{"id":21604,"date":"2020-04-03T10:29:28","date_gmt":"2020-04-03T09:29:28","guid":{"rendered":"https:\/\/staging.phdmedia.com_\/china\/?p=21604"},"modified":"2020-04-03T10:29:28","modified_gmt":"2020-04-03T09:29:28","slug":"phd-china-update-briefing-3rd-april-2020-2-2-2-2-2-2-2-2","status":"publish","type":"post","link":"https:\/\/www.phdmedia.com\/china\/phd-china-update-briefing-3rd-april-2020-2-2-2-2-2-2-2-2\/","title":{"rendered":"COVID-19 Crisis: PHD China Update Briefing 3rd April"},"content":{"rendered":"

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<\/p>\r\n

For the past 9 weeks, we have been sending updates on the latest situation in China as the country was hit by the COVID-19 crisis. With China continuing to work through into a stable recovery phase, from next week we will start to share observations on recovery dynamics and some potential \u2018new normals\u2019 that could become more permanent.\u00a0 <\/strong><\/p>\r\n

This week more official data has been released that sheds light on the business and economic impact of the coronavirus over the past three months. Predictions for the longer term are only starting to be released, but understandably many sectors are negatively affected. Some reassurance to brands can be seen as consumer spending starts to return and some trade routes are returning to pre-crisis levels.<\/p>\r\n

In terms of media, TV ratings continue to sit higher than average, and as urban traffic levels start to return to normal, out of home media should start to find its audience again.<\/p>\r\n

So as China continues its recovery, what has our PHD China Insights team uncovered this week?<\/p>\r\n

Business<\/strong><\/p>\r\n

Export industry anticipates a decrease of 18% in 2020<\/strong>.<\/span> Due to the impact of COVID outbreak globally, air cargo costs from China to Europe have increased from RMB 30\/kg to RMB 55\/kg with the shipping time doubling.<\/p>\r\n

The country\u2019s sea transport has normalized <\/strong><\/span>as the number of calls in China\u2019s ports across three days reached an average of over 800, similar to the same period of 2019.<\/p>\r\n

China\u2019s manufacturing PMI was 52.0% in March<\/strong><\/span>, an increase of 16.3 % points from February, while the non-manufacturing business activity PMI reached 52.3%, 22.3 % points compared to February 2020.<\/p>\r\n

Resumption operations rate of large and medium enterprises reached 96.6% <\/strong><\/span>in March, compared to 78.9% at the end of February.<\/p>\r\n

Cloud Travel is on the rise<\/span><\/strong>:<\/span> as of 8 Mar, at least 20 cities and more than 1,000 tourist attractions in China launched their online tour services with live streaming sessions lasting 1 to 2 hours and attracting 20 million viewers and starting 236,000 related discussions on Weibo.<\/p>\r\n

More than 200 bookstores have introduced live broadcasts<\/strong> <\/span>through which the store managers browse between shelves and recommend new titles.<\/p>\r\n

7.2 times more merchants live-streamed their content <\/strong><\/span>on Alibaba\u2019s eCommerce platform Taobao in February compared to the month before.<\/p>\r\n

China Film Administration has suspended the resumption of cinema operations <\/strong><\/span>across the country due to the fears of the potential second epidemic wave.<\/p>\r\n

95% of 277 shopping centers and 80 malls in Shanghai resumed their business <\/strong><\/span>operations by early March.<\/p>\r\n

The coal consumption recovered to over 90% of the same period of 2019<\/strong><\/span> in March.<\/p>\r\n

Gyms maintain customer relationship through different methods during the COVID-19<\/span>.\u00a0 <\/strong>About 50% of China\u2019s fitness centers and gyms have enough funds to sustain for 1 to 3 months with their operations suspended, 71% of them keep contact with their members, 38% of them send diet guidance and work out check-ins, and 36% of them send daily work out videos.<\/p>\r\n

Brands<\/strong><\/p>\r\n

Amazon has decided to temporarily close its warehouse in China<\/strong><\/span> as cross-border eCommerce logistics costs increasing by 40% due to the COVID-19 crisis.<\/p>\r\n

Ctrip decided to invest RMB 1 billion in the revival of the tourism industry in China <\/strong><\/span>and includes over 10,000 hotels and tickets for over 300 scenic spots. Currently, less than 30% of travel companies in China are back in business and 50 international airlines cancelling their flights to China\u2019s destinations<\/p>\r\n

Nike\u2019s sales online increased 30% with the help of live streaming on Tmall<\/strong><\/span>, despite over 5000 stores being closed in January. The brand launched the annual Air Max March Party which was broadcast online on 26 Mar. Nike\u2019s sales revenue for the Greater China area dipped only 4% in 2020 Q1.<\/p>\r\n

436 out of 450 milk tea brand HeyTea stores resumed their business operations<\/strong><\/span> and 80% of these allow their patrons to sit in by early March.<\/p>\r\n

Luxury brands are experimenting with live streaming, but are yet to discover a successful format<\/strong><\/span>. Louis Vuitton launched a live streaming session with the glamorous actress Elaine Zhong on the social commerce platform Xiaohongshu introducing the products, but the number of unique viewers was relatively low (around 15,000) and overwhelmingly negative comments, because the session was perceived as cheap and inappropriate for a luxury brand.<\/p>\r\n

Consumers<\/strong><\/p>\r\n

National college entrance exam postponed by one month.<\/strong><\/span> China\u2019s Ministry of Education has announced that the national college entrance exam (Gaokao) would be postponed by one month and held in July instead of June.<\/p>\r\n

Government of China\u2019s Henan province gave away RMB 7.71 billion <\/strong><\/span>to prevent the decrease of the living standard of its most vulnerable residents.<\/p>\r\n

Over RMB 1.1 billion vouchers released to boost consumption.<\/strong> <\/span>Previously released vouchers by the government of Nanjing valued at RMB 318 million have proven to be popular and led to 10 million purchases within only 5 days. Other local governments such as Hangzhou and Ningbo have also released consumption vouchers values at RMB 500 million and RMB 100 million respectively.<\/p>\r\n

2.5-day-weekend will be implemented to stimulate the economy.<\/span> <\/strong>Three regions in China \u2013 Zhejiang, Jiangxi and Longnan in Gansu \u2013 will be the first places that will enjoy 2.5 day weekend in 2020 Q2.<\/p>\r\n

Media<\/strong><\/p>\r\n

TV ratings in China are about 20% higher compared to the pre-epidemic period<\/strong><\/span> even when they have declined by 9% compared to February and have a clear declining trend.<\/p>\r\n

City traffic, important for OOH media, has started its recovery<\/strong><\/span>, but it is still 20% lower than before the crisis outbreak.<\/p>\r\n

<\/p>\r\n

Thanks to our PHD China Insights team for their contributions.<\/p>\r\n

Visit our WeChat<\/a> to view last week\u2019s advice and detail on the recommendations for managing communications during this period.<\/em><\/span><\/strong><\/p>\r\n

We are providing a weekly update on the impact and implications for this current health crisis. <\/em><\/span><\/strong><\/p>\r\n

If you have questions or suggestions, please feel free to email us at:<\/em><\/span><\/strong><\/p>\r\n

Mark Bowling \u2013 CSO PHD China <\/em><\/strong>mark.bowling@phdmedia.com<\/em><\/strong><\/a> or Vladimir Prostran \u2013 Group Director Strategic Insights PHD China <\/em><\/strong>vladimir.prostran@phdmedia.com<\/em><\/strong><\/a><\/p>\r\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":84,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[503,498],"tags":[1653,1652,528,898],"class_list":["post-21604","post","type-post","status-publish","format-standard","hentry","category-industry-insights-global","category-our-views","tag-managing-marketing-communications","tag-ncov-crisis","tag-phd-china","tag-phd-insights"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/posts\/21604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/users\/84"}],"replies":[{"embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/comments?post=21604"}],"version-history":[{"count":0,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/posts\/21604\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/media?parent=21604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/categories?post=21604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/tags?post=21604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}