Category

China’s ride-hailing sector witnessed a substantial decrease in annual growth, from 39% to 25%, with a gross merchandise volume of $40 billion in 2018. Electric Vehicle fleets will accelerate ride-hailing companies towards profitability since a 65% reduction in fuel costs could be seen by switching to EV. click for more…

 

INSIGHT & IMPLICATION: After booming for a few years, the ride-hailing market is now experiencing a decline in annual growth in China, likely due to the safety issues and growing regulation from government. Shifting to EV can be seen as a good way to keep the business moving forward, and the cost reduction is definitely contributing to profitability. Also, in the future, China will boast the world’s largest charging infrastructure, having already over 1 million installed EV chargers as of June 2019.  Also, since the ride-hailing market in first-tier cities is quite saturated, the battlefield will move to lower-tier cities. Lower-tier cities’ consumers have very different travelling behaviours, habits and even mindsets. To educate them, green travelling might be the first step.  

 

Consumer

93% of Chinese consumers think FMCG manufacturers do not do enough to reduce plastic waste and 54% of Chinese consumers care about sustainability and have taken action. Also, the proportion of Chinese consumers agreeing with “I feel that I can make a difference to the world around me through the choices I make and the actions I take” jumped to 63% in 2019 from 51% in 2017. click for more…

 

INSIGHT & IMPLICATION: Garbage sorting is the latest trend in China. It’s also having impacts on consumers’ shopping behaviour and even their attitudes towards brands. By the end of 2020, 46 big cities, mostly with populations of more than 2 million people, will have established their “basic garbage sorting system”. For Chinese consumers, now they have to think about the eventual cost of throwing away the garbage when making purchasing decisions. People are gaining a sustainability conscience, so when choosing brands, they will be keen on brands having minimum impact on the environment through its production, operation and distribution. Later on, sustainability-aware brands will win more Chinese consumers as this trend gets stronger. “Sustainability” is no longer an optional box to tick, this should be a compulsory question for all brands to answer and this should be integrated into every business unit and every step in a brand’s operation.

 

Culture

Between 2017 and 2018, the spending over 100k RMB on WeChat KOL campaigns jumped from 40% to 58% of total KOL investment. Articles with more than 10k views make up for only 3% of articles but account for around 50.2% of views on WeChat. click for more…

 

INSIGHT & IMPLICATION: The WeChat KOL market is maturing, with larger influencers tending to have a better return on investment for brands, even though top KOLs may be overpriced. Also, WeChat is showing an extreme concentration of views in a small number of accounts and articles. Somehow, large influencers have strong credibility among their followers, so it’s very likely that their followers will purchase a product simply based on reading one article—without doing further research or comparing price in other channels. Additionally, the content is still key for those WeChat official accounts with low fan bases. Either the amount of content is published too frequently, not frequent enough, or the quality is too low. It’s very important to make sure that they publish the right content at the right time because it could decide users’ engagement. The format of the content is another important factor that must be considered.

 

Media

In June 2019, Alibaba’s China retail marketplaces had 755 million mobile MAUs, representing a quarterly net increase of 34 million. Annual active consumers on Alibaba’s China retail marketplace was 674 million for the 12 months ending June 30, 2019, compared to 654 million for the 12 months ending March 31, 2019. click for more…

 

INSIGHT & IMPLICATION: The growth of active consumers for Alibaba is mainly from less-developed areas, which demonstrates the success of Alibaba’s initiative to cater to a broader base of users, such as using simpler interfaces for first-time or less-frequent users. Referral through Alipay and other special shopping festivals also helped to deepen Alibaba’s penetration into lower-tier cities. Through digitalizing all aspects of store-based retail operations using Alibaba’s solutions such as consumer insight technology, on-demand delivery, inventory tracking, supply chain management and mobile payments, it could truly help brands and retailers to offer an unrivalled consumer experience and improve their operating efficiencies.

 

Have a great weekend!