This week’s news and trends in China:
Bored Chinese consumers spent a national holiday on a shopping spree in China’s Hawaii: Golden Week saw a 1.5% drop in domestic trips made during this period from a year ago to 515 million domestic trips, down on 782 million in 2019 and the lowest since 2014, as more people chose to stay home, either due to lockdowns, or to avoid the hassle of contact-tracing apps and Covid-19 tests. Tourism spending fell 4.7% from 2020. ‘Red tourism’ increased 33% from 2019 on the Lvmama platform, with reports of 20% of Red travellers under 25. During the first six days of the national day holiday, sales at nine duty-free shops in Hainan reached ¥1.63 billion ($254.4 million), a 75% increase from last year, and a 359% increase from 2019. China’s box office revenue reached around ¥4.2 billion ($650 million) as of Thursday, compared to around ¥4 billion for last year. Consumption spending on UnionPay increased 32% on last year.
China Lays Out New Guidelines Intended to Better Protect IP: China has announced plans to improve protection of intellectual property, including boosting compensation for losses resulting from violations, addressing a broad area where it often comes into conflict with the US. The guidelines would also accelerate legislation covering big data, artificial intelligence and gene technology.
Trade Mark and Brand Protection in China – the Importance of a Comprehensive Strategy: Things brand owners should consider for IP protection in China: file and file early; file for a Chinese character trade mark; copyright registration provides strong rights; and register the mark with the Chinese customs office. Rejection of applications or cancellation of registrations filed in bad faith is a relatively new tool.
Establishing Trademark Fame in the Digital Age: With digital channels such a big part of Chinese marketing strategies, it can be important to ensure mobile applications are protected and localised. Docketing evidence of online use and sales can also help for non-use cancellations of squatters. Adhering to brand style guides, both with internally-led communications and through influencers, helps to gradually build up a corporate image.
China’s Population Could Halve Within the Next 45 Years, New Study Warns: In 2019, the UN projected that China would still have around 1.3 billion people by 2065. New research from Xian Jiaotong University warned that the country’s population decline may have been severely underestimated. The UN’s forecasts were based on China’s fertility rate remaining at above 1.7 children, whereas in the 2020 census, birthrates were 25% lower. China now has more seniors than young people for the first time. In countries such as the US rising property prices helps birthrates, whereas in China, every ¥1,000 ($155) per square metre increase in property prices reduces the likelihood of having one child by 2%, and that of having two children by 5%.
Key Lessons From China Brand Failures: International brands often make the mistake of downplaying the local competition, who can compete very well on cost and supply chain operations. In China, many fashion brands still fall into the trap of bypassing the need to develop locally appropriate strategies. A lack of newness or stand-out appeal contributed to the downfall of many fashion retailers in China.
Chinese Consumers’ Perceptions and Demand for New Zealand Foods: A Post-COVID Perspective of Daigou: Research including over 200 daigou in New Zealand found many are seeing their business gradually recovering from the pandemic, yet two thirds of them were still performing worse, and only 9% performing better than before COVID-19.
China’s Hottest Social Media Accessory Is Best Served Cold: While China’s consumers are accustomed to unique ingredients, this summer’s must-have treats were more artistic than flavourful, as seemingly every scenic site, museum, or historical institution catered to status-hungry shoppers by rolling out social media-friendly ice cream bars.
Trending Ingredient: Kombu Seaweed, Pioneer in Salt Reduction: Kombu Seaweed is known for its rich, fresh flavour with much lower salt ratios than other food. 22% of Chinese consumers cited “low salt” as the top factor when purchasing food in 2020, up from 15% in 2019 according to Mintel research.
Yum China, Lavazza Group Plan for Faster Expansion of Lavazza Cafés: Yum China and Lavazza plan to open 1,000 Lavazza cafés in China by 2025. The Lavazza flagship store in Shanghai opened in April 2020 and was the first store outside of Italy. The concept has since grown to more than 20 stores in China across Shanghai, Hangzhou, Beijing and Guangzhou. The companies credited digital channels for playing an important role in Lavazza’s initial success — sales to Lavazza members accounted for around 50% of total sales for the first half of 2021. Meanwhile Starbucks has opened its first greener store outside of North America in Shanghai.
Food Oil Fraud: China Issues Warning About Adulterated and Blended Sesame Oils: The Chinese government has published new consumer guidelines focused on sesame oil, in which consumers have been warned to look out for adulterated or blended products over fears of food safety issues. Consumers have also been warned to only purchase sesame oil from dependable sources where they can sure the proper food safety certificates and licences have been obtained.
Universal Studio Beijing Launches Probe After Criticism Over Service Issues: Despite its roaring success since launching last month, Universal Studio Beijing has been facing criticism over service and hygiene issues from Chinese consumers, after a video blogger showed its Kung Fu Panda-themed hotel room – which charges around ¥2,800 ($434) a night – did not replace pillow cases with new ones or clean the toilet for new customers.
Chinese Travellers Embrace the Glamor and Glitz of Glamping: Tour operators say the comfortable style of camping became a popular vacation trend during national holidays.
I’ll Have a Side of Gucci With My Common Prosperity, Please: Common prosperity — the policy directive du jour of President Xi Jinping — won’t banish luxury goods from Chinese malls. But it will usher in a new era where watches are encrusted with fewer diamonds and logos no longer embellish jackets and jewellery. Luxury consumers who have held back spending are primarily doing so in anticipation of travelling – and spending – outside of China again. But one in 10 said they had been influenced by the government’s stance against excessive shows of wealth.
Rolls-Royce’s China Lesson About Engaging the Wrong Brand Endorsers: Rolls-Royce’s choice of brand endorser has cheapened the brand according to many owners.