This week’s China market and marketing news:
Consumption Move to Spur Spending: In another government-mandated consumption initiative, the Ministry of Commerce has teamed up with China Media Group to launch a month-long campaign to spur retail sales across 179 Chinese cities. There will be more than 2,800 key activities and events integrating online and offline. More than 100,000 companies are participating, promoting 2 million physical and online services and products. Retail sales rose 0.5% in August from a year ago – the first month of growth this year.
China Continues to Sweet-Talk Foreign Firms, but Business Groups ‘Need Something Solid’: Vice-Premier Hu Chunhua says preferential policies released by the government will apply equally to foreign companies, however market access remains the top concern among European businesses operating on the mainland. A recent American Chamber of Commerce in Shanghai survey found that despite a rise in US-China tensions and a slowing economy in 2019, American businesses in China remained profitable, with 78.2% of companies reporting profits last year, marginally ahead of recent years. 49.2% of American companies expect this year’s China revenues to be lower than 2019 revenues, although a surprising 32.5% expect them to increase. Long-term capital continues to flow into China, including $9 billion in July alone, up 12.2% from a year earlier.
Why Australian Companies in China Aren’t Running for the Door: Relations between Canberra and Beijing seem to be getting worse by the day: A TV anchor detained, journalists fleeing, key imports banned. But Australians doing business in China aren’t heading for the exit just yet.
Are Top Tier Chinese KOLs Refusing to Take on Foreign Brands Based on Country of Origin?: How foreign brands’ engagements with top KOLs are being impacted as a result of geopolitical tensions.
Infographic: China’s Lucrative Post-90s Segment – How, What, Where and Who Online: Post-90s are now the largest age group online in China, yet they are unlike any other demographic in the market. This infographic highlights their online preferences and behaviours to shed light into what pushes their buttons and where to push them.
Imported Goods to Steal Limelight in Tmall Gala: Tmall Global is hoping 2,000 cross-border brands will sell over ¥1 million ($146K) worth of products during its Double-11 (Singles’ Day) Festival this year, as cross-border ecommerce soars due to restricted international travel resulting from Covid-19. Alibaba hopes to attract 2,600 new brands to debut this November, centring around cosmetics, baby and maternal, health and fitness, food, and pet goods. Some 22,000 overseas brands from 78 markets attended the gala last year. More than 200,000 products lunched on Tmall Global between January and March this year – and new brands on the platform grew 125% between April and August from a year ago, with gross merchandise value growing 113%. Tmall Global has also announced it would upgrade its overseas warehouse business and officially released the cross-border direct delivery service “Overseas Direct Procurement,” focusing on importing overseas niche products.
Oracle Wins Bid to Become TikTok’s ‘Trusted Technology Provider’ in US: Oracle confirmed on Monday it had struck a deal with ByteDance to be its “trusted technology provider” in the US. The deal, designed to allow TikTok to stay in the country, has been submitted to the US government for approval and commits to locating Tiktok’s global HQ in the US, creating 20,000 new jobs. Microsoft, with Walmart, had been the frontrunner to acquire TikTok’s assets in the US, New Zealand, Canada, and Australia. Walmart continues to have an interest in TikTok and continues discussions.
Bricklayer To Billionaire: China’s Second-Richest Man Rose From Rags To Extreme Riches—But Will It Last?: A big IPO in HK for the $50+ billion Nongfu saw founder Zhong Shanshan’s net worth sale past Jack Ma last week to become China’s second-richest man (pre-Jack Ma’s Ant Financial IPO). Nongfu’s margins of 20.6% are more than double the water and soft beverage industry average in the mainland however its stock price to earnings ratios are three times higher than other listed food and beverage peers.
China Becoming Battleground for Plant-Based Meat Makers: Beyond Meat has announced it’s building up its presence in mainland China with two new manufacturing facilities. The company’s R&D team in Shanghai is hard at work tweaking its products to suit the tastes of Chinese consumers. Both Beyond and Impossible Foods have targeted China as a top market for growth, despite Impossible still waiting for regulatory approval to sell in the market. Nestle is expanding its plant-based products factory in Tianjin. Local Chinese companies such as Zhenmeat and Starfield also are expanding their businesses, partnering with restaurants across the country and even offering vegan-based seafood.
Tear down your barriers, EU says after summit with China’s Xi: The EU and China have signed a deal to protect each other’s exported food and drinks items from feta cheese to Pixian bean paste meaning US, Australian or New Zealand producers will no longer be able to use the protected names on their exports to China. Meanwhile, China has banned imports of German pork imports after it confirmed its first case of the African Swine Flu.
‘Different Gender, Different Snack’ Food Promotion Slammed as Sexist: Bai Cao Wei, a well-known snack company has been slammed online for promoting gender-specific snacks in China. While the “girl version” included mostly vegetarian items such as cream-flavoured macadamia, mango chips, and canned peaches, the “boy version” had mostly meat, including beef and pork jerky, as well as a flavoured milk product. Earlier last week steak company Ding Nuo was belittled for its “dad steak” and “mum steak” products.
Why China is Expanding Access to Duty-Free Shopping: Sanya’s Haitang Bay Duty Free Shop, operated by state-owned China Duty Free Group, served 740,000 customers between 1 July – 18 August, 70% more than in the same period a year ago. They purchased 4.58 million items — from fragrances to cosmetics to luxury watches and bags – 150% more than a year ago. The store set a global industry record with ¥5 billion ($730 million) of sales in 49 days. The industry expects China’s duty-free retail market to expand to ¥200 billion ($29 billion) in three years – four times the current ¥50 billion. Hainan currently contributes 26% of total duty-free sales in China.
World’s Largest NBA Store Opens in Guangzhou: Shrugging off last year’s tensions, NBA China has opened a two-storey 2,680 square metre store in Guangzhou – its largest globally. The store aims to provide a “cutting-edge, immersive social experience” will sell authentic NBA products, including jerseys, footwear, trading cards, NBA Style apparel, headwear and kidswear. The store is operated by sportswear retailer Topsports and includes a Nike Hoops space.
China Car Sales Rebound Accelerated in August as Coronavirus Pressures Eased: Sales of sedans, SUVs, minivans and multipurpose vehicles increased 8.8% last month from a year earlier to 1.73 million units. That followed a 7.9% increase in July. Sales of electric cars increased 45%, with Tesla and GM-SAIC dominating sales despite trade tensions.