Mark Tanner
Mark Tanner
11 November 2020 0 Comments

This week’s China market and marketing news:

Consumers,  Chinese Consumers

Has Consumer Behaviour Changed in China?: You bet it has!

Chinese State Media Reacts to Biden Victory With Cautious Optimism: Propaganda outlets said a Biden presidency would most likely restore stability to frayed US-China relations, but warned that tensions would continue. The immediate reaction to Mr. Biden’s victory on Sunday was measured, indicating that China was willing to attempt, and indeed was eager for, a thaw. But even as Chinese propaganda signalled a new phase in US-China relations, it also continued to push a narrative of American’s decline. When Biden’s presidency was confirmed, a CCTV anchor declared that there had been “not only verbal attacks but also even physical clashes” between Trump and Biden supporters – in reality, there were few reports of violent confrontations. While most leaders rushed to congratulate Joe Biden on his election, Xi Jinping and Putin remained silent.

US Firms Get Another Boost From China: July to September “was another extraordinary quarter for Chinese consumer consumption,” says Estee Lauder whose China sales increased 28-30% against a fall of 9% globally. L’Oreal’s China sales rose 28% versus a global fall of 2%. Coca-Cola reported case volume of carbonated soft drinks rose by a ‘mid single-digit percentage’ in China, whereas they fell 6% in the US and 4% globally. Mercedes had record unit sales in China, Daimler was up 24% and GM reported a 12% increase, against a 10% decline in the US. Ford grew 22% in China, but declined 5% globally. Chines car sales in October grew 8% overall year-on-year.

How One Obscure Word Captures Urban China’s Unhappiness: Over the past few months, Chinese people from all walks of life, be they software developers, stay-at-home moms, or elite university students, have all discovered their daily lives can be accurately described by the same once-arcane academic term: involution. Involution has become a shorthand used by Chinese urbanites to describe the ills of their modern lives. Involution relates to Confucianism, how China’s narrow definition of social success means people end up competing with each other, and how there doesn’t seem to be an exit ramp from this “endless cycle of self-flagellation.”

Imports: CIIE

Keynote speech by President Xi Jinping at opening ceremony of 3rd China International Import Expo: Unlike the last two years when he opened CIIE in person, Chinese president Xi Jinping opened the expo via a video link. Notable quotes from his speech included: “The vastly huge China market is the most promising in the world. Total import into China is estimated to top 22 trillion U.S. dollars in the coming decade.” And “We will introduce a negative list for cross-border services trade and open still wider in areas like the digital economy and the internet.” And “China stands ready to conclude high-standard free trade agreements with more countries in the world. We will work for the early signing of the Regional Comprehensive Economic Partnership (RCEP) and speed up negotiations on a China-EU investment treaty and a China-Japan-ROK free trade agreement.”

Eye-Catching Exhibits at 3rd CIIE: New, innovative health tech wowed China Daily reporters at the CIIE including a ventilator with non-invasive modes, a waterproof electronic thermometer which could be full submerged in disinfectant, a handheld blood analyser, virtual clinical command centre and a new all therapy drug from Pfizer. A light-weight supercar, the world’s first hydrogen-fuelled heavy-duty truck, a tent which can be opened in 2 seconds, red hot instant noodles and jet black chewing gum were also highlights.

Online: Digital China

Highlights of 2020 11.11’s First Shopping Window: The first of two sales windows for this year’s Singles Day / Double-11 ran from 1-3 November. 100 brands topped gross merchandise volume of ¥100 million ($15.1 million) in 111 minutes after sales officially began. They included Nike, Adidas, Apple, L’Oréal, Estée Lauder, Xiaomi and Haier. AliExpress will use the world’s first real-time livestreaming translation on an e-commerce platform, also tapping into DAMO Academy’s technology to provide live captions to shoppers outside China. Just 40 minutes into 1 November sales, beauty products generated over ¥10 billion ($1.5 billion) in GMV. Estée Lauder was the first Tmall flagship store to surpass ¥1 billion ($151 million) in sales among American and European brands during 11.11; and in a little over nine hours, the brand broke its 11.11 record from last year. This year, almost 100% of the packaging shipped from Cainiao warehouses is biodegradable, and nearly 50% of the paper packaging in its warehouses is tape-free. With the second sales window underway, by 12:30am this morning, Alibaba’s 11.11 sales since 1 November had reached ¥372.3 billion ($56.3 billion) gross merchandise value.

Chinese Consumers Turn Focus to Home Comforts and Self-Care: During the first three days of this year’s Singles Day Grand Promotion on JD, shoppers flocked to buy products across home and lifestyle categories including kitchen, living room, children’s room, home spa items and more. 6.43 million kitchen shelving units sold, with Gen-Z making up nearly half of buyers. Parents born between the years of 1985-1990 bought about 10,000 units of a product designed to correct kids’ sitting posture. Sales of table and chair sets designed to facilitate learning for kids increased by four times; and sales of a children’s bed and mattress set designed to promote better sleep and spinal health more than doubled. JD says that the fastest-growing consumers of imported goods are from forth- and fifth-tier cities.

NetEase Yanxuan Bows Out of Double 11 Shopping Gala as It Eschews ‘Excessive Consumption’: The Double-11 Shopping Festival advocates excessive consumption, whereas NetEase Yanxuan is in favour of more moderate consumption, the e-marketplace posted on its Weibo yesterday. The firm, which mainly sells NetEase’s own brands, will not get involved in complicated promotional activities but will still offer big subsidies, it said.

Premium Food & Beverage

Wine Australia 2020 China Awards Winners: Winners, details and photos of the five categories from this year’s prestigious awards.

China Requires Disinfection of Imported Cold Chain Food: China is now requiring imported cold chain food to be thoroughly disinfected before going to market, after live coronavirus was detected on the outer packaging of imported cold chain food in three cities in two days. Loading and transporting carriers, and the inner and outer packaging of the cold chain food must be fully sterilized. In September, China suspended imports from 56 cold-chain food companies in 19 countries and regions where workers had been infected with COVID-19.

$400 Hairy Crabs Are Selling Out in China as Consumers Splurge: “Almost all the hairy crabs in our pools have been reserved, much faster than last year,” says a crab farmer. “To offset the frustration of travel restrictions, many customers are buying bigger crabs to share with their families.” Chinese are spending 10% more on in home dining than this time a year ago. The hairy crabs can cost ¥2,700 yuan ($400) for a box of eight and can only be purchased for a few weeks in autumn. The bestseller this year costs ¥1,600 ($242) per box, up from ¥800 ($121) in 2019. Demand for hairy crabs in China was about ¥120 billion ($18.2 billion) last year and is expected to reach ¥150 billion ($22.7 billion) this year.

JD and Diageo Partner on Responsible Drinking Efforts in China: JD and Diageo signed an agreement at CIIE to jointly promote responsible drinking and moderate consumption of alcohol in the China market. The companies will work together with industry partners in China to advance the development of a code of conduct for responsible sales of alcohol online in China under the principle of self-governance, and promote the responsible drinking platform DRINKiQ as well as other initiatives.

Premium and Luxury

Alibaba, Richemont to Invest $1.1 Billion in Farfetch with Focus on China: Alibaba said on Thursday it would launch Farfetch shopping channels on its e-commerce sites Tmall Luxury Pavilion and Luxury Soho, while also investing in newly formed Farfetch China along with Richemont. Meanwhile, Farfetch will cease operations with JD.com, who invested $397 million in the company in 2017 which merged its China sales platform with JD. Separately, Artemis, the controlling shareholder of Gucci-owner Kering, also plans to increase its stake in Farfetch.

Declutter: China’s Luxury Shoppers Call in the Tidy Teams: There are now thousands of graduates from a home-organising school called Liucundao, which teaches the art of bringing order to the chaos of China’s wealthy shoppers. More than 3,000 professionals work in the emerging industry, which CCTV projected could reach ¥100 billion ($14.9 billion) this year in turnover. During the pandemic, business surged by hundreds of percent for some professionals.