China Internet Watch

5 key trends shaping the Chinese economy, accelerated by COVID-19

CIW Team — Tue, 10 Nov 2020 13:06:31 +0000

In a recent report, McKinsey pointed out five key trends shaping China’s economy, being accelerated by COVID-19 has accelerated.

1. Digitalization

COVID-19 has also accelerated digitization of the traditionally less digitized part of the Chinese economy, such as areas requiring physical interactions, and B2B.

Before COVID-19, China was already a digital leader in consumer-facing areas— accounting for 45 percent of global e-commerce transactions while mobile payments penetration was three times higher than that of the US, according to McKinsey.

Based on McKinsey’s mobile surveys of Chinese consumers, about 55 percent are likely to continue buying more groceries online after the peak of the crisis.

Nike’s first-quarter digital sales in China increased 30% yoy after the company launched home workouts via its mobile app while real estate platform Beike said agent-facilitated property viewings on its virtual reality showroom in February increased by almost 35 times compared with the previous month.

2. Declining global exposure

20% of companies surveyed by AmCham China believe COVID-19 may accelerate “decoupling”.

A paper published in February by the European Union Chamber of Commerce highlighted how diversification is now at the top of the agenda for many European companies in China. Global trade and investment has slowed sharply, and the movement of people has become highly restricted.

3. Rising competitive intensity

In China, the top decile of companies capture about 90% of total economic profit, while the ratio is about 70% for the rest of the world, according to McKinsey’s analysis of the world’s top 5,000 companies.

Alibaba’s Freshippo supermarkets surmounted supply constraints and met soaring online orders for fruit. Foxconn’s agility allowed it to switch factory operations to mask production, protecting employees, and enabling the resumption of production earlier than competitors.

4. Consumers come of age

China’s affluent younger generation had never experienced a domestic economic downturn prior to COVID-19. The virus has forced them to think harder about spending, saving, and trade-offs in purchasing behavior.

One survey showed 42% of young consumers intend to save more as a result of the virus. Consumer lending has also declined, while four out of five Chinese consumers intend to purchase more insurance products post-crisis.

China’s post-90s start personal finance management 10 years earlier than their parents

5. Private and social sectors step up

According to McKinsey, the private sector and leading technology companies are playing a more significant role, making large socioeconomic contributions amid the emergence of powerful social institutions that have donated millions to recovery efforts.

CIW Annual Subscribers can download the 158-page report here.

Sneaker trading exchange? how some were sold x10 price in China

CIW Team — Tue, 15 Oct 2019 08:00:11 +0000

Recently, "Investing in sneakers" has become a trend, it is said that selling sneakers can bring money more easily and quickly than selling houses. And, "a post-95 young man bought a house in Hangzhou by investing in sneakers" became a trending topic on Weibo.

However, recently, a young man in Nanjing lost a lot of money in his gold-digging in sneakers.

In mid-August, Lu, a student in Nanjing reported to the local Qilin police station, claiming that he had been scammed up to 380,000 yuan (US$54 thousand) by buying sneakers.

On March 25th this year, Lu received a strange phone call, the other side claimed to be Mr. Qin, a guy who sells sneakers, has a strong supply ability. Subsequently, Lu and Qin became Wechat friends, Lu was also pulled into a WeChat Group by Qin, where Lu found his old netizen friend, and through the chat message, Lu found that other people bought and received sneakers at very low prices. All sneakers are authentic, so Lu put down his suspicion and started ...

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How to satisfy Chinese consumers’ demand in digital retail era

CIW Team — Thu, 06 Jul 2017 00:00:41 +0000

In order to meet the ever-changing Chinese consumer preferences in the digital retail era, companies should adjust their products and marketing strategies.

A recent McKinsey report shows five trends of Chinese digital consumers including omnichannel shopping, context-triggered shopping, social media centered consumer interactions, increasing demand for non-standard goods and services, and data-driven personalization.

But how to satisfy consumers' demand in the digital retail era?
1. Redefine channels
Businesses should integrate digital channels and the product information and prices of physical stores so that consumers can easily check the store inventory online and pick up goods from stores after placing online orders. They can make rational use of the consumer information collected. Brand owners can easily track consumer activities and collect online information through websites and applications, analyze the information to understand consumers and carry out marketing acti...

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New WeChat Moments ad format offers more creativity space

CIW Team — Wed, 10 Aug 2016 07:30:57 +0000

WeChat launched a new Moment Ad format, native promotional page ads, following the ceremony of Rio Olympics.

Related to Moment Ads: coupon ads on Moments, video ads, minimum budget

The native promotional page ad consists of outer and inner layers; the native promotional page will instantly be displayed when a user clicks on the outer layer:

Currently, native promotional page ads on WeChat Moments are by invitation only. It definitely provides advertisers more space for branding and creativity.

Also check out Nike and Samsung’s ads utilizing this new format: