Mark Tanner
3 July 2019 0 Comments

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

Pollution and Environment

China’s War on Trash Is the World’s, Too: Shanghai’s new program is the most visible and extensive municipal recycling initiative ever attempted in China. Shanghai Residents can only dispose of waste during certain hours, ensuring that neighbours will see who is and who isn’t sorting properly. They must empty food waste into public bins without using bags, so everyone can also see what they’re throwing away. Fines of up to ¥200 ($29), await those who don’t sort. Businesses face fines of up to ¥50,000 ($7,282). Following Shanghai, another 45 cities in the Chinese mainland will introduce similar regulations, including Beijing, Shenzhen and Guangzhou.

Consumers,  Chinese Consumers

China Warns of Long Road Ahead for Deal With US After Ice-Breaking Talks: In a sign of progress in relations on Saturday, Chinese President Xi Jinping and US President Donald Trump, on the side-lines of the G20 summit in Osaka, agreed to a ceasefire and a return to talks, with allowances on Huawei. Trump is now aware that China is not going to give in, and that tariffs on Chinese goods are increasingly unpopular back home. Unlike the previous meeting in Argentina, this time the two sides’ statements are reasonably similar. Here’s a comparison of Washington’s versus Beijing’s statements by Bloomberg.

More than Half Chinese Consumers Shun US Goods Due to Trade War, Survey Shows: 56% of respondents in a UK-based Brunswick poll say they had avoided US products in support of their country in an escalating trade war, while 68% said their opinion of American firms had become more negative.

Chinese Consumers Very Confident About Future, Says Bain & Company’s Lannes: 2:30 video: Chinese consumers are behaving as you would expect in a growing economy, with a strong FMCG growth rate in line with previous years – personal & home care grew in double digits and premiumization is growing strong which is another sign of upbeat consumers. Now is the time for consumer companies to double down on China according to Bain. Chinese retail sales grew 8.6% in May versus 8.1% forecasts.

What to Expect from a Transitioning China?: With 430 million people now classified as middle class, China currently has more people in this social bracket than the entire population of the US. What’s more, this number is expected to rise to 780 million by the mid-2020s. China now commands over 40% of the world’s e-commerce transactions, which is up from around 1% just 10 years ago.

Online: Digital China

Douyin’s Daily Active Users in China Top 250 Million: Douyin’s 250 million daily users outperformed rival app Kwai, which attracted 160 million daily active users. China’s short video market increased 744.7% year-on-year to reach RMB ¥46.7 billion ($6.8 billion) in 2018 with users spending 600 million hours a day watching content.

Faking Street Photography: Why Staged “Street Snaps” Are All the Rage in China: A new trend has popped up on Chinese social media: people posting short videos on their accounts that create the impression that they are being spotted by street fashion photographers. Some look at the camera in a shy way, others turn away, then there are those who smile and cheekily stick out their tongue. These self-made models are gaining more fans on their Weibo, Douyin, Xiaohongshu, or WeChat accounts.

Premium Food & Beverage

Chinese Consumers Willing to Pay Premium for Sustainable Seafood: 80% of consumers surveyed in China’s first-tier cities reported they’d be willing to pay up to 30% premium for certified sustainable seafood, while 95% of those surveyed would buy sustainable seafood according to Shenzhen-based environmental NGO GoalBlue. Support for sustainability was highest among females ages 18 to 35 with a college education.

Start-Ups and Incumbents Battle for China’s Meatless Future: China is estimated to eat 28% of the world’s meat, with consumption having increased from 30 pounds per capita in the early 1980s to nearly 140 pounds today. Plant-based meat substitutes have been part of Buddhist cuisine for centuries, and Chinese companies have been producing “mock meat” on a commercial scale for decades, if not longer. The Good Food Institute (GFI) estimates that sales of plant-based meat in China reached $910 million in 2018, on the back of annual growth of around 15% since 2014.

Appetite Grows for Meal Replacements in China: The volume of meal replacement products surged by 50% year-on-year in 2018 according to CBNData and Alibaba. While people born in the early 1990s made up the majority of meal replacement consumers, the even younger generation born after 1995 contributed for most of the sales growth. The market is expected to be worth ¥120 billion ($17.4 billion) in 2022. Yogurts, snacks and energy bars that claim to have the same function as meal replacement products, are priced 40-200% higher than their regular counterparts.

Luckin Coffee Testing Self-Service Coffee Machines: Luckin is testing new self-service machines branded as Luckin Coffee Express, designed for public spaces like schools and office buildings. Users can locate the nearest coffee machine and place an order through the Luckin app. Drinks are ready 30 seconds after scanning the pick-up code.

“The Use of Ripening Rooms is Gradually Infiltrating in the Chinese Fruit Industry”: More attention is given to the better preservation of fresh fruits and vegetables in China, not only because it can extend the shelf life, but also because it can effectively protect their freshness. This better meets the higher requirements Chinese consumers have for fruit and is driving demand for cold storage and ripening rooms.

Trade, Channel & Healthy

China’s Health Has Reached a Tipping Point: Lifestyle changes stemming from rising wealth have seen chronic conditions replacing infectious diseases, with stroke, heart disease and lung and liver cancers supplanting lower respiratory diseases and neonatal disorders. In short, rapid urbanization, diets with more meat and salt, less physical activity and increased air pollution are making people sick, while advances in health and medical care have cut the rates of death linked to pneumonia, flu, diarrhoea and childhood diseases. Smoking is the top risk factor in 21 of the 31 provincial-level economies in mainland China, and second or third among the rest. Liver cancer rose from the 11th ranked cause of death to 5th in 2017.

Video & Entertainment

China’s Big Brother Casinos Can Spot Who’s Most Likely to Lose Big: Macau operators install hidden cameras, RFID chips and tables, using algorithms that process the way customers behave at the betting table to determine their appetite for risk, giving casinos a way of easily separating who might become serious gamblers from those just having a fun weekend.

Designers and Fashion

Nike Pulled a Shoe Line from China After its Designer Supported Hong Kong Protests: Nike cancelled the China sale of a range of sports shoes designed by Undercover, the brand of Japanese designer Jun Takahashi after it posted on its Instagram account a photo of protesters with the slogan “no extradition to China.”

Premium and Luxury

What’s New with China’s Luxury Spending?: A report for Tencent and BCG highlighted: 1. WeChat remains the most-used social media app during discovery and research, followed by Weibo and Little Red Book; 2. Word-of-mouth (WOM) marketing is gaining significance; 3. “Research online, purchase offline (ROPO)” demand surges; 4. An ever-fragmented Chinese influencer landscape that’s remarkably different from the West; and 5. The top-50 Chinese cities generate over two-thirds of luxury consumption.

Chinese Luxury Fashion Consumers Prefer Instore to Online: Chinese consumers are increasingly focused on the sophistication that comes with luxury. Thus, the acquisition of luxury items is not merely to show off financial status, but also knowledge of what is good quality and therefore worthy of being shown off according to McKinsey. All luxury consumers consulted both online and offline sources at least once a week, spending 3-5 hours a week on luxury and fashion information per week. Buyers regularly access an average of 16 sources of information. 92% prefer to buy offline.

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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