China

The more you understand China the less you know… The enigma that is China is changing rapidly. David’s 19 years of China experience puts some of China’s developments into context.

Chinese New Year Is Approaching

Chinese New Year Celebrations

Apple’s ubiquitous products do not change one iota from market to market.

But they are starting to dabble in limited editions that tap key moments in specific countries consumers lives.

Announced today for Chinese New Year is one such initiative.

Two Apple Sports watches to celebrate Chinese New Year – the year of the monkey. These will be available in China, Hong Kong, Malaysia, Singapore and Taiwan.

Apple CNY Watch

Expect more of this type of activity by manufactures, especially in wearable tech, in the future.

11: 11 Singles Day – The Retail Explosion

Singles Day 11

If you missed my In Retail Conversation With…live web session all about Singles Day or 11: 11 the world’s biggest single day for retail sales, you can catch it here on the live recording. Many thanks to Doreen Wang, my guest on the show and the production team, Tuhin and Alex.

 

London Gets Ready for Xi

Xi UK Visit

London is looking decidedly more red that usual at the start of the autumnal season.

President Xi Jinping of China arrives today for the start of a very high profile 4 day State Visit.

The Mall is now intermingled and lined with massive UK and Chinese flags. It is on the route from Horse Guards Parade where he will be officially welcomed and travel the short distance by carriage to Buckingham Palace, where President Xi will be staying for most of his time whilst in the UK.

His trip includes a State Banquet at Buckingham Palace with the Queen as the host.

Now It Gets Interesting

Amazon

Not content with the established big national and religious holidays being turned into major shopping events retailers over time have invented their own calendar of shopping holidays that no one asked for or really cares about..

Undoubtedly the most successful of these recently has been ‘singles day’. This self-created day has been taken to epic proportions by China’s Jack Ma’s Alibaba.

What began in 1993, as a student led anti-Valentine’s Day at Nanjing University, situated in the capital of Jiangsu province in Eastern China, where single people could buy things for themselves has become a gigantic consumption event.

Alibaba embraced the concept to boost sales it has now become the World’s biggest online retails sales day. It compares with “Cyber Monday” in the US, the Monday after Thanksgiving, which is also marketed as a big online shopping day.

Here are the Alibaba ‘Singles Day’ numbers.

In November 2014, Alibaba rang up record sales of $9.3 billion dollars from “Singles Day” yes that right $9.3 Billion in 24 hours.

Nearly all the 30,000 merchants on the internet retailer’s platform offered discounts the 2014 event attracted the participation of more international brands a well including Japanese label Muji, Spanish clothing retailer Desigual and American outdoor clothing label The North Face.

That 24 hours trading resulted in 278.5 million packages in transit through China. Jack Ma himself appeared to reporters to say the logistics of delivering these packages made him nervous.

To find out more about singles day watch this video

 

So enter the latest ‘Prime Day’

Slated for today Wednesday July 15.

This time by Amazon. Ostensibly to celebrate Amazon’s 20 year birthday and for the now ubiquitous 24 hour period only.

Billed by Amazon as bigger than Black Friday with deeper discounts and new deals being released every few hours. Its point of difference is that it’s only available for Amazon Prime subscription service members and in only 9 countries.

In normal times that would be that.

But we don’t live in normal times.

We live in a dog eat dog fight in omni channel retail. So enter Walmart to the party. Raining of Amazons parade – or at least trying to.

It is launching 2,000 exclusive roll backs, across categories such as electronics, baby, home and toys and it will last for 90 days. In addition to these Walmart promises some ”atomic deals”

Walmart

Perhaps a year ago Walmart could have ignored this Amazon move but not today. With its stock having lost some 23% of its value since January 2015, it needs The Street to know that it’s still an Amazon fighting force.

Amazon meanwhile is perusing its own strategy. Whilst it is notoriously fugal with its sales and customer data. It is not too difficult to see the Amazon Prime strategy at work here, on Prime Day.

Signing on more Prime members. According to non Amazon sources 45% of Amazon customers in the US have signed onto Prime. That’s some 40 Million and that’s nice but this is even nicer…

Amazon prime members spend more than double non-members.

Happy Birthday indeed.

The Next Few Days Will Be Crucial

China

And no I don’t mean Greece and the Euro…

The Shanghai Composite Index has been seeing a lot of Red. Normally in China red is good…But not this type of red.

The Shanghai Composite has lost some 30% of its value since its June 12 peak.

Over the past two weeks of trading more than $3Trillion has been wiped off the value of Chinese companies. Everything in China is big but if you put it into context that is more than the Spanish, Russian, Italian, Swedish and Dutch stock markets combined according to The Financial Times.

Perhaps the most significant element to this is that the policy makes in Beijing have been trying to stop the decline with a number of financial measures, not least buying shares it appears. But, unusually the strong arm of Beijing is having little impact with both direct and indirect intervention.

Bank of America Merill Lynch forecasts the composite to close at the end of December at around 3,600 from the June high of 5,166.

This might not be far off the mark for if this goes on for much longer more investors will face margin calls which will require more liquidation of their holdings…

This is the first time many retail investors in China have felt the pain of the sea of red. Investing in the stock market has been a one-way bet. Now they are experiencing the downside in investing in Companies they really don’t understand and for the first time they don’t like what they see.

Don’t underestimate the Chinese Government determination to bring order back to the market. Thy have thrown a lot at this problem but they still have more left.

Red really is the new black.

Happy New Year Of The Goat

Happy CNY

Today starts the Chinese New Year celebrations. This year is the year of the goat. A very Happy Chinese New Year to all my Chinese friends.

David

Here Is The Report

China Top 100 2015 Cover

Have had many requests for a copy of the just published BrandZ Top 100 Most Valuable Chinese Brands 2015. So just click here or on the image above and you can download the entire report. Hope you find it insightful and enjoy the great pictures by Cecilie Østergren.

 

 

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