China's Growing Waistlines and Opportunities
If China's polluted air and water supply wasn't doing enough to bring on heart disease and other illnesses, there's a another scourge that's stepping in - the bulge.
More than a quarter of China's adult population, around 350 million, are now considered overweight. Those classified as obese number more than 60 million, rising 20% over the past four years in the 20-39 age group.
Busy lives in China's cities are driving demand for convenient, processed, oily and sugary food. That, coupled with more sedentary lifestyles, is fattening up the average urban dweller. However even with consumers in cities spending twice as much on food as their rural counterparts, obesity rates are growing faster in the countryside.
China's growing waistlines present plenty of opportunities. Sales of weight management health products and services grew 15.4% annually between 2007 and 2012 and are likely to surpass ¥8 billion ($1.3 billion) this year, spurning everything from fat-fighting bloggers to weight loss camps for kids.
Weight Management is part of a bigger subset of an increasingly health-conscious Chinese consumer spanning pharmaceuticals, health care, food and beverage, fitness, beauty, tourism and more. Three of the top-five reasons wealthy Chinese emigrate are health-related. Overall, 73% of Chinese consumers pay a premium for products that they consider healthier - something to think about with your products and positioning.
We hope you enjoy this week's Skinny.
Chinese Consumers
Chinese Customers' Lack of Loyalty Puts Pressure on Brands: Baby milk has the highest rate of loyalty among consumers across China's FMCG segments. The top-5 brands in all other segments have 40%-80% of their customers as newbie's each year. Chocolate, skincare and shampoo have the least loyal customers.
Boost in Chinese household consumption by 2020: China's Household consumption could grow from today’s 35% of GDP to between 45% and 50% by 2020 according to Nielsen - a rise of as much as ¥26.9 trillion ($4.3 trillion) on 2012 levels. Just 13% of Chinese have ever held a loan. 38% of consumers in Tier 2 cities and 37% in Tier 3 cities said they'd buy more premium products, versus 28% in Tier 1 cities.
Customer Service 'Leaves Shoppers Cold': As many as 75% of Chinese consumers are not satisfied with their customer experience through multiple channels. This is contributed to by processes that aren't integrated such as inconsistent promotional info across channels and sales staff unaware of policies and offers on social media.
Chinese Consumers Like Socially Responsible Firms, Study Finds: 69% of Chinese online consumers said they will pay more for companies that are socially or environmentally active, 14 percentage points higher than the global average and 10 percentage points more than last year.
Health
Chubby Little Emperors: About 350 million Chinese consumers are considered overweight or worse, with the obese count the same as the entire UK population. More than a third of Chinese die from heart disease. Meals in China now contain more than twice as much oil and meats than in the 1980s, although Chinese aren't eating more as they get richer with the average daily calorie intake dropping around 5% since 2002, pointing to more sedentary lifestyles.
Immigration and the Chinese High Net Worth Individuals: 64% of China's high net worth individuals have emigrated or want to do so in 2013, up from 60% in 2012 according to Hurun. Three of the top five reasons Chinese are emigrating abroad are related to health including pollution, food safety and the standard of medical care.
How Eating Broccoli Can Help Your Body Cope With Air Pollution: An international study in Jiangsu province has found a tea made from boiled broccoli sprouts helps the body to more speedily eliminate some ingested air pollutants. The potion is said to taste pretty bad, cause mild stomach complaints and possibly have a high concentration of pesticides when grown locally.
Internet, Mobile & eCommerce
Alibaba’s New Filing Shows Mobile Growth, But Also Challenges: In Q1 this year, 27.4% of Taobao and Tmall's transactions happened on mobile, up from 10.7% a year earlier. During the quarter, the number of active mobile shoppers grew from 136 million to 163 million.
These 7 US Startups Show That Your Business Can Survive in China: Whilst many of America's Internet behemoths have been blocked or failed in China, there are some making good inroads - here's a brief summary of seven who are, with a common theme of self-censorship.
Food & Beverage
Coffee May Not Dethrone Tea, But China Could Be the Largest Coffee Consuming Market By 2020: Although Chinese consumers drink just five cups of coffee a year on average, consumption is rising at 15% a year. At current growth rates, China is poised to become the top coffee drinking nation by the end of the decade.
China Unveils Plan to Consolidate Dairy Industry: Beijing has vowed to form ten strong domestic dairy companies by the end of 2018 which will account for more than 80% of China's total market share.
Alibaba Promotes a Mobile Marketing System with Pepsi and Tsingtao Beer: Taobao's mobile app has a new feature allowing consumers to scan QR codes on Pepsi and Tsingdao beer bottles to win prizes. Consumers can also use the scan feature to get product info and sales support from 300,000 online and offline merchants.
Chinese Tourists
Winning Today’s Globe Hopping and Shopping Chinese Luxury Consumers: More than two thirds of Chinese tourists are under 35 years old - 25 years younger on average than American tourist. In 2012, nearly three-quarters of the traveling Chinese consumers surveyed by McKinsey bought a luxury product while abroad in the past 12 months. 95% of Chinese visitors to Louis Vuitton shops in Paris were on organized tours.
Property & Finance
Q&A: What does London's China currency deal actually mean?: The China Construction Bank has been appointed as a renminbi clearing house in London - the first outside of Asia. European firms will be able to receive and pay China's currency in the western time zone, allowing easier, quicker and cheaper transactions.
Chinese Property Firms' Overseas Expansion: Chinese institutional investors' offshore property investments in Q1 2014 rose 25% year-on-year to $2.1 billion, with investments in residential property growing by 80% according to JLL. Savills analysis suggests that Chinese consumers invested $13.5 billion in the overseas market during 2013, almost double the 2012 figure.
Sports
Weibo Lights Up with First Kick of the World Cup: Brazilian defender Marcelo became the top-trending term on Weibo after scoring an own-goal . Within 6-hours of the opening match, there had been 1.3 billion posts related to the Football World Cup on the network. CCTV's post sparked 220,000 discussions, of which 65% of the interactions came from users aged less than 25 years and one third by women.
That's The Skinny for the week! We'd love to discuss how we could help with your marketing, online initiatives or research to take advantage of China's opportunities. Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.
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