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If you were peddling your products in Los Angeles and Chicago, there’s a good chance that you’d need to tweak the marketing strategy to account for differing lifestyles, varying tastes, disparate climates, different sales channels and varied cultural and emotional needs. In China, variations between cities are typically even greater. Many Chinese cities’ characteristics have been evolving since long before Columbus was leading expeditions to the Americas. These historic differences have helped shape regionalised consumer behaviour. More recent Beijing policies have further moulded differing consumer profiles. For example, residents in first tier cities have been able to travel abroad with more flexibility for longer than their lower tier peers, impacting their sophistication and maturity when travelling abroad, and their exposure to foreign lifestyles and products.

There’s no city that better illustrates the diversity of China’s megalopolis’ than the boomtown of Chengdu in China’s southwest. On the surface, it could be any Mainland city; thousands of grey apartment blocks sprawled across a flat grid of streets, dotted with adventurous modern commercial towers and restored ancient constructions, dissected by a winding river and heaving highways, obscured by a soupy smog more days that it isn’t. But filling those towers are a population arguably more independently-minded than consumers in other parts of China – with personalities as spirited as the peppers that are such as big part of the local Sichuan cuisine.

Chengdu is located some distance from Beijing’s policy makers. The mountains that encircle the city have provided a natural barrier for traders, invaders and legislators for centuries, isolating the city from the outside influences that have impacted other Chinese cities. Chengdu’s fertile soil and natural resources have seen it stay isolated for much of its history, allowing it to stay largely self-sufficient, with an attitude that’s both “mind your own business” and “anything goes.”

With the wealthy, sophisticated city of 16 million people increasingly on brand’s radars, China Skinny has delivered a number of research projects that include the Chengdu market. Their tastes and preferences are often the most disparate from other consumers in other cities we have investigated. One of our recent studies into the customer journeys of consumers in six mainland cities found the research and sales channels used in Chendgu were by far the most distinct.

Chengdu’s relatively lower rents have lured young, independently-minded migrants from across China, cultivating a hip, progressive culture that’s spawned San Francisco-style cafes filled with millennials. The many miles and mountains between Chengdu and Beijing has seen regressive policies about homosexuality hold less clout in the city, which has become a haven for the LGBT community, whose members are drawn to the relaxed, open vibe. Chengdu was voted the gay capital of China in a recent poll by gay dating app Blued.

Beyond sexual liberation, Chongqing also leads China for many genres of music, its underground scene and youth culture. Much of China’s Hiphop and Trap has spawned from the city, with many of China’s biggest hiphop hits dispersed with the Sichuan dialect.

For brands hoping to connect with independently-minded consumers in the city, you’d by wise to ensure that your product, messaging, channels, KOLs and most importantly, your brand’s purpose, are resonant with the target market in the city because just transposing a successful strategy from Shanghai or Beijing won’t always work.

For most brands in China, it can be impractical to have an independent marketing strategy for each target city, however there can be consistent elements by city tier and/or regional city clusters which can be incorporated to make marketing more targeted and resonant. We’ve found that understanding the consumers in a specific city usually highlights some quick wins that can make your brand and product connect with local consumers and break through the clutter. China Skinny has a lot of knowledge and experience to help you with that. We hope you enjoy this week’s Skinny.

Consumers, Chinese Consumers

Urbanization Rate to Reach 70% by 2035: Study: One billion Chinese people, or over 70% of residents, will live and work in cities by 2035 according to a report published by the National Academy of Economic Strategy. Hangzhou, Changsha, Chengdu and Xi’an had the highest rate of talent inflow between Q4 2016-Q1 2018. The per capita GDP in 12 Chinese cities surpassed $20,000 in 2018. China’s urbanisation rate was 58.5% at the start of 2018.

Chengdu Is Tapping Into China’s $300 Billion Rainbow Economy: Chengdu, or “Gaydu,” the city of 16 million best known internationally for its pandas, was voted the gay capital of China in a recent poll by gay dating app Blued. Although China decriminalized homosexuality in 1997 and removed it from an official list of mental disorders in 2001, gay, lesbian, and transsexual individuals still live in a grey area. There’s no law against being LGBT, but no rules protect against discrimination, either. China doesn’t recognize gay marriage and bans gay imagery in mainstream media. Just 5% of China’s LGBT population live their diversity openly according to the UN. Businesses have been carefully tapping into the $300 billion opportunity.

Is the Chengdu Music Scene Being Boiled Alive?: Yet all isn’t rosy in the laidback, chill town of Chengdu. As of March 2019, permits were technically compulsory for all ticketed live performances in Chengdu, which require artists to submit their ID, lyrics, recordings, setlist and general description of the show content. In actual fact, parties, gigs and festivals are actually growing in number rather than diminishing and the underground scene continues to thrive in new and innovative ways.

The Rise of Trap Music in China (Chengdu): 18 minute vid: The most thriving Trap scene in China isn’t in Shanghai or Beijing, but Chengdu and it is now spreading. Here’s a short video of one of Sichuan’s most popular Trap bands Higher Brothers, comparing their concert in Atlanta with one in Shanghai.

China’s Unmanned Store Boom Ends as Quickly as it Began: Across China, shops were considered the future of retail as recently as two years ago, have been shutting their doors for good. Alibaba launched the first unmanned store in 2017, and by the end of the year an estimated 200 convenience stores had sprouted up around the country. The difficulty of selling fresh groceries in stores without staff was one major obstacle, with boxed lunches, ready-made fresh meals, desserts and other products with limited shelf lives making up a large share of convenience store sales and a 40-50% margin, versus 25% for processed food.

Online: Digital China

Consumers “Trading Up” and Seeking Quality Drives Record-Breaking 6.18: Includes Infographic. JD sold $29.2 billion worth of merchandise for the 18-day shopping festival. Transaction volume growth was twice as high in lower tier cities than the overall growth. 91% of orders coming from JD fulfilment centres were delivered same-or next-day. JD’s smart customer service robot fielded more than 32 million inquiries, solved 90% of them. Some big numbers: 350 million cartons of milk sold, 150% increase in tampons sold, 6,700 tons of imported fresh food sold. Cosmetic medicine grew 572%, and sales of male beauty products saw a 522% increase within the first hour.

Alibaba’s Ecosystem Drives the Largest-Ever 6.18 Campaign: 200,000 brands took part in Alibaba’s 6.18 Mid-Year Shopping Festival, with 110 brands generating gross merchandise of more than ¥100 million ($14.6 million) for the 18-day campaign. Flash sales channel, Juhuasuan, added over 300 million new consumers, with more than 180 products topping ¥10 million ($1.5 million) and 4,700 breaking ¥1 million ($146K). 48% of newly-launched products were bought by consumers outside of first- and second-tier cities. Cross border sales from 3rd and 4th tier cities grew 153% from a year before. The top-5 cross border countries were Japan, US (consumers still love their goods), South Korea, Australia and Germany. Livestreaming promotions grew 120% from the previous year. During the campaign more than 100 brands – including L’Oréal, Clé de Peau Beauté, Emporio Armani, Crocs, Godiva and Budweiser – saw sales surpass last year’s 11.11.

Home Appliance Manufacturer Galanz Accuses Tmall of ‘Playing Dirty,’ Burying Search Results: One of China’s leading microwave makers, Galanz has accused Alibaba of blocking traffic to its products and demanding it to choose between its platform and the up-and-coming rival Pinduoduo, in what is describes as “forced exclusivity”. According to Galanz, its inventory of 200,000 home appliances was not visible on the first page of Tmall’s search results ahead of the 618 shopping festival. Alibaba began asking shop owners to choose between Tmall or rival e-commerce platform JD as far back as 2012 which is against Chinese law.

Premium Food & Beverage

Costco Set to Open First China Store: Five years after setting up an online store in China, Costco is set to open its first brick-and-mortar store in the country in Shanghai’s Minhang district at the end of August. Costco will offer two types of memberships – one for families and the other for corporations, with both having an annual price of ¥299 ($43).

JD.com Inks Deal to Handle Cross-Border Logistics for Carrefour: French retailer Carrefour is to offer cross-border logistics services. As part of the deal, Carrefour will set up a store on JD’s international marketplace to sell imported goods, following last year’s opening of a store which sells the retailer’s domestic goods on the platform. JD will import the goods and arrange customs clearance, sorting, and distribution for Carrefour. Interesting, the news may be short lived with Alibaba’s Suning acquiring 80% of Carrefour’s China unit for $698 million. Similarly, Japanese department store chain Takashimaya will close its Shanghai store and halt its operations in China.

China’s Dairy War Threatens to Engulf 2022 Winter Olympics: Yili and Mengniu are fierce rivals in China’s $62 billion dairy products market and things just got more heated with Yili warning it may pull out of sponsoring the 2022 Beijing Winter Olympics due to Mengniu allegedly infringing its status as the sole sponsor of dairy products at the games. Mengmiu slipped in as “joint beverage global partner” partnering with Coca Cola through its parent company Cofco. Yili is China’s dairy market leader holding a 23.6% share, with Mengniu close behind on 22.4%.

Overseas Chinese Tourists

Australia Nets US$8.2 billion from Chinese Tourism: China remained Australia’s leading tourism market, with the number of visitors from the country growing 2.9% to 1.3 million in the year ending March 2019. Their expenditure grew 10% to A$12 billion ($8.2 billion), representing an additional A$1.1 billion ($757 million) for the year, and 27% of total tourism expenditure.

Alipay Launches Cab-Hailing Integration Mini-Program: Alipay has launched a new mini-program which integrates online cab-hailing services from five overseas platforms, in 33 cities in 10 countries including the UK, the United States, Australia, Singapore, Thailand, Vietnam, UAE, Malaysia, Indonesia, and Philippines. It plans to expand to 20 countries and regions by 2020. The app will mean Chinese tourists don’t need to download a different app and can pay with their Alipay account.

Wellbeing & Healthy

Over a Third of China’s Babies are Delivered Via C-Section – the National Health Commission Wants to Change That: 36.7% of women in China deliver babies by caesarean, although in some urban and wealthier regions in China, such as Shanghai, rates are as a high as 68%. The international healthcare community considers rates of 10-15% to be the ideal rate. Anxiety about giving birth and fear of pain are the main reasons for nonmedical caesarean deliveries, especially considering that only a minority of Chinese women are given any form of pain relief during labour. Beijing hopes to reduce this rate by including stricter regulation of caesarean section operations and the provision of more support and pain relief for labouring women, as well as a higher hospital income for natural births.

Chinese sport Sport

UEFA Gets Digital Assist From Alipay to Grow China Fan Base: Alipay, the “digital lifestyle and payments platform” has signed a deal with the Union of European Football Associations, launching a “lifestyle account” on the Alipay mobile app to connect Chinese fans with the latest news about European soccer, as well as a mini-program within the app that fans could use to buy tickets to the UEFA Euro 2020 tournament – the first time UEFA will allow a digital ticketing channel outside of UEFA.com.

Autos and Auto

Harley-Davidson Strikes Deal to Build Smaller Bike in China: Harley-Davidson Inc will partner with China’s Qianjiang Motorcycle Co to build a new smaller motorcycle than its trademark “big hogs”. The new bike will be notably cheaper than Harley’s existing range and be 338cc, one of the smallest in the company’s 116-year old history. Its existing bikes are typically 601cc or more. Harley’s sales in China grew 27% in 2018.

It doesn’t have the sexiness of livestreaming, or the sizzle of Singles’ Day, but one of the most important components of China’s ecommerce and New Retail boom is the thankless task of making it all happen behind the scenes. China’s logistics infrastructure is experiencing some of the biggest, yet behind-the-scenes, changes in the country’s retail industry. Chinese logistics are evolving from fragmented and rudimentary systems, to consolidated ones driven by the internet-connected smart devices, robots and real-time end-to-end tracking and traceability.

Chinese consumer expectations around delivery have become some of the highest in the world. Many purchases are expected to be delivered in less than 30 minutes. And for other goods, if they don’t arrive within 1-2 days, most consumers will go somewhere else, with the exception of some customized products and goods coming from afar. Yet even expectations for delivery times for cross border products are increasingly short, with bonded warehouses bringing them closer to the consumer.

1.88 billion parcels were delivered just in the 10 days starting on Double-11 (Singles’ Day) last year. This gives China the scale to invest in technology and systems. The increase in New Retail and social commerce is driving both shopping and delivery to become a 24/7 business. Investment is also being propelled by lower tier cities, whose logistics infrastructure is behind high tier cities. Tier-3 cities and lower accounted for more than 70% of the growth of Alibaba’s 102 million new customers over the last 12-months, in addition to apps such as Pinduoduo and WeChat which are driving online shopping in the hinterland. The focus is also being driven by fast growth ecommerce categories like food and beverage delivery, which requires improvements in areas such as cold chain.

Logistics is big business in China. In 2017, SF Express IPOed to become the Shenzhen Stock Exchange’s most valuable company, while pushing founder Wang Wei’s net worth up to $16 billion. Alibaba’s partner logistics company Cainiao – which accounts for one in every 10 packages sold on Taobao and Tmall – was valued at ¥100 billion ($14.5 billion) a year ago, and like all of China’s logistics giants, is investing in exciting advancements.

Cainiao is evolving from just digitally managing the flow of parcels through e-shipping labels, to digitalising all components of the logistics value chain. This will see 100 million smart devices connected to its IoT (Internet of Things) technologies in three years, including partners such as warehouses, warehouse pickers, equipment, transportation vehicles, robots and management systems. It will also connect the anticipated 100,000 pick up stations such as schools and residential complexes, convenience stores and China’s ubiquitous fruit shops to cut down last-mile delivery costs. To complement this, Ciaoniao will enhance and leverage its Guoguo app which it hopes to serve consumers more than a billion times a year by 2022.

A digitalised end-to-end supply chain enables much more transparency and accountability, which is ever-important for China’s untrusting consumers. Such transparency is a key selling point allowing 17.5° oranges to sell for twice the price of similar brands of oranges that originate from the same region for example.

We expect domestic players’ investment, connections and local know-how will continue to see the Chinese logistics brands dominate the China market, and likely expand beyond its borders utilising the developing systems and technology. Foreign players won’t be helped by the recent trade war-related scandal which saw Huawei packages ‘misrouted’ in China by Fedex, whether proven to be intentional or not.

For brands selling in China, ensure you are dialled into the optimal logistics providers and their systems to guarantee customers will have the best possible experience. It will be difficult to compete otherwise. Go to Page 2 to see this week’s China news and highlights.

WeChat now boasts 1.1 billion active users, with most being in China. That’s great news for Tencent who have prodigious insights into the online, offline and commerce behaviour of a large swath of Chinese consumers. Yet its almost-100% saturation of China’s online population also presents challenges to Tencent, who is having to shift its strategy from growth by acquisition to extending the utility of WeChat and its data. To make things tougher, AI-driven competitors such as Douyin are cannibalising the screen time users spend on WeChat through services that are easier to use and more entertaining.

Tencent isn’t sitting still. It’s made some structural shifts in its strategy such as seeking to entrench itself in more industry-related applications from health services to public transport, and this month announced it joined the race for auto intelligence, aiming to provide car makers networking services, algorithms for autonomous vehicles, and location-based services.

Nevertheless, WeChat remains committed to its bread-and-butter (or rice-and-soy) consumer base, evolving with services such as authentic story telling, Official Account live streaming and new Little Red Bookesque-social commerce features – all enriching the consumer experience and presenting exciting opportunities for brands.

For many brands, finding success with WeChat isn’t just about strapping on new services as they are launched, but changing the structural approach to how they view WeChat – much like Tencent has done. The good old approach of pushing out content week in-week out on WeChat rarely works these days. More than half of WeChat Official Accounts are losing followers and the open rate of WeChat articles dropped from 17% to 6% between November 2015 and August 2018 according to social media management platform KAWO.

To increase engagement on WeChat, more brands would be wise to view the platform less as a one-to-many broadcast tool and more as a personalised and targeted interface to connect with and understand the target market. CRM capabilities on WeChat allow brands to gather information about their fanbase far beyond the standard name, avatar, gender and location that come by default. WeChat’s expanding suite of services and subsequent touch points allow brands to track individual’s preferences, behaviour and propensity to engage with different things. This data can be complementary to other insights that can be tracked such as how the user followed the WeChat account, whether through a specific article, promotion, at an offline event, store or scanning a QR code on packaging.

WeChat also lends itself to engaging initiatives such as chatbots, which offer brands a form of simple AI allowing them to connect with their customers’ personal needs and have related dialogue – over and above the usual WeChat messaging quotas – directing them to relevant content and services. Data from these interactions can feed into the CRM system to provide a view into consumer needs that can be coupled with other insights to build truly meaningful consumer-led propositions.

Richer CRM data allows brands to have more targeted, localised and personalised communications over WeChat. Interactions with consumers can be much more resonant based on whether the consumer has a family or is single, lives in Shanghai or Shenyang, if they like lace or leather or the time of the day they are most responsive. In a market as competitive and cluttered as China, particularly with more brands engaging with AI for targeted and personalised interactions, it is fast becoming a minimum requirement to continue to grow engagement. China Skinny can assist to develop your strategy for this.

For our Shanghai-based readers, China Skinny’s Andrew Atkinson will be presenting the Heath Ingredients & Food Ingredients Asia event next Wednesday 19 June discussing headline trends influencing consumer needs across China’s health food categories. More information here. Please let us know if you’ll be there. Go to Page 2 to see this week’s China news and highlights.

Remember when you’d see the big tricycles stacked metres high with polystyrene, rubbish and furniture cruising the streets? Or the vividly-coloured Facekinis poolside or on the beach? Or how about the infants with split pants on a cold Beijing day? They were all China novelties that have largely disappeared from the bigger cities. Yet with each disappearing quirk, a new curiosity has arisen to ensure that there is never a dull day in China.

One area that has recently taken on a life of its own is beauty. Fashion, haircuts and even hair colours are becoming more varied and diverse daily. It is not uncommon to see young Chinese spending 40 minutes on a photo editing app polishing their latest selfie, or a young man in a public place diligently applying mascara – not just representing the exponential rise of male makeup, but also that younger Chinese are confidently challenging traditional social norms to be what they want to be, unfazed by state media’s direction on how to behave.

The pursuit of beauty has been important since ancient times in China. In the Tang Dynasty, makeup became a part of everyday culture, with women applying foundation powder, blusher and a dusting of light yellow powder. Bluish black eyebrows, lipstick, painted on dimples and ornamental forehead flourishes were also added. Whilst beauty is a little less novel than it was 11-14 hundred years ago, it is as relevant as ever for Chinese consumers and something that many of us should take note.

China Skinny has compiled numerous pieces of research asking consumers how they would spend extra money if they received it. Beauty always scores highly, often the top way young millennials would spend the windfall. Many Chinese will directly correlate the way they look with their chances of success – in both their personal and professional life.

One of the most poignant illustrations of the importance of beauty in China is the soaring segment of cosmetic surgery. Unlike in the West where patients are older when looking to have work done – more than 75% are over 35 in the US – 54% of Chinese going under the knife are under 28. This is fuelling an industry expected to be worth ¥360 billion ($52 billion) by 2023. Last month’s IPO of plastic surgery app So-Young soared 44% on its first day of trading and has settled to a value of around $1.5 billion. Almost 2 million users are on the app monthly, 79% more than a year ago.

In addition to the obvious beneficiaries of plastic surgery, cosmetics and fashion, many other categories are touched by China’s beauty obsession. For example, health supplement purchasers are often motivated by beauty benefits – even with target markets you may not expect like the 20-year olds buying anti-aging pills. Categories such as food and beverage are heavily influenced by the quest for beauty, with an increase in healthy food demand resulting from how they can improve appearances such as skin and hair. The fast-growing fitness industry is also heavily swayed by the aesthetic outcomes. The good news is that it isn’t just the Pechoins, L’Oreals and J&Js of the world who stand to benefit, with the majority of Chinese consumers showing interest in niche beauty brands.

The free-spending young Chinese in particular often strive to stand out amongst the masses, and looking good is considered a key component of this. When brands are communicating to their target markets, they should bear this in mind wherever plausible. China Skinny can help determine if and how this all fits for your products or services.

In other news, China Skinny has moved its Shanghai HQ to a bigger and better office. We’re still in central Jing’An District, a block from our our office on Jiangning Road. We love visitors, so pop by any time for a coffee, tea or just to say ni hao. You’ll find our address here. Go to Page 2 to see this week’s China news and highlights.

One of the giveaways of a newbie to China is the bafflement about being unable to access Google, Facebook, Youtube, Instagram and Twitter – unless they’re chewing through their data roaming quotas or have planned ahead with a VPN. It quickly becomes apparent that China’s digital ecosystem is unlike anywhere else in the world.

Those same newbies are likely to try and make sense of it all by making direct comparisons of Amazon with Alibaba, Facebook with WeChat and Twitter with Weibo. Yet the Chinese platforms aren’t just different by appearance and namesake; their features and, more importantly, the purpose they serve in the consumer journey are often quite disparate from platforms in the West. In many cases, they are functionally more advanced (often by years) than overseas apps, which has seen companies like Apple, Amazon and Facebook replicating features from Chinese apps.

Many brands understand these differences and focus on localising tactical campaigns to take advantage of Chinese platforms’ rich and engaging features online and offline. Yet a number still miss the bigger picture of how China’s tech giants differ from the West: their touch points with consumers are far deeper, wider reaching and offline than those overseas.

One of the important growth strategies executed by China’s tech companies has been to expand beyond their core industries, even if links seem tenuous to outsiders. We saw this in 2014 when Alibaba began purchasing brick & mortar stores and then again in 2018 with their investment in screen advertising.

There are a number of reasons why this type of expansion has happened much more in China than other countries: 1. In most countries when companies get too large and dominant, they are usually forced to split. In China there is barely a whiff of this; 2. Most of China’s bigger companies with real money to invest are tech firms and State Owned Enterprises (SOEs). As SOEs are comparatively more conservative, there is less competition for big tech companies when making major acquisitions; 3. Traditional channels are less mature and more fragmented in China, enabling lower acquisition costs for market leaders and much more scope for disrupting tech giants to break in; 4. Accumulation of user data is far more liberal in China, providing significant scope for tech companies who already have the data. This enables them to utilise data synergies across new acquisitions, which can help justify paying a higher price for them; and 5. Consumers are much more open the commercial use of their data and appreciate the convenience it brings.

The approach hasn’t just been adopted by China’s famous tech giants though. We’ve also seen lesser-known tech companies utilising their presence, channels and data from their category. For example, mid-sized travel portal Tuniu has tapped into the nuptials industry, launching a marketplace just for wedding photography.

What does this mean for brands? Brands should understand just where Alibaba, Tencent, ByteDance, Meituan and other niche platforms are playing, even if they don’t appear to have an obvious connection with their industry. Awareness of their reach and subsequent opportunities can help determine how best to partner with and leverage them. Even the biggest brands in China rarely attempt to approach the market alone and will buddy up with one or more of the tech giants. Similar to the many brands who have co-located marketing staff close to Walmart or Carrefour in the West, close proximity to China’s tech leaders is likely to be an increasingly common strategy in China. Contact China Skinny to assist you in identifying these opportunities and recommending how best to leverage them. Go to Page 2 to see this week’s China news and highlights.

Food exports to China have been growing for some years now. Chinese consumers are known to pay a premium for foreign food and beverage as it is perceived to be safer and healthier, more prestigious and having interesting, unique varieties to feed their inherent curiosity. Yet one of the big drivers for shipping food from afar is that in many cases, they are actually cheaper and meet a demand that local produce can’t serve.

Although China has long been known for low wages and exporting cheaply produced food, for many food categories, China finds itself unable to supply enough food at a quality and price acceptable to Chinese consumers. The well-cited stat that China has to feed over 20% of the world’s population with just 7% of its farmland means this shortage will be around for some time yet.

With China’s population becoming wealthier and eating more as a result (calorie intakes have more than doubled in the last 50 years on average) and arable land eroding due to urbanisation, natural disasters and pollution, China is having a hard time keeping up with supplies. In addition, much of China’s working population have left rural areas for the bright lights of the city, and all of its drones, robots and AI have been unable to fill the farm worker gap. The majority of China’s farms are tiny and lack the ability to produce as cheaply and efficiently as in other countries, and even many of its larger scale operations cost more than abroad. For example, the US produces pigs 20% cheaper per kilo than even China’s new, factory-scale hog farms.  Filling a bottle of wine in Ningxia Province can be as much as three times more expensive as South Australia, with the need to bury vines during the harsh winter and high costs of bringing experts into the Chinese hinterland.

Food production costs continue to soar in China, contributing to food prices growing 6.1% in the past year according to the Government’s official consumer price index. To note a few, prices for fresh vegetables jumped 17.4% and pork prices grew 14.4% – the most since mid-2016.

The domestic price increases are making imported alternatives more alluring and giving some rosy trade figures – imported fruit purchases grew by 36% last year and beef imports have more than doubled since 2016 for example. Unfortunately the lion’s share of those imports are commodities, which are much more vulnerable to price variations.

The benefits of well branded food and beverages is nothing new – they can command a higher premium and are less susceptible to fluctuations in commodity prices and new lower-cost producing markets coming on board such as Latin America, Southern Asia and Africa. But having well-branded food products has become increasingly important as producers face mysterious delays and inexplicable rejections for food imports into China due to geopolitical tensions, and of course, increasing tariffs or lowering tariffs for competing exporters. In most cases, the hold ups at the border are commodities rather than branded products. With tariffs, well-branded products will always fare better as consumers are much less price sensitive to a brand they like than a no-name product.

Food producers don’t have to be one or the other. Selling commodities often provides cashflow that can be used to invest in building a brand. But to reduce exposure in these increasingly uncertain times, the advantages of branded products have never been more pronounced. Even if you already have branded products, it’s likely you could make them more resonant with consumers from optimised branding, messaging and other communications, being in the right channels and integrating those channels, having more appropriate packaging and formats and even loyalty programmes. China Skinny can assist you with these. Go to Page 2 to see this week’s China news and highlights.

“After 5,000 years of trials and tribulations, what kind of battle have the Chinese not been through?” asks the anchor on state broadcaster CCTV, referring to the escalating the trade war. The clip received more than 3.3 billion views. “Negotiate— we can! Fight— bring it on! Bully us— YOU WISH!” says the Chinese Communist Party’s official newspaper the People’s Daily.

Following the breakdown of trade negotiations between the US and China in Washington on Friday, and new tariffs on hundreds of billions of dollars of Chinese imports, Chinese propaganda has ramped up. Compared to other geopolitical disputes, China’s state run media had been relatively passive in the 310 days since the trade war began. Yet based on recent state media sentiment, China’s faith in forging an amicable deal appears to be thinning.

Wall Street bankers, American farmers and other US exporters will be deflated following Friday’s breakdown. In addition, many foreign brands in China are likely to feel some impact.

Chinese Brands Day – which coincidently also fell on Friday – was the catalyst for a number of reports highlighting Chinese consumers’ growing preference for homegrown brands. JD.com found the sales value of Chinese brands grew 8% faster than foreign brands last year with volume growing 14% faster. Categories that have traditionally been dominated by foreign brands, such as Mum & Baby, saw strong growth from domestic competitors.

Rising Chinese nationalism is not a new trend, we’ve being seeing signs of this over the past six-or-so years, but it is accelerating with every bit of news about trade wars and Huawei-exec arrests. As powerful and impressive as China is, consumers can still be hyper-sensitive to anything that looks to be putting their country and people in a bad light.

Rising nationalism is coupled with local brands producing better quality products and services, with more resonate marketing and sales strategies. It doesn’t mean foreign brands’ days are numbered in China – there remain plenty of cases of continued growth: purchases of imported fruit grew 36% last year, Nike’s sales in Greater China grew 24% last quarter, and Roger Dubuis announced their watches “resonate very well” with Chinese consumers last week. What it does mean is foreign brands have to work harder to find they place and point of difference that connects with consumers.

In a recent China Skinny fashion project, “国潮” – “China trend” often came up when speaking to consumers. It is something brands across many categories should consider incorporating into their mix to resonate with their target market. There have been many contrived attempts from foreign brands hoping to connect with Chinese culture, however we’ve found some of the most successful examples have been collaborations with local artists and cultural influencers. This could mean working with local fashion designers right through to well-known local chefs for product development and promotion.

Yet beyond trying to connect more with Chinese culture, countless foreign brands could align more with Chinese consumers by simply getting the basics right. Too many brands are still trying to force western sales channel strategies into China’s unique marketplace, others are using armies of Caucasian models to show Chinese how good something may look on them, they’re stocking the wrong sizes, shapes, packaging, formats or even flavours. Some are even developing China strategies based on talking to the ethnically Chinese who haven’t lived in China for some time, or are from a different region to their target market.

Trade war or no trade war, rising Chinese nationalism or not, there’s still countless opportunities for foreign brands to grow from delivering thoughtful strategies in China. China Skinny would welcome the chance to chat about how we can assist with that. Go to Page 2 to see this week’s China news and highlights.

To many readers, video gaming may seem like pastime reserved for a small tribe of socially-awkward folk with Vitamin D deficiencies. Yet any marketer in China should be paying attention. China’s $36 billion video gaming market is four times larger than its movie industry and a driving force behind the inclusion of eSports as a medal event in the 2022 Asian Games, and even a possible demonstration sport at the 2024 Paris Olympics as the IOC wrestles between tradition and appealing to vast new audiences.

Chinese gamers have long been stereotyped as young males spending their free time in dingy internet cafes; their gaming-contorted fingers covered in a thick film of greasy food and crumbs. The People’s Liberation Army has even attributed gaming as a major reason so many young men fail its physical tests.

Nevertheless, profiles are changing. Gender fluidity is one of the big trends happening in the China market. Just look to the runaway growth of men’s makeup, a spike in males buying lacy-style and see-through fashions on Taobao, while women are buying up suits and almost half of cars from brands typically purchased by men in other markets such as Maserati and Porsches. It seems now that gaming is no longer just the realm of males, with some estimates claiming females make up almost half of China’s 530 million gamers.

Chinese consumers’ obsession with gaming should give marketers clues into how their target markets – male and female – see the world. For many, gaming is a form of escapism from boredom during long commutes and the 9am-9pm-6 days a week work schedule in many Chinese firms. But it is also a pillar in many Chinese social lives; a convenient place to meet others with shared interests, and the closest thing many have to playing team sports, brother and sisterhood, and even a place to meet love interests.

When many marketers think of utilising games in their strategies, it revolves around gamification to connect and engage with Chinese consumers. Whilst there are some success stories, most attempts simply aren’t interesting, relevant or well-integrated into other marketing initiatives, with few gamification investments attracting more than a handful of genuinely engaged participants.

The sophistication of game developers is presenting increasingly diverse opportunities to connect with the target market during an emotional moment in their day. Female-focused mobile dating game Love and Producer saw an estimated $32 million of in-app purchases after one month of being launched. High-end cosmetics brand M.A.C. released five Honour of Kings limited-edition lipsticks targeting its 100 million+ female players – 14,000 were preordered and all five lipstick styles sold out across all sales channels within 24-hours of launching.

Combined with awareness-building initiatives through placements and partnerships, gaming is also looking to become a legitimate sales channel for goods and services. The industry has even created its own sect of KOLs who are supported by millions of live streamers, all potential endorsers of products and services.

With Beijing’s new gaming approvals freeze starting to thaw, games and their players will continue to evolve into more sophisticated marketing and sales platforms to connect with the lucrative male and female millennials, and Gen-Zs. Contact China Skinny for advice on how best to do that.

With the extended May Day Holiday (in hope of stimulating spending), there’ll be no Skinny next week, but we’ll be back the following Wednesday. Go to Page 2 to see this week’s China news and highlights.

In October 2015, China announced plans that it would be abolishing its one-child policy the following year, in hope of rebalancing its top-heavy population which is expected to see 500 million folk aged over 60 by 2050. The announcement, coupled with the earlier one-child policy changes, had brands selling everything from infant formula to educational toys readjusting their sales forecasts north. Even Disney invested an additional $800 million in the construction of the Shanghai Disney Resort to add extra capacity to account for the fertility spike.

On the surface things started off well, with birth rates jumping 7.9% between 2015 and 2016. But it was always likely to be just a blip. 2016 was the Year of the Monkey, which was a much more desirable zodiac for childbearing than 2015, which happened to be a Sheep Year. Superstitious Chinese don’t want their kids to be the docile followers associated with our woolly friends.

There was also some pent up demand from parents who had always longed for more than one child. Yet for most Chinese couples, the 37-year-old One Child Policy had reengineered the national psyche making it socially acceptable to have a single child. The competitiveness of China’s education system also sees parents invest significant sums into their child’s education and development, coupled with the premium paid for safe food and beverage and other extras to ensure their child gets the best start at life. Most couples consider it too expensive to have more than one child.

Since 2016, birth rates have fallen off a cliff, dropping by 12% in 2018. In another troublesome sign for China’s fertility planners, marriage rates hit record lows in 2018. Couples need to be married in China to legally have a child. Beijing will be banking on the country’s investment in robotics and Artificial Intelligence to help make up for the falling working population.

So should those infant formula brands, Lego, Disney and other companies hoping to sell their wares to Chinese youngins be revising their revenue forecasts down? Not at all. As Chinese families’ affluence rises, a disproportionate share of the increase goes to their child. As they only have one, few cut corners. A child born today will have parents earning 130% more than those born a decade ago. There have been countless surveys with Chinese consumers over the years about how they would spend additional wealth, and a large percentage always cite they’d spend it on their child’s education and development. Even extra budget directed at travel will often be to take the kids away, with families one of the fastest growing outbound tourist segments.

To get a real taste of how important the market for children’s goods and services is, take a trip to the town of Zhili in Zhejiang Province this November. The town famous for its child garment factories has a population of 100,000, which swells to around 350,000 around peak times such as Singles’ Day. The population boost comes from families relocating there in the hope that their kid will become China’s next top child model. Kids can earn up to ¥10,000 ($1,500) a day, with the most popular models reportedly earning a million ($150K) a year. The modelling rates highlight just how lucrative the children’s fashion category is, but also its competitiveness.

Although birth rates are falling, there were still 15.23 million children born in China last year – and a greater portion with affluent parents than ever. Citi Research, in their short video about the infant formula category, summed the situation up well: “having the right route-to-market, especially in the online channel, matters more than the underlying market”. That could be said for virtually every category in China, where there remain enormous target markets still willing to spend, regardless of slowing population or economic growth. China Skinny can assist with your route to market. Go to Page 2 to see this week’s China news and highlights.

Many brands are aware of how China’s innovations around New Retail, digital and mobile payments are fundamentally changing the way consumers research and buy products. Yet, what is often overlooked is how they are altering the format and even the type of product they buy.

Research was recently published claiming that Chinese mothers are moving away from traditional frozen ready meals, like dumplings and buns, and instead opting for frozen full meal sets such as beef noodles. Whilst this isn’t untrue, our research has found a much bigger trend pointing to a shift away from frozen foods altogether.

On numerous research projects, China Skinny has visited many homes across different China cities. In the kitchens, small freezers are stuffed with once-popular products like bags of dumplings coated with freezer-burn, seemingly untouched for many a moon. The ageing packs are representative of frozen formats falling out of favour with Chinese consumers as alternatives perceived as healthier become more convenient and accessible.

With healthy and natural having become key criteria for purchasing food, frozen options sit many rungs below fresh on the hierarchy of healthiness. That’s nothing new, but what has changed is the accessibility of fresh food, particularly for busy mothers. With stores like Hema/Fresh Hippo, 7Fresh and even the massive RT-Mart now delivering orders within 30-minutes, the incentive to have quick access to frozen products has diminished. There are currently 355 million users of delivery apps in China – a quarter of all Chinese are regularly having food brought to their homes and offices.

While the booming restaurant meal delivery service is cannibalising many food categories and changing countless restaurants and cafés’ strategies, China’s ever-discerning mothers still want an element of food preparation. They wish to have more control over their cooking, ensuring it is fresh when served – not soggy or luke-warm – while still deriving the emotional self-satisfaction of feeling they having played a part in cooking the meal. These factors, coupled with being time-short, have contributed to a stark rise in the demand for ready-to-cook fresh/chilled meals in China.

As brands define the appeal of their products, ingredients, packaging and sizes for the Chinese market, they should also consider the format. Frozen, tinned or other forms of preservation has provided a way for food to make the long trip to China and still be good for sale. While there is likely to long be demand for such food, brands should consider product development for alternative formats that will meet the growing demand for fresh, natural and convenient food.

Food is just one category that is being turned upside down by New Retail, and brands across almost every category should be cognisant of the changes to ensure that they aren’t left behind.

On a not-entirely unrelated tangent, China Skinny will be in Australia later this month with Austcham and Westpac to launch the 2019 Australia-China Business Sentiment Survey results. We’ll share the differences we found from last year’s survey, and how Australian businesses are tracking in this interesting geopolitical and economic climate. The events are in Sydney on 26 March, Brisbane 27 March, Melbourne 28 March, Perth 29 March and Shanghai 18 April. Let us know if you can make any of the events, it would be great to catch up there. Go to Page 2 to see this week’s China news and highlights.

As China’s urban millennials have become the most sought-after consumers on the planet, marketers have been seeking less contested consumer groups to target their wares. The next growth areas that we often hear about are the rural consumers and those with silver hair.

For the rural folk, many expect their latent demand to step up and fill the gap from the city dwellers – those who already have everything from cars to appliances to smartphones. 577 million Chinese lived in rural areas in 2017, and the big tech companies have been all over it. Alibaba and JD are investing in rural fulfilment centres, marketing and even drone delivery. Interestingly, the latest Internet growth data points to a rural population that may not be as enthused about spending up a storm as many had hoped.

China’s heaving Internet population stood at a whopping 829 million at the end of 2018 – 57 million or 7.3% more than the year before. The segment that has the most room for growth – Chinese living in rural areas, grew just 6.2% to 222 million, indicating a widening digital divide between China’s urban dwellers and those in the countryside. That’s not a great sign for consumption in these areas. The Internet represents the most promising channel for rural consumers to buy things – they can’t just pop down to the local IKEA to purchase a new sofa. Another barrier for sales is that rural consumers make less than a third of what urban-dwellers make and are much less likely to spend it on aspirational foreign brands.

The other well-cited growth opportunity – China’s seniors – by sheer numbers along should be one of the greatest opportunities marketers have ever seen. Last year, the number of Chinese over 60 reached 249.5 million to outnumber those under 16 for the first time in history. Since 2010, the demographic has seen an average annual growth of 2.08 million. At the same time, the under-15 brood has been dropping at 2.25 million a year.

If we look to the Baby Boomers in the West – the empty nesters riding on the back of a lifetime of savings and equity gains on their house and other investments – they have been spoiling themselves while their joints still allow it. Yet most of the seniors in China aren’t such free spenders. They have grown up in austere times, and have an inherent necessity to save for a rainy day and be frugal, even more-so than those who were around during The Great Depression in the West. The rising consumer debt in China can almost be solely attributed to the consumption-crazed youth; people between the ages of 24 and 35 account for more than 70% of consumer borrowers in China.

While there will inevitably be increasing opportunities by targeting China’s silver surfers – there will be a half a billion of them by 2050 – they will remain much less likely to pay a premium for better products and services than their younger peers. They also won’t be as easily wooed by foreign lifestyles, products and services.

In short, millennials and the younger post-95s/Gen-Zs remain the most lucrative consumer group in China. Yet the rules to reach and resonate with them are constantly changing. Companies need to dive much deeper in understanding their emotional and functional needs, what influences them, where they research and buy, and how to make advocates out of them. If a brand can understand and serve those needs, there’s still plenty of legs in the contested younger demographics in the city – particularly the lower-tier cities. China Skinny can work with you to ensure you’re there. Go to Page 2 to see this week’s China news and highlights.

Many people in the West still believe that China’s tech giants are built on thieving IP, not creating it. Those folk will probably be startled to learn that the US-based magazine Fast Company ranked a Chinese firm as the world’s most innovative company in 2019.

Perhaps even more surprising is that the Chinese company is not the well-known Tencent of WeChat fame, or even Alibaba (they were 15th on the list), but a mere $43 billion company, Meituan Dianping, which most people outside of China have never heard of, and probably can’t pronounce.

Meituan is best known for food delivery, restaurant reviews, hotel booking, movie tickets and acquiring bike share giant Mobike. The company topped the table for “pioneering transactional super apps” making the most profound impact on both industry and culture while showcasing a variety of ways to thrive in today’s volatile world. In the first half of last year, the company facilitated 27.7 billion transactions (worth $33.8 billion) for more than 350 million people in 2,800 cities. That’s 1,783 services every second of every day, with each customer using it an average of three times a week.  The company leverages user consumption data, including price sensitivity, to recommend other services they’ll like, taking advantage of its consolidation of service offerings, much like China’s other all-serving tech giants.

One of Meituan’s core services, food delivery, is representative of one of the most exciting consumer developments that has been happening in China over the past few years. We’re not talking the meandering Postman Pat or the daily milk round, these are on-demand delivery services that can have everything from noodles and coffee, to meds and adult toys, delivered around the clock in less than 60 minutes, often in half that time. It is a service that plays to a Chinese consumer who craves convenience and possesses little patience.

Delivery in China takes advantage of its densely-populated cities, allowing a concentration of delivery people. In addition, the broadening of products being delivered that are core to the New Retail explosion means delivery is no longer just at meal times, or located around ecommerce logistic hubs. Instead, this revolution is creating economies of scale across wider geographies, spreading the costs of delivery workers throughout the day.

One of the most powerful innovations in delivery is what happens behind the scenes. Like many things in China, companies are utilising their enormous pools of data, and making sense of it with Artificial Intelligence. Meituan’s Smart Dispatch system, for example, calculates 2.9 billion route plans every hour to optimise the delivery for its 600,000 electric bike riders to pick up and drop off up to 10 orders at once in the shortest time and distance. Since Smart Dispatch launched in 2015, it has reduced average delivery time by more than 30%, and riders complete 30 orders a day, up from 20, increasing their income.

Whilst economies of scale and tech systems are increasing efficiencies in the delivery space, this is accompanied by challenges forcing companies to continue to innovate. Labour costs of delivery folk seem to be increasing every few months and new laws are being rolled out to protect the workers. In answer to this, JD has been making deliveries by drone and is testing unmanned vehicles. Mckinsey estimates that autonomous vehicles and drones will deliver 80% of all products within 10 years.

For brands selling in China, the penetration of delivery is another example of the unique way that Chinese consumers shop and their expectations. This and other distinct purchase behaviour in China should be factored into development of marketing strategies. China Skinny can assist with this. Go to Page 2 to see this week’s China news and highlights.

What caught our eye in the build-up to this Chinese New Year is not the nearly-3 billion trips to be made via China’s transport system, not the thousands of ways to make pigs cuter including carving one into a watermelon, but the NBA’s pick for its Chinese New Year ambassador: 20 year old boy band member Cai Xukun from the group Nine Percent.

In a land where there has been much public debate and negative state media over the influence of ‘sissy boy’ role models, the decision caused the expected uproar online. On popular sports platform Hupu, known for its masculine user base, 82% – 39,363 voters – checked the option “I’d rather die” in a poll about Cai’s NBA mission.

On the surface the choice seems like an outrageous misalignment with the esteemed NBA brand. The NBA has some of the most athletically-impressive beings of the sporting world – poles apart from the effeminate 65kg pop idol. Yet the expensive decision is likely to bear fruit.

For a start, although the NBA already has an epic following in China including the largest social media fanbase of any sports league with 150 million followers, that only accounts for a small portion of China’s population. Like any business, they will be wanting to grow that base.

In choosing a target market, they will look to the Gen-Zs (those born in the mid-90s to early 2000s) as having a high propensity to support and spend on the game. Gen-Zs are an open-minded generation in a society that has never been so enthusiastic about sport, causing them to explore and embrace sports more than the generations before them. They’re also big spenders. Although most haven’t yet banked a single pay cheque, they account for 15% of household expenditure, versus just 4% in the USA and UK. As the only child/grandchild of six doting adults, and having never lived through tough times, they are free spending with seemingly few worries in the world.

You’ve probably guessed that many of Cai’s fans are Gen-Zs, and particularly females – another lucrative yet untapped sector by the NBA. Last year’s NBA All-Star Celebrity Game featured Chinese-Canadian singer Kris Wu, which reportedly increased female viewers by 30%.

There are plenty of examples where endorsements of effeminate pop-idols have bolstered sales for brands in China, albeit most are more closely-aligned to each other’s core values than the NBA and Cai. Yet the NBA’s China fans are so deeply rooted in the game, they are unlikely to stop supporting the game en masse due to a Chinese New Year endorser who doesn’t fit the league’s image. Most brands in China would struggle to pull that off.

There have never been more options for consumers to spend their money. Sport – like everything – has to find ways to boost the entertainment factor to stay relevant. Whilst there would be better ways to entertain their loyal fan base, they are likely to entertain a segment who may have never considered the NBA before. Although many of the NBA’s execs are unlikely to get down to Cai Xukun’s music, they are putting their own opinions aside to attract a new and wider pool of fans. Hats off to the league for embracing China’s countercultures – those who dare to rebel from entrenched traditional values – something brands are increasingly having to do to reach the younger, freer-thinking generations.

On that note, we’ll leave you to celebrate the coming of the Pig. Happy Chinese New Year, wishing you a prosperous and productive Zhūnián. We’ll be back after the break – enjoy this week’s Skinny. Go to Page 2 to see this week’s China news and highlights.

While you may be lamenting the need to constantly evolve your marketing mix to stay ahead in China, you can rest assured that even WeChat faces a similar challenge.

Although China’s super app hit 1.083 billion monthly active users in September last year, each sending any average of around 45 messages a day, WeChat faces headwinds to stay relevant to Chinese consumers. Readership for articles referred by friends on Moments has been dropping and Tencent’s share of screen time is being cannibalised by newer, easier-to-use and more entertaining alternatives such as short video platform Douyin.

That’s why all eyes were on WeChat’s founder Allen Zhang’s four hour speech at Tencent’s conference last week, about how he plans to reinvigorate the app to mitigate the risk of it becoming obsolete. Zhang got philosophical in acknowledging that WeChat has lost the veneer of authentic discovery that endeared it to users, because people were becoming too sensitive to their online personas on Moments.

Across the board, Chinese consumers are seeking more authenticity: from the way they travel, to the brands they buy, to how they project themselves on digital platforms. Women ‘beautification’ app Meipai discovered this as user numbers plunged 55% as Chinese women sought more natural and less formulaic portrayals of themselves. WeChat is hoping to evolve from photoshopped and choreographed Moments feeds, to a more real account of what people are really experiencing. To enable this, WeChat has launched a new video-streaming feature, not unlike Instagram’s feed, so people share their lives in real time, not through carefully curated photos and messages. Even the user interface aims to keep it real, with the typical ‘send’ button, replaced with ‘this will do’ to remind people their social feed doesn’t have to be airbrushed and polished.

Another area in which WeChat is pinning its hopes to counter the app’s saturation and encourage more engagement per user is Mini Programs. The WeChat-embedded ‘light apps’ are already hugely popular, but curiously, the majority of traffic isn’t coming from the famous mini programs you may have heard of, but rather the long-tail applications used by niches such as parent-teacher groups or your neighbourhood grocery store. Given WeChat is installed on virtually every smartphone in China, app developers are not concerned with having to create separate tools for Androids and iPhones, it is one simple app, seamlessly installed and launched from the comfort of WeChat. Tencent is thinking, if ‘there’s an app for it’ wouldn’t it make sense to make it a Mini Program?

Something that hasn’t received due airtime is the impact that the new ecommerce laws will have on WeChat. Commerce is one of the areas showing great promise on WeChat, with its transactional nature providing a logical way for the platform to grow revenue. Yet many of those stores have been run by smaller vendors and daigou, attracted by WeChat’s low barriers to entry. The new laws mean that it will be a lot more trouble to set up and maintain a simple WeChat store – or any online store – with the new taxation and reporting requirements. There are already signs of changes in the way smaller vendors promote their wares on WeChat as they try and skirt the laws, but for many, the effort won’t be worth the reward.

Regardless of its challenges, WeChat remains China’s super app with no other app being better positioned to evolve and stay relevant to Chinese consumers. To Allen Zhang’s and Tencent’s credit, they have recognised that they need to do this. There are some good lessons for any brand in China – you may be ‘killing it’ in China today, but you need to constantly review your position to stay that way. China Skinny can assist you with just that. Go to Page 2 to see this week’s China news and highlights.

‘Tis the season to be jolly. Well maybe not in Langfang, in northern China’s snowy Hebei province where folk can be arrested for selling Christmas apples and Santa suits. The parishioners of the renowned 40-year old Rongguili Church in Guangzhou may not be feeling so festive either after a children’s bible class was raided in the third unregistered Protestant church to be shut down in China this winter. Last year, it was a Chinese university banning Christmas to avoid “corrosive” Western culture that made it into the annual anti-Christmas headlines fuelled by a small brood of emphatic nationalistic types in China.

On a grander scale, the raining down of Christmas tree emojis that have brightened up WeChat message feeds for many Decembers are notably absent this year. Tencent has had a tough year with its stock price almost halving between January and November, and the new cool kid ByteDance eroding its share of screen time and now talking about launching a messaging competitor to WeChat. Perhaps Tencent is trying not to rub Beijing the wrong way by celebrating western holidays, in hope of them lifting the new game ban, but come on Tencent, cheer up!

For those of us who still love the magic of the festive season, fear not. Aside from a few sensational stories and WeChat policy-makers, a stroll down the streets of China appear as Christmasy as ever. Christmas trees that match China’s skyscrapers for architectural pizazz and neon brace the public plazas and shopping malls.

Online, smartphone screens are again filled with countless brands from Starbucks to H&M peddling their Christmas jeer, KOLs sharing their Christmas list ideas, kids showing off their advent calendars, and millions of Christmas paraphernalia bought from the ecommerce platforms, hopefully some of it in sustainable packaging.

For the vast majority of Chinese, Christmas isn’t a time to acknowledge newborns in mangers millennia ago. There remains little understanding of its religious or cultural associations, with most festival-thirsty consumers viewing it as an excuse to party and shop in the void between Singles’ Day and the Year of the Pig.

One thing we’ve noticed this year is how cities outside tier 1 are embracing Christmas. The China Skinny team has been crisscrossing the country on research projects and were out in Chengdu two weeks ago where they noticed more ceremony around Christmas than even in Shanghai this year. Most of the big hotels – Hilton, Waldorf Astoria, Wanda, Kempinski – had a grandiose celebration for the ‘lighting of the tree’, complete with VIPs, children’s choirs, elaborate Santas, and a host of delicate Christmas-themed foods. In the ‘lower’ tier cities – like for many things – celebrating Christmas en scale is a more recent tradition than in Shanghai, and therefore more of a novelty.

This will be the last Skinny for 2018. Thanks for reading this year. To our clients and partners, thanks for working with us – you’re awesome! The Skinny team wishes you the Merriest of Yuletides, Hanukkah, Kwanzaa and New Years. We’ll be back again in 2019. Go to Page 2 to see this week’s China news and highlights.