China's Love Affair with Plastic
Welcome to this week's skinny on China. China has long been as a cash society; large wads of red bills changed hands, counted with spectacularly fast fingers. But those Chinese who stash their savings under their mattresses are becoming less and less common.
China is waking up to cashless commerce, adopting bank cards and credit cards en masse. Last quarter, almost half [official] retail activity was with plastic, growing over 6%. It's been helped along by increasing trust in banks, lifestyle changes, convenience and new ways to pay. Alipay, the online payment platform, has taken ecommerce to the masses, and mobiles are an increasingly popular method to pay. Almost $2 billion worth of transactions were made on smartphones last year, growing 416% from 2010. With soaring smartphone adoption in China, some pundits are picking mobile commerce could account for half of Chinese retail by 2020.
Although cash is still a large part of many Chinese shopper's lives, the other methods are catching up as you'll read below. Make sure you've got your payment bases covered if you're selling to Chinese consumers. But before they pull out the cash, card or phone, you need to woo them first, which some of this week's other articles may assist. As always, we hope you find this week's skinny helpful and a joy to read!
Chinese Consumers
Content Marketing Trends, Challenges and New Media Adoption by Companies in China: In the past 12 months, 60% of Chinese companies said they'd adjusted or changed their products, services or marketing strategies at least once as a result of comments or feedback from their followers on social media sites, up 10% from last year.
The Line Between Rural and Urban Consumers is Beginning to Blur: Some interesting macro stats, but we don't agree with this author of $10 Trillion Prize that there's only room for the 1st and 2nd players in the China market - there are countless examples of niches being carved out in China.
Shifting China Consumer Tastes Show in Brand Sales: KFC, the darling of adapting to China's market is losing its shine with Chinese consumers - you can't stand still in this market and need to constantly evolve with the dynamic consumers themselves.
Green Buying Behaviour: What Counts Most for Chinese Shoppers?: As the Global Carbon Project announced China's carbon dioxide pollution grew 10% in 2011 to 10 billion tons, Chinese consumers were most interested in the green aspects of an offer from a global survey. “Fair trade” (82%), “green/environmentally friendly” (81%) and “organic” (72%) mattered the most. Those aged 30-59 deemed green/environmentally friendly to be the most important.
Regeneration Consumer Study Finds Consumers Buying Less and Buying Better: Consumers in developing markets (China, India & Brazil) are twice as likely to feel a sense of responsibility to buy products that are good for environment. But the products should perform as well or better than what they're currently using (75% would buy if they did), shouldn't cost much more (70%), and should have believable claims (64%).
Payment & Banking
Bank Card Payment Seen Rising: Cash's dominance in China is fading. China's bank card usage is increasing, accounting for 46.3% of all retail for July-Sep - up 6.1% (usage in developed markets is around 70%). 800 million Chinese are picked to have a bank card by the end of 2012. 318 million credit cards have been issued.
Chinese Spending Promise Pushes ASX Debut : Chinese consumers are expected to spend 20 trillion RMB on plastic this year, up from 11.2 trillion in 2010. That's good news for a Sydney-listed, China-based provider of online and offline purchasing technology.
Chinese Consumers Remain Fiscally Conservative: MasterCard Survey : 80% of Chinese consumers still planning to save at least 26% of their income in the next 6 months.
Internet & Gadgets
8 Tips on Optimizing Your Website in China: Our view on some quick wins to ensure your website is making the most of the online opportunity in China.
Chinese E-Commerce Site Xiu.com Caught Up In Counterfeiting Scandal: Less than a month after eBay announced its new partnership with Xiu.com, Xiu has been accused of knowingly selling fake luxury goods. Further reinforcement to choose your Chinese partners wisely.
Chinese Smartphones Upset the Apple Cart: Chinese brands have taken over half of China's smartphone market this year, and they'll continue to take more of the world's largest market according to Gartner.
The Tablet Market is Growing Fast in China: China's tablet market grew 62.5% for the year with 2.6 million tablets sold in Q3 alone. Apple's iPad still dominates with 71.4% of sales.
Food & Beverage
Foreign Cheese Firms Eye Big Slice of China's Market: Chinese cheese imports have doubled in 2 years as Chinese get the cheap feeling of a westernized lifestyle. New Zealand dominates with 42% of imports.
Making Cognac Cool: Remy Martin Chases China’s Younger Drinkers: Taiwanese pop stars, dancing competitions and China's 20-something crowd: how they've booster Remy Martin's fortunes in China. Asiapac now accounts for 60% of Remy's sales globally.
Automobiles
Selling Mercedes-Benz in China: Mercedes' placement as a 'youth' brand is paying off in China. Association with fashion, culture, arts and high profile sporting events has seen sales grow 77% in 2010 and 59% in 2011.
Volkswagen Crowdsources Auto Design: VW is crowdsourcing in China, hoping Chinese will contribute to design in 'The People's Car Project'. So far 11 million Chinese have registered on their site with 160,000 designs submitted.
That's the skinny for the week!
If you've missed earlier news or need to learn more, there's a library of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed. If you have any feedback or suggestions for future articles, please let us know.
