China's Changing Definition of Healthy Living
Earlier this month, a China-based study concluded that Beijing's pollution makes the city almost "uninhabitable for human beings". Whether or not these claims are exaggerated, as reported by Chinese state media, there are certainly healthier places to live than China.
The increasingly transparent Chinese media, and widespread sharing on social networks has helped raise consumer awareness of China's health issues. The 2013 Hurun Report found health to be the number one concern for wealthy Chinese, mirroring similar findings across many Chinese consumer groups. Over 80% have purchased vitamins and health supplements, and putting money aside for health issues is one of the main drivers behind China's high savings rates.
Like most things, what Chinese consumers define as healthy is rapidly changing. A little over a year ago, KFC was the restaurant of choice for many Chinese diners, opting for greasy buckets of fried chicken simply because they considered the food safer than local alternatives. In a short space of time, the definition of 'safe food' has evolved for many Chinese to include food that is not only safer, but better for you.
The purchase of products such as olive oil have grown 18,400% in the last ten years. The top reason Chinese consumers are increasing their wine purchases is because of the perceived health benefits from drinking the stuff. Oreo, one of the pin up kids of successful Western products in China, has had to create healthy products to counter weak sales last quarter from an increasingly health-conscious Chinese consumer.
Although Chinese shoppers place twice as much value on the quality of the environment where food is grown than their British equivalents, and are prepared to pay a premium for products with food safety certification, there are still some products, such as timber, where the market isn't prepared to pay more. And not all Chinese are concerned about their health or the environment. We only need to look to smokers, who outnumber active WeChat users in the Mainland, and are said to create the same pollution as 1.5 million cars every day.
Nevertheless, there are plenty of products and services that will benefit from an increasingly healthy and aware Chinese consumer. You may find a few below. We hope you enjoy this week's Skinny.
See below to see highlights of the news this week.
Chinese Consumers
Consumer Confidence Soars: Quarterly China consumer confidence was higher in Q4 2014 than it has been since Q2 2010. 47% of consumers are more willing to spend with 75% describing job prospects as rosy, helped by an 8.1% rise in incomes. 58% of China's newly opened stores in 2013 were in Tier 2 & 3 cities. 62% of consumers in Tier 2 and 56% in Tier 3 reported shopping online in Q4.
8 Retail Trends in China: WPP's predictions for the Year of the Horse, including: 1) The rise of eCommerce; 2) Convenience pulls a punch; 3) Mobile banking; 4) Local retailers will continue to up their game; 5) Executing continual improvement is essential; 6) Local luxury brands; 7) Gamification to deliver data insights; and 8) Trust is priceless.
Green Timber Preferred Overseas but Not in China: Although Chinese see the ill effects of pollution more than anyone, the market still isn't prepared to pay a premium for constructions that use eco-friendly timber, unlike other countries.
Internet, eCommerce, Mobile & Social Media
6 Key Steps to Winning on China's Social Media: Six key pieces of advice to help win the hearts of Chinese consumers on social media from China Skinny's Tourism Malaysia campaign.
Alibaba Opens eCommerce Door for Chinese Villagers: Selling online in China? You're up against 50% more villagers than in 2012 on Taobao and Tmall alone - more than one million villagers peddle their wares on the platforms. Seven of China's ten fastest growing areas for online shopping were rural.
From Alipay to C.O.D.: How To Successfully Navigate China's eCommerce Payment Options: 63% of Chinese online shoppers use credit and debit cards, 62% use third-party payments, and 32% still use cash on delivery as a payment method.
Food & Beverage
Chinese Put Value On Environment In Buying Food: 58% of Chinese consumers rated environmental quality as important when buying food, versus 29% in Britain. Chinese will pay 74% more for dairy products with food safety certification.
Health Drives Wine Consumption in China: 35.2% of Chinese consumers cited health as the driving factor for their overall wine consumption in 2012, followed by better value for money (24.6%), changing life stages (24%), quality seeking (22.8%) and changing age structures (22.3%). 55% of drinkers are male. Bubbly accounted for just 4% of wine consumption in China.
Why China’s Falling Out of Love With the Oreo: Oreo has had weak sales in China last quarter as Chinese consumers become more health conscious. To counter the drop, parent company Mondelez has launched a cracker line, Pacific, with flavours like sesame and red date, typically associated with health and traditional Chinese medicine.
China Fuels Olive-Oil Rush: Demand for healthy, 'prestigious' food has increased imported olive oil into China to $184 million, 9.3% more than 2012. A decade ago it was just $1 million.
Tencent Set To Buy Stake in Dianping.com: WeChat is likely to become deeper entrenched into China's restaurant and entertainment scene, with Tencent reportedly purchasing 20% of top restaurant rating site, Dianping.
Chinese Tourists
Taobao Rescues Chinese Travelers Needing a Visa: Taobao's foray in selling services is nowhere more evident than in tourism, with plane tickets, hotels, attraction tickets, car rental and even foreign visas. Thailand and Malaysia were the top two international destinations on Taobao in 2013.
Chinese Tourists Mean Hoteliers Learn New Culture: Advice to hoteliers on top of the usual Mandarin greetings, kettles in rooms, comfy slippers and congee - don't forget to take away the white flowers from the rooms and lobby as they symbolise death in China.
Health
Where’s All That Pollution Really Coming From? A Shocking Statistic: Some staggering numbers, even by China-standards about smoking. 350 million smokers puff on five billion cigarettes a day in China, emitting the same pollution as 1.5 million cars.
Chinese Consumers Opt for Vitamins to Boost Immunity: 83% of Chinese consumers have purchased vitamins and supplements to help ward of illnesses or boost their immunity. Half of respondents report taking them to compensate for their poor eating habits, versus around a quarter in the US.
Dedicating Wealth to Preserve Health: 55% of consumers in the Asia-Pacific are actively saving for health concerns, versus 24% in Europe and 33% in North America.
Investment
45,000 Chinese Seek New Homes After Canada Cancels Investor Visas: A Canadian policy giving residency to foreign nationals who loan 800,000 Canadian dollars (US$726,720) interest free to any of the country’s five provinces for five-years has been cancelled with all pending cases being rejected. 80% of investor migrants sought to live in Vancouver, creating the second least affordable housing market in the world.
Luxury
Is the Shine Gone from Luxury Goods?: The average spending of Chinese high net worth individuals dropped 15% last year, and the money they spent on gifts was down 25%. More than half of major international retailers missed their targets for store openings in China last year, as they had difficulty finding suitable sites, the crackdown on corruption reducing demand for gifts, and growing online shopping. Companies such as Hermes claim that those who adapt with the market are thriving in China. 73% of Chinese use the Internet to learn about luxury products.
Hermès Defies Luxury Trend as Sales Power Ahead: Hermes sales in China were up 19% in Q4. French sales, driven by Chinese tourists, rose 7.6% in the same quarter.
That's The Skinny for the week! China Skinny would love to discuss how we could help with your marketing, online initiatives or research to take advantage of China's opportunities. Just email us at info@chinaskinny.com or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.
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