China News This Week: Wednesday 06 July 2022

This week's news and trends in China:

 Chinese Consumers

Yili Remains the Most Chosen FMCG Brand in China, according to Kantar’s Brand Footprint Report 2022: Yili retained its top ranking for a Chinese FMCG brand on the annual Kantar BrandZ index.  The top-5 ranking Chinese brands overall were Tencent, Alibaba, Moutai, Meituan and Tiktok.

Chinese People Getting Taller: Health Authorities: Chinese people aged between 18 and 44 have grown taller over the 2015-2020 period, with women 0.8cm higher to 158cm and men 1.2cm up to 169.7 on average. With improved nutrient intake, the stunted growth rate among children aged six and below has dropped from 11.3% in 2015 to 5.8% in 2020. The average daily salt consumption in food has dropped from 10.5g to 9.3g and the proportion of people who regularly measure their health indicators, such as weight, blood pressure, blood sugar and blood lipids, has increased significantly.

China Relaxes Intercity Travel Restrictions by Removing Indication of Covid-19 Risk on Digital Passes: The ‘Big Data Itinerary Card’ will no longer show whether a traveller has recently been to a city with Covid-19 cases. This means that residents in cities such as Shanghai can theoretically travel to other Chinese municipalities without potentially being put under quarantine. Search volume for flight tickets on travel booking site Qunar surged 60% within 30 minutes after the announcement, while those for hotels and train tickets more than doubled. This is on top of last week’s announcement that international travellers landing in China now have to spend seven days at a government-run quarantine facility, followed by three days in home isolation – a major relaxation from the previous ’14+7′ – 21 days of isolation.

People Flock to Restaurants as Dine-In Services Resume in Shanghai: People flocked to restaurants, bars and cafes as dine-in services were finally restored in Shanghai last Wednesday. Restaurants such as Haidilao were reporting reservations and seating 20-30% higher than pre-pandemic levels, despite capacity limits.  Shanghai Disneyland reopened for the first time since March 21.

Digital China

JD.com Announces Renewed Strategic Cooperation With Tencent: Tencent will continue to offer JD.com prominent access points on its WeChat platform to provide traffic support, and cooperation in communications, technology services, marketing and advertising, and membership services, among others. The deal will see supply chain cooperation, strengthen technical exchanges and cooperation in artificial intelligence and other fields. This is the third round of strategic cooperation between JD.com and Tencent.

More than Two-Thirds of Bilibili’s Initial Users in 2009 are Still Active: Although Bilibili is considered to be the domain of teenagers and those in the early-20s, 65% of the first batch of users registered in 2009, when the platform was launched, are still active. In the first quarter of this year, Bilibili had 294 million average monthly active users, and 3.8 million were video creators of the platform, with a 75% year-on-year growth.

Food & Beverage

Winner of Six Awards, Yili Further Elevated Its Profile as a World-Leading Innovator: For consumers to freely enjoy cheese without storage limitations, Yili developed the “Best Cheese” winner – the ambient cheese lollipop, which is rich in nutrition and can be safely stored at room temperature. Revisiting traditional Chinese aesthetics, the Xujinhuan 3D Fresh Milk Ice Cream has been designed into the ‘elegant shape of a Chinese fan,’ featuring traditional painting carved on the surface.

To Attract Younger Consumers, Moutai Has to be More than Just Moutai: Although China’s 3rd-most valuable brand, Baijiu giant Kweichow Moutai, grew revenues 18.25% in Q1 to $4.95 billion, it is not resting on its laurels. Diversification into alcoholic ice cream costing up to ¥66 ($9.80) per cup is the first step as the company seeks to appear less old-fashioned.  The company is ready to move into the healthcare industry and into services for the care of the elderly. It has also launched a culture and tourism subsidiary that is actively developing new products, festivals, and tourism promotions. Baijiu is only the third choice in liquor for younger Chinese consumers at 38.6%, with most preferring wine (41.9%) and beer (40%).

China Ice cream Market: Customers Swamped by New, Exotic Products: Ice cream sales grew 10% last year to hit a record of $24 billion. Chinese and foreign ice cream retailers have frequently cooperated with producers of beverages, coffee and tea, as well as sightseeing spots, universities and museums, leading to a large number of innovative ice cream flavours. Flavours include milk with squid and meat floss with chives. Zhong Xue Gao, the ‘Hermes of ice cream’ selling for as much as ¥168 ($25) per item, has launched an ice cream that does not melt at high temperatures.

 Fashion

Balabala Introduces Virtual Child Ambassador Gu Yu: Chinese childrenswear brand Balabala has launched a virtual child ambassador named Gu Yu. First introduced on Xiaohongshu, Gu Yu doubles as an independent influencer — sharing regular short-form content and product releases from the brand alongside real-life models and in the form of NFT pieces. Seems like a creative way to get around regulations using children in advertising in China.

 Beauty

Recovery Growth Surge Drives Beauty in China: Following the negative impact of home seclusion and strict lockdown measures in China, beauty and personal care has enjoyed a surge in sales growth, driven by demand for better skin health, products that enhance personal wellbeing, the rise of Chinese beauty, and the ineluctable momentum of e-commerce and new retail experiences. Sales of beauty and personal care in China rose 10% in 2021. Colour cosmetics and fragrances saw particularly impressive growth on the back of the wider recovery, with a notable increase in consumers trading up.

Education

International Schools Offer Golf, Skiing in Japan, Luring Rich Chinese Parents: Campuses are being built across Japan with boarding, top-notch facilities and a wealth of outdoor activities. Annual tuition that can cost as much as 9.3 million yen ($68,250). Japan’s relative proximity, low Covid infection rates and fewer restrictions are all part of the sales pitch. Ongoing pandemic curbs and a crackdown on private education in China are pushing families out — both expatriate and local.
China Rolls Out 31 New Undergraduate Majors: Chinese colleges and universities have launched 31 new majors this year to educate more inter-disciplinary talents and adapt to the development of artificial intelligence technology. At least eight of the new majors are related to AI, such as a “smart” forestry major.

 Luxury

Tmall Luxury Pavilion Takes China Into a Virtual World of Luxury: Tmall Luxury Pavilion offers a virtual world of fashion through 3D shopping experiences, digital art galleries, avatars and more. More than 200 luxury brands are on the platform launching more than 30K new products a month.