Here are this week’s news and highlights for China:
Full WeChat Accounts are Available for Foreign Businesses: Here’s How to Set One Up: Foreign businesses no longer have to invest in building a WeChat account that is effectively owned by a ‘trusted partner’ in China, or even set up a WFOE (Wholly Foreign Owned Entity) to get a China-visible WeChat account. Tencent now allows foreign brands to set up WeChat Official Accounts with the core features but without WeChat Pay or API access at this stage. Here are the steps to setting one up. Brands can also transfer followers from their old makeshift accounts to their new ones.
China Skinny WeChat Webinar: The Checklist for Success: For any brands spending time and money on WeChat, we think China Skinny’s webinar on September 13 is the best investment you can make to ensure you’re maximising the WeChat opportunity and not throwing resources at the wrong things and how to best instruct an agency if you’re outsourcing.
Chinese Consumers Seek Social Currency Online: Chinese people are significantly more invested in their online identities than their Western counterparts. They spend more than three hours a day on WeChat on average versus 20 minutes Americans spend on Facebook. The rules-bound offline world ensures online identities remain highly compartmentalised and emotionalized. Compared with day-to-day reality, the internet is a blank canvas of self-expression driving emotional engagement and sharing with the “like-minded.”
China Reaches 800 Million Internet Users: 29.68 million people in China came online for the first time between January and June 2018 bringing the total to 802 million – 98% whom are mobile internet users. 71% use ecommerce or online payment services, 74.1% use short video, 43.2% have used taxi booking apps and 30.6% bike sharing apps.
Alibaba Delivers 61% Growth in Revenue Amid Increased New Retail Investment: Alibaba’s Q2 revenue reached ¥80.9 billion ($11.8 billion), up from ¥50.2 billion in the year-earlier period. Alibaba added 24 million users from last quarter for a total of 576 million annual active consumers. About 80% of new consumers came from lower-tier cities in China.
The Six Biggest Mistakes Multinationals Make in China: Ten years ago, for Western multinationals entering or expanding in China, the main question was “Is China different?” Most eventually answered “yes.” Rather than treating China as any other market, companies began to shift strategies and allow their Chinese operations to do whatever it took to win. Yet many multinationals are still not doing what it takes to win, including making mistakes such as: 1. Trying to fit China operations into a global mould; 2. Being too quick to punish failure; 3. Trying to tame the chaos; 4. Making a five-year plan; 5. Using the same compensation structure as at home; and 6. Taking competitive advantage for granted. Winning in China will help the rest of the company adopt an insurgent mind-set. Rather than treating the China business as unique to China, consider it as the model for how you will compete globally. [paywall]
40 Years of Growth: Ranking China’s Provinces by GDP per Capita, 1978-2017: Focusing on headline numbers like national GDP growth obscures the volatility and increasing economic divergence from province-to-province and city-to-city – the places where business and investment decisions actually play out. Fujian Province and the Yangtze River Delta have performed well, whereas Heilongjiang, Tibet and Gansu have declined in the rankings.
Why China Can No Longer Hide Its Health Scandals: 3:21 vid. Where the authorities used to downplay health scares and sweep them under the rug, the latest vaccine scare shows just how much things have changed. Chinese consumers have turned to social media and the Government has responded. Their response was more timely than ever and investigations and punishment was more effective.
China Says Australia Has Made ‘Wrong Decision’ After Huawei Ban: Last week Australia banned Huawei and ZTE from its 5G wireless infrastructure development, a key ingredient to the Internet of Things, which involves connected devices like self-driving cars. China’s commerce ministry said Australia had made a “wrong decision” which would have a “negative impact on the commercial interests of Chinese and Australian companies.” In related news, Australia’s new Prime Minister Scott Morrison has both championed greater economic engagement with China and blocked Chinese investment on national security and protectionist grounds, introducing new foreign interference laws earlier this year that have strained relations with Beijing.
Country of Origin, Brand and Tamper-Proof Seals…China Consumers’ Most Trusted Measures of Safe Foods: Chinese consumers regard a product’s country of origin, price, brand, and physical prevention measures such as tamper proof seals as the most trusted indicators in identifying authentic and safe foods, according to research into infant formula, scotch whisky and olive oil. QR codes are less likely to win the trust of consumers as credentials and codes can be easily falsified and were cumbersome to use. The research also found that there are geographical differences in food fraud concerns and the perception of regulatory system.
Chinese Tourist Numbers Surge as Overseas Travel Becomes Easier: Chinese tourists made more than 71.3 million trips overseas in the first half of the year, a 15% surge year on year. The increase could be attributed to the rise in international flights and visa service centres opening in China’s second- and third-tier cities. Domestic tourism grew 12.5%. The top 9 spots were all in Asia: Hong Kong and Macau (together accounting for 45.9% of all visitors), Thailand, Japan, Vietnam, South Korea Singapore, Malaysia and Taiwan, followed by the US at number 10. Thailand’s 26% increase is unlikely to be matched this quarter, with a 14.3% decline in August following the boat incident that killed 47 Chinese tourists last month.
Why Your Next Flight May Go Via China: China’s airlines are benefiting from regional Chinese governments offering them subsidies to run international flights from their main cities, in the hope of putting them more on the map, and encouraging tourism and economic development. In 2016 regional Chinese authorities outside Beijing, Shanghai and Guangzhou spent at least $1.3 billion subsidising airlines. The rise of Chinese tourists is also having a bearing in attracting preferential landing slots.
Alipay Launches Digital VAT Refunds to Save Chinese Travellers Millions: Alipay in partnership with Global Tax Free is offering the world’s first paperless mobile tax refund function in South Korea. The service is similar to AliPay’s refund service in Europe which launched in early 2017, but doesn’t require travellers QR codes to be scanned at airport tax counters – they simply scan eligible tax refund receipts to receive refunds immediately once they have completed necessary migration procedures from Korea.
China is Now the World’s Second-Highest Spender on TV Shows After the US: China is now the world’s second-highest spender on television shows after the US, with its annual expenditure hitting $10.9 billion in 2017. Online platforms accounted for over 40% of spending on programming.
China’s Sports Industry 10 Years After The Beijing Olympics: Global Leader Or Pretender?: A 2014 policy document called “Number 46” outlined China’s ambition to become the biggest sports industry in the world. China’s sports industry is, in some ways, a microcosm of the country’s economy — simultaneously saving the world while perched on the edge of the precipice. The potential of the sports market continues to generate excitement, both in China and globally, and the next decade will surely bring more dramatic changes to the industry — if it doesn’t get consumed by its own hype first.