This week’s China market and marketing news:
Break the China Habit? Lobsters, Lights and Toilets Show How Hard It Is: The risks of relying economically on the Asian superpower have never seemed clearer. As the world tries to get moving again, it needs China more than ever. The International Monetary Fund has reported that China will be one of the few countries to see economic growth in 2020, while the US economy is expected to contract by about 6% and the eurozone by 7.5%.
Who’s Buying Whom? COVID-19 and China Cross-Border M&A Trends: COVID-19 depressed company values around the globe, triggering fears across the United States, Europe and Asia of a distressed asset buying spree by Chinese companies. These concerns drove many governments to enact policies – some temporary, some permanent – to shield their companies from Chinese takeovers. Several months into the pandemic, the data tells a different story – there are no signs of a Chinese outbound investment boom – instead, takeovers are headed in the other direction: into China. Flows into China have picked up every month since January, driven by consumer-focused investments, policy liberalisation and maturing Chinese company targets. This has seen investments in China surpass outbound for the first time in a decade.
Chinese Shoppers Break Sales Records During 618 Online Festival: If the official numbers are true, Chinese consumers are back spending in a big way – when there’s a deal to be had. JD saw its 618 shopping festival sales growth 33.6% from 2019 to ¥269.2 billion ($38 billion) in gross merchandise value, Tmall hit ¥698.2 billion ($98.7 billion). With Pinduoduo and other platform’s sales added, the total was well over a trillion RMB. Categories such as pet snacks, beauty tools and health check devices were showing “high triple-digit growth this year” according to Alibaba.
Thanks to Live-Streaming Craze, China’s Midyear Shopping Festival has Moved Beyond Ecommerce: JD.com hosted more than 300,000 live streaming sessions during the gala. More than 300 celebrities and 600 brand executives joined live-streaming sessions on Alibaba’s Taobao Live, while over 10,000 physical retail stores live-streamed to promote their products. Transactions generated through Taobao Live reached 5.1 billion yuan on the first day of the 618 shopping event on June 1, with reportedly more than 1,000 brands, merchants and livestreamers generating at least ¥10 million ($1.41 million) each. The “official” value of goods purchased via livestreaming grew 250% year-over-year for this year’s 618.
How to Get Set Up on Pinduoduo as Foreign Merchants?: 18 minute video: PDD focuses on providing customers value for money and greater social interaction – aiming to be “a combination of Costco and Disney.” In the year-ended 31 March 2020, 628 million active users shopped on the platform spending ¥1,842 ($407), 47% more than last year. 45% of revenue came from tier 1 & 2 cities. Mother and infant care, skincare and cosmetics are fast growing categories for foreign brands. To list on PDD Global, brands pay a deposit of $1,000 and a transaction service fee of 0.6% with no commission. There is no minimum number of SKUs and no Chinese entity is necessary for cross border sales. It takes 3 days to get a store set up. Sign up pages are currently only available in Chinese. PDD has seen its market cap increase from $37 billion in March to break $100 billion this month, after launching less than five years ago. Its founder Colin Huang has just surpassed Jack Ma to become China’s second wealthiest person. More about PDD in this infographic.
Douyin/TikTok Owner ByteDance Expands into Ecommerce: ByteDance has established an ecommerce unit with a gross merchandise volume (GMV) target of ¥200 billion ($28.3 billion) for 2020.
This is How Blockchain Can Be Used in Supply Chains to Shape a Post-COVID-19 Economic Recovery: The COVID-19 crisis has rattled supply chains and some believe blockchain can help rebuild disrupted networks by providing trading partners and consumers with transparent, trusted and secured data on goods and transactions.
China’s Meat Importers Fret About Delays as Port Runs Virus Tests: Following Beijing’s virus outbreak and the notion that imported salmon was the source, China’s meat importers saw clearing delays and a hit to demand after Tianjin, one of the country’s major ports, began requiring coronavirus tests for all meat and seafood containers to prevent contamination.
Zhenmeat Launches Plant-Based ‘Pork’ and ‘Crayfish’ to Cater to Chinese Tastes: Beijing-based startup Zhenmeat has launched ‘fried pork tenderloin’ made of pea and soy protein with the outside layer being made of sweet potato starch to make it taste crispy after being fried. The other is plant-based ‘crayfish meat’ made with seaweed and konjac extracts. The ‘pork tenderloin’ will be supplied to selected Sichuan hotpot chains in China, while the ‘crayfish meat’ will be available in both Chinese and Western restaurants across the country. Anecdotally, Beyond Meat’s limited edition burgers in KFC China saw a lukewarm response. Whether or not they receive a wider roll out will provide some clues into their success.
Farmers Become Social Media Stars on Chinese TikTok: A farmer who goes by the name Northern Big Sis sits in her greenhouse taking giant bites of the raw vegetables she grows such as onions and garlic. A large number of farmers like Big Sis have all of a sudden become minicelebrities.
Lay’s China Ups its Snack Game With a New Range of Unique Localised Chip Flavours: Lay’s has further localised its snacks with a new range of creative, and slightly bizarre, Chinese chip flavours including salted duck egg, roast pork zongzi, White Rabbit candy and Beijing duck with the Beijing tourism administration among many of its collaborations.
China Protein Milk Powder Imports from Australia, New Zealand Jump But Questions Over Use as a Supplement For Infants: Chinese demand for lactoferrin and whey products has increased dramatically since the coronavirus outbreak due to their immunity boosting qualities, but there remains no evidence the products can prevent coronavirus infections. Exports of Australian whey protein milk powder to China tripled in March from February to more than 1,000 tonnes. One New Zealand milk powder manufacturer reportedly received three times as many orders in the first two months of the year than it did for the whole of 2019. A 60g tub of lactoferrin powder costs just under ¥30 ($4.20) to make and send to China, but is being sold for between ¥400 ($56.40) to ¥600 ($84.70).
Chinese Airline Offers ‘Flight Pass’ Promotion for Unlimited Travel: Six months of unlimited domestic travel on China Eastern Airlines can be yours for just ¥3,322 ($470), valid until the end of 2020. The initiative is hoped to generate cashflow and optimise flight occupancy for the airline. Despite recent signs of a COVID-19 rebound in Beijing, sales for the flight pass have taken off, even causing China Eastern’s mobile app to crash repeatedly on the first day that the promotional package was available.
Colgate Considers Rebranding its ‘Black People Toothpaste’ and Chinese Consumers are Confused: Colgate has announced a review of popular toothpaste brand Darlie’s Chinese name, hēirén yágāo, which literally means “Black People Toothpaste,” causing an interesting response online in China. Many Weibo users say that the decision was another example of “excessive political correctness” in the US and that “Black people are so sensitive and dramatic.” Johnson & Johnson received similar feedback after halting sales of skin whitening products in parts of Asia and the Middle East.
Oral Contraceptive Brand Slammed Over ‘Sexist’ China Market Ad: Bayer’s leading birth control product Yasmin has been accused of promoting a misogynistic narrative in its latest advertisement, which depicts a woman trying to attract a man by offering him unprotected sex. Bayer has responded saying it “respects a woman’s right to autonomous contraception” and has “resolved” the ad. China’s low rate of oral contraceptive use is partly due to misunderstandings about the product, research suggests. According to studies, nearly 20% of unmarried women do not know the purpose of contraceptive pills, while over 94% are unaware of its effects on the body, and think taking such pills will make them fat and ugly.