Trends in the 11/11 festival – Ashley Dudarenok

 

Ashley Dudarenok

China’s Double 11 consumer festival has kicked off for its longest edition ever with five weeks. Consumption expert Ashley Dudarenok looks at this year’s trends for Campaign Asia. Dudarenok, author and China digital expert predicts that countries such as Singapore, Malaysia, Thailand, Japan, and South Korea—now part of the “free shipping zone”—will see a sharp rise in new users.

Campaign Asia:
Ashley Dudarenok, China digital transformation expert and founder of ChoZan, agrees, noting that “emotional consumption” is on the rise, particularly among younger Chinese consumers. “Toys and plushies are popular for comfort and stress relief,” she says, pointing to Jellycat’s dominance in the plush toy category, even surpassing Disney last year.
Taobao and Tmall’s official data have identified several booming consumption trends, including designer toys for young adults, pet products, and niche home appliances and furniture. As of October 24, 284 brands surpassed $14 million in sales. In particular, the beauty, fashion, sports & outdoor, and digital product categories have seen significant growth this year. Zhang refers to this phenomenon as the “lipstick effect,” an economic theory suggesting that “people are more likely to buy small, affordable luxuries when facing economic uncertainty. Hence the rise of small luxury purchases such as lipsticks, fragrances, concerts, wellness products and pet products”. Dudarenok, with years of observation from China marketing, sums up that consumers are buying more furniture and appliances. A total of 224 brands surpassed their entire first four-hour performance from last year. “The IP economy is still thriving”,  and Tmall now features over 1000 IP-based products to meet rising fan interest. She also highlights “Apple’s increasing efforts to attract budget-conscious buyers in China by making premium devices more affordable during the annual shopping festival. Apple quickly achieved one billion yuan in sales within just five minutes on Taobao and Tmall”…
Dudarenok, author and China digital expert predicts that countries such as Singapore, Malaysia, Thailand, Japan, and South Korea—now part of the “free shipping zone”—will see a sharp rise in new users as well. Early data from Singapore and Hong Kong already show a doubling of new consumers compared to last year.

More at Campaign Asia.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Starbucks should focus on China for future expansion – Shaun Rein

 

Shaun Rein

Starbucks sold its stake in its South-Korean joint venture, worth in total over US$2 billion. The best they can do, is reinvest their capital in expansion in China, says business analyst Shaun Rein to Reuters. “Using the sale of its South Korean operations will equip it with more cash that it can deploy to China,” Rein said.

Reuters:

South Korea is Starbucks’ fifth-largest market with more than 1,500 stores across 78 cities, but analysts said that the country offers little growth opportunity for the world’s largest coffee chain due to its mature and saturated market.

“South Korea … would not be a market for major growth in the coming years. It’s better for them to sell their stake use the capital and proceeds to invest in faster growth markets like China,” China Market Research Group analyst Shaun Rein said.

The U.S. company has in recent years been expanding globally especially in China as its largest market – the United States – saturates and grapples with stiff competition. Sales from China in its latest second-quarter report nearly doubled.

“Using the sale of its South Korean operations will equip it with more cash that it can deploy to China,” Rein said.

More in Reuters.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How the US failed to stamp out the coronavirus, unlike China – Harry Broadman

 

Harry Broadman

The US failed to stamp out the coronavirus, unlike China, says Harry Broadman, a former senior US trade official to the Sydney Morning Herald. And since South Korea and New Zealand also dealt with COVID-19 efficiency, it is not China’s authoritarian regime that made the difference, he adds.

The Sydney Morning Herald:

“Obviously, the US government bungled it,” said Harry Broadman, a former senior US trade official and managing director with Berkeley Research Group. The singular authority of China’s Communist Party helped Beijing enforce contact tracing and lockdowns, Broadman said. But other democracies, including New Zealand and South Korea, stamped out the virus as China did.

The real difference between the US and China was that Washington “has been arguing over stimulus issues on Capitol Hill and it’s still far too little and too late”, said Broadman, who has served under both Republican and Democratic presidents. “That has created more and more uncertainty on the part of business.”

More at the Sydney Morning Herald.

Harry Broadman is a speaker at the China Speakers Bureau? Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Preparing the life after the corona crisis

President Xi Jinping visits Wuhan

China and South Korea might be starting to resume their economies, the rest of the world is getting further into lock-down mode. After Italy, the rest of Europe and the United States are only at the beginning of the corona virus pandemic. And for sure nobody in those countries is in de mood to prepare for a life after the current crisis.

At the China Speakers Bureau, we do start to look ahead, also as more events are cancelled and international flights still seem in a unstoppable free fall. But one thing is sure: even when timing is unclear, this crisis will be disappearing in the months to come, even when experts already predict a second wave of patients after the summer. In our line of business the average lead time between inquiries for speaker' assignments and execution is on average three months, and we do not want to start for resumption of our business until the pandemic has officially stopped.

Most of our speakers have been silent on the corona crisis, as it is still unfolding, and making sense for the future international trade relations has been hard. But when business is resuming, more than ever a solid advice seems to be needed. 

This week we will start to publish against stories from our speakers, so you can have an idea in what direction their thoughts are going, and where they might fit into your future plans.  We remain at our posts, and look forward to exchanging thoughts. Do get in touch here.

Early positive signs from China, the world braces for more coronavirus spots

With all possible caveats: early signs do indicated the coronavirus is slowly retreating in China. That might reverse, as workers are slowly returning to work, and quarantine measure are partly revoked. Meanwhile, the rest of the world, notably South-Korean, Japan, Iran and Italy are fighting their own hot spots of the coronavirus and the fears of a global pandemic outbreak are all but over. 

When you follow our social media feeds at Twitter, Facebook or LinkedIn, you might notice that our China news - not related to the coronavirus - is growing since the weekend, and that is a good sign too. But still, we do not expect the event industry to pick up before May, and much might depend not only on China and the success of its quarantine measure, but also how the virus is developing in the rest of the world.

 Are you interested in discussing how to deal with your China event? Do get in touch.

How can foreign brands deal with Chinese consumer boycotts? - Shaun Rein

Shaun Rein

Getting into hot water with China's consumers, its government or both happens regularly to foreign brands. Business analyst Shaun Rein uses the latest NBA-upheaval to explain how those boycotts work, and how foreign brands can deal with them, according to the Marketplace.

The Marketplace:

China’s nearly 1.4 billion consumers take issues about the country’s territorial integrity seriously. “They go back to what they consider humiliation during the Qing Dynasty,” said Shaun Rein, author of the book, ‘The War for China’s Wallet.’  

“They feel that the Western powers, led by the British, enslaved the Chinese to opium [and] destroyed the country’s economy.”... 

Chinese firms suspended or canceled sponsorship deals with the National Basketball Association last month after Houston Rockets’ general manager, Daryl Morey, tweeted support for protesters in Hong Kong.  

Ecommerce giants Alibaba, JD.com and Suning voluntarily removed Houston Rockets merchandise from their platforms.  

“They’re showing the government that they will support the motherland,” Rein said.
There are some signs that NBA is on a slow route to recovery in China. While Chinese state broadcaster CCTV has not resumed airing NBA games, internet giant Tencent has — except for the ones involving the Rockets.  

Rein, who is also founder of the China Market Research Group, suggested the best way for foreign brands to combat these boycotts and bans is to issue a sincere apology.  

“What we tell our clients is stand up, apologize [and say] ‘We are sorry. We respect China. We respect China’s sovereignty issues,’” he said. “Then afterwards you can say pretty much anything, as long as you’re showing respect to the Chinese people.”  

Rein said the NBA fell far short of that but, even so, that public anger appeared to have subsided after Chinese state media stopped covering the controversy.
There are times, however, when the central government, via the state press, whips up public anger.
In 2016, China felt threatened when South Korea signed a deal with the U.S. to deploy an American anti-ballistic missile shield called the Terminal High Altitude Area Defense (THAAD).
Rein said the government criticized South Korea in the Chinese state press.  

“They basically said: ‘How dare this little country install something that could be an offensive tool against us,’” he said. Chinese consumers took the cue. They stopped buying Korean cars, cosmetics and snacks.  

South Korean supermarket chain Lotte, because it provided land for the South Korean military to build the THAAD system, was the hardest hit.

More in the Marketplace.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more branding experts at the China Speakers Bureau? Do check out this list.  

How to deal with China as a partner - Shaun Rein

Shaun Rein

Business analyst Shaun Rein author of The War for China's Wallet: Profiting from the New World Order defines three different relations China can have with other countries: hot, warm or cold partners. From Cambodia he reports how a hot partner like Cambodia can deal with its powerful neighbor, according to the Phnom Penh Post. 

The Phnom Penh Post:

 I don’t think China is trying to forge alliances; instead, it is looking to use economic carrots and sticks to convince countries to either do its political bidding (a Hot Partner country like Hungary, Ethiopia or Cambodia) or to punish countries that cross it politically (a Cold Partner country like India or the Philippines and the Aquino administration). It knows it can never be truly close with any country in the long-term, so instead it tries to dole out low-interest loans and infrastructure investments to countries to make them open to China’s political aims in the short term. Meanwhile, countries that cross China politically, as South Korea did by installing Thaad missiles, get punished. China blocked Chinese tour groups from visiting South Korea last April, causing a 40 percent drop in annual tourist visits and crippling the South Korean economy. 

If Cambodia is a ‘hot partner’ with China, what does this mean for Cambodia’s economy and development? And what does China gain from the relationship?  

Cambodia’s [Prime Minister] Hun Sen has been quite savvy in his dealings with China over the past decade. He has supported China’s views on the South China Sea during summits of Asean. Having a supportive country in Asean like Cambodia is to counter criticism of China’s policies by countries like Vietnam or the Philippines, and causes China to look to invest more in infrastructure development in Cambodia and to give it low-interest loans. Moreover, the Chinese government uses its control of the state-owned media to tout the historical landmarks in Cambodia like Angkor Wat. Right now, Cambodia is one of the top destinations Chinese tourists want to visit. I am very bullish on Cambodia’s ability to attract Chinese tourists to its landmarks and high rollers to its casinos. This is all gained by being a friend of China in the “hot partner” category. 

One of the problems of becoming a “hot partner” country is that these countries often become too dependent on China economically and start to lose political independence. China’s economy is so large that if a country gets punished for crossing China politically, then it will have a real impact, as in the South Korean case. 

On the one hand, it is good to get close to China politically, as nations will reap economic benefits, but it comes at a cost of losing political independence so countries should try to be close to China but also distance itself at times, as the United Kingdom or France has done, so that they are not viewed as lackeys of the Chinese government.

More in the Phnom Penh Post.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch  or fill in our speakers' request form.

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China does not need bombs to win a war - Shaun Rein

Shaun Rein

South-Korea is not the first country to see China can fight an argument without sending the army in: Japan and France are just a few examples where tinkering with economic power was more effective, for example by redirecting its tourists. It is easier to bully South Korea than Japan," says business analyst Shaun Rein in the South China Morning Post.

The South China Morning Post:

Its heavy reliance on exports to China leaves South Korea more exposed to boycotts of its goods and services than Taiwan and Japan – both of which have been similarly targeted in the past by unofficial ‘sanctions’ imposed by the mainland. 

“South Korea’s economy over the last decade has really been geared towards selling to the Chinese consumer – everything from cosmetics to tourism to K-pop,” said Shaun Rein, managing director of China Market Research Group. 

“The level of Chinese media attacks is much harsher towards South Korea because they know how much of Korea’s economy is geared towards China. It is easier to bully South Korea than Japan. Taiwan has back up plans due to ongoing tensions, while Korea does not.”

More in the South China Morning Post. Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? 

Do get in touch or fill in our speakers' request form. Are you looking for more experts to manage your China risk? Do check out this list.  

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Rising tension as US carrier visits Yellow Sea - Wendell Minnick

Getty Images via @daylife

Military tensions between China and the US are rising again as US aircraft carrier George Washington will join exercises with South-Korea in the Yellow Sea, writes Wendell Minnick in Defense News.

The exact date the aircraft carrier would enter the Yellow Sea was not released. The George Washington did not enter the Yellow Sea during exercises last month, supposedly after Chinese objections, but plans to do so in upcoming exercises have once again enraged Beijing.

China "won't stand for U.S. naval provocation," said Maj. Gen. Luo Yuan in an editorial published in the Aug. 9 edition of Global Times.

More in Defense News

Wendell Minnick Fantake via Flickr

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