Mark Tanner
3 August 2021 0 Comments

This week’s news and trends in China:

Consumers,  Chinese Consumers

Shoppers Flock to Buy ERKE as a Thank You for their Donation to Henan: A group of small Chinese domestic brands’ generous but low-profile donations to help flood relief in Central China’s Henan Province set off a round of “crazy consumption.” Struggling sportswear company ERKE announced a donation of ¥50 million ($7.7 million) to help with flood relief resulting in a huge number of purchases of their products.

How Can Brands Earn Cultural Credibility From China’s Gen Z?: With an upbringing shaped by China’s fastest sustained development – from the late 1990s to the early 2000s – China’s Gen Zers are notably distinct from Millennials and Gen-Xers. They are more optimistic and impulsive and there is no “one-size-fits-all” shortcut.

Pop Star Kris Wu Detained in China After Rape Allegations: One of China’s biggest brand endorsers, Chinese-Canadian pop star Kris Wu, has been detained by Beijing police on suspicion of rape. More than a dozen brands – including Louis Vuitton, Bulgari and Porsche – have severed ties with Wu and there are numerous calls for him to quit entertainment and leave China. His official WeChat, Douyin and Weibo accounts have been removed as well as hundreds of related Weibo communities. His songs have been deleted from online music libraries, and even his statue has been removed from Madame Tussauds Shanghai. The scandal has prompted China’s internet watchdog to attempt to rein in unruly celebrity fan culture.

Foreign Industry-Leading Companies Look Forward to Fifth CIIE in 2022, Confident in China’s Economic Outlook: 284 Fortune Global 500 and industry-leading firms have confirmed their participation in this November’s CIIE, surpassing last year’s number of participants. Over 80% of those who will present at this year’s exhibition are repeat attendees.

Online: Digital China

China’s Big Tech crackdown: WeChat’s Suspension of Sign-Ups Adds to Uncertainty: Chinese tech giant Tencent’s decision to suspend new user registrations for its ubiquitous WeChat app to conduct a security upgrade has raised fresh concerns about the intensity and depth of Beijing’s regulatory push into the tech sector. Tencent Music, China’s largest music platform, has also been barred from exclusive rights on online music and gaming appears to be next on the list as the crackdown becomes more widespread.

Alibaba, JD and Meituan Singled Out for Fake Reviews: China’s market regulator has singled out more than 10 internet companies for criticism over unfair competition in the form of fake reviews and other spurious information designed to win consumers’ trust. Dianping, Tmall and JD were all listed as offenders by the State Administration for Market Regulation.

Apple Reports Record Quarter as China Sales Jump 58%: Apple’s total revenue in Greater China last quarter grew 58.2% year-over-year jump to $14.8 billion, accounting for 18.2% of the company’s revenue. Globally, revenue was up 36.4%. The company noted that there were plenty of new customers coming to the market in China.

Premium Food & Beverage

Data-driven Iteration Helped China’s Genki Forest Become a $6B Beverage Giant in 5 Years: Genki Forest’s sugar-free sodas, milk teas and energy drinks sell in 40 countries and generated revenue of about $450 million in 2020. The company aims to reach $1.2 billion this year. It is one of a new wave of Chinese brands that take advantage of the proximity to an advanced, flexible manufacturing network and supply chain for the vast majority of consumer products, and the ability to outsource almost everything to them.

How the Chilli Pepper Conquered China: From a salt substitute in China’s impoverished southwest to a fixture on tables nationwide, chilli peppers have come a long way over the past 400 years. To an extent, the pepper became a symbol of the spirit of the Communist Party of China itself: red, fiery, rebellious. There are few items that McDonalds hasn’t tried spicing up over the years – the spicy chicken burger and Spicy McWings are among its most popular menu items, but the chilli oil sundae wasn’t such a hit.

2021 China Dairy Top 20 Summit Held in Hefei: The theme of the summit was the goal of securing supply and safety and promoting dual circulation. Supply-side structural reform is vital for lifting the Chinese dairy industry to a new height during the 14th Five-year Plan period. Chinese milk production grew 7.5% in 2020.

Overseas Chinese Tourists

Personalized, Customized Travels a Niche in Nation: Personalised or customised travels, emerging niche destinations, as well as safe and flexible tours, are expected to gain popularity among Chinese tourists in the second half of 2021, according to an AirBnB China survey. 45% of respondents have booked at least one trip in the second half of the year. People plan to spend about eight days on their summer trips on average. 70% considered homestays or short-term rentals as accommodation for summer travels, and cleanliness and safety of rooms are the top priorities.

Video & Entertainment

IMAX Reports Significant Profitability Turnaround in China: Strong first-half revenue and earnings have returned IMAX China to near-2019 levels. 2021 started on a strong note with record-breaking New Year’s Day and Chinese New Year opening weekend box office, and continued network growth and expansion in new theatre signings. By 30 June there were 759 systems in the IMAX theatre network in Greater China.

Overall Beauty

Korean Skincare Loses its Edge as Chinese Embrace Luxury Western Brands and Global Customers Seek Simpler Routines: While K-pop and K-dramas are still going strong, the shine is wearing off K-beauty – Korean skincare is increasingly seen as too complicated and convoluted – consumers have become more focused on skincare rather than beauty regimes. Chinese consumers are buying Western and Japanese brands in Hainan instead of going to South Korea. Innisfree is being pulled from the US and China and Sephora has stopped promoting K-beauty with the fervour it once did.

Hair Growth Industry Invests in Acquiring Customers, Needs a More Mature Business Model: Analysts: China’s hair care market is booming with about 250 million people in the country suffering from various stages of hair loss. More and more young people are beset by early onset hair loss, and are willing to pay to redress the problem. The medical service market for China’s hair care reached ¥18.4 billion yuan ($2.84 billion) in 2020, and is expected to grow 22.3% annually until 2030.