Why Facial Recognition is Culturally So Different in China Versus the West
Last April in the third-tier city of Nanchang, a man wanted for "economic crimes" was arrested from a crowd of 60,000 getting down to Cantopop legend Jacky Cheung. The 31-year old man had been pin-pointed from the sea of people walking into the stadium using facial recognition.
By next year, 626 million CCTV cameras are expected to be installed in China - almost one for every two people - ensuring citizens will think twice before jaywalking and even using too much loo paper in the John. China is already home to eight of the top-10 most surveilled cities in the world, with London and Atlanta coming in sixth and tenth.
Many western readers are likely to shudder at the thought of being watched by "big brother" - cities like San Francisco and Portland have gone as far as banning uses of facial recognition. On the contrary, most Chinese are accepting, even applauding of the increased peace of mind and security they bring.
Beyond the well-cited public safety functions of the technology, China's tech companies are using it to keep the online masses a little more honest. Local Tinder-like service Tantan verifies profile pictures to ensure users aren't luring in would-be dates with photos of super models when they actually look like hobbits.
Another common facial recognition application for businesses is to provide the convenience that Chinese consumers crave. In JD's flagship cashless store in Beijing, shoppers walk in, take whatever they want from the weight-sensored smart shelves and then walk out of the store. CCTV cameras capture the face of the shopper and then charge them for the goods they selected on WeChat Pay when they leave. Easy and convenient.
Companies like Alibaba and Tencent-JD already have the facial profiles of more than 100 million people who have signed up to facial payments. It's likely they will overlay these profiles with the other data they have such as ecommerce and mobile payments purchases, holidays taken, social media posts and a whole lot more, to provide truly personalised and customised experiences in the bricks & mortar retail world and offline advertising space. With chains like Hema rapidly expanding and even opening shopping malls, in addition to the wholesale acquisition of retail outlets by the tech giants, we can soon expect this to become mainstream.
Yet facial recognition isn't all happy smiles in China. Last November, a well-known businesswomen was falsely accused of jaywalking after a camera scanned a bus advert which brandished her face. More recently, Taobao vendors were selling services which allowed the 'hobbits' to beat the facial recognition verifications on Tantan. The technology is improving all the time to counter such incidents, however there is also increasing pushback from consumers like the law professor who sued a wildlife park for their use of facial recognition. This is likely to drive more control and regulation of scanning faces from private businesses in China, but overall, nothing is going to stop the expeditious penetration and increasing uses for the technology in China. We'll keep you posted. Go to Page 2 to see this week's China news and highlights.Here are this week's news and highlights for China:
Chinese Consumers
HEMA Expands Retail Offering by Launching its First Shopping Mall: Hema has launched its first 'digitalised' mall, Hema Li / Fresh Hippo Mall in Shenzhen, which it hopes will revolutionise malls in the way its Fresh stores have done for groceries.
Customized Products and Services Proliferating Chinese Trend: 36% of Chinese consumers have expressed a willingness to buy customised products and services, with one in five already paying up to a 20% premium for personalisation. Personalised characters written in the snow for ¥2 (28 cents) each to NIKEiD allowing customization of colour, design and performance features, where consumers spend an extra $170 per item are examples of popular personalisation in China.
World Diplomacy Stocktake: A Shifting of the Ranks: Further evidence of Beijing’s drive for international influence: China has overtaken the United States and France in diplomatic reach for the first time this year, boasting more embassies and consulates with a total of 276 posts.
Digital China
China Due to Introduce Face Scans for Mobile Users: People in China are now required to have their faces scanned when registering new mobile phone services to "protect the legitimate rights and interest of citizens in cyberspace".
As Facial Recognition Tech Races Ahead of Regulation, Chinese Residents Grow Nervous About Data Privacy: Last month a law professor in east China sued a wildlife park for breach of contract after it replaced its fingerprint-based entry system with one that uses facial recognition.
Sellers Offer a Way to Beat Facial Recognition in China: Facial recognition is everywhere in China these days. Even China’s most popular dating app, a Tinder-like service called Tantan, only allows someone to become a verified user by letting the app scan their face, matching it with the person’s profile picture. However a Taobao vendor is offering a service allow would-be photoshoppers to spoof the system.
Why Amazon Picked Pinduoduo To Tackle The Chinese Market: After pulling its store in July with less than 1% market share, Amazon is hopping to tap into PDD's hundreds of millions of users, particularly in lower-tiers. For PDD, it helps raise its image with roughly 1,000 branded foreign items.
This Professor Is Using AI to Save Lives - On Weibo: Professor Huang Zhisheng from Vrije University of Amsterdam has developed an AI algorithm to detect Weibo posts that may contain or represent suicidal thoughts, followed by immediate actions carried out from his team of 600 volunteers who are local to or near the original poster to save them from death or severe injury. In the past year, his team has prevented 1000 potential suicides, totalling 700 people. Around 250,000 commit suicide in China every year - about one third of the worldwide total.
China’s Mobile Payments Grow More Than 60% in Third Quarter: 27.3 billion mobile transactions happened in the third quarter in China, 61.1% more than a year ago. A total of ¥86.1 trillion ($12.3 trillion) changed hands via mobile, up 31.6%. 633 million in China used online payment services as of June.
Food & Beverage
China Bottled Water Giant Gets Ready for More Than $1 Billion IPO: One of China’s biggest bottled water and beverage companies, Nongfu Spring, is weighing an initial public offering in Hong Kong that could raise at least $1 billion. Founded in 1996, Nongfu produces drinking water, vegetable and fruit juices as well as tea beverages and soft drinks
.A Chinese Company Just Bought Some Of Our Biggest Milk Brands. Should We Be Worried?: Hard on the heels of purchasing Bellamy's, Chinese dairy giant Mengniu has offered $600 million for Lion Dairy and Drinks, the second largest milk processor in Australia. 98.4% of dairy cattle businesses in Australia are fully Australian-owned.
Famous Yorkshire Chippy Opens in China After Tourists Flock to York Branch: A Chinese businessman has opened a branch of the Scotts Fish And Chips in Sichuan following the popularity of the original namesake in Yorkshire which became a magnet for Chinese after translating its menu and getting coverage on Chinese social media. The Chinese chippy uses the same recipes and methodologies as the Yorkshire store, with some local twists such as Sichuan sauce as well as ketchup. Smaller portion sizes are also on the cards.
Chinese Tourists
WeChat Eyes Empowering Global Tourism Services for Outbound Chinese Travellers: WeChat has set up the Welcome with WeChat Alliance to leverage its ecosystem and help participants meet the diversifying demands of Chinese travellers abroad. The alliance will support members in digitalizing their content and services, offer training on effective practices, and finance innovative solutions.
The Raging Protests in Hong Kong Have its Retail Sector Shrinking the Most in History: Hong Kong's retail sales declined 24% in October from the same month last year. The city entered a recession for the first time since the financial crisis in October after reporting GDP contracted by 3.2% in the third quarter. Weekday visitors to HK Disneyland have fallen by about 90% since protests began.
Sport
Ready, Set, Ski! In China, Snow Sports are the Next Big Thing: Opening day at Nanshan, one of about 10 ski areas within an hour’s drive of Beijing and the resort was packed. Multibillion dollar resorts are popping up in record time. It’s all part of the People’s Party plan to create 300 million Chinese “winter sports enthusiasts” by the time the Games roll around in 2022. In the last 20 years, China's ski areas have grown from around 20 to more than 700 today.
That’s the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing strategy, research and digital advice and implementation.
