Value of China’s top 100 brands up 30%, according to WPP and Kantar
May-14-2019 By : fcccadmin
The total value of the 100 Chinese brands increased 30% to USD889.7 billion despite trade tensions and slower growth, according to the latest study by WPP and Kantar. Alibaba was crowned the most valuable brand in China for the first time in the annual ranking, according to the “BrandZ Top 100 Most Valuable Chinese Brands.” Its brand value has grown 136% over the past five years in BrandZ’s list, outperforming the overall growth of the top 100 brands, which was up 92% over the same period. “The threshold to enter the BrandZ China Top 100 has more than doubled to USD681 million in 2019 from USD311 million a year ago, showing that Chinese brands are increasingly recognized as leading the way in innovation,” said David Roth, CEO of The Store, the WPP Global Retail Practice, for Europe, the Middle East, Africa and Asia.
The growth has been fueled by brands accelerating their expansion into China’s lower-tier cities, which have seen rapid development and rising consumer buying power, and increasingly positive attitudes to domestic brands with a global presence. Technology companies, which are gaining worldwide recognition, took the most spots in the ranking and contributed 26% of the total value. The study this year also included companies in four new sectors — consumer finance, entertainment, lifestyle platforms and transport. Xiaomi, local lifestyle services app Meituan, food delivery app Ele.me as well as Pingan Group’s consumer finance brand Lufax were the most valuable brands among 17 newcomers.
There is huge potential for further brand growth overseas as China moves beyond the industrial focus of its Belt and Road Initiative (BRI) toward establishing leadership in areas including AI, robotics, the Internet of Things (IoT) and green energy, the report adds. Doreen Wang, global head of BrandZ at Kantar, said: “Realizing brand growth requires Chinese companies to have knowledge and expertise to surmount new challenges.” The ranking was based on a combination of the listed companies’ stock performance and insights and opinion drawn from 290,000 Chinese consumers on more than 1,100 brands in 75 categories, the Shanghai Daily reports.
Holiday spending up 8.5%, reaching a new high
Feb-19-2019 By : fcccadmin
The 7-day Lunar New Year Holiday has always been an important barometer of consumption for the entire year. The combined sales of retail and catering enterprises in China rose 8.5% year-on-year to a new high of CNY1.01 trillion from February 4 to10, according to the latest statistics from the Ministry of Commerce (MOFCOM). Lunar New Year’s Eve dinners, and dinners with relatives and friends dominated the festival. But a lot more Chinese chose not to cook this year, resulting in an increase in Lunar New Year’s Eve take-out orders by various degrees in different cities. Beijing’s major restaurants saw their revenue up by more than 10% during the holiday compared with the same period of last year. More Chinese also ordered ready to eat meals through e-commerce platforms or hired a chef to cook meals at home. On one online ordering platform, the number of orders for Lunar New Year’s Eve dinners increased 107%, according to MOFCOM.
While making special purchases for the holiday, more Chinese favored imported food such as cranberries from North America, avocados from Myanmar, codfish from New Zealand, lobster from Boston and cherries from Chile. Apart from exotic foreign food, Chinese consumers also paid more attention to product quality, with the sales of organic food, smart home appliances and new electronic devices seeing fast growth.
Chinese e-commerce giant JD.com said its sales from February 3 to 7 rose 42.7% year-on-year, with smartphones, computers and home appliances being the top three items in terms of sales value. Cooking utensils posted the most substantial growth at 399% year-on-year, with people tending to prefer higher-end products in this category, the company said.
The Spring Festival once again unleashed China’s annual travel rush, with an increasing number of people opting to celebrate the holiday by traveling to tourist attractions. There was a 19% year-on-year growth in the number of Chinese tourists during the Spring Festival holiday, according to data from Fliggy, an online tourism service provider. A total of 12.59 million air passenger trips were made, up 10.6% from last year’s holiday, according to the Civil Aviation Administration of China (CAAC). Around 111,000 flights were made during the period, up 6% year-on-year. Domestic tourism revenues rose 8.2% year-on-year to CNY513.9 billion during the holiday. The number of overseas trips taken by Chinese increased by 28%. Ctrip, a Shanghai-based online travel agency, said countries along the Belt and Road such as Thailand, Indonesia, Singapore, Vietnam, Malaysia, the United Arab Emirates and Cambodia are among the most popular outbound destinations. The number of visitors to East European countries increased by nearly 40%.
China UnionPay said transactions over the weeklong Chinese New Year holiday surged 71.5% to a record-high of CNY1.16 trillion. Spending on gold accessories jumped 90% from a year earlier, while cultural entertainment spending more than doubled. The number of payments through UnionPay’s mobile platform increased 2.5 times, and the amount jumped 4.4 times.
During the 40-day travel rush from January 21 to March 1, air travelers are expected to make 73 million trips, up 12%, the Shanghai Daily reports.
Alibaba sets record USD30.8 billion in November 11 Singles’ Day sales
Nov-13-2018 By : fcccadmin
Alibaba Group set a record CNY213.5 billion or USD30.8 billion in Singles’ Day sales, underscoring the resilience in consumer spending in China. The gross merchandise value was about 27% higher than last year, also a record, which was surpassed mid-afternoon on Sunday. Sales were helped by the participation of Alibaba’s Southeast Asia unit Lazada, as well as subsidiaries Ele.me, supermarket chain Hema and other business units.
“Chinese consumers, especially the millennials, are incredibly confident about their futures, and that tends to enable spending, when you feel like you’re going to make more next year than this year,” said Jeffrey Towson, Professor of Investment at Peking University Guanghua School of Management. “It’s commerce but it’s also entertainment, this is not necessarily people who are buying stuff that they need in life, it’s a big festival, it’s fun and there are good discounts.”
Alibaba Group Executive Vice Chairman Joe Tsai told the media in Shanghai: “China has developed consistently over the last 20 years. China’s GDP per capita was about USD800 per person back in 1999 when I joined the company, and has risen to about USD9,000 per person today, an average across 1.3 billion people. Is it going to USD20,000, USD30,000 in the future? Absolutely, it’s happening.”
Consumers took less than two hours to rack up CNY100 billion in purchases after the festival began at 0:00h on November 11, a milestone that took seven more hours to achieve last year. In just 30 minutes, 30 brands including Nike, Adidas, Apple and Xiaomi had crossed CNY100 million in sales. MAC sold out its 3,700 special edition lipsticks in one second. Health supplements topped the most popular imported products, with milk powder, diapers and skincare products also high on consumers’ shopping lists, the South China Morning Post reports.
This year is the 10th edition of the shopping day, which has grown to become the biggest online shopping event in the world and in recent years has included traditional bricks-and-mortar retailers as well as more merchants and consumers outside China. With sales dwarfing those of Black Friday and Cyber Monday in the U.S., the festival has become the largest of its kind globally. Alibaba prepared 1 million square meters of bonded warehousing space, equivalent to about 140 soccer fields, through the Cainiao logistics network for the event this year, according to Alvin Liu, General Manager of Tmall Import and Export. Six procurement centers were set up in regions including Europe, North America, Japan and South Korea.
Small Chinese cities are the future of global luxury goods consumption
Oct-09-2018 By : fcccadmin
New apartment buildings in Hohhot, capital of Inner Mongolia
In China, luxury goods are no longer exclusively for well heeled city folk. In fact, the future of brands like Louis Vuitton, Chanel, Gucci and Prada may lie in smaller cities like Hohhot, with a population of three million and 10 hours by rail to the capital Beijing. More than half of all luxury consumers in China live outside the top 15 cities, in so called second and third tier cities and other less developed ones, according to a report by Boston Consulting Group (BCG) and Tencent. Luxury goods, more often associated with sophisticated city dwellers, have become commodities to be bought by members of the rising middle class in smaller cities.
Such a market fragmentation was made possible after brands digitized the marketing and purchasing process, and as Chinese consumers increasingly obtained information about luxury goods online, especially via smartphones. Mobile apps and content offer luxury buyers insights of key opinion leaders (KOLs) and the brands themselves.
However, 58% of consumers still prefer the old-fashioned way of buying in bricks-and-mortar stores after doing the research online, and around half choose to make their purchases while traveling overseas. “The battle for luxury consumers will shift swiftly from offline to online, and in five years, we will enter the age of Luxury Digitization 2.0 where online and offline marketing and sales will knit together closely,” BCG Partner Wang Jiaqian said. In tier-three and lower-tier cities that do not have physical luxury stores, buyers are twice as likely to make purchases online as those in the top 15 cities, but nearly 80% of them said they would not mind making the trip to a physical store to shop.
Chinese consumers have been the key target for global luxury brands for their deep pockets and the sheer size of the country’s market. China’s personal luxury goods market, worth €105 billion in 2017, is expanding at 6% annually, and is expected to reach €162 billion in 2024, according to the report. By then, 70% of all new growth in the world’s luxury market will be driven by China, which will account for 40% of the global market. Chinese luxury goods buyers are mostly young and well educated – and 70% are female. The average age among both genders is 28 years, and two out of three are aged 18 to 30 with a bachelor’s degree or above, the South China Morning Post reports. Chinese e-commerce platforms account for half of the country’s online luxury purchases, driven by the launch of Luxury Pavilion by Alibaba Group Holding’s Tmall and Top Life by JD.com.
China retail sales fell in July, endangering a hoped-for rise in domestic consumption
Aug-14-2018 By : fcccadmin
Sales at 50 major Chinese retailers fell by 3.9% in July from a year earlier, raising concerns over whether Beijing can push through its plan to ramp up domestic consumption to offset the effects of the intensifying U.S.-China trade war. Retailers of home appliances saw the biggest decline, with a 9.9% drop, followed by daily necessities, which fell 5.7% and clothing sales down 3.8%, according to the China National Commercial Information Center, a state-backed consultancy that is authorized by the National Bureau of Statistics (NBS) to release the figures.
“In general, the performance of China’s retail sector was rather sluggish in July,” it said, noting that a 6.5% rise in cosmetics sales was the one bright spot. The weak figures come as Beijing has been trying to encourage domestic consumption, with measures such as lowering tariffs for consumer goods, as part of its strategy to deal with the mounting pressure from the trade war, which is set to crimp the country’s exports, traditionally one of the main drivers of growth. At the same time, industrial production, another pillar of the country’s economic growth, also lost steam in the month of July, pointing to the possibility of a slowdown in economic growth.
An index of retail sector stocks, consisting of 169 major retailers listed in Shenzhen and Shanghai, dropped 2.16% on August 8, with 138 shares seeing declines and 18 shares an increase, according to Stock.com, a Chinese stock exchange information provider. Clothing chain Heilan Group lost 5.1% and Midea Group, China’s leading home appliances retailer, fell 1.1%. China’s stock markets are currently the world’s worst-performing, the South China Morning Post reports.
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