China News This Week: Wednesday 7 September 2022
This week's news and trends in China:
Chinese Consumers
For Better or Worse, In Sickness and In Health: Australia-China Political Relations and Trade: The study quantifies the effects of shocks in bilateral political relations on Australia’s merchandise goods exports to China between 2001 and 2020.
China Economy: Economists Say Country Still Faces Challenges, but Recovery Expected from Sharp Slowdown in Q2: Economists at the Nomura Investor Forum believe that the US and Europe may slip into mild, but quite long-lasting recessions. Unlike other economies, inflation is not a threat in China and it has returned to easing its fiscal and monetary policies. For the rest of the year, Nomura expects an economic recovery from the sharp slowdown in the second quarter. But the path to recovery will be uneven as China faces some challenges.
My CIIE Story: Dole Brings Fruits from Around the World to China: An entire year's output of Dole's Belgian conference pears, which debuted at the fourth CIIE in 2021, sold out even before the expo concluded. The expo has also expanded Dole's circle of friends as many government officials visited their booth, and hundreds of companies, including Shanghai Disney Resort, which signed cooperation deals with them. In addition, the CIIE's international influence has helped Dole build a stronger brand image, with more than 1,000 Chinese and foreign media outlets publishing stories about Dole over the past four CIIEs.
Sri Lanka National Pavilion in China Attracts Over 1 Million Viewers: A five-hour broadcast from the new Sri Lanka National Pavilion on Douyin attracted more than one million viewers, and added more than 27,000 followers. More than 10 KOLs participated and over 16,000 Sri Lankan products were sold.
Swire Mall in Shanghai Apologises for Violating Data Privacy Rules: Taikoo Li Qiantan shopping mall in Shanghai has apologised for violating Chinese data privacy rules after its shopping app caught the attention of a local consumer watchdog. When registering on the mall’s shopping WeChat mini program, consumers were required to give it access to photos and videos, ID card numbers, bank account numbers and travel records. The mall also required users to consent to its handling of sensitive personal data.
Big-Box Appliance Retailers Gome and Suning are Suffering, but Suning has a Plan: Sunning is taking inspiration from Apple and IKEA to improve its sluggish performance. It will open new stores providing intelligent, scenario-based, one-stop home purchases. The stores will integrate products and services with home appliances, home furnishings, and home decoration to enable users to engage in "whole house customization." In short, it will expand from selling home appliances into the broader experience of home decoration, renovation, and renewal.
China’s Intellectual Property Landscape is Maturing: Recent trademark rulings in favour of western brands such as New Balance and Manolo Blahnik is in line with a host of other efforts to boost investor confidence in China’s commercial legal system. Last year, China allowed some of its courts to start to recognise Hong Kong insolvency judgments, theoretically permitting international companies to chase Chinese debtors into the mainland.
Digital China
China’s Ecommerce Giant Pinduoduo Quietly Launches US Shopping Site in Amazon Challenge: Pinduoduo (PDD) has launched its US online shopping site, Temu, as the Chinese ecommerce giant makes its first major push overseas. The site lists items across a number of categories including clothing, jewellery, pet supplies and home and garden. In China, it was a late-comer, but still managed to challenge incumbents Alibaba and JD and achieve an unthinkable milestone, and SHEIN continues its strong growth, with GMV up over 50% to more than $16 billion for H1, so PDD could present a challenge to Amazon. PDD reported 36% revenue growth and nearly tripled net income in Q2.
Beijing Accelerates Adoption of Metaverse by Including it in a Development Plan: The Beijing municipal government announced a two-year Metaverse innovation and development plan that focuses on promoting the development of Metaverse-related industries and helping Beijing build a benchmark city for the digital economy. The action plan requires that all districts build technological infrastructure at the urban level and promote its use in various fields, including education and tourism. Before Beijing, Shanghai also included the Metaverse in the five-year development plan.
Beauty
China Luxury Skin Care: Consumers Refocusing on ‘Essentiality and Real Value’ – Shiseido: Chinese beauty consumers are zeroing in on the efficacy and functionality of skin care products. Consumers are also valuing long-term effects and well-being. For imported brands, growth is in high prestige.
Education
Survey Demonstrates Continued Strong Perceptions of Australian Education in China: A survey of parents and Chinese students planning to go abroad in the next 1-2 years found the US as the most popular destination, followed by Australia. The top overall influences on a destination decision identified in the survey were the respective COVID situations and policies, geopolitical tensions, accessibility, and safety/gun violence. The survey revealed a general lack of confidence in China’s domestic tertiary education, with factors cited including a lack of exposure to group work, creative learning and problem-solving – rendering graduates less competitive when moving into the global workforce.
Fashion
Diesel Mounts Giant Inflatable Sculptures In Shanghai: Diesel rolled out a pop-up store featuring its Fall 2022 collection in trendy TX Huaihai in Shanghai. The brand exhibited a 7-metre-tall blow-up model in a sensual pose.
Skechers Exercises More Markets Across Country: Since opening its ¥1.35 billion ($196m) logistics centre in Taicang, Jiangsu last month, Sketchers has announced that it aims to double its store count in China to 6,000 stores by 2026. Stores will range from 50 to 3,000 square metres, with a strong focus on lower tier cities. The company will also be investing more in ecommerce sales channels.
Luxury
Chinese Love of Luxury Remains Strong, but Shoppers are Ditching London and Paris for Home-Grown Brands: Back in 2015, overseas luxury purchases accounted for over 70% of total purchasers from China. The inability to travel saw that drop to 25-30% in 2020 and just 10% last year. Online sales accounted for 19% of luxury sales last year – up 56% on 2020 – with the total rising to 26% when duty-free purchases are added.
