This week’s news and trends in China:
China GDP: Economic Recovery Stalls, Growth Slows to 4.9% in Third Quarter: China’s economy grew by 4.9% year-on-year in the third quarter, down from the 7.9% growth seen in the second quarter. Retail sales grew by 4.4% in September, up from the 2.5% increase in August. In the first three quarters of the year, China’s economy grew by 9.8% from a year earlier, with consumption contributing 64.8%, investment 15.6% and exports 19.5%. China has set an economic growth target of “above 6%” for 2021 after it grew by 2.3% last year. China created 10.45 million new urban jobs in the first nine months of the year.
In Flex of Political Muscle, Xi Pushes through Controversial Property Tax: China’s new five-year pilot program for property taxes is thin on details, but Beijing is hoping it is a way to safely and smoothly deflate the real estate bubble. Residential properties in China are 30% higher per square metre than the US, even though the United States’ per capita income is nearly four times higher than China’s in relative terms. Chinese home prices have grown over 2,000% since the 1990s.
Maximising Sales and Impact on the 11.11 Shopping Festival: The 23-day shopping festival kicked off last week with pre-sales, presenting plenty of opportunities and challenges for brands. Alibaba says the emphasis of this year’s event will be on sustainability and inclusiveness, alongside new approaches to social shopping. Tmall will be offering ¥100m ($16 million) worth of vouchers for ‘green’ purchases, such as energy-efficient and low-impact products. A new ‘senior mode’ is designed to make shopping online easier for older people, with features including voice-assisted technology, simpler navigation and larger font sizes and icons.
The Older Chinese Consumers Turning Silver into Ecommerce Gold: In the first three quarters of this year, online purchases by the silver-haired demographic grew almost fivefold year-on-year according to JD, with users spending on leisure goods, such as gardening supplies and package tours. Over half of the goods catering to the elderly were bought by users themselves this year. 123.3 million 60+ users were active online as of June, more than double the 60.6 million in March last year. The 2021-25 five-year plan lists development of the “silver economy” as a goal and mainland policymakers have begun to implement measures to ensure websites and apps are more accessible to older users.
Top Chinese Livestreamer Sells Nearly US$2 billion of Goods in 12 Hours in Run Up to Singles’ Day Shopping Festival: Austin Li, also known as “lipstick brother”, pre-sold $1.9 billion in products in a marathon 12-hour live-stream. The show attracted nearly 250 million views – a record for any show livestreamed on Alibaba’s Taobao online marketplace.
It’s Not Just Facebook – China’s Big Tech Firms Like Alibaba and Tencent are also Piling into the Metaverse: Social media giant Facebook has thrust the metaverse into the limelight, reportedly going as far as planning to change its name to reflect its focus on the concept. The buzzword refers to shared virtual spaces that people can access via the internet using VR and AR devices. Tencent is set to sharpen its focus on developments in the metaverse space with a new gaming studio. ByteDance is also seen to be taking steps into the space with the acquisition of VR startup Pico Interactive. Alibaba, has registered several related trademarks – including “Ali Metaverse.”
Catering Sector Changes Tack to Embrace Diverse Needs of Young Chinese Consumers: Several unique emerging businesses have sprung up across China to meet the diverse dining needs of young Chinese consumers offering a plethora of dining experiences, focusing on relaxation after work or spending quality time with friends. There are many restaurants nowadays in China that offer costume services.
From Moscow with Love: How the City’s Confectioners Won Over Foreign Consumers: Russian sweet brand Khlebprom’s launch in China required in-depth analysis of consumer habits. Chinese consumers eat on the go and prefer products in smaller packages, with the company offering cakes in 100-gram packages instead of the traditional 400 grams. Consumers’ palate differences were clear, with many traditionally popular flavours considered too sweet by Chinese tasters who showed an unexpected interest in fig flavours.
Where Have China’s ‘Tiger’ Parents Gone?: Chinese parenting norms have become much less discipline-focused in recent decades, but an increased focus on raising good, well-adjusted kids sometimes clashes with the reality of life in a highly competitive society. The “tiger mother” archetype capitalises on and reinforced certain long-held Western stereotypes about Chinese people. Within China, however, these stereotypes feel increasingly out of date.
Beijing 2022 Winter Olympics: China Unveils Physical Fitness and Exercise Overhaul for Schools Ahead of Games: China is proposing schools run mandatory gym classes and for children to have at least one hour of sports every day. President Xi has repeatedly stressed the need to improve physical fitness in China amid rising obesity rates.
China Wipes Boston Celtics from NBA Broadcasts After Enes Kanter Slams Abuses in Tibet: The Boston Celtics are facing blowback in China after centre Enes Kanter posted a video on Twitter voicing his support for Tibetan independence. Tencent acted quickly, cutting the live broadcast of that night’s National Basketball Association game between the Celtics and the New York Knicks. Chinese social media was filled with angry fans calling for a boycott the following day. Kanter isn’t the only one getting less coverage in China, reputable Chinese business publication Caixin has been scrubbed from the approved list meaning that its articles cannot be reprinted by other outlets.
Birkin Bag Maker Hermes Shrugs Off China Slowdown, Sales Beat Forecasts: Hermes sales grew by 31% in the third quarter with the company saying that there was no impact so far in China following comments by Chinese leaders indicating plans to reduce wealth gaps in the country, including through property taxes. Recent quarters have seen an acceleration of store traffic, an improvement in conversion rates and an increase in average baskets. There are some clouds ahead though, as China’s plan to reform its consumption tax system will likely entail a hike in rates on luxury goods and products that use high energy or generate significant pollution according to CICC. The HK border may get a little busier.
China’s Latest Tourist Craze: Bright Pink Convertibles: In China’s vacation hotspots, a new fashion for “grammable” rental cars is flooding streets with colourful sports cars — and fuelling safety concerns. More than 20 businesses have set up shop to hire out brightly coloured convertibles to tourists in Dali, Yunnan alone.
BMW Missing Out On China’s Karaoke Fans Signals Digital Car Gap: Customers in China are demanding that sing-along apps work in new vehicles. Local manufacturers XPeng, Nio and BYD are besting Western rivals by offering models with karaoke microphones. The push extends beyond music, with Chinese buyers expecting seamless access to features like in-car payment and social-media connectivity. China is the biggest market for BMW as well as Volkswagen, accounting for 36% and 40% of sales.