digital China

Online Deals to Account for 40% of China Retail Sales by 2020: Consumer retail sales are forecast to reach ¥50 trillion ($7.5 trillion) by 2020 – 67% more than 2015 according to the Fung Business Intelligence and the Beijing-based National Academy of Economic Strategy at the Chinese Academy of Social Sciences. Online retail sales are estimated to account for 40% of retail sales, compared with 10.8% at end of 2015.

China’s ‘Super Shoppers’ Rock the Wallet: China’s “super shoppers” account for just 5% of the total population but contributed to 87% of the country’s online shopping revenue according to an international study by Worldpay. 60% could leave for another online store if preferred payment methods didn’t exist.

China Gets a Genuine Taste of Canada via Online Storefront: Jack Ma and Canadian Prime Minister Trudeau launched the Canadian Pavilion on Tmall Global last week with more than 30 businesses selling over 100 products.  The Pavilion follows a dozen other countries. Special promotions included apparel, ice wine, maple syrup, seafood and health products. An MOU was also signed between Air Canada and Alitrip.

Video and Entertainment

Is China’s Movie Boom Doomed?: China’s box-office sales declined for the first time in five years, contracting by 15% in July alone, prompting Beijing to lift its ban on summer Hollywood movies. Numbers haven’t been helped by the crackdown on falsified box-office data, poor story lines and higher prices – the average ticket price rose to $3.35 in Q1 2016, from $2.54 a year earlier.

Premium Food & Beverage

Alibaba Adds 9.9 Wine and Spirit Event to its List of Online Shopping Festivals: This Friday 9.9 Global Wine & Spirits Festival will bring 100,000 promotional international wines, cognacs, whiskeys and other drinks from 50 countries to Tmall. The online-offline festival will see about 5,000 bars and pubs in China offering free tastings and distribution services for consumers. Between 2013 and 2015, the number of active wines and spirits buyers on Tmall grew by five times to 10 million consumers, and nearly half of all wine imported into China is now sold online. The festival provides some good opportunities for alcohol brands, but probably won’t deliver big profits.

Growing Awareness of Animal Welfare in China: About seven in 10 Chinese consumers consider the welfare of farm animals important and are willing to pay 5-10% more for pork products from pigs that have lived better lives according to a survey by World Animal Protection.

Overseas Chinese Tourists

China’s Mall-and-Theme-Parks Tycoon Outlines Plan to Set up Tourism, Sports Complex in Jinan: Wanda Group chairman Wang Jianlin called on Beijing to cut import taxes, impose heavy fines on China’s bootleg products, and run a campaign to improve the image of Chinese brands in a bid to keep some of the estimated ¥2.5 trillion Chinese spent abroad in China. Wang also announced plans to invest ¥63 billion ($9.4 billion) to set up a tourism and sports complex in Shangdong’s capital Jinan and 19 other tourism-entertainment complexes in a bid to keep more Chinese at home.

Schooling and Education

Chinese Parents Sleep in “Tents of Love” Outside their College Kids’ Dorms to Make the Goodbyes Easier: Universities across China are setting up tents and makeshift accommodations for parents staying overnight when they drop off their only child at the start of the semester.

Pollution and Environment

Chinese Public Overwhelmingly Backs Renewables Push: 91% of Chinese say they would accept rises of up to 10%, averaging about $1.50, on their monthly electricity bill, if it delivered clean power. 44% would support a rise of $1.50-$4.50. Similar surveys in the US and the UK found that 50% and 48% are willing to pay a higher price for renewable energy respectively.

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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