Few things are changing the way Chinese consumers communicate, build brand preferences and shop than mobile phones. With feature-packed smartphones such as the XiaoMi Hongmi selling for ¥799 ($130), smartphones have become accessible for every middle and upper class Chinese consumer. 460 million of China’s 591 million Internet users go online on their mobiles, and that will grow even further with the 450 million smartphones forecast to sell in China next year. Two-thirds of Chinese with smartphones now use them to browse or buy products. For wealthy Chinese, it’s nearly three quarters.
In China’s hyper-competitive mobile space, Xiaomi is one to watch. The local brand launched just 3-years ago and now sells more units in China than Apple. It wasn’t long ago when image-conscious Chinese consumers would only sheepishly pull out a Chinese mobile brand in public; now the young and hip are proudly browsing, WeChatting and shopping everywhere on their Xiaomi’s. Xiaomi has hit a sweet spot with Chinese consumers, with good looking phones and lots of bells and whistles, all for a great price. That has been coupled with some clever marketing such as innovative pre-launch sales on social media. Having just hired Hugo Barra, Google’s ex-VP of Android Product Development, it’s clear that Xiaomi has ambitions far beyond China.
China’s growing love of Xiaomi is a pin up case for how Chinese consumers are evolving. Most Chinese are proud of their Chinese roots and many support local brands if they measure up. As Chinese become more confident consumers, they are looking beyond just the brand, and evaluating the value. While an Apple iPhone may have higher quality components, increasingly more Chinese believe that the extra benefits from Apple’s premium brand doesn’t justify paying significantly more. Although some categories such as luxury goods, instant formula and cosmetics are still the realm of foreign brands, Chinese consumers are maturing at rocket pace, and are now assessing brands and products to a much deeper level. While many foreign brands will still be able to command a premium price, they need to back that up with solid reasons and great marketing more than ever. Hopefully some of the news and views below will help you do just that. Happy reading…
Chinese Consumers Shift To Lifestyle Brands, Engage In Price Arbitrage; High-End Luxuries Most Affected, Says Credit Suisse: Tori Burch, Kate Spade and Michael Kors, as well as lifestyle-oriented brands like Vans, have stronger relevance for these younger Chinese consumers than brands such as Louis Vuitton and Dunhill. 30% premiums for foreign luxury goods are likely to drop to 10-15% before converging with global pricing according to Credit Suisse.
Unleashing the Chinese Consumer: With the rising Chinese consumer, the biggest winners exporting to China are likely to be food and agriculture, environmental equipment, financial services and other services, such as health care, education, tourism and transportation.
Amway Bankrolls Harvard Course For Chinese Cadres: China has been Amway’s top market for the past 9-years, accounting for 40% of global revenue. The company pays commission of up to 27% and has brought more than 500 Chinese leaders to Harvard on a fellowship programme, with leaders of three provinces amongst former fellows.
Xiaomi’s Budget Smartphone Redefines What You Get for Just $130…: ¥799 gets you a lot of phone in China these days, which will only help bring more mobile marketing opportunities to the masses. 100,000 sold in 2 minutes and 5 seconds.
HTC Edged Out by Xiaomi in China’s Smartphone Market: Poll: Samsung is the most popular mobile in China with 21.5% of China’s mobile market – 66% of consumers would like to buy one. The one to watch is Xiaomi, which has 7.1% market share, but 75.1% would like to own one.
China’s smartphone shipments to exceed 450 million in 2014: IDC: Smartphones sales in China are expected to grow 25% next year to 450 million, including an expected 120 million 4G devices.
Apple Kowtows to China’s censors; Removes Circumvention App: Apple knows it’s in the best interests of stakeholders to keep the Chinese Government happy and has removed an app from the Chinese app store that allows Apple users to circumnavigate the Great Firewall.
China’s Online Retail Turnover Rocketed 70% YOY To 880 Billion Yuan In 2013 H1: The number of online shoppers in China grew 29 million, or 12%, to 271 million in the first half of 2013.
Alibaba, Baidu, Haier ‘most admired’ companies in China: Chinese consumers love tech companies: Alibaba is the most admired local company in China, followed by Baidu. Haier comes in at number three. Just three years after it was founded, Xiaomi is the 11th most admired.
China Employs Two Million Microblog Monitors State Media Say: In addition to a slew of automated tools, the Chinese Government has more than two million employees, monitoring, analysing, reporting, deleting and black-listing public opinion online in China. That’s one for every 245 Chinese people online.
China Probes Juice Makers into Allegations of Processing Rotten Fruits: In another food scandal, Chinese juice makers are buying cheap rotten fruit to lower their costs.
Condé Nast Traveller Targets Chinese Consumers in London: Condé Nast is targeting the discerning Chinese traveller giving advice on how to spend their money while in London – be it fashion, beauty, jewellery and watches. This will be helped by the UK’s alignment with other European countries to make it easier for a single entry visa on the continent for Chinese travellers. Meanwhile, Chinese tourists in London spent an average of $12,800 each, breaking the record formerly held by the Middle Eastern countries.
Chinese Tourism Tastes Are Changing, and Here’s Why: A recent Tripadvisor survey found almost half of the top-20 international destinations for Chinese travellers were in SE Asia. Time-short, young, white-collar workers liked the proximity and were also inspired by films set in the region. 90% of China’s travellers over the past decade were under 45, with young increasingly opting for independent travel.
China’s Generation Winnebago Avoids Traffic in RVs: The number of RVs in China is forecast to grow from 9,000 in 2012 to 800,000 by 2022. Even Yao Ming has rented a Chinese-made one. The Government plans to increase the current 150 designated camping areas.
Chinese Clothing Market Attracting Global Brands: Chinese paid $24.4 billion on foreign apparel and textiles last year, 6.6% more than 2011. For smaller foreign brands, there are many lessons to learn, from marketing strategies and where to advertise, to opening hours and talent recruitment.
In China, Where TV is Often Scripted and Predictable, ‘The Voice’ has Become the Nation’s Most Popular Show: ‘The Voice’ is the most popular TV show in China, with 7 million viewers per episode on TV and 70 million online. A lot of the show’s popularity has been put down to winners chosen purely on their voices, not by their connections or good looks.
Chinese Property Investors are Looking Beyond New York and California to Cities Like Houston, Seattle and Boston, as the U.S. Rebounds: Chinese investors in the US are increasingly diversifying from the traditional cities to diversify their investments and get bigger lot sizes.
Ford Comes From Behind in China to Stun Japanese Rivals: Ford’s sales grew 50% in the first eight months of this year to 552K, and may soon overtake Toyota and Honda in the market. By 2015 Ford will have the capacity to produce more cars and trucks in Asia than it made last year in North America. Although Ford was a slow starter in China, Morgan Stanley values Ford’s Chinese operations at $15 billion, more than the global value of Mazda and Fiat. VW and GM continue to dominate in China, both expecting to sell more than 3 million vehicles this year.
New Warranty Law Threatens Small Chinese Car Builders: New “lemon law” gives Chinese consumers more protection when buying new cars with free fault repair or replacement of defective vehicles.
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