China News This Week: Wednesday 22 June 2022
This week's news and trends in China:
Digital China
JD.com Reports over ¥379.3 Billion ($56.7 billion) Transaction Volume for 2022 618 Grand Promotion: JD’s 618 festival sales were up 10.3% on last year. Whilst positive, it was well down on last year’s 27.7%.
Tencent’s WeChat Debuts in 618 Shopping Festival with Big Bet on Live-Streaming Ecommerce Despite Slowing Economy: Tencent’s WeChat has launched its own 618 online shopping festival via its in-app video function Channels for the first time. Sales made through live-streaming on WeChat grew 15-fold in 2021, with over 50% coming from private domains – such as a brand’s existing fans on WeChat. Buyers in Channels live streams spend an average of ¥200 (US$29.9) in each session, with 60% of users making repeat purchases.
More Virus-Hit Chinese Firms Join Livestreaming Ahead of Mid-Year 618 Shopping Festival, Expecting Rapid Consumer Market Recovery: Chinese businesses spanning industries have transformed and diversified business to incorporate livestreaming. Airlines such as China Southern and Hainan sell cosmetics through livestreams, with lower prices than duty-free stores.
Education
From Teacher to Livestreamer: Ecommerce Move is Game Changer for China’s New Oriental Education: New Oriental is going from classroom to e-commerce. Online shopping has never been more educational. Whether they are selling fruit, rice, or even shrimp, New Oriental’s livestream hosts are grabbing every opportunity to teach their viewers a new word or concept, often using a whiteboard to introduce new vocabulary. New Oriental Education’s livestreaming sales exceeded ¥20 million ($3 million) a day, with best selling products being books and videos, fresh agricultural products and food & beverage.
Chinese Consumers
China Adopts Targeted Measures to Bolster Foreign Trade Growth: In an effort to help foreign trade firms navigate difficulties, the State Council, China’s cabinet, issued a guideline last month to improve services and provide more financial and fiscal support for the enterprises. 27 government departments, including the Commerce Ministry and the Central Bank, have rolled out relevant policies, which mainly focus on smoothing foreign trade logistics, strengthening financial support for foreign trade firms and stabilising the industrial and supply chains of foreign trade.
What Do Chinese Consumers Want? Walmart Can’t Figure It Out: The hypermarket model is losing ground to local competitors who refresh their offerings and layout more often. They also have faster, 30-minute local delivery, which is popular as car ownership is still relatively low. It also isn’t straightforward for Walmart to open new stores. For example, the company needs permits for each store in order to sell condoms, the top form of birth control in China, because they are considered medical devices. Permits can take years to clear. Walmart held 10.9% of China’s overall retail sales market last year. That was up from 9.3% five years ago, yet Walmart dropped to fourth place from third. Despite the challenges, operating stores in China helps Walmart stay abreast of trends in retail and ecommerce.
For Young Africans, China is More Influential than the US: Survey: A survey conducted by the Ichikowitz Family Foundation found that 76% of 4,507 young Africans across 15 countries named China as a foreign power with a positive influence on their lives, compared with 72% for the US. In 2020, the same survey found 83% positive about the US versus 79% for China. About 42% of the world’s youth are expected to be African by 2030.
Young Chinese Have Shunned Marriage. Now, They Want Singles’ Rights: According to government estimates, the number of people living alone in China reached 92 million in 2021. Single people can’t adopt a child, access assisted reproductive technologies, or — in many cases — claim maternity benefits. In some cities, they even face extra restrictions when buying a home.
Food & Beverage
European Diplomats in Beijing Invited to Deliver Products Ahead of JD’s 618 Grand Promotion: Ahead of the 618 Grand Promotion, JD.com invited diplomats from European countries including Denmark, France, Hungary, Italy, the Netherlands, Portugal, and Slovenia, to deliver European products to Chinese consumers. During JD’s 618 pre-sales period, the transaction volume of Danish food products grew by 98% YOY. The French National Pavilion recorded an increase in transaction volume of nearly 220%; and the transaction volume of imported European cheese products grew by almost 250%. Germany, France, Italy, the Netherlands and Denmark were the largest European countries of origin by sales volume on JD over the past year. Dairy products, candy biscuits, wine, and black tea were the most popular food products imported from Europe.
Parenting
How China’s ‘Mom Groups’ Share the Work of Parenting: In the absence of public childcare services, some urban moms are trying to rebuild and recreate a sense of community among families.
Beauty
Prestige Beauty: The Next Growth Engine for Beauty Players in China: Premium beauty sales are expected to grow at 13% annually, with premium market share further increasing to 53% by 2025. Post-90s account for 57% of high-luxury beauty consumption and a similar rate of online beauty purchases.
Fashion
Anta’s Big Marketing Spend and Sexy Ads are Paying Off: Chinese sports giant Anta recently found itself slammed online for “edge marketing” – using attractive female models with suggestive or tight-fitting clothing to inspire impulsive buying among men. The technique is increasingly common in China, especially in the auto industry, but many do not approve of this “vulgar” tactic. The tactic appeared to be paying off with Anta’s revenue growing 38.9% in 2021, versus 19.1% for the industry overall, although some of rise was at the expense of the hit Nike and Adidas took from the Xinjian cotton issues. Anta’s advertising spend grew from 10% of revenue to 12.4% between 2020 to 2021, spending ¥6.1 billion ($917 million) on advertising last year, including cooperation with Eileen Gu. R&D spend dropped from 2.5% to 2.3% over that time.
Forever 21 Takes Third Crack at China with New Bricks and Mortar Store: American fast fashion retailer Forever 21 is making its third tilt at the China market, with plans to open a physical store in a shopping centre in Taizhou, Jiangsu province, later this month. The youth-focused, fast fashion retailer quietly re-entered the Chinese market last August, at first selling exclusively online via platforms such as Vipshop and Pinduoduo and later on Tmall.
China’s Plus-Size Market: Big Business Opportunity?: Since 2020, sales of plus-size fashion have risen rapidly in China — but consumers are calling for better quality and choice in high-end plus-size apparel. A live broadcast by large-size fashion brand Plusmall on Xiaohongshu (RED) resulted in ¥16.8 million ($2.5 million) of sales in a day. The brand notched up ¥100 million ($15 million) in sales within 10 months of launching. Some estimates suggest that 35% of the adult population of China are in the plus-size category. The category grew 42% in 2020.
Environment
China Rolls Out Another Plan to Adapt to Climate Change: China’s Ministry of Ecology and Environment, and various other departments, yesterday published a new plan to tackle climate change amid another season of heavy rainfall that has already left at least 32 people dead in southern China. Three tornadoes, record rainfall, and blistering heat waves have further raised climate alarm in China.
