Mark Tanner
Mark Tanner
8 November 2017 0 Comments

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

Online: Digital China

Alibaba Takes to the Streets for this Year’s Singles’ Day: “18% of China total retail is ecommerce. We don’t want to grow that number, instead we want to digitalize the other 82%.” All over China Alibaba has linked up with brands like Levis and Calvin Klein to provide a “special experience” for those seeking a fully integrated O2O shopping adventure this Saturday.

Singles’ Day – the World’s Biggest Online Shopping Day: Millions of overseas brands and overseas-based Chinese will be jumping on the 11.11 wagon this Saturday.

Chinese Consumers Numb about Ecommerce Festivals, Except 11.11: 45% of Chinese consumers feel their enthusiasm has sagged in the face of too many ecommerce festivals, with the exception of this week’s 11.11 festival [paywall].

China Aims to Clean Up Internet Shopping: Changes to China’s Anti-Unfair Competition Law will see Chinese websites that engage in unscrupulous activities such as paying for positive reviews and deleting negative feedback facing fines of up to ¥2 million ($301,000). The new provisions also ban false or misleading advertising about a product’s features, functions or quality, forbid falsifying sales data, user comments and awards, and prohibit “organizing fake transactions” that amount to false or misleading commercial publicity. A 2014 report highlighted over 1,000 websites and messaging groups offering to make fake purchases, with fabricated online sales amounting to more than ¥600 billion ($90.6 billion).

Jack Ma to Promote Malaysia for One Week Next Year: Alibaba will promote Malaysian food, products, culture and places to visit for a week next year – the first such promotion according to a conversation between Jack Ma and the Malaysian PM. Malaysia has long been a loyal supporter of Alibaba and is the first country to sign up to its eWTP platform and consequent Digital Free Trade Zone. 1,972 Malaysian SMEs are on board so far, exceeding the original target of 1,500.

China’s Cross-Border Ecommerce Remains Strong: Chinese consumers’ cross-border ecommerce spending grew 32% to $1 trillion on in 2016 – about one fifth more than the 26% growth of ecommerce overall. Shoppers born in the 80s account for 59% of overall orders, with 90s-kids 23% and those from the 70s accounting for 14%. Beauty products and mother and child goods remain the most popular categories according to the China Cross-border E-commerce Index Report.

iPhone 8 Cheaper in China than in Hong Kong after Falling Demand Forces Retailers to Offer Discounts: Pre-orders for the iPhone X are looking good, following lacklustre iPhone 8 demand which has seen the device selling for less in China than the normally cheaper territory of Hong Kong. Apple faces stiffer competition from local brands such as Huawei which have outsold globally Apple since June despite the launch. Nevertheless, iPhones remain among the top gifts for China’s wealthy and the launch has helped Apple reverse six-consecutive quarters of declining revenue in China to grow 12% year-on-year.

Consumers,  Chinese Consumers

Five Key Consumer Trends for 2018: Mintel’s five trends for China next year (it’s hard to believe these are coming out already) are 1. Consumers will embrace machine learning and artificial intelligence if it makes their life easier; 2. Young consumers are actively looking for ways to deal with social stress with escapes such as gaming; 3. Traditional native Chinese philosophy, remedies and forms of exercise will be important; 4. Consumers will want brands that allow them to enhance who they really are, and experiment and express themselves however they choose; 5. Mobile will be essential for brands.

P&G Succeeds in China with the Human Touch: P&G has turned around the fortunes of two of its beauty brands by showing more consumer empathy. This has seen a shift in studying consumer desires from impersonal and ‘skin deep’ insights to understanding about consumer’s larger emotive needs – they should have spoken to the Skinny years ago! A transformative moment for P&G, as it examined how to boost flagging sales of its VS Sassoon brand, came when they realised target consumers liked photos which didn’t just a model’s hairstyle, but also her accessories and full outfit.

Premium Food & Beverage

Infant-Formula Makers Milk Chinese Consumers’ Wallets: Chinese families with 2-3 month-olds spend on average $286 per month on infant formula – 40% of the average income versus the equivalent in Europe costing around 1-3% of local household incomes. Premium products cost up to 2.5 times more without any scientifically proven beneficial value, but on parents’ willingness to pay for features highlighted from research into consumer preferences.

Healthy and Cool? Packaged Water Sales in China Driven by New Consumer Preferences: Sales of packaged water grew 14% by value, well ahead of the 2% growth of FMCG overall in the first half of 2017. The top five local brands accounting for 70% of market share, but in the upscale segment, imported brands have an upper hand. The bottled water market, worth ¥60.7 billion ($9.2 billion) in 2016, is set to grow to ¥86.5 billion ($13.1 billion) by 2021.

Overseas Chinese Tourists

The World’s 5 Fastest Growing Cities for Tourism are All in China: Chongqing is the world’s fastest growing tourism city growing at 14% annually, followed by Guangzhou at 13.1%. Shanghai, Beijing and Chengdu round out the world’s top-5. Shanghai has the largest tourism and travel GDP contribution in the world, at $30.2 billion. It also accounts for 11% of China’s total travel and tourism GDP contribution. With China’s domestic tourism whetting the appetite for outbound travel, the future looks bright for China-related tourism the world over.

Chinese Tourist Behaviour Changing Amid Boom in Overseas Travel: The number of Chinese travellers mostly planning holidays themselves grew from 49% to 74% from 2015 to 2016, with the those mostly planned by travel agents dropping from 15% to 2% according to Oliver Wyman. Spending while away is both increasing and becoming much more diverse.

Overall Health & Beauty

How Duty Free Shopping is Changing the Beauty Industry, by Forcing it to Innovate: Travel retail is one of the biggest markets for prestige cosmetic brands such as Estée Lauder and L’Oréal, with many new collections now being sold exclusively in airport duty-free shops. At Singapore’s Changi Airport, Lancôme recently introduced the Lancôme augmented-reality virtual makeover app, Virtual Mirror, as an in-store experience. Beauty vending machines, like Sephora and Benefit Cosmetics, also came into prominence at airports.

Premium and Luxury

The Changing Nature of Luxury in China: Changing expectations of Chinese luxury consumers include minimalism; lifestyle where architecture, cultural events and the sporting arena are used as vehicles to convey exclusivity; naturalness; and local cultural confidence.

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

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