Mark Tanner
Mark Tanner
16 June 2020 0 Comments

This week’s China market and marketing news:

Consumers,  Chinese Consumers

Off the Shelves in Beijing, is Salmon Guilty of Spreading Coronavirus?: Beijing’s largest vegetable wholesale market, Xinfadi market, was shut down after another burst of COVID infections over the weekend. According to local health officials, the virus was found on a chopping board used by a seller of imported salmon, sparking speculations on whether the fish can spread the virus. No evidence has shown that the novel coronavirus can be transmitted directly through food and drink to humans, yet salmon is no longer for sale across Beijing and in other places, and many consumers are talking about the risks of contracting the virus from imported food.

6 Ways to Boost Your Next Brand Collaboration in China: Few people would have picked these unexpected big-name collaborations, but they getting consumers attention in China, and also providing foreign brands as a great way to appeal and connect with patriotism.

Scott Morrison Allows International Students Back From July, Says Australia-China Relationship ‘Not Injured’: Australia’s Federal Government will allow international students back into the country in a “pilot basis” from next month, as the country’s higher education industry looks to recover from a double hit of travel restrictions and accusations of racism. The diplomatic storm with China continues, with the country’s Education Bureau last week taking the rare step of warning Chinese students about studying in Australia because of “racist incidents” during the coronavirus pandemic. In related news, a survey including Chinese students who had secured an offer to study in the UK, found 75% would go if it opened its doors, 20% would probably put off enrolment until next academic year, and just 3-4% would give up their UK studies all together as a result of the pandemic.

Is Targeting Vouchers A Successful Strategy For Brands?: To date, over 190 cities in China have issued vouchers to their citizens. Although the value of vouchers versus actual consumption varies from single to double-digits, the cities that have achieved remarkable results are mainly economically developed regions with relatively strong spending power. Shanghai’s shopping festival generated ¥100 billion ($14 billion) in sales from online channels and ¥144.36 billion ($20.4 billion) in May.

The Ups and Downs of ‘Intensive Motherhood’ in Shanghai: Extreme parenting is increasingly the norm for the city’s anxious, status-conscious middle class.

Online: Digital China

Big Data Allows Tax Authorities to Collect on ‘Brushed’ Ecommerce Sales: Chinese ecommerce shop owners reliant on “order brushing,” a practice of falsifying sales numbers, may now be required to pay taxes based on the inflated figures with the implementation of a new tax law. Chinese taxation authorities began sending alerts in late May to merchants on ecommerce platforms like Tmall and, warning about risks of unpaid taxes from 2017 to 2019. The first group of nearly 2,000 merchants in Beijing were warned of such irregularities and were required to make a supplementary payment based on the inflated numbers by early June. In an attempt to better regulate the industry, China’s Ecommerce Law in 2019 made order “brushing” illegal, along with a number of other unscrupulous practices like rewarding positive consumer reviews with money.

Live-Streaming Scams & Struggles in China: The scam many live-streamers are running is getting paid to simultaneously buy and sell collaborating brands’ products. Livestreamers don’t even need to front the cash to buy the products in streams, they use brands’ upfront flat fee instalments for that, return what they can, and resell the everything else they’ve bought on group buyings sites. Coupled with a majority bot-controlled audience, it’s the perfect hustle.

Flight Attendants and Tour Guides Promote Cross-Border Shopping: As part of 6.18, Tmall Global has partnered with several leading airlines and travel agencies in China for a livestream series that promotes cross-border products. Hosted by flight attendants and tour guides, the broadcasts are designed to encourage Chinese consumers to continue exploring and shopping from international brands even as overseas travel remains stymied.

Premium Food & Beverage

Chinese Market Undergoing Drastic Change Through Coronavirus Crisis: The pandemic has seen strong growth from China’s leading players in the frozen and processed seafood space. The frozen ready-to-eat-meals market and the chilled ready-meals market are expected to grow 9.9% and 14.6% annually between 2018-2023, although frozen remains dominated by meat products such as pork dumplings. Frozen foods, chilled beers and ice cream were given a boost during Alibaba’s 6.6 campaign. For consumers seeking better quality and healthier food options, the virus has forced purchasing trade-offs. More than 70% of respondents in McKinsey’s COVID-19 consumer survey said they will continue to spend more time and money purchasing safe and eco-friendly products, while three-quarters want to eat healthier after the crisis, which may subdue frozen and processed sales in the medium term.

Tmall Spotlights Fruit: More than 25,000 brands, nearly twice as many as 2019, from 92 countries and regions are participating in this year’s 6.18 festival on Tmall. Imported fresh food from Thailand, Malaysia, Singapore, Chile and Russia will be offered for the first time via their country flagship stores on Tmall. Meanwhile, the Netherlands and Hokkaido, Japan are scheduled to open their respective flagship stores in June.

How China’s Expansion of Ecommerce Zones Could Benefit Overseas Food Companies: China has expanded its cross border ecommerce zone scheme to help bounce back post-COVID. The country has approved 46 new pilot cross border ecommerce zones to join the existing 59 zones. Many of the newly-added locations are also in smaller ‘second-‘ and ‘third-tier’ cities, where food imports are less readily available.

Overseas Chinese Tourists

Chinese Domestic Air Travel Recovery Continues: Domestic air travel has just now topped 60% of its 2019 level. As an indicator of improving consumer confidence – and a lack of alternatives – hotel occupancy on Hainan Island has now exceeded 2019’s rates year-on-year. Tax-free shopping on the island has increased to ¥100K ($14K), which is also helping to bump up numbers. Increased demand for travel to Hainan has seen the launch of a new airline, Sanya International Airlines.

Investments & Property

China Home Prices Up Most in Seven Months as Economy Reopens: China’s house prices rose at the fastest pace in seven months in May, as the property market continues its rapid recovery from the coronavirus shutdowns. New-home prices in 70 major cities, excluding state-subsidized housing, increased 0.49% last month, up from a 0.42% gain in April. Values in the secondary market, which is largely free from government intervention, gained 0.24%, also the most in seven months.

Premium and Luxury

Luxury Brands Look to Online Sales in China in Aftermath of Pandemic: April sales were basically equal to last year according Adriel Chan, CEO of Hang Lung Properties who owns 11 mostly high-end shopping centres in China. Chan noted “the luxury brands’ CEOs that we talked to just a year ago were saying that online sales were accounting for 5 to 7 percent, and they saw it going up to maybe 15 percent when we most recently spoke to them.” There are two particularities of Chinese consumers that are different to other markets — they are the youngest luxury consumers with a sweet spot between 25 and 35 years of age, and they are the most digital.