This week’s news and trends in China:
It’s a ‘Golden Age’ for Chinese Brands Bolstered by Tech Crackdown: From cosmetics to bubble tea, Chinese ventures are making waves among a new generation of shoppers, and becoming a magnet for funds. Investors are seeking a viable alternative to tech startups because the government, rather than clamping down, is pushing to foster domestic champions that can fuel spending and compete with the likes of Coca-Cola and Nike.
Young Chinese Eye Billions Yuan Worth of Near-Expired Products: Consumers can buy Beingmate milk powder products worth ¥888 ($137.4) for just ¥7.5 ($1.16) on Chinese ecommerce platforms when close to expiry – meaning they’ve reached 40% of their shelf life. Those aged 26-35 accounted for 47.8% of near-expired purchasers, with over 60% made through ecommerce apps in 2020.
China’s Transport Costs Surge in Line with Skyrocketing Oil Prices, But at Least Food is Getting Cheaper: China’s official consumer price index (CPI) rose by 1.1% in June, year on year, while plunging pork prices helped drive down the cost of food by 1.7%. Transport costs grew 5.8%, which is likely to put pressure on online delivery. Price changes for household items, clothing and health care products remained flat.
Seven Consumption Trends of 2021 in China: JD.com has identified 7 trends this year: 1. Enthusiasm for brands from both home and abroad; 2. Omni-channel at full speed; 3. The emergence of new categories; 4. Lower-tier cities and rural revitalization; 5. Responsible consumption; 6. Product + service; and 7. Supply chain + technology.
Wanghong Vibe Check: The word “wanghong” is inescapable in China. It’s everywhere as a descriptor, online and offline. There is no precise translation. At the simplest level, it means “internet famous,” referring in its earliest iterations to viral personalities or social media influencers. The word has since mutated, and can refer to people, places, cities and entire counties.
China Bans Tallest Skyscrapers Following Safety Concerns: China is prohibiting construction of the tallest skyscrapers to ensure safety following mounting concerns over the quality of some projects. The outright ban covers buildings that are taller than 500 metres (1,640 feet). Local authorities will also need to strictly limit building of towers that are more than 250 meters tall. There are only 10 buildings in the world exceeding 500 metres, and five of them are in mainland China.
Chinese Milk Tea Firms Face Bubble Amid Over Competition, Fast-Changing Consumer Preferences: Amid an increase in new players, only 18.8% of milk tea businesses survived for more than a year in 2019. The pandemic wiped out more than 130,000 such operators, or 43% of the total market, as of the end of November last year. Nevertheless, investment into tea drink makers hit a 10-year peak, climbing to ¥5.3 billion ($820 million) in the first six months of this year, causing a bubble and forcing firms to improve products and services.
Why ‘Punk Health’ Foods Are Popular with China’s Youth: Goji berries in Beer. Chinese medicinal herbs infused in coffee. Staying up all night, but eating a bowl of bird’s nest soup to feel better. You get the gist. For the last couple of years, a seemingly oxymoronic concept has been adopted by a broad cross-section of young, urban people in China. “Punk health,” or péngkè yǎngshēng, means pairing a vice with a seemingly healthy ingredient, which has been swiftly adopted by brands.
Diageo Takes Shot at China Growth with Scotch and Baijiu: Nascent Scotch still has few regular drinkers in China, but growing fast. Diageo is working hard to “educate Chinese consumers” through its online whiskey academy. The maker of Johnnie Walker Scotch and Smirnoff vodka also holds “whisky summits,” in China – dinners where influencers learn the finer points of the spirit from Scottish experts.
MSG Giant Lotus Flower Withers as Company Auctions Its Trademarks: As China’s growing middle-class stops sprinkling monosodium glutamate into their dishes, the industry is suffering.
Aptar Announces Collaboration with Chinese Skincare Company: AptarGroup has announced a collaboration with the online platform YAT to develop an innovative range of products and services for the skin care market. Chinese consumers increasingly demand products that have strong scientific support, yet are tailored to their precise requirements, which can include skin complexion, conditions and product functionality. Aptar should have tried the Skincare Tracker.
China’s Cosmetic Surgery Trends are Getting Riskier — and Weirder: Chinese clinics are pushing women to undergo increasingly invasive procedures to obtain the perfect body. But the treatments can have serious side effects. The invasive calf reduction surgery involves severing some of the nerves inside a patient’s calf, withering the muscle and, if things go well, making the leg more slender. This, with ear enlargements to make the ears more “elf-like,” and genital reconstructions are all skyrocketing in popularity.
Trip.com Releases Latest Mainland China Night-Time Economy Consumption Trends: On average, Chinese consumers made 1.3 night-time (6pm-2am) attraction bookings in the first half of 2021, spending ¥187 ($29) per person, with women accounting for 53% of bookings. Post-90s consumers make up 34% of the tourists making night-time travel product bookings, post-80s users account for 29% and post-00s, 12%. Tourists from these 10 provinces/cities are the top night-time economy consumers: Shanghai, Beijing, Jiangsu, Guangdong, Henan, Shanxi, Zhejiang, Hubei, Sichuan, and Chongqing.
The Science of the New-Car Smell: Chinese associate the new car smell with pollution and chemicals. No matter the type of vehicle or its price, car shoppers don’t like any smell in a vehicle, even if the scent is generally pleasing, like leather seats. The best new-car smell is no smell.