Testing China Through Cross Border Ecommerce
China's online shoppers are showing the stamina of Ironmen. Less than three weeks after the Single's Day frenzy, they were tapping and clicking up a storm for America's Black Friday. Shopper's Fatigue? Not the Chinese.
A recent Nielsen survey found 38% of shoppers in Tier 1 cities, and 27% in Tier 2 currently make cross border purchases online. This was confirmed on Single's Day, when a third of all shoppers bought goods from an international brand or merchant. 88% of respondents are interested in buying from overseas next year according to Nielsen.
It's hard for Chinese shoppers to miss America's version for Single's Day. Black Friday ads have been sprouting up across the major online platforms including QQ, Baidu, Taobao, Alipay and even Ctrip.
The #2015BlackFriday# hashtag on Weibo inspired 150,000 discussions and 450 million views by yesterday. Over 50,000 articles bombarded WeChat users covering deals and purchasing guides. In the week leading up to Black Friday, there were around 90,000 searches a day on Taobao for Black Friday, many looking for dàigòu - shopping agents, who could buy the discounted goods in the U.S.
Yet just having discounted goods is no sure way to attract Chinese shoppers. For a start, they need to be able to pay using the systems they like, such as Alipay. By far the fastest-growing Black Friday related search terms on Baidu were 'Alipay Black Friday' which grew 41,400% in the week and 'Black Friday Alipay' which grew 6,700%. Transactions through Alipay grew 700% on last year.
Cross border commerce is a great way to test if Chinese consumers want your goods before investing in a market entry. For example, boutique NY fashion house Otte opened a store in Shanghai after discovering China's hearty appetite for their clothes, with over 50% of their export sales going to the Mainland. It's a low-risk approach to test the market. As a starting point, contact China Skinny for a site audit to ensure your store and site are optimised to reach Chinese.
Here are this week's news and highlights for China:
Chinese Consumers
Who Are Winning More Chinese Consumers in 2015?: P&G is the top performing FMCG company in China for coverage, reaching 153 million households - 2.1% more than last year. Nestle, Unilever, Coca Cola, Mars, Mondalez and Colgate are the other foreign brands to make the top-10.
China Consumer Trends 2016: Mintel's picks for the trends set to make an impact in 2016: 1. O2O, redefined; 2. Interactive now; 3. Women only; and 4. Conscious health. 74 page report.
Internet, Mobiles, Social Media & Ecommerce
China's Cross-Border Online Shoppers are Increasingly Mature
China's online shoppers spend 176% more per purchase when buying from overseas than domestically. 11% make purchases over ¥5,000 ($782) and a quarter spend between ¥1,000-3,000 ($156-$469) per international purchase according to Nielsen.
UK is World's Third Largest Online Exporter - Thanks to Chinese Shoppers
21.9 million Chinese have bought goods online from the UK. 59% bought British clothing, footwear and accessories in the last year, while 57% bought beauty products and 42% bought UK groceries, food, drink and alcohol. More than half of Chinese shoppers return to a website they have used before.
Sina Posts Higher Revenue, Driven by Weibo:
Weibo's users active in September grew 33% from a year earlier to 222 million. Daily active users topped 100 million - 30% more than in 2014.
Young Chinese Big Users of Cell Phones:
Online Chinese aged 16-30 spend 3.9 hours a day on their mobiles. They spend just 0.8 hours watching TV, reading newspapers and listening to the radio, versus 2.3 hours for consumers aged 46-65.
Food & Beverage
Whittard of Chelsea to Sell Tea to China:
The 129-year-old British retailer is considering opening stores in China and on Tmall. It has seen customers from the Mainland double in the past two years, with Earl Grey plus fruit and herbal infusions particularly popular with Chinese consumers.
Australian Macadamias: Powerful First Impression in China:
Australian macadamias have launched a million dollar consumer marketing campaign in Beijing, Shanghai and Guangzhou. The campaign will include social media, advertising, TV, newsletters and other promotions and focus on key occasions like Chinese New Year.
"Delicious" Cloned Beef? S. Korean and Chinese Planning Mass Cloning of Cows
A $31.3 million cloning factory opening in Tianjin next year is aiming to produce 100,000 head of cloned cattle a year, with one million a year in stage two.
Smorgon Cow-Share Plan a Hit With Wealthy Chinese
A new venture trialled on JD.com allows Chinese families to own a share of an Australian dairy cow from which they will receive guaranteed, safe and secure infant formula [subscription required].
Chinese Tourists
Chinese Golden Youth Boosts Entertainment & Tourism
A decade ago, spending on travel accounted for 5% of disposable income in China. Now it's 10% to 15%. Last year, more than two-thirds of the Chinese travelling abroad were under 31 years old, and 90% of them shared their travel pictures or experiences on social media according to Credit Suisse.
Property
CapitaLand 'Confident' About China Properties
CapitaLand expects record home sales for its mainland projects this year. Tenants in its malls have seen sales increase about 9% year-on-year, with the company bullish on China's prospects for real estate over the next 10-20 years due to urbanisation trends and large population bases.
Cars
Chinese Car Market Will Do Better Than Feared in 2016, Says UBS
China's passenger car sales in October rose to 1.9 million cars - 13.3% more than the same month last year. UBS has increased its forecasts for 2016 Chinese car demand to 8% growth, from 6% previously.
Luxury
Chinese Shoppers Tipped to Remain World’s Biggest Luxury Spenders
Chinese luxury shoppers continue to reign supreme accounting for 46% of worldwide luxury sales. They are forecast to spend US$117 billion in 2015, 9% more than 2015, with 78% of the purchases made overseas. Just 10% of worldwide sales are expected to be in China, down from 11% last year, contributing to 80% of global luxury brands having closed Mainland stores.
That's the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing, research and digital advice and implementation.
