May 2018 – Mpoint

Defining Chinese Millennials – The World’s Leading Consumers

On : May 31, 2018

China is home to 400 million 20 to 36 year olds verses the 80 million in the US.

They are digital natives with an eye on the outside world as compared to their parents. While only 6% of the Chinese population has passports, two thirds of them are held by millennials. They represent the surge in international travel coming out of China.

Theirs is a “rags to riches story [that has seen the country move] from rural to urban, bikes to cars, tenements to high-rises — in their lifetime.” It affects their outlook on life. While they are aware of the desperate past, they have experienced nothing but positive growth. Rags to riches have turned into rose colored glasses.

On the negative side, Chinese millennials have the challenge of caring for their aging parents. In the bad old days (50 years ago) when life expectancy was 36 years old and Chinese families averaged 6 kids, it wasn’t a problem. Kids were expected to and did take care of their elderly parents. Today with the consequences of the one child policy, a relatively small group of millennials are responsible for the care of a massive population of aging parents who are now living to an average age of 76. The pressure to succeed is enormous.

Chinese millennials live in a kind of psychological conflict. On one hand, they are full of cultural pride stemming from the re-emergence of their country; while they live with concern being caught between the old values of service to family and the new values of personal accomplishment. Source: New York Post

One Intense Loyalty Building Strategy

On : May 30, 2018

Winning the customer loyalty battle has three elements according to The Exchange Lab’s VP, North American Operations & Business Intelligence, Edward Lee. It all begins with data…big data that requires big databases. Customer info should come from as many sources as can be gathered. Customers can be matched into groups and subgroups – even fuzzy matching helps. Use these data to parse customers by where they are, both digitally (mobile or not) and physically (geo), or where they are by lifestyle – are their searches about kids or about Beyonce? Once identified, the game is just beginning because the customer needs to be tracked over time, changes in behavior have to be noted and responded to with speed so that messages are always speaking to the customer in their time and space. Source: CampaignUS

China’s Service Sector Outlook Lookin’ Good

On : May 29, 2018

The latest survey continues the light undulation, this time the move is slightly upward to slightly above the 13-month average of 52.4. The service side of the Chinese economy is important to watch because, unlike the manufacturing sector, the service side has no government run business included and, therefore, it is a more pure version of the capitalist element in the economy. That it has been sitting comfortably above the balancing point of 50 since well before January 2016 is very positive and indicative of the changing structure of the country’s economy. Source: Markit Economics

Superhero Challenge is on between China & the West

On : May 25, 2018

Superhero Grosses

The US cultural influence on the world over the last one hundred years has been pervasive. The country adjusted in the 1960s when British culture in music and film pushed back. Now is it time for China to push. Chinese people have accepted America’s superheroes, as the world had in the past, but now China wants superheroes of its own.

Response: Marvel and one of China’s largest game developers, NetEase, have joined forces, as it were, to create graphic novels featuring newbie heroes Aero and Lin Lie among others. The goal is for these Chinese heroes to be absorbed into the larger hero lexicon and ultimately to be accepted in The Avengers galaxy. Source: BBC.com

Digital Video Ad Spending Will Continue to Increase

On : May 24, 2018

Digital video ad spend as a percentage of the total has been on the rise over the last couple years, and according to the latest survey of more than 350 big brand marketers by IAB, the trend will continue in the 12-months going forward. “Two-thirds plan to shift some TV budgets to digital video this year.” The table shows clearly that the energy for spending is moving toward digital video.

Warning: We learned from a consumer survey last week that marketers should be careful not to impose ads longer than 6-15 seconds on the front-end of a video because the audience will bail and the budget will be wasted. Source: MarketingLand

Mobile Subscriptions Pass 1.2 billion

On : May 23, 2018

Mobile subscriptions for China’s major carriers have passed 1.2 billion in a population of 1.4 billion. April was the fourth consecutive month in which China added more than 10 million new smartphone subscribers. As these milestones are crossed they remind us of just how large China is and how enormous the potential is for marketers trying to penetrate it. Sources: China Mobile, China Unicom, China Telecom

US Digital Advertising up 21.4% in 2017

On : May 22, 2018

Digtal Ad Spend 2017

Spending on digital advertising in 2017 rose 21.4% over the previous year. And while mobile continues to take a greater share of the total (56.7%) it only increased by 4% over the prior year. The implication is that as a percentage of total digital buying, the shift to mobile has slowed to point where it is likely future mobile spending increases will reflect the general move to digital advertising instead of outpacing it as in past years. Source: MarketingLand

China’s Manufacturing PMI Remained Steady in April

On : May 21, 2018

Manufacturing PMI-April-18

April data saw output move up slightly while new orders slowed. Employment declined while buying activity increased. And, in spite of March’s spike in food prices, inflationary pressures in April remained relatively quiet.

Zhengsheng Zhong, analyst at CEBM Group, a subsidiary of Caixin, commented, “Operating conditions continued to improve in April. But uncertainty in exports has increased significantly, and the dependence of the Chinese economy on domestic demand is rising.”

Source: Markit Economics

Chinese Consumer Confidence Down, but still Up

On : May 18, 2018

Though Consumer Confidence dropped in March, probably due to the increased cost of food seen in February, it still sits at very positive levels, particularly when contrasted to the 13-month average of 118. The past six months have all been above 120, which indicates a population that is ready and willing to spend – a willingness all marketers enjoy seeing. Sources: Tradingeconomics.com; Nat’l Bureau of Statistics, China

China’s Financial Sector Transformation Will Benefit Western Banks and Securities Companies

On : May 17, 2018

Financial Sector Changes

In 2001 China gained entry into the World Trade Organization, which began the transformation of the country’s manufacturing sector. On June 30^th of this year, the Chinese government’s promise “to ease ownership and business restrictions for banks, securities firms, asset managers and life insurers” will go into effect. As indicated by these projections, enormous gains are expected for western financial sector companies doing business in China as the rule changes will have the same transformative effect on the financials as entry into the WTO did for manufacturing.

Bloomberg Economics Chief Asia Economist, Tom Orlik, commented, “A more open and competitive financial sector should deliver more growth bang for each unit of credit buck — critically important if China is to make headway on deleveraging.” Source: Bloomberg