China News This Week: Wednesday 6 April 2022
This week's news and trends in China:
Pets
As Robot Dogs Take to the Streets of China, Could they Ever Replicate the Companionship of Man’s Best Friend?: The futuristic robot canines are becoming more common in Chinese streets and on social media. But they still look like robots, making some wonder if they are too cold to become popular.
Digital China
‘Adopt or Fail’ – New Report Emphasizes the Importance for Brands to Integrate AI: 70% of Chinese consumers believe that AI has the potential to improve their quality of life, versus 41% in the US and 29% in the UK. In the UK, 26% of consumers did not know what AI was, while only 5% in China said the same. 52% of Chinese consumers felt AI was about apps or software, compared to the highest percentage in the US (33%) who thought it was about physical machines or robots.
Live Sales Outstrip Online Shops for Some of China’s Clothing Vendors: In 2018, fashion seller Zhong Xueliang received 90% of sales from e-commerce and 10% from livestreaming. Now it is 60% livestreaming. Consumers are more likely to visit e-stores when they have something they want to buy, whereas they will have extensive and direct contact with livestreaming platforms throughout the day, spending 100 minutes a day on platforms like Douyin and Kuaishou. People like to watch videos, such as how to match clothes, before they buy anything.
China Plans New Restrictions for its Booming Live-Streaming Sector: Regulators are planning rules limiting virtual tipping of live-streaming hosts and time spent by young people on the apps. The industry was valued at $30 billion in 2020. Livestreaming services are consumed by roughly 70% of China's online population, commanding an audience of more than 700 million last year. Livestreamers can make money from virtual tips ranging from the equivalent of 15 cents for a virtual beer to more than $1,100 for a virtual spaceship - popular livestreamers can make tens of thousands of dollars each day from fans.
The Shake-Out of China’s Community Group-Buying Market: After exploding in 2020, China's once-crowded community group-buying market is getting quieter as it turned into a winners-take-all battleground amid cut-throat competition and intensifying regulatory scrutiny. The entire market was burning at least ¥10 billion ($1.6 billion) every month at its peak.
What Will China’s Metaverse Look Like?: Whether future or fad, one thing is certain: China will not miss out on shaping the new ecosystem. One key aspect that differentiates this Chinese metaverse is government control and political censorship within a yet-to-be-defined regulatory strategy. NFTs, for example, cannot be traded (only collected) and cryptocurrencies cannot be used. But there are other factors that differentiate the Chinese metaverse. While many Western apps focus on best-in-class functionality, Chinese apps tap into consumers’ desire for human connection.
Chinese Consumers
How ‘Ascension’ Became the Must-Watch China Documentary of 2022: There are butlers, bodyguards, smiling lessons and hyperreal sex dolls. But Jessica Kingdon’s Oscar-nominated documentary is really an exploration of something more profound: the meaning of the Chinese dream. Shot in over 50 locations across China, "Ascension" is a sprawling yet often intimate portrait of a nation in transition. It weaves a picture of a country that — despite the current geopolitical tensions — is grappling with many of the same issues as the United States: rising inequality, growing economic insecurity, and a younger generation that is increasingly fed up with both.
As the Pandemic Enters its 3rd Year, More Chinese People Say They’d Rather Save than Spend: A People's Bank of China survey found 54.7% of respondents were more inclined to save - the highest percentage on record since 2002. The survey was taken as Omicron spread through major economic areas like Shenzhen and Shanghai. 23.7% wanted to spend money, higher than the 22% during the worst of the pandemic in the first quarter of 2020. Shanghai has extended its lockdown and brought in the military and 38,000 healthcare workers to carry out Covid-19 tests for all of its 26 million residents in one day.
Chinese Consumers Splurge on Luxury Goods as ‘Covid Hasn’t Changed the Lifestyle of the Rich’: Chinese consumers spent 36% more on luxury goods in China last year, totalling $73.6 billion. Luxury brands are being driven to tap into markets in China’s smaller cities as top-tier cities like Shanghai and Beijing are already saturated with stores and rent is high.
Food & Beverage
Luckin Coffee Surpasses Starbucks in Number of Outlets in China: Luckin Coffee's revenue for 2021 was around ¥8 billion ($1.26b), up 97.5% from 2020 helped by coconut lattes, ready made beverages and Eileen Gu's endorsements. Net store openings last year numbered 1,221, taking the total to 6,024 stores, greater than Starbucks' 5,400 stores. In 2020 before the scandal was exposed, they reportedly had 6,500 stores.
China Mengniu Dairy's Net Profit Rose 42% in 2021: Chinese dairy giant Mengniu's sales grew 16% to ¥88.1 billion ($13.9 billion) on the back of rising health awareness amid the pandemic, which encouraged the consumption of dairy products. The company said it would continue to work on its digital strategy and upgrade its sales and supply-chain operations over the next few years.
Kweichow Maotai Gains as Chinese Distiller Starts its Own Online Sales Platform: Kweichow Moutai launched its own online sales platform as the Chinese liquor maker seeks to overhaul its marketing network. iMoutai became the most downloaded app on Apple's App store on March 28, one day after it was launched, with over 430,000 downloads. The firm's fiery signature alcohol Kweichow Moutai is available on the platform for ¥3,599 a bottle ($567), 20% less than the price charged by third-party dealers. Kweichow Moutai sells most of its products through distributors who often add margins greater than 50%. The firm already cut the number of distributors by 632 between 2018 and 2020.
Entertainment
Keanu Reeves' Movies Have Been Removed from Chinese Streaming Platforms Over His Support for Tibet: Films starring Keanu Reeves were scrubbed from streaming platforms in China including Tencent Video, Youku and iQiyi after his participation in a Tibet benefit concert. The actor incurred the wrath of Chinese social media users. Pop star Lady Gaga has been banned from performing in the country since 2016 after she held a 19-minute meeting with the Dalai Lama.
Sport
After a Boycott, Chinese Television Is Again Airing NBA Games: China Central Television, China’s state-run TV network, has begun to broadcast NBA games again, signalling that the rift between the league and Beijing that has persisted since 2019 appears to be coming to an end. China now has more fans of the league than there are in the United States. Before the pandemic, the NBA’s top stars routinely travelled to China between seasons to promote sneakers. Since 2004, the NBA has played dozens of games in China.
