Mark Tanner
10 July 2013 0 Comments

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

Chinese food and beverage Food and Beverage

Dairy Measures Start At Source: New Chinese Government measures will require companies producing baby formula to own their farms. This will ensure greater supervision of the process and safety, and restore consumer confidence.  It won’t be easy. The number of farms with more than 100 cows in China has increased to 35%, almost double the 19.5% in 2008.

How Nestlé Finds Clean Milk in China: Nestle hopes to ensure the safety of it’s local milk supply with their “factory and farmers” model, which cuts out the middle man. Farmers bring milk to a network of Nestle owned collection centres, all within an hour of the farm, where a computerized system samples, tests, and tags each batch of milk. Farmers will also be provided constant training and help choosing cows, feed quality, storage, and other relevant aspects.

Foreign Milk Formula in China: A Passport to Safety?: The Chinese Dairy Association has reported that Chinese milk formula brands have twice the nutritional value of foreign brands – what impact will that have on the 70% of Chinese consumers who said they wouldn’t buy milk powder produced in China?

China Investigates Danone, Mead Johnson on Milk Powder Pricing: In what may help the perception of local dairy, NDRC’s Price Monitoring & Anti-Monopoly unit are investigating Danone, Mead Johnson, Nestle’s Wyeth, ABT, Royal FrieslandCampina NV and local firm Biostime. The companies have apparently sold milk powder at higher prices in China, with price-points as much as double of local suppliers, and increasing by 30% since 2008.  30% in five years?  The price of lunch around our office has increased by almost 30% in the past 6-months? Nevertheless, Nestle, Danone and some other producers have slashed their prices by as much as 20% since the probe.

Dirty Ingredients Prompt More Chinese To Opt For Clean Labels: Chinese consumers are increasingly looking at labels on the back of F&B products and buying products with recognisable ingredients. Research in Tier 1 cities indicates 85% of consumers check the labelling before buying and 86% desire lists than are easier to read and understand. 70% are more willing to buy products with a cleaner ingredients list.

China Animal Activists Rescue Hundreds Of Dogs Before Dog Meat Festival: 400 dogs have been saved from an estimated 10,000+ dogs to be eaten with lychees at the annual Yulin Dog Meat Festival.

China’s Growing Vegetarian Community Now Larger Than In U.S: 50 million Chinese are now thought to be vegetarian – more than the USA. Buddhism, environment impacts, and a lack of trust in meat (bird flu chicken, floating pigs, toxic fish, beef/lamb=rat) are contributing to the trend.

Chinese consumers Chinese Consumers

The ‘China Price’ Is Not Right: With foreign brands generally 30%-80% more expensive in Mainland China, savvy consumers are purchasing more and more overseas through travel, networks living overseas and shopping agents. To understand the Chinese market, brands should look outside just those purchasing in China and find ways to influence international shopping as well.

Winning The Battle For China’s New Middle Class: McKinsey’s take on creating products that appeal to both China’s mass market and the soon-to-be-majority upper-middle class: businesses need: (1) Aspirational brands; (2) Dual strategies; (3) Well-timed transition; and (4) State of the art marketing.

A Tenth Of Each Day Spent Watching Television: The average Chinese consumer is watching 2:38 of television a day, up 6 minutes from 2008 and the first rise in four years. In 2011, 44% surfed the net while watching TV. Consumers in Shanghai, more likely to have a TV, watch 5:12 a day. The average across the US was 5:17 a day in 2010.

Chinese Internet Internet, Mobile & Social Media

More Than Half Of Chinese Consumers Favour Mobile Shopping: 57% of Chinese consumers would purchase from a mobile, versus 49% globally. The most popular categories are: groceries, fashion, health & beauty, casual dining & fast food. Chinese smartphone owners use it for 4.9 activities a day (US is 4.7%). 67% are just as satisfied shopping on a mobile as in-store and 77% felt it removed the hassle of talking to sales staff. 84% were likely to buy a product with favourable online reviews if convenient, versus 66% globally.

China Now Has Over 300 Million 3G Subscribers: China hits 300m 3G subscribers – almost double the 175m a year ago. At the end of last year, the 3G split was 2:1 Android:iOS.

China’s Online Luxury Market Soars: China’s luxury online sales grew 71% in 2012, and are expected to grow at double digits for several years. Nearly 50% of consumers are worried that online luxury goods may be fake.

Chinese health and beauty Health & Beauty

China Campaign Begins To End Cosmetics Animal Testing: The campaign has begun to promote beauty without animal suffering in China. China is the world’s fourth largest beauty market, worth $22 billion annually, and one of the few countries where cosmetics animal testing is still legally required.

Chinese education Education

Elite Western Summer Schools Never Say They Offer A Ticket To The Ivy League. Wealthy Chinese Parents Sign Up Anyway: Chinese kids are already spending 40 weeks a year in school (US kids spend 36), and now they’re getting lobbed with summer schools. US Summer schools for Chinese students, where parents accompany their kids, can cost $30K all up. The three-week program at Eton College: $10,000 a child.

Chinese property Property

Chinese Immigration Turns Out To Be A Leading Indicator Of Australian Property Prices: Wealthy Chinese are now among the biggest buyers of real estate in Australia. Their purchases are touching all the residential segments from modest suburban homes to $50 million mansions.

Chinese Buyers Flee Hong Kong For Overseas Property Markets: Chinese buyers looking further afield than HK to buy property – scared off by cooling measures and better returns elsewhere. 18% of new luxury home sales in HK were to Chinese, the lowest in 4 years – in Q3 2012, it was 43%. Popular locations are London, US and Vancouver, where 25% of residents speak Chinese as a first language (no doubt that includes Cantonese).

Business 2 Banking

Navigating The New Era Of Asian Retail Banking: By 2015, more personal financial assets will reside in Asia than Europe. Growing at 9% a year since 2010, retail banking is expected to reach more than $900 billion by 2020.

Chinese auto Auto

Ford and Baidu Form Partnership for In-Car Infotainment: Ford buddies up with Baidu to offer Chinese customers Baidu Maps and Baidu Voice Assistant, for voice-activated info about the weather, traffic conditions and their current location, to read messages and voice dictation.

Chinese luxury Luxury Goods

China’s Luxury E-Commerce Market Worth $27 Billion in 2013: China’s eCommerce looks set to be worth $296 billion this year, making it the world’s biggest market. $27 billion of that will be for luxury goods following 71% growth in 2012. Almost 70% of online shoppers are willing to purchase luxury online. However, nearly 50% of consumers are worried that online luxury goods may be fake.

Chinese Consumers’ Taste For Luxury Brands Are Evolving: More than half of luxury searches in China are for cars. Beauty is the next most common at 22.7%, fashion 14.9%, jewellery 6%, hotels 1.8% and watches 1.1%.

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

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