Chinese Consumers in the Driver’s Seat

GDP 6.9%

As we have documented, the Chinese economy is healthy. To further substantiate that fact, the country’s premier Li Keqiang has predicted the GDP for 2017 to come in at 6.9%, the first move upward in seven years. From a marketer’s point of view the internal fact that almost two-thirds of the activity results from consumers spending is reassuring. In particular, retail spending is up 10%.

When we look deeper we see a consumer population that is growing more proud of their Chinese heritage as the country prospers and less enamored by the pull of foreign products. While that is true, it doesn’t mean that the fascination is gone. Smart marketing by outside companies, marketing that respects the culture is still very welcome by Chinese consumers.

Foreign Brand Do’s & Don’ts in China

Do: Promote the heritage that makes your brand special

Don’t: Enter the market as though you are the big western poobah.

Do: Turn around “Chinese renaissance through thoughtful communications, promotions and product development.”

Source: China Skinny

2017 Was a Big Adjustment Year

2017-Year of Change

Last year saw more than ninety percent of CMO’s adjust their strategies because of concerns about brand safety. And those changes appear to be pretty substantial.  Almost 60% have increased spending in channels that can prove they’re safe for their brands. A majority or near majority have reviewed their relationships with either their agency or their suppliers or both. Those data speak to the seismic shift caused by the wild west nature of the early digital advertising revolution.

The changes in 2017 set a new base for digital advertising going forward.  Both sides, supply and demand, have been put on notice. Safety and transparency are no longer a desire, in 2018, and going forward, they are a requirement.  Source: eMarketers

On a Four Month Roll

Service Sector-Feb-18


Since October of last year this service sector index has seen an 8.1% increase in its outlook for the future. That sits in contrast to the up and down pattern of the months prior. The rise of the non-manufacturing sector is a sign of China’s ever-maturing economy especially since a significant portion of the manufacturing sector is still State owned. And these data are consistent with the current positive outlook for the world economy.  Source: Markit Economics

Contrasting Attitudes


A recent study of UK consumers suggests they are of two minds regarding personal data privacy. The data suggests consumers are largely content with the amount of personal data they are sharing and they believe it is a requirement of a smooth running modern economy. Twenty-five percent are relatively unconcerned about their data privacy while most view their personal data as an asset to be traded for benefits of some sort.

The level of contentment and lack of concern is even more pronounced as demographics scale younger. And for what it’s worth, 88% in this survey believe that transparency is key to further data sharing.

Notably, the comfort level with data sharing reflected in this survey comes in a world where data hacking is a recurrent event, where stories of stolen personal data for sale on the dark web are real…a puzzle. Source:

January Mobile Subscriptions up 50%

Carrier Data - Jan2018

With the addition of almost 12 million new subscriptions in January, the total mobile subscription base in China can now be rounded to 1.17 billion. Though we see this number range every month, it is still astonishing. January’s increase was 50% above the 7.6 million monthly average for the prior year. It is unlikely that this level of increase can continue going forward.  Sources: China Mobile, China Unicom, China Telecom

What Can $800 Million Buy?


For Alibaba, it can buy a seat at the table with the biggest players in the multinational space like Coca Cola and Samsung while for the Olympics, it gets a sponsor through the 2028 Games and it’s first sponsor for the 2022 Games in Beijing.

Alibaba’s interest is its newish cloud business, which it sees as a multinational enterprise that competes with the likes of IBM and Amazon.

Rick Burton, a former U.S. Olympic Committee chief marketing officer notes, “It’s an insightful deal by (Alibaba founder) Jack Ma, in the sense that it makes Alibaba instantly as credible as a company like Coca Cola, Visa, or McDonald’s [while] for companies in the U.S. like Amazon or Google or Facebook, it’s symbolically launched Alibaba as an international player to be reckoned with.”  Source: Bloomberg

Sixty-Six Percent Growth Seen For Digital Advertising by 2022

Digital Ad Projections - Statistica

This table has a load of numbers, but there are three essential facts to be drawn out: Statistica projects digital advertising to grow steady through 2022 and the relative position of the breakouts will remain the same. Less obvious is that banner ads will see the slowest growth at around 36%, which in any other circumstance would be strong. But next to search and social media in the seventieth percentile range and video, which is projected to grow more than 90% by 2022, banner looks weak.  Source: Statistica

Chinese Consumer Trends to Watch in 2018

Chinese Consumer Profile 2018

A Mintel Research survey of Chinese consumers ages 20-49 reveals the unique way their preferences are shaped by the social/political environment in which they have grown up as compared to that of their parents.

Opt-In: Consumers between the ages of 20-49 tend to be willing to opt-in to big data collection of behaviors via their many connected devises. Their belief is that machine learning of their preferences will yield better life experiences

Playful Preference:  Sixty-three percent of Chinese 20-24-year-olds say they play online games to relieve stress. These new consumers prefer a less rigid, more flexible approach to the world than their predecessors.

Individuality:  At the young end of the age range, there is more of a desire to express individuality in behaviors and in lifestyle. “Forty-one percent of teens…say they would like to live in an unconventional way.” These data imply a rebellion against the rigid ways of Chinese life and educational system that existed in the near past.

Environmental Concerns:  Mintel research reveals that 58% of Chinese adults ages 20-49 are willing to pay up for “ethical brands,” that is, products that are environmentally conscious and those that will benefit their health.

Mobile is Ubiquitous: As a measure of how thoroughly internalized and how quickly mobile technology is transforming Chinese culture, Mintel’s data shows “87% of Chinese consumers in tier 1-3 cities used mobile payments in 2017, up from 69% in 2016.”  The smartphone is the central devise of Chinese life for the core consuming demographic.

These trends all have marketing implementations as we approach the Chinese market.  Source: Branding in Asia

Programmatic Tech To Grow Through 2025

Prog Ad Growth Projection


Data from Persistence Market Research projects the adoption of programmatic technology moving into a more mature stage going forward. The compound average growth rate (CAGR) during the liftoff phase was 36% a year between 2012 and 2016. The projected average growth rate for the eight years ending in 2025 will be under 30% a year.  The slowdown in growth is to be expected as programmatic advertising becomes more universal. The study also notes that there is a shortfall in the number of skilled talent in the industry, those who fully grasp the nuances and implications of programmatic.   Source: Persistence Market Research

All Hail the Chinese Consumer’s Never Ending Desire for Stuff

Retail Sales Growth - Dec-17

Retail sales data is finally in for December 2017 and it comes in at the low end of the range for the last eleven months. Still, it grows as it has ever since June 2014 – the earliest month for which we have records. This speaks to the dependability of the Chinese consumer and their ongoing desire to have stuff as well as the market into which we are selling.  Source: www.; National Bureau of Statistics of China