Three Innovative Ways to Reach Chinese Consumers

The Chinese super app WeChat is not only a superior social media tool (as I wrote here), it is also at the forefront of mobile e-commerce innovation that the West has never seen.

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As of this writing, WeChat has over 800 million users (yes, it seems that WeChat’s user base is growing by the minute). Better yet, its users are super active. An average user checks into the app 10 times a day. They are practically living on WeChat.

This has created a tremendous opportunity for brands to reach consumers. Reports indicate that brands in the fashion, watches, and jewelry categories receive an average of 7,000 views per WeChat post.

WeChat offers platforms for brands to engage in interactive and one-to-one communication, driving online-to-offline activities and encouraging loyalty. WeChat’s payment system allows brands to sell directly to consumers seamlessly. Its true potential has yet to be tapped. Continue reading

Apple: A Trend Follower in China?

It was not too long ago that Apple’s iPhone was a status symbol among young Chinese middle class consumers. They would stand in a long line before the launch of a new iPhone and spend a month’s salary just to own one.

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This has changed. According to a Financial Times article, Chinese consumers no longer buy into the hype they once did in iPhone. These days, Apple looks like “a trend follower” and is struggling to “keep itself interesting” in China.

Apple has continued losing ground as China’s smartphone market becomes increasingly competitive. iPhone sales dropped 32 percent in the second quarter, and the Silicon Valley company fell to fifth place behind Huawei and other unknown brands such as Oppo and Vivo, according to research from International Data Corp (IDC) Continue reading

Will China Become the World’s Innovation Hotbed?

I am honored to be invited to speak at the Economist Innovation Summit in Hong Kong on Sept. 6, 2016.

InnovationSummitThe Summit gathers entrepreneurs, venture capitalists, and industry luminaries to examine how Chinese firms have evolved from copycats to innovators, and what impact they will have on the rest of the world.

A couple of years ago, I wrote an article Why China Will Lead Innovation in Social and Mobile Commerce. Clearly, Chinese firms are innovating in many other fields as well. An Economist article indicates that:

In fields from gene editing to big-data analytics to 5G mobile telephony, Chinese experts are now among the world’s best. Sunway TaihuLight (pictured), a supercomputer made using only local computer chips, is five times as fast as the best American rival…. WeChat, a social-media and payments platform with 700m monthly active users, is more useful and fun than Facebook, Twitter and WhatsApp put together.

Continue reading

600 Million Consumers, 3 Emerging Trends

The Chinese economy may have slowed down, but Chinese consumers haven’t. In 2015, consumer spending increased approximately 13 percent, compared to less than 7 percent growth in GDP.

HK_consumer2_450A recent McKinsey report indicates that Chinese consumers have remained confident despite the economy slowing down. Among the 10,000 individuals surveyed by McKinsey, 55 percent expected their incomes would increase significantly over the next five years, compared to just 32 percent of consumers in the United States and 30 percent in the United Kingdom believed so.

The Chinese middle class now represents one-half of China’s population. Although they are new consumers, they are maturing and modernizing rapidly. Three characteristics are emerging: Continue reading

China’s Middle Class Has Become a Major Pillar of Its Economy

The Chinese middle class, now estimated at more than half a billion strong, has become a key driver for the country’s economy.

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The newly released data indicates that China’s retail sales grew more than 11 percent in 2015, despite economic slowdown. Consumer spending was one of the brightest spots in the Chinese economy, which is now $10 trillion in size, and registered a 6.9 percent growth last year.

A Bloomberg article, “Beyond the Headlines, Five Things to Watch in China’s GDP Report,” wrote:

Rapid income growth over the last decade has made Chinese consumers an increasingly powerful force, snapping up Apple iPhones, Tiffany diamonds and Toyota sedans.

Urban household incomes increased more than 8 percent, the new data shows. China also added 13 million jobs last year, exceeding the government target of 10 million, thanks to the booming service sector.

The unemployment rate was at 5.2 percent, about the same as the United States.

While investment in fixed assets slowed, the residential housing market is rebounding. The data also shows that “home-price recovery spread to more cities in December, especially smaller ones.”

All these indicate that the Chinese middle class is still growing, Continue reading

The Future of China’s Economy: Its Middle Class

Two Wall Street Journal articles caught my eye this morning: The Future of China’s Economy: Yuppies and Women Fuel China’s Fitness Craze. Both discuss the spending power of the Chinese middle class.

Trendy Chinese consumersIn the first article, author Laurie Burkitt wrote that China’s economy will be relying heavily on “yuppies” – young urban professionals:

According to a new study from the consultancy the Boston Consulting Group and Alibaba’s Aliresearch, richer, younger and tech-savvier Chinese will be the main drivers of growth in the country’s consumer economy going forward. Affluent consumers, shoppers under the age of 35 and Internet surfers will push China’s consumer market up to $6.5 trillion in sales by 2020.

This projection is based on GDP growth at only 5.5% (compared to nearly 7% currently). I am not surprised. For years, I have been saying that the rise of the Chinese middle class is the biggest story of our time. Continue reading

Can Mattel Make A Comeback In China?

After Mattel’s embarrassing closure of its flagship store, the House of Barbie, in Shanghai two years ago, the American toy maker seems to have learned a thing or two about the Chinese market.

Its newly launched “Violin Soloist” Barbie aims to target Chinese parents who want their daughters to be “geniuses,”  just like any self-respecting tiger mom would. The doll has a traditional Barbie look – blonde, blue eyes and dressed in glamorous hot pink. In addition to her five-inch high heels, she even has a violin!

At first glance, it’s hard to imagine that a Barbie like this would appeal to Chinese girls. Don’t they want dolls that would look more like them – black hair, brown eyes and round face? Continue reading

The Wall Street Journal Interview: The Barbie Story in China

Recently, I was interviewed by The Wall Street Journal about how American toy-maker Mattel misread feminism in China. As the result, it had to close its flagship store, the House of Barbie, in Shanghai, and threw away over $30 million investment.

Since then, Mattel seemed to have learn a thing or two about the Chinese market. The Wall Street Journal article indicates that the company is making new efforts in China.

The Chinese toy and games market has been growing at 14% in the last five years. The demand will continue to be strong as growing Chinese middle class families want to give their children the best. And, they have the disposable incomes to do that.

There are still opportunities for Mattel to get it right in China. I will soon have an article on Forbes.com to comment on Mattel’s newly launched Barbie “Violin Soloist.” Stay tuned!

China’s Middle Class: New Global Travelers

Recently, I was interviewed by Travel Weekly, a national newspaper of travel industry, on increasing Chinese travelers and how they affect the travel industry in the U. S. Below is an excerpt of my conversation with Diane Merlino, editor in chief of Travel Weekly PLUS:

Merlino: How do you define the Chinese middle class?
Wang: Chinese middle class households earn between $10,000 and $60,000 a year, but those figures can be misleading because the cost of living in China is very different from what it is the West. In the U.S. you can’t even get by on $10,000, but in China $10,000 is the beginning of having a lot of purchasing power in certain areas, especially in smaller cities. In Shanghai, the cost of living is quite high; that’s why there is that range in income.

So, the rule of thumb I use is a family is considered middle class in China if the household has a third of its income available for discretionary spending.

Merlino: Give us an idea of the size of the Chinese middle class and the growth rate of that demographic.
Wang: Five years ago, when my book first came out, the Chinese middle class was estimated at 250 million to 300 million people. Today, the middle class has reached an estimated 450 million people, and we’re projected to reach 800 million middle-class Chinese by 2025.

….

Merlino: How important is travel to the Chinese middle class?
Wang: 
A lot of Chinese have a desire to travel because China was closed 30 or 40 years ago. Very few people traveled during that time, but now that China is opening travel, to go see the world is a life goal for a lot of people. The younger generation, those in their 20s and 30s, are traveling a lot. If they have less money, they travel within China, but now when I travel around the world I see so many younger Chinese. It’s amazing. Continue reading

Why Some Brands Succeed While Others Struggle in China

I was invited to be on CCTV-America, the America bureau for China Central Television, to discuss China’s middle class and what it means to Western brands. Here is a clip:

Apparently, CCTV-America was launched last February in the United States. It broadcasts a daily program from its Washington DC production center.