Here are this week’s news and highlights for China:
Xi Jinping Seems Destined to Become China’s New Mao: Xi Jinping came out of the Communist Party of China’s 19th National Congress even more powerful. The week-long event that ended last Wednesday unanimously decided to enshrine “Xi Jinping Thought” into the ruling CPC’s amended charter, making Xi the first living leader since Mao Zedong to be accorded such an honor. Xi JinPing’s three-and-a-half hour speech which opened the congress provides some clear insights into the direction China is taking going forward.
Alipay, WeChat Top China Brand Relevance Index: Alipay and WeChat came in first and second respectively in the China Prophet Brand Relevance Index for the second consecutive year, followed by Android, IKEA and Apple. Almost half of the top 50 brands were technology-led. The rest were significantly invested in digital connectivity, showing that Chinese consumers like brand experiences that occur on demand, across devices and channels.
Post-90s Consumption, Big Data, and the Future of AI: China’s post-90s consumers are willing to pay for non-diplomatic education, willing to invest in their hobbies to develop them up to a professional level and willing to spend money more than their income level on certain areas that previous generations didn’t, such as sports, fitness and losing weight.
Ikea Apologises for ‘Sexist’ China Advert: A commercial by from Ikea showed a mother scolding her daughter for not “bringing home a boyfriend” to meet her parents, attracting accusations of insensitivity towards single women. Ikea pulled the 29-second ad and apologised in Chinese and English on its Weibo account saying it was sorry for “giving the wrong perception”.
Daigou Shoppers Ring Up the Sales: Daigou are estimated to send 50,000 to 60,000 parcels per day to China from Australia [paywall].
In China, Mobile Payments are Creating a Thriving Industry of Micro Services: Five innovative, and mainly underreported ways that Chinese consumers are spending money on their smartphones: 1. Location-based freelancing, paying someone in your immediate vicinity to do a small job for you; 2. Paid group challenges, a strong motivator where individuals buy in and lose their money if they don’t complete a daily task; 3. Tipping for content; 4. Knowledge economy, paying for advice from celebs and professionals such as lawyers and psychiatrists; and 5. Micro rentals, from bikes to basketballs, umbrellas, power banks and even sex toys. The mobile payment industry is forecast to grow from $8.8 trillion to $14 trillion this year.
Consumers Care More about Low-Salt than Low-Fat: Chinese consumers are the most selective on what to eat and drink out of the 17 countries surveyed in a GfK survey. In eight out of the nine decision factors researched, China places the greatest importance on that claim, with ‘locally produced products’ the only claim that it didn’t top. Over half of Chinese consumers place high importance on prebiotic or probiotic food, 21% ahead of the next closest country.
Whiff of Discontent in Singapore as Malaysia Courts Chinese Market for its Durian: Malaysia’s hopes to export fresh durian to China is kicking up a stink with Singapore who is worried it will push up their prices of imports and Thailand who currently have a monopoly. The first whiff of trouble came after the announcement of a three-day, Malaysian government-backed “Durian King Festival” in Nanning which is expected to draw 100,000 visitors to celebrate the thorny fruit that smells like sweaty socks is. Beijing has granted a one-off approval for Malaysia to ship four tonnes of fresh durian for the festival.
How the Chinese Fell Back in Love With Black Tea: Chinese have been drinking tea for more than 2,000 years, only came up with a Chinese term for “black tea” (hongcha) less than 200 years ago, which is still typically seen as a foreign import although it originates from China. Nowadays, a diverse range of black teas from overseas have taken the mainland Chinese market by storm, including British-style honey and lemon tea, American iced tea, Hong Kong-style “silk stocking” and “yuenyeung” teas, and Taiwanese bubble tea.
Australian Vintage’s Chinese Export Deal: Chinese consumers’s taste for Australia wine continues to soar with exports up 42% this year with $A853 million ($655 million) of sales coming from mainland China, Hong Kong and Macau.
Why Did Priceline Decide To Invest In The Leading Chinese e-Commerce Platform, Meituan-Dianping?: Priceline has recently invested around $450 million in Meituan-Dianping, with Tencent investing $4 billion to fund expansion of its presence in the online hotel, restaurant booking, and ride booking businesses. Priceline’s Agoda brand will work closely with the platform. Meituan-Dianping is China’s third-largest online marketplace with 260 million active users. Priceline has also invested in Ctrip with an option to own up to 15%.
Why China Led the ‘Great Retail Apocalypse of 2017’ and How Fashion Labels are Reinventing Themselves: 2017 is the first year in history that has seen more luxury store closures than openings around the world – which makes sense given how few brands embraace offline to online integrations. Only 14% of fashion brands in China offer in-store product availability online, while 5% allow users to pick up online purchases in the store and none allow in-store returns of online purchases.
Liquor Maker Moutai’s Heady Profits Underscore China Luxury Revival: Kweichow Moutai, China’s top maker of baijiu whose bottles can sell for over $300 a pop, saw its revenues and profits more than double in the third quarter – the sharpest quarterly rises in over half a decade. The rise represents a general increase in appetites for luxury, with 15% growth expected this year versus a 2% contraction last year.
Led by Levante, Maserati makes China Top Market: Since the launch of Levante in mid-2016, the first SUV in Maserati’s history, the brand has enjoyed tremendous growth in China, which is now its largest market worldwide. The brand has experienced 47% growth in China in the first three quarters of this year and now has 66 authorized dealerships and 74 points of sale in the market.
China’s Tech Titans Set Sights on Car Innovation: Alibaba, Tencent and Baidu move up a gear in the race to build ‘smartphones on wheels’ with intelligent and connected vehicles. Car “operating systems” which include touchscreens, GPS and other functions normally found in smartphones are being developed by the tech titans in conjunction with car makers. Roewe RX5 sport utility vehicle, which was billed at its July 2016 launch as “the world’s first mass-produced internet car” with Alibaba’s AliOS is now China’s sixth top selling SUV, with 75% of customers saying they bought the car for the operating system and display. 64% of Chinese consumers say they switch brands for better in-car connectivity, compared with 37% Americans and 19% of Germans [paywall].