China's Record-Setting Consumers
Welcome to this week's skinny on China. Just three days ago, Chinese consumers broke more world records, this time online. Single's Day on Nov 11, or 11,11, saw China's online retailers promising discounts as large as 70% to woo shoppers. And woo they did. China's leading eCommerce sites, Alibaba Group's TMall and Taobao, turned over $3 billion on the single day, eclipsing the much-celebrated $1.25 billion US retailers did on Cyber Monday. Chinese consumer's appetite for online shopping, coupled with increasing consumer confidence last quarter points to good times ahead for those getting their Internet mix right in China. In the Internet section below, you'll find some good news about Alibaba Group working on global procurement to make it easier for western companies to sell to Chinese consumers within two years. There's also news about eBay's reentry into China, partnering with Xiu.com to open doors for more western companies. I hope you find it helpful!
There Are Two Dueling Groups Of Consumers Emerging In China: A game of two halves - China's two distinct diverging target markets - (1) the mainstream young, particular about brands & designers; and (2) the emerging middle class just looking to upgrade on basic needs.
China’s Confident Consumers: McKinsey's November report indicates Chinese consumers are more confident and mature than ever. Their brand awareness and loyalty is increasing, with more and more shoppers having their favourite brands. 35% are trading up to more expensive goods in the same category (up from 26% last year). There's also signs of maturing with just 5% are first time buyers, down from 20% last year.
Chinese Consumers to the Rescue: A good overview on why there is so much opportunity ahead in the Chinese market.
Why MNCs Tend to Treat Chinese Consumers Unfairly: Further reinforcement to keeping service up in China. 89% of Chinese consumers surveyed say they've bought foreign brands, and 38% of them aren't happy with the service. And they'll be spreading it on Weibo.
Chinese Public More Familiar with Climate Change: 77.7% of Chinese consumers surveyed are worried about the impact of climate change, and are prepared to pay higher prices for environmentally-friendly goods.
Nike Fine a Wake-up Call for Foreign Firms: Who would have thought - advertising standards in China? There's a possibility that western brands are more likely to be targeted, so be aware.
Tmall Plans to Link China's Consumers with Foreign Goods: Great news, Alibaba's TMall is making it easier for western exporters to tap into China's burgeoning eCommerce market - their Global procurement system expected in 2 years.
The eBay and Xiu.com Deal: A New Way to Reach Chinese Consumers: eBay is having another crack at China making it easier for their global brands currently selling on eBay.com to reach Chinese consumers through China's fashion and luxury retail site, Xiu.com.
As China Grows in Purchasing Power, the Western Dominance of Consumer Electronics Fades: The pendulum is shifting from the West to China in the world of electronics, as Chinese consumer needs are increasingly catered for by device manufacturers.
Tmall Plans to Link China's Consumers with Foreign Goods: Great news, Alibaba's TMall making it easier for western exporters to tap into China's burgeoning eCommerce market - their Global procurement system expected in 2 years.
Food & Beverage
International Dairy Firms Face China Obstacles: Importing Dairy into China: White Gold? Not as golden as it could be.
Operators Fight for Bigger Slice of Rising Bakery Market: Donuts anyone? China's love of bakery food more than doubled from 2000 to 2010 and is expected to grow by the same amount by 2015. Tastes are becoming more western - healthier, less sweet bread, but more cakes for kids - wait for all the little Buddhas.
China: Consumption Machine: Loosening China's 1-child policy is picked to be a boon for instant baby formula producers and everything that follows. But are Chinese parents going to jump all over it and have big families again?
China's Middle Class Growth Offers Shoe Export Opening: Although a good few shoes are made in China, here's good case study of a American manufacturing business capitalizing on Chinese consumers' appetite for quality premium products from abroad.
China's Rag Trade Looks Ragged: All isn't rosy for the clothing industry in China, especially for the local guys.
The Rising Profile of Niche Brands in China: Mainstream luxury brands like Louis Vuiton, Versace, Hugo Boss, Gucci, and Omega are being increasingly associated with bribing bureaucrats and are being substituted with niche brands by China's new consumers.
Toyota's Misfire in China Offers Lesson in Local Market Savvy: There isn't a lot of Japan-love in China right now, and to make things worse, Toyota is reeling from a few bad marketing calls on the Mainland. Here are some lessons Toyota should learn from misaligning price and features of it's Yaris with the target market in China - no street cred for it's price and too pricey for entry level.
That's the skinny for the week!
If you've missed earlier news or need to learn more, there's a library of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed. If you have any feedback or suggestions for future articles, please let us know.