Where are the Christmas Trees Tencent?
'Tis the season to be jolly. Well maybe not in Langfang, in northern China's snowy Hebei province where folk can be arrested for selling Christmas apples and Santa suits. The parishioners of the renowned 40-year old Rongguili Church in Guangzhou may not be feeling so festive either after a children's bible class was raided in the third unregistered Protestant church to be shut down in China this winter. Last year, it was a Chinese university banning Christmas to avoid "corrosive" Western culture that made it into the annual anti-Christmas headlines fuelled by a small brood of emphatic nationalistic types in China.
On a grander scale, the raining down of Christmas tree emojis that have brightened up WeChat message feeds for many Decembers are notably absent this year. Tencent has had a tough year with its stock price almost halving between January and November, and the new cool kid ByteDance eroding its share of screen time and now talking about launching a messaging competitor to WeChat. Perhaps Tencent is trying not to rub Beijing the wrong way by celebrating western holidays, in hope of them lifting the new game ban, but come on Tencent, cheer up!
For those of us who still love the magic of the festive season, fear not. Aside from a few sensational stories and WeChat policy-makers, a stroll down the streets of China appear as Christmasy as ever. Christmas trees that match China's skyscrapers for architectural pizazz and neon brace the public plazas and shopping malls.
Online, smartphone screens are again filled with countless brands from Starbucks to H&M peddling their Christmas jeer, KOLs sharing their Christmas list ideas, kids showing off their advent calendars, and millions of Christmas paraphernalia bought from the ecommerce platforms, hopefully some of it in sustainable packaging.
For the vast majority of Chinese, Christmas isn't a time to acknowledge newborns in mangers millennia ago. There remains little understanding of its religious or cultural associations, with most festival-thirsty consumers viewing it as an excuse to party and shop in the void between Singles' Day and the Year of the Pig.
One thing we've noticed this year is how cities outside tier 1 are embracing Christmas. The China Skinny team has been crisscrossing the country on research projects and were out in Chengdu two weeks ago where they noticed more ceremony around Christmas than even in Shanghai this year. Most of the big hotels - Hilton, Waldorf Astoria, Wanda, Kempinski - had a grandiose celebration for the 'lighting of the tree', complete with VIPs, children's choirs, elaborate Santas, and a host of delicate Christmas-themed foods. In the 'lower' tier cities - like for many things - celebrating Christmas en scale is a more recent tradition than in Shanghai, and therefore more of a novelty.
This will be the last Skinny for 2018. Thanks for reading this year. To our clients and partners, thanks for working with us - you're awesome! The Skinny team wishes you the Merriest of Yuletides, Hanukkah, Kwanzaa and New Years. We'll be back again in 2019.
Here are this week's news and highlights for China:
Chinese Consumers
Chinese City Bans Christmas Sales for ‘Clean Environment’: Langfang in Hebei Province has banned city peddlers from selling Christmas related items like Christmas apples, Santa costumes and stockings and Christmas trees. Stores are not allowed to put up posters, banners or light boxes about Christmas sales. Outdoor performances to celebrate the holiday or promote sales are also prohibited. However, the city's urban management bureau said the move is not targeted at Christmas but to maintain a clean city environment in an effort to pass the annual rating of "National Civilized Cities."
Canada Goose Delays Beijing Store Debut Amid Huawei Tensions: Canada Goose is delaying the opening of its flagship store in Beijing "due to construction reasons", as tensions escalate between China and Canada following the arrest of Huawei's finance chief. Prior to the issues, Chinese consumers had embraced the $1,000-plus parkas, but the fallout has seen shares in the company fall over 20%. Other Canadian brands IMAX and Tim Hortons appear to have had very limited pushback in the market.
Digital China
Alibaba Brings Face-Scan Payments to Tablet for Shopkeepers: Alibaba has introduced in-store tablets allowing facial-recognition payments through Alipay for small and midsize retailers. The company says "customers can make purchases while playing a game on their phone, or when they run out of battery power or have no network connection." As if Alibaba doesn't have enough data already, they will soon have your face.
ByteDance to Compete with WeChat by Launching Messaging App: The world's most valuable startup behind the successes of Douyin and Toutiao, now has its sights on WeChat. It plans to launch a messaging app dubbed Flipchat, which will undoubtedly incorporate their advanced AI algorithms. Douyin is banned on WeChat, whereas Kuaishou and Baidu-backed Haokan aren't.
Alibaba DIEN AI Boosts Ecommerce Ad Effectiveness: A technical but helpful overview of Alibaba researchers' proposed Deep Interest Evolution Network (DIEN) to better predict customers’ Click Through Rate (CTR) for advertising. DIEN has two core modules: 1. temporally capturing and extracting latent interests based on customer history behaviours; and 2. modelling an evolving process of user interests. A test in June on Taobao saw a 20.7% CTR increase compared with the BaseModel method.
Environment
China Issues Standards for Cutting Delivery Waste Amid Ecommerce Boom: The Chinese government has issued a set of standards to promote the use of sustainable packaging materials in the logistics industry. Nearly 2 billion packages were delivered in the 10 days following the Singles' Day this year, a 25% increase from 2017 where 160,000 tonnes of packaging waste was created. Less than 10% of packaging material in China gets recycled.
Food & Beverage
Chinese PhDs and MBAs Give Up City Life for Farming, Driven by Desire to Improve Agriculture and Livelihoods: Last year the Ministry of Agriculture announced that seven million people, many educated, had returned to the countryside from cities, although it did not give a time frame for the migration. Of those, 60% had done so to work in agriculture. The drive to boost and modernise the rural economy comes from Xi Jingping and includes tax breaks, easier financing and other support measures for rural entrepreneurs.
Why MSG Is Falling Out of Favour With Chinese Consumers: In 2014 China accounted for 55% of global consumption of MSG, but sales have steadily declined since. Over 40% of Chinese consumers in major urban areas in 2018 reported a desire to limit their MSG intakes, making it a bigger target than sugar, salt, or oil according to Mintel. Many restaurants have also started advertising MSG-free menus. Although there’s no evidence that MSG is dangerous in moderation, diners are proving vulnerable to pseudoscientific claims and clickbait health articles that confirm all their worst fears about the food they eat.
Ferrero Enjoys the Sweet Taste of Success: China's confectionary market has bounced back this year, helping to boost Ferrero's sales revenue by 6%. Wedding ceremonies accounted for 15% of the annual sales of its signature product Ferrero Rocher.
Chinese Tourists
Ctrip is Not Only Bringing the World to Chinese Tourists, the Online Travel Agent is Changing the Industry Too: "One of the things that makes Chinese tourists different is their dependency on technology. They are used to arranging everything online and through their mobile phones," according to Ctrip. About 80% of all transactions on the platform are conducted on mobile platforms, and the percentage is increasing. "Also, individual travellers like to improvise and demand flexibility. They tend to choose places to stay and things to see once they’ve arrived at their destination." The company utilises data and AI from this to personalise offerings. First- or business-class fliers from Shanghai to London may be pushed a discount at the Ritz-Carlton or Four Seasons hotels. Once they select a hotel, Ctrip calculates the distance between the location and the hotel, and pushes a limousine to them. Then the app may direct them to a Michelin-starred restaurant nearby, or offer a nice shopping tour or a show.
2019 China-New Zealand Year of Tourism: Things to Know: The “China’s New Tourists: New Zealand and the Year of Chinese Tourism” conference in Wellington this month provided key takeaways that are relevant to tourism operators around the world: 1. China’s new tourists: independent, tech-savvy, female; 2. Demand from China may not be constant; 3. NZ needs to ‘shout its uniqueness out loud’; and 4. Kiwis need to be ‘China-ready’.
Wanda Looks to Cash in on 'Red Tourism' with $1.74 billion Communist Theme Park: Wanda is to build a Communist Party theme park in Yan’an, Shaanxi, recognised as the birthplace of China’s communist revolution. The park is on-trend with a rise in China-pride and should help Wanda win back favour with Beijing. The official opening will coincide with the 100th anniversary of China’s Communist Party in 2021. The 1,266,666 square metre complex will have four thematic districts, including “Revolutionary Culture,” “Military Entertainment,” and “Traditional Intangible Cultural Heritage.” The architecture and style of the theme park will attempt to replicate the environment of Yan’an during the years from 1935 to 1948.
Cars
Chinese SUV Brands in Hot Pursuit of International Competitors: Prejudice against Chinese car brands is waning with WEY considered more “Stylish” and “Cool” than Land Rover by a new generation of consumers according to Brand Finance research. Great Wall's WEY has targeted the higher income segment by using better technology and more differentiated, premium marketing. Brand value of the top 5 Chinese brands has risen 92% from 2017 to 2018, largely thanks to local demand. In comparison, the value of brands from other countries has risen just 9%.
Fashion
The Curvy Controversy: Is China Ready for Plus-Size Fashion?: Although Chinese culture has a tradition of valuing conformity dating back to Confucius' teachings, coupled with a long history of equating thinness with beauty, there are promising signs of more acceptance of less skinny fashion models. Open minded millennials and Gen-Zs are likely to drive the nascent trend as they increasingly embrace individualism. There are Taobao retailers who make over $15 million a year selling plus-size clothing to Chinese women, and plus-size models on Taobao receive twice as much pay on average as slender models due to the increased demand. When a Singles' Day gala emcee made disparaging comments Japanese plus-size model Naomi Watanabe, the online community severely criticised the speaker for “body shaming” with the hashtag #EmceeTeasesNaomiWatanabe# generating 20 million views so far on Weibo.
That’s the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing strategy, research and digital advice and implementation.
