Why is China winning the Trade war?

China is winning the Trade war

Elon Musk's Tips to Chinese People

Elon Musk's Tips to Chinese People

China Becomes Largest Export Market for European Firms

Many brands can learn from the success of Zhang and his trio of squirrels. For starters, its DNA is embedded with three super cute pets, taking advantage of the worship of Chinese consumers of Japanese-inspired Meng culture, and their cute cartoons like Pokemon. Its appeal extends beyond children with many urban professionals hooked to everything that is beautiful.


This can be seen in some of China's most aspirational leading brands, such as Tmall's cat and JD's dog.

However, while many Chinese brands involve cute pets in their packaging and promotions, Three Squirrels has always gone beyond incorporating personalities into everything they do.


The videos, stories, games and prizes show the personality of each squirrel, giving consumers the experience they so often seek and intertwining them in a longer narrative.


Thoughtful extras that add to the experience include a wet wipe, a bag for shells and, often, walnut cookies with purchases. In their customer service line, consumers are directed as 'pet owners' and purchases are called 'adoptions'. Everything Zhang does keeps his clients at the center of his business, so much so that he considers the "fans" to be as part of Three Squirrels as his employees.

China digital channels 

The Three Squirrels D2C (Direct to Consumer) model overlooks retailers, but still manages a notable premium over the sea of ​​competitors that make up China's mass snack category. It also takes advantage of other digital channels, such as asking and listening to social media fans about the type of products they want, which has shortened their development cycles of new products to a few months.

While the Three Squirrels brand was created on the basis of Tmall sales, like many online retailers, the reduction of e-commerce margins and high customer acquisition costs have led it to focus on channel diversification.
While Tmall once accounted for 80% of its sales, now only half of its revenue of more than one billion dollars comes from the platform. A good part of this growth comes from the search for offline "experience" stores, where gross margins exceed 40%, compared to less than 30% online.

Unlike what happened in 2012, selling online is no longer new in China. While it remains a vital sales and marketing channel, one of the advantages of physical stores is that it is more difficult to compare products than simple online searches. In online stores, brands tend to use their best-selling products for promotional purposes and, therefore, must discount, resulting in even lower margins.

How long do I want to operate in cross-border e-commerce?It all depends on the goals of your business. Is the goal to become fully established in China? Or to maintain this position of exporter?
If the goal is to enter China in retail, then CBEC can be a good alternative to start and test the market and customer feedback, test your concept before taking more risks. The steps to establish in China require patience and time, it is better to be convinced of your project before launching. The CBEC is a smart first step.

14FAQ about crossborder

Chinese Customers can see how many ratings and often the amount of purchases, which is likely to further distort sales, as consumers regularly only search for the most sold or most reviewed items. In an offline store, hero products are not so obvious, so sales distribution is less likely to be diverted to a few popular items. This plays best with Three Squirrel's product diversification strategy, which has seen that cakes account for more than 20% of its sales, and nuts a little more than half.

Physical stores also allow consumers to buy very little at a time, much more frequently and without additional shipping costs. Fixed online delivery costs mean that each order must reach a certain dollar amount to be financially viable. Offline purchases do not have that threshold.

importance of e-commerce in China

While no one should underestimate the importance of e-commerce in China, China is increasingly seeing brands focus more on traditional retail as the golden years of high growth and high margin sales through platforms such as Tmall and JD seem to be done. Experience-focused physical stores, such as New Retail, have also given the channel a second boost. Brands are increasingly worried about relying too much on platforms like Tmall for sales and are also aware that e-commerce platforms launch more private brand brands, which are a conflict of interest. Like many things in China, it is important to understand and evaluate sales and marketing channels beyond exaggeration and develop strategies that balance risk with opportunity, as China does. We hope you enjoy the this week.
Consumers, Chinese consumers
Will there be a currency war? Behind China's ‘Momentous’ decision to turn the Yuan into weapons: the Chinese Yuan has fallen sharply by 2% to break

China news Update

In July 2017, Beijing set the target to make China “the world’s primary AI (Artificial Intelligence) innovation centre” by 2030. Whilst a detailed plan didn't accompany the goal, it sent a message reinforcing how serious China is about AI. Such a signal is almost always accompanied by investment, policy and supporting regulations (or lack thereof) from Central Government. In early 2018, eagle-eyed Chinese spotted AI-related books on Xi Jinping's bookshelf, highlighting that the mandate is being supported from the very top.

source : https://www.theverge.com/2018/1/3/16844364/china-ai-xi-jinping-new-years-speech-books

The vital ingredient for AI is the data that fuels the machines that learn from it. Unlike in the West where data is becoming more difficult to access as a result of heightened privacy legislation, China has very liberal rules. Chinese consumers are also among the least concerned about privacy and rate convenience as more important. On top of that, between some of the highest ecommerce, mobile payments, general smartphone and o2o (Online to Offline) usage rates in the world, coupled with the “datatization” of public spaces through facial recognition, the breadth of data-sourcing opportunities are second to none. China has so much data, it needs AI to make sense of it all.

source : http://agency.marketingtochina.com/investment-in-china/

There has been no shortage of news about how AI will touch most things we do including our education, whether or not we're offered a job, romantic matches, bank loans, how we are entertained, self-driving cars, and even the scarier things such as military drones. In China, 'keeping the population safe' has become one of most commonly cited applications. Yet possibly the most underreported driver for why China needs AI is to address the lack of youngsters being born to fill the gap in the workforce, as the ballooning elderly population retires.

While AI has some way to go to being able to match humans for feelings and emotional intelligence, improvements are happening. This is where things are getting interesting.

The global race for AI supremacy has illustrated just how far values differ between China and the West, resulting in different prioritisation in AI algorithms. This was evident during an AI ethics seminar in London earlier this month which highlighted that there is no global ethical standard for this very important technology which will impact us all. Codes of principles written in the west tend to focus on fairness, transparency, individual rights, privacy and accountability. Chinese AI ethicists prioritise values that are open, inclusive and adaptive, adding up to “great compassion and deep harmony” - collective good rather than individual rights.

http://news.chinaskinny.com

These values don't just provide an interesting perspective on the cultural differences between the West and China, but how AI's execution may differ in China and how it will shape marketing here. Most of China's tech giants are already using AI to offer adaptive and personalised offerings that make life easier and more convenient for consumers. This is already impacting marketing and will increasingly do so beyond the smartphone, such as future evolutions of New Retail and when personalised Out of Home advertising comes to the fore.

It’s China’s World: As the Chinese Century nears its third decade, Fortune’s Global 500 shows how profoundly the world’s balance of power is shifting. American companies account for 121 of the world’s largest corporations by revenue. Greater China companies account for 129. For the first time since World War II, the US isn't at the top of the ranks of global big business. The US is still ranked first for the top-50 and revenue, accounting for 28.8% of the Fortune 500 companies versus China's 25.6%. 82 of the Chinese firms in the Global 500 are “SOEs”. Whether the 21st century becomes the Chinese Century in the full sense—with China dominating culture, ideals, and concepts of human rights and human nature—remains to be seen. But at least in business, the Chinese Century is growing intensely more Chinese, and faster every day.

Chinese Consumers Rate Quality Above Price: 91% of Chinese consumers agree that when making a purchase, quality is more important than price, although when it comes to basic daily offerings, value for money is still the top consideration according to Mintel research. Consumers are willing to spend more for broader, self-indulgent experiences; as many as 84% of Chinese respondents who upped their spending on holidays in the last year did so to treat themselves. 81% are interested in trying something new rather than sticking to the familiar, such as buying a new product or going to a new holiday destination.

further readings
https://startuplivingchina.com/complete-guide-wechat-marketing/




Vivid Hopes to Simplify Access to China’s Burgeoning OOH Market: China set to be the second largest Out-of-Home (OOH) advertising market in the world by 2022, valued at $9 billion, yet it remains fragmented and complex. The White Magnolia Plaza on the Huangpu River in central Shanghai is an example of the platforms available, with the screen extending over 23,000 square metres over two sides of the building - more than three times the size of a football pitch.

https://www.prolificlondon.co.uk/marketing-tech-news/digital-news/2019/07/vivid-hopes-simplify-access-chinas-burgeoning-ooh-market

China’s AI Dream (startup updates in China August 2019)

Formulating Values for AI is Hard When Humans Do Not Agree: How we embed human values into AI code will be one of the most important forces shaping our century. Yet China and the west prioritise different things in algorithms; how far values differ were highlighted during an AI ethics seminar in London this month [paywall].

China’s AI Dream

Intro: China’s AI Dream: Chinese companies often lag behind their American peers in quality and diversity of data, but are particularly strong in the depth of data on each person. What this means is that many aspects of a Chinese citizen’s daily life are captured in digital form, and can then be used to either optimize AI-powered products. Digital and o2o apps aren't the only source of data, with facial recognition through CCTV helping the “data-tization” of China’s public spaces. In 2014, China had one university - Tsinghua - ranked in the top-15 for AI. By last year, it had four. The article includes interactive tools such as some of  WeChat's sources of data.

5 Ways Digital Payments are Most Disruptive in Ecommerce: Just 10% of Chinese use cash, 12% use bank transfers and 20% use cards for ecommerce purchases - two-thirds of Japanese and three quarters of South Koreans use cards. China has the highest penetration of eWallets such as Alipay and WeChat Pay for online shopping globally.
What Are Click Farms? A Shadowy Internet Industry is Booming in China: One third of all clicks on China's internet are from click farms or bots, as businesses and KOLs of every shape and size pay companies to boost their rankings and sales. Last year, Chinese state media CCTV reported that 90% of views generated by many popular shows on video sites are fake. As algorithms and regulations get tougher, many fakers have shifted from automated bots to human click farms which are harder to detect and regulate, albeit more expensive.