Mark Tanner
19 July 2022 0 Comments

This week’s news and trends in China:

Consumers,  Chinese Consumers

China’s Economy Records Slowest Growth Since the Start of 2020: Covid lockdowns hit factories and consumer spending to see the economy expand by just 0.4% for the quarter ending June. The economy expanded 2.5% in the first half of this year. GDP growth has to accelerate to more than 7% in the second half to deliver annual growth of 5% for the whole year.

China’s Foreign Trade of Goods up 9.4% in First Half: China’s foreign trade of goods jumped 9.4% from 2021 to ¥19.8 trillion ($2.94 trillion) during the first half of the year. Exports rose 13.2% while imports increased 4.8%. Trade with ASEAN countries expanded 10.6%, the EU grew 7.5% and the US was up 11.7%.

Brands Apologize Quickly to China Consumers, Except on Xinjiang: Amid a rising wave of nationalism, Chinese shoppers have mounted at least 78 boycotts of foreign companies since 2016, more than six times the number seen in the preceding eight years. There was evidence of state support in nearly a third of all boycotts. More than 80% of companies apologised upon facing backlash for infringing on China’s territorial integrity, such as Taiwan, Tibet or Hong Kong. Only about a quarter did so after making a stance against sourcing products from Xinjiang. Companies from the US, Japan and France were the most frequently targeted. Those in the food and beverage, luxury goods and automotive sectors – especially ones with local Chinese alternatives – faced the most boycott calls. Firms should avoid “switching positions,” which is typically met with more severe criticism.

India will overtake China in 2023, says the UN: India is set to become the world’s most populous country next year, overtaking China with its 1.4 billion people, according to UN figures. More than half the growth we will see in the next 30 years will happen in just eight countries – the Democratic Republic of the Congo, Egypt, Ethiopia, India, Nigeria, Pakistan, the Philippines and Tanzania.

Swiss Army Knife Maker Victorinox Targets China’s Millennials and Gen Z with Digital Push, Personalised Products: Victorinox has been adapting to consumer trends, allowing buyers to personalise Swiss knives with engravings on the scale and blade.

Online: Digital China

Top 5 Chinese Search Engines & How They Work: 99.7% of Chinese access the web via their smartphone, versus 32.8% on a desktop and 28.2% on a laptop. Baidu controls more than 75% of the search engine market but only indexes sites with Chinese content, and prefers sites hosted in China. Sogou is number two with a 4.8% share.

China Introduces New Rules Governing Cross-Border Transfers of Data: From 1 September, many companies will have to seek approval before exporting data, increasing compliance and business costs. Companies processing data for key industries such as telecommunications, defence, energy and finance, in addition to parties with data of one million people or more; personal data of at least 100,000 people; or sensitive personal information of 10,000 people, must pass a security review. The definition of “important data” still lacks clarity.

China Was Seen as a Gold Mine For Western Tech Companies But Now They Are Leaving There Empty-Handed: It’s not just a case of showing up and saying you’re from overseas and then having success, it’s more complex, more competitive than it’s ever been.

Premium Food & Beverage

Adopt a Cow is Disrupting China’s Milk Industry with Online Sales and Pampered Cows: The company presents itself as taking extra special care of its cows, which are provided with imported fodder, deep well water, spa treatment, classical music, and herbal baths. In 2021, the company had revenue of ¥2.56 billion ($381.30 million), with almost 80% of its sales occurring online. Since launching on Tmall in 2018, the company has accumulated 10 million fans on the platform. The company now seeks to raise ¥1.85 billion ($275 million) through an IPO.

Overall Beauty

Skincare Brands Find an Eager New Customer in China: Men: Companies including Unilever and Shiseido are launching new skincare lines targeting male consumers, who are expected to increase spending on skincare and grooming products. Unilever’s EB39 line which launched in May is a luxury skincare brand designed for men and inspired by video games and the CyberPunk NFTs. Shiseido’s Sidekick uses natural ingredients targeting Gen-Z men. 86% of male consumers buy their skincare products online.

Staying Health

Former Herbalife China Executive Ordered to Pay Fine After Defaulting in SEC Case: The former China- head of Los Angeles-based dietary supplements company has been fined about $550K for paying bribes to help obtain licenses and to fend of government investigations. He was alleged to pay off officials at state media to quash negative coverage of the company.

Cute, Fluffy Pets

The Rise of China’s Fluffiest New Economy: In the first 5 months of the year, sales of smart pet toys increased by 80% year-on-year on JD, smart water dispensers grew 84%, while smart cat litter box search volume jumped by 267%. From non-alcoholic dog beers to post-modern pet furniture, pet humanization – also known as anthropomorphization – is another emerging trend in the pet industry.

Overseas Chinese Tourists

China Cranks Up International Flights as Covid Limits Ease: China plans to gradually increase international flights after health authorities eased quarantine requirements for overseas travellers last month. A number of domestic and international carriers resumed flights to China in recent days. Over the past two-weeks, tourist-based bookings increased 9-fold on Ctrip from the previous two weeks.

Schooling and Education

Chinese Students Now Biggest Foreign Market for UK Universities: Chinese students are now by far the biggest overseas market for UK universities, with the number of applicants up almost 60% in three years to a record 31,400. The European Union, which was the biggest source of overseas demand before last year, fell 54% to 23,160 between 2019 and 2022.