China's Year of the Sheep - Who Wants the Woolly?
It's upon us. No sooner have the Christmas decorations come down, and the red lanterns, woolly sculptures and giant inflatable sheep have popped up in every corner of China with even more gusto. The excitement is further fuelled by infinite fireworks explosions, gushy television commercials, and the biggest consumer spend-up of the year.
19 February will mark the start of the Year of the Sheep (Yang). Its auspicious placing as the eighth sign in the 12-year cycle counts for little for many superstitious Chinese, who rank the animal lowly versus the luckier Dragon, Tiger, Horse and even next year's Monkey. Would-be parents often hold back, believing kids born as sheep are destined to be docile followers, rather than leaders. An old Chinese idiom remarks that only one in ten born in the Year of the Sheep will find happiness.
Nevertheless, countless businesses in China have some form of Spring Festival promotion and sheep symbolism. Online shopping platforms, to the NBA Chinese New Year uniforms and TV commercials, and sheep-themed Reebok Pumps are all jumping on the wagon to play their part in commercialising the traditional festival.
The current Year of the Horse (Ma) has been a two horse race between the namesakes - Tencent's Pony Ma and Alibaba's Jack Ma, whose companies were rated the two most valuable brands in China in 2014. Some may recall that Tencent was quick out of the starting gates with its hugely successful WeChat Virtual Hongbao campaign, used by more than 8 million people during the week of Spring Festival, fast tracking the adoption of WeChat Payments for millions.
The Virtual Hongbaos are back again this year, yet not without a spat between Tencent's WeChat and QQ and Alipay, who are not accepting each other's virtual hongbaos - taking some of the shine out of the holiday tradition. It won't be the last drama between China's online giants this year, in what is destined to be another colourful and dynamic year in China's online sphere.
China Skinny wishes you the happiest of Chinese New Years. If you're on one of the 2.8 billion trips over the festival period, we hope you travel safe. We'll be back with the Weekly Skinny in the Year of the Sheep; until then, we hope you enjoy this week's Skinny.
Chinese Consumers
For Chinese New Year 2015, Brands Are Getting Their Ram/Sheep/Goat On: Another Chinese New Year rolls around with the usual slew of zodiac wares, from sheep-themed Reebok Pumps, to thermoses, to watches and purses.
The Two Worst Lies About Chinese Consumers: Before you put a dragon on your label to sell to the Chinese market, it's best to note a couple of common myths: 1. You should Sinofy your brand for China; and 2. The Chinese only pay more for “face”.
JLL City Momentum Index 2015: Five of the world's ten most dynamic cities are in China. Rounding out the top-20 Chinese cities and their global ranking are 3. Beijing; 4. Shenzhen; 5. Shanghai; 8. Wuhan; 10. Chongqing; 19. Tianjin; and 20. Nanjing.
Internet, Mobiles, Social Media & Ecommerce
What WeChat Account Is Best For My Business: A Service or Subscription Account?: WeChat is the most popular social network in China, providing businesses plenty of opportunities to grow brand awareness and engagement with Chinese consumers. What type of account is most suitable for your objectives?
China's Internet Population Hits 649 Million, 86% on Phones: 557 of China's 649 million Internet users accessed from a mobile phone in 2014, 57 million more than in 2013 according to the China Internet Network Information Center (CNNIC). Online shoppers increased by 20%, and users of messaging tools' such as WeChat grew 10%. Online travel and group buying both grew 22.7%, whereas online video users grew just 1.1% and microblog users were down 11%, following a 9% decline in 2013.
Online Retail Spending in China to Exceed $1 Trillion By 2019: Forrester forecasts that online shopping will grow from $307 billion in 2013 to over a trillion by 2019. Mobile sales average growth will be 44.2% a year - more than double the overall growth rate of 19.9%. More categories traditionally sold offline, such as pharmaceuticals and furniture, are moving online, with a wide variety of high-end products, such as fresh food, imported goods, and automobiles increasing in popularity.
The One Barrier China’s Smartphone Companies Can’t Seem to Break: Although Chinese smartphone shoppers are falling over themselves to drop at least ¥5,288 ($847) on an iPhone 6, Chinese brands just can't break the ¥3,000 ($480) mark.
Apple Commemorates New Year in Its First TV Spot Created Specifically for China: Apple is further reinforcing its increasing focus on the China market by launching its first TV ad specifically for the market, with some nice subtle references to Chinese culture.
Food & Beverage
Bend Baijiu Like Beckham: Diageo Talks Up Chinese Turnaround But Sales Keep Falling: Diageo's super premium baijiu brand sales growth of 25% were driven by the launch of the lower-priced premium option - Master Distiller's No.8. The austerity campaign is still hurting Diageo's scotch sales, dropping 22% last year.
Haagen-Dazs Eyes China's Coffee Market: Haagen-Daz is hoping to tap into China's growing taste for coffee by launching its "Rainbow Latte" made with its ice cream and Illy coffee. It plans to open coffee shops to expand beyond its staple of ice cream.
Chinese Tourists
Sentiment Bullish on China's Hotel Sector: Long held concerns about a glut of China's hotels are being allayed by the rise in occupancy rates last year, on the back of the rising purchase power of China's middle class. Beijing's hotels were 63.6% full in 2014, up from 59.5% in 2012. Shanghai's 2014 occupancy rate grew to 71% from 66.2% in 2012.
Consumers May Mistake Daffodils for Chinese Vegetable, UK Stores Warned: Another example of how Chinese can view food differently, with a number of Chinese poisoned in the UK from eating daffodils.
Sports
China Digital Football Index 2015: Chinese football fans tend to follow a team due to their star players, with Lionel Messi having more online fans than the combined Weibo followers of Spain's six teams. Manchester United's Weibo account attracted 11 million new followers over the past 12 months.
Luxury
76% of China's Luxury Consumption Happens Overseas: Chinese consumers' consumption of luxury goods worldwide was $106 billion last year, 4% higher than 2013. Goods bought in Mainland China totalled $25 billion, down 11%, whereas goods bought overseas - 76% of consumption - were up more than 9% to $81 billion.
Auto
New-Car Smell? No Thanks, Say Chinese Car Buyers: That sweet scent of new cars - the off-the-factory-floor plastics, glues and leathers - that appeal to many in the West does not have the same attraction for Chinese buyers, and so brands like Lincoln are doing what they can to deodorize them.
That's the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing, research and digital advice and implementation.
