A look back at 2017
As we proceed towards the new year, I thought it appropriate, if somewhat late, to do a lookback at China in 2017. This is definitely not an exhaustive list, rather a random selection of news items that have stuck in my hazy, post-Christmas, pre-New Year brain.
New buildings and new toilets
The Chinese government has made a push in recent months to address domestic health and safety issues. Much has been reported on China’s drive to install better toilets across the nation. While mundane to most western audiences and even comedic at times, this initiative is one that underscores all modern cities: Sanitation. Similarly, the widely reported forced evictions in Beijing’s poorer neighborhoods is underpinned by one thing: Deadly fires in buildings that did not meet building safety standards. On more than one occasion, these fires have resulted in deaths, each in the double digits.
The government initiatives rings opportunity for non-China producers of occupational health and safety goods that meet higher quality standards. Be that luxury multi-function toilets from Japan, or fire alarms systems from Australia.
Lingerie: Made in China, bought in China
Victoria’s Secret held their first-ever Asia show at Shanghai’s Mercedes-Benz Arena.
Let that sentence sink in for a while. For the first time in 23 years, the high-end underwear brand held its show outside of the US or Europe, and they chose Shanghai. Not only that, they featured more Chinese and Asian models than ever. “The world’s sexiest show” aside, this is a showcase event for their target markets, and the fact they are using Asian models is a huge indication of where their aspirations lie.
Of course, this is not really news. It is China or bust for some of the largest brands in the world, and they are only just making a mark in this growth market. Consumer goods are making good in a big way in China, with a middleclass forecasted to grow beyond that of both the US and Europe combined in the next two years. In particular, China’s women are a force to be reckoned with.
China has doubled down on the green
The lush green hues of trees, that is.
In late November, the Chinese government announced plans for the world’s largest market for carbon emissions. This is just one small part of China’s ongoing fight against pollution. From laggard to leader, China has spearheaded the global fight against climate change, taking the leadership role from the deflating influence of the U.S.
The Clean Energy sector will be a clear winner, and ancillary services will also benefit. The nature of clean energy means energy storage and measurement providers, for example, will almost certainly see a rise in demand and profit, as will the likes of solar panel producers and green design providers.
QR codes. Remember those things from 10 years ago that looked like a poor attempt at optical illusion pictures? Well they never went out of fashion in China. In fact, Chinese tech startups have taken it to a whole new level. The humble QR code is the key to mobile service apps and serve as mobile payment gateways. From renting a public bike to paying for your diabetes-inducing coffee concoction, the QR code and mobile payments is a necessary part of doing business in China.
The extent of growth in usage of these technologies is such that, as a business, you need to pay attention even if you are not an online store in the traditional sense. This is because the QR is the backbone of China’s cashless society. As a result, Chinese companies have progressively moved towards what is commonly referred to as online-to-offline, or O2O, as they seek to reach not only the rural masses across China, but also the increasingly (physical) cashless youth.
Hong Kong and the UK have quietly follow suit. The Hong Kong Monetary Authority is developing QR-code standards for retail payments. Such standards hopefully will help expand the cashless system to more merchants, particularly small shops and businesses.
Sharing economy and apps, apps, apps
Head to Shenzhen, China’s very own Silicon Valley, and you will see that apps are everywhere. Not only are QR codes (read above) pervasive, they are also not a novelty. Similarly, apps are used regularly and freely. The level of peer-to-peer lending has increased dramatically in 2017. Dianrong is one example. Created by an American who had never been to China prior to launching the business venture in 2012, the app gathers funds from the people (and also institutions), and redistributes them in the form of small loans for the people of China. In 2017 Dianrong raised US$220 million, more than double the entire capital they had raised in the years before, and are looking at a potential IPO in 2018.
Creating a strategy that is tailored to Chinese audiences requires an in-depth knowledge of this market. Getting your brand name into the Chinese market has never been so attractive. The economics of population and wealth growth means that China can no longer be ignored. The coming years will be mission critical for companies seeking to expand their footprint. Mark 2018 as the year you make your move.
Cal Wong is Content Services Manager at PR Newswire Asia.
PR Newswire Asia is headquartered in Beijing with an expansive media network, and deep insights into the local market. We can get your brand in front of those who matter. Ask me how!