This week’s China market and marketing news:
JPMorgan Says Chinese Consumers are in ‘Reasonably Good Shape’ Despite Miss in Retail Sales: Strategists at JPMorgan Asset Management predict a relatively robust purchasing power of consumers in China despite the fall of retail sales in June (down 1.8% YoY). Chinese citizens are feeling increasingly comfortable to travel domestically again, which reflects in the increased chatter surrounding topics such as summer holiday bookings and cheap airfare deals.
Silver Linings in Covid-19 Crisis for China’s Department Stores: Chinese department stores’ long-term outlook remains positive despite being greatly impacted by Covid-19. According to a report by Fung Business Intelligence, 75% of department store operators use social media as a marketing and promotional platform, chiefly WeChat. And 78.9 per cent have already fitted technology elements such as virtual dressing mirror/fitting room, customer service robot, self-service cashier and real (AR) & virtual reality (VR) shopping experience to their physical stores, with close to 80% confirming that these technology elements have helped to improve customer traffic and sales.
Beijing to Lower COVID-19 Emergency Response: The Information Office of Beijing Municipality announced to lower its emergency response from level II to level III which was initially implement following a second wave of COVID 19 outbreak that has seen 335 new cases from June 11th to July 19th. After effectively containing the infected area, Beijing has not reported a new case over the last 14 days, which should result in eased restrictions as per the announcement on Sunday.
Urumqi Shuts Down After First Coronavirus Cases Confirmed: Xinjiang’s capital was said to restrict more than 3 million people from leaving their compounds and hotel since Thursday night, following the first recorded cases of COVID-19 in the province. Xinjiang was the only province that managed to stay COVID-free for nearly five months. Since the lockdown over 600 flights to and from the region have been cancelled with passengers required to show a negative nucleic acid test as well as a green health code for all flights to Urumqi.
Europe and US Can Still Compete with Chinese Tech: Earlier this year, USA, Europe, and China seemed to be moving in separate digital directions, but with the recent Privacy Shield data sharing agreement between the US and EU, Western democracies have found common ground on how digital business should be governed. Their approach is vastly different from China, which is rolling out 5G telecoms systems globally much faster than either the US or Europe. The liberal democratic West needs to build a stronger alliance in order to offer an alternative to China’s digital surveillance model [paywall].
Bilibili Wants to Help Brands “Sparkle” With Content: Previously only used internally, popular video platform Bilibili is now opening up its new service “Sparkle” with the goal of matching brands with its content creators. Creators will now be able to use functions such as pricing recommendations, a means to showcase samples of their video work, and access to data on followers and audience engagement that can be used to develop monetization strategies.
Cultivating Future Stars: No Funding Shortages for Food Tech and Alternative Protein Start-Ups Despite COVID-19: The coronavirus outbreak has not stopped F&B supply chains and alternative protein start-ups across the Asia Pacific region from attracting investment. Many investors in APAC today are looking into new companies that use technology to target pain points for physical store operators. Supply chain disruption is especially relevant in China where there is even greater urgency to provide direct-to-consumer services. Another major area of focus in the country is plant-based food, which has attracted international firms Beyond Meat and Impossible Foods to enter the market.
Domestic Travel Set for Summer Boom: China’s travel agencies have reported a huge public interest in domestic tours that cross provincial boundaries. According to Trip.com, search volume for tours, hotels, and flights on its platform increased dramatically after The Ministry of Culture and Tourism announced the easing of travel restrictions due to COVID-19. Travelers will be required to show their health QR code when signing up for a group tour, and it will be checked multiple times throughout their journey.
British Museum Pops Up in Shanghai: In its first offline event since lockdown ended, the British Museum pop-up in Shanghai’s Shimao Festival City welcomed an estimated 6,500 visitors. The Museum has also tapped into China’s ‘blind box’ phenomenon, i.e. selling a collectable art toy as a ‘mystery product’, alongside Osiris mugs, scarab beetle trinkets, and replica Rosetta Stones. Playing into local trends and tastes, the Museum has also introduced a ‘punching the card’, the practice of customers proving visits to a popular site, often with a social media post.
Brands are Ramping Up for a ‘Cruelty-Free’ China but Do Consumers Even Care?: With an avenue in place for foreign cosmetic brands to offer their product through general trade in China without testing their products on animals to come in January 2021, China Skinny ran an initial fire poll to grasp the sentiment on how consumers feel about these developments. Responses were generally met with caution and a lack of interest with consumers main concern being around ensuring the product is not harmful to themselves. Educating around new testing protocols will be a major talking point for brands to reassure consumers on product safety leading up to these new regulations being implemented early next year.
How Brands Can Take Advantage of the Male Beauty Boom in China: Chinese males are among the biggest contributors to the growth of the male cosmetic market with is expected to reach $166 billion globally by 2022 according to CNBC. Among the key drivers for male cosmetics sales in China are a new generation of boyish men gaining traction on a variety of social media channels posting beauty tutorials and skincare routines. Dubbed as “little fresh meat” (小鲜肉) these influencers command high engagement and push male beauty trends forward which particularly appeal to Gen-Z and millennial men passionate about grooming. However, several brands are failing to see the potential in this growing segment, continuously pushing stereotypical gender roles which are getting increasingly fluent among Chinese consumers.
In Rural China, Schools Tackle a New Subject: Sex Ed: Sex education has long been neglected by schools across China, but the problem is far worse in rural areas thanks to lower local living standards, traditional social attitudes, demographic dislocation, and a lack of educational resources. While educators have found it difficult to introduce a more comprehensive curriculum, the situation is slowly starting to change as forward-thinking teachers work with charities to promote new sex education programs at their schools.
Xpeng Raises $500 Million Even as China EV Market Sputters: The Chinese electrical vehicle manufacturer Xpeng managed to secure $500 million from a group of venture investors strengthening its position as a viable global contender competing with the likes of Tesla, BMW, Mercedes Benz as well as domestic competition NIO Inc. The fundraising follows a $400 million round in November 2019. Despite a slow year for China in EV sales – which dropped 35% last month – Xpeng was able secure the funding, giving hope to domestic start-ups for a brighter outlook for the second half of 2020.