Watch Winter Sports in China Over the Next Few Years
To understand the impact of Government directives on consumer behaviour in China we'd suggest watching the rise of winter sports over the next four years. Already well underway, the surge in related content through state-controlled traditional media channels provides a clear insight into Beijing's strong influence over digital touch points.
In 2022, Beijing's hosting of the Winter Olympics will see it become the first city to ever host both a Summer and Winter Games - remarkably within less than a decade and a half of one another. Beijing's dual-hosting symbolises the dramatic rise on the sway China now holds across the world.
Looking back to the effort and expense Beijing made for its Olympic host campaign 10 years ago, it is clear how serious China takes the Games to showcase the new face of a powerful China. Beijing spent $42 billion hosting the 2008 games - almost three times the $15 billion Athens spent just four years earlier. But beyond the infrastructure investments and ceremonies, the success of China's athletes was just as impressive. Almost half of China's medals were gold - 48 - a third more than second-placed USA.
China is a different nation than it was in 2008 - much more assertive, wealthy and influential, but equally focused on not losing face in front of the world. That is why Beijing will be doing everything it can to ensure it puts on a good show when it hosts the Winter Olympics.
Beijing will be bitterly disappointed with the woeful showing in Pyeongchang last month, where China's short track speed skater Wu Dajing was the only athlete to bring home a gold. China was squeezed out of the top-15 by Belarus with just 9 showings on the podium. The legends of Norway earned around 3,700 times more gold medals per capita than China.No doubt there'll be plenty of Chinese lurking through the snow in Norway studying how the country is producing so many champions, but that is just the start of it. Not long after Beijing was awarded the hosting rights in 2015, China announced it would sport 650 skating rinks and 800 ski resorts (complete with fake snow) by 2022. It hopes to attract 300 million people into winter sports by then. There are reports of highly paid foreign coaches combing cities, towns and villages for the most promising kids - Cool Runnings-type stuff.
Yet the success of hosting its second Olympic games won't just be built on medals - the buzz and support of the hosting city and country is equally important. For that reason, Beijing may also be concerned about the 200,000 Chinese visitors that Korea was aiming to visit the Pyeongchang Olympics, only 20,000 came. The Korean tour group ban and negative propaganda over their THAAD defence installation won't have helped, but China will be wanting a little more enthusiasm for winter sports by 2022. Rent-a-crowd has got a lot more expensive than it was in 2008 in China.
So for the next four years, expect Beijing to be pulling a lot of levers so they can showcase China's brilliance in the 2022 Olympics. Expect there to be a major uptick in airtime and interest for anything related to exercising in the cold stuff. There'll be a lot more presence for ice skating gear, snow boarding exhibitions, skiing KOLs, and winter tourism promotion. Alibaba has already jumped on the wagon, but expect most of China's other big companies to follow suit. If nothing else, it will be a fascinating four years to observe!
Here are this week's news and highlights for China:
Chinese Consumers
Wealthy Chinese Women Are Unique in APAC: Research into affluent female consumers across eight AsiaPac countries found Chinese women to be unique for reasons such as they 1. see luxury as an identity; 2. still don't value experiences as highly; 3. worship foreign brands; 4. are more influenced by social media; and 5. are more optimistic about their financial future.
How Chinese Women ‘Hold Up Half the Sky’ but Earn Far Less than Men: Women earn 22% less than their male counterparts on average according to a Zhaopin poll of more than 100,000 employees. Women devote 15% more time to family than men, while men spent 9% more time at work. Women were also more likely to cite convenience as the most important factor when evaluating job opportunities, outweighing "room to grow." China is ranked 100 out of 144 countries and territories in the Global Gender Gap Report in 2017.
From Lu Han to Papi Jiang, Chinese Celebrities are Making A Lot of Money from Social Media: China's online celebrity economy was worth around ¥58 billion ($9.1 billion) in 2016 - almost a third more than the domestic film industry's ¥45.7 billion ($7.2 billion). Chinese actor-singer Lu Han, a former member of South Korean-Chinese pop group EXO, reportedly made ¥210 million ($33.1 million) for the year ended 30 June, 2017 endorsing everything from Cartier to flavoured milk from Yili. Actress Yang Mi made ¥200 million ($31.6 million) being the face of brands such as Estee Lauder and Michael Kors.
New Devices to Meet Consumption Upgrade in China: Cookers for nutrition gourmet, mirrors with beauty advice and intelligent washing machines playing to changing Chinese demand were on display at China's Appliance & Electronics World Expo 2018 last week. Rising disposable income and growing demand for a better quality of life, has seen 40% of Chinese families in China are willing to pay more than ¥10,000 ($1,538) for a TV or a washing machine according to industry insiders at the show.
Daigou Hub: Australia’s First Opens in Sydney: Australia's first daigou hub has opened in Sydney from ASX-listed Daigou company AuMake. The hub will bring together 70 retailers into one place for daigous buying products, providing a wrapping and postal service for the products to be dispatched immediately and also allow local suppliers to have face-to-face interaction with Chinese consumers through live streaming.
Digital China
How Brands Can Better Engage Chinese Consumers on Social Media: Offering convenience, partnering with KOLs or mini influencers, making short video a priority, using advanced tech, giving discounts and incentives in creative and sharable ways, and engaging in cross branding and cross promotion are all ways to engage Chinese social media users.
China's Biggest Retailer JD.com Takes on Amazon with Robots and Drones: JD's real technology will never be seen by most consumers. JD's ultimate goal for its back end technology is full automation and a near-seamless merging of offline stores with its original online offering. The future is likely to see an online order packed by a robot and delivered by a self-driving vehicle within 30 minutes.
Food & Beverage
Chinese Consumers Favour Taste Over Price of Imports: 41% of consumers chose imported products for their taste and flavour. 34% selected ‘natural and safe’ according to a study by the Agricultural Trade Office in Shanghai into beef, dairy, fruit, infant formula, pet food, pork, seafood, tree nuts, wine and beer. 45% of respondents listed high prices as their top purchase barrier. The second most cited issue was availability of local substitutes.
Festivals Fuel Chinese Food and Travel Spending: 67% of urban Chinese consumers say they buy festive food during festivals, while 65% like to shop for food to be eaten at home and 61% spend more on eating out according to Mintel.
Accountability Can Help Chinese Dairies Regain Trust: Following a milk powder scandal involving Lactalis in December, the French dairy giant recently admitted that some of its milk sources may have been contaminated for more than 10 years. Nevertheless foreign sourced dairy is still considered superior. This research fellow believes Chinese brands need more accountantability to build trust and take advantage of local brands formulations being more suitable for local Chinese physiology.
Health & Beauty
Tmall to Doll Up Business for Beauty Brands with 'New Retail': Tmall will work with ten top beauty brands such as Estee Lauder and Lancome to help them cross ¥1 billion ($157.9 million) in annual sales on the platform this year, as well as deliver an updated suite of New Retail solutions so that all merchants can better serve Chinese consumers. 35% of respondents in a Kantar survey said they have added more steps to their beauty routines, and therefore are spending more on skincare products and cosmetics. Tmall attributed 53% of their beauty product sales to consumers making more purchases per person. There are currently 3,000 beauty brands on Tmall, with 56% of skincare sales on the platform coming from homegrown brands (54% last year) and 56% of cosmetics brands being foreign.
The Beastly Reality Behind China’s Beauty Industry: Over 300,000 rabbits, mice, and other animals are used each year in China for testing cosmetic products, according to PETA, over half of the estimated 500,000 animals used in cosmetics testing worldwide. Yet there’s still limited impetus for change in China, where there’s a lack of awareness among consumers about animal cruelty, and a belief that animal testing is still safer than other methods.
Supermodel Miranda Kerr Launches Organic Beauty Brand on Tmall: Last week founder and supermodel Miranda Kerr launched Australian luxury skincare brand KORA Organics’ first Tmall store in China via livestream from her Hollywood home. The event attracted over 223,000 live viewers, with KORA Organics offering exclusive giveaways for spectators.
Sport
Chinese vs Western Wrestling: Same Impulse, Different Execution: The reasons why WWE and UFC have failed to break the China market are economic and cultural. Most of the money in WWE and UFC is earned through pay-per-view, online gambling, high ticket prices, and merchandise sales. Chinese consumers are price-sensitive, do not buy much merchandise, and pay-per-view and online gambling are almost non-existent in the country. Popular Chinese sports like ping pong and badminton aren't aggressive like football in America, meaning their is a less inherent draw to violent wresting according to a three year study.
That’s the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing strategy, research and digital advice and implementation.
