This week’s news and trends in China:
China’s Shrinking Families: Almost all 30- or 40-somethings in 2050 who don’t have siblings will still have cousins, uncles, and aunts. Not so Chinese youth: by then nearly a sixth of China’s children and teenagers will have no brothers, sisters, uncles, or aunts. [paywall]
China Population: Birth Control Policies Should Be Scrapped to Retain Economic Edge Over US, Says Central Bank: The People’s Bank of China has recommended Beijing completely abandon birth control policies or lose its economic edge over the United States. Under current scenarios, China’s population could lose 32 million between 2019 and 2050, whereas the US will add 50 million, the central bank says. China’s births may fall below 10 million annually in next five years.
China’s Q1 GDP Growth Seen Hitting Record 18.3% as Domestic, Global Demand Recovers: While the reading will be heavily skewed by the plunge in activity a year earlier, the expected jump would be the strongest since at least 1992. Retail sales jumped 33.9% in comparison to the same period last year, but just 1.86% quarter over quarter. Imports grew 38.1%. Urban incomes grew 12.2% year on year to ¥13,120 ($2,012) in the first quarter in China, compared to a 16.3% growth to ¥5,398 ($828) among rural residents. Chinese firms are set to report that net income surged by an “eye-popping” rate of 55% in the first quarter thanks to the ongoing economic recovery, according to Goldman Sachs.
Chinese Consumers Emerge From the Pandemic More Confident: For the first time since the onset of the coronavirus pandemic in late 2019, consumer confidence in China shot higher than its pre-pandemic level. Morning Consult’s Index of Consumer Sentiment in China read 156.85 for the first 13 days of April, up 2.36 points from March. This compares with the pre-pandemic figure of 153.14 for the month of October 2019.
Why Chinese Language Trademarks Could Mean Market Success for Foreign Brands: While foreign language trademarks have been increasingly recognised in the Chinese market, local consumers will still likely use Chinese language trademarks to refer to foreign brands. In addition to making marketing more ‘convenient’, if brands don’t register one, distributors or squatters probably will.
What Brands Should Know About Zhihu: Ahead of the opening of its travelling exhibition, Louis Vuitton tapped Chinese peer-to-peer social platform Zhihu as part of its marketing campaign. LV encouraged conversation on Zhihu around the exhibition, stoking up interest, and offering some rare access. Zhihu is a text-heavy question-and-answer platform often described as the Quora of China. It has an online content community of 75.7 million average monthly active users who ask and answer questions. It provides access to in-depth articles, columns, videos and live-streaming sessions, often produced by the platform’s 43.1 million content creators. [paywall]
How to Nuture China’s Growing Interest in Cheese: 32% of Chinese consumers are looking to increase their dairy intake as much as possible, with a further 47% trying to consume a moderate amount. 53% of consumers cite dairy as a food they prefer to snack on. China’s cheese market is expected to grow 13% annually between 2020 and 2025, with cheese products that are targeted at children currently the most popular cheese offerings.
Barbie Dreamhouse Adventures, Peppa Pig and My Little Pony Children’s Cartoons Too Dangerous and Violent, Chinese Consumer Group Claims: Peppa Pig is in the dog box again in China, alongside friends My Little Pony and Barbie after officials from the Jiangsu Consumer Council released a list of 21 cartoon series which it said contained behaviour and language it claimed were inappropriate for children. The council spent three months watching all of the series, before identifying 1,465 “problematic points” and conducting an online survey of 1,026 parents and face-to-face interviews with parents and teachers from primary schools and kindergartens.
Learnings from Shanghai Fashion Week: Sustainability lay at the heart of this season’s programming. This was seen in material intervention and fabric development, circularity, and upstream trade business promotion. Emerging Chinese designers were a key focus of Autumn 2021’s schedule.
English Pub Chain Helen’s to IPO as Enormous Offline Social Network: Helen’s operates more than 350 pubs in 80 cities across China, billing itself as “an offline social platform for young people.” Despite declining sales in the first half of 2020, the pub chain opened 105 new pubs last year. In December, the company promoted the “Helen’s Coke Bucket,” a signature beverage made from whiskey and Coca-Cola served in a large stainless steel drink dispenser, which saw the promotion viewed more than 1 billion times, and is now the chain’s best selling drink.
Shanghai 2021 Autoshow: From Cutesy to Cutting Edge, in China There’s an EV for Everyone: Everything from the $4,230 Hongguang Mini to Mercedes-Benz’s new Tesla challenger, to the Xpeng Heitech flying vehicle appeared. MG’s new Cyberster EV wowed the crowds. There were a number of world premieres, and global exclusives for China, such as VW’s ID.6, with design, infrastructure, and technological developments all catering to match the wants and needs of Chinese consumers: “A desire for roomy interiors, safety and comfort, coupled with a high level of interest in technology and connectivity – China is a market like no other,” says VW.
Hainan ‘On Fire’ as Luxury’s Centre of Gravity Tilts to China: The share of Chinese consumers’ high-end purchases within the country soared from 32% in 2019 to more than 70% in 2020, according to consultancy Bain, and is expected to be about 55% by 2025 once the pandemic effect fades. Chinese consumers are forecast to grow from 33% of luxury consumers to 46-48% between 2019 to 2025. Only Louis Vuitton, Burberry and Gucci had stores in all of China’s 25 biggest cities, suggesting that others might need to expand their footprints. Duty free stores doubled in Hainan in 2020, with duty free sales on the island being forecast to increase seven-fold between 2018-2030. [paywall]
Chinese Discount Retailer Vipshop in Hot Water After Being Accused of Selling Fake Gucci Belts: The company was embroiled in controversy after customers complained that the discounted Gucci belts they bought on Vipshop in March were marked as fake by resale platform Dewu. The belts, originally priced at ¥3300 ($503), were sold at a discounted price of ¥2,549 ($391).
With New Louis Vuitton Partnership, JD.com Inches Forward in $54 Billion Fight For Chinese Luxury Buyers: Last week, JD.com began to share its 471.9 million annual active customer accounts with Louis Vuitton, by redirecting ‘LV’ search results on the JD.com app to Louis Vuitton’s official WeChat mini-program. LV sells exclusively through its own stores and e-commerce sites – and this provides a creative way to increase its online reach in China, and deliver further growth for the brand, all without losing control from listing on a third-party platform, something that most luxury brands have traditionally shunned.