This week’s news and trends in China:
China’s Macro Prospects: Five Key Questions: Five areas to think about in China for the next few quarters: 1. What is the direction of US-China relations? 2. What is the direction of China’s regulatory environment? 3. Has China’s consumer sector recovered fully from COVID? 4. How has the property market weathered COVID? and 5. What will monetary policy look like in the second half of 2021?
Mainland China brands ascendant in Asia’s Top 1000 Brands: A total of 33 mainland-based brands made improvements in their ranking – with many jumping hundreds of places – across a diverse range of categories. Just five suffered drops. The most improved brand from China, furniture retailer Macalline, was the fastest riser up 651 places to 276. 59 mainland-based brands entered the list for the first time in 2021, with Meituan Waimai and Eleme, debuting at 132 and 135 respectively.
China’s Brand Collaborations Tapping into Unlikely Pairings, Local Pride and Streetwear for Success: Brands wanting to create hype among China’s young consumers’ should tap into unusual partnerships, national pride, and the popularity of streetwear to get themselves noticed. In an unexpectedly successful collaboration, Volvo and Durex’s short film drew 130 million views on Weibo.
China’s Vast Network of Gray-Market Shoppers Grounded by the Pandemic: Although some daigou still place orders through overseas partners, without being on-site to personally vouch for the provenance of the products, many customers don’t trust the authenticity of the goods. Consumers are gaining more options domestically, a result of the proliferation of cross-border ecommerce services and duty-free malls. To discourage customers from going back to daigou, some brands are offering more services designed to build longer-term relationships with individual consumers.
China Bans For-Profit School Tutoring in Sweeping Overhaul: Once regarded as a sure-fire way for aspiring children (and parents) to get ahead, after-school tutoring and its associated costs are now viewed as an impediment to one of Xi Jinping’s top priorities: boosting a declining birth rate. Companies and institutions that teach the school curriculum must go non-profit and cannot pursue IPOs, or take foreign capital.
Is This the End For China’s American Education Craze?: From 2005 to 2019, the number of Chinese undergraduates enrolled at American tertiary institutions increased 16-fold. The past year has shaken the foundations of China’s church-like devotion to American higher education, but a full reversal seems unlikely. Compared to China, which placed just three universities in the top 100 of the most recent Times Higher Education World University Rankings, the US is home to almost forty such universities.
China Offers Baby Bonuses, with Births on Track for New Low in 2021: Beijing is focusing on introducing policies to actively encourage more births. The measures include reducing the cost of giving birth, raising a child and education; and abolishing fines for violating birth control policies. Primary and middle schools will have to extend the school day by at least two hours five days a week to reflect the needs of working parents. Half a million low-cost child care places will be added in 150 cities and at least 90% of the children of kindergarten age will have places by 2025. Nursery schools for children under 3 years old will be expanded from 1.8 per 1,000 people to 4.5.
Flying Car, Triphibian Vehicle and Other Cool Things at Taobao Maker Festival 2021: A flying car and a triphibian electric vehicle that can travel in the air, on land (including snow and ice), and on water were hits at the Taobao Maker Festival which showcases emerging trends in China’s effervescent consumer market. Snackable health foods, like nutritional coffee made with Chinese medicine, transparent burgers and broccoli and melon ice cream, which contains fewer calories than a banana where also a hit. Treadmills for pets and tents with projectors garnered a lot of interest taking advantage of the growth of “glamping” products, which grew by over 130% on Alibaba’s platforms during the 6.18 shopping festival.
How Chinese Young Urbanites Relax after Work: Cuddle a Robot Or Raise a Jellyfish: 1 min video: Artificial clouds, cuddly robots and jellyfish pets proved popular relaxation and wellness products among young urbanites looking to unwind after work at the Taobao Maker’s Festival.
Craving Viral Milk Tea, Faraway Buyers Call Train-Hopping Couriers: Sexy Tea appeals to mostly social media-savvy younger consumer base with photography-friendly traditional Chinese-style packaging, as well as distinct flavours. Couriers, some carrying up to 200 cups per trip, reportedly charge as much as five times the ¥12-18 ($1.85-$2.78) original price for the nearly four-hour train ride between Changsha and cities in Zhejiang Province. Sexy Tea currently has over 400 stores in Changsha.
Chinese Ecommerce Fresh Produce Market Exceeding 360 Billion: China’s fresh food ecommerce market exceeded ¥360 billion ($55.5 billion) in 2020, and the business model is continuing to diversify. The number of average daily active users has reached more than 8 million, and it is expected to exceed ¥500 billion ($77 billion) in 2021. With the development of cold chain logistics, the rise of new retail, and the change in thinking of the younger generations, the scale of the market is expected to exceed one trillion yuan in five years.
Aussie Wine Exports to Hong Kong Soar After China Tariff Hit: Australian wine appears to be taking a similar route into China as its lobsters, with shipments to Hong Kong rocketing 111% in the 12 months ended June 30, to A$187 million ($136.7 million). Direct delivery options that grew popular during the pandemic make it easier than ever to get wine with any label into the hands of eager consumers. Exports increased to the UK, Singapore, South Korea, Malaysia, Taiwan and Hong Kong by a combined A$240 million ($177 million), but they did not offset the decline in exports to mainland China. Exports to North America dropped 5%.
Sparkling Beverages Soar in Popularity Among Young Chinese: Revenue from carbonated water in 2019 surged 43.9%, far higher than the 5% increase of mineral water. Palatable flavours and a fun texture are keys to the success of carbonated soft drinks and the increasingly popular flavoured sparkling water category. PepsiCo’s Bubly, a line of calorie-free fizzy water, has three flavours for Chinese consumers: peach, grapefruit and passionfruit.
Chinese Influencer’s Death After Liposuction Highlights Dangers of Plastic Surgery: Once considered the exclusive domain of the rich and famous, cosmetic surgery has become increasingly normalized and prevalent in China. Yet a beauty influencer has died after a procedure. The government has promised to crack down on sketchy plastic surgery clinics, but will anything actually change in a market worth $27 billion?