Mark Tanner
Mark Tanner
2 December 2020 0 Comments

This week’s China market and marketing news:

Consumers,  Chinese Consumers

Comparing China’s Elderly to its Millennials & Gen-Z: China’s Millennials & Gen-Z and silver consumer segments are among the most important in the world. Here’s how they differ.

Chinese Consumers Move Towards Forefront of Economic Recovery: Chinese consumers savings in the first three quarters of this year reached 37% of disposable income, versus 32% in 2019. Morgan Stanley expects this excess saving to be partly released in 2021, with early signs happening already such as October’s retail sales growth climbing to 4.3% in October. Goldman Sachs believes consumption will be the main driver of China’s economic growth next year forecasting that household consumption will increase 13%. Unemployment in urban areas was 5.3% in October, just a whisker up on the 5.2% at the end of last year, pre-Covid.

The Export Recovery Opportunity: Results from a survey of 1,000 British small and medium businesses by Alibaba to understand their attitudes towards export, perceived barriers to doing business internationally, and how overcoming these will be key to boosting growth and resilience in the wake of the Covid-19 pandemic. Just 7% of British companies looking to export are currently considering China, lower than Africa (23%) and Australia (10%). Some of those British brands who’ve entered the market are finding great success: “It’s sometimes easier to sell our products in China than it is in the UK,” says Stephen Shortt, Founder of Hawkins & Brimble.

Shanghai Wins Smart City 2020 Award: Shanghai was named the world’s “smartest city” at the Smart City Expo World Congress, the first Chinese city to win the award. The city’s People-Oriented Smart City digital infrastructure project saw it become a “Dual Gigabit” city – achieving full 5G coverage in the downtown area and fibre coverage across 99% of the city. Its e-government initiative, an interactive tool for citizens that has over 14.5 million users, also received special commendation from the judges.

Beijing Reins in the Social Credit System to Prevent Official Abuse, Avoid Collateral Damage: Most Western commentary on the China social credit system is inaccurate. New directives for the system from the State Council aim to raise the bar of applying restrictions and slash the severity of such restrictions.

Senior Xiaomi Exec Resigns After Calling Customers Losers: Be careful what you say at large HR conferences about your Chinese customers.

Online: Digital China

China Rises as World’s Data Superpower as Internet Fractures: China has had more cross-border data flows than the US since 2014 and now accounts for 23% of flows, with the US ranking a distant second at 12%. The source of Beijing’s power lies in its connections with the rest of Asia. While the US accounted for 45% of data flows in and out of China in 2001, that figure dropped to just 25% last year. Asian countries now make up more than half the total, particularly Vietnam at 17% and Singapore at 15%. As China becomes a global data superpower, it will control huge quantities of a resource that will be invaluable to its future economic competitiveness such as developing artificial intelligence and information technologies. China has surpassed the US for the number of AI patents for the first time.

The Rise of Facial Recognition in China’s Real Estate Market: Some homebuyers are countering the rise of facial recognition technology in real estate offices by wearing helmets during their visit.

Premium Food & Beverage

Australian Wine Exporters Face Fresh Blow After Beijing Imposes Tariffs: Australian wine, the global success story of wine exports to China has been hit with ‘anti-dumping’ duties ranging from 107.1% to 212.1%. Top-selling Penfolds faces a 169.3% tariff. In its provisional findings, the Chinese ministry of commerce cited “various financial programmes and grants” offered by the Australian government. A Nanjing importer said he was looking to redirect his uncleared Australian wine imports into a bonded warehouse with plans to sell the wine, bottle by bottle, on ecommerce websites, to get around the high anti-dumping import duties. At least 75 containers of Australian wine that have been stuck at Chinese ports since early November face the new tariffs. “The whole industry is devastated. Business and ordinary people suffer from politicians’ failure in handling diplomacy,” says a South Australian wine exporter.

Sales of Ready-to-Eat Chinese Kiwifruit Overtaking Foreign Brands: Imported kiwifruit which costs 4-5 times the local variety, now have a domestic competitor that isn’t too tart and firm when bought. Many Hema stores have seen sales exceed foreign brands, with the repurchase rate ranking highest in the category. In related news, Zespri recently signed a memorandum of intent for a trial project with Sichuan State-owned Assets Operation and Investment Management, in hope of advancing the development of the Chinese kiwifruit industry through cooperation throughout the supply chain.

MSC Launches New App for Chinese Consumers Tying Seafood to Health: The non-profit Marine Stewardship Council is seeking to expand its recognition among Chinese consumers by launching a new app that helps customers find out more about products bearing the MSC eco-label in China’s retail outlets. In launching the app, MSC pointed to the Chinese government’s Healthy China 2030 strategy and noted personal health and environmental health are intertwined.

Overall Beauty

China’s Rapidly Changing Beauty Market: China beauty market is rapidly changing – not just in terms of size, but also in terms of consumers and how it works. Although China has traditionally followed Japan and South Korea for beauty standards, it is starting to branch out on its own with subtle changes in what is considered attractive, such as eyebrows that are shaped differently. In 2019, 70% of cosmetics revenue came through ecommerce, and that portion has grown since the pandemic.

Overseas Chinese Tourists

Chinese Traveller Trends and Travel Retail: 15 min vid: China Skinny’s Mark Tanner joins Beam Suntory for their Spirited Speaker Series talking about current trends within the Chinese travel market, how it is starting to bounce back and ways we can enrich the customer journey across multiple touch points, including some insights into the Chinese consumer’s digital behaviour.

Pollution and Environment

Why Brand Sustainability Is Critical in China: Packaging made up 0.85% of China’s total household waste in 2018, which has driven Alibaba’s smart logistics arm, Cainiao, to launch the “National Cardboard Box Recycling Day” on November 20, following the onslaught of Singles’ Day. The company also transformed its 75,000 delivery outlets into recycling stations last year and has developed ‘ABOS’ which includes an AI-powered tool which can scan rubbish and identify plastic. Research released last year found 380 million consumers acquired eco-friendly products on Taobao and Tmall, with 41.8% of those customers born in the 90s and 32.9% in the 80s. According to a post-COVID-19 McKinsey & Company survey on consumer attitudes in China, 64% agree or strongly agree that they would consider products that are more environmentally friendly.

Autos and Cars

Global Carmakers Team Up with Chinese Internet Firms: International carmakers are partnering with Chinese internet companies to offer in-car applications familiar to Chinese consumers. Maserati made QQ Music available in its Chinese models earlier this month. Audi is working with Alibaba to improve in-car applications like navigation and digital assistant services. Last year Ford launched its China-specific infotainment system that leveraged Baidu’s artificial intelligence for improved connectivity.