Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
Confidence among consumers and investors is still low, but Shanghai-based analyst Shaun Rein sees some light at the end of the tunnel. Liquidity is not a problem, but both consumers and investors are still careful in spending their money for the next two, three months, he tells CNBC.
Live streaming is a solid marketing tool in China, but some of the live streamers focus now on TikTok for Europe and the US. Business analyst Shaun Reinexplains to AP why that shift is happening.
AP:
Many Chinese hosts on TikTok view the U.S. as an emerging market that has yet to be saturated with livestreaming hosts
“There’s more opportunity for growth to target America because the competition is so fierce in China,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Livestreaming in the U.S. is at a beginning starting point. There’s more opportunity to grab market share.”
Rein also said Chinese merchants can often price items higher in the U.S. compared to in China, where product margins are often razor-thin.
Chinese livestreaming hosts try various tactics to stand out and build a loyal customer base. For some, it’s personalized customer service, while others use quirky catchphrases and concoct flamboyant online personalities to keep their customers entertained.
China business veteran Shaun Rein discusses with Cyrus Janssen how China has faced challenges since it opened up post-Corona. Outbound travel has not resumed, expected revenge spending did not happen and consumer confidence is at the lowest rate ever. No, he says, China is not yet back to normal, because consumers sit on their corona savings, unwilling to spend. And foreign investors, while CEOs are going to China, are hesitant to resume investing in China, at least till the end of 2023. But support for Xi Jinping is still he, he sees. Though, expect a tough 10-20 years.
Business analyst Shaun Rein visits the US for the first time in four years after Covid-19 lockings in China, and he explains why he has become bearish on the country. Consumer confidence is down at a historic low, and an expected revenge purchase after the lockdowns ended stayed away. Foreign companies are pressured by the US to split off their operations, despite a wide range of international CEOs visiting China last month.
China’s consumer confidence remains low, even when its largest e-commerce platforms offer massive support, says business analyst Shaun Reinat the Hill. Rein said that consumers were less likely to spend more during 618 as merchants had already been discounting heavily for years because of the pandemic, and deals were not that much better compared to previous months.
The Hill:
Analysts say that consumption remains soft this year as China emerges from the pandemic, even as platforms including JD.com, Tmall, Taobao and Pinduoduo offered billions in subsidies.
“Chinese consumer confidence remains weak due to a mix of geopolitics, continued weakness from COVID-19 and domestic Chinese politics,” said Shaun Rein, founder and managing director of the China Market Research Group in Shanghai.
Rein said that consumers were less likely to spend more during 618 as merchants had already been discounting heavily for years because of the pandemic, and deals were not that much better compared to previous months.
In March, JD.com launched a “10 billion yuan subsidies” program to compete with rival Pinduoduo, which is known for its low-priced goods. The CEO of Alibaba’s e-commerce business unit, Trudy Dai, also previously pledged to make “huge, historic” investments to attract users to its platforms.
“For months, Chinese consumers have been price-conscious, looking for deals and trading down across most product categories,” Rein said.
Business analyst Shaun Rein comments on the disappointing figures from Alibaba for CNA. “The economy is improving, but certainly not on track,” he says. While the consumers might be traveling more compared to 2019, they are certainly spending less, as their confidence is low, Rein adds.
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The baby industry used to be a winner in China in the past, but the falling birth rate is hitting international companies in this industry hard, says Shanghai-based business analyst Shaun Rein to Reuters. Part of the industry is now refocusing on India, which overtook China in population growth.
Alibaba’s plan to split its US$200 billion company into six entities with IPO potential unlocks massive opportunities for investors, says business analyst Shaun Rein to CNA. It also aligns nicely with Xi Jinping’s intention to make China’s economy, more competitive by dividing up the Alibaba giant, he adds.
The crowds might be back in China’s restaurants but they are not spending as much as they used to. The economy is not back on track, the labor market is bad and salaries are being cut. Business analyst Shaun Rein has sent his researchers out, and they did come back with bad news, he tells CNBC.
China’s consumers are sitting on excess savings of 6 trillion yuan (US$874 billion), but business analyst Shaun Rein sees consumer confidence is pretty low, and they seem unwilling to spend their savings, he tells the South China Morning Post.
The South China Morning Post:
For others, the pulse on the ground is less than encouraging. Three years of living with tough zero-Covid restrictions have forced consumers to tighten their purse strings under the pressure and threat of job losses. A persistent downturn on the property market is another hindrance.
“Consumers are trading down and consumption downgrades are going on here,” Shaun Rein, founder and managing director of China Market Research Group in Shanghai, said in an interview on Thursday. “People are not sure about the economy and they are still remembering job cuts. Consumer confidence is bad.”
Retail sales fell for a third straight month in December and the combined January and February data will not be released until mid-March because of Lunar New Year seasonal effects. Funds should avoid companies making high-end brands and pick those that cater to the mass market, Rein said.
Business analyst Shaun Rein experts the housing market in China is going to get weak as consumers are not buying big-ticket items for the near future, he tells CNBC.
China’s crackdown on its tech sector in the past few years might have loosened, but the fallout is still hurting its development after the government has loosed its grip, says business analyst Shaun Reinto AP. “The crackdown was deep and cut far to the bone, probably more than the government expected it to,” said Shaun Rein,
AP:
“The crackdown was deep and cut far to the bone, probably more than the government expected it to,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Because what’s happened is over the last two years, venture capitalists and entrepreneurs have been scared to deploy capital and start new companies.”
The value of venture capital deals in China plunged 44% to $62.1 billion in the first 10 months of 2022 compared to the same period in 2021, according to research firm Preqin.
Some entrepreneurs and venture capitalists are taking a wait-and-see attitude, “worried in the long term that if they invest in a hot sector that the government that goes against China’s agenda or doesn’t fit with the government’s agenda for the private sector that they might get wiped out,” Rein said.
Well-established internet companies are still at an advantage to other tech industries in China that face added uncertainty due to friction between Washington and Beijing over advanced technology and trade as the U.S. seeks to block exports of high-end semiconductors and chip-making equipment and to limit Western dealings with companies like Huawei Technologies, the world’s largest maker of telecommunications networking gear.
Japan is hitting China’s citizens with unfair Covid restrictions, and will in return suffer from retaliatory actions by the Chinese, says business analyst Shaun Rein to CNBC. The contrary effects on Japan’s economy will be huge, he says.
When even an acknowledged China bull like strategic analyst Shaun Rein turns negative on its short-term economic development, things do not look well for the middle kingdom. “Consumer confidence has brutally collapsed and I think investors need to think twice or maybe even three or four times before investing in China right now,” says Rein in the Economic Times.
Shaun Rein
I have been in China for 25 years and this is by far the worst consumer confidence and business confidence I have ever seen and it is really because of the implementation of zero Covid. Most people in China actually support zero Covid because it saves lives and the Chinese government should be credited for what they did in 2020 and 2021 but in 2022, the implementation has been a disaster. That is the only way you can word it. It has hurt mental health, it has hurt other health issues and it has actually killed people because people cannot get to hospitals or as we saw in Xinjiang and Urumqi fire, people could not get out of their homes.
Consumer confidence has brutally collapsed and I think investors need to think twice or maybe even three or four times before investing in China right now. The next three to six months are going to be a real struggle because the government cannot ease up on zero Covid without causing a lot of deaths but they cannot continue the current pace without causing a lot of lack of business confidence. We are in a very difficult conundrum right now. No matter what the government does, the economy is going to be weak for the next three to six months…
The problem that we have right now is each province, each city, each district, even each street are making up their own rules as they go along and they are not following the directives of the central government. So sometimes the street will put up barriers and say one cannot cross the street. These local officials do not have the right to do that, the central government is telling them that they do not have the right to do that but they are so scared of Covid, that they are still putting up barriers.
China’s economy is heading for a rough time as it continues to curtail activities under its dynamic zero-COVID policies, says Shanghai-based business analyst Shaun Rein in the Global Eye. Heatwaves, drought, and high unemployment among youngsters add to those problems, he says.
China’s internet censors took down a popular influencer showing a tofu tank, which suddenly made this year internet users aware of an issue that was mostly ignored: Beijing’s tank man on June 4, 1989. Political expert Shaun Rein explains how the censor shot into his own food at ABC News.
ABC News:
“I didn’t know before, but now I think I know,” said one user on Weibo, where self-censoring posts using vague language to refer to sensitive topics are commonplace to evade censors and prevent account suspensions.
The apparent censoring of Li’s show has had the contrary effect of drawing more attention to it and to what happened in Tiananmen Square in 1989, said Shaun Rein, founder and managing director of China Market Research Group in Shanghai.
“For many Chinese users, taking Li offline at this time could have the opposite effect of bringing attention to an incident that nobody in China usually talks about,” said Rein.
Business guru Shaun Rein challenges Australia’s recent wave of Sinophobia by its politicians, and not questioned by its prime-minister Scott Morrison, while Australia and China are natural allies, says Rein.
Confidence among consumers and investors is still low, but Shanghai-based analyst Shaun Rein sees some light at the end of the tunnel. Liquidity is not a problem, but both consumers and investors are still careful in spending their money for the next two, three months, he tells CNBC.
