Mark Tanner
9 October 2019 0 Comments

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

Consumers,  Chinese Consumers

In Pictures: China’s National Day Parade: Last week’s parade in Beijing, among the largest in modern Chinese history, was designed to commemorate 70 years of Communist rule featuring 100,000 performers, 15,000 goose-stepping soldiers and an array of heavy-duty weaponry. Five interesting graphics illustrating 70 years of the People’s Republic of China.

‘Golden Week’ Brings Consumption Boom: In the first seven days of October, retail and catering sales grew 8.5% on last year’s holiday. Domestic tourist numbers grew 7.8% to 782 million, spending 8.5% more than in 2018. 7 million tourists went abroad – down 15.1% from last year – with the “frenzied shopping abroad” of previous years replaced by relaxation. If the overall numbers reported by Bloomberg are correct, visitors to Hong Kong fell no more than total foreign tourists, also dropping 15.1%.

China’s Love for the NBA Runs Deep. But the Rockets Scandal is Forcing Fans to Choose Between Sport and Country: Will NBA’s massive popularity and cultural relevance outweigh the nationalist fervour that’s swept through China?

People Around the Globe are Divided in their Opinions of China: The share of people who evaluate China positively has also dropped since 2018 by double-digits in nearly half of the Western European countries surveyed, including Sweden (down 17 percentage points), the Netherlands (-11 points) and the UK (-11) according to Pew. Only in Greece and Italy has opinion improved. Canada and the US have highest unfavourable opinion of China recorded in the Centre’s polling history, with Canada climbing 22 points. 36% of Australians have a favourable view, with 51% of those aged 18-29, replicating the higher favourability skew globally with younger people. The country median is 41% favourable and 37% unfavourable.

Beyond the Headlines: A Question of Innovative Thinking: 22 min video: Innovative thinking has pioneered new business models for Australian businesses to interact with Chinese customers, with brands like Melrose’s Nu-Lax reaping the rewards. Click/tap here to view within the Great Firewall.

Online: Digital China

2019 WeChat & Weibo Data Insights: KAWO analysis of 20 million data points over the last three years has found many interesting insights into WeChat and Weibo trends: WeChat Service Accounts have seen a slight net increase in followers and engagement (over the past 12-months), whereas Subscription Account followers have declined on both measures. The push message still accounts for 68% of article reads, although smaller accounts get a larger portion of readers from sharing. In 2019, the average click through rate of the “Read More” link at the bottom of WeChat articles fell 17% down to 2.9%. Many more interesting insights including when to publish and how often, and how many articles. In short, focus on quality, not quantity.

US Tech Chief: China is Threatening America’s Lead in the Global Artificial Intelligence Race: The US Chief Technology Officer Michael Kratsios has called on government and private sector to collaborate to keep US on top in the competition for AI as China quickly catches up. A Centre for Data Innovation study found the US leads in four of the six categories evaluated: talent, research, development and hardware. China leads in two categories: adoption and data. The city of Tianjin alone plans to set up a ¥100 billion ($14.06 billion) fund focused on AI industry.

Premium Food & Beverage

What’s Driving China’s Noodle Revival?: Between 2001 and 2011, the peak of China’s boom, instant-noodle sales increased 140%, to 43 billion bowls and packets. By 2016, China was consuming 7 billion fewer bowls. Yet noodles are again making a comeback. Sales rose 7.5% during the first half of 2019. Premiumisation is driving the renaissance, accounting for 40% of 2018 revenue for one of the country’s largest noodle-makers. The slowdown in delivery services – with restaurants now paying at least 20% of each order to the delivery giants – is also making noodles attractive once again. The slowing economy and rising cost of living is also believed to be contributing as Chinese consume more selectively. Although instant noodles may be bouncing back in China, South Korea consumes double the volume per capita, and Japan eats roughly 50% more.

Alibaba’s Hema Lumbers Toward Profitability: By August, Hema had 171 stores in China with 20 million active consumers. Same-store sales grew 13% year-on-year while operating costs fell 30% year on-year, with stores open for 12-months or more profitable overall.

JD.com Adds More Bricks-and-Mortar Stores to Supply Chain to Speed Up Deliveries: Yet another innovation to get goods to consumers quicker in China, with JD tapping into 20,000 offline retail stores in 54 cities, including 175 Walmart hypermarkets to deliver goods purchased on the online platform. The process is said to cut out unnecessary steps, improve efficiency for retailers, maximise resources, reduce costs and improve the customer experience and aims to deliver within 30 minutes. The programme initially covers items such as non-alcoholic beverages, beer, wine, rice and flour.

New Zealand Pushes to Shut Australia Out of Manuka Honey Market in China: Kiwi honey producers are to apply to the Beijing intellectual property court to obtain the Chinese certification trademark that would link the “mānuka” name to New Zealand alone. International mānuka trade is worth $1.2 billion NZD ($760 million) in table honey alone, and this could be expected to double once cosmetic and pharmaceutical uses were exploited to their full potential. NZ has also applied for a certification mark on the term in NZ, the US, UK and EU.

Overseas Chinese Tourists

Five Years is a Long Time in Chinese Travel & Tourism: Eight key drivers that define the Chinese travel industry over the past half-decade: 1. Airline radar goes off-the-chart; 2. Data is travel gold; 3. Tapping new aspirations; 4. The adventure economy; 5. New markets make their play; 6. Tier-2 travel takes off; 7. The China panic; and 8. A shifting tourism map.

Airbnb Eyes Improved China Localization After Freeing Up Beijing Unit: AirBNB will improve its localisation in China by empowering its Chinese unit to make its own locally-tailored strategy.

Parents and Kids

Are China’s Grandparents Reaching their Limits on Free Childcare?: China has a long history of several generations living under one roof and grandparents participating in child rearing. While rapid urbanisation has broken up multi-generational households, Chinese elderly still take an active role in child rearing. Many relocate to their children’s cities to take on the job, and 7 million others are “left behind kids” whose parents leave their children in their hometown with the grandparents as they seek better jobs in the city. Two recent lawsuits from grandparent carers shows some don’t want to be taken for granted.

Pollution and Environment

How Air Pollution Makes People Unhappy and Irrational, and Why in China it is Likely to Keep Getting Worse: Research has previously shown that air pollution is damaging to health, cognitive performance, labour productivity, and educational outcomes. But air pollution also has a broader impact on people’s social lives and behaviour. On polluted days, people have been shown to be more likely to engage in impulsive and risky behaviour that they may later regret, possibly as a result of short-term depression and anxiety. Women’s happiness is more sensitive to higher pollution levels than men. The good news is 74 major Chinese cities have seen PM2.5 – the tiny particulate matter that is a health hazard – improve by 41.7% over the past six years according to the minister of ecology and environment. The unfortunate news is that face masks don’t block fine pollution particles such as PM2.5.

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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