China News This Week: Wednesday 9 June 2021
This week's news and trends in China:
Chinese Consumers
China Likely Reopens to World in First Half of 2022; COVID-19 Jabs May Need to be Given Annually, Just Like Flu: Top Experts: Chinese experts believe that China will be able to reopen to countries with good inoculation and low infection rates in the first half of 2022, but that will still depend on how many people in the country have been inoculated. Countries with a higher inoculation rate such as Israel, the US and the UK will make deals to resume people-to-people exchanges in the second half of this year.
Daigou Trade Drives Up Average Foreigner Spend in Korean Duty Free to US$26,370: Duty free sales in South Korea – the world’s biggest duty free market – rose by 8.6% month-on-month in April to US$1.39 billion - 72% up from last April. The market was dominated by foreigners (mostly daigou traders), who accounted for 95% of sales. Sales to small-scale Chinese merchants, the main customers of domestic duty free shops, have been on a steady growth track.
Digital China
Why, How and When About Autonomous Delivery Vehicles: Info, specs, charts and policies about the evolution of JD's Autonomous Vehicles.
JD 618 Mid-Year Shopping Festival Statistics: JD.com’s 618 Grand Promotion (Jun. 1-18) officially began at midnight on Jun 1. In the first five minutes after midnight, JD Super, JD’s online supermarket, saw sales of coffee beverages, oat milk, fruit wine and other new products increase over 15 times. Cosmetic medicine increased 15 times in the first 15 minutes. Sales of smart pet products increased 300 times and pet snacks and treats increased 28 times. In 10 minutes, products from 900 international brands from over 100 different countries more than doubled. Nutrition and health care products intended to relieve fatigue increased by 500% YOY while probiotics increased more than 300%. Tmall said that 250,000 brands on the marketplace participated in the event, 2.5 times more than last year.
Asia Dominates on Internet Front: US, EU Way Behind; India Minuscule: China's mobile payment penetration accounted for 24% of total retail sales in 2019, compared with 9% in Germany, and 11% in the US. China is the world’s largest ecommerce market, accounting for about 45% of global retail e-commerce transaction value in 2018. In 2019, China’s internet market was worth $1.5 trillion, while USA was $600 billion and India’s was $40 billion. Here are the 15-biggest ecommerce companies in China.
Tencent Bans Nose Picking, Spanking and Other ‘Violations’ on its WeChat Livestreaming Service: Tencent published a list of dozens of common "violations" on its WeChat livestreaming service in a bid to clean up the app. Fortune telling, picking your nose, putting underwear over your head and any actions with sexual provocation such as "seductive lip licking" and focusing the camera on "sensitive" parts of the body are among the prohibited actions. Fishnet stockings can't be worn, broadcasts can't be in a bikini or wrapped in bed sheets or bath towels.
Fashion
'No Sale': Patagonia Defies Shopping Festival Fervour in China: 'Buy less, demand more', the outdoor brand has proclaimed, in a contrarian tactic that has drawn attention amid the frantic discounting during the country's 618 ecommerce festival. Patagonia was recently ranked as the third most conscious brand in China behind Huawei and Microsoft.
Food & Beverage
Membership-Based Markets Gaining Popularity: The success of Sam's Club membership program in China is pioneering a path for programs from other grocery chains including Hema, Suning Carrefour, Costco and Metro. Metro has seen consumers demand more quality, diversified goods, consumer-centric retailing approaches, and emphasis on health and the environment. Private label brands are becoming more common, particularly for categories without established leaders.
The Small Businesses Trampled in Big Tech’s Groceries Tug-of-War: Shop owners in Wuhan thought community group buying would help them earn more money. Instead, it’s putting them out of business. Residents say that they eventually switched back to fresh markets for their vegetables, but continued to order everything from toilet paper to eggs, dairy, and fruit via community group buying.
Over 1 Billion Chinese People Still Have No Dairy Consuming Habits: The number of Chinese people who keep a daily intake of dairy products is only about 360 million. More than one billion people have not yet formed a dairy consuming habit. Dairy foods (products containing milk, including cream biscuits and cream cakes) accounted for 25.4% of increased dairy intake, followed by yogurt (20.5%), liquid milk (15.7%), milk powder (14.1%) and cheese (14.1%). 37% of people recognise that lactoferrin in dairy products helps boost immunity, up 7.7% from last year - 53% of parents of children aged 0-3 recognised this.
Beauty
China’s CBD Crackdown Deals Blow to Emerging Market Using Cannabis-Derivative in Cosmetics: Late last month China officially banned the use of CBD in all cosmetics, also banning three other popular cannabis plant derivatives – cannabis sativa fruit, cannabis sativa seed oil and cannabis sativa leaf extract – all of which have a growing global following for their “wonder drug” ability to lift depression, cure acne or relieve pain.
Sport
Football’s relentless search for the ‘Asian fan’: For many years, Asian fans of European football have had an almost mythical status in the globalisation of the sport. They are often complacently viewed as a single block and their potential has often been overestimated. Some fans in Asia are already fiercely devoted to one club, like their counterparts in Europe, while others are far more promiscuous, supporting teams across different leagues; some view the sport purely through the lens of gambling, others through status and branding; some follow particular superstars such as Ronaldo and Lionel Messi and will change club loyalties as their heroes roam. Between 2018 and 2020, European teams increased their followings on Weibo from 60m to 93.3m and from 2.5m to 19.2m on Douyin. If clubs want to convert this kind of fan into a long-term supporter, and also keep the other kind engaged, they still have a lot of work to do to demonstrate that they respect and value them as supporters, not as an abstract source of revenue. [paywall]
Finance
China’s Digital Currency Trials Accelerate, But Will Users of Alipay, WeChat Pay Switch to the New e-Yuan?: China’s e-yuan is one of the most advanced central bank digital currency initiatives in the world, with over ¥2 billion ($314 million) spent so far. But China already has an established digital payment system dominated by Alipay and WeChat Pay, potentially slowing its wider adoption.
Luxury
These 4 Types of People Buy Fake Luxury Goods: Why Even Rich Chinese Consumers Choose Counterfeit Brands, and How to Stop Them: Brands like Gucci and Louis Vuitton lose millions to counterfeits – bought by four main consumer profiles: "Dreamitators", face savers, smart fakers and fraudsters.
