China's Heaving Population Just Officially Got Bigger
Many people, including some of the big media houses, still refer to China's population as 1.3 billion. This was true five years ago, but since 2012, the number of people living in China has been closer to 1.4 billion.
China's latest census results were released last month, showing the population is edging even nearer to the 1.4 billion figure at 1,373,490,000. Between 2011 and 2016 that number grew 0.5% or 34 million, the slowest growth in recent history, but still similar to the population of Canada.
The census highlighted the concerning trend of China's declining working-age folks. Those aged 15-59 dropped by 15 million, from 70.1% to 67.3% of the population at 925 million. Whereas the number of Chinese over-60 grew by almost 45 million people from 13.3% to 16.2% in just five years. Under-15 year-olds increased by 4.5 million from 2011 to 227 million. Whilst China's aging population and the One-Child Policy haven't helped birth rates, the portion of youth remains virtually unchanged at 16.5%.
China's urban population rose 6.2% over the past five years to 767.5 million - 55.9% of the population, although migration growth is slowing.
Nevertheless, whether China has 1.3 or 1.4 billion people, the total population is not overly relevant for most brands selling into China. The percentage of the populace with the means, and the will, to buy most imported products is currently only a fraction of that. That fraction is growing however, and fast.
Although China is already the largest market for luxury goods, cars, tourism, international education, foreign property and countless other categories, what we are seeing today is just the tip of the iceberg. The number of Chinese urban households with earnings of at least $25,200 annually is expected to soar from 4% in 2010 to 54% by 2030 according to McKinsey. In addition to rising incomes, the willingness to spend on consumables is also increasing. Brands that are already building a presence and channels, and an understanding of China, are best placed to tap into that opportunity.
For our Shanghai-based readers, China Skinny's Mark Tanner will be explaining who those relevant consumers are and how to best reach them next Tuesday May 10 in association with the Canadian Chamber of Commerce. Click here for more information. Here are this week's news and highlights for China:
Chinese Consumers
China Adds 34m People to Population, but Greying Trend Continues, Census Shows: The working population - those aged 15-59 – has fallen to 925 million.
Urban World: The Global Consumers to Watch: China's urban working-age population will grow by more than 100 million in next 15 years to 628 million according to McKinsey. Education spending accounts for 12.5% of under-30 year olds' consumption spending and almost 50% of the average 20-year old, compared with less than 25% in the US.
More Property, Less Pork: What’s Behind China’s Robust Economic Figures: Property investments climbed 6.2% in the first quarter of 2016 from a year earlier, helping fuel positive economic growth in China. In a rare disclosure, Beijing released unemployment rates of 5.2%, up from the 4.99% announced in January this year. Disposable incomes rose 6.5% in the quarter, which is likely to contribute to continued consumption growth.
Hello, Under Armour... Meet Uncle Martian: Under Armour is the latest brand to be victim of a blatant rip off in China.
Digital China
Digital Tops Chinese Media Use: Chinese consumers will spend more time on digital channels than traditional media for the first time in 2016, according to eMarketer. The average Chinese adult will spend six hours and six minutes a day consuming media in various forms this year, including an average of three hours and five minutes spent online.
China’s Next Xiaomi?: As Chinese consumers evolve, there have been changing fortunes of two of their smartphone brands, Xiaomi and Vivo. In the first quarter of 2016, Vivo pushed Xiaomi out of the top-5 global brands for shipments.
Chinese Government Shuts Down Apple’s iBooks Store and iTunes Movies: Just six months since launching in China, the State Administration of Press, Publication, Radio, Film and Television has ordered Apple to halt its book and movie store in China. DisneyLife was also shut down by Beijing last month.
Food & Beverage
Food and Drink Firms Urged to Look East: Chinese consumers are expected to spend around ¥6.3 trillion ($980 billion) on food this year, a rise of more than a third in four years. Meat, alcohol and dairy products currently account for around two thirds of Chinese food and beverage imports according to the China Britain Business Council.
Waitrose Enters China and Predicts it Will Become Top International Market by 2021: Waitrose has dipped its toe into China, selling 30 products through Royal Mail's Tmall Global store.
Nestlé 8Cube Taps Quirky Anime to Woo Chinese Millennials: Nestlé launched ACGN (Anime, Comics, Games and Novel) characters to promote its new 8Cube ice cream to China's youth consumers. The characters are portrayed debating unconventional, out-of-the-box and funny topics such as "Your teacher’s zipper is un-zipped. Do you tell him?" that speak to the teenage target market.
Chinese Tourists
China's Global Hotel Shopping Spree is Back On: China's HNA Tourism Group has agreed to buy Carlson Hotels, the owner of the Radisson hotel chain and 1,400 hotels globally. In another acquisition, Anbang who lost to Marriott International in the hunt for Starwood, is in the process of buying Strategic Hotels & Resorts for $6.5 billion.
Health
Explosion in Childhood Obesity in China ‘Worst Ever’, Expert Says of New Study Findings: A 29-year study finds childhood obesity is up 17-fold among boys and 11-fold among girls in rural Shandong; Western lifestyles are being blamed as a doctor calls for a 'catastrophe committee' to stem the rise.
Beauty Obsession Drives China Selfie App's $3 Billion Valuation: Meitu's apps help 270 million monthly active users slim faces, lengthen legs and otherwise spice up their online appearance. The company is looking like they could be become one of China's 10 most valuable private startups.
Luxury
Price Alignment is Not a Strategy but an Obligation, says HSBC Analyst: Luxury brands can no longer get away with disparate pricing around the world. The average Chinese luxury consumer is 15 years younger than their European peers and 20 years younger than their American counterparts and are social media savvy and connected to their mobile phones.
Banking
Rules Covering Internet Finance Ads Tightened amid Rise of Fraud: New rules for advertising include bans on promises of high returns and celebrity endorsements. Around 4,000 peer-to-peer lending websites have been established since 2011, and about 38% of them have defaulted on payments to investors.
Cars
Finding the Fast Lane: Emerging Trends in China’s Auto Market: 53% of consumers aspire to upgrade when they buy their next car - 37% switching to a better brand and 16% to a better model of the same brand. 60% of consumers think buying a car is no longer a status symbol in contrast to before. 47% of Chinese car buyers considered a used car in their last purchase, up from 18% in 2011. Digital consumers drive 20% less after using mobile ride-sharing type services, which now supports a fleet of 2 million vehicles according to McKinsey.That's the Skinny for the week! See previous newsletter here. Contact China Skinny for marketing, research and digital advice and implementation.
