China: At Least Two More Decades Of Grim Pollution
The China-U.S. Climate agreement signed at Apec last week is a positive step for the world, and China in particular. The unfortunate reality is that even if the commitments are delivered, China's pollution will continue to worsen until 2030. Beijing's toxic environment - earlier this year labelled 'almost uninhabitable for human beings', will continue to edge towards the unliveable, along with many other parts of the country.
Real estate developers and agents in big, clean Western cities will inevitably profit from the smog, as will their local schools. More Chinese will travel abroad to 'detox' in the fresh air, filling tourism operators' coffers. Yet the outlook for many urban Chinese - for the next two decades at least - is predominantly grey.
There's no easy answer to fix the pollution. Much of the focus appears to be on industry which contributes significantly to the emissions, but increasingly wealthy consumers are adding their bit as well. We can hardly expect Chinese consumers to stop buying the cars and clothes driers which we have enjoyed for years in the West. However more could be done using the almighty state media machine, digital marketing and influencers like the First Lady Peng Liyuan and other celebs, to educate the masses on individual accountability. The collective mass of hundreds of millions of consumers using their utilities more frugally and swapping their SUVs for energy efficient cars could make quite a difference. Likewise, insulation in Chinese homes could go a long way in helping the problem.
It's no secret that breathing foul air, eating unsafe food and the increasing stresses of urban living in China is bad for one's health, and that's reflected in consumer sentiment. Nielsen research released this month, further reiterates that Chinese consumers' top concern is their health - rated even higher than their income.
Chinese consumers are voting with their wallets and mobile phones. For example, consumers' desire for healthy characteristics in snack foods far exceeds the global average. The 15% annual growth of safe imported food, is almost triple the 5.7% growth of FMCG overall. Google's Fitness app swiftly rose to the top spot in China, outperforming any other market globally. Something to bear in mind for your products, services and positioning if you haven't already. We hope you enjoy the week's Skinny.
Chinese Consumers
Tony Abbott Seals Free Trade Deal with Beijing: Xi Jinping has had a busy week of deals, with Australia and China sealing a Free Trade Agreement after more than a decade of negotiations. Australian manufacturers, farmers, miners and the service sector, including finance and tourism industries, are believed to be among the biggest winners of the A$18 billion purse. "It's so far beyond what anyone expected that it looks to me to be more than just a trade deal with Australia but a statement by the Chinese government to the world," said Chief Executive of the Australian Services Roundtable Ian Birks. The growth of the Chinese middle class demanding safe imported food is expected to see Australia's 'Mining boom' transition to a 'Dining boom'.
Chinese Consumer Confidence Held Steady at 111 for the 4th Consecutive Quarter: Health remains the top concern of urban China (26%), followed by income (21%). Related issues such as healthcare (16%) and environment (11%) also ranked highly according to Nielsen. Consumers from Tier 3 cities are still highly influenced by price, with “seasonal discount”, “stable price” and “promotion” the top three reasons for consumers’ willingness to spend. Tier 2 consumers cited “financial status”, “convenience” and “promotion”.
Brands Succeed by Being Authentic: 4/5 Chinese consumers believe a brand should stand for more than just making money. 81% would be "extremely angry" if a company used low-quality ingredients in food when promoting a high-quality product. 64% of Chinese consumers say they'd be extremely angry if a company harmed the environment, versus 51% last year according to Cohn & Wolfe.
Using Cultural Cues in Social Media: Local sports brand Anta used online social masses to influence product design, with input into the Air Jordan-style logo to support their sponsorship of NBA player Louis Scola. Online communities came up with sì kè lā, which sounds like Scola, but also means 4-carat. A diamond incorporated with the number 4 became the logo, which also happened to be the number on Scola's shirt. Wonder if there were negative connotations with using four, which sounds like death and is unlucky in China.
Internet, eCommerce & Mobile
Singles' Day International: Buzz Around the World: Self-adhesive bras were in the top-5 most purchased goods from Brazil on Singles' Day, while American's were busy buying cheap ties. Of the 6.8 million goods ordered from abroad, there were some surprises in the most popular purchases.
Mobile Marketers Should Pay Attention to China: 81% of China's online tablet and smartphone users watch video clips on their devices at least once a week according to IAB. 76% of Chinese used their smartphone on public transport and 49% in cars. 62% of Chinese accessed a coupon (37% in the U.S.) and 55% researched a product or service (28% in the U.S.) on their smartphone.
WeChat Growth Slows Right Down As It Reaches 468 Million Monthly Active Users: WeChat's active users grew to 468 million between July and September - a respectable 30 million or 6.8% up from three months earlier, but down on the 10.6% growth from the previous quarter.
Food & Beverage
China Modern Dairy Plunges as Government Probes Cow TB : In the latest China food scandal, several of the 94 dairy cows sold by a unit of China Modern Dairy Holdings tested positive for bovine TB. Humans can be infected by bovine TB both by drinking raw milk from infected cattle or by inhaling infected droplets. China had around 96,000 new cases of human TB in September, and 151 related deaths, according to the National Health and Family Planning Commission. The breakdown of bovine TB cases was not specified.
Anxious Consumers Snap Up Safety Testing Kits : Many food safety test kits detecting poisons such as melamine in milk, artificial contaminants in red wine, hydrogen peroxide in pork, and pesticide residues in vegetables sell for less than $10 online, with about 70% accuracy. The kits are mainly being bought by consumers in Tier 1 and 2 cities.
Healthy Snacks in Demand in China: Chinese consumer demand for healthy snacks with the attributes such as 'no artificial colour' (58%), 'all natural' (54%), 'no artificial flavour' (54%), 'GMO-free' (53%) and 'organic' (45%) are all above the global average.
Health & Beauty
Google Fitness App Climbs to Top of China Rankings: Google Fit, an Android app that tracks activity and connects to health-monitoring devices, shot to number one on China app charts in a matter of days. The app peaked at 69 in the USA, 38 in the UK and 272 in Japan. Android accounted for 83.4% of smartphone sales in China versus 15.2% of iOS.
Environment
One Word, China: Insulation: During the 2000's nearly half of the world's new buildings were erected in China, yet only 5% of them met China’s energy efficiency standards. Back in 2009, buildings accounted for 28% of energy use. Given much of China experiences extreme weather, fixing China's uninsulated concrete boxes with single pane windows probably could do a lot for electricity-generation caused pollution.
Chinese Tourists
New Visa Rules Expected to Boost U.S.-China Tourism, Investment: Another deal concluded at last week's APEC will extend some business and tourist visas between China and the U.S. from the current 1-year to 10-years. Last year's 1.8 million Chinese tourists to the U.S. could grow to as much as 7.5 million by 2021 under the new scheme. More than 10,000 people currently travel between China and the U.S. every day.
Auto
Newest Toy for China’s Rich Is the SUV Lined in Sharkskin: Latvia's Dartz Motorz hopes to lure a few of China's nouveau rich with their new Prombron Black Shark. Costing more than a million dollars, the SUV sports armour-plating, crowd-suppression lasers and anti-paparazzi electrified door handles, with shark and ostrich skin interiors. Overall SUV sales in China grew 37% over the past year.
Luxury
Tmall’s ‘Premiumization’ Slowly But Surely Snags Global Brands: Tmall hasn't been a great channel for premium brands in the past, but a few are following Burberry's lead and creating a presence such as Calvin Klein, Ports 1961, Fossil and Citizen - possibly inspired by the wholesale removal of Burberry fakes from Taobao after the brand launched. Luxury jewellers, high end beauty products and expensive cars are also present on the platform.
That's the Skinny for the week! On the to-dos this week, why not contact China Skinny to discuss how we could help with your marketing, online initiatives or research to take advantage of China's opportunities. Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.
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