{"id":21638,"date":"2020-04-24T10:39:05","date_gmt":"2020-04-24T09:39:05","guid":{"rendered":"https:\/\/staging.phdmedia.com_\/china\/?p=21638"},"modified":"2020-04-27T10:52:55","modified_gmt":"2020-04-27T09:52:55","slug":"phd-china-update-briefing-24th-april-2020","status":"publish","type":"post","link":"https:\/\/www.phdmedia.com\/china\/phd-china-update-briefing-24th-april-2020\/","title":{"rendered":"COVID-19 Crisis: PHD China Update Briefing 24th April"},"content":{"rendered":"

\"\"<\/a><\/p>\r\n

<\/p>\r\n

Is it business as usual already? With the majority of China back to work, and slowly getting back to school, there is a cautious optimism about life returning to normal.<\/strong><\/h4>\r\n

More government initiatives and spending inceptives are being announced to speed up the economy, and whilst the country\u2019s GDP has taken a hard hit, consumer confidence appears to be high.\u00a0 What has our PHD China Insights team uncovered in the market this past week?<\/p>\r\n

<\/p>\r\n

\u00a0<\/h4>\r\n

Economy and Trade<\/strong><\/h4>\r\n

It is being reported that industrial activity in China has completely recovered (Index 101),<\/strong><\/span> with the benchmark being two weeks before the quarantine of Wuhan, according to Goldman Sachs.<\/p>\r\n

China\u2019s GDP dropped by 6.8% in 2020 Q1.<\/strong><\/span>\u00a0<\/strong><\/span>Beijing and Shanghai both saw their GDP declining (6.6% and 6.7% respectively) due to the impact of COVID-19 pandemic. Shanghai also reported a loss of 63,200 jobs.<\/p>\r\n

\u00a0<\/h4>\r\n

Day to Day Life<\/strong><\/h4>\r\n

Looking forward into \u2018the next two weeks\u2019, most Chinese consumers\u2019 spending will increase (by 11%) but income and savings they predict to decrease in the short term<\/strong>\u00a0 (by 16% and 29% respectively) <\/strong><\/span>although they remain confident about the economic recovery (index: 143),\u00a0according to McKinsey. \u00a0\u00a0More spending is anticipated on household supplies (+25%), groceries (+13%), skin care and make-up (+9%),<\/strong> but less on apparel (-1%) in-home entertainment (-3%), and quick service restaurants (-22%).<\/p>\r\n

The same research indicates the biggest concern amongst Chinese consumers about the pandemic is not knowing how long it WILL last<\/span>, <\/strong>followed by overall public health, safety of their family and relatives in high-risk population groups.<\/p>\r\n

The Wuhan local government released shopping vouchers on 19th<\/sup> April on its designated WeChat Mini Program in order to help the economic recovery.<\/strong><\/span> The total value of vouchers is RMB 30 million and they attracted 2.39 million consumers within the first hour. All vouchers were collected by a number of lucky consumers within 9 minutes.<\/p>\r\n

\u00a0<\/h4>\r\n

Brands<\/strong><\/h4>\r\n

After selling only 18,600 vehicle units in 2019 (-63% YOY) in China, Renault have announced their exit from China\u2019s market<\/strong><\/span>\u00a0<\/strong>and withdrawing from the joint venture partnership with Dongfeng Motor Group.<\/p>\r\n

Victoria\u2019s Secret announcement of a new brand ambassador, actress Zhou Dongyu (known for her tomboy<\/strong> <\/span>looks),<\/span> <\/strong>has sparked a heated social discussion on standards and conventions of beauty in China, with some wondering if the brand is either being bold or has lost its touch.<\/p>\r\n

Starbucks and KFC have launched sustainable meat alternatives in China,<\/strong> <\/span>with the former launching its \u201cBeyond the Meat\u201d offering and the latter starting the sale of plant-based chicken nuggets.<\/p>\r\n

Luxury brand Hermes announced RMB19 million (USD2.7 million) in sales on the day of reopening of its flagship store in Guangzhou<\/strong><\/span>\u00a0on 11th<\/sup> \u00a0April.<\/p>\r\n

\u00a0<\/h4>\r\n

Travel and Transport<\/strong><\/h4>\r\n

53% of surveyed Chinese consumers are planning overseas trips in 2020 and more than 25% of them plan to travel abroad during the country\u2019s Golden Week (1st<\/sup> to 7th<\/sup> October).<\/strong>\u00a0<\/strong><\/span>71% of them would consider traveling to Thailand, 72% would stay in hotels (as opposed to AirBnB) and 83% would travel independently. CTrip remains the most popular online travel agency (at 61%), followed by Fliggy (16%), hotel websites (9%) and Booking.com (5%).<\/p>\r\n

Shanghai government has announced the installation of an additional 3,000 car battery power chargers in the city during 2020.<\/strong><\/span> Currently there is 1 charger for every 1.7 vehicles which is already much higher than the national average of 3.29.<\/p>\r\n

\u00a0<\/h4>\r\n

Media<\/strong><\/h4>\r\n

The national television company CCTV launched a campaign \u201cThank you for joining shopping for Hubei\u201d in order to help the economy of Hubei province,<\/strong><\/span> collaborating with various celebrities such as Austin Li, Zheng Shuang and Zhu Guangquan. The livestreaming sessions on platforms such as Douyin, Kuaishou, Pinduoduo and Taobao included the promotion of agricultural foods from Hubei and helped sell over 790,000 tons of produce within several days.<\/p>\r\n

Lifestyle service platform Meituan has launched a collaboration effort with 19 FMCG brands to release coupons that should help encourage consumer spending in this category.<\/strong> <\/span>This also indicates the platform\u2019s first serious foray as a potential ecommerce competitor to main players TMall and JD.<\/p>\r\n

Mobike celebrate the Earth Day (22 Apr) by partnering with German design brand YUUE and manufacturing furniture out of scrapped bicycle parts<\/strong> <\/span>to promote sustainability under the slogan \u201cBorn for Environment\u201d<\/p>\r\n

Social media platform Weibo has launched a new feature called Weibo Mini Store (Xiaodian),<\/strong>\u00a0<\/strong><\/span>aiming to utilize its user base and turn them into salespeople who will sell products to others and collect commission on each sold item.<\/p>\r\n

 <\/p>\r\n

Sources: McKinsey, Goldman Sachs, Dairy Association of China, China Dairy Industry Association, National Institute for Nutrition and Health, C9 Hotelworks, China National Bureau of Statistics, Meituan, Digitaling, TMT, Tesla<\/em><\/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":[1885,1653,1652,528,898,1886],"class_list":["post-21638","post","type-post","status-publish","format-standard","hentry","category-industry-insights-global","category-our-views","tag-covid19","tag-managing-marketing-communications","tag-ncov-crisis","tag-phd-china","tag-phd-insights","tag-phd-shanghai"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/posts\/21638","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=21638"}],"version-history":[{"count":0,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/posts\/21638\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/media?parent=21638"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/categories?post=21638"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/tags?post=21638"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}