The Marketing, Online & Research Agency for China

The Impact of China's Media Corruption on Consumer Behaviour



Chinese media

China's state press agency Xinhua has shut down the website of the respected business newspaper 21st Century Business Herald, and terminated a ¥3.5 million ($590,000) contract between the agency and the Bank of Communications, after it was exposed for receiving payouts for publishing good news and concealing bad press. It follows other high profile state media corruption cases this year, such as the senior CCTV employees involved in bribery and corruption.

Chinese Innovation in Retail and Technology



Chinese Shopping

After a strong start, bringing the world the compass, gunpowder, paper, printing, loo paper and arguably football, many would liken China's recent innovation scene to the Gobi Desert.  But scratching the surface a little provides a glimpse of the types of innovations we can expect to see coming from the Mainland over the next few decades, particularly in the consumer tech segment.

Ironically, it's China's ability to copy technology and reproduce it cheaply that is assisting with this innovation.  The art of reverse-engineering hardware and software is creating an army of engineers with an intricate understanding of technology.  It's also brought down the cost of a fully-featured smartphone to well under $100 - within the realm of almost every Chinese consumer.

Apple's Strong Position to Compete in China Where Other Foreign Brands Cannot



Apple iPhone 6 China

Yesterday: 9/9, marked the much-anticipated launch event for the iPhone 6.  As the world's largest smartphone market, Apple is hoping its new phones will attract a healthy share of the expected 420 million smartphone purchases in China this year.

Apple has weathered the roller coaster ride of the China market better than some of its international competitors, but there have been some bumps along the way. Back in 2012, following accusations from state media about being arrogant and offering poor after-sales service, Apple's market share slid from 9% to 5%. Apple has worked hard to win back share, such as supporting China Mobile's proprietary network and responding smarter to criticism from the state.  But it knows it that can never rest on its laurels.

Localising For China - Not Always What You Think



Localising Chinese Food & Beverage

As Chinese consumers are becoming more sophisticated, so are their diets.  Increasing awareness of healthy living and food safety issues, coupled with rising affluence is making Chinese more particular about what they eat.  

Food and beverage imports are expected to grow 15% a year to $80 billion by 2018. Yet Chinese still have many different flavour preferences to the consumers in countries these imports are coming from.

A look at the most popular Western food and beverage brands in China is case in point.  Red Bean Green Tea Frappuccino isn't exactly a top seller in Starbucks stores in Seattle, and red date-flavoured crackers from Oreo's Mondalez probably wouldn't go down well in Oklahoma. Many of the big Western companies such as Nestle and Pepsi Co have set up research centres in the Mainland to develop products that appeal to Chinese palettes.

Where to Host Your Chinese Website



Chinese web site

Many websites hosted outside of China are experiencing increasing traffic coming from the Mainland. Although these sites can be optimised for Chinese visitors by providing translations, localised content and familiar payment options, they will only ever win a tiny share of China's rising consumers' spending.

Sites hosted outside of the Mainland load noticeably slower for Chinese surfers. They are less likely to rank well on search engines such as Baidu and Qihoo, and are generally less trusted than sites hosted in Mainland China. Just 3% of China's Internet traffic goes beyond the Great Firewall, and most of it is to the big American dotcoms.

Businesses Who Do Well in China, Even Without Being in the Government's Good Books



Volkswagen China

The Chinese Government have a dream, and businesses that align with that dream are well placed to prosper. 

For a prospering business, we only need to look to online shopping and specifically Alibaba.  eCommerce is one of the key pillars of China's 12th Five Year Plan, aiding China's transition from an investment-led to a consumption-led economy.  But the Government's support spans deeper than that.  Beijing's official line on its much-publicised "Chinese Dream" is first and foremost about national "rejuvenation" (民族的伟大复兴) and the development of a "comprehensive national power" (综合国力的发展). Nothing represents a strong and rejuvenated China more than its ecommerce sector. 

China's Fashion Industry Trends That Apply Across Many Products



Chinese fashion

Few industries are a barometer for what consumers consider to be "cool" quite like the fashion industry.  Over the past 12-18 months, some interesting fashion trends have been occurring in China that are worth taking note of.

It wasn't long ago when foreign brands had a 'monopoly' on high-end fashion. In October 2012, research from the World Luxury Association found that 86% of Chinese consumers refused to buy luxury products "Made in China" due to the country's reputation for cheap goods.

Enter popular role models such as China's First Lady Peng Liyuan, who wear nothing but Chinese fashion, and that perception has swiftly changed. Mintel research in March this year found 40% of Chinese believe local luxury clothing and shoes provide the same quality. 

China's Health System Provides Plenty of Opportunities



Sick Chinese consumers

A poor environment, unsafe food and unhealthy urban lifestyles are only partly to blame for Chinese consumers' soaring health concerns. One of their most pressing worries is the state health system.

The Chinese Government's contribution to health has been historically low compared to many countries. Even after spending more than ¥2.3 trillion ($372 billion) on health reforms between 2009 and 2013, Chinese consumers remain generally dissatisfied with public health. Much of the motivation behind China's high saving rates is to pay for future health care.  It's also been the main factor in Chinese consumers' long history of preventative self care, which is driving demand for consumer-focused health products and services.

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. 

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