Page 334 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
increased by 359% to 1.64 billion RMB (US$257 coveted milk formulas. This affects foreign trade
million) compared to same time in 2019 before the as well. Baby milk brands from Australia and New
outbreak of the coronavirus, according to Hainan’s Zealand depend heavily on China. New Zealand’s A2
department of commerce. While not included on Milk Co. cut its forecast in May for the second time in
the list of pioneer international consumer cities, five months after its revenue declined by about 30%
the likes of Shenzhen, Fuzhou and Changsha in the second half of 2020 because of disruptions
have also announced plans to increase duty-free in the daigou market, according to Bloomberg.
shopping. It is predicted that China may have five Pregnant consumers worry about finding pregnancy-
to ten international consumer center cities five safe beauty products for themselves and often
years after 2021, not only in coastal provinces but turn to familiar international brands. Established
also in central and western regions (Sun). domestic beauty brands and international players
like L’Oréal Paris have already developed pregnancy-
Imported Luxuries and Cosmetics safe skincare. Nevertheless, domestic consumers
still prefer imported stretch mark creams, diaper
Despite the plethora of products available on rash creams, and maternity oils. Among skincare
the Chinese market, consumers still desire some brands, those from Korea and endorsed by K-Pop
imported goods. There is still a belief among brands are especially sought after. Korean and
some Chinese shoppers that international labels Japanese skincare and fashion brands continue
use better ingredients in products manufactured to grow in popularity. Korean skincare products
for the Western market. Young urbanites chase are undoubtedly available across China. And yet,
country-specific releases and limited-edition beauty junkies know that there are more brands out
capsule collections from select countries because there than Hera and Sulwhasoo. K-Beauty fans love
owning them communicates affluence. Consumers returning to the services of daigous for all the latest
in China can find every conceivable product in their facial kits, masks, and facial devices coming out of
domestic market, as e-commerce giants like Alibaba Seoul. Additionally, K-Pop-owned brands like RDVZ
and JD.com have partnered with some of the most and Tempus Studio have become in demand with
acclaimed global brands to bring innumerable the cool crowd in China. Some Japanese and Korean
foreign products to their shores. According to streetwear brands are harder to come by in China
data released by China’s Ministry of Commerce or are only sold at concept stores for a premium
(MOFCOM), demand for imported consumer goods, price. Therefore, customers prefer to acquire them
especially beauty and luxury products, remained through daigou channels. These buying practices
strong in 2020. Imported consumer goods were are similar to those in Europe in the years prior
booming, rising by 8.2% to $242.1 billion (1.57 to 2020. This is reflective of the economic growth
trillion RMB) in 2020, year-on-year. Meanwhile, among certain consumer classes in China (Achim).
on the other hand, sales of domestic consumer
goods shrank by 3.9%, according to the National Despite the interest in Korean and Japanese
Bureau of Statistics and the South China Morning brands, 2021 showed a decrease in interest in
Post. Despite the plethora of products available US cosmetics. Chinese consumers will purchase
on the Chinese market, consumers cannot locate fewer American-made goods during Singles' Day
all the items they want. Although international (November 11). According to a new survey and
luxury products get quickly purchased through report released in October by AlixPartners, 41%
e-commerce websites and physical retailers, certain of Chinese consumers say they plan to buy fewer
items still are not available for purchase in China. American brands. The survey found that the US
This raises the question about which foreign goods ranks third, behind Japan and South Korea, as the
do domestic consumers desire? One area of items preferred source country for foreign brands, as 37%
are infant formula and maternity goods. According chose the US as a top-three preference. Meanwhile,
to Export2Asia, infant formula is one of the most 50% chose Japan and 41% chose South Korea—
imported products in China. The digital publication while 26% chose France, 23% chose Germany,
also highlights how Chinese families resort to the 15% chose Italy, 12% chose the United Kingdom
services of daigous to get their hands on these highly and 6% chose Canada. Foreign brands hoping
to excel in China generally and on Singles’ Day in
334
increased by 359% to 1.64 billion RMB (US$257 coveted milk formulas. This affects foreign trade
million) compared to same time in 2019 before the as well. Baby milk brands from Australia and New
outbreak of the coronavirus, according to Hainan’s Zealand depend heavily on China. New Zealand’s A2
department of commerce. While not included on Milk Co. cut its forecast in May for the second time in
the list of pioneer international consumer cities, five months after its revenue declined by about 30%
the likes of Shenzhen, Fuzhou and Changsha in the second half of 2020 because of disruptions
have also announced plans to increase duty-free in the daigou market, according to Bloomberg.
shopping. It is predicted that China may have five Pregnant consumers worry about finding pregnancy-
to ten international consumer center cities five safe beauty products for themselves and often
years after 2021, not only in coastal provinces but turn to familiar international brands. Established
also in central and western regions (Sun). domestic beauty brands and international players
like L’Oréal Paris have already developed pregnancy-
Imported Luxuries and Cosmetics safe skincare. Nevertheless, domestic consumers
still prefer imported stretch mark creams, diaper
Despite the plethora of products available on rash creams, and maternity oils. Among skincare
the Chinese market, consumers still desire some brands, those from Korea and endorsed by K-Pop
imported goods. There is still a belief among brands are especially sought after. Korean and
some Chinese shoppers that international labels Japanese skincare and fashion brands continue
use better ingredients in products manufactured to grow in popularity. Korean skincare products
for the Western market. Young urbanites chase are undoubtedly available across China. And yet,
country-specific releases and limited-edition beauty junkies know that there are more brands out
capsule collections from select countries because there than Hera and Sulwhasoo. K-Beauty fans love
owning them communicates affluence. Consumers returning to the services of daigous for all the latest
in China can find every conceivable product in their facial kits, masks, and facial devices coming out of
domestic market, as e-commerce giants like Alibaba Seoul. Additionally, K-Pop-owned brands like RDVZ
and JD.com have partnered with some of the most and Tempus Studio have become in demand with
acclaimed global brands to bring innumerable the cool crowd in China. Some Japanese and Korean
foreign products to their shores. According to streetwear brands are harder to come by in China
data released by China’s Ministry of Commerce or are only sold at concept stores for a premium
(MOFCOM), demand for imported consumer goods, price. Therefore, customers prefer to acquire them
especially beauty and luxury products, remained through daigou channels. These buying practices
strong in 2020. Imported consumer goods were are similar to those in Europe in the years prior
booming, rising by 8.2% to $242.1 billion (1.57 to 2020. This is reflective of the economic growth
trillion RMB) in 2020, year-on-year. Meanwhile, among certain consumer classes in China (Achim).
on the other hand, sales of domestic consumer
goods shrank by 3.9%, according to the National Despite the interest in Korean and Japanese
Bureau of Statistics and the South China Morning brands, 2021 showed a decrease in interest in
Post. Despite the plethora of products available US cosmetics. Chinese consumers will purchase
on the Chinese market, consumers cannot locate fewer American-made goods during Singles' Day
all the items they want. Although international (November 11). According to a new survey and
luxury products get quickly purchased through report released in October by AlixPartners, 41%
e-commerce websites and physical retailers, certain of Chinese consumers say they plan to buy fewer
items still are not available for purchase in China. American brands. The survey found that the US
This raises the question about which foreign goods ranks third, behind Japan and South Korea, as the
do domestic consumers desire? One area of items preferred source country for foreign brands, as 37%
are infant formula and maternity goods. According chose the US as a top-three preference. Meanwhile,
to Export2Asia, infant formula is one of the most 50% chose Japan and 41% chose South Korea—
imported products in China. The digital publication while 26% chose France, 23% chose Germany,
also highlights how Chinese families resort to the 15% chose Italy, 12% chose the United Kingdom
services of daigous to get their hands on these highly and 6% chose Canada. Foreign brands hoping
to excel in China generally and on Singles’ Day in
334
