The Marketing, Online & Research Agency for China

Western F&B Brands May Want to Rethink Their Supply Chains in China

Sad McDonalds

It wasn't long ago that many Chinese consumers considered KFC's greasy chicken drumsticks to be a good healthy meal.  The assurance of safe Western preparation standards and quality control processes had diners confident that they were less likely to fall ill than eating at a local restaurant.

That perception took a dive in late-2012, when state media revealed that excessive amounts of antibiotics and hormones were being pumped into some KFC chicken products.  Coupled with the bird flu outbreak in early 2013, KFC's sales sunk 30% in the first quarter of that year.  The ensuing advertising campaign centred around the "trust in every bite" messaging has struggled to restore consumers' faith. 

WeChat's Commerce Balancing Act

WeChat Money

Every other week, there's a report of a new WeChat feature allowing businesses to advertise or sell to the 400 million+ active monthly users on the service. 

While WeChat's transition from a communication tool to a transactional one won't happen over night, and sales of products are currently only a fraction of platforms like Tmall, there are plenty of signs that Chinese consumers are warming to the idea of shopping through their favourite app. 

G'Day Mate: Australians the Most Welcoming to Chinese Tourists

Chinese with koala in Australia

Australia has long been known for its stunning beaches, peculiar marsupials, the Opera House and a big red rock.  But now Australia has become recognised as the most welcoming country for Chinese tourists according to the 2014 tourism report.  With 39% of those surveyed considering Australia a welcoming country, it was streets ahead of the number 2 placed country Singapore at 29%. The French, not known for their politeness, came in as the top European destination tying for third with the South Koreans and loveable Kiwis at 28%.  Asian destinations are perceived as the most welcoming overall to Chinese earning four of the top-10 spots, in light of some political tensions.

The positive perception of hospitality will bode well for the countries far beyond the tourist operators, with food and beverage, property and a slew of other segments standing to benefit. 

Chinese Parents Aren't Exactly Breeding Like Rabbits

chinese baby

Last December many applauded the Chinese Government's liberalisation of its one-child policy, which allowed most families in China to have two children for the first time in 35 years. As a result, we have seen many businesses ramp up their forecasts and investments to cater for the anticipated boom - Shanghai's Disneyland development, which added $800 million to its budget, was one of them.

China's 1.04 birth rate in 2011 was less than half of the 2.10 rate needed to maintain the country's population. Conservative analysts predicted the new policy would raise the birth rates to 1.8 per mother, or 19 million births every 12-months, with one of the more bullish commentators predicting a rabbit-style explosion of 48 million babies a year.  

Batman the Bad Guy in China

Batman the bad guy in China

For some, Batman is a selfless hero fighting to keep evil from Gotham City.  Yet, according to China's Communist Party mouthpiece the Global Times, the Caped Crusader is a vehicle for American skulldugery, grouped in with the CIA, an American think tank and pro-democracy NGO, and said to be responsible for the current troubles in Hong Kong.

Online Shopping in China: Mobile-to-Home to Get Much Quicker

China's Logistics

Although eCommerce is going gangbusters in China - Tmall sales grew 90% last year - one of its key challenges is logistics. According to GLP, it costs twice as much to deliver a parcel in China as in the USA, even with China's lower wages.

Delivering packages to consumers in China's biggest cities may be a speedy and cost effective service, but that's not the case for thousands of other municipalities, including many of China's 114 cities with more people than New Zealand

China's Growing Waistlines and Opportunities

Fat Chinese

If China's polluted air and water supply wasn't doing enough to bring on heart disease and other illnesses, there's a another scourge that's stepping in - the bulge. 

More than a quarter of China's adult population, around 350 million, are now considered overweight.  Those classified as obese number more than 60 million, rising 20% over the past four years in the 20-39 age group.

Busy lives in China's cities are driving demand for convenient, processed, oily and sugary food. That, coupled with more sedentary lifestyles, is fattening up the average urban dweller. However even with consumers in cities spending twice as much on food as their rural counterparts, obesity rates are growing faster in the countryside.

China's Changing Retail Scape

Shopping malls in China

Few activities excite Chinese more than browsing the latest boots and blazers at the mall or on their mobile. Even as tourists, shopping continues to be the top motivator for going abroad, accounting for 30% of the trips' total expenditure.

There's no shortage of building going on to cater to this obsession. Of the ten cities that created the most shopping mall space globally last year, nine were in China. More than half of the world's total mall space currently under construction is in the Middle Kingdom.

The Football-fying of China

China FIFA World Cup

With the Football World Cup beginning tomorrow, many Chinese will have their eyes on Brazil.  Despite the fellow BRIC's time zone being 10-13 hours behind China's, CCTV is banking on a bumper of a tournament and a massive 530 million Chinese are expected to follow it online according to iResearch.

WeChat in the Bad Books

WeChat Villain

Over the past couple of years, there's been no shortage of Western brands in the Chinese Government's dog box. Some of the market's highest profile foreign players such as Apple, KFC, Starbucks, Nike, P&G, European carmakers and milk powder brands have been singled out for their 'misdemeanours' by state-run media.

Although Chinese consumers aren't always trusting of what they see and hear in the all-present state media, there's no disputing the negative effect the bad press can have on sales.


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