E-commerce on mobile in China

With the fast development of different kinds of smartphones, shoppers and consumers today use their mobile devices for a range of retail activities, from looking for special but cheep items to couponing to ordering a pizza for lunch.

By the other side, Consumers have come to expect to a quiet consistent shopping experience across any purchasing channel. It seems that the mobile devices provides a much more broader space for e-commerce, and there is no doubt that the further development of e-commerce demands the mobile devices to be more professional and user-friendly. There are many popular e-commerce apps in China, including Taobao, Jingdong, etc., which are classified as shopping app, while there are also some apps providing people with service that help them find popular restaurants, shopping malls, for example Dazhong Comments and Meituan. And also some other apps such as Eleme, are orientated as new O2O ordering platforms.

If you want to know more about the e-commerce market in China, we must not miss the case of Taobao, which belongs to Alibaba Group and is the largest e-commerce platform now in China. Alibaba Group is a Chinese e-commerce company, which provides C2C and B2C sales services via web portals. It also provides electronic payment services, a shopping search engine and data-centric cloud computing services. Over the five years, double 11 has gradually transformed from the marketing day for electricity suppliers to Shopping Festival for the whole country. This year the turnover of TAOBAO and T-mall, two main platforms, topped 57.1 billion yuan in the 24-hour period, surpassing last year’s 35 billion yuan. It reached to one billion in three minutes. It is expected that the turnover will be at least 800 billion yuan this year. The scope of last year also benefited from domestic to global expansion. The most significant feature of last year was “Buy things from all over the world and the world can buy from us", domestic consumers can buy products from the entire world, and overseas consumers from more than 220 countries around the world can buy domestic goods.

It is necessary for us to pay attention to one fact: among all the turnovers, about 42.6% were finished on the mobile devices such as smartphones or tablets. The Internet has created new ways to do business through the opportunity of universal information distributions. The 3^rd generation wireless networks provide new business opportunities and new market segments to the existing and traditional telecommunication market."While mobile-commerce in China was almost non-existent just several years ago, shopping through mobile devices such as smartphones and tablets has quickly gained acceptance among Chinese digital consumers. The spread of mobile-commerce will make it the purchasing channel of choice going forward." David Wei, Former CEO of Alibaba said. A strong indication that e-commerce in China is rapidly transitioning towards mobile in 2015.

However, to make money through the small screen of mobile phone is, after all, much different from the traditional electronic business. Under double restrictions including the hard one of flow and soft one of user experience, can the mobile electronic business move forward smoothly in Chinese market?

First we could see there are several reasons for the rapid development of mobile e-commerce in China, or we could say it is these advantages of mobile e-commerce that attracts more people to use mobile devices other than PC. The first reason for choosing mobile devices is that it is much more convenient. Just one smartphone in hand, it is possible for us to choose products, pick up restaurants that offer coupons or even find a parking spot by the information provided by thousands of apps on the mobile phone. All of the information is integrated by the personal preference that is recorded by the backstage supporter. In such consuming pattern, the customers but not the sellers play the leading role. On the other hand, we also could find that the number of mobile users has achieved four hundred million and in the future there is no wonder that it will still rise. With the rapid development of technologies, the cost of producing smartphones is much cheaper while the ability of consumption is much stronger, which means more people in China can afford a smartphone or tablet. These kinds of mobile devices have achieved more people in more areas than PC. And among people who prefer mobile e-commerce, from a research, there are also considerable high-end consumers. As a conclusion, with strong ability of consumption and broad user scale, e-commerce on mobile has more potential in future market.

But there are also some other challenges that retailers need to face and solve. First comes the problem of the safety of personal privacy. In order to attract young people, most of mobile e-commerce platforms allow users to post their information among the friends, which leads to reveal of personal information. Second, people hope to have better user experience and it results in new expectation: the products and pricing they see online to be the same products and price they find in store; efficient product delivery and returns processing, regardless of whether they ordered the product online, at the store or over the phone. Because of this trend, mobile must be fully integrated, both technically and strategically, with the greater commerce ecosystem.

Today’s mobile infrastructure has leapfrogged mobile commerce strategy, and mobile platform capabilities are processing rapidly with the continuing proliferation of smartphones and tablets and faster cellular networks. For this reason, e-commerce on mobile in China must evolve beyond its current situation and make mobile to become a rich, multifunction commerce platform that drives sales and retails more efficient.

Gaoxin prepare HSK and work for market research company in Shanghai

Here is the story of Gaoxin, an intern for Shanghai market research agency Daxue Consulting and HSK platform Global Exam.

Q: Can you tell us more about yourself? Education? Experience?

My name Is Gaoxin, my English name is Fay. I graduate from shanghai institute of foreign trade. Now I study here with my master degree. In school, I am outstanding; I have won many times scholarship and the title of Excellent Student. I also participated in many competitions, such as the financial case analysis competition, Computer Design Competition for Application Ability, Social Entrepreneurship Competition. At the same time, I take an active part in internships. All of these experiences have made me a hard worker, good learner and adapter. I have excellent logic and analytical capability. I am always willing to devote myself into daily work in the future.

Q: Can you tell us more about the city where you come from in China in terms of culture, economy and history?

I come from baoding, hebei province. Baoding is a city of heroes; it has a long history of a glorious revolutionary tradition, on this land. As the main battlefield enemy combat and command centers, there are many heroic deeds during the Anti-Japanese War and the War of Liberation. Now, economy here has a rapid development. More and more large enterprises settled in Baoding. People’s life get better and better. We like enjoying the life.

Q: What brought you to Daxue Consulting?

My classmates introduce me to this company.

Q: Can you tell us about the biggest change you have been witnessing in China over the last 10 years?

I think te biggest change in China is the Chinese have gone to the world. They opened their eyes and look for ways to get knowledge and wealth. We Chinese are really wise and have learning skills. We import technologies, and then turn them into wealth. In this ten years, we hardly realize our shortage and have the courage to change. And the result is that China has become the second rich country in the world, and the Chinese become richer and well-educated.

Q: China has changed so quickly. What is your vision of China in 10 years?

People get richer and richer. We can hardly imagine one day we can buy goods from the Internet that conveniently, but now it just like our daily task to buy something we need. And we can afford almost everything we want now, no matter it’s in foreign  or nation, no matter  it’s expensive or cheap, we can just buy it by moving our fingers.

Q: How do you see yourself in 10 years?

Of course I work hard and have made great improvement. I graduate from my undergraduate degree and start my master degree. I take an active part in all kinds of competitions .and I also do some academic research at school. I become more and more optimistic and cooperated.

Q: What do you do in your free time? Why? What for?

I like to spend my time on reading books. I think writers such as Wang Xiaobo, Han Han and Mo Yan’s thoughts are look-ahead and their words are sharp. By reading their words, I learn a lot. I get the skill to analysis the seeming and look into the core.

Q: What is special about you? Cooking? Playing an instrument? Sport? Painting? Own story? Etc.

I think I’m a really good strong girl. I can’t stand for the failure in my daily life. So I have to work hard in studying, working and so on. I know living in the special society of China, a girl must pay more endeavor if she wants to be successful by herself. That is the distinction between I and the most of girls, and I’m very proud of it.

Foreign universities in China

China: high-standard education is crucial for the country

According to official statistics, some 1.27 million Chinese students are currently studying abroad including the universities of the US, England and other European countries. Such an interest is explained by high-standards, which these countries offer in education. Due to China's rapid development, a number of middle-class families is rapidly shrinking every year. These families have an opportunity and usually a desire to invest in their children. As a result, European and American universities stand as a first choice for higher(or college) education. An increasing demand for high-standard institutions facilitates development of relationship between China and foreign countries in this area. It may take different forms including student exchange, joint research, joint programs, joint degrees, setting up a educational institution branch in a foreign country, and many others.

A number of partnerships between Chinese and foreign universities is increasing each year

Since such an interest has emerged, there have been few initiatives, designed to facilitate foreign university (or college) education on the territory of China. For example, London School of Economics and Peking University currently have a 2-weeks summer program, which introduce students to various areas of economics and politics. Courses itself take place in Beijing, although professors, a final certificate and academic syllabus are joint attempts of both universities. Another great opportunity, became available for Chinese students, is the initiative of Oxford International College, which opens two branches in Chengdu and Changzhou in 2014. Both branches offer full British curriculum and foreign exchange opportunities. The campuses have excellent learning and sports facilities as well as green areas and high level security.

Foreign professors: plagiarism and cheating are major problems among Chinese students

However, it is crucial to recognise some difficulties, which foreign institutions come across, when they attempt to enter Chinese educational industry. The main challenges, highlighted by foreign professors and researchers working in China, were plagiarism, cheating and politically sensitive topics. These lead to some partnerships to break up, including Yale University-Peking University. The major reasons were those highlighted above. After the program was launched, Stephen Stearns, a visiting member of Yale University, commented: “When a student I am teaching steals words and ideas from an author without acknowledgment, I feel cheated...I ask myself, why should I teach people who knowingly deceive me?” He suspected that such practices were not discouraged by Chinese academics, thus resulting in massive plagiarism by Chinese students. Another major problem, which European academics come up with in China, is the limitation of topic, which can be discussed and included in the syllabus. Such politically sensitive topics are population-control policies or the use of executed prisoners as organ donors for transplants. However, Dali Yang, who heads a research and conference centre in Beijing run by the University of Chicago, advices to be understanding to it: “They have good judgment and know to be respectful of what goes on here. That doesn’t mean they have to shut up, but they know it won’t go well if they go so far that Chinese counterparts won’t be able to participate”.

Regardless unsuccessful experience of Yale-Peking universities, Chinese officials strongly encourage the presence of European educational institutions in China. They believe that it will prevent smart student from leaving the country as well as allow Chinese higher education to improve and develop.

For more information:

http://www.economist.com/news/china/21569070-foreign-universities-find-working-china-harder-they-expected-campus-collaboration

http://studymagazine.com/2011/04/22/chinese-students-studying-in-canada/

http://daxueconsulting.com/recruiting-chinese-students/

Matthieu David Experton, president of Daxue Research, about the Snack industry in China

-How is the snack industry in China in terms of value, volume/scale, growth rate? 

According to Chinairn.com, the sales of snack industry in China are more than ¥200 billion in 2011 and it is growing with 15% growth rate. It is forecasted increasing to ¥480 billion in 2018.In the recent 5 years, the average growth rate of importing snack markets is remains15%, and the main consumer group is from age 18-25 female consumers.

-Is there any visible trend? What are the reasons behind that? What drive the growth?

Based on the research from Standard Chartered 2014, the growth rate of sweets and chocolates declined to 10% in the first 10 years in China. The same situation happen to the instant noodles, despite the growth rate of instant noodles was nearly 20% in 2014. In terms of fruit juice and soft drinks, the growth rate is decrease almost half when comparing with last three years. However, the growth rate of bottled water remains increasing with 16% every year.The main reason for that is mainly because of the slow economic growth in China. In addition, Chinese consumers have stronger health consciousness than before.

A research carried by Chinese Snack Association aims to the age range below 40, found out that there are 88.5% interviewees said snacks are nonnutritive, especially those snacks with Saturated fats and sweets. Therefore, the development of snack industry in the future should made of low-energy, low-fat, low-sugar materials, to provide consumers more healthy and nutrition foods.

-What kinds of snacks are more popular and who would buy more snacks?

The research from Chinese Snack Association also shows 41.6%, 40.4% and 26.7% interviewees choose chocolates, sweets and potato chips as their favorite snacks respectively.

The young people from 22-35 are the main consumer group for snacks, especially the females. The teenager and children are also the main consumers for snacks.

-Will imported products/multinational brands more popular in China?

According to the development trend of Chinese Snacks Industry in 2013, the multinational brands take the complete advantage in China snack industry. The top 10 snack brands are: Want-want, Kraft Foods, LIWAYWAY, DANONE, Wm Wrigley Jr Company, Dove, ORION, Xufuji and Jiashili. Among these brands, Wang-want and Xufuji are the Taiwanese company, which accounted 20% market share. Kraft Foods, LIWAYWAY, DANONE, Wm Wrigley Jr Company, Dove, ORION are occupy 50% in Chinese market. Xufuji and Jiashili are domestic brands, only accounted for 20%.

However, some domestic brands have the potential to increase their market share in the future. For example, Le Conte, Dali and Qinqin. As these brands know the needs of Chinese consumers better than foreign brands, for example, the Chinese snacks manufactures produce some snacks that foreign brands do not produce, like pot roast foods.

- What's the position of China in Asia in this industry?

Investigation conducted by Nielsen shows the sales of frozen snacks take up the one third of total snacks sales on Asia-Pacific area, which are $13.7 billion. The most popular snacks in Asia-Pacific area is chocolate(69%), cookies/biscuits(55%), nuts/seeds(49%), yogurts,(48%) chips/crisps(43%), gum(38%).

In 2013, the growth rate of exports and imports of Chinese snacks increased about 8%, Brazil,ASEAN (Association of Southeast Asian Nations) and America are the three biggest foods trade partner.

Source:

http://www.chinairn.com/news/20120328/193508.html

http://www.ftchinese.com/story/001055227

http://food.lppz.com/spzx/326.html

http://www.chinairr.org/view/V08/201302/05-121978.html

Nielsen, http://www.199it.com/archives/280595.html

Xinhua.net, http://news.xinhuanet.com/food/2013-10/20/c_125566791.htm

The effect of appreciation of RMB on investment in China

The appreciation of RMB has great effect on Chinese export and import, investment policy, debt issues and the inflation problem.

China is an exporting superpower. Chinese people rely on sells of export a lot. The kinds of products we export can be simply divided into 2 parts: primary products and processed products.

The primary products, like paper, woods, ferrous metals (metals with iron), will be exported less. This is negative for the economy of the country in a short time. However, in the long terms, this is beneficial to the country because the limited resources can be saved which can help adjust the industrial structure. After all, China is not a country with rich resources. We have large amounts of people to consume them. What’s more, we may save the money for environmental problems of making primary products.

The processed products, like technological products, cars, machines, foods, toys, are highly influenced by the changes of currency prices. If the price of RMB rises, the products exported will become more expensive. The consumers in other countries will be more eager to purchase the cheaper products (maybe the products of their own country or other countries). This is hard for the country whose export occupies 30%-40% GDP. That is to say, output is quite important for the country.

These years, Chinese input has increased. We can also divide the input products into 2 parts as above.

About the primary products, we mainly talk about the energy products. The percentage of coal consumption is about 65% to 70%. Most of the coal is produced locally. That mains we basically use the energy produces by ourselves. On the other hand, the percentage of oil is about 20% to 25% according to the report of Chinese government. Most of them rely on the input. This is also not a small figure in that the energy we consume is quite huge. If the price of RMB becomes lower, the price of oil is relatively lower. We can use less money to buy more oil. In this sight, the appreciation of RMB is beneficial.

Here come the processed products. The kinds of processed products are the same as the export products. If the appreciation happens, the price of the import will become quite cheap. Chinese people will start buying more foreign products and give up their local products. This will be a great loss for the country because the market of China is very large. If you lose the market, you lose everything. The economy of the country will meet its period of stagnations.

The appreciation issue will also influence the investment policy.

The first is about the negative influences. As the prices of RMB rises, the currency will not be so attractive to foreign investors. The reason is the cost of investment is quite high. That may be good for the local company for they will face fewer competitors. They can have more freedom to control Chinese market. However, that is negative for the corporation of local companies and foreign companies. The technological research abilities of China are far from super big countries like the US and Japan. We really need to learn more from these countries. If they do not invest and supply technological support, we will lose the competitive ability in the world.

The second is about the positive influences. We have mentioned that we will lose some investment from other countries, but our investment to other countries will increase. We can find the evidence from some figures. Since the exchange reform in 2005, the appreciation of the RMB at a stage of excess domestic liquidity and the international context of economic imbalances, the government encourages the development of foreign direct investment. With close to 10% economic growth in 10 years, China’s foreign direct investment has a rapid growth. The reason of it is quite clear. The cost of external investment is quite low. The asset and resources of foreign countries become more attractive to Chinese investors. They are relatively cheap. Another reason is the lower financing cost. The lower the cost, the higher the return on invested capital.

The RMB currency changes will also arouse foreign debt problems. As we all know, China is a country with huge amounts of foreign debts. The latest number is USD863.167 billion, which exclude the debt of Hong Kong, Macau and Taiwan. So if the price of RMB becomes higher, the foreign countries need to pay less for their debt. If America borrows USD10 from China, it needs to pay back RMB60. If the RMB price appreciates, it only needs to pay back less than RMB60. That means we lose part of the money. So if the number is USD863.167 billion. A little change leads to a great loss.

Finally, the inflation problem is quite easy to understand. The rise of the currency makes the inflation mute. We can use less money to buy more products. On this aspect, it’s positive for the country.

All in all, the appreciation of RMB has good parts and bad parts. It’s good for the primary products import and export, the external investment and inflation. And it’s bad for the processed products import and export, the internal investment and foreign debt. We really need to find which currency policy will get more benefits and carry out it.

By Daxue Consulting

See more at:

http://www.sjgrand.cn/investing-china

http://www.reuters.com/article/2014/12/09/markets-china-idUSL3N0TT28R20141209

http://www.ft.com/cms/s/0/95372ce6-7f79-11e4-b4f5-00144feabdc0.html

http://gulfbusiness.com/2014/12/uae-activate-5-7bn-china-currency-swap-soon/

Chinese system of conformity assessment

The Chinese system of conformity assessment has played an essential role in the history of Chinese law. When the conformity assessment carried out, the consumers were more confident in the products they produced, thereby protecting the health of consumers and encouraging them to buy more without hesitation.

The beginning of the conformity assessment can date back to 2006. In order to reduce technical barrier to trade and facilitate bilateral trade, the government established the China National Accreditation Service for Conformity Assessment which is more helpful to the trade especially the founding of well-functioning quality infrastructure (QI).

With the release of quality infrastructure, the relevant department can assess the products in a standard way, which decreases the complaint from the consumers. While standard implementation is not simple like what the government think. The first problem is the unified setting and compliance. Every industry has its own benchmark and they cannot imitate from each other according to the similar principle, therefore problems fall into the relevant department. Forexample, fish and cargo belong to diverse type of product. If the department examinee them in a similar way, the fish or cargo may have problems in the future in spite of the absurd standard.  What requires the government to do is that formulate system from person to person to make the system more perfect than before, which makes people believe the system.

The second problem is the implementation of the system. Since ancient times, promulgation of the system is not excellent itself, but the problem of Law enforcement agencies such as corruption, favoritism. In this way, the absolute execution is quite important, so the government may formulate relevant regulations to restrict the officials. If they cannot perform in terms of regulation, they will be severely punished. Such methods can constrain the officials better and reduce the risk of weak implementation. Since then, the credibility of QI has been guaranteed and people do not care about the standard because only the unfair system is likely to make people worried about it.

While the excessive reliance on regulation will have a negative on officials and pose a threat to the future development, so it is not a long-term policy. The main cause is that the stiff regulation is more likely to reduce the initiative of the officials, for they are afraid of making mistakes with stiff punishments. Hence for them, slacking is a choice for amounts of them that is counterproductive for the authority. In this way, the appropriate measure is adequate punishment and better system which gives partial freedom to the relevant department. In the future they are more possible to have an efficient execution for the sake of guaranteeing the system.

The third problem is the market surveillance. When the relevant department passes the products to the markets in terms of standard, related merchant dispose of the products at will and append additives after the process of inspection. Apart from the subsequent behavior, some amounts of businessmen dare to try illegal behavior escape from inspection that not only brings a huge trouble to the consumers but also themselves. 

The point is best illustrated with the example of Shanghai Husi Food Company. The company is the one who produce the food with raw expired materials delivering to the foreign fast food restaurants such as McDonald's KFC, etc., When the government reached the factory to examine the materials, the merchants have prepared in advance such as hiding the expired food in the refrigerator or adding the qualified sample label. Therefore whether the authority checked several times, they would never find the illegal food. Examples of such incidents are not only once, but only the Husi Company was exposed to the public owing to its huge range of harm violations.

For the sake of guaranteeing the system in order, the relevant department should not remind the company of checking the products in advance, or they will never know about what they are like actually in the factory. The relevant departments need to comply with this standard to perform the implementation of this system, not individual problems individually. What’s more, officials cannot examine only once, they are able to have a spot check irregularly, which can test the real strength of the enterprise and the safety of the food. From then on, the factory is careful of producing food because the health of people is the vital element for everyone.

The Chinese system of conformity assessment is not among core subject areas in law but deserve a place in the system, for it is beneficial to people. During the last decades, global economic integration has become the focus of public concern. The system will be a good way to reduce technical barrier to trade and facilitate bilateral trade, If the government can overcome the problems like implement and market surveillance.

By SJ Grand

http://daxueconsulting.com/market-potential-china/

http://www.standardsportal.org/usa_en/prc_standards_system/conformity_assessment/ca_used_in_china.aspx

http://www.cnas.org.cn/english/introduction/12/718683.shtml

Example of naming in China

Naming can be a difficult task

What do your brand names really mean in Chinese? What do your brands want to express? According to the consultants of Sinonym in Beijing, there is no question about it: the choice of a brand name in appropriate Chinese, usually called naming in China, has a critical role to play in the branding strategy in the middle Kingdom.

You will so can in the reading of both developed examples, to understand the traps and the obstacles which are on the path of the brands in China and all the flexibility of necessary jump to stay on its legs in the operation of sinisation of the brand name!

The meaning of the Chinese name: literally, this name indicates a strong or striped horse, in the Chinese traditional culture it represent the strength on a long lasting and the elegant success. It adds to the name a dynamic and athletic connotation.

Example of Puma in branding strategy in China

The puma became the horse. The Puma is also known in certain regions under the name of cougar, lion of mountains, which occupies the continent of America, its feline icon is especially strengthened by its image in jump. Nevertheless, the name of the brand in Chinese sends back to the horse, it can cause a grave confusion of image in mind of the consumers.

Furthermore, in the Chinese culture, the horse is a soft animal in the quiet temperament, incapable to manage a troop or to show its creativity or individuality. On the contrary, the puma, is a wild and wild animal which always shows us its power, its energy and its leadership.

All in all, the name of the brand in Latin character exceeds that in Chinese. But the first one is more represented on Google, whereas that in Chinese is more prominent on Baidu1. It demonstrates the influence of the Chinese name locally which in the battle of its translation in Chinese lost some claws and a little of its character.

http://sinonym.net/

http://marketingtochina.com/sinonym/

http://www.china.org.cn/living_in_china/news/2008-04/11/content_14936851.htm

http://daxueconsulting.com/branding-china-2/