China News This Week: Wednesday 21 September 2022
This week's news and trends in China:
Chinese Consumers
Why Innovators in China Stay Close to the Market: Businesses in China increasingly source their innovations from customers, competitors, and front-line employees, bucking trends seen elsewhere in the world. Two large MIT studies over the past 3 years found that companies in China — be they domestic or foreign — have chosen a different path from the rest of the world. In a market where fast growth is producing a disproportionately large share of new customers for many industries, and advanced digital infrastructures provide the means to access them.
Chinese consumers set to beat global averages on spending: PwC report: Chinese consumers will have a stronger tendency to spend more on health and beauty products, home entertainment and consumer electronics in the next six months than the global average, despite challenges brought by the pandemic. "The economic conditions will improve on pent-up consumption demand in the months ahead and growth momentum is expected to rebound in the second half of 2022, aided by a slew of policy stimuli such as consumption vouchers," said Jennifer Ye, PwC China Consumer Markets Leader. Chinese consumers are nearly twice as likely as global respondents to pay a higher than average price for a product that is traceable or has a transparent origin.
Want Your Brand Collaboration To Stand Out In China? Get Nostalgic: When evaluating collaborations in China, one stand-out trend is the leveraging of familiar cartoons or national food brands that stir a sense of nostalgia. In 2021, Mintel found that 77% of Chinese consumers enjoy products that stir memories of the past, including childhood snacks.
Is the End to China’s Strict Zero-Covid Rules in Sight? Internet Users Hope So: Hopes that the Covid-19 pandemic could be over soon have risen online in China with a UN agency’s assessment that the end is "in sight" but there is no sign in the country that strict controls will be abandoned. Nevertheless, Chinese state media have denied suggestions that the country’s "dynamic zero-Covid" approach will become permanent government policy. The number of new weekly cases around the world fell by 28% in the first week of September, compared with a week earlier according to WHO.
China's Yuan Breaks 7 Per Dollar Again, This Time in Onshore Market: Now the more tightly controlled onshore yuan has broken 7 against the dollar—crossing a level that was closely watched by economists, traders and even Chinese consumers.
Luxury Brands Drop Chinese Star Held for Hiring Sex Workers: Global brands including Prada and Remy Martin have cut ties with Chinese superstar Li Yifeng, after the actor was detained for soliciting sex workers.
Digital China
Demand for Australian Brands Grows in China Despite Tension: 67% of China’s cross-border online shoppers expecting to increase their online spending for Western and Australian goods in the coming year according to research from Pattern. For Chinese shoppers buying cross border products, 60% buy Australian or Western brands for product quality, 59% due to a sense of uniqueness, 59% to match their style or values, and 57% for value for money.
China NFT and Metaverse Marketing Requires Tiffany, Other Global Luxury Brands, to Tread Lightly and Be Creative: Brands must try to reach China’s young, digitally savvy consumers while adhering to the nation’s ban on cryptocurrencies and NFT trading. Loopholes still exist for Chinese consumers to trade cryptocurrencies and NFTs, despite China’s hard-line stance. They can trade with friends outside China and they can try to skirt restrictions on crypto exchange platforms.
Food & Beverage
Starbucks China Aims for 9,000 Stores by 2025: Over the past decade, Starbucks stores on the Chinese mainland have grown by nearly 10 times and are on track to reach 6,000 stores by the end of this year. By 2025, the company is expected to open a new store every nine hours to add 3,000 new stores in about 300 cities throughout the country.
China Brewery Market Report 2022: A few notable trends may include rising preferences for craft beers, surge in online penetration of beer sales, growing consumer inclination towards premium beers, increasing consumption of non-alcoholic beers and a rising affinity for imported beer.
Fashion
Patagonia Owner Gives Company Away, Elevating Credibility In China: Within two days of the Patagonia family’s announcement to give all company shares away to fight climate change and protect unspoilt lands, a wave of positive feedback was seen in China. The hashtag #PatagoniaFounderGaveAwayTheCompany has over 1.8 million views on Weibo and media outlets such as The Paper, YiMagazine, and Jiemian News have covered the news.
Finance
What China’s New Credit Card Rules Mean for Banks and Customers: New rules released and implemented in July impose tighter supervision on a sector that's become an increasingly important part of lenders' business and income. Some 800 credit cards and credit-debit cards had been issued by the end of 2021, almost double the number in 2015.
Luxury
Inside Louis Vuitton’s Aranya festival: An On-the-Ground Strategy for Post-Lockdown China: Rather than host a 15-minute runway show, as it’s done in the past in Shanghai, Louis Vuitton took the opportunity to spend more time with Chinese customers by creating a full-scale hyperlocal marketing and branding campaign. The men’s Spring/Summer 2023 collection festival was set in the artsy coastal community, 'China's Hamptons', Aranya. More festival than fashion show, the three-day event included parties and movie screenings, while the collection itself featured a capsule of all-new looks. More than 270 million viewers watched the Vuitton spin-off show and live streams.
Cars
China’s Car Sales Grow at Fastest Rate in Over 10 Years in August; BYD Is Country’s Top Seller: 1.8 million passenger autos were sold in August, 28.9% up on a year ago, and the highest amount since April last year. The NEV penetration rate was 28.3%, an increase of 11 percentage points from the same period last year.
