This week’s news and trends in China:
Consumers in China Shift Focus from Instant Gratification to Longer-term Value: Chinese consumers have entered a new phase marked by increasing sophistication and prudence, a bent towards sustainability, and the pursuit of work-life balance according to an Accenture study. Although family continues to play a central role, there has been a rise of the “me” economy. Convenience is a growing priority.
Australia’s Defence Minister Meets Chinese Counterpart, Marking the End of a Two-Year Diplomatic Freeze: Taking place on the sideline of the Shangri-La security summit, Defence Minister Richard Marles’ meeting with General Wei Fenghe marked the first high-level contact with Australia’s biggest trading partner since January 2020. The meeting is seen as a critical first step that could pave the way for more high-level talks between the two countries. In related news, China’s Foreign Minister, Wang Yi, held a virtual meeting with his New Zealand counterpart, Nanaia Mahuta, on Monday.
5th CIIE to be Held Offline, On-Schedule: Exhibitors have signed up to over 75% of exhibition space. The expo bureau will roll out special supportive measures for eligible exhibitors, such as fee relief for booth building, and will extend the sign-up period to July 31.
Urbanization Rate Exceeds 70% in Eight Chinese Provincial Regions: Beijing, Shanghai and Tianjin have urbanisation rates above 80% with Guangdong, Jiangsu, Zhejiang, Liaoning and Chongqing above 70%. Ten provinces logged urbanisation rates below 60%. Last year, China’s urban population reached 914.3 million with an urbanization rate of 64.7%. To learn more about China’s urban areas, try China Skinny’s free City Tier tool.
Photos: ‘Gaokao’ in the Shadow of COVID: Last week’s national college entrance examinations saw a record of 11.93 million students taking it – 1.15 million more than last year. It is the third year under the shadow of the pandemic. Meanwhile, an estimated 10.76 million will graduate from universities this year, an increase of 1.67 million compared to 2021.
Record Numbers take China’s Gaokao with AI a Popular Career Choice: Artificial intelligence topped the list of 10 most-searched majors, followed by mechanical engineering, electrical engineering & automation, and big data technology, according to the data. Biomedical engineering, and health services & management made the list as awareness of health management increases.
As Life in China Returns to Normal, Food Delivery Platforms Face a Slowdown: While the second wave of zero-COVID lockdowns in China have proved beneficial for food delivery platforms, a number of factors—including limited customer loyalty, price wars, and a poor customer experience—could hurt their efforts to become permanently ingrained in users’ lives. That’s led platforms like MissFresh and Dingdong making investments in private label brands, expand their fresh produce offerings by teaming up with local suppliers, and move into prepared meals to capture additional revenues. In Aug 2021, 40% of consumers bought fresh food and beverage, and 16% bought groceries at least once a week. 11% bought sports products, 10% books and 10% toys, weekly.
JD’s Appetite for Ready Meals Biz Grows: JD said in the next three years, it will support 20 ready-to-cook, ready-to-heat and ready-to-eat meal brands, whose sales revenue is expected to surpass ¥100 million ($15 million), and five pre-made cuisine brands that are likely to see their turnover exceed ¥500 million ($75 million). JD’s support will be extended in areas like data flow, retail channels, marketing and cold chain logistics. There are about 5,000 varieties of ready-to-cook products at JD Super, with the transaction volume jumping 156% year-on-year in 2021.
Beyond Meat Hones in On Chinese Consumers With New Pork Sauces Launch: Beyond Meat has entered a new category, launching two Beyond Pork sauces to gain traction in the meal prep sector. Classic Bolognese and Savoury Black Pepper are confirmed and are now available through the company’s online Tmall store. Each sauce is slated to be suitable for multiple applications while delivering a protein hit. Both contain animal ingredients including added oyster sauce and chicken powder.
Starbucks to Have 6,000 Stores in China by the End of FY22: Starbucks is on track to surpass 6,000 stores in China this year, up from around 5,400 at present. It will continue construction of its China Coffee Innovation Park in Kunshan, Jiangsu Province. Starbucks was recently slapped with a ¥10,000 ($1,500) fine and barrage of barrage of negative airtime on social media after an inspector in Hanghzou found four boxes of expired coffee powder on its shelves selling for ¥69 ($10) each last December.
Nike to End Run Club App in China; Will Offer ‘Localised Solution’: Nike is discontinuing its popular Nike Run Club (NRC) App in China from July. It has not given a reason, but plans to provide Chinese runners with an “enhanced and localised solution in the future.” The app has more than 8 million users in China.
Shanghai Property Deals More Than Doubled After Lockdown: From May 30 to June 5, the transaction area of newly built residential buildings in Shanghai grew 142% from a week earlier, following policies making it easier to buy property and the end of the widespread lockdown measures.
As Luxury Resale Catches on in China, Investment Buying is on the Rise: China’s customers are paying more and more attention to the long-term investment value of luxury goods when they make purchases, signalling a new brand hierarchy in the region. On social media platforms, including Xiaohongshu (Little Red Book), customers are searching for products with terms such as “value preservation”, with bloggers ranking the long-term value of various brands and styles based on buying experience. They guide shoppers to the best brands and product styles to buy as investment pieces.
Head of Tmall Luxury Division on Chinese Luxury Consumers’ Shopping Habits: The general characteristics of Chinese luxury consumers are mobile-only, online-first. And they’re extremely digital-savvy. They make sure they’re always connected to the current events and always looking for the latest trends. The largest profile of spenders is Gen-Y who are 70% female. They come onto Tmall one out of four days on average, spending nearly ¥30,000 ($4,500) a year. They are interested in the latest products, trends and events. They place importance on services offered by brands. Gen-Z is the next most important, with features such as 3-D product displays and AR / VR try-ons particularly resonant with this profile.