Mark Tanner
Mark Tanner
14 April 2020 0 Comments

This week’s China market and marketing news:

Consumers,  Chinese Consumers

MollyBox Case Study: Lessons Around Subscription Models and D2C in China: Mollybox teaches us some valuable lessons about subscription models in China, D2C commerce, growing during the COVID-19 lockdown and some differences with pet ownership in China.

China’s Consumers are Starting to Binge on Travel, Cosmetics Again in Signs Economy is Reviving: Demand for travel, cosmetics, outdoor gear and food has surged in recent weeks as policy-driven stimulus kicked in, workers returned to offices and factories and the government started easing restrictions on people’s movement. “We found most opportunities in areas where the virus brought short-term disruption, but without impacting medium-term underlying demand,” says Wenli Zheng, a Hong Kong-based money manager at T. Rowe Price. Nationwide food consumption has expanded by a robust 24%. Apart from daily necessities, apparel and outdoor gear are among the hottest items. Last month, Nike said its experience in China shows the financial suffering is temporary and can be reversed. Starbucks said its China recovery went at a “slightly faster pace” in March and there’s evidence that its business will “fully recover over the next two quarters.”

Cute, Fluffy Pets

The Paws-itive Growth of China’s Pet Economy: China’s pet economy is expected to reach ¥472.3 billion ($66.8 billion) by 2023, up tenfold from 2013. China’s pet economy is in its early stages, given there is still significant potential for higher pet ownership in the country. In 2018, 100 million families – or 22% of total households – owned a pet, versus 67% in the US. Millennials under 30 accounted for 45.2% of total pet owners in China in 2019, while those between the ages of 30-40 made up 29.5% of the pet-owning population.

China Just Upgraded the Status of Dogs from “Livestock” to “Pets”: The Chinese Ministry of Agriculture and Rural Affairs has made a surprising announcement tucked away at the bottom of the policy document: dogs are no longer to be treated as mere livestock, but as loyal companions. Around 10 million dogs and four million cats are estimated to be slaughtered and eaten in China every year, according to Hong Kong-based animal welfare group Animals Asia, but the practice is coming under increasing criticism from the country’s growing ranks of pet lovers.

How Perfect Diary’s Puppy Marketing Broke The China Internet: A collaboration between Perfect Diary and Discovery Channel features nine animal-themed eye palettes. Perfect Diary casted China’s top beauty influencer and livestreamer Li Jiaqi’s puppy named Never. The animal series monthly sales on Tmall has hit 85,000 palettes and the presale for Perfect Dairy’s “Super Brand Day” has received over 156,000 orders.

Online: Digital China

China’s Remote Office Platforms See Boom During Outbreak: The virus outbreak has fast forwarded the development of the remote working market by five years according to Tencent. Alibaba’s DingTalk had more than 200 million daily active users (DAU) by mid-March, up from less than 100 million in early February. Tencent Meeting’s DAU grew from less than 2 million to over 10 million during the same period, and WeChat Work’s rose from nearly 10 million previously to 15 million at the beginning of March.

Online Gaming Companies Have the Highest Pay in China Tech: Gaming has been one of the largest beneficiaries of the COVID-19 pandemic and as a result, average salaries for gaming professionals rank only behind bankers and money managers in China.

Premium Food & Beverage

China’s Bars and Restaurants Resume Trade, Says Distiller Diageo: Diageo, the maker of Johnnie Walker whisky and Smirnoff vodka, has said trade in Chinese bars and restaurants has resumed in parts of the country as it cautiously emerges from lockdown. Rival distiller Pernod Ricard said last month it had seen “very limited business” in China in February and March, and expected a “slow recovery from April”. A Bernstein survey of 240 restaurants across big cities including Beijing and Shanghai, and found 90% were open last week — up from 63% on March 16. “During the Friday and Saturday dinner peak hour (6pm-7pm) most restaurants we surveyed were full to capacity and there were, on average, 25 groups waiting for tables,” said Bernstein analysts. [FT paywall]

Will Foodservice Become More Automated Post COVID-19?: GlobalData’s 2018 Q4 consumer survey saw 31% of consumers worldwide find the concept of being served by robotic waiters appealing versus 61% in China. In the COVID-19 tracker consumer survey, 80% Chinese consumers of are always / often / somewhat influenced by how digitally advanced service is, again, being much higher than the global response of 58%.

Baijiu: Everything You Need to Know About China’s National Liquor: Baijiu is the world’s most popular drink — each year, roughly 10 billion litres of it is produced and consumed. It is one of the world’s most diverse drinks and, for adventuresome tipplers, one of the most rewarding. A consumer can sometimes move from apprehension to grudging acceptance to appreciation in a single sitting. Yet for all its popularity and all the emotion it evinces in its subjects, baijiu remains poorly understood within and outside of China.

Overseas Chinese Tourists

As China Lifts Restrictions, Here’s Where Its People Want to Travel: As China slowly eases lockdown restrictions and life returns to somewhat normal conditions, residents have once again started travelling. But an uptick in domestic sight-seeing doesn’t necessarily mean international travel will rebound as quickly. A Ctrip survey of 15,000 people across 100 cities in China in late March found that 16% of respondents will be ready to travel again in the five-day holiday in May. 90% would prefer to travel domestically, with Yunnan, Hainan island and Shanghai the top three preferences. 61% of Chinese travellers surveyed indicated that they would feel ready to travel again by August. Travel styles that are considered unsafe – such as large group tours or cruises – may take more time to attract virus-wary residents.

Overall Beauty

Eco-friendly Beauty for China: Shiseido’s New R&D Centre to Focus on Development of Green Products: The Shiseido Company will establish a new research branch of its China Innovation Centre in Shanghai to focus on R&D of green beauty products for the local market. Health conscious Chinese consumers tend to associate green products with health, which will spur the trend.

Perfect Diary’s ‘Perfect Day:’ Tiger Global Backs Online Cosmetics Brand: Founded in just 2017 and the largest selling beauty brand on Tmall last year, Perfect Diary’s valuation now stands at $2 billion. Taking advantage of social media like WeChat and Little Red Book, Perfect Diary contracted with KOLs on these platforms to promote its products. With a few macro KOLs and celebrities and more mid- and micro-ones, the KOL pyramid helped to solidify the brand and user-generated content (UGC) on these platforms spread the influence further.

Schooling and Education

Nearly 1 Million Students Return to School in China’s Zhejiang: The eastern Chinese province of Zhejiang on Monday partially reopened schools, with a total of 977,000 senior students in junior and senior high schools resuming classes in classrooms, as the novel coronavirus epidemic wanes in China. Students wearing masks had body temperatures taken and presented their digital codes proving their health conditions before entering schools. Students in their final year of junior and senior high schools Jiangxi, Hunan, Hainan, Xinjiang and Tibet have returned to school. Beijing and Shanghai have announced that classes for high school seniors would reopen on April 27.