China News This Week: Wednesday 11 August 2021

This week's news and trends in China:

 Chinese Consumers

Made in China But Not For China: How a Mysterious Fashion Retailer has Emerged to Take on the World: Shein adds nearly 5,000 new items to its website every day. It has topped Amazon.com as the most popular app in the shopping category of the Apple and Google app stores in May in the US.

China Tops Global Fortune 500 List: 135 Chinese companies (including mainland and Hong Kong firms) made the cut for this year’s Fortune Global 500 - an increase of 11 from last year and surpassing the 122 US companies on the list. 18 Chinese companies debuted on the list. Chinese enterprises in the group are less profitable than ones from the US.

Social Media Influencers Help Chinese Brands Outfox Foreign Rivals: Much of the recent success of local brands comes down to hefty investments in marketing, particularly on social media. Marketing has made Chinese products cool. They don’t have heritage brand equity that they’re trying to protect, which means they’re willing to take risks and move quickly.

12-Hour Days, Six Days a Week: Some companies have taken steps to improve work-life balance. Kuaishou, a short-video app, in July ended a policy requiring its staff to work on weekends twice a month. One division of Tencent began encouraging workers to go home at 6pm - though only on Wednesdays. Some Gen-Zers have turned to reading Mao Zedong’s writings on communism to rage against capitalist exploitation. An online craze this year called on young people to "lie flat" — essentially, to opt out.

Pandemic and Competition Reshuffle China’s Top 100 Brands: In one year, the brand landscape of China's top-100 brands has changed profoundly, with 26 brands exiting/entering the list, and significant movements throughout the top 100 as measured by Campaign Asia. Panasonic and Starbucks have entered the top-10, whereas Nike fell from 8th to 11th and Nestle dropped from 3rd to 34th. Across the top 100, 11 Chinese brands moved down, 30 jumped up, and eight dropped out. At the same time, 17 overseas brands declined in the ranking, 29 moved up, and 18 dropped out.

Digital China

China’s Live-Streaming Video Market May Face Tougher Regulation Amid Spread of ‘Vulgar Content’: China's livestreaming market and its 130 million content creator accounts, has become "a game for traffic flows, as operators compete on who can be as vulgar as possible" according to state media.

Antitrust Crackdown on China's Tech Sector Could Lead to Greater Competition, S&P Says: Competition is likely to intensify among Chinese internet companies like Alibaba, JD.com and Tencent, as Beijing places greater scrutiny on mergers, overseas listings and anticompetitive behaviour in the technology sector, according to S&P Global Ratings. Practices that are perceived to give companies unfair advantages or the ability to grow through acquisitions could be limited by regulators as they try to level the playing field and balance security and social stability considerations with growth and innovation.

Food & Beverage

The China Challenge: Chinese Food and Beverage Brands Could Soon Muscle In on Premium Exports to Other Countries: Chinese brands’ ambition and structure have established them well to compete in the increasingly dynamic, digital and competitive world that we trade in. They are becoming more premium and are even rising in the food and beverage category.

China Food Safety Sweep: Government Launches Three-Month Crackdown on Online Counterfeits, Fake Certifications: The government is coming down on fakes, following an uproar on social media because safety and quality reports and certifications can be purchased online without the need to send samples for testing or taking any follow up actions. Regulators will also be placing extra onus on ecommerce platforms to ensure compliance. Australian wine brand Penfolds was the victim of a $20 million counterfeit scheme in China last year, even local candy-brand White Rabbit has seen the counterfeit 'Little White Rabbit' emerge.

China Dairy Labelling Findings: Consumers Most Concerned with Shelf Life than Nutrition Facts: Consumers in China are more concerned with the production date, shelf life and storage conditions on the labels of dairy products than other information such as nutrition facts, ingredients, certification, origin, and manufacturer according to research funded by China's Ministry of Education.

Education

Chinese Applicants Overtake EU as Brexit Raises UK Student Fees: EU applicants to study in the UK dropped by 43% to 28,400 this year, compared with 28,490 applications from China, a number that has more than doubled since 2017 including 17% in the last year.

 Luxury

Chinese Shoppers Complain Bagging a Hermès Was Never Harder: Luxury brands’ sales tactics come under scrutiny as supplies appear to have tightened since the start of the COVID-19 pandemic.Luxury Brands Embrace Chinese Valentine’s Day: Special-edition collections relating to Chinese Valentine's Day of Qixi on August 14 launched to create ‘emotional connection’ with consumers were being launched a month ago - much earlier than usual.

Cars

Wolfsburg, We Have a Problem: How Volkswagen Stalled in China: A failed crash test fractured a key pillar in Volkswagen’s reputation in China, a market that is of utmost importance to the company's financial health. Profit per vehicle in China has fallen from levels of €1,400-1,500 around 2015 to €800 in recent quarters.