Mark Tanner
21 August 2013 0 Comments

There’s a stunning spot in Idaho, where sweet and plump cherries grow.   Many miles away in Shanghai, consumers on Tmall are clicking ‘buy’.  As those US cherries are looking nice, they’re picked and sent with bags of ice.  They reach Chinese homes two days after they were on a tree, faster than they got to Tennessee.

That isn’t just a poorly-rhyming fantasy, it’s the way Chinese consumers are now buying online.  Fresh American cherries, cheaper than they’d be at Walmart China, sold out in three days.  Tens of thousands of online shoppers pre-ordered 60 tons of cherries in the latest series of offers that have enabled Chinese to buy fresh, trusted, American produce, directly from the source.  In the first half of this year, sales of imported food have grown 500% on Tmall, as increasingly wealthy consumers opt for food they deem as safer.  

Retailing in China is a competitive and ever-changing beast.  Just ask Tesco.  What is consistent is that Chinese consumers are shopping more and more on their PCs, tablets and mobiles.  Food and beverage is one of the stand-out growth areas for online shopping, with some pundits picking growth for fresh food to be 400% in the next five years.  Consumers aren’t just buying their weekly supplies online for convenience or a lower price, they’re looking for products they can trust and that aren’t on the shelves at the local Lotus store.  American cherries are just one example of how businesses can innovatively sell more goods online, and also grow their brand’s awareness and reputation in offline channels. Watch this space.  In the meantime, we’ve got the usual rundown of news, views and stats about marketing to China.  We hope you find it helpful.

Chinese consumers Chinese Consumers

With Another Failed Foreign Venture to its Name, Tesco Turns its Focus Back to Britain: After 9 years, Tesco is folding its unprofitable China operation into a state-run company as a minority shareholder. Tesco holds about 2.4% of China’s market, accounting for 2% of Tesco’s global sales. Soaring online grocery sales can’t have helped the outlook.

Chinese Consumers Value Product and Service Quality Over Price: 76% of China’s middle class place the most importance on quality when buying goods according to a survey by HKTDC. Just 24% consider price to be the highest priority for choosing a product. 59% stated well-known brands reflect higher quality and 56% use brands to enhance their self-image.

Chinese Internet Internet, Mobile & Social Media

Chinese Online Shopping Boom Reaches ROK, Japan: Online purchases in China on Alipay for the first half of 2013 are up 219% from a year ago. Volumes from overseas sites have more than tripled during that time.

M-commerce in China Surges More Than 40 Percent in Q2: mCommerce in China surged 181% from a year ago, with mobile estimated to account for 8.6% of online shopping in Q2, almost double the portion it made up a year ago.

Xiaomi Sells First Batch of 100,000 Budget Phones in 90 Seconds: 100,000 of Xiaomi’s new Hongmi ¥799 ($130) smartphone, sold out in 90 seconds on Qzone. 7.45 million have been preordered. Higher up the value chain, Xiaomi’s ¥1699 ($277) Mi 2S outsold the Samsung S4 in the first half of 2013 to become the top selling mobile in China. Started just 2-years ago, Xiaomi now outsells Apple in China on units and with Lenovo’s shipments up 131% in a year, the local manufacturers are making some serious inroads.

Specialized Newsrooms Abuzz on WeChat: WeChat’s broadcast messaging is creating a plethora of citizen reporters and specialised storytellers.

For A Winning Weibo Strategy, Gaining Followers Is Only Half The Story: Don’t base a company’s Weibo success on their number of followers. Coach is a good example of engaged followers, attracted by its focus on visuals, consumer advice, easy purchase and constant activity.

Chinese food and beverage Food and Beverage

Sales of U.S. Cherries to Chinese Consumers Shows Growing Potential: A US cherry promotion on Tmall, which saw cherries reaching Chinese consumers just 48-72 hours after being picked saw a sell out in three days – 30,000 orders totalling 60-tons. The early stages of the wave of foreign f&b selling directly to Chinese consumers online have begun. The freshest American cherries you’ll get in China, are actually 22% cheaper than their equivalent in Walmart’s China stores.

Cashing in on Health Scares, China Online Food Sales Boom: Some pundits are picking online sales of fresh food will grow by almost 400% to ¥40 billion ($6.5 billion) in five years. Sales of meat, seafood, fruit and vegetables on Taobao grew 42% in 2012 year to nearly ¥1.3 billion ($210 million). Shunfeng Express, China’s largest delivery company, offers food to around 500K customers, with 70% being imported.

China’s 10 Best Selling Wines Online: What the Chinese are drinking according to online wine retailer Wangjiu.

Chinese Consumers Go Crazy for Californian Pistachios: California’s largest food export to Mainland China? The humble pistachio nut. Exports have grown 2,200% since 2004 to $109 million a year – 35% of its harvest.

Outbound Tourism

Tourism Australia Spreads Web into China: Australia launches its first website dedicated exclusively for an overseas market – within the Great Firewall. By 2020, Chinese tourists are expected to be worth $9 billion to Australian tourism.

Destinations Target Chinese Tourists on Weibo: California is hoping to follow New Zealand’s success with Yao Chen, signing up Chinese actress Gao Yuanyuan, with her 21 million Weibo fans to promote tourism in the state.

Education Education

Cards Make Paying Global Tuition Easier: 194,029 Chinese students enrolled in US Schools in the 2011-2012 academic years, 23% up from a year earlier. More than 300 Universities including BU, MIT and Cornel have just made it easier for Chinese to pay for tuition and living expenses online with RMB.

Physical Health & Beauty

China is Getting Fatter: 11% of Chinese between 20-39 are obese, having put on 1.9kg since 2010 on average. Over a third between 20-69 are overweight. 9.6% exercise more than 3 times a week.

Chic and Cheap: China Takes Shine to South Korean Cosmetics: Chinese consumers are taking a fancy to Korean cosmetics in the country’s ¥208 billion ($34b) a year beauty & personal care industry. They’re cheap, chic, can read market trends and react quickly. Amorepacific sales jumped 34% in the 2nd Quarter of 2013, growing its share in China’s skincare market 20% to 2.6% last year. L’Oreal has 16.8% and P&G 9.8%.

Jewelry Jewellery

China’s Increasing Appetite for Bling is Giving Some Spark to the Moribund Gold Market: Chinese consumers, who make up a quarter of global gold demand, have helped drive up the price of gold to $1,335 an ounce. Some expect Chinese consumers to buy more gold than their Indian neighbours this year.

Recreation & Sport

NFL Home Field Coming to Shanghai: NFL is upping their presence in China, with ‘Home Fields’ to be set up in Beijing, Shanghai and Guangzhou between 31 August – 17 November with special guests, cheerleaders, live entertainment and games.

Chinese auto Auto

In China, Curbs on Car Purchases Encourage Pricier Rides: Pricey plates for cars in China’s big cities has meant it makes more sense to buy a bigger car to justify the expense. The average price paid for cars in Beijing has soared 88% since 2011.

BMW Sales Growth Outpaces Mercedes-Audi in China Luxury Car Race: BMW’s July growth in China outpaces Audi and Mercedes, growing 39% on the back of its stretched 3-series.

Morgan Joins Race for Chinese Consumers: Morgan enters China’s competitive luxury car market, differentiating with its craftsmanship, exclusive image, and 104 years of hand-built style. Growth in China’s premium car market has slowed to 8.3% in the first quarter of 2013.

Chinese luxury Luxury Goods

As Chinese Consumers Break E-Commerce Records, it’s Luxury they Seek: In 2012, 242 million Chinese consumers spent ¥1.3 trillion ($209 billion) on eCommerce, and they’re increasingly willing to buy big ticket items.

That’s The Skinny for the week!  China Skinny would love to discuss how we could help with your marketing, online initiatives or research to take advantage of China’s opportunities.  Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.

If you’ve missed earlier news or need to learn more, there’s a library of information about Chinese consumers in prior China Skinny Weekly’s right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed.  If you have any feedback or suggestions for future articles, please let us know.