Mark Tanner
Mark Tanner
29 September 2020 0 Comments

This week’s China market and marketing news:

Consumers,  Chinese Consumers

China’s Retail Recovery Still Rests on Richer Consumers: “Consumer confidence appears to be coming back even without a vaccine. This is reflected in strong pickups in sales of non-essentials, such as cosmetics and jewellery, in recent months. Improved sentiment and spending at home in lieu of overseas trips should help support private consumption,” according to Bloomberg economists. Overall retail sales grew 0.5% year-on-year in August, helped by car sales 8.8% growth and sales of goods at 1.5%. Catering and restaurants, contracted 7.0%, although better than July’s 11.0% decline. Residential floor space sold was 14.7% up in August. Subway usage is recovering to within 20% of pre-COVID levels. While China’s coastal provinces and major cities are recovering strongly, firms in its poorer western and central provinces are falling well behind in metrics like output and sales revenue.

China Will Allow Foreign Residents to Return After Six-Month Border Closure: After an expansive border closure early in the pandemic that shut out even foreigners with residency permits, China reopened its border to some travellers for “work, personal matters and reunion” from 28 September.

Views From the Floor of SIAL 2020: With the global pandemic, Asia’s largest food show SIAL China in Shanghai was likely to be different this year. China Skinny was at the event again and here are some of our observations.

Overseas Chinese Tourists

Ready. Set. Holiday: China’s Golden Week Travellers Head for Wide Open Spaces: Authorities have reminded holidaymakers to be vigilant against the coronavirus but more than 600 million trips are still expected to be made throughout China. “The desire has been pent up for nine months, and is likely to erupt in these eight days,” a spokesman said. Among the most popular domestic destinations are expected to be the traditional favourites of Sanya, Lijiang, Xiamen, Xian and Chengdu, although China’s vast northwest is rising in popularity with more than a four-fold increase in searches. Lanzhou in Gansu province was the fourth-most search city in China.

Golden Week: Record Number of Chinese Travellers Planning Domestic Trips Tempted by Cheap Airline Fares, Overseas Curbs: China’s domestic air traffic volume is expected to reach a record high during the upcoming Golden Week holiday, as lower ticket prices and curbs on international travel spur travel-hungry Mainlanders to seek out local tourist destinations. Domestic flight trips made between October 1 and 8 will reach more than 15 million, a 10% increase from last year.

Thomas Cook’s Chinese Owner Sees Sunny Horizons: Fosun has already seen a strong recovery in tourism within China, for all its travel and leisure brands, which also includes high-end resort chain Club Med. It has started building 10 new resorts to be ready for the end of 2022 and has more in the pipeline. Fosun plans to launch a handful of bricks-and-mortar Thomas Cook stores starting with Shanghai early next year. They will be “multifunctional and more than just travel agencies”, but they will not be on a large scale. The first store in Shanghai will feature attractions such as skiing machines and ski instructors, cafes serving exotic drinks and children’s education classes.

Online: Digital China

Infographic: WeChat Mini Program Usage: WeChat mini programs have been the standout performer in the WeChat ecosystem over the past few years, here are the latest insights into how they are being used.

Premium Food & Beverage

Shanghai Police Bust $4.4 Million Fake Mooncake Operation: Double check your moon cakes this Mid-Autumn Festival. The Shanghai, Guangdong and Fujian police apprehended more than 40 suspects and seized over 12,000 fraudulently labelled boxes in addition to 180,000 of the fake Maxim’s mooncakes with ¥30 million ($4.4 million). Shanghai’s police have uncovered over 70 food business-related crimes and apprehended more than 360 suspects since the beginning of the year. Beijing uncovered 54 food-related crimes and detained 173 suspects in the first half of 2020.

Beijing Asks Frozen Food Importers to Shun Countries With Severe Coronavirus: Beijing called on importers on Monday to shun frozen food from countries suffering from severe novel coronavirus outbreaks after several cases of imported seafood products testing positive for the virus.  Importers are urged to closely monitor the overseas pandemic situation and “proactively avoid importing cold chain food from areas heavily hit by the coronavirus” and make alternative plans for imports. Earlier this month China suspended imports from seafood producers in Brazil, Indonesia and Russia for a week or more.

China and Its Centuries-Old Drinking Culture: In 1952, China drank 0.4 litres of pure alcohol per capita. By 1979, that number had risen to 2.5 litres, and in 2017, it was estimated to be 7 litres. The World Health Organisation suggests China will overtake US alcohol consumption per capita by 2030. Today, 80% of all alcohol in China is consumed is baijiu or other similarly high-alcohol spirits (in most countries it is 35%-60%).

Trending in China: Autumn Milk Tea – Cynical Marketing Strategy or True Friendship?: “#The first cup of milk tea in autumn” was trending on Chinese social media last week as over 400,000 Weibo users discussed the topic and set about treating friends to cups of tea. Although lots of people had no idea why the action of offering to pay for a friend’s tea had become so popular, they still posted screenshots of their chats with friends or family members containing money transfer records on social media, with milk tea shops seeing double-digit sales increases.

Video & Entertainment

With ‘The Eight Hundred’ Now 2020’s No. 1 Global Grosser & As National Day Nears, Will China Box Office Top Domestic This Year?: Pulled from the Shanghai film festival in 2019 and censored by the state, China’s war epic The Eight Hundred has become the top-grossing movie globally this year. The movie is based on the legendary defence of the Sihang warehouse in Shanghai, where, in 1937, an isolated battalion of Chinese soldiers held out against the invading Japanese for four days and, as the film would have it, “restored the pride of a nation”. The film took 10 years to make. Chinese cinemas last weekend were running at 75% capacity. Most of China’s 70,000 screens have been open since early August.

Banking, Payments

In China, Paying With Your Face Is Hard Sell: In April 2019, Ant’s Alipay network said it would spend as much as ¥3 billion ($439 million), to promote its facial payment systems via merchant subsidies and shopper rebates. Despite this, and new enhancements that make eyes look larger and skin appear fairer in reflections, the payment technology has largely failed to gain popularity. Some consumers have found the sign-up process cumbersome and had concerns about how their images and data would be used. A survey of more than 6,000 people in China last October found that nearly 80% were concerned about personal information leakage due to the use of facial-recognition technology. [paywall]

Pollution and Environment

China Pledges to Become Carbon Neutral Before 2060: China will reach carbon neutrality before 2060 and ensure its greenhouse gas emissions peak in the next decade, Xi Jinping has told the UN general assembly. China is the world’s biggest emitter, and had previously committed only to aim for peak emissions in about 2030. Its response to the coronavirus crisis has included plans to build new coal-fired power stations. But last week the country held an online summit with the EU, amid signals Beijing would take a stronger climate stance.

Autos and Cars

Why Tesla Thrives in China During the US-Sino Trade War: Elon Musk has long championed vibrant business ties with China. He has been a frequent visitor to the nation, stayed positive during the geopolitical tensions and takes a more hands-on approach to connect with Chinese consumers.