China Direct

British Business optimistic about 2020 China market opportunities

Dear CBI Members and Partners,

The British Chamber in China recently published its 2020 British Business Sentiment Survey in Beijing.

The Survey revealed that:

• More than 50% of respondents were optimistic about the China market and intended to continue to invest

However:

1. More UK businesses report that it is harder to do business in China
2. More than 30% feel that they are not treated fairly compared to domestic firms

According to the Survey the top three regulatory issues are:

1.     Cybersecurity & IT restrictions
2.     Accessing and moving company finances
3.     Competition with SOE (State Owned Enterprises) or state-sponsored companies  

For a detailed overview of the Business Sentiment Survey (English & Chinese versions) please access and download the survey here.

Our thanks to partner The British Chamber in China for sharing these insights.

Nike keeps up the pace with its China e-commerce business

 

CBI member, Nike has announced plans to expand its digital presence in China and to take further advantage of the market’s burgeoning e-commerce infrastructure. The US-based sportswear manufacturer plans to introduce more apps and related technologies into China that will allow customers to incorporate a greater number of Nike health incentivising programmes into their lives.

Michael Martin, vice-president of Nike China and general manager of Nike Direct China said, “China’s fast growing 5G technology infrastructure, artificial intelligence, machine learning and digital related-business environment, as well as people’s willingness to connect with various products via digital applications, are creating many opportunities [for Nike in China].”

Nike currently operates a TMall and WeChat mini programme to sell its products and services into the market. These programmes will be accompanied by ‘Nike App China’, which will offer customers exclusive content including coaching tips, and personalised experiences for the brand’s Chinese clients. According to Martin, the Nike China App will function as a member network, “Encouraging every athlete in China to make sport a daily habit, through opening up the world of sport through personal and immersive experiences.”

Iris Yen, vice-president of Nike Direct China and general manager of Nike Direct Digital Commerce China said, “The digital economy will bring huge market opportunities for China and the other parts of the world, as technology has profoundly affected consumer behaviour and raised the expectations of potential customers.”

 

L’Oréal announces new China flagship store

CBI member, L’Oréal has announced that it will open a new flagship store for its Lancôme brand in China, in order to capitalise on the booming demand for high-end cosmetics in the market.

Lancôme is one of L’Oréal’s largest subsidiary brands, and already sells into China through concessions at airports, department stores and through 50 freestanding stores in China. The Lancôme flagship store is planned for Beijing in 2020.

Francoise Lehmann, Lancôme CEO, said: “Young Chinese women are drawn very early on to skincare products. […] even among 20-35-year-olds, rejuvenating treatments are particularly popular.”

The Beijing store will be Lancôme’s second international flagship store, following the opening of the luxury skincare manufacturer’s 300 square metre store on Paris’ Champs Elysee avenue earlier this month. The Champs Elysee store has become a major tourist attraction and features video gimmicks on interactive walls, mirroring similar moves made by other fashion brands.

L’Oréal has enjoyed robust demand for its products in China and reported lifted sales in the 3^rd quarter, countering fears of a slowdown in the region. Jean-Paul Agon, Chief Executive, said: [L’Oréal] still see a very strong appetite from the young generation [in China] for luxury beauty products, so we are confident. […] Of course, it was not the same in Hong Kong where the market has really slowed down, but we think we have recovered that in other Chinese regions.

L’Oréal’s Asian sales were up 22.6% on a like-for-like basis. Overall the group’s third-quarter sales were up 11% to $7.98 billion, rising 7.8% like-for-like and far surpassing the 6.3% increase expected by analysts.

 

Next Generation Drives Establishment of Family Offices in Asia

CBI member Jersey Finance has just announced the tenth anniversary of its Hong Kong office and to mark the occasion has released its latest research into the rise of family offices across Asia.

Please access the Report here and congratulations to Jersey Finance on ten years serving clients and doing business in Hong Kong.

Kindly refer to the Press Release below for more information.

Download Jersey Finance_whitepaper_press release_HK version

Accenture to acquire China auto tech start-up Futuremove Automotive

 

CBI member, Accenture has announced that it has agreed to acquire Futuremove Automotive, a Chinese vehicle connectivity solution provider, to bolster its service offering in digital consulting in smarted connected in-vehicle and mobility services, to meet rising demand from China-based auto clients.

Futuremove Automotive was founded in 2015 by John Wang, a former head of Microsoft’s China auto business, and has been developing a mixture of in-vehicle software packages and a cloud platform for inter-car connectivity. The Beijing-based start up had secured hundreds of millions of RMB in venture capital funding from some of China’s leading technology companies, such as Haier, and listed six of the world’s largest car manufacturers as its clients. Accenture have announced that Wang will join Accenture as a senior executive for its digital transformation solution business, Industry X.0.

Marcello Tamietti, Managing Director of Accenture Industry X.0, said: “The addition of Futuremove Automotive to Accenture will enhance the company’s service capabilities to drive digital innovation in the automotive industry. With the addition of Futuremove Automotive’s expertise, [Accenture] will be able to provide networking and travel services to a wider range of customers, and continue to drive innovation in this key market in China and its rapidly growing new energy vehicles sector.”

According to Accenture, revenue in the Chinese connected car segment is expected to grow at a rate of 16.5 % annually over the next four years. The company estimates that more than 73 million connected cars will hit the roads by 2023, nearly four times the current figure.

Scotch Whisky - China & HK Market Briefings 2019

 

Dear Members and Partners,

Kindly find the SWA's latest China and Hong Kong market briefings attached below for your reference.

Our thanks to Alison Morton and the team at SWA in Edinburgh for kindly sharing these insights.

China Direct

CPP partners with Bank of Communications to provide China online loss reporting services

CBI member, CPP Group has partnered with the fifth-largest bank in China, Bank of Communications, to provide its online Loss Reporting Service.

Bank of Communications has 74 million registered mobile banking customers, who will all be able to report the loss of their cards through CPP Group’s service on the popular banking app, Mai Dan Ba.

CPP Group will then provide Bank of Communications online banking customers with 24/7 online assistance in the event of their card going missing.

Jason Walsh, CEO at CPP Group, said: “China is a very important market for CPP and the partnership with Bank of Communications is a clear reflection of our ambitious growth plans in this area. In our recent half year financial results announcement, we were pleased to report that revenue in China has grown by 84% compared to the same period last year. This impressive growth shows the significant market opportunity available to CPP, with the team in China playing a significant role in us realising this potential.”

Wilson Chan, CEO at CPP China, said: “In the first six weeks of our partnership with Bank of Communications we have already generated over 30,000 new customers. This indicates the success the product is seeing and also how important this type of service is to consumers in China. Our expert team is working closely with our business partners to continue offering services to meet the demand of the market.”

To read the press release in full, please follow the link.

LEGO builds China double-digit growth

 

CBI member, Lego has reported that the toy company has continued to post double-digit growth in China, after the company released its financial returns for the first half of 2019 on Tuesday.

Revenue for the period grew by 4% to $2.18 billion, compared with the same period last year. Consumer sales grew by 5% compared with the first half of 2018, and the brand grew its market share in China.

Lego Group CEO, Niels B Christiansen said: “[Lego] are satisfied with our performance given the transformative shift which continues to reshape the global toy industry. Against this backdrop, we continue to grow consumer sales and market share in our largest markets. […] Lego are making long-term investments, including expanding in China [while] creating innovative retail experiences and developing new products and play experiences.”

The Danish toy manufacturer’s plans for China include reaching a total of 140 stores across 35 cities by the end of the year, and building on its partnerships with Tencent to launch the Lego Cube Digital Game to provide a safe digital experience for children in China.

Top selling themes in China included Lego’s China-themed sets – such as a Chinese processional dragon – and Lego Star Wars and Lego Marvel Avengers sets. Off the back of strong sales within these themes, Lego has stepped up its investment in digital platforms in China to capitalise on the popularity of these characters on children’s computer screens.

CBI Members - Beijing Daxing International Airport

Dear CBI members & partners,

Kindly find a short business briefing highlighting the role of CBI member companies in the new Beijing Daxing International Airport due to be opened on 01 October.

Thank you.

China Direct

Download Aviation - Daxing Airport2

Microsoft’s Xiaoice AI ready for smart device integration

 

CBI member, Microsoft has announced that its first-generation AI framework, that was developed in China in Beijing’s Haidian district, will be made available to other companies for incorporation in smart devices.

Microsoft’s Avatar Framework has been under development by the global technology giant’s team in Beijing for some years now, and first attracted netizen’s attention after the company launched Xiaoice – an AI-driven chatting robot – in 2014.

Since her launch, Xiaoice has already been “talking” with more than 100 million users in China, has published two collections of poetry, composed and released dozens of songs, and held a painting exhibition.

Xiaoice has played a central role in Microsoft’s brand outreach in China in recent years, and her endeavours have helped the company accumulate more than 5 million followers on Weibo, as Microsoft continues to experiment with how AI can incorporate emotional intelligence characteristics, to allow robots, such as Xiaoice, to serve as a companion for people in old age care and upgrade other traditional sectors.

Li Di, Head of AI Development at Microsoft’s Search Technology Centre, said: “[Microsoft] wants to build a platform to empower others to improve their AI capabilities. […] The Avatar Framework Kit can empower other companies to quickly have multiple AI capabilities on their products, such as functioning AI voice-activated control [systems] for home appliances or smartphones, [providing] chatbots to accompany consumers shopping online, singing songs, drawing pictures or designing clothing patterns.”

Over the past year, Xiaoice has already been functioning as a voice-activated virtual assistant in 450 million units of third-party smart hardware, including smartphones and smart speakers, through the company’s partnership with fellow CBI member, Huawei and Xiaomi.

Microsoft announced last week, that Xiaoice will soon be present in the smartphones of major Chinese handset makers, Vivo and Oppo, on the WeChat platform of Tencent, and the news section of Beijing Bytedance Technology.