China News This Week: Wednesday 23 February 2022
This week's news and trends in China:
Beauty
2022 China Skincare and Beauty Trends White Paper: We've used ecommerce and consumer data from our Trackers to identify some of the key trends in China's skincare and cosmetics categories. The white paper includes market and category data, and illustrates the trends in action with case studies. Good reading!
Buoyed by Chinese Consumers, L’Oréal Defies Earnings Expectations: Thanks to an insatiable Chinese middle class, L’Oréal posted record annual sales of $36.6 billion in 2021. Q4 sales grew 11.3% year-on-year to $10.4 billion. Nearly a third of L’Oréal’s 2021 revenue came from online sales with China’s ecommerce platforms, with L’Oréal on Tmall averaging 198 million monthly visits and JD.com 153 million. Sales of L’Oréal cosmetics in China have seen a 50% rise over the past two years.
Expanding Coverage: Estée Lauder Preparing to Increase Presence Across All China Retail Channels: Estée Lauder says it will be increasing its coverage across all channels in China - online, travel retail and brick and mortar - this year to capitalise on the growth potential of its beauty market. The company will launch a new innovation centre in Shanghai in a few months. China sales grew 6% in the latest quarter, despite the impact of Covid disruptions. Online grew double digits and now accounts for more than half of its China business.
Chinese Consumers
What Defines China’s Gen Z Consumers?: China’s Gen Z is considered to be a culturally confident young generation. They are a diverse group that uses clothes as personal expression, yet are wary of overconsumption. 19% of consumers surveyed identify as "trend followers", 14% as "excessive shoppers" and 11% as "patriotic spenders." 43% said they "love authenticity and hate hypocrisy" when it comes to marketing. They are more connected with the spiritual ideals and values of Western individualism than previous generations and have experienced greater internationalisation. However, they grew up in the era where China's social, economics and brands have taken off, with 27% having "patriotic feelings.
"Geographic Proximity is a Poor Way to Identify Consumer Similarities Around the World. Marketers Must Search for ‘Mindset Neighbours’ Instead: The world's consumers are very diverse. While commonalities do exist, geographic proximity turned out to be a remarkably poor way to identify similarities in consumer mindsets around the world. Consumers in the US and Australia are highly like-minded, but attitudes among Chinese and Japanese consumers differ dramatically, even though they are geographic neighbours. The countries with the widest mindset gaps with the US are China, Nigeria, and Saudi Arabia. The countries with the most similar mindsets to China are India, Mexico and Italy according to BCG.
Being Gay in China Has Gotten Harder Under Xi Jinping: He's set a tone for a more assertive, self-reliant China. One outcome has been a subtle but constant narrowing of gay spaces — physical, virtual and philosophical. Being gay, bisexual or trans is seen by some in China to be an imported or "Western" concept.
Digital China
Chinese Companies Show Off AI Technologies with Virtual Humans Throughout Winter Olympics: "Meet Gu" is a virtual version of Eileen Gu who serves as a brand ambassador and helps her human counterpart manage commercial activities. China Mobile’s Migu video has introduced four other AI clones to represent human athletes, take interviewing requests from media and make TV appearances.
Food & Beverage
Can-Do: How China’s Canning Industry Preserved Local Tastes: To appeal to the country’s overworked, underfed young consumers, Chinese canned food brands have started marketing "meals for one," a sort of TV dinner for the mandatory overtime era. Inside each can, you’ll find entire dishes, from kung pao chicken to fish-flavoured pork.
Starbucks Raises Prices, Drawing Ire of China's Coffee Lovers: A grande Americano has increased ¥2 to ¥30 ($4.74), while a red-tea flavoured latte increased by the same amount to ¥35 ($5.53) as Starbucks increased prices on drinks and a few sandwiches by ¥1-2 ($0.16-0.32) drawing ire from Chinese online. Tim Horton's and Luckin Coffee have also raised their prices. Starbucks was already having a bad week after it faced backlash after a number of police eating outside one of its cafes in Chongqing were asked to move by a staff member. China's already-competitive coffee market has just seen China Post enter the fray.
Aussie Red Meat Export Market Expected to Hold During Chinese Recovery: Australia's red meat exports to China are expected to remain robust, particularly once political tensions ease. China's pork industry in unlikely to be back on its feet until the middle of decade, which will help further preference towards red meat, which is also being driven by rising incomes.
Education
The Universities and Disciplines China Aims to Turn into World-Beaters: China's education and finance ministries have revealed a plan listing 147 universities and 331 disciplines intended to reach 'first-class' standard. 180 engineering-related subjects, 59 basic science majors such as mathematics, physics, chemistry and biology, and 92 related to philosophy and social sciences were included with the aim of ranking among the world’s best by 2030, and to be a global education power by 2035. Meanwhile, many Chinese studying abroad are finding it difficult to travel home.
Chinese Tourists
Legoland Set to Compete in Beijing’s Theme Park Market: Experts say newcomers still have space to break into the capital’s competitive market, provided they attract visitors with unique experiences. Legoland is expected to span over 30 hectares - about one-fifth of the newly opened Universal Beijing Resort.
China Plans to Turn Olympic Ski Jump Into a Giant Water Slide: Now the Olympics have finished, Beijing plans to turn the much talked about ski jump into a very large water slide in the summer. Here are
Luxury
How China’s Covid-Zero Policy is Giving a Polish to Gold: Gold isn’t behaving quite as you’d expect right now. Chinese and Indian buyers are driving demand for the precious metal countering the usual selling cycle following rising Treasury yields. In mainland China, consumption jumped 63% last year, likely to be a benefactor of the $255 billion that was spent in 2019 on foreign travel being diverted to other goods.
Cars
Tesla Zeroes in on Beijing for Design Centre to Build Chinese-Style Cars for the Mainland Market: Tesla plans to follow GM's lead and set up a design centre in China to develop cars specifically for the Chinese market, stepping up plans to consolidate its foothold in the world’s largest automotive market. Its China sales grew 117% last year. Telsa's Shanghai Gigfactory produced 51.7% of the company's vehicles globally last year.
