Big data is a buzzword that gets bandied around a lot these days, and with good reason.  When companies like Google, and more recently Baidu, can uncover flu outbreaks from spikes in web searches long before health agencies become aware, you know you’re onto something good.

Applications for big data are starting to be used everywhere, but nowhere is it more relevant and powerful than in China.  China’s sheer scale and diversity makes it the perfect environment to utilise the power of lots of data.  Although just 47% of China’s population are online, they are mainly the urban, educated and wealthy classes who are likely to buy imported and premium goods and services, making the data particularly relevant.

For the 47% of Chinese who are connected, the Internet has become a deeply integrated part of their lives.  Social media, online shopping, QR-Code scanning and mobile usage rates are among the highest in the world.  That behaviour, coupled with a population that isn’t overly protective about sharing their information online yet, makes China the perfect breeding ground for helpful data analysis.  Data can be analysed to understand and even predict a consumer’s journey, preferences and influences, to target them in a way that is most relevant to their needs and desires.

Big data’s relevance goes far beyond just the Internet, and can even assist in refining strategies for brick and mortar shopping centres. One of China’s best known companies for harnessing big data online and offline is Alibaba.  In addition to its ecommerce interests, Alibaba owns businesses in segments as diverse as finance, film and football, giving it access to data across countless touch points of consumers’ lives.

For Alibaba’s finance business, it has an extensive insight into the eligibility of borrowers through all of its data channels, providing a competitive advantage over traditional competitors. Likewise for films, big data can help determine the direction of the entertainment it funds – hopefully not taking too much of the artistic license away from creators. What happens with football will be interesting, but if you were an online beer seller in Guangzhou, some of those insights could be interesting.

Taobao’s popular mobile app allows consumers to scan barcodes on over-the-counter drugs to check their authenticity, which also gives a lot of insights into who may be unwell, and with what ailments.

China Skinny uses a lot of big data for our research and strategy, right through to our web and social media services.  One of the more curious insights from big data we’ve seen lately is that women who buy larger bra sizes, are more likely to spend more onlineGo to Page 2 to see this week’s China news and highlights.

Yesterday: 9/9, marked the much-anticipated launch event for the iPhone 6.  As the world’s largest smartphone market, Apple is hoping its new phones will attract a healthy share of the expected 420 million smartphone purchases in China this year.

Apple has weathered the roller coaster ride of the China market better than some of its international competitors, but there have been some bumps along the way. Back in 2012, following accusations from state media about being arrogant and offering poor after-sales service, Apple’s market share slid from 9% to 5%. Apple has worked hard to win back share, such as supporting China Mobile’s proprietary network and responding smarter to criticism from the state.  But it knows it that can never rest on its laurels.

With a slew of low-cost smartphone manufacturers in China, the market is fiercely competitive. As local brands have become savvier with marketing, design, quality control and service, and consumers are more accepting of them, it’s becoming tougher for foreign brands to justify higher price points for a similar device.

Samsung has seen its share eroded by being just another Android device, however Apple is faring better with its exclusive operating system and the prestige that still exists from owning an Apple device.  The more difficult your wares are to imitate – both the physical and intangibles – the more sustainable they will be in the China market.

Apple’s iPhone 6 designers have catered to Chinese consumer desires by offering larger 4.7 and 5.5 inch Retina HD screens, compared to the current 4 inch iPhone 5. There’s the usual higher-res cameras, better battery life and more torque. We’ll be watching Apple Pay – the improved integration with payments launching the US next month – and how it incorporates China’s standard eWallets such as Alipay and Tenpay. A new smart watch will launch in 2015 offering health and fitness features, which could be particularly relevant to Chinese consumers if localised well. The new iPhones are top trending on Weibo this morning and launches in nine regions on 19 September.  China’s launch date is still to be confirmed.

We hope you enjoy this week’s Skinny.

Consumers,: Chinese Consumers

K-Pop Attracts Louis Vuitton InvestmentChinese consumers’ fanaticism with K-Pop would have helped LVMH make the decision to invest up to $80 million in South Korea’s YG Entertainment, the artist management powerhouse behind some of Korea’s biggest stars. Chinese visitors to South Korea spent $7.5 billion last year, more than double the spend in 2010 – most of it going on perfume, cosmetics, clothing and shoes.

The Strange Cult of M&Ms Obsession has Spread to ChinaThe M&M store in Shanghai is crawling with consumers seeking exclusive products, Selfie opportunities and localised exhibits such as the Great Wall of Chocolate.

Online: Internet, Mobile & eCommerce

Apple Unveils the Watch, Larger iPhones at Star-Studded Event: The iPhone 6 had its launch event yesterday with a focus on Apple Pay NFC payments, rounder corners and the long-promised larger screens.  Apple also unveiled a smart watch that tethers to an iPhone combining health and fitness features.

US to Fall Behind China as World’s Top 4G Phone MarketChina is on track to be the top market for 4G phones in the second half of this year, crowded with 250 devices at an average price of ¥1,000 ($163). Local brand Coolpad leads the market with an 18% share. Samsung is number 2 at 17%.

Alibaba Agrees Crackdown on Fake GoodsWith a lot of press about fakes on Alibaba’s eCommerce leading up to its IPO, Alibaba has signed a Memorandum of Understanding with the China-Britain Business Council (CBBC) to reinforce the “processes Alibaba already has in place”. The agreement will make it easier for CBBC members to notify Alibaba about infringing products and make it easier to remove them.

Premium Food & Beverage

Dissatisfaction With Food Safety Pervasive80% of Mainland consumers are not satisfied with food safety in China, with 58% believing production and processing carries greatest risk. 25% are most concerned about the planting and breeding.

Can Smart Chopsticks and Other Gadgets Make Food Safer in China?Baidu has released its prototype “smart chopsticks”, which can tell you if your food is cooked with gutter oil. The next iteration is likely to identify contaminated water. Sales of food safety testing kits were ¥4.4 billion ($716 million) last year representing how serious Chinese consumers view the problem.

“Cloud” Renders Visualization and Traceability, Possible to Watch Pastures by “QR code”Baidu is working with Mengniu Dairy to allow milk customers to scan a QR code or search on Baidu to see streaming video of cows on Inner Mongolia pastures and milk factories in real time, in a bid to improve trust in local milk.

Penfolds Five: Pressing Issues for Aussie Wine Favourite in ChinaAustralian’s rock star premium wine brand Penfolds has a few problems on its plate in China, most notably for failing to register the trademark for its Chinese name. It is now locked in a legal battle with a trademark squatter. Intercontinental Hotels has taken Penfolds off the list due to a fear of liability from the trademark issues, expected to lead to around 5,000 cases of lost sales annually and less exposure in the market.

Wellness, Health

Doctor Consultation App Gets China’s Biggest Ever Investment in a Healthcare StartupChunyu Yisheng, the Chinese smartphone app that lets users remotely consult with physicians and hook up with a series of medical devices for in-app diagnosis, has raised a US$50 million. The app has 30 million active users and 40,000 doctors online, dealing with about 50,000 health issues a day.

Chinese Authorities Search for Whereabouts of Toxic CapsulesChinese officials are trying to track down 90 million drug capsules contaminated with the heavy metal chromium that were released in the China market earlier this year. 11 people have been arrested.

Banking,  Finance & Property

Plastic SurgeHousehold debt in China was 37% of GDP at the end of July, versus 81% in the USA. While credit card debt in China is less than 10% of total household debt, it is a third higher than a year ago. The amount outstanding per card has grown by two-thirds in the past two years. The average Chinese consumer has 0.3 credit cards.

China Home Purchase Restrictions Disappear – The Complete TimelineRules once intended to cool soaring home prices have now been removed in more than two thirds of the 47 cities that had them.  The move hopes to revive China’s flagging housing markets which slid 0.2%, 0.5% and 0.9% from May-July this year. Local Governments rely on land sales for as much as 80% of their revenue. In related news, just 12 property tycoons were included in China’s top-100 richest households this year, down from 24 last year.

Cars and Auto

Stuck in First Gear?In the first half of 2014, Chinese auto makers’ share of the domestic market fell 3.1% overall, with sedans falling 5.4%. Chinese consumers believe local manufacturers’ technology, branding and after sales service is inferior, and cars are prone to regular glitches such as oil leaks. Local brand Hawtai sells less than a quarter of its output in China.

Premium and Luxury

A Luxury Brand Thriving in ChinaWhile many luxury brands in China are struggling, Comme des Garçons is thriving with sales growing 35% in their Beijing store – their only major outlet in China. The secret: have the courage to buck mainstream fashion and business trends.

Kooky, Weird & Wonderful

Underwater Hitch – Smile Please, but Hold Your BreathThe latest trend in China’s $130 billion a year wedding industry are underwater weddings, complete with waterproof makeup.

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.

Many websites hosted outside of China are experiencing increasing traffic coming from the Mainland. Although these sites can be optimised for Chinese visitors by providing translations, localised content and familiar payment options, they will only ever win a tiny share of China’s rising consumers’ spending.

Sites hosted outside of the Mainland load noticeably slower for Chinese surfers. They are less likely to rank well on search engines such as Baidu and Qihoo, and are generally less trusted than sites hosted in Mainland China. Just 3% of China’s Internet traffic goes beyond the Great Firewall, and most of it is to the big American dotcoms.

Notwithstanding, as Chinese consumers’ become more aware of lower prices and wider ranges on overseas sites, and sign up to credit cards, online shopping outside of China has risen. Chinese consumers buying on overseas websites accounted for around 4% of online shopping in 2013, spending a total of $12.1 billion. That number is expected to almost double this year and is growing faster than eCommerce overall, although the big international sites will account for the vast majority of sales.

Cross-border sites such as Tmall Global are making it easier for consumers to buy abroad, but additional steps still act as a deterrent for consumers. Last week, Amazon announced that Chinese shoppers will be able to buy directly from its international sites, following a partnership with the Shanghai Free Trade Zone.

Growing cross-border sites are all helping groom Chinese consumers to buy on online from overseas. China-optimised sites hosted in the West can test Chinese appetites for their wares, however any business who is serious about China should have a site hosted in Mainland China to best position themselves to really tap into the potential of China’s growing market. We hope you enjoy this week’s Skinny.

Consumers,: Chinese Consumers

In China, More Girls Are on the WayIn 2004 in China, 121.2 boys were born for every 100 girls, with the ratio being close to 140 in some rural areas. Last year, the balance dropped to 117.6 boys, and is expected to fall to 110 within a decade. Since 2001, it has been illegal for doctors to reveal the sex of the fetus to expectant parents in China.

P&G’s Take on Targeting China’s Fast-Changing ConsumersP&G is China’s biggest advertiser, spending almost $1.8 billion a year. Their words of wisdom for succeeding in China is 1. China’s affluent segment is increasingly sophisticated and influential for other segments; 2. Japanese and Korean brands and culture have a growing influence; 3. Individuals are empowered and have higher expectations; and 4. Online is influencing everybody’s lives in China and has a huge impact on the fast moving consumer goods industry.

China Remains a Key Market for Cross-Border RetailersBeijing and Shanghai make the top 10 markets globally for attracting new international retailers, despite having additional challenges to market entry. Stores in Paris, the top market, also benefit from Chinese tourists as the highest spending tourists in the city.

Meet China’s Boomerang Kids: One-Third of Graduates Still Rely on ParentsMore than one-third of recent Chinese graduates continue to live off their parents according to a Peking University survey. Over 40% live paycheck to paycheck.

“Bastards” and “mongrels”: What Will Clive Palmer’s Anti-China Crusade Mean For Your SME?Australian billionaire mining magnate turned politician has come under fire from Australian political leaders and the Chinese embassy in Australia for berating the Chinese Government on the national ABC network.

Online: Internet, Mobile, Social Media & eCommerce

Meet China’s ‘Hai Tao’ Shoppers Who Spent $12.5 Billion OnlineChinese consumers spent ¥74.4 billion ($12.1 billion) on online retailers overseas in 2013, with the value expected to almost double to ¥140 billion ($22.7 billion) this year. Beauty and health products, women’s clothing, milk powder and toys are the top sellers.  The USA, Hong Kong, Malaysia and the Netherlands are the top sources.  66% are female and nearly half of shoppers are married with kids. Just 8% of shoppers are over 36 years old.

Deal Accesses All Amazon’s SitesChinese consumers will be able to buy products directly from Amazon’s international sites in Q4 following a partnership between Amazon and the Shanghai Free Trade Zone. Amazon China currently has 7.85 million users, accounting for 1.5% of China’s B2C online shopping market in Q2 this year.

Qihoo’s search share tops 30%, Baidu’s drops below 55%Baidu’s share of China’s search market is 54.5%, down from 67.7% a year ago according to CNNZ. Qihoo now has 30.2%, almost double the 16.3% it had 12-months earlier.

Weibo Grows to 157 Million Monthly Active Users, But Still Losing Money in Q2Weibo’s active monthly users grew 30% in the past year to 156.5 million according to the company’s quarterly report. 69.7 million are active each day.

Premium Food & Beverage

Heinz Recalls Some Infant Cereal in China After Excessive Lead Is FoundHeinz is the latest US-owned food company to be affected by food safety issues in China after regulators found excessive levels of lead affecting more than 1,400 boxes of infant food.

Overseas Chinese Tourists

Chinese Are Traveling More, Shopping LessChinese tourists outspent travellers from other countries, accounting for 27% of the value of all tax-refund claims, however refund claims by Chinese travelling to Europe grew just 18% in 2013, compared with 57% in 2012.

Understanding Chinese Luxury TravelersOnline reviews of luxury hotels indicate that Chinese guests care most about helpfulness, beds and speed. 30.7% of luxury hotel reviews from Chinese travellers are on Ctrip, with 16.8% on Tripadvisor.

High End Fashion

Fashion Brands Seek China FootholdBritish fashion brands Top Shop and Miss Selfridge have opted to launch online first in China, starting with The site has a limited base of just 5 million users, but is well positioned amongst fashionable Chinese consumers.

Premium and Luxury

Swarovski Has Crystal-Clear Vision for Chinese MarketSwarovski has 245 stores in China covering 71 cities, and is expanding in China at a rate of 25-30 stores a year. Sales in the Mainland now account for 10% of global revenue. European craftsmanship holds a lot of appeal with Chinese consumers, as does jewellery pieces designed for local tastes such as the 12 animals of the Chinese zodiac. Many are designed by young Chinese artists.

Kooky, Weird & Wonderful

Chinese ‘Facekinis’ Take High-Fashion TurnMasks warn by Chinese women at the beach to protect their face from sun damage have made the French world of high fashion, featuring in CR Fashion Book.

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.

A poor environment, unsafe food and unhealthy urban lifestyles are only partly to blame for Chinese consumers’ soaring health concerns. One of their most pressing worries is the state health system.

The Chinese Government’s contribution to health has been historically low compared to many countries. Even after spending more than ¥2.3 trillion ($372 billion) on health reforms between 2009 and 2013, Chinese consumers remain generally dissatisfied with public health. Much of the motivation behind China’s high saving rates is to pay for future health care.  It’s also been the main factor in Chinese consumers’ long history of preventative self care, which is driving demand for consumer-focused health products and services.

China’s elderly stand to be most affected by the limited health system. There are currently just 25 care beds for every 1,000 Chinese aged over 60.  And with the elderly population set to double by 2030, many aging Chinese aren’t putting too much faith in the public system.

Whilst the Government is continually changing policy to encourage more private businesses to invest in China’s healthcare, it is likely that China’s wealthy will be the biggest recipients of this investment. 

One of the best chances for improving China’s health system for everyday consumers will be through technology, and not just in the traditional health-tech sense. An example of this is the cooperation between several hospitals and Alipay, which allows patients to cut red tape with their smartphone. 

Health is one of the areas which will continue to see soaring growth in China, whether it is related to technology, medical equipment or just healthy food.  It is not always an easy sector to navigate, but for those who do, there’s plenty of willing customers.

We hope you enjoy this week’s Skinny.

Consumers,: Chinese Consumers

1% Of Chinese Own One-Third Of National WealthChinese households had an average net worth of ¥439,000 yuan ($71,000) in 2012, up 17% from 2010. 75% of Chinese household wealth came from owning real estate.  Meanwhile, the top 1% in the US control 40% of the country’s wealth and the top 0.1% control over 20%.

Overall Health

China’s Aging Millions Look Forward To Bleak Future1 in 4 Chinese will be aged over 60 by 2030, double the rate it is today. Currently there are only 25 care beds for every 1,000 senior citizens.

China Hospitals Adopting Alipay Mobile Tech to Improve EfficiencyIn the land of overcrowded hospital waiting rooms and long queues, Alipay is cooperating with several Chinese hospitals to allowing patients to book doctors’ appointments, make payments and receive diagnostic results using their smartphones. Further services are planned. Meanwhile, doctors in Guangzhou aren’t happy about patients being asked to rate medics on websites and social media.

The Smart Money is on Shopping via SmartphonesIn 2008, domestic consumption made up about 35% of China’s growth, today it accounts for half. 64% of Chinese consumers are actively saving to pay for future health costs according to Neilsen.

Online: Internet, eCommerce & Social Media

Chinese Provinces with the Fastest Growing Internet UseChina’s inner and central provinces had the fastest Internet user growth in 2013, but also the lowest penetration. Just five coastal provinces, Beijing, Shanghai and Tianjin had penetration above 50% in 2013, with Beijing leading the pack at 75.2%.

China’s Online Sales Surge to $176.1 Billion in H1Chinese consumers spent ¥1.1 trillion ($176.1 billion) on goods online in the first half of 2014, up 33.4% from last year.  Ecommerce now accounts for 8.4% of China’s retail market, up from 7.8% in 2013.  150 million shoppers now use UnionPay’s online and mobile payment services.

What Do Chinese Online Consumers Want To Buy From The U.S.? It’s Not What You Think: Tmall Global is the HK-based version of Tmall. Although the division is tight-lipped about the number of Chinese consumers who have taken the additional registration steps enabling purchases on the cross-border platform, those who have are buying quite differently than on Mainland-based stores. Whilst apparel and electronics are the top online sellers domestically in China, on Tmall Global’s platform, beauty accounts for 31% of sales versus 5% domestically. Baby care products are 17% versus 5% and food is 11% versus 2%. Overall, cross-border shoppers are seeking quality and authenticity.

China’s Popular WeChat Messenger Tests Facebook-Esque “Like” button, And It Looks Strangely Familiar: No doubt you’ll be able to buy fake WeChat Likes on Taobao before too long.

LinkedIn China New Daily Users Up 80%: LinkedIn’s new daily users in China has increased 80% since officially launching in China in February, helped by the WeChat integration.  There were more than 5 million users in China at the end of May with 60% of users live in Tier 1 cities and 42% holding manager positions or above. More than 31 million Chinese were using business social media at the end of last year, up from 3.7 million in 2008.

Premium Food & Beverage

China Brands Beat Global Rivals With Tea Toothpaste & Pickled PlumsSnow pear and pickled plum drinks, green tea and jasmine flavoured toothpaste, and smaller packaging are examples of how understanding Chinese consumers’ unique tastes is helping some local businesses get ahead in the hyper-competitive market.

China To Become Largest Beer Market By 2017Euromonitor predicts China’s spending on beer will grow 45% between 2013 and 2017 to overtake the USA, becoming the world’s most valuable market. Cheap brews account for 82% of volume, although premium beer is rising 2.5 times faster. Snow remains the top selling brand, followed by Tsingtao. 

Diageo Net Profit Hit by China SlowdownMeanwhile, sales of premium liquor are sinking like a stone in China.  Diageo, the world’s largest spirits company has seen profits dive with China sales dropping 33% in the past year.  Johnnie Walker Black Label consumption fell 30%, with scotch dropping 20% overall.  Premium baijiu brand Shui Jing Fang sales declined 78%.

Melamine Found In Milk Candies Produced In GuangdongA factory operator in Guangdong has been arrested for adding melamine to a milk candy mix. The confectionery is believed to be sold in 12 provinces.

Overseas Chinese Tourists

Beyond Slippers and Tea Kettles: What Chinese Travellers Want In A Boutique Hotel65% of Chinese want free WiFi in their hotel room and 29% want an iPhone dock according to a survey by The Small Luxury Hotels of the World. 7% want amenities for their pets.

Cars and Auto

Tier 1 City Auto Consumption Survey41% of Chinese consumers in Tier 1 cities see a car as a symbol of status and success. Safety, performance, quality and durability are the top purchase considerations.

Kooky, Weird & Wonderful

Look: Ladies’ ‘Armpit Hair Selfies’ Take Over Chinese WebChinese women are taking selfies of their underarm hair, posting thousands of photos on Weibo in a competition that has no prize – it is just said to be challenging social norms and encouraging ‘natural beauty’. 28.5 million users viewed the contest in 5 days. Warning: photos may offend. In other strange beauty news from China, an increasing number of Chinese graduates are wearing wedding frocks to their graduation.

That wraps up this week’s Skinny!  On the to-dos this week, why not contact China Skinny 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 December many applauded the Chinese Government’s liberalisation of its one-child policy, which allowed most families in China to have two children for the first time in 35 years. As a result, we have seen many businesses ramp up their forecasts and investments to cater for the anticipated boom – Shanghai’s Disneyland development, which added $800 million to its budget, was one of them.

China’s 1.04 birth rate in 2011 was less than half of the 2.10 rate needed to maintain the country’s population. Conservative analysts predicted the new policy would raise the birth rates to 1.8 per mother, or 19 million births every 12-months, with one of the more bullish commentators predicting a rabbit-style explosion of 48 million babies a year.

It’s been eight months since the changes were announced, and Chinese parents don’t appear to be rushing to their bedrooms.  Although some research suggests 60% of Chinese parents would like to have a second child, a Weibo survey last November found that 52% of parents said the “economic pressure” of a second child would be too much.

The limited extra breeding is no surprise. Chinese parents invest heavily in their treasured offspring, with some spending as much as 30% of their annual incomes to educate their child.  Add another to the mix, and there’s not a lot of money left to pay for the cars, home appliances, designer clothing and overseas holidays that urban Chinese are increasingly aspiring to. There is also much less societal pressure to have more than one child than in other countries.

Milk powder and educational toy companies shouldn’t write off big expansion plans though. The rising affluence of urban Chinese is driving soaring demand for premium goods and services for young ones, whether there are one or two.

It’s probably the Chinese Government who is most concerned, who need more income earners to support the ballooning pensioner population – 484 million in 2012, up 50.9% from 2007, and rising.  But it’s early days and they still have plenty of tools in their belt, from legislation and incentives, to their far-reaching media channels to sway parents.

On the subject of baby and maternity consumer trends, China Skinny’s Sophie Lees will be presenting about China’s Little Treasures on 23 July in Shanghai. For Austcham members in the industry, it will be well worth attending.  More info here.  We hope you enjoy this week’s Skinny.

Precious Little Emperors

Hard Choices for Family Planners and ParentsWith the loosening of China’s one-child policy, unexpected challenges are emerging. Eligible parents haven’t jumped into bed and bred at the rate expected and slow implementation of the law by some local governments has caused issues for parents who had a second child after the national-level decision. Former university lecturer, Cai Zhiqi, who was fired from the South China University of Technology for having too many children, predicts 48 million babies will be born every year.

Consumers,: Chinese Consumers

Here’s What Investors Get Wrong About Chinese ConsumersMany businesses investing in China have a distorted view, thinking of Chinese consumers as one big market and over-relying on retail sales as a measure of consumption. It is also difficult to define China’s middle class.

Dos & Don’ts for Courting Chinese ConsumersWhile big data will provide some assistance, brands that connect emotionally with Chinese consumers will stand out. The key is to understand the landscape, not to innovate by sitting in an office, don’t export your brand – reinvent it, and become an educator.

A U.K. e-Retailer Gets an Education in Selling Online in ChinaUK retailer Asos only launched online in China. The social media campaigns had a 300:1 sales to marketing expenditure return. The company has found that Chinese consumers are much more likely to buy different clothes for different seasons that Europeans, but most Chinese choose one style for all occasions.

Hot Pot to Herbal Tea: Report Names China’s 10 Most Eye-Catching CompaniesBoston Consulting Group has named Chinese companies finding success on their own and becoming formidable challengers to global companies, competing on innovation rather than lower cost.

Online: Internet, eCommerce, Mobile & Social Media

Can WeChat Become A Major Advertising Platform?WeChat is now allowing official verified accounts to place ads at the bottom of corporate pages with more than 100,000 followers. Advertisers can target viewers based on gender, age, location and personal interests.

Overseas Online Shopping: China’s Next ‘Blue Sea’Online shopping from overseas sources through domestic platforms is estimated to top ¥70 billion (US$11.3 billion) this year. In 2012, overseas shopping via Alipay grew 117% versus 64.7% growth for domestic online shopping.

Chinese Consumers Warming Up to Xiaomi, Surpassing Apple on EngagementXiaomi users are 7% more engaged with apps on their smartphones than Apple users. They are also particularly popular with young urban professionals. Even 18 months ago, a lot of Chinese wouldn’t have thought a Chinese brand would rise to that.

Premium Food & Beverage

Quality Still Our Ace in the HoleAlthough Mainland consumer perceptions of Chinese brands on the whole are rising, it will be a long time until premium food and beverage produced in China can match the quality and safety standards of food produced in some Western countries.

Wine Becoming ‘Part of the Lifestyle’ for Chinese Urban WealthyThe number of urban upper middle class consumers drinking imported wine hit 38m in 2014, double that of 2011 according to Wine Intelligence. Those surveyed drank imported wines almost 3 times more often in informal settings, such as at home, than formal occasions such as business dinners. 65% of consumers bought wine at hypermarkets, 62% at wine shops, 52% at department stores and 47% online.  Imports have risen to 30% of the market, from 10% a decade ago, but eCommerce is driving some stiff price competition.

Overall Health

Alibaba Group Fights Fake Drugs with Scannable CodesAlibaba has added the ability check the authenticity of drugs as part of their 2D code strategy. Using the Mobile Taobao or Alipay Wallet app, users can scan a bar code to check the authenticity, origin, usage instructions, ingredients and reasons not to take the drug. WHO estimated the global pharmaceutical counterfeiting industry was worth $75 billion in 2010, of which China was the biggest contributor.

Banking, Property

Real Estate Pros Rank China’s Top Cities for Investment and DevelopmentTier-1 cities came out as the best Chinese cities to invest in property, with Shanghai, Shenzhen, Beijing and Guangzhou taking out the top spots and Nanjing rounding out the top five. Tier-2 cities are being treated with caution.

Premium and Luxury

2 Percent Growth Forecast For China’s Luxury Industry Through 2015Luxury products related to gifting have been hit the hardest following the Government’s clamp down on corruption. Men’s luxury watches, accounting for more than a fifth of the country’s total luxury consumption, saw sales plummet 11% in 2013. There is a shift in focus towards the female categories and fashion.

Kooky, Weird & Wonderful

Shanghai to Look More Like LondonThe Chinese owners of London’s distinctive black cabs have signed a deal to supply 200 cabs for Shanghai streets, with the roll out starting in September. 1,000 cars have already been sold throughout China.

Well, that’s another week!  One of the most productive things you could do this week is contact China Skinny 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.

Over the past couple of years, there’s been no shortage of Western brands in the Chinese Government’s dog box. Some of the market’s highest profile foreign players such as Apple, KFC, Starbucks, Nike, P&G, European carmakers and milk powder brands have been singled out for their ‘misdemeanours’ by state-run media.

Although Chinese consumers aren’t always trusting of what they see and hear in the all-present state media, there’s no disputing the negative effect the bad press can have on sales.

Last week, another well-known achiever was singled out by the state media, this time it wasn’t a foreign brand, but the local success story WeChat. People’s Daily and a slew of other local rags criticized WeChat for not being as “pure” as before.

In the past, almost all of the coverage of WeChat in China’s state media has been unequivocal praise, so it will be interesting to observe if this criticism continues.  The negative press for Tencent won’t do any harm for its most formidable competitor, Alibaba, so close to its IPO, and the day before Tencent announced that more WeChat accounts can sell goods online.

WeChat has been treading a relatively fine line in China. Although the Government works closely with Tencent to track inappropriate content, the network’s closed nature can make it more difficult to identify and suspend communications than the open platforms such as Weibo. Other features such as WeChat’s QR-scanning mobile payments have been suspended following lobbying from state-run banks. The service has also cannibalised the state-run telecommunication companies’ revenue streams.

There is no shortage of Chinese tech companies that have had to toe the line for not aligning with the Government mandate. Negative press is often followed by new laws. China’s successful taxi apps, which skirted around the state taxi regulation, have had all sorts of rules imposed. Laws threatening jail for spreading rumours on Weibo also affected usage on the network. WeChat has already reduced the maximum number of friends allowed on a personal account to 5,000, and it’s likely there’ll be other new rules imposed.  We can be certain that Tencent will be working especially close with the Government right now, as anyone operating on scale in China should be.

We hope you enjoy this week’s Skinny.

Consumers,: Chinese Consumers

China Online Spending Power UnmaskedChina’s retail spending for the first four months of 2014 were up 12% from a year ago. Online shopping grew at 52%, with growth expected to continue at 20-30% over the next 3-5 years. China’s per-capita retail floor space was 0.6 square meters in 2013, compared with 2.6 in the USA, 1.3 in the UK and 1.3 in Japan.

Consumers’ Outlook Brightens in MayWestpac Bank’s latest Chinese consumer sentiment indicators shows rising confidence as personal finance and job conditions pick up. The measure rose to 121.2 in May from 117.3 in April. Similarly, Nielsen’s Chinese consumer confidence index remains at a record high for the first quarter. 

Wildlife Consumption and Conservation Awareness in China: a Long Way to Go52.7 % of Chinese agreed that wildlife should not be consumed, compared to 42.7 % in 2004. Nevertheless, the proportion of respondents who had consumed wildlife only decreased slightly from 31.3 % down to 29.6 %

Online: Internet, Mobile, Social Media & eCommerce

Tencent Criticized by China State Media as Some Accounts LimitedInteresting coverage in China’s state media that isn’t singing WeChat’s praises.

Top Chinese Messaging App Makes Big eCommerce Leap with Opening of WeChat StoresFollowing a trial with major brands and retailers, verified service accounts can now set up stores on WeChat with transactions processed through the WeChat Payment platform.

Weibo CEO: Clutter is Good for Us, and Microblogging Can Thrive Alongside Messaging AppsWeibo knows it can’t compete with WeChat head-on for communications, so it is focused on challenging the traditional media channels for news, information and gossip. Weibo sees key opportunities coming from the integration with Alibaba, adding value for its users through music, video and games and attracting new users from China’s lower-tier cities and rural areas.

Crocodile on the Yangtze: An Insiders Look at Alibaba16 min vid interviewing former Alibaba VP, Porter Erisman about his Alibaba documentary. The biggest lesson from his time with Alibaba was the importance of localising the Internet, and not just the advertising or packaging. Some great footage of Jack Ma belting out the Lion King. China Skinny was at the Yellow Dragon Stadium for Taobao’s 10th birthday celebrations last May and we can attest that Jack Ma is quite the performer in person.

Wellness, Health & Beauty

Estee Lauder First Day Tmall Sales Data LeakedEstee Lauder launched its official Tmall store on 21 May, and within 24 hours had clocked 7,941 transactions averaging ¥339 ($54). The day’s takings totalled ¥2.7 million ($430,000), more than the average offline store does in a month.

One in Every Two Cigarettes Will Be Smoked by Chinese Consumers by 2018Of the ten biggest markets for cigarettes, China, Indonesia and Vietnam are the only ones not in decline. Their increase in volume will more than offset the declines in the other markets, adding a combined 60 billion cigarettes in 2013.

In China, There’s Now a “Xiaomi of Condoms” Startup. And it Just Got $5M in FundingOnline condom brand Daxiang, meaning “big elephant”, has $5 million to spend on developing more features such as the one-handed application. It is planning to constantly launch new products based on user feedback. A trial is currently aiming to deliver condoms in a Beijing neighbourhood in under 45 minutes.

Overseas Chinese Tourists

Hong Kong Mulls Curbing Tourist Arrivals Amid DiscontentWhile most countries are falling over themselves to attract more Chinese tourists, Hong Kong is considering following Taiwan in restricting numbers. 75% of the city’s 54.3 million tourists in 2013 were mainlanders, who accounted for more than a third of the territory’s entire retail sales.

Premium Food & Beverage

Wine: New Roads to ChinaCase studies from Australian, French and German wine businesses approaching China in different ways.

Instruments and Music

Middle Class Status Symbols: Beyond Cars and WatchesPianos are becoming a new status symbol of wealthy Chinese families, partially because there is prestige associated with those who have homes large enough to house them. They are also an investment in a child’s future as talented young musicians have a greater chance of getting into the top universities. In Europe about 40% of Steinway grand pianos are bought for amateur player use, whereas it is over 65% in China.

Premium and Luxury

Economist: China Luxury Slowdown ‘Short Blip’ in Big PictureThe Economist Intelligence Unit is predicting a bright future for luxury goods in China given rising wealth and an appreciating RMB. The number of Chinese households earning more than $150,000 a year will grow from 384,000 currently to 10.3 million in 2030. By 2020, there will be 61 Chinese cities with more than 100,000 residents that have an income greater than ¥150,000 ($24,500) a year, up from just Beijing and Shanghai in 2012.

China: Luxury Fashion Still in DemandDaily search volumes for luxury brands on Baidu increased 36% between 2013 and 2014, with Chanel becoming the most searched-for brand. Fashion searches on mobile increased 110% versus 26% on desktops.  Mobile searches for jewellery were up 60%, versus 10% on desktops.

Kooky, Weird & Wonderful

The Sphinx: Didn’t the Egyptians think to Trademark it in China?China has just created one its most monumental fakes: a bogus $1.3 million Sphinx 50% taller than the original. On the subject of imitations, Starwood Hotels is opening a faux Bavarian castle in Dalian later this year.

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.

Group travel has been losing its shine for some time with Chinese tourists. Research by TNS last August found that 62% of Chinese tourists would prefer to travel independently.  This has been backed up by countless anecdotes from tourism operators, and recent spending analysis from Union Pay which points to a healthy rise of independent Chinese travel abroad.

Whilst many less experienced tourists still prefer the security of travelling in tour groups, Chinese consumers, especially the younger ones, are becoming more confident with their journeys.  A slew of online information and tools are helping them get by on their own in faraway lands.  It’s also becoming easier as local operators increasingly cater to Chinese language and cultural differences – although there’s still plenty of room for improvement.

One of the promising signs from the Union Pay data is the 65% average annual increase on dining expenditure abroad between 2010 and 2013.  In the past, travellers in tour groups would often be shuttled between restaurants serving poor quality Chinese food. The rise in spending on dining indicates that travellers are becoming less likely to be eating at restaurants as part of their “all-inclusive travel package”, instead paying for their own meals elsewhere.

More varied dining, means there’s a good chance Chinese tourists are eating at restaurants that give a snapshot of the local cuisine and culture. In most cases, they’ll have a richer experience, and potentially acquire a taste for local food which may see them buy it when they return to the Mainland. That’s great news for food and beverage exporters.

Spending on recreation has also seen a significant rise in spending, at more than 60% a year, indicating Chinese tourists are becoming ever more adventurous and not just focused on shopping.  This is positive for overseas destinations.  Although independent Chinese tourists still travel with somewhat of a ‘pack mentality’, and are most likely to visit places marketed well and endorsed by their peers, they are going beyond the few stops serviced by tour groups, meaning their spending funnels down across a wider range of tourism operators. 

With Chinese consumers’ wealth increasing and visas becoming easier to obtain, the high portion of independent travellers making up the 200 million Chinese expected to travel abroad by 2017 will change the landscape of global tourism forever.

For our Shanghai readers, China Skinny’s founder Mark Tanner will be joining the panel talking about China’s mega trends next Thursday 29 May, as part of the Austcham Shanghai Business Forum and All Star Lunch – it should be a great afternoon if you can make it.  In the meantime, we hope you enjoy this week’s Skinny.

Consumers, Chinese Consumers

4 Unique Characteristics of Chinese Shopping Habits68% of Chinese consumers enjoy shopping versus 48% in the USA and 41% in the UK. Chinese consumers are more inspired and want to learn something when shopping, with digital channels being significantly more important components of their shopping experience, and instore being less so than in the USA and UK. Chinese also consider themselves much more likely to be an opinion former than a follower.

China’s Luxury Market Set For Good TimesOver one third of Chinese households will earn more than $50,000 a year by 2030. 10.3 million will make more than $150,000 according to the Economist Intelligence Unit.

The New Buzzword for Wealthy Chinese – Balance63% of young professionals in China think that their lives were “getting really busy” and 44% are worried that they weren’t taking good enough care of themselves because of it. 22% percent of China’s total population believe in separating work and leisure.

Overseas Chinese Tourists

Travel Boom Reshapes Spending70% of China’s international travellers are from outside of the Tier 1 cities Beijing, Shanghai, Guangzhou and Shenzhen. Between 2010 and 2013, recreation and dining were the fastest growing categories for Chinese tourists, with spending up around 65% annually for both.

Here Are Top 12 Most Interested Topics of Chinese Online TravellersMore than a third of travel searches on Baidu are for destination, followed by locations at 29%, transportation maps at 13% and travel guide at 10%. Special local products were number 7, price at number 9 and travel agencies number 12.

Could UK Do More to Attract Chinese Tourists?France has nearly ten times more Chinese tourists than the UK and numbers are growing faster – over 23% in 2012, and expected to continue at a similar rate over the next few years. One of the biggest barriers for Chinese travelling to the UK are the difficult visa processes.

Online: Internet, Mobile, Social Media & eCommerce

WeChat Grows to 396 Million Active UsersWeChat’s active monthly users grew 11.6% in Q1 2014 to 396 million. Not quite the 30.6% the quarter before, but as WeChat changed its measurement techniques at the end of Q3, the two figures can’t be compared like for like. The number of users paying for WeChat games doubled in Q1.

China Top B2C Websites Market Share in Q1 2014Tmall and accounted for around three quarters of B2C eCommerce in China.

Electronic Word-of-Mouth Significantly Influences UK and Chinese ConsumersUK respondents are more cynical toward a positive review that follows a negative review online than their Chinese counterparts. Neither Chinese nor UK respondents’ initial purchase intentions improve when first exposed to a positive comment, while they drop significantly when first exposed to a negative one.

Top Ways to Maximize Your Online Brand Presence in China80% of Weibo users followed an average of 18 company accounts, but less than 20% reported paying much attention to information from them.

Chinese Find Number URLs Easier Than LettersWebsite addresses with numbers that loosely represent Chinese spoken words are often easier for Chinese to remember than Roman characters.

Premium Food & Beverage

Food Categories Lead Slowdown in Retail GrowthBiscuits followed an overall trend of slowing growth in China, yet premium segments, including gift cookies and innovative bite-size snacks, still enjoyed double-digit growth. Chocolate was another fast grower. The anti-corruption crackdown has reduced the cost of eating out, reducing spending on cooking by 6.6%, although premium ingredients such as oyster sauce and olive oil showed strong growth.

High End Fashion

How Burberry Has Fared in its First Days on TmallNews of Burberry’s new Tmall store had 1,500 reposts on Weibo within the first few hours. In 18 days, 132 items had sold, although 32 were returned – more than three times the average rate for similar items on the platform. Feedback was 60% higher than average.

Recreation and Entertainment

China Has 100 Million Brain-Damaged Online Gamers: StudyAn estimated 100 million gamers in the mainland have lost self control and developed an irrational dependence on games. There is a particularly high concentration in the northeastern provinces.

Pollution and Environment

New Government Report Shows China’s Air Pollution Worries Going from Bad to WorseA new Government report has found the average PM2.5 reading across China’s 74 main cities is 72, with just three cities meeting Government standards of 35. The report was published at a similar time to the World Health Organization raising its estimates of China’s premature deaths caused by air pollution from 3.2 million to 7 million.

Kooky, Weird & Wonderful

Fake Government Busted in ChinaJust when you thought you’d heard it all in China, a fake Government was set up in Dengzhou, Henan, complete with an HQ, fake government seals and issue papers, and even advertisements for staff.

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.

China’s pollution is one tough nut to crack.  Although the Government has pledged ¥1.7 trillion ($270 billion) for pollution control as part of the current Five Year Plan, it’s unlikely that more than 1% of urban Chinese will be breathing safe air any time soon.  Coal consumption grew 2.5% last year, increasingly wealthier consumers are using more electricity, and the Government is hopeful that of the 25 million+ vehicles expected to sell in 2015, 500,000 will be hybrid and electric – just 2% of all sales. 

The health effects of China’s pollution are sobering.  Lung cancer deaths grew 400% in three decades, asthma rates are up 40% in five years, and even infertility is on the rise.

Consumers are now making a stand with their wallets. 59% of Chinese consumers now consider environmental quality as important when buying food and beverages, boosting demand for imported food.  Air quality is a major factor in domestic Chinese tourists becoming increasingly less satisfied, contributing to more travellers heading abroad. And many of China’s brightest and wealthiest are leaving because of it.  When China Skinny did research into Chinese migrants in early-2013, we found education was the main reason for migrating, by far.  Just 12-months later, 80% of Chinese considering moving overseas cited pollution as the primary reason.

Big China problems such as pollution have traditionally been left to the Government to fix.  But imagine if 1.35 billion Chinese consumers really worked together to fix it as well. A good place to start would be the water given 90% of Chinese cities’ ground water is polluted, two thirds of it severely. 

Alibaba’s Jack Ma is hoping to harness the power China’s half a billion smartphone users to raise awareness of China’s water pollution, and create a massive database that can help pinpoint and ideally help fix trouble spots.  What a dude.  If anything could prompt Chinese consumers into action, smartphones would be it. Go to Page 2 to see this week’s China news and highlights.

Consumers, Chinese Consumers

A Billion Shoppers: China has about 200 buildings more than 250 metres high, more than four times America’s count. It also has the world’s biggest building, Chengdu’s Global Centre, complete with a 300-long indoor beach; a monument to the increasingly essential ingredient of China’s economic development: Consumption. The building is representative of the rising wealth in Western China. By the late 90s, GDP per capita in the West was around one-third of the fast-growing coastal Eastern China provinces, by 2012, it had recovered to more than half.

What Makes a Tier-2 City in China? Count the Starbucks: Higher-tier cities are generally considered more sophisticated and mature in their consumer tastes, but there is no set definition of what a Tier 2+ city is. Some suggest a good measure would be the number of Starbucks cafes.

No One Tops Chinese Consumers In Thirst For Brand Knowledge: Making Chinese consumers ‘curious’ about a brand can increase the likelihood of purchase by 58%, with 42% likely to talk to others about the brand. The article contains some dubious stats around Chinese smartphone and Internet usage, but the rest is interesting.

Home Shopping in China: Although they charge large commission, home shopping networks can be an effective way to reach Chinese consumers, with the industry growing 31% between 2011 and 2012 to ¥58 billion ($9.3 billion).

Almost 10,000 Divorces Each Day in China’s Breakup Boom: There were 3.1 million divorces in China in 2012, up 133% from the golden years of 2003. In bigger cities the rates are even higher, with a 65% jump in Beijing from 2011 to 2012. Extramarital affairs, domestic violence, and an inability to communicate, in addition to simplified laws are cited as the top reasons for untying the knot. No mention of the limitations on multiple home ownership as a reason, which anecdotally, is a sizeable contributor.

Pollution and Environment

Alibaba Recruits Users to Identify China’s Polluted Water: Jack Ma leads the battle against China’s water pollution calling on 500 million smartphone users for help. A great initiative using smartphones, water testing kits and some digital mapping will raise awareness, action, and possibly some eyebrows in Beijing.

Overseas Chinese Tourists

New Zealand to Vietnam: Where Chinese Tourists Feel Most Satisfied: New Zealand, United States, Canada, Australia and Singapore were rated as the destinations where Chinese tourists were most satisfied according to a survey by the Chinese Tourism Academy. Overall atmosphere, transportation and urban management in these countries got the highest marks, with travellers least satisfied with safety, poor Chinese language services and the cost of travel. Satisfaction from domestic travel is the lowest it’s been since 2009, with air quality a big factor.

A Chinese Travel Powerhouse in the Making?: China’s two online travel gorillas, Ctrip and Qunar, are in partnership talks as intensive price-based competition will require efficiencies. China’s online travel industry is expected to grow from ¥‎131.4 billion ($21 billion) in 2011 to ¥‎465 billion ($75 billion) by 2017. On the subject, WeChat adds flight booking to its feature list.

Online: Internet & Social Media

China Social Sharing Report in 2013: WeChat friends, WeChat Moments and Sina Weibo accounted for more than two thirds of social shares in China last year – 25.6%, 23.4% and 19.2% respectively.

Jesus More Popular Than Mao on Weibo: Although it isn’t always easy to talk about religion on Chinese social media, Jesus has yielded over 18 million mentions. Officially, the Government estimates that there are 25 million Christians in China, however outside observers believe the number could be closer to 60 million.

Premium Food & Beverage

Fake Duck Blood Investigation Leads to More Chinese Consumer Anger: Sacred duck blood, faked and laced with artificial additives. Yet another food scandal in China affecting consumers’ perception of local produce.

The 4Ps and Tmall’s New Zealand Seafood Promotion: Some relevant lessons about Tmall promotions, not just applicable to food.

McDonald’s to Give China Restaurants a Makeover: McDonalds is overhauling a number of its restaurants in bigger cities using a local designer. It is also launching an advertising campaign that focuses on Chinese aspirations and has signed up LeBron James for China-based commercials later this year.

Banking, Banking & Investments

China Enters a New Era of Consumption: Just 13% of Chinese have ever held a loan according to a Nielsen survey. The main reasons consumers aren’t borrowing is because they “don’t like the feeling of carrying debt” and high interest rates.

Chinese Citizens Have Their Eyes on the Bubble: Chinese consumers big purchases are often influenced by anticipated Government policy. Beijingers have been known to buy two cars to get around potential every-other-day-road-space-rationing. Investors have been buying multiple apartments in anticipation of future ownership limitations – helping to drive the per capita housing area from 9 to 32 metres in 35 years.

Premium and Luxury

Selling Luxury Online in China: 27 min vid: Chinese luxury consumers are much more aware of worldwide pricing of luxury goods through travel and the web, so the price online in China is likely to be more expensive than abroad, even when discounted.  This means discounted prices aren’t always a good option for luxury online. Finding unique and differentiated products online has strong appeal. Reverse logistics, enabling simple return of products is almost as important as normal delivery in sales.

Kooky, Weird & Wonderful

Fun With Baidu Autofill: “Eating Sperm Can Lead To What?”: Another interesting insight into Baidu’s autofill, and what appears when someone types the character for ‘eat’. Does it really make one pretty?

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.

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.

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.

In the first four weeks of January this year, the air quality in Beijing was 16.6% worse than the shrouded confines of an airport smoking lounge.  Last month in the Northeast city of Harbin, pollution led to visibility at less than 10 metres in places.   The PM2.5 levels reached 1,000, forty times the rate that the World Health Organisation deems safe, and as high as Fairbanks, Alaska during the 2004 wildfires. Lung cancer deaths in China have grown by more than 400% in China in the past three decades, and recently, an 8-year old girl was diagnosed with lung cancer.  Couple that with food scandals such as tainted rice, rat dressed as beef and lamb and toxic preserved eggs, all within the space of a few weeks, and it’s little surprise that more than a few Chinese are looking to buy homes abroad.

Tier 1 cities are said to be the safest residential property investments in China, where prices have grown more than 20% in the past year.  Even still, the price to income ratio in Shanghai is 27:1, 31:1 in Guangzhou and 33:1 in Beijing, versus less than 9:1 in New York and Sydney. When prices are reaching those levels, and commentators start speaking of property bubbles, added to purchasing restrictions put in place trying to curb constantly-rising house prices, a growing group of cashed-up Chinese are going to diversify their property investments elsewhere. Chinese have become a force to be reckoned with in many property markets they consider safe and transparent, buying houses where the air is clean, the food won’t poison them and their child can get a good education.  They can wash their hands of ‘grey’ money in some cases, and get residency if everything goes pear-shaped in the homeland. 

Whilst residential markets such as London, New York, California and Sydney are being driven up by Chinese purchasers, less-traditional markets are also starting to feel the presence, with countries like Germany and Belgium experiencing exponential growth in Chinese buyers and Portugal seeing 80% of its Property Investor Visas going to Chinese.  It’s unlikely to slow down any time soon.  China’s rising affluent classes are getting wealthier, and the air quality and food safety doesn’t appear to be improving, in the medium-term at least.  If you’re hoping to sell property to Chinese, it’s a good time to do it, but it’s also more competitive than it’s ever been.  Nevertheless, like most things in China, it comes down to the right messaging and channels .

Clarifying last week’s Skinny on the Singles’ Day boom: the ¥35 billion ($5.7 billion) figure quoted, was just the sales on Alibaba’s Tmall and Taobao. clocked in an additional ¥9.8 billion ($1.6 billion) and banked some 17,776 vehicle orders worth ¥2.6 billion ($433 million).  Along with the other stores participating, sales were around the ¥50 billion ($8.2 billion) mark.  Quite a day!  

For Weekly Skinny readers and friends in Shanghai or nearby, next Wednesday 27 November at 7pm you are invited join China Skinny’s founder Mark Tanner as he talks about leveraging social media to create brand champions in China. Mark will discuss how to best use social media as a tool to break through clutter, educate consumers, build trust and create brand champions in China, and how it integrates with your other marketing channels. Visit the Irish Chamber of Commerce for more information.

We hope you enjoy this week’s Skinny. 

Consumers,Chinese Consumers

Chinese Value Honesty More than Price: 91% of Chinese consumers value product quality when buying, 79% value the business’s transparency and honesty, ahead of 65% placing value on price.

4 Types of Chinese Consumers by Attitude to Brands: Analysis into four types of Chinese consumers. ‘Loyalists’ make up 24% of the market, are much more likely to be female and are especially strong in cosmetics and milk powder brands. ‘Indifferent’ are 17% and probably male. 39% are ‘Switchers’, with FMCG particularly high, and ‘Explorers’ make up 30%.

Furniture Giant IKEA sees Rapid Growth in China: Ikea’s sales surged 17% in China this year. It has moved its production to China to lower costs and tweaked furniture for the local market, such as balcony and hallway furniture.

Mattel Gives Barbie A China-Friendly Makeover: Now Equipped With Violin and Cheaper Price Tag: Mattel wants Chinese children to have a doll that emulates what their parents want, but with the signature Barbie flair. Unlike many other Western products, Barbie is selling for less than half the price of Barbies elsewhere.

Who needs Uber? This Chinese Startup Lets You Connect with a Designated Drive: Not long after Uber launched in China, there’s a new app from Beijing where passengers can book a cab. The difference here is that anyone with a car can sign up and effectively be a taxi driver, with driver location related to the would-be passenger. Interested to find out the how they screen their drivers?

Residential Property

Chinese Property Buyers go Beyond New York and London, Grab Bargains from Scotland to FloridaIn 2013 so far this year, property sales in Germany to Asian buyers, largely Chinese, are ten times what they were in 2012 according to JLL. The $453 million spent in Belgium is twenty times [WSJ subscription required].

Why Chinese People Buy So Many Homes in Palo AltoChinese buyers have tripled their purchases of home purchases in Palo Alto since 2011, and now account for 15% of transactions, helped along by education, investment and immigration opportunities.

Chinese Get 80% of Portugal Property-Investor Visas248 went to Chinese, with 15 to Russians, the next biggest group. A minimum property investment of 500,000 Euros ($668,000) is needed for the residents visa for Portugal.

Online: Internet, eCommerce, Mobile & Social Media

‘Social Shopping’ is All the Rage Now in China: China’s social media see’s more integration with online shopping, from Weibo users being able to make purchases from Taobao & Tmall, to Douban’s new Pinterest photo sharing that allows users to categorise products by ‘recommend’, ‘want’ or ‘own’, and Mogujie having a leaderboard for products based on user ratings.

Qihoo Takes 20% of Chinese Search Market in October, but Baidu SlipsBaidu’s China search engine search share dropped to 62% last month, whereas Qihoo broke 21% – more than double its share a year ago. Sogou came in at number 3 at 10%.

China App Index October 2013Three of China’s top downloaded apps in October were integrated into WeChat. Six of the ten fastest growing mobile games were from foreign developers.

Explaining China’s Mobile App Ecosystem: the Potential, Players, and Pain PointsChina has hundreds of app stores, but only about 20 main players, all with different billing and approval processes. Many apps beyond games are making traction in China.

Chinese Food and Beverage

Fonterra on Track in China: Fonterra has launched the instant formula brand Anmum in China, hoping to be in 70 Chinese cities within 3 years. 55% of Chinese consumers remained unaware that the Botulism botch-up was a false alarm and smaller baby milk exporters from NZ claim to be losing $1.65 million a week from it.

Retail and Fashion

75% of Chinese Consumers Interested in Buying Wearables, According to Baidu Report: 75% of Chinese consumers could be interested in a wearable device according to a Baidu poll. 48% would use it to keep fit, 37% to overcome laziness and implement a sports plan and 26% to share sports results with friends.

The Former English Tutor With One Million Weibo Fans: Fashion Blogger Peter Xu: Peter Xu, a former English tutor, is now a fashion opinion leader with 1.3 million followers on Weibo – more than Vogue China. His popularity has been helped by TV, magazines and other media.

Health and Beauty

Korean Cosmetics in China: 89% of Chinese 20s & 30s Like Korean Cosmetics: 89% of Chinese consumers between 20-30 are satisfied with the quality of Korean cosmetics. 26% preferred to buy them online. 70% of Chinese cosmetics are currently bought in department stores or large markets.

Banking and Finance

Alibaba Lends Smarter in China: Alipay’s lending arm assesses prospective borrowers using data from Taobao and Tmall sales, how much business they do, and their credibility with customers. Alipay has 45% of the online payments processing market, and it also uses this history to evaluate borrowers . Alibaba is expected to have issued $2 billion worth of loans by the end of the year.

Films and Entertainment

China and Hollywood by the Numbers: There are 7,914 people for every movie screen in the USA versus 103,923 people per screen in China. Plenty of room for growth. China’s box office is picked to surpass the US in 2018.

China Demands ‘Positive Images’ in Return for Access to Markets: Speaking from the US/China film summit in Hollywood, a senior figure in the Chinese industry outlined the conditions it is setting for Hollywood to have access to its market: “We have a huge market and we want to share it with you [but] we want films that are heavily invested in Chinese culture, not one or two shots … We want to see positive Chinese images.”

Premium and Luxury Goods

China Luxury Forecast: Expect Sophistication To Grow In 2014: 49% of Chinese luxury shoppers cited uniqueness as the reason for wanting to buy abroad. Last year it was 41%.

Kooky, Weird & Wonderful

China’s Top-Secret Nuclear Base to be Revived as £30m Communist Party Theme Park: 300 million RMB ($50 million) is being spent to convert the former nuclear base in Xinjiang into a Communist theme park, complete with a Communist-themed shopping precinct, military vehicle display, spa-like resort, and even a bit of horse riding.

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.

20 years ago at Nanjing University, a group of students decided to celebrate their bachelorhood by creating a festival called ‘Singles’ Day’ on 11.11. The date was chosen because of the connection with single 1’s, which carried through in celebrations such as eating four Youtiao, deep fried dough sticks that resemble a ‘1’, with a baozi steamed bun.   Similar to much of China’s popular culture, it spread over the Internet and is now a firmly-entrenched annual tradition for Chinese youth.

Like many celebrations, businesses in China have seen the opportunity and jumped onboard.  Unquestionably the most successful commercialisation started in 2009 by Alibaba, turning around a traditionally-quiet month of online sales with Singles’ Day promotions.  Five years on, most of the big online retailers in China are on board offering discounted products from bracelets to BMWs, often slashed by 50% or more. 

It took just six minutes on Monday morning for Chinese desktop shoppers to spend ¥1 billion ($160 million) on Alipay.   Before lunchtime, 1.6 million bras had sold, three times the height of Mount Everest if folded and stacked.  Two million pairs of undies were also scooped up.  By midnight, 402 million unique visitors, almost one in every three Chinese, had checked out the deals on Tmall and Taobao, placing a whopping 171.4 million orders; contributing to a total of 324 million parcels expected to be delivered in China this week

A grand total of ¥35 billion ($5.7 billion) was spent, 83% more than the 2012 Singles’ Day record breaker, and two and a half times the size of America’s Cyber Monday last year – firmly cementing it as the biggest one-day shopping day on the planet.  More than 2% of all China’s online shopping for 2013 happened within the 24 hour period.  No other event demonstrates the scale of China’s online influence, and the opportunities it presents, quite like Singles’ Day.

Nevertheless, there is obviously much more to the China market than eCommerce, some of which we cover below.  We hope you find it helpful.

Consumers,Chinese Consumers

Why Is It So Important For Us To Understand The Evolution From China’s Farming Landscape To The Digital Landscape?: With 5,000 years of continuous history, it is remarkable that China is changing as quickly and dramatically as it is. Our overview on how social media, mobiles and eCommerce are playing such a big part on these changes.

Kenzo Thinks China is Ready for ‘Less Recognized’ Brands: An increasing number of Chinese consumers are “expanding their brand repertoire beyond the long-beloved established brands”, which means good news for newcomers and less established brands in China.

What do Chinese Consumers Want From British Brands?: Chinese consumers have an appetite for British goods, for their high quality, unique heritage and quirky style. There’s certainly no shortage of Union Jacks around Chinese cities.

Online: Internet, eCommerce, Mobile & Social Media

Online Sales Records Toppled on PRC’s Biggest Shopping Day: Mobile accounted for 21% of Singles’ Day sales on Tmall and Taobao, more than four times last year’s 5%.  Zhejiang, Jiangsu and Guangdong were the top three spending provinces.  Smartphone maker Xiaomi sold more in value than any other store on Alipay, and accounted for the top-4 selling products of the day.  The most expensive single order was a 13.33 carat diamond ring, selling for ¥20.5 million ($3.4 million).

China Farmer Turns Yarn Baron as Villages Embrace Alibaba: 22% of Alibaba’s 7 million stores on Taobao and Tmall originated from small towns and villages in China.

China’s Mobile Phone Sales Surge in Q3: 103 million mobiles sold in China in Q3, up 54.5% from a year ago. 93 million were smartphones, taking the smartphone share of the market to 91%. Samsung, Lenovo and Coolpad were the top-3 brands, with Apple’s share falling 1.1% from Q2, although it’s expected to rebound in Q4. iPhones are now available in 50% more Chinese stores than 12 months ago, in hope of bolstering sales.

Lenovo’s New Secret Weapon: Hollywood Star: Apparently Ashton Kutcher is chipping in with design, specifications, software and usage scenarios for tablets, to help Lenovo compete with Apple in the tablet space – curiously, he recently starred as Steve Jobs in the Jobs movie. Lenovo’s notebook sales rose 8% last quarter from a year ago, when overall industry shipments fell by 12% globally. Its smartphone share in China remains flat.

76.5% of Sina Weibo Users Access the Service via Mobile: 10% access the microblog from outside of China, predominantly in the US and UK. First tier cities in China have the highest number of checkins, with 60% from restaurants.

Sina Weibo’s New Subscriptions Connect Fans with Brands and Celebs: Celebs and businesses on Sina Weibo who are verified can now charge a premium for content, and specific content can now only be viewed in selected locations.

China’s Most Exclusive Social Network Hits 3 Million Users: China’s ‘exclusive’ referral only social network P1 now has 3 million users.

Chinese Food and Beverage

New KFC Promotion Strives for Disaster Trifecta in China: KFC makes another boo-boo in China, and are getting slammed on social media for it. Their ‘Half-Price Buckets’ actually contain less food than the original buckets. Chinese consumers are shrewd and ensure they get their money’s worth, being especially vigilant about rip-offs – in Shanghai restaurants have started installing scales for diners to verify the weight of food.

Canadian Shopping Platform for Chinese Buyers in Operation: Polar Bear Canada Corporation has launched a B2C supermarket targeting Chinese consumers who want imported foods.

Click and Clink: Amazon Selling Wine in China: Amazon China is selling wines directly imported from California, with Shanghai consumers buying almost half of the volume.

Chinese Police Find Slaughterhouse Selling Cat Meat: Chinese authorities find an underground abattoir in a village close to Shanghai, with freezers fill of domestic cats being sold as rabbit.

Tourism and Travel

Alibaba Sets Out to Grab a Slice of China’s Surging Travel Bookings: Alipay has teamed up with UATP (Universal Air Travel Plan) to make it easier for China’s 800 million registered Alipay account holders to pay for flights, hotels and other tourism services.

Pollution Halves Visitors to Beijing: Tourism in Beijing declined 50% in the first three quarters of the year, compared to a year ago. At this rate, Beijing will see its first decline since 2008.

Recreation and Sport

Guangzhou Evergrande and the Making of Asia’s First ‘Superclub’: Guangzhou’s Evergrande is putting their money where their mouth is in their aspiration of becoming Asia’s first true football superclub, paying manager Lippi more than ¥80 million ($13m) a year. Things are looking good for the club who defeated Korea’s FC Seoul on Saturday night to become China’s first ever winner of the AFC Champions League, Asia’s foremost club soccer competition.

Residential Property

Investors Become Like Bulls in a China Shop: A Sydney property developer believes prices in some areas would drop by 25% if Chinese buyers lost interest.

Premium and Luxury Goods

2% Chinese Consumed One Third of Global Luxury Products: 33% of the world’s luxury cosmetics, private jets, jewelry, watches and designer bags are bought by just 2% of Chinese.

Kooky, Weird & Wonderful

Kangaroo Testicles a Hit With Chinese as Aphrodisiac: At a time when China’s pollution is crippling men’s fertility with two thirds of sperm at Shanghai’s main bank not meeting World Health Organisation standards, Chinese consumers have gone nuts over an aphrodisiac made from Kangaroo jewels, selling between $30-$150 for 100 capsules. The male kangaroo may mate with 40 female kangaroos and produces twice as much semen as a bull.

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 were to take a straw poll asking how the Internet is changing the way Chinese consumers buy products and services, the majority of people would likely make reference to online shopping.  And rightfully so, eCommerce is booming in China.  These days, most Chinese workplaces get more visits from kuaidi (couriers) delivering online purchases, than legitimate business visitors. Alibaba, whose Taobao and Tmall sites account for more than 90% of online shopping in China, saw their revenue grow almost 60% in the second quarter of the year to $1.73 billion, with close to half of that being straight profit.  

Yet with all the hype, online accounts for less than 8% of total retail sales.  But it is early days.  Over the next eight years, ¥100 billion ($16 billion) is planned to be invested into improving one of China’s biggest eCommerce challenges: logistics.  The project is being spearheaded by Alibaba’s founder Jack Ma, with a target of parcel delivery to any Chinese city within 24-hours by 2020.  That will open up eCommerce to China’s ‘smaller’ cities, the current growth engine of China, more than ever before.  eCommerce is forecast to account for 20% of China’s total retail consumption by 2020, with the bullish Alibaba picking it could be as high as 50%.  The reality is likely to be somewhere in between.

Forecasts aside, the other 92% of China’s retail consumption that is currently offline, has also become heavily influenced by China’s digital sphere.  Information on websites and social media are some of the biggest influences for brand awareness, purchase intent and loyalty.  There are few bricks & mortar stores that aren’t touched by the Internet in China. 

We only need look to the basic necessity of food to see how the Internet is reshaping things.  Right from the noodle sellers on the street taking orders through WeChat and Weibo, to the 7,533 restaurants just in Beijing’s Haidian District, which allow diners to scan QR codes on their mobiles to assess the safety of their food. Consumers in 2,300 Chinese cities can check a restaurant review on, influencing where they go for dinner.  Smartphone users with WeChat can scan the barcode on a food packet, and with a few clicks, have it delivered the next day.  The digital world is redefining the way Chinese consume both online and offline, and those businesses who keep up have the best chance of winning the biggest share.

On the subject of selling online in China, if you’re in or close to Shanghai next Thursday, 7 November, Austcham is hosting a great event, Selling Online to China. China Skinny joins the good-looking line up in what should provide some invaluable insights and tips into reaching Chinese customers online.  More info at

We hope that you enjoy this week’s Skinny.

Consumers, Chinese Consumers

Why International Brands Can’t Ignore Culture In China: 74% of Chinese Millennials say they have more in common with their age group globally than older Chinese. Nevertheless, 90% believe family traditions are important, and 88% are proud of their national traditions and customs.

Affluent Chinese Likely to Spend More: “Affluent Chinese are looking for custom-made or exclusive products or services to reflect their affluence, and they tend to favor enjoying life with friends and family over materialistic pleasures such as latest designer handbags or flashy watches,” says Jeff Liao, General Manager of Visa China. Nights out, family holidays and fine dining are the three most common ways affluent Chinese consumers are spending their money.

China May Be in Much Better Shape Than it Looks : Three factors that are contributing to China’s reported consumption rate being lower than it really is: 1) Housing doesn’t account for how much Chinese would have to pay if they were renting (home ownership rates are 90%); 2) A lot of private consumption often shows up as a corporate expense; and 3) High income earners don’t generally report their expenses. It’s estimated that these knock 10-12 percentage points off consumption as a percentage of GDP.

Baidu ‘Worry Ranking’ Exposes Netizen Anxieties: Chinese in big cities most likely to be anxious about love and relationships.

Why Are Chinese Media Outlets Brooding Over What Starbucks Is Brewing?: Starbucks is in a bit of a pickle in China.  The Government aren’t happy that their consumers are paying a lot more for Starbucks than in other markets.  Starbucks wants to keep the Government onside, however if their coffee was cheaper, would consumers still consider it a cool place to be seen in? Not sure where this article get’s its 30,000 cafes number from, maybe outlets selling product, as Starbucks is only hoping to open its 1,000th cafe in China this year. 

Samsung Apologises After ‘Dodgy Hardware’ Criticism from China State TV: It’s not just Starbucks, now the Government is going after Samsung, reporting on CCTV that their devices crash several times a day – a problem that could be fixed with a chip upgrade that isn’t covered under the current warranty.  Samsung was quick to react, offering free repairs and extended warranties on seven models. After Apple, KFC & Co’s experience with bad press in China, Samsung is well aware that it wants to make things right as quickly as they could after being exposed.

In China, Victory for Wildlife Conservation as Citizens Persuaded to Give Up Shark Fin Soup: Who said old Chinese ways couldn’t be changed? Thanks to Yao Ming, businessmen, celebs, students and some investigative journalism, with a hand from the anti-corruption drive, the 1,000-year-old tradition of shark fin soup has lost its lustre with most Chinese, with consumption down 50-70% in the last two years. Nice work!

Consumers, Internet, eCommerce, Mobile & Social Media

Alibaba to Transform China’s ‘e-conomy’ with $500 Billion Marketplace: ¥100 billion ($16 billion) investment into China’s logistics will see hundreds of millions of new customers become much easier to reach with eCommerce by 2020. In the meantime, Haier’s e-commerce revenue jumped almost six-fold to ¥633 million ($103.4 million) in the first half of this year, while Suning Commerce Group’s e-commerce business doubled to ¥10.6 billion ($1.7 billion) over the same period. GOME’s online revenue now accounts for 5-6 percent of its total first half revenue of ¥27 billion ($4.4 billion).

Alibaba Nears Facebook Sales With Double the Profit: On the subject, Alibaba’s revenue soared 60% to $1.73 billion in the second quarter on 2013, with net income more than doubling to $707 million from $273 million a year earlier. Alibaba accounted for 70% of packages delivered in China last year.

Chinese Food and Beverage

Chinese Restaurants Embrace QR Codes: 7,533 restaurants in Beijing’s Haidian District have adopted QR codes making food safety information available to consumers.

Shuanghui Accused of Using Chicken in Ham to Save Cost: On the subject of food safety and scandals, chicken meat was found in nearly 40 difference kinds of hams and sausages made by 15 Chinese meat processors including Jinluo and Shuanghui, the company who purchased Smithfield last month for $4.7 billion in the largest Chinese purchase of a US company.

Dianping Sees IPO Larger Than Yelp as Users Tap China Reviews: Dianping now has 28 million food and entertainment reviews covering 2,300 Chinese cities. 70% of page views from the site’s 75 million monthly active users come through mobile.

After Wine, Chinese Consumers Want a Slice of Cheese: China’s yearly consumption of cheese is just 200 grams a year, versus 26kg in France, although it is growing at 20% a year. Old World cheeses aren’t too popular; 40% of imports come from New Zealand, and another 40% from Australia and the USA.

NZ Told Not to be Complacent: The clean, green New Zealand brand took a hammering in Chinese newspapers over the poisoned milk false alarm, and many businesses far beyond Fonterra are baring the brunt of it. Bad press aside, things are looking good for dairy exporters, with Euromonitor predicting that the Chinese market for infant formula will double over the next four years to $25bn. China bought 27% more milk in the second quarter of 2013 than in the previous 12 months, according to a report by Rabobank.

Tourism and Travel

Have Yuan, Will Travel Far and Wide: China’s outbound travel market will rise by 17% to 106 million for the year ended June 2014, helped along by the fact that it is often cheaper to travel abroad than to domestic destinations.

Asia’s Travel Business: Last year only 12% of vacations were booked online – it’s expected to be 26% by 2015. Leisure travel is the fastest-growing online category, rising 55% to $3.4 billion in transactions in 2012.

Apparel and Fashion

Under Armour’s Aggressive Plan To Expand Overseas: Under Armour hopes to drive sales in China with initiatives such as opening the Experience Store in the new luxury Shanghai mall, Jing’An Kerry Centre, complete with an immersive wrap-around video experience to tell their story and having the man who won eight golds at the Beijing Olympics, Michael Phelps, as a ‘virtual’ host.

Auto and Cars

How General Motors Wins The Minds And Wallets Of Chinese Consumers: GM is one of the foreign success stories in China, leading China’s auto market with VW. What some attribute to their success: 1) They got in early; 2) Joint Ventures with well connected local companies; 3) Localisation; and 4) Innovation.

Curious, Weird & Wonderful

Cockroach Farms Multiplying in China: Delightful: Some Chinese farmers are pinning their hopes on cockroach livestock, growing to more than 4cm long and selling for as much as $44/kg (up 1,000% since 2010). The roaches are used in medicine and cosmetics. China has about 100 cockroach farms, including one from which a million escaped in August.

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.

It wasn’t long ago when virtually all Chinese consumers assumed the more expensive a product, the better quality it must be.  Marketers would create premium brands just by raising prices, and in many cases, they’d actually sell more than if their prices were lower.  While many Chinese consumers still associate higher prices with better quality, this can no longer be taken for granted. 

As Chinese consumers increasingly travel abroad, or simply look online to compare prices overseas, they are becoming more aware of when they’re being rorted.  You just need to check social media to see the latest exposé about Chinese consumers being fleeced, from Starbucks charging 75% extra for a cuppa than in America to a pair of Nike kicks costing 500 kuai ($82) more than overseas.  While higher prices can sometimes be attributed to the additional costs of doing business in China, the Chinese Government doesn’t look fondly on significantly higher price tags either.  For those brands who have been singled out and crucified on state-run media, winning the hearts of Chinese consumers becomes a much tougher road.  Just ask Nike how their sales have been in China lately.    

Chinese consumers are maturing quickly.  They’re still prepared to pay a premium for quality, but it doesn’t come unconditionally.  Your brand needs to tell a story that resonates with Chinese consumers to justify the big bucks.  The increasingly discerning Chinese consumer is looking for value more than ever, and that isn’t always always associated with the highest price.  While it’s most prevalent in Tier 1 cities, we’re also seeing value increasingly becoming the most important purchasing factor in China’s smaller cities as well. 

Speaking of value, China Skinny is pleased to announce a strategic partnership with British-headquartered research agency CrowdDNA.  The partnership will see our two agencies share methodologies and resources across our respective markets.  The synergies will ensure China Skinny continues to evolve with China’s constantly changing market, so we can carry on providing great value in our research and insights-focused marketing strategy and execution services.  More about our partnership here.  As always, there’s more news and views below, we hope you enjoy it!

Consumers, Chinese Consumers

The Science of Choosing Which Chinese Cities to Target: Shanghai, Beijing and other big cities in China are some of the most contested markets in the world, and may not be the most profitable markets to focus on for your products and services. Here are some insights into Chinese cities that may surprise you.

Winning in a Transitional China: An 18-page report from AmCham, finding ‘value as a differentiator’ and the ‘ rise of digitization’ are seen as the top two trends influencing the Chinese consumer.

Five Things Marketers Get Wrong About China: A 17-minute vid with some good observations into how Chinese consumers have evolved. Ten years ago 41% of Chinese were happy with how things were going, and wanted things to stay the way they are. Today, it’s 61%. Home is becoming more important to Chinese, as is an appreciation for what is earned, adventure and experience.  Consumers also want to understand and trust the brands they’re buying.

The Chinese Want Quality, Too: Chinese consumers are getting friends and strangers together over social networks to negotiate better group buying rates for furniture and a slew of other products. Emphasis on quality is particularly pronounced for 31-40 year old consumers.

Exporters Too Naive About China: Too many exporters are over-reliant on distributors and underestimate the power of their country’s brand.

Today’s Alarming Japan-China Charts: While some foreign brands have taken a hit lately in China, it’s nothing like Japan as a whole, which has seen favourable impressions sink like a stone. Let’s hope hosting the 2019 Rugby World Cup and 2020 Olympics can help Japan’s brand in China.

Online: Internet, eCommerce, Mobile & Social Media

Chinese Shoppers Set To Become World Leaders Online: eCommerce could account for half of China’s retail spending within 10 years. Online sales now make up 7.3% of consumer retail in China. Growth averaged 71% a year for the past 4 years.

Apple’s iPhone 5C misses the low-cost mark: Apple has unveiled its new iPhone devices, including the lower-cost 5C, in hope of expanding beyond the premium end of the lucrative China market. With unsubsidised prices starting at ¥4,488 ($733), costs are still high relative to feature-packed mobiles such as Xiaomi. Apple has ensured the low cost iPhones, available in strawberry red, blue, lime green and yellow, look distinctively cheaper than the 5S, ensuring that owners of the higher-priced 5S can still show off their status.

Lenovo, Taking Page From Apple, Chases Samsung in China: Although not quite as sleek, Lenovo is following Apple’s lead by opening specialist stores.

HTC Will Reportedly Roll Out its Own Mobile Operating System Specifically for Chinese Consumers: HTC developing its own China-focused operating system for Android, hoping to break some of Android’s dominance in the market. Interestingly, there’s a lot of talk of Weibo integration, and nothing on WeChat. A few years too late?

China’s “Seven Base Lines” for a Clean Internet: The Chinese Government has announced seven baselines for the ‘mutual building of a favourable online environment’, to stop false and destabilising information such as the frenzy of salt buying after the radiation rumours in 2011. Baselines are: Laws & Regulations, Socialist System, National Interests, Citizen’s Legal Rights & Interests, Public Order, Moral Base Line and Information Accuracy. Best to stick to those, as you can face three years in prison for sharing false information online that is defamatory or harms the national interest. On the subject, here’s an inside look into China’s online censorship, its tools and 2-3 full time censors per 50,000 users.

Chinese food and beverage Food and Beverage

Vineyards Pour Billions into Chateaus: Chinese aren’t just faking wines, they’re now building faux ‘European’ towns and chateaus around wine regions. 160 are already built and another 200 are under construction in a bid to raise the marketing and standard of Chinese wine. Wine imports in the first half of 2013 grew 20.9% in volume and 8.2% in value.

Outbound Tourism

China Online Travel Market Up 29% in Q2 2013China’s April-June online travel revenue grew 29%  from 2012 to ¥50.9 billion ($8.25b).

Learning and Education

Seeking Edge in Academics, Chinese Spend Summer in U.S.An estimated 100,000 Chinese students, some as young as 10, did their summer school, camps and tourist attractions in the USA this year, paying $5-$15K for several weeks of USA-experience.

Banking and Finance

China’s Consumers Take Eagerly to Credit: Chinese are borrowing more, especially the young ones. Household debt has tripled since 2008. Between 2008-2011 average household debt rose from 30% to 50% of disposable income.

Fine Fashion

What Do you Need to know as a Fashion Brand about the Chinese Consumer?: Know your target market, what makes them tick and speak their language to influence Chinese consumers on Weibo.

Property Property

Chinese Investors are Buying more than a Quarter of London’s New Homes: London prices keep rising, 8.1% up in June from a year ago, helped by surging Chinese demand. Chinese spent $266 million in the first 6-months of 2013, 60% for investment purposes. Chinese accounted for 17% of total transaction value in 2012.

Chinese auto Auto

Daimler’s Mercedes-Benz to outline strategic plan for China: Mercedes will introduce 20 new or upgraded models in China over the next 2 years in hope of growing sales by a third by 2015.

Weird Weird & Wonderful

Adultery Website Is About To Enter China, Where Demand Is Already Huge: Apparently there’s a lot of pent up demand from Chinese wanting to find a mistress online.

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.

There’s no shortage of jaw-dropping numbers in China, however it’s the speed those numbers are changing that’s most fascinating.  Since Adam first met Eve, the world has never seen changes on the scale that are currently happening in China.  In 2000, just 4% of Chinese households were considered middle class.  By 2022, three-quarters of China’s urban dwellers, 630 million, are expected to be middle to upper class.

In 1990, China had a total of 5.4 million vehicles on the road.  Fast forward 22 years, and 19 million cars and trucks were sold in China in 2012 alone.   As recently as 2010, Nokia had a 70% share of China’s smartphone market.  In the first six months of 2013, 150 million smartphones sold in China and less than 5% of them were Nokias. Even with all the food scandals, Chinese consumers are eating almost three times more meat than they were in 1990, including 1.7 million pigs a day.  But it is urban migration that’s really changing consumer habits.  Since 1990, China’s urbanisation rate has more than doubled to 53% and there are now more than 123 Chinese cities with more people than Barcelona

All the big numbers aside, China is still behind the USA for overall consumer spending.  Nevertheless, with a growth rate of 14.3% last year, Chinese consumers are poised to take the top spot by 2018.   This is obviously good to know for any business selling in China, but also relevant to consumers everywhere.  Chinese consumers will have an increased influence on many of the products and services everyone consumes. We’ve already seen Hollywood blockbusters pampering to Chinese audiences, smartphone manufacturers are now developing big screen devices for Chinese tastes and many tourist spots around the world are now quite China-focused.  Because of China’s growing consumer classes, fruit lovers in Arkansas may be paying more for cherries.  And that’s just the start of China’s influence everywhere, so it’s best to stay abreast of this ever-changing market.

Below you’ll find a few more of those staggering statistics and growth rates, as well as the usuals.  Hopefully the insights will be helpful.  Enjoy!

Chinese consumers Chinese Consumers

China Will Overtake USA as World’s No. 1 Consumer: China is set to become the world’s largest consumer market in five years according to a new report by Standard & Poor. Retail sales of consumer goods in 2012 grew 14.3% to $3.29 trillion.

Will China’s Little Emperors Become Little Consumers: Balinghou- Chinese born from 1980-1990, are increasing consumption by more than 20% annually. An overview of their characteristics those of other generations.

5 Eye-Popping Numbers Behind China’s Rise : China’s staggering population numbers, consumption of steel, Internet users and car buyers.

Tesco Didn’t Understand Differences Between Chinese and Western Shoppers: Tesco failed to understand the Chinese consumer and how unsuited they are to its so-called secret weapon – the clubcard. Almost all Chinese consumers are in at least one loyalty programme and 63% had loyalty cards from four or more retailers.

China’s Crackdown on Pricing by Foreign Companies is Getting Public Support: Beijing is showing its might across industries from luxury cars, to drugs, to baby formula, which is driving down costs for consumers and slowly helping local brands build cred [paid subscription required].

Chinese Internet Internet, Mobile & Social Media

All the Facts and Stats on China’s Web Users: An infograph showing a nice overview of China’s 591 million web users.

236 Million Users Active on WeChat Every Month : WeChat’s active monthly user count now stands at 235.8 million, up 177% in 12-months. With almost 400 million registered users, 100 million are now outside of China. From Vodka companies inviting VIPs to events, to Durex using WeChat’s unique features, WeChat has become an effective marketing tool for businesses in China.

China Emerging as ‘Mobile Only’ in Sharp Contrast to the U.S. Multiscreen Market: 32% of Chinese use their smartphones for web browsing, versus 21% of Americans. Chinese are more likely to forego TV and print media to use their mobile, with 23% using it for at least 3 hours a day. The most popular use is entertainment.

Tablet Users in China Accepting of Ads: 84% of Chinese tablet owners use their devices for watching videos, 50% read online magazines. 39% of them were open to clicking on ads on their tablets, 60% more than ads on their PCs.

Chinese Consumers Leaning Towards Samsung and Local Brands as Apple Loses its Charm: When Chinese consumers were asked which smartphone brands immediately comes to mind, 80.6% thought of Apple and 79.6% thought Samsung. However Samsung is trending up, and Apple is spiralling downwards as the “most anticipated smartphone purchase” and “most used smartphone brand”.

Over Half of Activated Android Devices Installed Wandoujia App Store: The Wandoujia app store has been installed on more than half of Chinese Android smartphones, with almost 200 million users.

Mike Tyson Joins Weibo: But Chinese sardonic sense of humour may be a little over his head.

Chinese food and beverage Food and Beverage

Bottled Water Market Quickly Turning Chinese: Increasingly health conscious Chinese have seen mineral water rise to 42% of China’s soft drink market.

China Beer Market Insights 2013: China’s beer market is seeing an upturn in premium beers. Innovative packaging is also on the up due to environmental concerns, cost-saving initiatives, convenience and novelty elements. Constant investment is required to stay ahead in the market [report for purchase].

Outbound Tourism

China Travel Market Gained Strength in 2012Long haul trips by Chinese tourists are picked to top 20 million by 2015. Travel agents are still involved with 90% of Chinese long-haul trips, either through bookings (63%) or research (27%).

Auckland Airport Announces Weibo Travel App: From Weibo’s ‘540 million’ registered users, 62 million are travel enthusiasts with 2 million users daily posting 2.6 million posting about overseas travel. Auckland Airport has launched a new Weibo travel app enabling potential visitors to create their travel itineraries and share them with their followers and find travel deals.

Physical Health & Beauty

Practical Advice for Doing Business in China: China’s dietary supplement market is worth ¥135 billion ($22 billion) supported by China’s massive aging population, rising upper middle class, poor external health conditions, and increasing levels of acceptance of western healthcare brands.

Property Property

Body paint sells homes in China: Chinese property developers are using models giving away gold bars, girls scantily clad in flowers and now ladies with body paint showing floor plans to sell houses.

China Retail Trends Q2 2013: International retailers continue to expand in Shanghai as new projects come on stream, but competition for space in the best spots remains fierce. Supply in Beijing is still tight with pent up demand. Most foreign retailers are focusing on a core 12-15 cities, compared with 30 a few years ago. Developers in smaller cities are giving away space to foreign brands to fill vacancies.

Chinese auto Auto

Keanu Reeves Stars in VW Sponsored Chinese Microfilm: Nice creative piece of brand building to win Chinese car-buyers preference: A 16-min short film starring Keanu Reeves, Chinese singer Jing Boran and Hong Kong actor Lam Suet features VW Group’s Bentley, Audi, Lamborghini, Bugati and a Volkswagen Scirocco R.

In China’s Luxury-Auto Market, More-Affordable is in Fashion: Hopefully that can help the slowdown in high-end luxury car sales in China, with Ferrari’s growth down 12.5%, Bentley’s growth slowing 23% and Lamborghini’s growth at zero. A little further down the value chain is faring better: Audi, BMW and Jaguar-Land Rover all have growth in the teens [paid subscription required].

Chinese luxury Luxury Goods

Only 20pc of Chinese Consumers Prefer to Buy Luxuries at Home: 44% of Chinese luxury consumers prefer shopping in HK and Macau while 15% would like to buy in the U.S. 15% prefer Europe, down from 23% last year.

Weird Weird & Wonderful

Lyin’ zoo’s deceitful ways: A whole new class on fakes in China: Henan Zoo passes off a Tibetan Mastiff as a lion, discovered when the ‘lion’ started barking. Next time you’re at the panda enclosure, double check it’s not one of these.

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.