Mark Tanner
5 March 2013 0 Comments

Last month Weibo announced it had reached 500 million users as part of it’s quarterly results. An impressive, yet surprisingly large number given there are only 564 million Internet users in China. It also added the last 100 million users in just 3-months, when the 100 million before that took six – and it’s a mature product. As a listed company, there is pressure for Weibo’s parents Sina to continually report good news and maintain face, especially with WeChat nipping at it’s heals. Numbers in China can’t always be taken at face value and unfortunately Weibo is no exception. The growing number of ‘zombie’ users on Weibo, even those classed as ‘active’, should be viewed with caution.

There is no question that Weibo needs to be a key pillar for almost all Chinese marketing strategies; it’s a powerful and cost effective way to reach key influencers and the masses. We’ve covered many business’s Weibo success stories in previous newsletters and we include another today. With social media anywhere, one needs to be aware that some followers, forwarders and commenters may not be who they appear to be. There are a number of agencies to be wary of, who buy and sell these types of followers. Like many marketing metrics, it’s worth delving deeper than those numbers to the actual qualifiable leads and sales results from Weibo campaigns. As Yale University has learnt, fake users and other dubious behaviour online can seriously harm a brand in China.

On a lighter note, in this week’s skinny you’ll find plenty of great (and reliable) statistics to be celebrating in the China market, in addition to the usual round of views and tips. We hope you find something useful!

Chinese consumers Chinese Consumers

Chinese Firms Lead CSR Perceptions: Western companies investing in Corporate Social Responsibility in China are missing the mark, with domestic firms taking the top-9 spots for recall (Coke is no.10). Western firms are often going for the ‘feel good marketing’ factor and not focusing enough on the long term sustainability needs of China.

Chinese Internet Internet & Social Media

Sina Weibo Passes 500 Million Users, But Needs to Monetize More on Mobile: Weibo announces 500m users. 46.3 million users are reported to be active.

Chinese Celebrity Blogger Han Han Talks Weibo, WeChat, and Why User Numbers Are BS: Plenty of Han Han’s 11 million Weibo followers are zombies. His humorous take on Weibo being helpful, but sometimes deceptive of reality. Like an increasing number of Chinese consumers, he prefers WeChat where posts are seen by people who should see them.

The Chinese Go Bananas for Nestle!: Nestle launches it’s new BenNaNa range on Weibo, where 70% of food-related updates in China are posted. It became Nestle’s best selling icecream product within 3-months.

China’s Internet is a Giant Shopping Mall: Excellent infograph from Alibaba about China’s soaring eCommerce industry – 242 million shoppers spent an average of $1,054, buying 101 items each in 2012. 90% use ePayment services (half also pay by cash). Apparel and accessories continue to be the most popular item bought by 68% of shoppers. Unlike Weibo, the 242 million shoppers may actually be conservative – with one ‘shopper’ often buying products for a number of friends and family. Whatever the real number, it is much bigger than Texas.

The Luxury of Convenience: The percentage of Chinese luxury consumers purchasing online increased from 2% in 2010 to 8% in 2012, although online sales only accounted for 3% of luxury goods, and are generally the smaller items. Official luxury websites account for just 4% of online sales, with most customers buying through online retail portals from TMall to niche sites like Shangpin, however an online presence is still imperative for luxury products to build their brands.

Chinese education Education

Yale Brand Wades into China’s Weibo World: 200,000 Chinese students are studying in the USA, and many institutions are using social media to attract them. Yale has 140,000 Weibo followers, many more than every other foreign university except the esteemed Peoples’ Friendship University of Russia. Just 2% of Yale’s followers are active on Weibo daily and many are from rural areas – not exactly a big source of students for the university. Buying zombie fans on Weibo is obviously frowned upon and could do serious damage to Yale’s reputation in China.

Chinese mobile Mobile Phones

China Surpasses US as Biggest Market for Apple, Android Devices: China now has more active Android and Apple devices than any other country – over 220 million devices. With Android devices as cheap as $100 each, that number will continue to soar.

Chinese food and beverage Food and Beverage

Uncorking China’s Spirits Market: 14-min video with some good lessons on marketing Cognac in China. The market is now the world’s largest by value and accounts for 22% of volume (up from 5% in 2000). Over the past 20-years consumers have changed from just older businessmen showing off wealth & status, to a group who actually enjoy it and younger consumers who drink it for status, drinking it in different environments such as bars as cocktails. Small players are competing against the big boys by building brand personality and maintaining quality in addition to education such as brand presentations, PR and magazine ads in focused niches such as golf and yachting. A simple and recognizable logo and bottle shape also helps distinction. Champagne, on the other hand, is only selling 1/30th of the volume of Cognac in China.

Mexican Multinationals Target China’s Most Adventurous Consumers: Mexican’s foray into the Chinese consumer market is through it’s food – Yum! Baked goods are leading the charge, although manufacturers such as Bimbo and Gruma are learning how different Chinese tastes can be to their other markets, further emphasising the need to do the research.

Chinese tourists Chinese Tourism

The U.S.’s $4.4 billion Surplus with China: Chinese tourists are surging in the US, becoming the highest average spending tourists at $6K each. Tourists cram in many destinations, mainly eating Chinese food and love to hear about US universities and companies. NYC is the most popular destination drawing 40% of Chinese visitors, LA is second, and Gone with the Wind tours of the south are also popular. Room for improvement: Although the visa interview process has been sped up, it could still be better. 54% of international tourists claim they are treated rudely by customs officers. There are concerns that the USA is working in silos and should take a more unified approach to Chinese tourism.

Chinese property Property

Chinese Real Estate listings portal Expands European Property Coverage: is allowing more western real estate agents to list on their site to capitalize on Chinese buyers being the fastest-growing buyers of real estate in many countries. In 2011, Chinese spent US$28.7 billion on residential property around the world, expected to rise to US$114 billion by 2015. Chinese buyers bought 54% of the total value of prime central London, paying an average of £5 million ($7.4 million). They’re also the biggest foreign buyers in the central Paris, Ile-de-France area, with 16% of the market. European properties were viewed 882,000 times by Chinese investors on Juwai in January 2013 alone.

Cracking the Chinese Market: Cyprus property sales to Chinese on the rise as investors get permanent residency with purchases of €300,000 or more. Chinese tourism also expected to increase as a result.

Chinese auto Auto

VW Developing $8K Budget Car For Chinese Market: Volkswagen are developing an $8,000 car it hopes will woo 3 million Chinese customers a year. Honda, also playing to China, are launching two China-specific cars and doing a global launch for another.

China Passenger Car Sales Surge In January: 1.49 million passenger cars sold in January 2013, up 53% from Jan ’12, helped by the timing of Spring Festival. Medium-sized and SUVs saw the biggest growth, with SUVs now 15.5% of the market. Medium-sized are the most popular at 57.7%, small cars just 20% and luxury 3%. VW is the top brand, followed by GM. Japanese brands have taken a hit, while local brands are on the rise.

Chinese jewelry Jewelry

De Beers (and the entire diamond industry) pins its hopes on China and India: When De Beers entered China in 1994, few could afford them. In 2012, 80% of engaged ladies in Shanghai and Beijing wear the precious jewel on their finger. Although growth has slowed in the past year, China is expected to be the No.1 market by 2016.

Chinese babies Little Buddhas

China Market for Disposable Diapers: Disposable diapers are one of the fastest growing segments of China’s infant industry; In 2011, it was valued at RMB18.46 billion, growing 27.7% in the year, and it’s expected to be even more the Dragon kids. Not great for the landfills or the seamstresses who make those little holy trousers.

Chinese luxury Luxury Goods

Bloomingdale’s Courts Chinese Customers: Bloomingdale’s is dipping it’s toe in the China water before diving in, with a month-long Year of the Snake series with limited edition merchandise, special events and pop-up stores.

Luxury Watchmakers Focus Increasingly on Chinese Consumers: Luxury watch brands are tailoring designs, business models and marketing campaigns to the China market, although they need to be careful not to lose their Europeaness. One of the highest profile examples of tailoring to China is Hublot who partnered with Ferrari to design a China limited edition watch and also used ManU to open a Shanghai boutique.

That’s the skinny for the week!

If you’ve missed earlier news or need to learn more, there’s a library of information about Chinese consumers in prior China Skinny Weeklys 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.