Mass urban migration, the one-child policy and opening up to the world have all had an enormous impact in shaping modern China. WeChat has hit a sweet spot addressing some of the challenges that have resulted from the changes.

WeChat reunites families separated by the exodus to cities, connects and entertains lonely only children, and links the millions of Chinese who travel, study and migrate abroad every month. This is evident from the tens of billions of messages sent, and the 280 million minutes of video and voice calls made on the app every day. Yet WeChat’s influence in transforming Chinese society spans far beyond its communication features.

China has some of the highest mobile Internet usage rates in the world. Remarkably, more than half of the time spent online on smartphones is on WeChat. In many cases, it has become the default way Chinese communicate, network and entertain themselves, and its increasingly changing the way they transact. With around 80% of users following a brand on WeChat, it has also become a formidable marketing tool. Businesses have been quick to adapt, with more than a fifth of Chinese companies having WeChat accounts. Just four years since WeChat launched, there are now over 6 million official company accounts.

With WeChat touching so many parts of urban Chinese’ daily lives, Tencent has accumulated an enviable suite of insights into how Chinese consumers go about their day. The countless Chinese consumers who diarise their lives on WeChat’s Moments provide Tencent the ability to track when the population is happy or sad, where they are going on holiday, and what pop culture is hot.  It can tell what time they go for their daily walk.  It can gauge consumer’s interests by which WeChat articles they read. It can even dissect Chinese consumers’ routines from morning to night.

Until last week, Tencent had been very guarded with this information.  But not long after announcing that it was leveraging WeChat data to help compete with Alibaba on Single’s Day, it released some fascinating insights into WeChat’s 570 million users. We’ve translated this data and presented it in an infographic. It provides an intriguing view into Chinese consumers, particularly when combined with other insights. Click here to see it.

For our Australasian readers, China Skinny’s Mark Tanner will be New Zealand and Australia early next month talking about WeChat and all things China.  On Monday 9 November, he’ll be in Auckland joining the esteemed line up at the China Business Summit.  On 11 and 13 November, Mark will be in Sydney and Melbourne moderating the Australian Business Forum’s China Digital Conference.  It’s the third year we’ve attended the event as it’s always well organised, with excellent speakers and great attendees.  Click here for more information.  We hope to see you at one of the events.  Go to Page 2 to see this week’s China news and highlights.

A Chinese consumer’s purchase journey is like no other.  It begins online for most, with 85% using search engines, brand websites, or social media as their first step for researching a new product or purchase, according to a PWC survey.

Whilst online research is not unique to Chinese consumers, the way they do it is. For a start, they are less trusting of products and services, and investigate more, across a wider range of online channels before making a decision.

Globally, 56% use a search engine as their first port of call for doing research, whereas just 33% do in China. When Chinese search, it isn’t just on Baidu as it is on Google elsewhere.  Consumers are more likely to research products on ecommerce platforms like Taobao, particularly when they are getting closer to making a purchase decision.

Food and beverage is one illustration of Chinese search habits.  For example, consumers do twice as many searches for wine on Taobao/Tmall than on Baidu.  And wine is a product most consumers still require further education about.  Products such as packaged snack food – which consumers are more familiar with – often account for ten times more searches on Taobao/Tmall than on Baidu.

32% of Chinese will go directly to a brand’s website – much higher than the 19% globally, and almost as many as those who will use a search engine initially.

When we talk about online research in China, it’s a good idea to be thinking about mobiles.  Wherever Chinese are thinking about making a purchase – in a store or online – they will always have their smartphones with them, so it is important to factor this in to customer touchpoints.

PWC’s findings are polarising: 85% are online for their first step of research, whereas just 11% of retail sales happen over the Internet.  This signals a disconnect in the customer journey and represents an opportunity to further integrate online and offline channels to better tailor to consumer preferences.  China Skinny can assist with that. Go to Page 2 to see this week’s China news and highlights.

China’s fixation with Hollywood movies has driven American culture in the Mainland and helped many Western brands along the way.  It’s aided Nike to become the top-selling and most loyally followed fashion brand in China.  It’s why many consumers are prepared to pay ¥27 ($4.40) for a medium sized Starbuck’s latte – a third more than the equivalent cup in Chicago, and why planes are full of Chinese tourists visiting their favourite movie settings around the globe. 

While Beijing tries to limit Hollywood’s influence by restricting the number of foreign films shown to 34 a year, those blockbusters, coupled with the billions of pirated Western movie downloads every year, have penetrated China’s consumer culture. 

Hollywood’s reign doesn’t go unchallenged in the Mainland.  The sway of South Korea’s and Hong Kong’s popular culture is strong, as is the rising home-grown movie scene.  Domestic films’ share of China’s box office grew from 47.6% in 2012 to 54.5% in 2014.  Even with it the declining share, Western movies’ total revenue rose 60% in 2014 on the back of soaring growth.

Box office revenue in February this year saw China overtake the U.S. for the first month ever, helped by the 1,000 new cinemas that opened in 2014.  That momentum continued in March, with takings 73% higher than in 2014.  Chinese consumers spent more on movie tickets in the first three months of this year than all of 2010, and earlier this month, Fast & Furious 7’s release in China almost doubled the previous opening day record and broke the $250 million mark in just eight days.

China’s box office growth and influence has caught the attention of some of China’s wealthiest and highest profile individuals, including Alibaba’s Jack Ma, Tencent’s Pony Ma and Dalian Wanda Groups’ Wang Jianlin, who are investing billions into China’s movie industry.  Its allure has also tempted industry execs from all corners, with Hollywood  inserting ever-more Chinese actors and backdrops into its blockbusters, Netflix pressing on with its China launch, and the world’s biggest short film making contest, My RØDE Reel, allowing budding film makers to concurrently enter on Youku and Youtube for the first time this year

Depsite the growth of the local film industry, it’s unlikely Hollywood will lose its stature in China any time soon, which is good news for foreign brands who cleverly tie in Western cultural elements.   Contact China Skinny for help with that.  We hope you enjoy this week’s Skinny.

Consumers,: Chinese Consumers

What Are China’s Shenzhen Shoppers Buying in Hong Kong?HK is restricting Mainlanders with multi-entry visas to one visit a week. Goldman Sachs expects trips to Hong Kong to shrink by 4.6 million a year – 10% of total Mainland visitors – and reduce retail sales by 2%. Around 90% of multi-entry visas are used by day trippers who go to buy cosmetics, food, alcohol and tobacco, with Hong Kong goods typically considered safer and cheaper.

Once-Prized Tibetan Mastiffs Are Discarded as Fad Ends in China: Sales of another luxury item have been hit by China’s austerity campaign and fakes – Tibetan Mastiffs. The breed once sold for as much as $200,000 in China, with some even having plastic surgery to increase their value.  Nowadays, there are reports of the surplus pooches headed to the slaughter house to be used in hot pots and as glove liners.

Films and Entertainment

‘Furious 7’ Shows Rise of China’s ConsumerFast and Furious 7 has smashed the record for China’s biggest one-day box office takings at $63.2 million, doubling the previous record holder Transformers 4, further reinforcing China’s move to a consumption-based economy.

Netflix CEO Says Will Stick With Ad-Free Model in China PushNetflix is pursuing a subscription video streaming service without commercials for the Chinese market, keeping with its traditional subscription model. It will be a tough sell with Chinese consumers used to watching entertainment for free that is either supported by ads or illegally pirated.

Online: Internet, eCommerce, Social Media & Mobile Making it Easier for Foreign Brands to Sell Directly to Chinese ConsumersJD Worldwide is allowing foreign brands, and even eBay vendors, sell directly to its 97 million active users. The runaway demand for cross-border eCommerce in China is outstripping supply of bonded logistics space

Unsafe Product Alert: Be Very, Very Careful What You Buy on WeChatWeChat’s aspirations to challenge Alibaba’s leadership for online shopping have taken a step backwards following a damning CCTV report about dodgy facial cleansing masks bought on the platform. The masks had 6,000 times more of the hormones than legally allowed. “Taobao has fake products but at least there’s platform supervision. On WeChat you just have to trust that [the seller] has a conscience. It’s unreliable,” one online commentator stated.

Is Apple Betting Big on The Chinese Market?Chinese consumers are having a big influence on Apple’s product development with features such as big screens, gold iPhones, gold Macbooks, and $10,000 bling gold iWatches. If any market is going to buy the expensive gadgets, it’s China, with 73% of Chinese luxury watch buyers thinking the brand is most important, versus 38.7% in the U.S. and 50.1% worldwide. Downloads on Apple’s iOS in China have surpassed those in the U.S. for the first time

Premium Food & Beverage

Chinese Consumers’ Demand Drives Up Imported Food SalesSales of imported food to China grew 14% last year, almost three times FMCG’s 5.4% growth, with overseas purchases and online shopping the two fastest growing channels. 86.7% of urban Chinese families have bought imported food at least once according to Kantar. The biggest sales growth in China’s food and beverage sector came from tier three and four cities.

China Considers Ban on Infant Formula Ads China is considering banning mass media and public advertisements for its $18 billion infant milk formula market, in a bid to tackle low levels of breast feeding. This will further increase the importance of targeted digital media to reach mothers. Less than a third of babies are exclusively breastfed in China and the number is falling.

Make the Most of FTAs, Fonterra Executive Tells Farmers“If you don’t have an offering, a proposition to take to consumers, one that will be wanted, then the free trade agreement has not a lot of use,” Fonterra advises at the Global Food Forum [subscription required].

Coke to Buy China Multi-Grain Drinks Maker for $400 MillionCoke is buying China’s Culiangwang, a drinks company that specialises in multi-grain beverages with flavors such as red bean, walnut and oats. Coke is hoping the acquisition will help bolster its disappointing 2% volume growth last year. Soda represents around 70% of Coke’s sales in China, but it is diversifying into faster growing categories such as plant-based protein drinks.

Overseas Chinese Tourists

Chinese Affluents Research at Home Before Purchasing Abroad: Hurun ExecChina’s affluent consumers are underpinning the global luxury market and are unlikely to have their supremacy challenged in the next five years at least. Chinese luxury shoppers travelling abroad do a lot of research at home before they leave. Apple’s rise in the affluent consumer segment represents an increased desire for affordable luxury, particularly in the gifting space.

Understanding the Chinese LGBT TravelerAn estimated 40-70 million Chinese are lesbian, gay, bisexual or transgender. More than one-third of Chinese gay men surveyed online travelled abroad in the past year, with 72% preferring to travel with close friends, although 90% are reportedly married to women. Scenery, quality of food and culture influenced destination decisions the most.

Premium &: Luxury

Why eCommerce is the New Gold Standard for JewelersGreater China is now the larest market outside of the U.S. for online diamond and fine jewellery retailer Blue Nile, and it grew 37% last year. There are more than 10 million new Chinese brides each year, with many wanting traditional Western-style engagement rings.

Cars &: Auto

China Rethinks Its Car-Sales ModelChina’s parallel car imports, or grey market, is having an impact on its auto industry, particularly at the high end. It reportedly contributed to BMW’s decision to reduce prices of its X5 an average of 14% across China last month.  At the other end of the market, a low pricing strategy has seen China-branded SUV sales more than double in the first quarter of 2015, to overtake foreign brands and hold 56% of the market.

That’s the Skinny for the week! See previous newsletters hereContact China Skinny for marketing, research and digital advice and implementation.

It’s nothing new that Chinese consumers are opting for food and beverages that are better for them.  In 2013, after a decade and a half of mouth-watering growth from its Oreo cookies, Mondelez discovered that wealthy urban consumers were turning to healthier alternatives.  Likewise, earlier this year Nestle announced it was revamping its food and beverage business in China due to the shift towards nutritious items.

Whilst China’s affluent urban consumers have been the most prepared to pay premiums for healthy food, even lower-income Chinese preferences are changing.

Chinese munch their way through half of the world’s instant noodles – more than 40 billion packets a year.  But appetites appear to be waning, with sales dropping by billions of packets last year.  The traditional strong-hold for noodle companies – low income earners – are increasingly forgoing cheap food for higher-priced, more nourishing options.

Food safety is another factor concerning 84% of Chinese consumers according to Mintel research.  That’s reflected in soaring growth for products like imported fresh milk, and increasing awareness for healthy foreign products such as cranberries, avocados and olive oil.  Similarly, China’s organic food market grew 12-fold in the past six years.

While nutritious, safe food is one of the big shifts in China’s food and beverage sector, other trends include convenience food, online shopping, sharing, product and packing innovation, food origin/provenance and the ever-present localisation. China Skinny can work with you to ensure that your product fits into the mix.  More info hereGo to Page 2 to see this week’s China news and highlights.

China’s state press agency Xinhua has shut down the website of the respected business newspaper 21st Century Business Herald, and terminated a ¥3.5 million ($590,000) contract between the agency and the Bank of Communications, after it was exposed for receiving payouts for publishing good news and concealing bad press. It follows other high profile state media corruption cases this year, such as the senior CCTV employees involved in bribery and corruption.

Extortion by staff at the state-run news monopolies continues to erode Chinese consumers’ faith in traditional media channels. IPSOS research found that Chinese shoppers trust online sources more than the state media. For example, 49% of consumers increase their purchase intent through websites, versus less than 32% for the state-run newspapers, television and radio.

Research by Cohn and Wolfe found the watching television is the 6th most common method Chinese consumers use to find info about a brand, newspapers are 9th and radio is 10th.  Digital channels such as web sites, social media and online reviews are the main methods for research, and they influence other popular channels such as asking friends and family.  Although most Chinese consumers know not to trust everything they read online, it is much more transparent and objective than state media, and has become the standard research channel for middle and affluent class Chinese.

Whilst online channels are important, offline marketing can still create many synergies that reinforce and raise awareness of online campaigns.  Traditional media channels are powerful tools that can make or break a brand – as Nike or Apple will tell you – and should be an important component for brands with large marketing budgets in China.

Between October 1-7, China Skinny’s Shanghai office will be closed for the Golden Week holiday.  We hope our China-based readers have a great break and don’t eat too many instant noodles.  See you on the other side!

Go to Page 2 to see this week’s China news and highlights.

China has long been known as the land of fakes. The country was the source of two thirds of fake goods seized globally between 2008 and 2010.  Street-side stalls, shops and entire shopping malls are dedicated to counterfeit bags, garb and DVDs.  Staff in a fake Apple store were fooled into believing that their employer was the real thing.  Rat meat has been sold as beef and lamb.  Even the kids aren’t sacred, with a local zoo in Henan duping visitors with a fake lion.  From the minute Chinese are old enough to consume, they are exposed to a myriad of phoneys.

Having your brand and products ripped off in China is an unfortunate reality of doing business in China.  Even though the China Government is focused on addressing the issue to meet the World Trade Organization mandate, and to protect its own growing innovate and creative companies, China’s vast and disparate supply chains mean it’s a difficult puzzle to solve.

However, not everything is looking grim.  Online shopping, once a breeding grounds for peddlers of fakes, is one of the beacons of hope for fighting the fraudsters.   China’s B2C platforms such as Tmall, and Yihaodian are the fastest growing eCommerce channels in China, and are close to accounting for half of all online sales.  Much of their growth can be attributed to consumers trusting the platforms to sell genuine and safe products.

Sites such as Tmall only allow registered trademark holders or associated parties to list on their platform.  Vendors pay a sizable deposit which can be used as refunds if goods aren’t what they’re meant to be.  And customer reviews, which are a large factor for consumer perceptions and search results, soon weed out the fraudsters.

Buying goods online is often more reliable than elsewhere in China.  We only need to look to wine as an example; even at a swanky bar in Shanghai, you could drop $100 on a bottle of wine, which could turn out to be fake plonk in a real bottle. On Tmall or Yihaodian, you can be pretty sure it’s the real thing, which has why 47% of wine consumers are expected to buy online by 2020.

Alibaba’s imminent IPO in the USA will bring even more focus to cleaning its platforms of fakes.  Expect to see smaller players like Amazon and Dangdang clamping down on third parties selling fake cosmetics and other wares following CCTV accusations.  Online platforms are working with the authorities to help the cause.  ¥172.9 billion ($27.8 billion) worth of fakes have been seized and 59,000 people have been arrested. The war hasn’t been won yet, but the good guys are winning a lot of battles.

For our readers in Hong Kong and Southern China, China Skinny’s founder Mark Tanner will be sharing valuable insights at the Fashion Access Conference in Hong Kong on 1 April.  It would be great to see you there.  In the meantime, we hope you enjoy this week’s Skinny.

Consumers, Chinese Consumers

Alibaba Shakes Off Counterfeit Label Smoothing Path to U.S. IPO: 18 months after Alibaba was under US scrutiny for supporting counterfeiters, it may now be the biggest IPO in America since 2008. Alibaba has removed 114 million allegedly intellectual-property infringing listings and has teamed up with brand owners and law enforcement to arrest suspects from 51 counterfeit rings. Tmall is now more trusted than some physical retail outlets.

How China (and the Rest of the Emerging Markets) Spend Today: Unlike in Western countries where older people make more, young and educated Chinese have higher incomes and spend more of it. Consumers aged 18-29 earn the most, more than those aged 30-45, and significantly higher than older age groups.

In China, the Customer Experience Is Better Online: Chinese consumers rate online retailers easier, more enjoyable and having better customer service than physical retailers. Four of the top five ranked retailers only sell online.

Chinese Consumers Fastest to Adopt Ultra-High Definition TV: Of the 1.6 million ultra-HD TVs shipped in 2013, China accounted for 84% of them.

Online: Internet, eCommerce, Mobile & Social Media

China Mobile Search Development in 2013: Reading is the most searched category on Baidu mobile, accounting for almost one in five searches. Life service, tool & inquiries, health and education searches rose in 2013, however Chinese sites were of poor quality in these areas.

WeChat Sees Resurgent Growth, Now Has 355 Million Active Users: In December 2013, 355 million WeChat users sent out one or more messages via WeChat or used other features such as logging into Game Centre or updating Moments. Weibo has 129 million active monthly users, although it is hard to compare like with like as it is often used for different purposes.

Premium Food & Beverage

Weetabix Explores ‘Savoury’ Flavours as it Sets Sights on Chinese Consumers: Weetabix is incorporating ingredients such as green tea and sesame seeds, to align with Chinese breakfast habits. Chinese also prefer hot and fast breakfasts.

‘Hedonic Expectations’: How to drive healthy drinks sales in China: The Chinese place more trust in the bigger beverage brands to deliver safe products.  They also link ‘naturalness’ to single-flavour varieties and are increasingly willing to pay more for quality, safety and nutrition.

Why Chinese brands stumble in the West: Some Chinese brands are focusing on data and customer experience in the domestic market which will help them expand globally. Hot pot chain Hai Di Lao ‘delivers happiness’ by creating a fun-loving employee culture and share that enthusiasm with customers.

Milk Flies Off e-Commerce Shelves as Site Sets a New Guiness World Record: 30 container-loads, or 600,000 packets of half-price milk imports sold in less than an hour on Yihaodian to set a new world record. The online grocery store expected it to take a day to break the record. Yihaodian sells 40% of China’s imported milk. In an average week, 5,000 litres of fresh Australian milk is flown from Melbourne to Shanghai and sold at $8/litre. Interestingly, OzDairy was singled out for dodgy use-by date labelling on CCTVs 315 Gala consumer protection show.

Chinese Pay Double for Organic Kale After Food Scandals: An online poll of 3.26 million people by People’s Daily found food and drug safety was the third-biggest concern for ordinary Chinese this year, up from seventh place in 2013. The number of certifications issued to ‘organic products’ more than doubled between 2009 and 2013 in China. Sales of those items reached ¥‎80 billion ($13 billion) at the end of 2012. Sales of packaged organic foods such as honey and cereals jumped 46% in China last year to ¥‎5.94 billion ($1 billion).

Overseas Chinese Tourists

Chinese Travel Willingness Report in 2014: A Ctrip survey found 51% of Chinese want to travel three or more times in 2014. 56% plan to increase travel spending this year. 81% wanted a self guided tour, with a little under half not booking those through travel agencies.

High-End Malls in Southern California Court Shoppers in China: 40 of the wealthiest 100 individuals made their millions in Tier 2 & 3 cities, and shopping malls in popular tourist destinations like LA are increasingly catering for them.

Samsonite Takes the Pulse of Chinese Consumers: Samsonite’s China sales grew from $92 million in 2010 to $192 million in 2013. Although sales increased just 5.3% last year, Samsonite are expecting sales to grow more than 10% this year due to rising wages and soaring tourism numbers. Some Samsonite retailers around the world are offering scales in stores as Chinese consumers like to double check the advertised weight of cases.

Accessories Jewellery

China’s Secret Vaults: Where Is All The Missing Gold?: Chinese consumers bough a record 1,066 tons of gold in 2013, 32% more than a year earlier. The value and status of gold remain high in China, where it represents financial security. Tight government control over gold in the past has contributed to this.

Pollution and Environment

Beijing’s Smog Ain’t Going Nowhere: In the Beijing and its surrounds, 58% of PM2.5 pollution comes from coal combustion in the power, steel, cement and brick industries, with an as little as 4% coming from cars according to one study. Even with all the attention on pollution in China in 2013, coal consumption still rose 2.5%.

Cars and Auto

Chinese Consumers Prefer Not to Buy Chinese-Built EVs – In Steps US-Made Tesla: “Modern electric vehicles are a new mass market technology, which adds to the apprehensions of the typical Chinese car buyer…Consumers must not only overcome this range anxiety but also Chinese-car anxiety.” Beijing, Tianjin and Shanghai are all subsidising electric, hybrid and fuel cell cars.

Premium and Luxury

Luxury Brands Look to South Korea for China Sales Boost: Brands such as Chanel, Gucci and Louis Vuitton have used product placement in Korean TV dramas to broaden their appeal to young Chinese consumers.

Kooky, Weird & Wonderful

Farmer Rides His Pig to Market After Illness Left Him Too Sick to Walk: A pig farmer in Chongqing who became too sick to walk after a bout of bronchitis, has started riding a 250kg hog to get around. Pigs may be the answer for China’s aging population.

That’s The Skinny for the week!  We’d love to discuss how we could 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.

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

Happy belated Valentines Day.  With Spring Festival fatigue still evident, the timing wasn’t great to be pushing another celebration in China.  Nevertheless, there were still plenty of starry-eyed youth with arms full of flowers and chocolates walking city streets throughout the Mainland last Friday.

Like most celebrations, observing the Feast of Saint Valentine has become a bit of a cash cow in China. Long gone are the days of taking your princess to the noodle vendor, and dropping $2 on an intimate dinner.  Nowadays in China, some define a ‘medium-priced’ dinner for two as a ¥500 ($82) graze – the most popular priced deals booked on plush restaurant website, DiningCity

Dinner was just the start for China’s romantics.  The price of local roses and lilies rocketed 500% due to heavy snow in Kunming, China’s main flower growing area.  For those wanting something a little more exotic, Tmall offered 11 fresh tulips from the Netherlands for ¥99 ($16), preordered to be picked on 10 February, and delivered with love on Valentines Day. However, even with the tulip promotion, the overall sales of flowers on Taobao and Tmall were down 6.1% on last year.

Increasingly adventurous Chinese consumer behaviour is spilling out across Valentines Day.  Buyers wanting to express their love with something a little less mainstream, with tailor-made and personalised gifts were on the rise – 70% of users on a Taobao forum said they’d like a custom-made gift on Valentines Day. The top-3 selling gifts on Taobao were specially made coins with a couples’ photo on it, a cupid train ticket travelling “between their hearts”, and a box of condoms shaped like Ferrero Rocher chocolates.  

China’s growing affluent demographic increasingly want to show their individuality with what they buy.  This is particularly evident in the luxury segment, where those paying big bucks don’t want to be wearing the same garb as the other 80 million luxury consumers in the Mainland – that’s why niche and tailored luxury brand growth is the envy of most mainstream labels.  For the less affluent middle class Chinese, ‘Diaosi’ or ‘losers’, are also influencing purchases – where the less dedicated followers of fashion are making more individual choices based on value.  Online penetration has enabled much easier customisation for mainstream consumers, wanting to buy everything from Coke to cars, and something we’ll see more of going forward.  We hope this week’s Skinny gives some more insights into what Chinese consumers are looking for, enjoy!

Consumers, Chinese Consumers

‘Custom-Made’ is Trending in China: Some wealthy Chinese are not only pursuing “high-end, with good taste, and of high quality”, but paying more attention to uniqueness and personal character.

China’s ‘Losers’ Have Become Mainstream Consumers: ‘Diaosi’, loosely translated to ‘loser’, is becoming a term more Chinese consumers relate to. They are those who don’t have the status objects: the apartment, the car, or great career and marriage prospects, but are confident regardless and even proud of it. They are less likely to follow the herd and purchase the latest trends, often making more individual purchases based on value, quality and for fun.

Top Trends Changing China in 2014: 13 min video with some of the trends picked in marketing this year: big events such as the FIFA World Cup will bring true 360 degree integrated marketing, there is likely to be fragmentation of social media, requiring marketers to understand how to leverage each network, and mobile’s influence will continue to grow through advertising, connecting accessories and integration with other channels.

China’s Hillbillies Need to Open Their Wallets: China’s 220 million migrant workers spent $677 billion on goods and services in 2012, 1.5 times Indonesia’s entire spend.

A Secret Climb to the Top of China’s Tallest Tower: Video and photos of the view atop of the 650-metre Shanghai tower, courtesy of a couple of Russian photographers who sneaked in on Chinese New Year.

Online: Internet, eCommerce, Mobile & Social Media

WeChat Links Up With a Major Chinese Shopping Center to Launch Offline-to-Online Purchases: WeChat has teamed up with Wangfujing Department Store in Beijing, kicking off with a small Valentine’s Day promotion. Within 6-months, customers should be able to scan a QR code on certain items in the store to purchase them on WeChat; to take away or have them delivered.  Similarly, Alipay Wallet has linked up with 330 OK Mart stores, cosmetic retailer Bonjour, and fashion house Giordano in Hong Kong targeting Chinese tourists.

Wallet Wars: A Visual Peek Inside China’s PayPal: On the subject, a look into how China’s Alipay Wallet users can buy goods in 30,000 stores nationwide with their smartphones, either by using their mobile to send sound waves or by scanning QR codes. Consumers can also split the bill with other Alipay users.  Over 70% of Chinese consumers felt comfortable shopping online and using a payment card on a mobile device – the highest rate in a global Nielsen survey.

21 million Taxi Rides Have Been Booked on WeChat in the Past Month: If you needed more proof that mCommerce is buzzing in China, just look to the 700,000 taxi rides booked a day on average on WeChat. 2.62 million were booked on 7 February with 2 million paid for via mobile on WeChat payments.

Q&A: How to Build a Smartphone Fan Base in China: ZTE’s Nubia brand sells through online channels in China and has developed unique features inspired by comments and feedback on social media.

How to Create Powerful Online Videos: Three great examples of videos that resonate with Chinese viewers, with Pepsi’s Chinese New Year vid demonstrating the core Chinese value of family, but doing it by cleverly combining traditional and contemporary values. Qeelin transformed the deeply rooted, distinctly Chinese Lion Dance and made it sophisticated and aesthetic. Johnnie Walker’s Chinese video takes the same theme as the UK ad of finding your inner self and being true to it, yet with these values expressed quite differently.

Apple’s iPhone Shipments Strong in China, But Can’t Catch Xiaomi: Apple is on the up again in China, with 7% market share for the last quarter of 2013, but still kept out of the top-5 by Xiaomi on volume. Apple’s share is expected to keep growing with the China Mobile relationship. Samsung maintained it’s top position with a 19% share.

Premium Food & Beverage

Asian Consumers Spend More on Brands They Follow Online: Chinese consumers who follow food and beverage brands online, spend 160% more on food and beverage.

Chinese Wine Consumers Steer Clear of Modern Labels: Research into a small sample of wealthy wine drinkers from Shanghai and Beijing found that the overriding need when choosing a wine was for reassurance, meaning modern, funky labels were less likely to appeal. Visual symbols were important.

Golden Age of Wine: Eight Reasons Why Chinese Consumers are Living in One: Although wine drinkers in China pay a lot more for imported wines than in most countries, here’s an interesting view why they’ve never had it so good: value, price checking, choice, distribution, information, privacy, access and local quality.

WeChat Restaurant: The Quiet Culinary Revolution: WeChat has become the platform of choice to queue, order, pay and provide customer services for many restaurants in China.

Outbound Chinese Tourists

Starred Hotels Lose Shine Amid China’s Austerity Drive: 56 of the 680 five-star hotels in China sought to lower their ranking to four stars in 2013. Revenue of five-star hotels dropped 14%, more than other types of hotels. Prior to the Government’s clampdown on corruption, almost 60% of high-end hotels and restaurants’ turnover came from Government departments and state owned enterprises.

Beauty and Beauty

The Chinese Make-up Market: What Consumers Use and Why?: 40% of Chinese females use nail products. 75% of young consumers use face makeup, versus 32% of older consumers. Global brands account for more than 90% of the market.

Investments and Property

China Home Prices Jump 11% But Shanghai Sales Slow by 29%: House prices in China have gone up for the 20th month in a row, up 11% from a year ago. Houses in 94 of the 100 cities monitored recorded rises.

Precious Jewellery

China Buys, Produces Record Amounts of Gold: Chinese consumers bought 41% more gold in 2013 than the year before, with the largest expenditure on gold jewellery [subscription required].

Premium and Luxury

Chinese Consumers Drive Demand for High-End Watches in 2013: Although sales of luxury watches decreased in the Mainland, Chinese consumers’ market share is said to have grown 58% to 34% of the global market.

Baidu Users Care More About High Luxury Prices Than Fake Goods: 14.4% of luxury handbag consumers search for “price” on Baidu, ten times more than the 1.4% who search for “authenticity” and 0.9% who search for “reputation”. Brand name searches for luxury handbags have dropped 26% in the year. Luxury watch-related searches had a similar focus on price, often to find the original price of the items before tariffs and other extras are slapped on.

That’s The Skinny for the week!  China Skinny would love to discuss how we could 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.

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

If you’d popped into a Chinese village about 4,600 years ago, there’s a slim chance you’d have been offered a clay flask of wine.  Although archaeologists have discovered Chinese produced wine from native “mountain grapes” since the time the Egyptians were building the Giza pyramids, drinking wine never took off in China like it did further west.  Yet, with changing lifestyles, tastes and demographics, China is finally coming to the party.

China is expected to become the second largest consumer of wine by 2016, and the sixth biggest producer – Chinese actually drink four times more locally-grown plonks than the imported stuff, and local vintages are starting to receive international acclaim.

Whilst some wine exporters may see the rise of local wines as a threat, it is great news for the industry overall, helping raise awareness and encouraging more Chinese to develop a taste for wine.  With China still plagued with constant food scandals, and so much fertile land contaminated with heavy metals and excessive pesticide use, as wine tastes mature, so will their desire for safe, quality imported wine. 

When Chinese consumers are buying imported wines, they are no longer just beelining it to the shelf with the most expensive bottles of Bordeaux.  Chinese are considering more wine varieties and origins. Some wine brands have taken a hit with the crackdown on corruption and gifting, yet an increasingly confident, independent and adventurous Chinese consumer is having more of an effect on wine sales in China.  Chinese drinkers are becoming more educated, basing wine choices more on value and personal taste – just look to the 4.6 million Chilean wine drinkers in China. Another trend is the move online, both to find information wine and brands, and to purchase wine, with 47% of wine consumers expecting to buy online by 2020.

Wine consumption in China is in many ways, a symbol of the way Chinese consumers are evolving overall, echoed across countless other categories from soaring independent travellers, to confident shoppers buying niche luxury products.  We hope this week’s Skinny provide some insights to help you tailor your marketing to them.  Enjoy!

Consumers, Chinese Consumers

Chinese Consumers Get More Emotional: A survey of 19,400 Chinese consumers in Tier 1 to 4 cities found emotional factors came first as a reason to buy for more than half of the 22 categories. Tier 4 consumers showed surprising similarities with their equivalents in Tier 1.

Premium Food & Beverage

Pollution Rising, Chinese Fear for Soil and Food: One-sixth of China’s arable land — nearly 50 million acres — suffers from soil pollution. Over 13 million tons of crops harvested each year are contaminated with heavy metals, and 22 million acres of farmland are affected by pesticides.

Waiter, There’s Fox in My Donkey Meat: Another fake meat scandal in China: Cheap fox meat being sold as fake donkey meat in Walmart.  Walmart will invest ¥100 million ($16.5 million) into improving the safety of its food, including mobile food inspection, training suppliers and by adding DNA tests to donkey meat. The retailer plans to increase imported food five-fold this year because of food safety concerns locally.  2.4 million donkeys are eaten a year in China.

Chinese Consumers Judging Chinese Wines: Chinese consumers pick their favourite local wines for 2013. Chinese drinkers enjoy around four domestic wines for every imported one.

6.4 Million Litres of Wine Went from Chile to China in One Year: 4.6 million Chinese consumers drink Chilean wines, with 1.6 million drinking it regularly, helped along by a low-budget, but ambitious online marketing campaign. Wine consumption in China is expected to triple from 1.1 litres per capita to 3 litres per capita a year by 2017.

Hershey Makes Its Way Into China: China is forcing Hershey’s to try new things, such as making $584 million acquisitions – no Hershey’s acquisition had ever been over $200 million before.  Many Western companies use acquisition as an effective way to crack the lucrative China market.

Formula Sellers Face Tighter Rules: Chinese consumers can seek compensation from retailers if they buy baby formula with quality issues. In turn, retailers are now able to seek compensation from producers. For pharmacies that meet certain requirements, they can now sell baby formula.

Online: Internet, eCommerce, Mobile & Social Media

China’s Vine-Esque Video App for WeChat Takes Selfies to a Whole New Level: WeChat’s new app Weishi lets users create and send videos up to 8 seconds long. Will provide some creative new ways to market and interact with Chinese consumers.

Huawei, ZTE Chase ‘Cool’, Xiaomi Chases Apple: While other Chinese handset manufacturers try to play catch up with Xiaomi from a branding perspective, Xiaomi meets Brightstar in the hope of global expansion. Xiaomi aims to more than double smartphone sales to 40 million in 2014, up from 18.7 million in 2013 and 7.2 the year before.

Jingdong Pulls In Over $16 Billion in Sales in 2013:, China’s 2nd largest eCommerce platform had 140 million registered users in 2013 spending $16 billion. 100 million users were on its mobile apps, with 15% of orders coming from smartphones.

China Mobile Payment User Behavior 2013: 86% of Chinese mobile payments use a third party platform such as Alipay or Tenpay. 70% of transactions are over 100RMB. 53% like the idea of paying with WeChat.

Outbound Chinese Tourists

Five Ways Chinese Travelers Will Be More Independent in 2014Independent tourism is increasing in popularity in China – even tour groups in most markets have less than ten people. Chinese tourists will expect more, travel to more diverse destinations, and be influenced by social media.

Harrods Boss Criticises Chinese Visa ProposalsHarrods boss claims Chinese visa simplification process is just smoke and mirrors and the UK is missing out on £1.2 billion ($2 billion) in sales a year because of it.

Investment Property

Chinese Investment in London Property Up 1500% Since 2010Chinese are investing in all sorts of property in London including offices, retail and industrial units, hotels and mixed developments. Chinese investment has grown by 1,500% from $88.2 million in 2010 to $1.63 billion by Q3 2013. London now accounts for more than 50% of Chinese property investments in Europe.

Finance and Banking

82% Chinese Netizens Held Credit Cards: More than four out of every five Chinese consumers online have a credit card, 78% of them are currently using them. 66% have two or more cards.

Accessories and Jewellery

Want to Reach Chinese Consumers? Here’s My Advice: Everything from weight of the metal used to finish a piece of jewellery to design details are scrupulously studied by Chinese consumers.

Retail and Fashion

Do I Make Myself Clear? China’s Young Fashionistas Mobilize73% of Chinese consumers use the Internet to research before they buy a luxury product. With social media such a key component of that, up and coming Bomoda, the Instagram-Pinterest-type-app, with its 250,000 users could be one to watch.

Premium and Luxury

LVMH Shows Dedication to Chinese Consumers With Training Program: LVMH is offering recent Chinese migrants to America luxury retail training and store internships, so they can better cater to Chinese tourists. A nice win-win.

Selfies, Puzzles, And Quizzes: The Top 5 WeChat Luxury Campaigns Of 2013: The top-5 WeChat Luxury campaigns for the year from Jing Daily, including interactive airport promos, quizzes, integrated WeChat-Weibo puzzles, Selfies and voice recordings.

Kooky, Weird & Wonderful

Dead But Not Buried: Preserved human bodies for sale on Taobao, going for a song at 126,500 yuan ($21,000), delivered to your door. No documentation required. All corpses come with a two year warranty.

That’s The Skinny for the week!  China Skinny would love to discuss how we could 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.

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

Happy New Year, we hope your 2014 has started off with a bang.  While many of you would have still been crooning Auld Lang Syne, another record was broken in China, where 808,298 Sina Weibo posts were sent in the first minute of 2014 – up 11% on last year’s record. But Weibo’s record, helped by partnering with CCTV’s New Year broadcasts, does little to hide the reality that the network’s popularity has taken a hit with the rise of Tencent’s WeChat. Weibo recently conceded that ‘if you can’t beat ’em, join ’em’, by reopening content sharing with WeChat on its network in the hope of staying relevant to Chinese consumers.

Nevertheless, WeChat’s race with Sina Weibo for China’s social media crown is likely to be less interesting than its duel with Weibo’s part-owner, Alibaba, for China’s lucrative mobile shopping throne.  The spectacular rise in China of both smartphones and online shopping saw triple digit growth for mobile shopping in 2013.  In November’s Singles’ Day shopping fest, 21% of Taobao and Tmall’s sales were made on a mobile, up from 5% a year earlier. Mobile shopping has arrived in China, and 2014 will see it really take off.

Whilst almost 80% of China’s mobile transactions in Q3 2013 were through Alibaba’s Alipay, Alibaba doesn’t appear too comfortable with WeChat’s runaway popularity.  WeChat is becoming an increasingly integral part of affluent Chinese lives, and Alibaba knows it.  Alibaba recently launched its Laiwang app to compete directly in WeChat’s space, and has blocked WeChat from some of its services and apps. Likewise, Tencent has blocked Alibaba from some its services.  There’s also been public relations mudslinging between the two companies. You can now use your mobile to transfer money by scanning a QR code, collect vouchers, buy movie tickets and much more, both on WeChat and Alipay.

Alibaba’s founder Jack Ma and Tencent’s founder Pony Ma both like to win, which they’ve done convincingly in their respective segments.  But now their segments are merging, it will be an exciting competition, which will only encourage innovation.  It seems appropriate that this Lunar New Year will be the Year of the Horse (Ma), given some of the most fascinating developments over the next 12-months for anyone selling to Chinese consumers, will be mobile commerce from the two Mr. Ma’s – still well and truly a two horse race!

However, there is more than one race being run in China this year, and no doubt you’re involved in a few of them.  Hopefully the articles below provide some assistance. Enjoy!

Consumers, Chinese Consumers

Record New Year’s Day Splurge in ChinaChina’s New Year’s Day spending with Union Pay was up 53% from last year. Supermarkets & department stores saw 52% growth, appliances 42% and jewellery 77%. Overseas transactions soared 860%.

China’s Best Ads in 201338 min vid: Following China’s ads’ best year in Cannes, here are the top ads for 2013 according to some industry leaders. The spoofed food safety in China ad, a toilet paper art exhibition, KFC movie placement, SUVs, visiting parents and books promoting cafes.

A Wedding in Aisle 3? Why Ikea Encourages Chinese to Make Its Stores Their OwnChinese consumers believe that tomorrow will be better than today, and Ikea hopes to tap into that and make an emotional connection. Some couples have even gotten married at an Ikea store. Many Chinese lack self-confidence when it comes to decorating their own space, but as younger professionals are increasingly entertaining at home, they want their furnishings to look good.

China State Broadcaster’s Attack On Foreign Brands Fuels Citizens’ Skepticism Of GovernmentInteresting analysis on negative CCTV reporting of Western brands, which has actually bolstered public opinion of brands. Some good arguments, however basing opinion just on Weibo sentiment can be misleading and not always representative of reality – Apple is case in point, it received a lot of support on Weibo, yet has only recently halted its shrinking share following the negative press. With the shoe on the other foot, why do Chinese companies want to go West?

Government, Online Retailers, Telecom Firms Work Together on StatisticsTaking ‘Big Data’ to a whole new scale – China’s National Bureau of Statistics has teamed up with online retailers such as Alibaba, search engines like Baidu and telcos like China Unicom to compile official data. That’s a lot of data – there are 5 billion queries a day on Baidu alone.

Online: Internet, eCommerce, Mobile & Social Media

China’s eCommerce Goes Mobile in 2014: Retail mCommerce sales reached 43.3 billion RMB ($7.1 billion) in Q3 2012 in China, up 141.9% from the same quarter in 2012. 78.4% of mobile transactions were with Alipay, which supports standard mobile shopping, plus it allows users to transfer money to a contact face-to-face via QR code, organize travel itineraries, collect electronic coupons, buy movie tickets, and much more.  Alipay invested heavily into mobile payments in 2013 to retain its lead.

Boosted by WeChat, China’s Mobile Gaming Market Worth $590 Million in Q3: Mobile is China’s fastest growing gaming segment, growing 75% between Q2 and Q3 last year, helped along by the ‘Social Gaming Centre’ integrated into WeChat last summer.

China Mobile & Apple Bring iPhone to China Mobile’s 4G & 3G Networks: Apple has signed a long awaited deal with China Mobile, likely to make its phones more attractive to the world’s largest mobile company’s 760 million subscribers. China Mobile-compatible 5C and 5S’ will be available on Jan 17. The jury is out how many Chinese will pay a premium for iPhones versus the feature-rich cheaper, and increasingly cool, alternatives. However, even before the deal was signed, Apple’s share in China grew to 12% for the month of October.

Lee Min Ho Breaks Record On Wei Pang Interview: South Korean actor Lee Min Ho breaks Weibo records fielding 530,000 questions on the social network on December 20 – no word on how many he managed to answer.

Robin Li Passes Wang Jianlin as China’s Wealthiest ManThere’s money in bits and bytes in China. Robin Li, founder of search engine Baidu has become China’s richest man, worth $12.23 billion, helped along by overseas-listed Chinese tech stocks more than doubling in 2013. WeChat’s owner Tencent founder Ma Huateng also climbed the rankings to become China’s second richest. The big three: Alibaba, Baidu and Tencent spent $7.4 billion combined on acquisitions in 2013.

Premium Food & Beverage

Chinese Develop Whisky Connoisseurship: Whisky accounted for just 3.1% of China’s $42 billion spirits market in 2012, however Scotch Whisky exports to China were $230 million, up from $1.6 million in 1992, and distilleries are investing significantly to continue the growth. By comparison, Rémy Martin Cognac was $445 million, although sales dropped 10.4% in the first 6-months of 2013.

China Bans Wild Animals from Official Dinner Tables: It’s official, dishes containing shark fins, bird nests and wild animal products are banned from official reception dinners in China.

Outbound Chinese Tourists

Global Hotels Going Local to Woo Chinese TravelersChinese domestic tourists made 2.6 billion trips last year, expected to grow to 3.3 billion by 2015. Chinese hotels are going local to ensure they capitalise on it, with Chinese branding, head and shoulder massages, and 24-hour congee.

Retail and Fashion

Woolmark Partners with Chinese Textile Group Youngor The Woolmark Group and Youngor, China’s largest vertically integrated textile group, have launched a marketing campaign to promote Australian Merino wool across a selection of Youngor’s 3,500 stores in China. Youngor hopes to differentiate its brand as the focus shifts to materials for high end apparel in China.

Banking and Finance

Alibaba’s ‘Leftover Treasure’ Hits 43 Million Users: Six months after launching, Alibaba’s bank substitute Yu’ebao, had 43 million signed up at the close of 2013, with combined deposits of ¥185.3 billion ($30.4 billion).

Cars and Auto

Chinese Car Dealers Surf Surging Tide of Auto Demand86% of Chinese consumers said they would be likely or very likely to purchase a car online.

French Renault Enters into Billion Dollar Chinese Alliance with DongfengAnother JV with a Western car brand and Chinese motor group. Renault imported more than 30,000 cars into China in 2013.

Tesla Starts Offering Cars in China With No Chinese Name: A fortunate marketing stunt or another reason to ensure you trademark your brand in China asap.

Premium and Luxury

Gucci, Chanel, and … Qeelin?: Diamond panda pendants worth tens of thousands of dollars are striking a chord with Asian consumers – from Asian-founded jewellers who understand the local luxury market. Qeelin, one of the shining stars of the region was recently acquired by Gucci owners Kering who see the potential of home-grown luxury in the lucrative Asian market.

The Top 5 Sina Weibo Luxury Campaigns Of 2013: The top-5 Weibo Luxury campaigns for the year from Jing Daily, including new days to celebrate, match making, hot mums, life lessons and virtual plastic surgery.

Kind of Helpful

12 Essential Apps for China Travellers on a BudgetA handful of great apps to help make getting around China a little easier for foreigners, from taxis, to buses, trains, to translating Chinese from menus or transport time tables.

That’s The Skinny for the week!  China Skinny would love to discuss how we could 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.

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

Many luxury brands in China haven’t been smiling much lately. In years gone by, the world’s big peddlers of luxury have been broadcasting double digit annual growth in China – this year, the market is picked to grow just 2.5%. The Chinese Government’s crackdown on corruption, lavish events and gift giving has seen sales of Swiss watches, premium alcohol and mega brands such as Gucci actually decline.

Regardless, there’s been plenty of grinning from some of the luxury brands.  Those brands, such as Bottega Veneta and Coach, who have invested into understanding how the Chinese market is evolving and adapted their marketing mix accordingly, are still experiencing growth north of 20-30%.  As wealthy Chinese consumers mature and become more independently-minded, they don’t want the same LV handbag as millions of their compatriots. Whilst many are still buying luxury goods for status, they are confident that those who need to know, will recognise their brands without having to brandish garish logos.  For products such as wine, they are looking beyond the traditional regions such as Bordeaux and Burgundy and becoming more adventurous.  For those who have travelled before, many are over the crowds at mainstream tourist sites, and looking for more unique experiences.

Chinese consumers now account for almost 50% of luxury goods bought globally, including the 73% of goods that Chinese purchased abroad.  That’s created a lot of buzz around Chinese consumer’s appetite for luxury brands, however it is just the just the beginning.  In 2010, there were 14 million affluent households in China; by 2020, there’ll be 65 million.  And those households will be spending a lot more money on premium goods and services than they have to date.

There are forecast to be 180 million consumers who will buy luxury goods by China in 2020, up from 80 million today.  By 2016, China is predicted to overtake the US as the world’s largest luxury auto market. Tourism catering for wealthy Chinese will make up a notable portion of the 400 million Chinese who will have travelled abroad within five years.  Premium Western food and beverages, that simply can’t be replicated in China’s polluted, pesticide-soaked fields will boom.  It’s golden times ahead for those high end brands who understand and meet the needs of the Chinese market.  Hopefully this week’s Skinny will help with that a little more.  Enjoy!

Consumers, Chinese Consumers

Middle Class Sitting in the Driver’s Seat for Consumption: 75% of China’s middle class are more anxious to buy a car than a luxury watch. Daily use of the Internet is 34% higher for middle class than the general Chinese population. Time spent on digital media was higher than television in this group.

Meet the 2020 Chinese ConsumerThe 2020 Chinese consumers is picked to be more mainstream, educated and independent. By 2020, China’s luxury consumer base is anticipated to expand from 80 million to 180 million consumers.

Understanding Chinese Consumers: Chinese consumers are brand conscious, but price sensitive. If a brand can signal a higher social and/or economic status, or is deemed safer, Chinese consumers would be happy to pay a premium. If it doesn’t, they become very price sensitive.

Safe Bets for Marketing in China: The good bets to market to Chinese consumers born between 80s and the 90s is social, mobile and gamification. Although mobile marketing is still in its infancy in China, it has much higher penetration than the USA, with users more comfortable about mobile data and transactions.

Premium and Luxury Goods

92% of Chinese Consumers Dissatisfied with Luxury Services at HomeChinese luxury consumers cite poor customer service and poor product knowledge by staff as the primary motives for shopping abroad. 36% of Chinese prefer to shop for luxury goods online. 52% said that social content is the best way to build trust.

Ted Baker Has High Hopes for ChinaTed Baker has doubled its number of stores from two to four in China in the past month, with plans to have ten in Tier 1 cities, and possibly a few in Tier 2 cities. Nevertheless, China is yet to “grab hold of the luxury, contemporary, affordable market” TB is in.

Gucci’s Expands Logo-Free Collection to Appeal to Chinese ConsumersWhile Gucci’s sales declined in China, many low-key niche brands are soaring -Bottega Veneta grew 30% over the year. Gucci is moving towards more sophisticated products, which has seen its 55% of its handbags sold globally be logo-free, up 20% from a year ago.

Skincare, Apparel Beat Out Wine and Watches in Luxury Forecast52% of affluent Chinese consumers expect to spend more on apparel over the next 12 months, up from 38% next year. 50% will be shelling out more on beauty products. Less consumers expect to be spending more on fine wine, shoes, bags, watches and jewellery than last year.

Chinese Food and Beverage

China Developing Thirst for Spanish Wine: Exports of Spanish wines to China are up 40% by volume and 44% by value for the year to become the third biggest exporter to China. More consumers are looking at alternatives to French regions as they become more educated about wine and look for value.

Would You Like Fries With Those Spicy Pork McBites?: McDonalds looks to localise its menu further in China in hope of growing its stagnant market share in China’s $174 billion fast food industry.

Online: Internet, eCommerce, Mobile & Social Media

China’s Unstoppable E-Commerce Market Ready To ‘Explode’More than 80% of Chinese consumers say they use social media to learn about products before purchase, and 66% write product reviews after making a purchase.

Sina Weibo: We’re Still Seeing Growth, Now Up to 60.2 MillionSina Weibo had 60.2 million active users a day, up 11.2% for the quarter, and an 8.3% rise on the quarter before, even amid the crackdown on rumour spreading. Average time spend on Weibo remains unchanged, but mobile usage is on the rise. 

Tencent Rises After Boosting Online Game SalesTencent’s five games released through WeChat and QQ had 570 million registered users within three months. Monthly active users on WeChat grew 15% to 272 million in the third quarter. In related news, Brazilian football sensation Neymar, joins his Barcelona team mate Messi as a WeChat ambassador as the app continues to grow its 150 million overseas user base.

China’s Flirty Momo App Quickly Doubles User-BaseMomo doubles its registered users in four months to 80 million users. Half are active every month and 13 million every day. Earlier this month social gaming integration was released, with 2 million downloads in a week.

Outbound Chinese Tourism

China’s Luxury Travel Industry to Take Off: Luxury, customized travel for wealthy Chinese consumers is set to take off now 2.8 million Chinese nationals have assets of $1 million or more. At the upper end, ten world trips priced at ¥1.18 million (US$193,610) each sold out in 15 seconds, boat trips to the North Pole had 138 tourists sign up, and there are a number of Chinese with budgets of at least $1 million for travel.

Chinese Can Visit 18 Countries Without Prior Visas: Chinese travellers can now visit 18 foreign countries and regions without acquiring a visa first, but the exit and entry inspection could bar Chinese nationals from leaving the country if their destination does not fit with the government protocol.

Shanghai Firm Buys New Zealand Resort as Chinese Tourism Booms: Shanghai’s CRED has become the first Chinese company to make a significant investment in NZ’s tourism sector, buying 1,100 hectare (2,718 acre) Peppers Carrington resort in NZ’s Northland province, complete with seaside golf course and vineyard, to tap into the growing high end tourism and Chinese travel agency’s preference for Chinese-owned resorts.

Residential Property

Chinese Buyers to Have Access to Australian Property Listings Through New WebsiteREA Group will allow property sellers in Australia to offer their properties for sale in China through their new site launching in 2014.

Banking and Finance

Alibaba’s Internet Financial Products Gain 50 Billion Yuan Within One and a Half MonthsAlipay’s Yuebao has become China’s first public offering to exceed 100 billion RMB ($16 billion), with almost 30 million investors.

Accessories and Jewellery

Gold Retains Luster for Chinese Consumers as Economy ImprovesWhile gold demand globally shrunk 21% year on year for the third quarter, China’s demand for gold jewellery jumped 29%, surpassing India to become the world’s largest market. Lowering prices, increased branding from jewellery stores and rising incomes has helped the rise in China. Jewellery style and design is becoming increasingly important with Chinese consumers.

Cars and Auto

Audi Bets Chinese Love Small Cars Too After Seeking More LegroomChina’s market for premium compact cars is forecast to grow 50% in China next year, five times the mid market brands. China will overtake the US as the top market for luxury cars by 2016 according to McKinsey. SUVs make up 36% of China’s premium market.

Volvo Discovers the Benefits of Being ChineseSince selling to China’s Geely for $1.8 billion, Volvo has received a $1.2 billion loan from the China Development bank, opened up Chinese factory capable of producing 120,000 cars a year, and has just been included on the lucrative Chinese Government procurement list. In 2012, the Chinese Government purchased 750,000 new cars, about 4% of China’s market.

That’s The Skinny for the week!  China Skinny would love to discuss how we could 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.

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

Anyone who has walked down the street in China, eaten at a restaurant, taken public transport, been in a shopping mall, or even a workplace, will be well aware of the significance of mobile phones in Chinese consumers’ lives. 464 million, or 78.5% of China’s 591 million Internet users, go online with their mobiles. Through apps and websites, mobiles now touch almost every aspect of Chinese lives. Amazingly, China Skinny still comes across countless businesses targeting Chinese consumers who don’t even have their websites optimised for mobiles.

China’s mobile landscape is changing even faster than China itself.  With locally-branded smartphones going for as cheap as $100, they are not just the realm of the wealthy, but are in the pockets and handbags of virtually every Chinese consumer who buys Western products. Smartphones are replaced every six months on average in China, compared to every couple of years in developed markets. With each replacement mobile comes new specs and technology to consider. While your target market may have had an Apple with a 4″ screen six months ago, there’s a good chance they’ve now got an Android phone with 5+ inches of viewing pleasure.

Chinese consumers bought 150 million smartphones in the first half of 2013, with new features presenting all sorts of opportunities. There are few channels that are more personal and more likely to break through the clutter than mobiles, which smart marketers can use to win consumers’ hearts. Below you’ll find more about mobiles and the usual roundup of marketing advice, views and news that’s all related. We hope you find it helpful.

Chinese consumers Chinese Consumers

Tackling China: Interview with CEO of Carat China: Words of wisdom from Carat China CEO Adil Zaim for businesses marketing in China.

Consumer Behavior Changing: Innovation and marketing are becoming more important than geographic expansion for multinational companies in China. Chinese consumers, particularly in Tier 1 and 2 cities, are seeking greater reliability, consistency and integrity in consumer products.

Wealth Report 2013: In 2012, the number of high net worth Chinese with a personal wealth of at least ¥10 million ($1.6 million) grew 3% to 1.05 million millionaires. 40% are in Tier 1 cities, 29% in Tier 2 and 31% in Tier 3 and lower.

Uber Arrives in China With Test Launch in Shanghai: Uber taxis have come to Shanghai, hoping demand in Chinese cities will help grow its current $3.5 billion valuation. More expensive than the cheap standard cabs, but good service and a nice ride.

Chinese Internet Internet, Mobile & Social Media

Chinese Mobiles Get Bigger: 150 million smartphones sold in the first six months of 2013, making up 85% of total mobile sales.  During this time the portion of sales with screens 5″ or bigger increased from 5% to 12% over the half. No doubt the bigger screens are cannibalising some of China’s tablet growth which slowed to 5.2% last quarter.

China’s Domestically-Made Smartphones Take 60% Market Share: Chinese-made smartphones take 60% of the local market for the first half of 2013, with sales up 115% from a year ago.

Apple, iPad may be Losing Must-Have Tablet Status in China: As with smartphones, iPad appears to be following iPhone’s slippery slope in China, accounting for just 28% of total tablet shipments from April to June.  It was 49% a year ago. Small Chinese manufacturers’ strength is that they cover all price points, and together account for 50% of market share, up from 36% a year ago.

How Much Chinese Consumers Are Willing To Pay For A Cheap iPhone: Morgan Stanley research found more than 50% of Chinese consumers think ¥4,000 ($486) is a fair price to pay for a cheap iPhone.

What Chinese Consumers Want in a Mobile Phone: Quality & performance are the most important factors Chinese consumers consider when purchasing a mobile phone. Even more would buy local if it wasn’t for the questionable quality, poor usability and aesthetics.

HTC Will Reportedly Roll Out its Own Mobile Operating System Specifically for Chinese Consumers: Recognising the importance of Chinese consumers, HTC is developing its own China-focused operating system. Interestingly, there’s a lot of talk about Weibo integration, and nothing about WeChat.

10 Charts to Tell You About China Online Shopping Market in Q2 2013: Advertising spending on Taobao is now 74% of Baidu’s, and growing 20% faster.

China Online B2C Market Surpassed 30% of Total Online Shopping: B2C shopping is now a third of all online consumer spending, up 96.5% from last year and growing much faster than C2C. Tmall holds 51.3% of market share.

Baidu to Pay $160 Million for Stake in Chinese Group-Buying Firm: Further consolidation in China’s online space. Not long after its $1.9 billion purchase of 91 Wireless, Baidu is coughing up more cash, paying $160 million for 59% of Group-buy site Nuomi to further its mobile aspirations.

Chinese Gov’t Calls on Celebrities to Take Up Social Responsibilities: 3,300 Weibo accounts have more than a million followers on Sina and Tencent. 200 have more than ten million, and the Government expects them to keep in line.

Chinese Food and Beverage

Food Safety Tops Public’s Concerns: Illegal additives, poor hygiene and unsafe materials in the manufacturing process were the major concerns of Chinese consumers in 2012.  52% were concerned about private companies and 17% about multinational companies.

Fonterra can learn from Yum’s Woes: Although it now turns out that Fonterra’s bacteria scare was just a false alarm, damage has been done to Fonterra’s and NZ’s brand. How Fonterra can learn from KFC’s response to a crisis in China – a softly-softly approach on food scandals is not a good option.

NSW Farmers Cash in on China’s Agricultural Import Boom: China’s growing middle class is causing an agriculture boom in NSW as the clean image and low freight charges help make their products attractive. Australia’s agriculture exports to China have more than tripled since 2001.

Sustainability and Environment

China Is Going To Embark On An Epic Attempt To Reduce Pollution, And The Business Opportunity Is MassiveChina’s intention to tackle air pollution will see 1.7 trillion RMB ($280 billion) over the next 5 years invested, bringing plenty of opportunities.

Outbound Tourism

China Becomes World’s Biggest Travel Spender96% of overseas Chinese travel has been for leisure purposes, although 52% of travellers have also travelled abroad for business or education.

Macau Developer Signs Deal for Versace HotelA Versace-branded hotel is to be built in Macau. Versace hopes it will help build their brand in China, given there is “nowhere that has a higher concentration of rich mainland Chinese consumers than Macau”.

Ritz Carlton Banks on China RecoveryThe Ritz is looking to double its number of hotels in China over the next three years.

Precious Jewellery

Jade Ring Bid at $2.6 Million as Chinese Seek Green GemsA jadeite ring sold for $2.6 million as Chinese investors drive the price of jade up almost 300% since 2005.

Premium Luxury Goods

China to Place Consumption Tax on More Luxury Goods: China is looking to widen the scope of its consumption tax to include more luxury goods and goods that cause heavy pollution and use excessive energy.

Film and Entertainment

China’s Movie Market Booms with Local Content, Cinema ExpansionPWC picks Chinese movie takings will grow 15.6% a year for the next 5 years, although much of the growth is being driven by cinema’s opening in Tier 2 and 3 cities. There are 15,000 movie screens in China, with 10 being added a day. Meanwhile, the 10th Beijing International Film Festival was canned last minute in a deal struck with the Government that allowed special guests to watch DVDs of the lineup, in groups of five or less.

That’s The Skinny for the week!  China Skinny would love to discuss how we could help with your mobile strategy, 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.

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

There’s a stunning spot in Idaho, where sweet and plump cherries grow.   Many miles away in Shanghai, consumers on Tmall are clicking ‘buy’.  As those US cherries are looking nice, they’re picked and sent with bags of ice.  They reach Chinese homes two days after they were on a tree, faster than they got to Tennessee.

That isn’t just a poorly-rhyming fantasy, it’s the way Chinese consumers are now buying online.  Fresh American cherries, cheaper than they’d be at Walmart China, sold out in three days.  Tens of thousands of online shoppers pre-ordered 60 tons of cherries in the latest series of offers that have enabled Chinese to buy fresh, trusted, American produce, directly from the source.  In the first half of this year, sales of imported food have grown 500% on Tmall, as increasingly wealthy consumers opt for food they deem as safer.  

Retailing in China is a competitive and ever-changing beast.  Just ask Tesco.  What is consistent is that Chinese consumers are shopping more and more on their PCs, tablets and mobiles.  Food and beverage is one of the stand-out growth areas for online shopping, with some pundits picking growth for fresh food to be 400% in the next five years.  Consumers aren’t just buying their weekly supplies online for convenience or a lower price, they’re looking for products they can trust and that aren’t on the shelves at the local Lotus store.  American cherries are just one example of how businesses can innovatively sell more goods online, and also grow their brand’s awareness and reputation in offline channels. Watch this space.  In the meantime, we’ve got the usual rundown of news, views and stats about marketing to China.  We hope you find it helpful.

Chinese consumers Chinese Consumers

With Another Failed Foreign Venture to its Name, Tesco Turns its Focus Back to Britain: After 9 years, Tesco is folding its unprofitable China operation into a state-run company as a minority shareholder. Tesco holds about 2.4% of China’s market, accounting for 2% of Tesco’s global sales. Soaring online grocery sales can’t have helped the outlook.

Chinese Consumers Value Product and Service Quality Over Price: 76% of China’s middle class place the most importance on quality when buying goods according to a survey by HKTDC. Just 24% consider price to be the highest priority for choosing a product. 59% stated well-known brands reflect higher quality and 56% use brands to enhance their self-image.

Chinese Internet Internet, Mobile & Social Media

Chinese Online Shopping Boom Reaches ROK, Japan: Online purchases in China on Alipay for the first half of 2013 are up 219% from a year ago. Volumes from overseas sites have more than tripled during that time.

M-commerce in China Surges More Than 40 Percent in Q2: mCommerce in China surged 181% from a year ago, with mobile estimated to account for 8.6% of online shopping in Q2, almost double the portion it made up a year ago.

Xiaomi Sells First Batch of 100,000 Budget Phones in 90 Seconds: 100,000 of Xiaomi’s new Hongmi ¥799 ($130) smartphone, sold out in 90 seconds on Qzone. 7.45 million have been preordered. Higher up the value chain, Xiaomi’s ¥1699 ($277) Mi 2S outsold the Samsung S4 in the first half of 2013 to become the top selling mobile in China. Started just 2-years ago, Xiaomi now outsells Apple in China on units and with Lenovo’s shipments up 131% in a year, the local manufacturers are making some serious inroads.

Specialized Newsrooms Abuzz on WeChat: WeChat’s broadcast messaging is creating a plethora of citizen reporters and specialised storytellers.

For A Winning Weibo Strategy, Gaining Followers Is Only Half The Story: Don’t base a company’s Weibo success on their number of followers. Coach is a good example of engaged followers, attracted by its focus on visuals, consumer advice, easy purchase and constant activity.

Chinese food and beverage Food and Beverage

Sales of U.S. Cherries to Chinese Consumers Shows Growing Potential: A US cherry promotion on Tmall, which saw cherries reaching Chinese consumers just 48-72 hours after being picked saw a sell out in three days – 30,000 orders totalling 60-tons. The early stages of the wave of foreign f&b selling directly to Chinese consumers online have begun. The freshest American cherries you’ll get in China, are actually 22% cheaper than their equivalent in Walmart’s China stores.

Cashing in on Health Scares, China Online Food Sales Boom: Some pundits are picking online sales of fresh food will grow by almost 400% to ¥40 billion ($6.5 billion) in five years. Sales of meat, seafood, fruit and vegetables on Taobao grew 42% in 2012 year to nearly ¥1.3 billion ($210 million). Shunfeng Express, China’s largest delivery company, offers food to around 500K customers, with 70% being imported.

China’s 10 Best Selling Wines Online: What the Chinese are drinking according to online wine retailer Wangjiu.

Chinese Consumers Go Crazy for Californian Pistachios: California’s largest food export to Mainland China? The humble pistachio nut. Exports have grown 2,200% since 2004 to $109 million a year – 35% of its harvest.

Outbound Tourism

Tourism Australia Spreads Web into China: Australia launches its first website dedicated exclusively for an overseas market – within the Great Firewall. By 2020, Chinese tourists are expected to be worth $9 billion to Australian tourism.

Destinations Target Chinese Tourists on Weibo: California is hoping to follow New Zealand’s success with Yao Chen, signing up Chinese actress Gao Yuanyuan, with her 21 million Weibo fans to promote tourism in the state.

Education Education

Cards Make Paying Global Tuition Easier: 194,029 Chinese students enrolled in US Schools in the 2011-2012 academic years, 23% up from a year earlier. More than 300 Universities including BU, MIT and Cornel have just made it easier for Chinese to pay for tuition and living expenses online with RMB.

Physical Health & Beauty

China is Getting Fatter: 11% of Chinese between 20-39 are obese, having put on 1.9kg since 2010 on average. Over a third between 20-69 are overweight. 9.6% exercise more than 3 times a week.

Chic and Cheap: China Takes Shine to South Korean Cosmetics: Chinese consumers are taking a fancy to Korean cosmetics in the country’s ¥208 billion ($34b) a year beauty & personal care industry. They’re cheap, chic, can read market trends and react quickly. Amorepacific sales jumped 34% in the 2nd Quarter of 2013, growing its share in China’s skincare market 20% to 2.6% last year. L’Oreal has 16.8% and P&G 9.8%.

Jewelry Jewellery

China’s Increasing Appetite for Bling is Giving Some Spark to the Moribund Gold Market: Chinese consumers, who make up a quarter of global gold demand, have helped drive up the price of gold to $1,335 an ounce. Some expect Chinese consumers to buy more gold than their Indian neighbours this year.

Recreation & Sport

NFL Home Field Coming to Shanghai: NFL is upping their presence in China, with ‘Home Fields’ to be set up in Beijing, Shanghai and Guangzhou between 31 August – 17 November with special guests, cheerleaders, live entertainment and games.

Chinese auto Auto

In China, Curbs on Car Purchases Encourage Pricier Rides: Pricey plates for cars in China’s big cities has meant it makes more sense to buy a bigger car to justify the expense. The average price paid for cars in Beijing has soared 88% since 2011.

BMW Sales Growth Outpaces Mercedes-Audi in China Luxury Car Race: BMW’s July growth in China outpaces Audi and Mercedes, growing 39% on the back of its stretched 3-series.

Morgan Joins Race for Chinese Consumers: Morgan enters China’s competitive luxury car market, differentiating with its craftsmanship, exclusive image, and 104 years of hand-built style. Growth in China’s premium car market has slowed to 8.3% in the first quarter of 2013.

Chinese luxury Luxury Goods

As Chinese Consumers Break E-Commerce Records, it’s Luxury they Seek: In 2012, 242 million Chinese consumers spent ¥1.3 trillion ($209 billion) on eCommerce, and they’re increasingly willing to buy big ticket items.

That’s The Skinny for the week!  China Skinny would love to discuss how we could 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.

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

Back in 2011, a long time ago in Chinese marketing years, everyone was talking about Weibo as the silver bullet for Chinese marketers.  Businesses were scrambling to attract as many Weibo followers as they could, hiring ‘Weibo experts’ to post enthusiastically, and giving away all sorts of goodies.  Since then, Weibo has done good things for some businesses: building brands, attracting a loyal following and creating a great platform to spread their messaging and promotions far and wide. 

As Weibo feeds have become increasingly crowded with advertisements and growing Government presence, coupled with Chinese consumers looking for the next new thing, Weibo has lost some of its mojo.  As we reported in last week’s Skinny, Weibo activity for key opinion leaders has dropped 30% since its peak in 2011-early 2012.  Nevertheless, businesses shouldn’t be writing off Weibo as a has-been. 

Weibo still holds significant influence over Chinese consumers.  The transparent nature of Weibo means that information about products, services and brands, good or bad, is out there for all see.  Chinese consumers know they’ll find honest and concise views from other consumers on Weibo, which helps sway their perception of a brand and purchase intentions before buying things.  Almost half of Weibo users read comments about products and services.  They also share their own experiences, look for promotions and interact with companies. Businesses, recognising the benefits of Weibo, have joined en masse, with 300,000 enterprise accounts now on Weibo, averaging more than 1,000 followers each.  In April, Alibaba paid $586 million for an 18% stake in Weibo due to its influence on Chinese consumers and their buying behaviour.

Weibo can be great, but businesses shouldn’t just be ticking the box and judging their success on the number of followers.  Anyone can buy Weibo followers, and quite cheaply too.  Businesses should be seeking quality followers ahead of quantity, and aiming to convert those followers into loyal customers.  Clear objectives, coupled with a smart and creative Weibo strategy integrated with other marketing channels, can still be a very powerful tool in winning the hearts and wallets of Chinese consumers.   More on Weibo below, and the usual weekly roundup.  We hope you find it helpful.

Chinese consumers Chinese Consumers

How IKEA Adapted its Strategies to Expand and Become Profitable in China: Ikea’s lessons from localising to China: They adapted furniture to meet Chinese needs, and built stores close to public transport with displays that reflected local apartments. Ikea positioned itself as an aspirational Western brand targeted at the young middle class, not like the low-cost mass markets in other countries.  Social media marketing also played a big part.

To Sell Consumer Goods in China, You’ll Need to Go Digital, but Chinese-Style: There’s still plenty of growth opportunities in China, even in mature markets: 98% of Chinese households already buy cookies, but the segment still grew 23% last year .

On Economy, Chinese Sees Rosy Future Where Americans Do Not: Boston Consulting Survey: 19% of Chinese consumers don’t feel financially secure versus 51% of American. 80% of Chinese think their children will have a better life than they did, versus 24% of Americans. Chinese said education would be the number one priority if they were given a 25% increase in discretionary income. 51% of high net worth Chinese save more than 20% of their income – 17% of wealthy Americans do.

Chinese Internet Internet, Mobile & Social Media

Weibo Emerges As Top Marketing Platform: 46.5% of Weibo users read user comments about products and services; 29.7% look for promotional offers on company accounts; 26.7% share their product experiences; and 19% interact with companies.

Enterprise Weibo Accounts Exceeded 300 Million Followers: In March this year, 285 million Weibo users accessed from desktops, 88 million from the mobile app. In 2012 there were more than 300K enterprise accounts, with the top-5 most followed being online shopping, entertainment, consumer electronics, food and clothing.

Sina Weibo Credit System Has Docked 200k Users: 200K Weibo users posting ‘harmful’ content such as rumours, politically sensitive information and spam have been spanked with low credit logos and possible shutdown of their account – some probably see it as a badge of honour. 15m complaints have been received in the past year including 12 million spam and one million porn.

BMW’s Fabricated ‘Ctrl Z Day’ Sparks Viral Sensation On Weibo: Nice brand association for BMW on Weibo.  Like Alibaba did with 11/11, BMW have created another ‘national day’ for China, the day of regret. The campaign saw more than 300,000 Weibo users share their thoughts.

Marketing On WeChat Helps Apps Succeed In China’s Fragmented Marketplace: China’s smartphone app ecosystem will be worth $1.2 billion in 2013, although 200 app stores compete in the market. WeChat’s growth is helping spur the segment, incorporating apps such as Baidu’s Photowonder which had 1.6 million downloads in June.

New Rules For Modern Marketing: It’s All About Mobile: Mobile marketing to Chinese consumers should increasingly be becoming part of a cross-channel integrated marketing strategy. The 3 important factors for mobile marketing are content, context and channel.

Soaring Popularity of eCommerce in China sees Alibaba’s Business Boom While Economy Slows: PricewaterhouseCoopers: More than a quarter of Chinese consumers shop online principally because it is easier to find their favorite brands that way. That’s helped Alibaba’s revenue rise 71% in Q1 and profit grow more than 300%.

Chinese food and beverage Food and Beverage

California Winemakers Target China: Although California is aspirational to many Chinese, the fourth largest wine producing region in the world is yet to really convert that strong brand to wine sales. But it’s going in the right direction, with $74 million of exports last year, up 20%. And now Yao Ming owns a vineyard there, it will only help the region’s brand in China.

SABMiller is Betting that Chinese Tipplers will Crave Fancier Beer: In 2001, the top-4 beer companies in China had 28% of the market, in 2012 it was 61%. Now the beer brands are consolidating, their next quest is to sell more premium beers. For example, the Asia-Pac region accounts for 22% of volume for SABMiller, mainly from Snow Beers, but only 13% of revenue.

Domestic Food Producers Regain Customer Confidence: China’s green food mark and annual quality check hopes to convince Chinese consumers that local food can be safe.

Chinese Authorities Ground Cake-Delivering Drones: Some of the best marketing we’ve seen in China, unfortunately it didn’t last long. Banned or not, Incake certainly earned some good branding from it.

Fashion Fashion

Nike Just Doesn’t Do It With Chinese in Lost Sales Year: A more educated, global Chinese consumer has seen Nike sales decline for three straight quarters, and probably the next two, as the more fashionable Adidas AG’s fashionable street wear and Hennes & Mauritz AB’s H&M cheap, hip clothing take a larger share.

Penetrating China: A Challenging Mission for Western Fashion and Luxury Companies: 48% of foreign businesses fail in China within two years. Some good insights into why.

Chinese tourists Chinese Tourism

Mommies Flock to Become ‘Flight Aunties’: Spring Airlines bucks the Asian Airline trend of young and hot trolley dollies by seeking ‘flight aunties’ – 25-45 year-old mothers. The campaign has been well received on social media, let’s hope it encourages some ticket sales.

UK Retailers Bemoan Visas for Damping Chinese Spending: Chinese tourists account for 1% of arrivals at Heathrow, but are responsible for nearly a quarter of all luxury sales. Chinese tourists spend nearly £300m a year in the UK – but not nearly as much as could be because of visa policy: For example, Chinese tourists can go between France, Italy and Spain on a single visa, but need an additional visa for the UK. On the subject, three quarters of Chinese tourists to the UK visit the Bicester Village luxury outlet mall in Oxfordshire – 40% of Chinese consumers identify “retail-tainment” as a favourite pastime.

Chinese health and beauty Health & Beauty

China Cautions Hospitals Against Inferior Implants: If fake food wasn’t bad enough, these will last a while inside. On top of the fake implants, there’s also fake hygiene products.

Chinese auto Auto

China’s Automotive Market: How to Merge into the Fast Lane with Consumer and Digital Marketing Insights: Accenture: When Chinese consumers buy a car, 49% seek recommendations from friends & colleagues, 64% from family. 64% look to social media for opinions and 53% visit manufacturer websites. The important factors for a car are brand prestige and telematics – 85% of buyers look for in-car tech. A better and more customised experience is key.

Jewelry Jewellery

Billionaire’s Jewellery Retailer Sees Revenue Surge On China’s Gold Fever: Chow Tai Fook, the world’s largest jewellery retailer saw revenue grow 63% in Q1 2013. Gold accounted for more than half of sales in its 1,836 stores in China, HK and Macau, helped by sinking gold prices.

Chinese luxury Luxury Goods

China’s Limitless Potential For Online Luxury: Online purchases of luxury goods grew 71% in 2012. 70% of Chinese consumers are open to buying luxury online, and increasingly open to buying big-ticket items online. Almost 50% of shoppers are concerned about authenticity.

That’s The Skinny for the week!  China Skinny would love to discuss how we could 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.

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

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.

Although the Chinese New Year and Spring Festival has been the talk of the town in China this month, another celebration is getting it’s share of observers. Valentine’s Day is becoming increasingly fashionable with Chinese consumers; especially the young, urban and affluent. While romantics aren’t yet spoiling their loved ones with chocolates, jewelry appears to have become a popular gift. During the Spring Festival period from February 9-15, bank card transactions in jewelry shops increased 119% from the 2012 Festival period. That compares to a 43% increase for overall card usage in China and 33% overseas.

Valentines Day is another example of Chinese consumers embracing western traditions – with Chinese characteristics, as chocolate sellers have discovered. Below you’ll find the usual weekly roundup of news, views and stats to help you better understand and appeal to those characteristics; hopefully you find it useful. Enjoy!

Chinese consumers Chinese Consumers

Three Things You Need to Know When Building Your Brand in China: Three essential pieces of advice for building a western brand in China, with some best practice from those finding success; our view.

Elderly Chinese Consumers have Money to Burn – And Nowhere To Spend It: Chinese elderly consumers not feeling loved by marketers and retailers. Given 34% say they have no worries about their financial future, you may want to reconsider that. Entertainment, value-for-money and sensitivity are key ingredients for marketing to the elderly.

China Consumer Mood to Gather Pace in 2013: Chinese consumer sentiment to improve in 2013 according to Nielsen. Rural consumers are most optimistic, then consumers from 2nd & 4th Tier cities.

Infographic: Why Do Chinese Consumers Pay So Much for Foreign Brands?: A widely-circulated infographic translated into English, comparing the high costs Chinese consumers pay for goods compared to other countries – such as 4 times as much for milk powder as Holland. The reasons for the higher prices: higher distribution fees, higher taxes and established brands. The infographic overlooked one key element of marketing to Chinese – many consumers are more likely to buy an expensive product over a mid-priced equivalent, so a lot of brands intentionally charge a premium.

What’s Next for China?: McKinsey’s predictions about the shift in the Chinese economy. Consumerism will account for 51% of GDP growth from 2020-2030, versus 41% this decade. Cities with current populations of less than 1.5 million will make up 40% of GDP growth, more than the 35% from megacities. Their advice for businesses selling to Chinese: (1) Embrace new trends in urban development – have city-specific products, marketing and operating models; (2) Focus on the growing demand for services and consumer goods – demand stemming from growing incomes. Business services opportunities will also grow; and (3) Foster new skills and innovation capabilities – training, automation, flexible production and increased staff loyalty will take place.

Chinese food and beverage Food and Beverage

Chocolate Not Yet China’s Cup of Tea: It’ll take more than a chocolate Terracotta Army to tempt Chinese consumers to chocolate. Although consumption has grown 17% a year for the past 5 years, Chinese eat just 100 grams a year on average – that’s two snicker bars each, or 1/82nd of the Germans.

Consumer Goods in China, Moving Fast: Nice chart illustrating market share of the top 5-players in the Chinese beauty, packaged food & soft drinks in 2007 & 2012. Interestingly, there are 3 new big players in the food and beverage categories, indicating late-comers still have a good chance of succeeding in China.

Chinese Farmers Now Growing More Corn Than Rice: Chinese farmers are set to grow more corn than rice for the first time. Chinese consumers are demanding more meat, which needs to be fed. In the past 20 years, poultry has increased 300%, pork 87% and beef 155%. Will corn syrup in everything be next?

Chinese jewelry Jewelry

More Counting the Cost of True Love in China: Chinese romantics who bought jewelry on Valentines Day spent an average of $350 each. For those splashing out for dinner, it was $40 according to a Home Credit survey.

Chinese Internet Internet & Mobile

Online Video Revenues Surge in China: Online Video revenue surges 50% in China, with big brands like Pepsi, Nescafe and GM finding much success. Pepsi, for example, premiered a 30-minute film “Bring Love Home” and related music videos with celebs on online video leaders Youku and Tudou and got 71m views and 72,000 comments in the first day of being online.

Global Multi-Channel Consumer Survey 2012: Findings from PWC international online shopping survey including some interesting statistics on China: 36% of Chinese consumers shop online several times per week and 56% of Chinese online consumers have already shopped via a social media platform, versus the global average of 24%.

It Won’t Be Long Till The Chinese Are More Important To Apple Than Americans: Although Apple didn’t end 2012 as well as they started in China, the numbers would indicate that China will contribute more revenue for the company than it’s home market within a few years.

Chinese tourists Chinese Tourism

Chinese Consumers are Increasingly Purchasing Overseas: 71% of Chinese consumers in a KPMG survey say they travel overseas, up from 53% in 2008. While there, 72% are purchasing luxury goods, which is making luxury brands (especially cosmetics, watches and bags) around the world refine their strategy. The survey reiterated the importance of a digital strategy with 70% of those consumers searching for luxury items at least one a month online. 40% of those intend on purchasing luxury goods online, up from 22% in 2011. 56% prefer to purchase well-known luxury brands, with 69% paying a premium for them. Consumers distinguish country of origin, with European countries popular for heritage brands, particularly Switzerland for watches, France for cosmetics, perfumes, clothes and bags, and Germany for cars.

Chinese VIP Tourists’ High Expectations in Europe: VIP Chinese tourists and their high expectations when shopping abroad: (1) Shopping is a key part of the trip, but VIPs prefer the service and choice from boutiques, not department stores; (2) Have high expectations and expect tickets to big fashion shows, etc; (3) Are not very imaginative and generally want the same big brands, Hermes, Chanel, Louis Vuitton and locations; (4) Expect even further discounted prices; (5) Prefer in-store presentations than visiting manufacturing sites, as they don’t want to lose shopping time; (6) Men often like to meet brand managers and often recommend locations they’d like to see the goods sold; and (7) Love to take pictures from the store and post on Weibo.

Chinese auto Auto

China’s Green Drivers: Electric cars and renewables have a bright future ahead in China as the Govt aims for renewables to account for 20% of energy consumption by 2015 – a lot of incentives when you can see the effects of pollution out the window, just read the Weibo posts.

More Than 1 Million Vehicles Imported, But Growth Slows: China auto imports broke 1m last year, although they only grew 9%. More than half of dealers trading imports faced a loss due to high operating costs and lowering margins.

Coming of Age: China’s Used Car Market Outpaces New Sales Growth: Not all Chinese are buying shiny & new everything – used cars growth was more than new car growth in China for the second year running – although new cars still outsold used by 3 to 1.

Chinese art Art

The Chinese Art Market Slowdown Is Great News: Auction houses are reporting sales of Chinese art are half of last year, but some believe this is a good thing as it will reduce the speculation and leave room for art lovers to develop a healthy market based on increasingly sophisticated tastes.

Chinese luxury Luxury Goods

Chinese Brands Struggle in Luxury Market: Chinese luxury brands aren’t faring well against foreign brands, not helped by high retail rents pushing the local brands out. Just 10% of Shanghai’s traditional brands are making a healthy profits.

That's the skinny for the week!

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