Here are this week’s news and highlights for China:
Are China’s KOLs Creating True ROI for Brands?: Fashion KOL posts mentioning luxury brands on WeChat receive on average more than four times the views and nearly eight times the engagement than posts by the brands themselves, according to L2. Top beauty bloggers get more than three times the number of views and four times the engagement than beauty brands’ accounts.
New Balance Court Ruling in China Is Rare Win Against Piracy: A court in Suzhou has fined five shoe manufacturers and sellers $250,000 for using New Balance’s signature slanting ‘N’ logo in a small step for anti-counterfeit progress in China.
Aldi Enters Chinese Retail Market: German retailer Aldi ‘officially’ launched in China on Tmall Global last week, kicking off with a fashion show. The company has been trialing hundreds of SKUs since March 20 with its best-selling products, adult milk powder, honey and mixed nuts, selling out and more needing to be shipped in from Australia.
WeChat User & Business Ecosystem Report 2017: WeChat now has 889 million active monthly users, using it for 66 minutes a day on average, with a third spending over four hours. Age distribution has shifted, with a lower percentage of younger users and greater share of all users in the 26-60 age group relative to previous years.
iPhone To Be Squeezed In All Chinese Market Segments In 2017: 493 million smartphones are expected to be sold in China in 2017, 4.8% more than 2016, with value increasing 11.4% to average $289 a device according to GfK as Chinese consumers continue to trade up across most categories. Apple will find it harder to win back share from smart domestic brands unless it launches a spectacular new device in September. Globally, China’s Huawei, Oppo and Vivo saw growth of 20-30% in 2017 Q1, taking spots 3-5. Market leaders Samsung and Apple saw 0 and 0.8% growth respectively.
Dairy Giant Plans Big Investment: Dutch global dairy giant Royal FrieslandCampina saw 2016 China revenues reach ¥5 billion ($726 million), jumping 30% from 2015. The company plans to develop more Chinese-catered dairy products and launch Frico butter, Chocomel chocolate milk and an adult milk powder on cross border ecommerce. It is also tapping into the Belt and Road initiative with the first batch of products arriving by rail from Rotterdam to Chongqing.
Wine Producers from Italy, Losing Market Share to France, Hope to Penetrate China’s Imbibing Consumer Market: Although Italy is the world’s largest wine producer, it commands just 5% of the import market in China. Initiatives such as “I Love Italian Wines” festival in Shanghai hope to increase this. Market share remained steady in 2016 although value increased 38%.
China’s Distillers say Ganbei as Banquets and Parties Resume: Major Chinese liquor makers are expected to post average profit increases of 26% this year, almost double the estimated 14% growth for all Chinese mainland-listed companies. Retail prices have increased for Moutai and Wuliangye this year amid rising demand for the high-end Chinese liquor from growing wealth among Chinese consumers. Disposable incomes increased by 8.5% from a year ago in the first quarter, outpacing economic growth.
Crushing Blow? Chinese Grow Wary of GMO: A Chinese consumer backlash against genetically modified (GMO) crops is beginning to dent demand for soy oil, the nation’s main cooking oil. A Nielsen survey found that more than 80% of Chinese shoppers would be prepared to pay more for GMO-free products and a 5-litre bottle of GM-free soy oil already sells at a 20% premium to oil produced from GMO soybeans.
IHG Unveils New Hualuxe Hotel as 300th Opening for Greater China: IHG has opened its 300th hotel in China in Zhangjiakou, Hebei Province, one of the host cities for the 2022 Winter Olympic Games. It has hotels in nearly 130 cities in Greater China, with more than three quarters located in tier 2, 3 and 4. Approximately 240 more hotels are due to open in the next 3 to 5 years, including 22 Hualuxe hotels which are specifically designed for Chinese travellers.
In Fast-Paced China, Marathon Craze Is Off And Running (Despite A Clumsy Start): Six years ago China hosted 22 marathons. This year it’s scheduled to host more than 400. Yet it hasn’t been all smooth sailing; last year Qingyuan marathon’s runners were assisted 12,000 times in the medical service tents from a total of 20,000 runners. After the race, runners received gift bags that included bars of purple soap in packages with English text and pictures of grapes. Some runners, unable to understand the English packaging, mistook the soap for energy bars, ate them and fell sick.
Nine Out of Ten Chinese Prefer Mobile Payment Over Cash, Credit Cards: 92% of Chinese consumers prefer using mobile payments to buy goods in stores. A third opt for debit and credit cards, which were more popular in lower tier cities according to Penguin Research. Supermarkets and convenience stores are the most popular place to pay with the apps, followed by online shopping, restaurants and apps.
Alibaba’s Yu’e Bao Becomes World’s Largest Money Market Fund: In just four years, Alibaba’s Yu’e Bao fund has surpassed JPMorgan’s US government money market fund to become the world’s largest totalling $165 billion. The vast majority of Yu’e Bao’s 260 million ‘investors’ are under 30, with 70% having balances under ¥1,000 ($145) and 85% less than ¥10,000 ($1,450).
Dolce & Gabbana Ad Campaign Upsets Chinese Netizens: D&G has removed its online advertisement campaign “DG loves China” shot in Beijing after it sparked accusations of only showing a ‘stereotyped’ China.