China News This Week: Wednesday 18 May 2022
This week's news and trends in China:
Chinese Consumers
As Shanghai Nears End of Lockdown, Covid Angst Spreads in China: Shanghai aims to ease its lockdown restrictions by May 20, helped by yesterday's report of no community spread. The Shanghai Government has announced that life is expected to be back to normal mid-late June. Beijing is still on knife-edge in its gruelling battle against omicron. Whereas previously Chinese citizens could favourably compare their lives to friends and family who lived overseas, now their belief in the superiority of the Communist Party’s approach has been shaken.
China’s Consumer Prices Hit a Six-Month High as Covid Prompts Locals to Stock Up on Food: China’s consumer price index rose by 2.1% in April from a year ago, the fastest rise since November. It still isn't a scratch on the 8.3% CPI in the US and high rates in other countries. Fuel for transportation rose 28%, fresh veges were up 24% and fruit climbed 14%, sending prices higher, whereas the 33% plunge in pork prices helped moderate inflation. Excluding food and energy prices, the consumer price index rose by a muted 0.9% in April from a year ago.
COVID-Induced 'New Economy': Advent of Outdoor Camping, Ready-to-Cook Meals, Nucleic Acid Testing: New business opportunities have resulted from the pandemic including outdoor camping, ready-to-eat meals, smart logistics, VR/AR devices, nucleic acid tests-related industries to fight the virus, and other sectors.
JD Rolls Out Online-to-Offline Department Store Business with Plans for Physical Outlets: JD has launched a new department store channel by integrating several existing businesses from its fashion and lifestyle sections, including clothing, cosmetics, and housewares. In addition to online channels, the company will build an offline presence for the service with plans to open themed bricks-and-mortar stores in major cities. The first in Beijing, Chengdu, and Xi’an will open before June 18 this year.
Chinese Tourists
Applying for a Chinese Passport? You May Need a Fake Job Offer China has stopped issuing passports for "non-essential reasons" as part of its "Covid-zero" policy. The result: a thriving market for fake foreign documents. In the first half of 2021, China only issued 335,000 passports — 2% of the total for the same period in 2019.
Digital China
TikTok Parent Aims to Double Ecommerce Volume on China App to $240 Billion: ByteDance this year aims to double the amount of shopping that happens on Douyin in China to nearly $240 billion. Now ByteDance is eyeing a global e-commerce expansion.
China Restricts Minors from Live Streaming, Citing Need to Improve their 'Physical and Mental Health': Users aged between 16 and 18 must obtain permission from their parents or guardians before doing live-streams. Internet platforms will need to strictly implement the real-name registration requirement, and prohibit offering minors’ tipping services such as cash top-up, gift purchase, and online payment. China’s tighter rules on the live-streaming sector appear to be following a similar path as that for video games.
Operating Income of China's Courier Sector Exceeds 1 Trillion Yuan in 2021: A total of 108.3 billion parcels were handled by the country's express delivery companies, up 29.9% year on year - almost 80 parcels for every man, woman and child in China. The operating income of the industry grew 17.5% to ¥1.03 trillion ($147.3 billion).
Food & Beverage
Meeting China’s Demand for Meat and Dairy: The Ministry of Agriculture and Rural Affairs’ Five-Year Plan released in December 2021, set out China’s new self-sufficiency targets. This includes full self-sufficiency for poultry and eggs, 95% self-sufficiency for pork, 85% for beef and mutton and 70% for dairy. China’s current self-sufficiency levels for meats and dairy are already high, but rising incomes and rapid urbanisation means that China is consuming more animal proteins. Maintaining the current level of self-sufficiency will require greater domestic production. China’s meat output target for 2025 is 89 million tonnes, about 15% higher than 2020.
Chinese Drinkers Popped Record Champagne in 2021, and Here’s Why: Chinese consumers are increasingly open to white wines, including Champagne, which used to be shunned for its razor sharp acidity and cold serving temperature. Champagne exports to China in 2021 grew 15% in volume and 70% in value over pre-Covid 2019 to $69 million. China's relatively uninterrupted hospitality scene largely attributed to the growth as it could still flow in restaurants and venues, in addition to consumers being more open to drinking at home. Chinese consumers are also more open to training and education, particularly online. By categories, vintage Champagne and rosé have seen the best growth in China.
How Innovations in Channels, Scenarios are Driving China's Alcopop Market: As the alcoholic beverage market expands its reach to Gen-Zers and women, channels play a bigger role for domestic brands. Creating scenarios through self-owned offline stores or unconventional channels to attract consumers seems to be the trend in the market.
Would You Like Coffee with Your Sneakers? Chinese Sports Brand Li-Ning Registers Its ‘Ning Coffee’ Brand: An unexpected competitor is joining China’s coffee market. With over 7,000 stores in the country, Li-Ning has the potential to become the biggest athletic coffee chain yet. The brand will provide in-store coffee services to enhance customers' shopping experiences.
Beauty
A Closer Look At China’s Hair Care Market Boom: The demand for high-end shampoos - above ¥120 ($18.20), conditioners, leave-in hair oils or serums and hair masks is growing faster than its mid-price market counterpart. Volume, oil control, anti-dandruff, and anti-itch products are strong, while silicone-free, ginger, fluffy, and coconut fragrance are new trending keywords. The market for high-end conditioners is growing twice as fast when compared to mass-market brands. 66% of consumers in a survey said they don’t like to keep using the same hair care products.
Fitness
Furious Chinese Netizens Are Boycotting Lululemon: Lululemon was fined ¥81,000 ($12,000) for selling poorly made products. Following this, the hashtags #Lululemonsellspoorlyqualifiedproducts and #Lululemonapologies trended on the platform’s Hot Search List garnering a combined 200 million views. The company has grown 70% over the past two years in China.
Art
$800,000 for Skateboards: China’s Gen-Z Collectors Upend the Art Market: Chinese collectors under 40 are reshaping the art market by pushing up prices for sneakers, cartoon-like art, dinosaur artefacts, luxury watches and vintage cigars. Sotheby’s says it’s selling art to at least 4,000 Asian collectors under the age of 40 now, twice as many as three years ago. During Sotheby’s Hong Kong spring sales, which sold $496 million in art, Asian people under 30 accounted for a third of the bids. Overall art sales last year in China grew 35% to $13.4 billion.
