A lot can happen in a year in China, and 2014 is a testament to that.  It was the year China’s face-kinis went global, girls with armpit hair went viral and Yao Ming’s campaign to save sharks helped fin soup sales dive 82% since 2012.  Over the past 12-months, China surpassed Japan to become the world’s second largest advertising market, with spending on online ads usurping television ads for the first time.  

Retail growth slowed a little this year, but still rose a respectable 12% in the first 9-months – two-thirds faster than GDP.  Not all segments have grown though; the Government’s crackdown on corruption, coupled with changing tastes, has seen mainstream luxury brands continue to struggle, while also giving the state-run media a wakeup call.

Smartphone usage has continued to soar, fundamentally altering the way Chinese consumers shop both online and offline.  42.6% of sales at this year’s record Singles’ Day festival on Tmall were by mobile, up from just 5% in 2012. More than 83% of online Chinese access the Internet from their phone, while many business’s China websites still remain unfriendly to mobile visitors.  WeChat strengthened its top standing for social media with a slew of new features, but not everyone is impressed.

Health is the word on most Chinese consumers’ lips with worsening pollution and countless food scandals from bean sprouts, to mineral water, to expired meat from the floor at Western fast food chains, driving demand for safe, imported food and beverage.

Ever-rising wealth, coupled with new FTAs, visa agreements and Government policies have made it easier for Chinese to travel, invest and migrate abroad. This aided China to become the first country to ever send 100 million tourists overseas in a year this November.  That growing wealth has also enabled more Chinese to get behind the wheel, with licensed drivers surpassing 300 million, collectively buying 23 million new vehicles this year – around 50% more than in the U.S.

There’s little doubt that 2015 will be another fascinating year in China with its share of curiosities and challenges, but no shortage of opportunities.  With Xmas next week, this is our last Weekly Skinny for the year.  We wish you the happiest of Festive Seasons and hope you enjoy the last Skinny until 2015.  圣诞节快乐！

 Chinese Consumers

‘Authentic Christmas’ in China – Another Shopping Holiday:  Whilst there are an estimated 100 million Christians in China – more than Communist Party members – and one ‘village’ in China produces 90% of the world’s festive supplies, Christmas is still typically observed as a shopping holiday by most Chinese.

Retail Traditions Hit a Wall at Wal-Mart China: With rental for commercial premises rising 3-5% a year and 10% in premium locations, and retail staffing costs up 10% a year over the past few years in China, Walmart is hurting as it grapples with the rise of ecommerce in China.

HSBC Asks: How Big is China?: IMF’s announcement earlier this year that the Chinese economy is the world’s largest based on purchasing power parity has been questioned by some. HSBC recently announced rankings based on measuring GDP in USD, concluding that the U.S. accounts for 22% of the world’s economy, versus China’s 11%. Although the U.S. reigns supreme on those measurements, there’s no disputing China’s rapid rise since 2000, when the U.S. accounted for 31% and China just 4%. China’s contribution to global growth will be double that of the U.S. next year.

What You Need to Know About the Global Ad Market: China has passed Japan to be the world’s largest ad market after the U.S. Whereas ad spending on TV globally is almost double that of the Internet, in China this year, ad spending on the Internet has surpassed TV. Red Bull spends 38% of its global ad budget in China; KFC’s owner Yum Brands 35.5%; Estée Lauder 29.2%; and Mars Inc. 25.9%

 Internet & Social Media

Does Social Media Influence Buying Decisions in China?: 68% of 26-35 year old Chinese consumers frequently make purchase decisions based on what what’s happening on their social networks versus 7% of Americans according to AT Kearney.

 Chinese Tourists

Luxury Hotels Chains Expand in China: Hotel chains such as JW Marriott and Sofitel are rapidly expanding into China’s Tier 2 and 3 cities. The Marriott is opening a new hotel each week in Asia and is expanding its China coverage from the current 16 cities to 59 cities by 2017. Chinese chains are increasingly moving into the space, with local developer Dalian Wanda looking to build 150 premium hotels globally by 2018.

New Transit Card to Ease Travel for China Tourists: More than 2 million Chinese tourists who visit Singapore each year can now pre-purchase a transit card using their Alipay account, with collection at the airport. Transport is a top concern for Chinese tourists, who prefer travelling by public transport overseas according to World Tourism Cities Federation.

 Food & Beverage

KFC Calls on Chinese Diners to Inspect its Kitchen: KFC is advertising on its placemats for tours of its kitchens and suppliers in a bid to restore faith in the safety of its chicken. KFC’s parent company Yum Brands plans to open 700 new restaurants in China in 2015.

Chinese Tests Find Quarter of Drinking Water ‘Substandard’: China Food and Drug Administration (CFDA) found excessive bacteria in 23% of purified drinking water products. Brands with unsafe water included China’s biggest drinks maker, Wahaha Group, as well as C’estbon Beverage Co Ltd and Danone SA’s Robust brand.

Digestibility Drives Yogurt Consumption in China: 80% of Chinese consumers seek probiotics as an ingredient when purchasing yoghurt, with 76% buying yoghurt for gut health benefits versus an average of 48% in US, Brazil, Turkey, Poland and France.

 Fashion

Abercrombie’s Still Having Its Heyday In China As American Teens Walk Away: As sales tumble in North America and Europe for Abercrombie, the rare bright spot is China. The company’s flagship store opening in April drew “huge crowds and strong sales”, exceeding forecasts and generating 500 million social media impressions and more than 30,000 new Weibo followers.

 Environment

Xiaomi Answers Jack Ma Pollution Jibe With Air Purifier: Just a month and a half since Jack Ma asked Xiaomi’s Lei Jun how much making a good smartphone mattered when the air and water were so bad, the company has announced a ¥899 ($145) air purifier. In related news, local purifier brand Baomi is following Xiaomi’s marketing model with flash sales, and U.S. company Alen looks to join as many as 300 competitors in China’s contested air purifier market, developing products tailored to China’s requirements.

 Insurance

Online Insurance Sales Growing Amongst Consumers in China: Over the past decade in China, 56% of insurance buyers purchased through an agent, 13% through a bank and 8% through insurers’ websites. Last year, that shifted to 23% through an agent, 13% through banks and 40% through insurers’ websites. Males make up a larger share of online purchasers and females dominate banks’ customers.

 Luxury

Consumption of Luxury Brands in China: 50% of luxury consumers in China plan to spend more on travel – the highest category according to IPSOS and Ruder Finn. 57% reported greater confidence in buying luxury goods online, but 78% of online shoppers still prefer to visit a physical store first. 90% of Tier-1 consumers affirmed the relevance of social media to their everyday life.

China’s Luxury Consumers Buy for Quality While Americans Seek Bargains: ‘Exclusivity’ is a purchase decision for 86% of Chinese luxury consumers, versus 51% of Americans. 81% use the web to research luxury products compared to 65% of Americans.

Tastes are Changing, but Appetites Remain Keen: Since 2008, 70-80% of global growth in the luxury sector has come from China. Spending on luxury by the rich will nearly quadruple between 2012 and 2020, according to Exane BNP Paribas. Female’s share of luxury purchases in China have gone from around 10% in 1995 to 50% last year.

That’s the Skinny for the week!  See previous newsletter here.  If you have any comments and suggestions about our newsletter, please contact us at newsletter@chinaskinny.com. 

The post 2014 Marketing in China: The Year That Was appeared first on China Skinny.

China Skinny wishes you a happy 2015; we hope you saw it in with a bang!  The beginning of the year is often a time to plan ahead for the following 12-months. Whether you are already in China, or entering this year, here are a few points to keep in mind:

1. Strive to Understand Chinese Consumers

Understand who your consumers are. Where do they shop? What will catch their attention? How have businesses been successful with similar products and target markets? In addition to the answers to these questions, understand that Chinese consumers are becoming more sophisticated and diverse each day. Just because a foreign business is present in China does not mean they will succeed, especially with the growing competition – not only from foreign brands but also from homegrown brands

2. Be Bold

Entering China with an online-only strategy has worked nicely for some but it is not going to work for everyone, especially those with low to moderate brand recognition. How are you going to make a splash and get noticed? Chinese consumers are not limited in their options as more imported goods and services attempt to attract their wallets. How will you stand out? Not every organisation or company may have the means to open a store, but how about a pop-up store? Or can you join a road show to exhibit your goods? Combining offline efforts with digital efforts is one way to smartly and efficiently capitalise on opportunities in China. There are ways to make a buzz beyond store openings, one just has to be smart about it.

3. Venture Out

First and second tier cities are fun and exciting, with their bright lights and big malls, but they’re becoming very crowded. Is there a place for your goods or services outside of the major cities – the most landlocked province in China was the number one seller of bikinis online per capita!  Provinces in China differ enormously so trying to tackle a population as large as China’s with a single countrywide strategy can be difficult, if not impossible. Geographical differentiation needs to be taken into account and regional strategies should to be considered to maximise available opportunities and provide consumers with relevant products, services and messaging.

4. Be Committed and Flexible

China changes fast. Entering China and getting setting up is only the first step to tackling China. To succeed in China you must not only be committed but also informed on the constant changes that happen in China. A long-term strategy that is flexible is fundamental when entering China. 

5. Keep it Real!

Stay true to your brand. In a low-trust society such as China it is vital to stick to your foundation. Attempting to change your brand to satisfy someone’s notion of what appeals to Chinese shoppers often backfires in the medium term. Understand your market, the available opportunities, and how your products or services best fit into that market. There are ways to localise and appeal to Chinese consumers while still remaining true to your brand. Presenting your brand as authentic and retaining your roots while taking a China-fied approach has a more sustainable chance of success than changing your brand’s identity.

China isn’t easy by any measure, but keeping these five points in mind will ensure your business is well placed to maximise the opportunities that China presents. All the best for 2015 in China!

The post 5 Key Points for China Strategy in 2015 appeared first on China Skinny.

Happy 2015; we hope the year has started well for you.  Unfortunately it wasn’t that way for some – our hearts go out to the friends and families of the 36 young Chinese who died during the New Year’s Eve celebrations on the Bund here in Shanghai.

With every New Year comes the slew of forecasts for the next 12-months. One prediction that hasn’t gone amiss is the continued rise of mobiles as an integral part of Chinese consumers’ lives.  Just look to the 83% of online Chinese using their smartphones, the 468 million active WeChat users in Q3 2014 and mobile shopping accounting for 54% of transactions on Alibaba’s Alipay.

However, if we dig a little deeper, there are some notable variations in mobile habits between different regions.  Mobile commerce – the next evolution of online shopping – is actually much more popular in China’s developing cities than in the sophisticated Tier-1 cities.  Shanghainese consumers used mobiles for less than a quarter of online shopping purchases in the first 10-months of 2014, whereas consumers in Shaanxi province bought 60% of their goods online via smartphones.

The variances illustrate how much mobile shopping has penetrated the fast-growing ‘smaller’ cities of China, largely due to limited fixed broadband infrastructure and slim pickings in high street stores.   It also represents how dissimilar the customer journey can be in different parts of China.

Looking beyond China’s biggest and most saturated cities to grow sales, and having different regional marketing tactics are two of the five points China Skinny recommends considering when making your 2015 plans for China.  As always, China Skinny can help ensure your plans maximise the opportunities in China – contact us today.  We hope you enjoy this week’s Skinny.

 Chinese Consumers

5 Key Points for China in 2015: Five points to keep in mind when refining your China plan for 2015.

The Power of the She-conomy: Chinese women have the largest amount of independence in handling their finances, with 76% of them having their own bank accounts, much higher than other Asian areas surveyed by the Economist Intelligence Unit. 69% of Chinese women prefer shopping online to physical stores. 63% bought products from abroad because they considered them better than those produced domestically.

Captive Audience: IKEA Lures Sleepers With Showroom in Beijing Airport: Nice brand building from Ikea, showcasing their products while providing Chinese consumers some real benefits.

Kingfisher Sells B&Q China Stake as DIY Fails to Take Off: B&Q’s 39 outlets in China are now 70% owned by Beijing-based Wumei Holdings. Cheap labour to do odd jobs around the home, a lack of interest in DIY from Chinese, and not adapting to the Chinese market has seen B&Q struggle in China.

China’s Best Ads in 2014: 46 minute vid: Three creative directors share their thoughts on the best ads of 2014 for China.

 Internet, eCommerce & Mobile

Alipay Report Shows Mobile Commerce Booming in China: 54% of transactions conducted over Alibaba’s Alipay were made on a mobile for the first 10-months of 2014, up from 22% in 2013. Mobile payments had the highest penetration in remote Western regions Tibet (62%), Shaanxi (60%) and Ningxia (58%), whereas the lowest mobile penetration was in the Tier-1 cities: Shanghai (24%), Guangzhou (27%) and Beijing (29%).

China’s Startup Sector is Effervescent With Peculiarities of its Own: Interesting analysis of China’s domestically-targeted startup scene versus India’s international focus. 109 Chinese companies are now listed on Nasdaq or the New York Stock Exchange versus eight Indian firms.

 Food & Beverage

Eight Officials Sacked After Pork from Diseased Pigs Sold for Food in China: Another food scandal for those who saw in the New Year with smoked ham or sausages – they could have been sourced from the estimated 70,000 diseased pigs processed each year in China.

Costco ‘Shocked’ by One-Day Sales of $3.5M on Alibaba’s Tmall Site: Costco will expand further into China after selling $3.5 million worth of goods online on Singles’ Day. Five of the top-10 European supermarket chains and more than 100 global merchants are lined up to join Tmall according to Alibaba.

A Glimpse Inside Hershey’s Innovation Centre in Shanghai: Although its Innovation Centre doesn’t look overly sleek, Hershey’s ensures it chocolates are localised to China’s unique preferences. With the average Swiss consumer eating almost 1,000 times more chocolate the average Chinese consumer, there is plenty of room for growth.

 Chinese Tourists

Top 12 Chinese Outbound Travel Trends to Watch in 2015: A good roundup of trends in China’s tourism market: 1) A broader destination spread; 2) Visa-free access goes global; 3) Chinese firms buy more tourism assets; 4) A surge in strategic agreements; 5) The rise of the Chinese hotel brand; 6) Secondary airports take centre stage; 7) Big year for Brand USA; 8) Cruising at high speed; 9) Keep an eye on Africa; 10) Better profiling and market analysis; 11) Travel niches ready for take-off; and 12) Consumer marketing extends beyond UnionPay.

InterContinental Rolls Out New Hualuxe Hotel Brand for China: InterContinental Hotels Group, the world’s largest hotel group, is opening its first China-specific brand, Hualuxe, with hotels in more than 100 Chinese cities plus overseas locations planned over the next 15-20 years.

 Beauty

Shiseido Aims to Double China Sales With More Local Execs, Ecommerce: “China store sales are expected to rise between 5-10% but it’s in e-commerce, that we see an extraordinary opportunity,” Masahiko Uotani, CEO explaining how Shiseido will double sales in China by 2020.

 Investments

Surging Chinese Investment Overseas Has Widespread Global Impact, Especially For The Hospitality Industry: How things have changed in a year for Chinese investment – particularly in the tourism and hospitality, real estate and food industries.

 Luxury

Exclusive, Mobile, And Global: The China Luxury Market’s Top 5 Trends of 2014: How the luxury segment panned out for the year: 1) China’s luxury consumers more global than ever; 2) “New normal” domestic growth here to stay; 3) Individualism in high demand; 4) Brands worked to prevent overexposure; and 5) Luxury consumers go mobile.

That’s the Skinny for the week! See previous newsletter here. Contact China Skinny for marketing, research and digital advice and implementation.

The post China’s Mobile Commerce Habits: Surprising and Varied appeared first on China Skinny.

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China’s fixation with Hollywood movies has driven American culture in the Mainland and helped many Western brands along the way.  It’s aided Nike to become the top-selling and most loyally followed fashion brand in China.  It’s why many consumers are prepared to pay ¥27 ($4.40) for a medium sized Starbuck’s latte – a third more than the equivalent cup in Chicago, and why planes are full of Chinese tourists visiting their favourite movie settings around the globe. 

While Beijing tries to limit Hollywood’s influence by restricting the number of foreign films shown to 34 a year, those blockbusters, coupled with the billions of pirated Western movie downloads every year, have penetrated China’s consumer culture. 

Hollywood’s reign doesn’t go unchallenged in the Mainland.  The sway of South Korea’s and Hong Kong’s popular culture is strong, as is the rising home-grown movie scene.  Domestic films’ share of China’s box office grew from 47.6% in 2012 to 54.5% in 2014.  Even with it the declining share, Western movies’ total revenue rose 60% in 2014 on the back of soaring growth.

Box office revenue in February this year saw China overtake the U.S. for the first month ever, helped by the 1,000 new cinemas that opened in 2014.  That momentum continued in March, with takings 73% higher than in 2014.  Chinese consumers spent more on movie tickets in the first three months of this year than all of 2010, and earlier this month, Fast & Furious 7’s release in China almost doubled the previous opening day record and broke the $250 million mark in just eight days.

China’s box office growth and influence has caught the attention of some of China’s wealthiest and highest profile individuals, including Alibaba’s Jack Ma, Tencent’s Pony Ma and Dalian Wanda Groups’ Wang Jianlin, who are investing billions into China’s movie industry.  Its allure has also tempted industry execs from all corners, with Hollywood  inserting ever-more Chinese actors and backdrops into its blockbusters, Netflix pressing on with its China launch, and the world’s biggest short film making contest, My RØDE Reel, allowing budding film makers to concurrently enter on Youku and Youtube for the first time this year. 

Depsite the growth of the local film industry, it’s unlikely Hollywood will lose its stature in China any time soon, which is good news for foreign brands who cleverly tie in Western cultural elements.   Contact China Skinny for help with that.  We hope you enjoy this week’s Skinny.

 Chinese Consumers

What Are China’s Shenzhen Shoppers Buying in Hong Kong?: HK is restricting Mainlanders with multi-entry visas to one visit a week. Goldman Sachs expects trips to Hong Kong to shrink by 4.6 million a year – 10% of total Mainland visitors – and reduce retail sales by 2%. Around 90% of multi-entry visas are used by day trippers who go to buy cosmetics, food, alcohol and tobacco, with Hong Kong goods typically considered safer and cheaper.

Once-Prized Tibetan Mastiffs Are Discarded as Fad Ends in China: Sales of another luxury item have been hit by China’s austerity campaign and fakes – Tibetan Mastiffs. The breed once sold for as much as $200,000 in China, with some even having plastic surgery to increase their value.  Nowadays, there are reports of the surplus pooches headed to the slaughter house to be used in hot pots and as glove liners.

 Entertainment

‘Furious 7′ Shows Rise of China’s Consumer: Fast and Furious 7 has smashed the record for China’s biggest one-day box office takings at $63.2 million, doubling the previous record holder Transformers 4, further reinforcing China’s move to a consumption-based economy.

Netflix CEO Says Will Stick With Ad-Free Model in China Push: Netflix is pursuing a subscription video streaming service without commercials for the Chinese market, keeping with its traditional subscription model. It will be a tough sell with Chinese consumers used to watching entertainment for free that is either supported by ads or illegally pirated.

 Internet, eCommerce, Social Media & Mobile

JD.com Making it Easier for Foreign Brands to Sell Directly to Chinese Consumers: JD Worldwide is allowing foreign brands, and even eBay vendors, sell directly to its 97 million active users. The runaway demand for cross-border eCommerce in China is outstripping supply of bonded logistics space. 

Unsafe Product Alert: Be Very, Very Careful What You Buy on WeChat: WeChat’s aspirations to challenge Alibaba’s leadership for online shopping have taken a step backwards following a damning CCTV report about dodgy facial cleansing masks bought on the platform. The masks had 6,000 times more of the hormones than legally allowed. “Taobao has fake products but at least there’s platform supervision. On WeChat you just have to trust that [the seller] has a conscience. It’s unreliable,” one online commentator stated.

Is Apple Betting Big on The Chinese Market?: Chinese consumers are having a big influence on Apple’s product development with features such as big screens, gold iPhones, gold Macbooks, and $10,000 bling gold iWatches. If any market is going to buy the expensive gadgets, it’s China, with 73% of Chinese luxury watch buyers thinking the brand is most important, versus 38.7% in the U.S. and 50.1% worldwide. Downloads on Apple’s iOS in China have surpassed those in the U.S. for the first time. 

 Food & Beverage

Chinese Consumers’ Demand Drives Up Imported Food Sales: Sales of imported food to China grew 14% last year, almost three times FMCG’s 5.4% growth, with overseas purchases and online shopping the two fastest growing channels. 86.7% of urban Chinese families have bought imported food at least once according to Kantar. The biggest sales growth in China’s food and beverage sector came from tier three and four cities.

China Considers Ban on Infant Formula Ads:  China is considering banning mass media and public advertisements for its $18 billion infant milk formula market, in a bid to tackle low levels of breast feeding. This will further increase the importance of targeted digital media to reach mothers. Less than a third of babies are exclusively breastfed in China and the number is falling.

Make the Most of FTAs, Fonterra Executive Tells Farmers: “If you don’t have an offering, a proposition to take to consumers, one that will be wanted, then the free trade agreement has not a lot of use,” Fonterra advises at the Global Food Forum [subscription required].

Coke to Buy China Multi-Grain Drinks Maker for $400 Million: Coke is buying China’s Culiangwang, a drinks company that specialises in multi-grain beverages with flavors such as red bean, walnut and oats. Coke is hoping the acquisition will help bolster its disappointing 2% volume growth last year. Soda represents around 70% of Coke’s sales in China, but it is diversifying into faster growing categories such as plant-based protein drinks.

 Chinese Tourists

Chinese Affluents Research at Home Before Purchasing Abroad: Hurun Exec: China’s affluent consumers are underpinning the global luxury market and are unlikely to have their supremacy challenged in the next five years at least. Chinese luxury shoppers travelling abroad do a lot of research at home before they leave. Apple’s rise in the affluent consumer segment represents an increased desire for affordable luxury, particularly in the gifting space.

Understanding the Chinese LGBT Traveler: An estimated 40-70 million Chinese are lesbian, gay, bisexual or transgender. More than one-third of Chinese gay men surveyed online travelled abroad in the past year, with 72% preferring to travel with close friends, although 90% are reportedly married to women. Scenery, quality of food and culture influenced destination decisions the most.

 Luxury

Why eCommerce is the New Gold Standard for Jewelers: Greater China is now the larest market outside of the U.S. for online diamond and fine jewellery retailer Blue Nile, and it grew 37% last year. There are more than 10 million new Chinese brides each year, with many wanting traditional Western-style engagement rings.

 Auto

China Rethinks Its Car-Sales Model: China’s parallel car imports, or grey market, is having an impact on its auto industry, particularly at the high end. It reportedly contributed to BMW’s decision to reduce prices of its X5 an average of 14% across China last month.  At the other end of the market, a low pricing strategy has seen China-branded SUV sales more than double in the first quarter of 2015, to overtake foreign brands and hold 56% of the market.

That’s the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing, research and digital advice and implementation.

The post Hollywood’s Influence on Chinese Consumers appeared first on China Skinny.

Women power is nothing new in China.  From Empress Cixi, ruler of the Qing Dynasty to Chairman Mao proclaiming that “women hold up half the sky,” females have long contributed to all aspects of life in the Middle Kingdom.  In modern day China, their influence is ever-increasing.  Supporting the growth of female power, Alibaba is currently hosting their inaugural Global Conference on Women and Entrepreneurship in Hangzhou.  And rightly so, unlike many male-dominated tech companies globally, 40% of Alibaba’s employees are female.

As China’s women receive more equal employment and education opportunities, the playing field is flattening.  Today’s ladies have come to expect more than their predecessors.  Their influence is being felt on all levels including the consumer market.

Women’s average contribution to household income jumped from 20% in 1980 to 50% in 2013.  86% of Chinese mothers believe the future holds new opportunities and financial stability for their daughters, according to Nielsen.  With this blooming confidence, women now have a louder voice in financial decisions.  Women have become the CFO’s of the household, handling the purchasing decisions for everyday goods like family groceries and to big ticket items such as finances, electronics and even automobiles.

Of China’s huge population, 640 million are women consumers.  Not only are they shopping, but also creating change and driving China’s economy.  Whether it be dancing grandmas or online entrepreneurs the “She-era” is the backbone of the China century.  Capturing these women is going to take more than just being a foreign brand or feminine branding – slapping a pink label on a product doesn’t mean it will resonate with Chinese women.

Marketing to the modern woman in China is communicating with someone who is balancing work and family – which often consists of their parents and children.  Women in China, as elsewhere, are looking to streamline their lives and online shopping is one example of how they’re doing this.  86% of China’s internet users access through mobiles with women browsing and buying on their way to and from work and picking up the kids.

Consumers are not the same from province to province and of course vary even more between gender.  Whether you are targeting consumers from tier-1 cities or specific demographics such as young urban females, without understanding and speaking to consumer needs and desires, there is little chance of standing out in China’s fiercely competitive market.

Kudos to Alibaba for bringing women into the spotlight and raising the profile of women in China and abroad.  A stronger and more confident female market in China is good for the country, and for Alibaba.

If China Skinny can assist you in understanding or reaching a specific China market whether females, or another consumer segment, be in touch today.

The post The Empowered Female Market in China appeared first on China Skinny.

China is made of many unique markets.  Chinese consumers not only vary by geographical location but also by generation.  The young in China receive a lot of airtime, and for good reasons; but there is a consumer group in China that many brands, products and services are missing.

In China, the older generation often gets overlooked when it comes to foreign products and services. There are over 200 million Chinese over the age of 60, making China’s elderly population the largest in the world. This number is expected to rise to 243 million by 2020 and 400 million by 2050 according to China’s National Committee on Aging, yet this huge and growing segment remains relatively untapped and often wrongly marketed to. Life expectancy in China has risen from 40 years old in 1950 to around 70 years old today; with indications the trend towards longer life will continue.

The spending power of Chinese over 60 is not something to overlook. In 2014 elderly spending accounted for USD $643 billion or 8% of China’s GDP. This is expected to reach USD $17 trillion by the end of 2050. Well-intended but ineffective marketing highlighting and reinforcing the debilitating effects of aging are not going to make this group want to buy a product or service.

Chinese above 60 want to live their lives fully, and opportunities exist for well-marketed brands that can speak to these unique consumers. Whether it be about health products, health care, travel, investments, FMCG or fresh food and beverage, reaching and communicating with this target market is quite different than addressing the young and affluent.

In research China Skinny completed for a dairy product targeting elderly, one recurring theme was how to best reach this age group.  Not as active online as their younger counterparts, and often times less trusting, makes many traditional digital marketing tactics less effective.  Getting smart about targeted online channels and influencers can be effective. With this group not as familiar with foreign brands, Chinese brands have a foot up as of now, but there are ample opportunities for foreign goods and services.

One positive caveat is that like younger Chinese, older Chinese are becoming more aware of, interested in, and proactive about their health and are choosing products for health reasons. Products meeting these needs are often imported as they are usually trusted to be safer. Emphasizing this point from the younger to older Chinese is pragmatic but these are two different demographics that vary not only by age, but also by geographical location and a number of other factors.  For example, Mintel research found that 96% of Shanghainese 55 and older planned to eat more healthily compared to only 33% in Beijing.  That’s a huge variance and doing due diligence to fully understand your target market by both age and location will go a long way. If China Skinny can assist in market research or marketing execution be in touch today.

The post China’s Older Consumers appeared first on China Skinny.

With 55.2% of its 549 million monthly active users opening WeChat at least 10 times a day, the app is China’s most popular social network. Being perceived as the “Chinese Whatsapp”, WeChat offers far more features and many opportunities for brands to interact with their target market. Besides the regular user accounts, businesses can register official brand accounts to promote their products. Additionally, there are a number of functions that effectively support marketing to Chinese consumers. If you want to know more about how to effectively leverage those services, be in touch.

The post Infograph: WeChat’s Functions for Marketing appeared first on China Skinny.

The impact of the spectacular rise and fall of China’s stocks is anyone’s guess.  It would appear that China is imploding if you read some news reports – stories of a weaking China attracts readers in some countries.  Discuss it with Chinese consumers buying food for their kids in high end supermarkets, and they will shrug it off, unphased; China has made it through bigger economic challenges.

Of course some consumers will be feeling less confident, but it is unlikely to have the same impact on consumer spending as a crash would in markets like America.  In January this year, following a 122% rise in the Shanghai Composite Index over 12-months, retail sales grew at their slowest rate in five years.  At the time, just 6% of Chinese households owned stocks versus 55% of Americans.  The latest spike would have drawn a few more in with Beijing’s encouragement, but as a whole, fewer Chinese consumers gamble on stocks – China’s reputation for being conservative with their high savings is well deserved.  Although consumer investors make up a large portion of the owners of China’s stocks, their share of the overall market value is estimated to be 5% or less.

China needs healthy capital markets to finance the ongoing development of its economy, and will need a different approach to what we have seen recently.  Nevertheless, the biggest impact on consumption growth in both the US and China is wage growth, which has been rising faster than GDP in China.  IMF is keeping its pre-crash China GDP forecasts from April, as it believes China’s stock exchanges are so disconnected to the wider economy, and are small relative to the overall economy. 

The rate of growth across many categories is slowing in China, but that was happening before the market meltdown.  We expect Chinese consumers, particularly those born post-80s and 90s, will carry on in the consumer groove.  Consumption will continue increasing in areas such as premium food and beverage, tourism and experiences, health and wellbeing, affordable and some niche fashion, overseas investments and anything to do with the precious only child – food, clothing and education – just look at the 50% growth that Lego has experienced in China over the past two years, despite counterfeits costing a quarter of the price.  

China’s affluent and middle class base will continue to grow -an extra million USD millionaires came on board in China last year, despite the reports of doom and gloom.  One loser will be state media who have been cheerleading the stock market, further eroding trust in traditional media and driving even more consumers to objective digital channels.  We hope you enjoy this week’s Skinny.

 Chinese Consumers

The Chinese Stock Market and the Chinese Economy Have Literally Nothing To Do With Each Other: “We don’t see it as a major macroeconomic issue,” said IMF’s research chief Olivier Blanchard referring to China’s recent market meltdown, citing many examples of the disconnect between China’s stocks and its wider economy. Despite the recent drop, Shanghai stocks are still up more than 80% over the past year, and the Chinese stock market is small compared to the overall economy, the world’s second biggest.

Landmark Trademark Victory for Menswear Designer Michael Bastian in China: A trademark squatter has lost its ability to use the Michael Bastian brand that it registered in China.  It is the first time a trademark registration application has been rejected in China in favour of a non-Chinese individual or entity. Nice work Foley & Lardner!

Megalopolis: the Future of Urban Planning in China: A massive new economic area encompassing 100 million people living Beijing, Tianjin and the province of Hebei is likely to become a model for China’s future urbanisation. One joint plan will cover economic and social development; urban and rural planning; and land use for the area larger than Uruguay, with a population roughly the size of Japan.

Uber Said to Seek Up to $1 Billion Funds for China Carveout: Uber has been claiming a $7 to $8 billion valuation for its Chinese unit, which has been marred by police shutdowns and volatile regulations. Investments from local, Beijing-connected firms such as Baidu will help their cause.

Foreign Brands Losing Lustre in China: Local FMCG brands gained more ground than foreign brands last year, with local market share growth strongest in skincare, fabric softener, colour cosmetics and infant formula, juice and biscuits. Foreign brands increased their share in the toilet tissue, beer, chewing gum, hair conditioner and chocolate segments.

 Little Emperors

Lego Builds on Strong Success in China as Playful Children Discover Their Creative Side: Lego’s Mainland sales have surged more than 50% over the past two years as parents recognise that playing with interlocking plastic bricks boosts inventiveness.

 Internet, eCommerce & Mobile

A Significant Group of Consumers is Ditching Android for the iPhone: 53% of Chinese who own an iPhone switched from an Android according to a CLSA survey. 32% of Android users who plan to buy a new phone in the next 12 months will switch to the iPhone.  This is representative of Chinese consumers upgrading their products across a number of categories. It comes at a time when Android-based Samsung is facing more bad news in China, with lawsuits for loading its mobiles with unneeded and unwanted apps.

Chinese E-Commerce Loophole Set to Close: Many Western companies have been avoiding strict Chinese consumer laws, such as the requirements for animal testing, by selling to consumers for “personal use” directly via e-commerce. This loophole is likely to be closed by the Chinese Government.

 Food & Beverage

McDonald’s, KFC Go High-Tech In China With Customization, E-Payments: KFC is hoping to resonate more with China’s lucrative youth segment by accepting Alipay, rolling out Wifi and launching a menu app. Likewise, McDonald’s is piloting its “Create Your Taste” burger customisation in three Shanghai stores.

Top Chinese Wines Have Gone From Bad to Good. Will They Become Great?: China now has more acres of vineyards than France. Locally grown wines are getting more impressive too.

Xu Jinglei Being Sued for Making False Health Claims About Cookies: Actress and director Xu Jinglei is being sued for endorsing “river monkey mushroom stomach cookies,” claiming they are good for the stomach, when they are no different from other cookies.

JD.com’s Richard Liu Buys Into Australia’s Biggest Milk Processor Murray Goulburn: JD.com snapped up 4.6% of Australia’s dairy cooperative trust for A$20 million, not long after launching an “Australian Mall” on the platform while CEO Richard Liu was in Australia.

 Chinese Tourists

U.S. Tops Chinese Tourists’ Satisfaction List in Q2: Chinese travellers are most satisfied in the United States – 3.1 points higher than the average rating of 77.86 for 24 countries, according to a China Tourism Academy survey. Singapore topped Asia, with Mongolia and India reaching record highs. Complaints mainly focused on public services and travel agency services, such as a lack of Chinese translations of public information and poor transportation.

 Fashion

Opportunities for Growth In Challenging China Market: Chinese consumers expect to spend more on children’s clothing, women’s casual, shoes, men’s casual and health, beauty & accessories over the next 90 days according to analysis by Prosper China.

 Health

Have Chinese Consumers Started to Look Beyond Beauty Products?: By 2013, only 5 million Chinese women had some form of cosmetic surgery. By the end of this year, an estimated 7 million will have, and 11 million by 2018. 15% of Chinese women are considering using plastic surgery for anti-aging, with the highest rates in Tier 1 & 2 cities.

 Luxury

Eight Surprising Facts About The Chinese Luxury Consumer: Eight characteristics about Chinese luxury consumers: 1. They’re younger than you think; 2. They’re not as well off as you’d expect; 3. Most are married and have children; 4. They’re mobile natives; 5. They all have WeChat; 6. They prefer Chinese brand names; 7. They like to shop at retail; and 8. Alipay is an important method of purchase.

That’s the Skinny for the week! See previous newsletter here. Contact China Skinny for marketing, research and digital advice and implementation.

The post China’s Market Meltdown’s Effect On Consumer Spending appeared first on China Skinny.

Few markets have experienced changes in the way that China has over the past few decades.  

Just 35 years ago, more than four in five Chinese were living in the countryside, typically tending small, family-sized plots with animals and crops.  Now around half of the population live in city apartments, surrounded by conveniences that they could have only dreamt of a generation ago, and earning over three times what they would if they still lived rurally.  Since 1990, China’s average incomes have grown more than 10-fold, and those extra earnings usually only need to support one child, unlike the large families a few decades earlier. 

China’s social changes are almost matched by its market transformation. There were no foreign FMCG brands in China until 1979 when Coca Cola launched in the Middle Kingdom, although it was only allowed to sell to tourists.  Nowadays, China has truly become internationalised with products from Italy’s Moleskine stationary, to New Zealand apples, to Belgian beer all vying for China’s lucrative consumers’ wallets.  More than 500 new products launch every day on average in China.  

How Chinese learn about products and services has also transformed.  Until recently, propaganda messages made up the lion’s share of marketing in China.  Most consumers learnt about things through the traditional state-run media channels such as radio, newspapers and later, television.  Now the average urban Chinese consumer is bombarded by advertising messages across a wide range of mediums, unrivalled in other markets.  

China’s 668 million Internet users have become the most rampant users of social media and ecommerce globally, using online channels more than any other medium for research before and after buying things.  In addition, over 100 million Chinese travel and study abroad each year, and together with the networks they influence, have created a massive consumer population that is more aware, astute and internationally-minded than ever before.

Such remarkable social, economic and market changes have created a unique consumer class.  Their consumer journey and retail market are unlike the West and other Asian markets.  But there are also a number of fads, social habits, fashion trends and food that are a result of this dramatic change and China’s unique culture and history.  We’ve listed a few to give you a taste of just how different some Chinese consumer trends are. We hope you enjoy this week’s Skinny.

 Chinese Consumers

Buzzwords: Unique Chinese Consumer Trends: Those unique fads, social habits, fashion trends and food that all make China a little more interesting.

4 Strategies For Reaching The Chinese Consumer: As consumerism becomes more entrenched in China, companies will have to 1) segment more and more precisely; 2) extend modern trade channels and distribution networks to reach consumers outside the biggest cities; 3) communicate benefits of products that are unfamiliar to consumers; and 4) develop the products and services that are underpinning increases in consumer spending, and which remain relatively scarce in China.

Italy’s Luxury Firms Set Their Sights On China: On the back of a 44.7% increase in net income for the first half of 2015, high end notebook maker Moleskine will open most of its new stores in China in the second semester, a market it describes as “very interesting”.

19,470 Firms Sign Up For Three New FTZs: Three months since free trade pilot zones were launched in Tianjin, Guangdong and Fujian in April, almost 20,000 firms had signed up.

Big Brands Like Michael Jordan Are Still Losing Trademark Battles In China; Here’s How to Win: If you’re planning to launch a legal challenge against a trademark squatter in China, don’t delay, and register your Chinese brand name if you have one.

 Internet & Ecommerce

PayPal Aims to Connect More US Merchants with Chinese Consumers: One of two pieces of research by Paypal studied how Chinese consumers learn about products they purchase cross border. Search engines were the most common way, followed by word of mouth and social media.  Alibaba has just recruited a former vice chairman at Goldman Sacks to lead its cross border drive.  The company has partnered with Kobe Bryant to sell his documentary and products on Tmall.  

Apple Loses Top Market Share In China As Xiaomi And Huawei Take Over: After leading for two quarters, Apple has been beaten out of the top spot for market share in China by Xiaomi at 15.9% and Huawei at 15.7%. Apple’s share was estimated at 12.2%.

 Food & Beverage

What’s Going Wrong With Chinese Juice?: After accounting for 61% of global juice volume growth between 2009-2014, the volume of juice sales declined last year, with value only slightly growing. A few big safety scandals didn’t help.  There has also been an overall shift to healthier beverage options with better ingredients such as fortified/functional juices and reduced sugar juice.

China’s Top Wine And Beer E-Tailer Nabs $80M Funding To Get Everyone Drunk: Jiuxian adds $80 million funding to take its total funding to $225 million since 2011. It comes at a time when China overtook Japan to be the top consumer of Belgium beers in Asia, with imports growing 140% last year and 850% since 2008.

 Chinese Tourists

Ctrip Goes On A Round The World Trip: China’s largest online travel agent faces challenges in expanding globally, in addition to more aggressive domestic competitors backed by the big boys such as Tencent and Baidu. 53% of Chinese travelling internationally book on websites or over apps.

 Fashion

Fakes Are Costing Europe’s Fashion Industry 10% Of Its Sales And Thousands Of Jobs: Two thirds of the worlds fakes are said to originate in China, with Chinese counterfeits are estimated to cost European fashion brands €17.5 billion ($19.2 billion) a year and result in 242,000 lost jobs according to OHIM. Italy is the hardest hit, followed by Spain, the UK, Germany and France.

 Beauty

Chinese Consumers Most Satisfied With Their Looks Among Asians: 9.8% of Chinese consumers are completely satisfied with their looks, while 44% are fairly satisfied, making them the most contented among the AsiaPac countries surveyed by GfK.

 Banking

China’s Once High-Flying Internet Money Market Funds Are Now Barely Better Than Traditional Banks: Interest rates on Internet funds are less than half what they have been since 2013. In early 2014, Chinese International Capital Corp estimated that online money-market funds could soak up 8% of total consumer deposits in three years. Jack Ma’s Yu’ebao, is the market leader with more than $98 billion in assets and 200 million users to date.

 Auto

Chinese Consumers More Upbeat On Buying Cars: Despite the slowdown of car sales in China, 20.7% of respondents in an MNI Indicator survey said they were planning to buy a car in the next 12 months – the highest rate since the series began in March 2012.

 Luxury

Luxury Consumer Price Index Falls For First Time In Eight Years: Price declines in luxury properties, overseas trips and products drove the overall luxury price index down 1.8% this year according to Hurun. Yachts and private jets witnessed the largest price drops of 10.5%, as a result of foreign exchange differences.

That’s the Skinny for the week! See previous newsletter here. Contact China Skinny for marketing, research and digital advice and implementation.

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Relevant to Your Target Market

Timely Messages

Engaging Content

In Conclusion

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Relevant to Your Target Market

Timely Messages

Engaging Content

In Conclusion

The post Connecting with Chinese Consumers appeared first on China Skinny.

The post Baidu’s Domination in China appeared first on China Skinny.

The post China’s Heaving Population Just Officially Got Bigger appeared first on China Skinny.

The post The Interesting Undertones of Chinese Regulation appeared first on China Skinny.