China News This Week: Wednesday 14 September 2022
This week's news and trends in China:
Chinese Consumers
China to Step Up Regulation on Overpackaging: China will step up its regulations on overpackaging in a bid to facilitate a green shift in production and lifestyle. New requirements include production, sales, delivery and recycling to stem overpackaging. Packaging innovation will be encouraged to promote green packaging solutions, while supervision will be enhanced on ecommerce, courier and food delivery services.
Mooncake Madness: China Cracks Down on Extravagant Versions of Festival Staple: Chinese authorities launched a crackdown on "sky high" mooncake prices ahead of last weekend’s autumn festival. The average box of mooncakes cost about ¥70 ($10) to produce, and should not exceed a retail price of ¥500 ($72). In the lead up to the festival, anti-corruption and commerce authorities have targeted sellers who are overcharging or offering "excessive packaging" which exceeded strict limits on production costs and banned ingredients.
Chinese Life Expectancy Increased to 78.2 Years Over Past Decade Thanks To Childbearing, Population Policies: Over the past decade, China's average lifespan has increased from 74.8 to 78.2 years. By contrast, life expectancy in the US saw its steepest decline in a century, dropping from 78.8 years in 2019 to 76.1 in 2021. China's population development faces profound and complex changes, such as the growth of the total population having slowed down significantly, the general birth rate being lowered to 1.3 or below, and a deepened aging problem.
Digital China
Alibaba’s Tmall Global Attracts China’s Gen Z, Female Consumers As Cross-Border E-Commerce Grows: Over 100 million active consumers shopped on Tmall Global for the 12 months ended July 31, and 70% were female. Meanwhile, two-thirds of Tmall Global’s consumers were born after 1990, with most being Gen-Z. The pandemic has greatly increased these consumers' awareness for health. Probiotics and nutrition supplements for adults and hypoallergenic baby formula are examples of categories achieving high growth. In the past year, more than 6,400 overseas brands have entered China via Tmall Global.
Singles Day pre-sale on Alibaba Tmall to start on October 24: Alibaba announced that the 2022 Tmall 11.11 shopping event will begin presale at 8 p.m. on October 24, with the first selling period starting on October 31 and the second one on November 10.
Food & Beverage
Genshin Impact is China’s Most Popular Global Video Game, and Chinese Food Brands Can’t Get Enough of It: Food and beverage chains in China are co-branding with Genshin Impact. The strategy has proven so successful that police have had to stop large crowds gathering outside fast-food restaurants offering game merchandise and themed meals.
China's Stricter Cheese Standards to Refine Flavours, Experts Say: New rules introduced by year-end will mean products need to have 50% or more raw cheese to be considered processed cheese. Previously, those with 15% could be called processed cheese. A large number of brands have entered the cheese market due to the relatively loose national standard and the low industry threshold - China currently has 1,490 cheese-related domestic businesses. On average, each Chinese person consumed 6.5 kilograms more dairy products in 2021 than they did in 2019, with consumption up 66% over that time and consumption of processed cheese almost doubling.
Penfolds Wins With Chinese Name at China Supreme Court: In a valuable reminder to trademark a Chinese brand name, a Chinese company called Rush Rich was first to register Ben Fu, the Chinese name that Penfolds is known under in the market. A six-year legal battle saw Penfolds win a trademark case at a Beijing court, which was subsequently overturned at the Beijing Higher IP court, but won again at the Supreme Court of China. The ruling in favour of Penfolds was based on the decision that Rush Rich had acted in bad faith. The decision was helped by Penfold's long reputation in China and that Rush Rich had also registered other famous brands in bad faith.
‘Specific Chinese needs’: Nestle’s Garden of Life Launches Two New Probiotics for Kids’ Growth and Immune Health: Nestle has launched its first set of products designed to meet the specific needs of Chinese consumers.
"30% of Australian Chocolate Oranges are Exported to the Chinese Market, and Niche Fruits are Popular with Boutique Channels": Chocolate oranges are mainly sold through online retailer FruitDay and boutique supermarkets in first and second-tier cities. They cost ¥59.9 ($8.65) for 6 fruit and ¥149 ($21.50) for 15 packed in gift boxes. Chocolate oranges cost slightly more than similar citrus fruits, due to the small supply and unique taste. In order to let consumers more intuitively feel the unique charm of chocolate orange, they use customised gold foil paper to put on a golden coat for chocolate orange. The packaging stands out and preserves moisture.
China’s Plans for ‘Smart’ Agriculture: The plans include ‘smart’ farms and machinery, agricultural industrial parks, and ‘digital villages.’ But can tech make up for extreme weather, diminishing agricultural land, and fewer people willing to work it?
Beauty
Mosaic of China – The Trend Tracker Stéphane Wilmet, L'Oréal China: In Western markets, anti-age skincare for wrinkles and skincare for early signs of ageing is usually bought by women and men around 35-40 years old, when the wrinkles start to show up. In China, its around 22-23 years old. This links back to the Chinese culture of prevention and keeping balance.
Cars
Meet Hozon, the Little Unknown Chinese EV Startup that Stormed the Market Using Xiaomi's Strategy: Nezha's 93,185 EV deliveries outperformed larger rivals placing it second for unit sales behind Aion for the first eight months of 2022. Like Xiaomi, it initially targeted customers outside of major cities with inexpensive cars.
GM Employs Tesla-esque Direct-to-Consumer Sales Strategy in China: General Motors notes a shift in the Chinese market for "halo cars." Consumers in cities have specifically started to show growing interest in performance vehicles for racing and SUVs for more off-road adventures. So GM hopes to attract three types of customers with Durant Guild: nature lovers; executive VIPs; and young, sporty drivers. Chinese consumers want to extend their digital lifestyles to their cars. Cars from foreign brands designed and engineered overseas are increasingly not meeting these needs.
