The Top Ten Most Promising Cities in China 2019

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No.1 Shenzhen

The reform and opening up promoted Shenzhen’s take-off. From 1979, the GDP was only 1/172 of Hong Kong’s small fishing village to 2018, surpassing Hong Kong to become a dynamic first-tier city. Since 2015, the annual population has increased by more than 500,000, ranking first in the country.

Shenzhen has moved from “manufacturing factory” to “hardware silicon valley” and “innovation city”. The new generation of information technology, biomedicine, cultural and creative industries and other strategic emerging industries have become the pillars, accounting for 38% of GDP.

Shenzhen faces problems such as insufficient land resources, industrial migration, urban renewal, and shortage of quality public service resources.

Shenzhen will join hands with cities in the Pearl River Delta to participate in the global division of labour and cooperation to create a global creative and creative capital.

No.2 Beijing

Although Beijing’s urban function positioning does not have the function of an economic centre, the advantage of taking the political centre has become the de facto main economic centre and financial centre. The future capital is separated from Beijing. Beijing is Beijing and the capital is the capital.

Beijing has gradually developed from an industrial city to a service-oriented city. The proportion of the three industries has reached 81%. The financial, headquarters economy and technological innovation have become the three business cards.

Beijing’s urban planning is obviously lagging behind, strictly controlling the population size and raising the cost of living, affecting the vitality of the city; moreover, the economic development around Beijing is obviously backward, which is not conducive to the scale effect caused by interaction with Beijing.

Beijing will be built into a world-class harmonious and livable capital, and as a core engine to lead the coordinated development of Beijing-Tianjin-Hebei.

No.3 Shanghai

Shanghai is the heart of China’s economy. As China’s economy continues to take off, it is expected to rival New York in the future and become a major global economic and financial centre.

Shanghai is dominated by automobile, electronics and finance, with the three accounting for 58% of GDP; the number of A+H listed companies is 367, accounting for about 1/10 of the country.

Shanghai has a similar urban planning lag behind Beijing, strictly controlling the size of the population and thus affecting the vitality of the city. It also faces the problem of insufficient development of the new economy such as the Internet.

Shanghai will continue to open up and build a superior global city, leading to the formation of a world-class city group in the Yangtze River Delta with global competitiveness.

No.4 Guangzhou

The reform and opening-up have released Guangzhou’s new vitality. The GDP rose from the eighth in the country in 1978 to the third in the country in 2015. After that, it was surpassed by Shenzhen. Since 2015, the annual population has increased by more than 400,000, second only to Shenzhen.

With the automotive, electronics and chemical industries as the pillars, the three companies account for 56% of the total industrial output value, and are currently accelerating into the high end of the industry.

Compared with other first-tier cities, Guangzhou has problems of weak innovation ability, backward development of financial industry and high dependence on land finance. The status of the third city is facing challenges.

Guangzhou will join hands with cities in the Pearl River Delta to participate in the global division of labour and cooperation to build a vibrant global city.

No.5 Chengdu

In 2018, Chengdu’s GDP exceeded 1.5 trillion yuan, accounting for 38% of Sichuan’s province. It ranked first in the new first-tier cities.

Chengdu is dominated by electronics and automobiles, which account for 50% of the industrial added value; it has the largest number of financial institutions in the central and western regions.

Chengdu and Chongqing, as the southwestern twins, have extensive competition and cooperation, and the development of the automotive and electronics industries is fierce.

Chengdu will fully utilize the core functions of the national central city and drive the Chengdu-Chongqing urban agglomeration into a sustainable world-class urban agglomeration.

No.6 Nanjing

Due to geographical and historical factors, Nanjing is the link between Jiangsu and Anhui. In 2018, per capita GDP ranked third among the top ten cities, only lower than Shenzhen and Guangzhou, with a new population of 100,000 and accounting for half of Jiangsu Province.

Nanjing is committed to building the “Chip Capital” with its core of electronics, petrochemicals, automobiles and steel.

Due to the strong economic market in the Yangtze River Delta region, Nanjing has limited radiation capacity compared with Hangzhou, Jiangsu and Suzhou, and the recent population agglomeration capacity has been significantly weakened.

In the future, Nanjing will take “Innovative City, Beautiful Ancient Capital” as the vision of urban development, and work together with cities in the Yangtze River Delta to build a world-class city group.

No.7 Wuhan

Wuhan is basically in the geographical centre of China’s main economic zone. In 2018, its per capita GDP reached 135,000 yuan, ranking the forefront of the central region.

From “Steel City” to “Car Capital” and “Optical Valley”, Wuhan currently has complete industrial systems such as steel and deep processing, automobiles, information technology and medicine.

The added value of Wuhan’s private economy is only 43%, which is at the bottom of the top ten cities, and the private economy is not active enough.

Wuhan will stand up the backbone of the Yangtze River economic belt and serve as a strategic fulcrum for the rise of the central region, building a national central city with certain competitiveness and influence on a global scale.

No.8 Chongqing

After Chongqing became the capital of Shanghai, Beijing, Shenzhen and Guangzhou in 2018, the fifth GDP exceeded 2 trillion yuan. The GDP per capita in Xiao Chongqing was 91,000 yuan, slightly lower than that of Chengdu. With the automobile and electronics as the pillars, Chongqing accounts for 42% of the total industrial output value and gradually develops intelligently.

Chongqing faces the problem that the automobile industry is “big but not strong” and the strength of scientific and technological innovation is not strong.

Chongqing will strengthen the role of the comprehensive transportation hub in the southwest region and consolidate the positioning of the economic centre and the national central city in the upper reaches of the Yangtze River.

No.9 Tianjin

Tianjin is the second city in the north after Beijing. The central government once tried to drive Tianjin and even the entire Beijing-Tianjin-Hebei region and the Bohai Rim region with the Binhai New Area, but it did not meet expectations.

From “Tianjin Manufacturing” to “Tianjin Creation”, Tianjin is gradually becoming a national advanced manufacturing R&D base.

Tianjin is dominated by heavy industry, its development is too dependent on investment, and its population is not attractive. The economic growth rate for the second consecutive year is only 3.6%, and its growth is weak.

Tianjin continues to take advantage of international shipping, accelerate the construction of “one base and three districts”, and develop into an international aviation logistics centre and a core area of ​​international shipping in the north.

No.10 Hangzhou

Hangzhou’s economic development momentum is good, and the recent population increase is the third highest in the country, second only to Shenzhen and Guangzhou.

Hangzhou’s private economy accounts for 61% of GDP, and the digital economy represented by information software, e-commerce, and IoT security is leading the country.

Hangzhou faces problems such as partial deviation of industry categories, excessive dependence on land finance, and backward construction of rail transit.

Hangzhou will improve the city’s internationalization level, build a high-energy Bay Area platform, and build an international e-commerce centre.

Resouce: Hengda Research Institution

In the next 10 years, Chinese need healthier food and more nutritionists

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Recently, the Chinese government issued the “Healthy China Action (2019-2030)”, and health topics have once again become the focus of public attention. The Office of the Health China Action Promotion Committee held a press conference in Beijing to interpret the situation regarding the reasonable dietary actions of the “Healthy China Action”.

In recent years, the nutritional health status of Chinese residents has improved significantly, but they still face problems such as insufficient nutrition and excess, and frequent nutrition-related diseases. The intake of oil, salt and sugar in Chinese residents is high.

The resulting problem of overweight and obesity has become increasingly prominent. In 2012, the overweight rate of Chinese adults aged 18 and over in the country was 30.1%, and the obesity rate was 11.9%, which was 32.0% and 67.6% higher than that in 2002; 6-17 years old. The overweight rate of children and adolescents was 9.6%, and the obesity rate was 6.4%, which was doubled and 3 times compared with 2002.

In addition to the overweight and obesity problems, some people face another problem: undernutrition. The data show that from 2010 to 2012, the adult malnutrition rate in China was 6%; in 2013, the growth retardation rate of children under 5 years old was 8.1%, and the anemia rate of pregnant women, children and the elderly was still high, calcium, iron, vitamin A, micronutrient deficiencies such as vitamin D still exist, and dietary fibre intake is obviously insufficient.

The government document puts forward the overall goal of the Healthy China Action to 2022 and 2030 and clearly implements 15 special actions. One of the special diet actions is one. Three reductions (salt reduction, oil reduction, and sugar reduction) are the focus of a reasonable diet. The document clearly sets out the goal of three reductions: By 2030, the average daily salt intake of Chinese people should not exceed 5 grams, and the daily intake of edible oil for adults should not exceed 25-30 grams. The amount does not exceed 25 grams.

It is worth mentioning that the action clearly proposes to promote the use of healthy “small three pieces” (a limited salt spoon, a limited oil pot and a healthy waist ruler) to increase the household penetration rate and encourage professional industry organizations to guide the correct use of the family.

In addition, it is necessary to improve the oil, salt and sugar packaging standards, and on the outer packaging, it is recommended to eat a reasonable amount of oil, salt and sugar per person per day. Shops (supermarkets) are encouraged to open low-fat, low-salt, low-sugar food counters.

In terms of reducing sugar, the action is particularly pointed out, the government should speed up research and development standards to limit the production and sales of high-sugar foods.

In view of the problem of excessive intake of sugar in children, the action is also clear. It is necessary to research and formulate a limited guide for the addition of sucrose in Chinese children as soon as possible, and advocate the substitution of natural sweet substances and sweetener drinks.

In the action announced this time, it is also proposed to formulate the implementation of the nutritionist system. Nutritionists are provided in collective feeding units such as kindergartens, schools, old-age institutions, hospitals, etc., and nutrition instructors are provided in the community.

The nutrition instructor is the new word proposed this time, mainly in the community. It is hoped that the nutrition instructor is nutrition and medical background. Professionals with practical work experience, after a certain training, have dietary nutrition knowledge and skills, can provide nutrition education, dietary guidance and balanced nutrition guidance, and can solve practical problems in Chinese communities.

Resource: China News

KFC became a Chinese Restaurant in China

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KFC recently launched “Chuan chuan” and Lu Wei in China. “Chuan chuan” is a spicy snack that Chinese people like very much. It originated from the spicy kingdom of Sichuan Province, the hometown of giant pandas.

The Chuan chuan series of 59 yuan (A$12.21) / barrel, a total of 12 skewers, including 8 skewers of chicken and cattle organs, as well as 2 skewers of fungus and 2 skewers of oil tofu.

The Lu Wei series includes fragrant wing tips, chicken hearts, chicken giblets, and shredded chicken. The average price is about 14 yuan (A$2.90). The price of the two series is slightly higher than the similar products on the market, the quality of the ingredients is excellent, the packaging is exquisite, and the delivery is fast.

The catering professionals believe that KFC’s choice of skewers and Lu Wei as new products is not only a focus on the Chinese night market with great potential, but also a further deepening of the brand’s integration into China. These two categories are more down-to-earth and younger, and are a strong category of food and beverage subdivisions, and are suitable for standardized production of chain brands, which is convenient for quality control.

Chuan chuan and Lu Wei are important categories of night snacks. According to a report from the Ministry of Commerce of China, 60% of consumption occurs at night in China. According to data released by the China Cuisine Association, more than 60% of Chinese consumers eat at least 1 to 2 night snacks per week, and only 20% of consumers have no habit of eating night snacks. The growth rate of night-end take-away orders is gradually higher than that of dinner, which has become an important growth point for take-away consumption. KFC launched the series of new products in China and has already prepared to establish an independent supply system, which is aimed at the market with huge consumption potential.

Resource：Red Star News

China’s domestic goat milk prices are now “roller coaster” style plunge

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China’s domestic goat milk industry suffered a cold spell in the summer of 2019. In Shanxi Province, the main producing area of ​​Chinese goat milk, the purchase price of goat milk has plummeted since March this year, with a drop of more than 100%. In some areas, milk prices have even approached the breeding cost line. At the end of 2018, the purchase price was still around 8.5 yuan/kg (1.76 Australian dollars) , but from March 2019, the price suddenly began to decline, the purchase price directly fell back to 6.5 yuan/kg (1.35 Australian dollars), after half a month, the price began to fall all the way Until the current level of 4 yuan/kg (0.83 Australian dollars).

In recent months, China’s State Administration of Markets has launched a series of measures, such as the 100-day campaign to jointly rectify the “health care products” market, to rectify the health care products industry, which has also affected some goat milk powder enterprises. Some goat milk powder dealers have adopted a similar sales method as health care products and have also been rehabilitated.

Due to over-reliance on channels, some companies have to give up their profits. After the surge in the purchase price of goat milk in 2018, the profits of processing companies cannot cover the increase in costs, and they have to raise prices frequently. Some companies raise the price three times in the short term. Even more, this also disrupted the normal operation of the dealers, the enthusiasm of the dealers was damaged and the final sales were also affected.

For a long time, compared to the milk industry, the Chinese domestic goat milk industry is not large. Shanxi is the main goat milk producing area in China. According to public data, there are 34 goat milk powder production enterprises in Shanxi Province, including 19 infant formula milk powder enterprises. In 2018, Shanxi dairy goats had about 2.4 million stocks, 600,000 tons of milk, and an output value of 6.7 billion yuan. The output value of the entire industrial chain was 31.3 billion yuan.

In 2018, the Shanxi Provincial Government also proposed the 100 billion goat milk industry plan. The official information released recently shows that Shanxi will further accelerate the development of the goat milk industry, and strive to save 3 million dairy goats by 2020, with a total industrial chain output value of 35.5 billion. Yuan, by 2025, the output value of the goat milk industry has exceeded 100 billion yuan.

For example, in China, the current sales of the largest goat milk powder brand, Ausnutria (01717.HK)’s Kabrita, imported from the Netherlands, achieved sales of 2.03 billion yuan in 2018, an increase of nearly 60%. In recent years, the steady growth of the Chinese goat milk powder market has also attracted the attention of the major Chinese dairy companies.

Many respondents believe that in the face of imported products, the biggest advantage of local products is that the milk source is close to the consumers and can achieve more fresh products. Therefore, goat milk enterprises should have a longer-term vision and strategic layout.

If in the future, foreign farms are aware of China’s market opportunities and have a large number of converted dairy goats, then the Chinese domestic goat milk industry will also face the same import impact as milk.

Source: China Business News

Highlights of new e-commerce cross-border business policies in China

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At the end of November 2018, the long-awaited and cross-border new e-commerce policy was launched in China: On November 28, the Ministry of Commerce, the Ministry of Finance, and the General Administration of Customs and other 6 ministries and commissions issued “Notice on Improving the Supervision of Cross-border E-Commerce”; on November 29, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation issued the “Notice on Improving the Tax Policies for Cross-Border E-Commerce Retail Imports”. On the same day, the Ministry of Finance and the General Administration of Customs and other 13 ministries and commissions issued the “Announcement on Adjusting the List of Cross-Border E-Commerce Retail Import Commodities”. In conjunction with the “Announcement on Real-time Access to Cross-border E-Commerce Platform Enterprise Payment Related Raw Data” and the “Announcement on Issuing <Customs Certification Enterprise Standards” issued by the General Administration of Customs on November 8 and 22, respectively. This batch of new policies and regulations has a relatively high level of content, specific content and wide coverage. After January 1, 2019, China’s cross-border e-commerce retail import business has bid farewell to the “transition period” of two and a half years. Advance to the “E-commerce Law”-led “new era of cross-border e-commerce” has prepared adequate policies and regulations. The following highlights deserve our attention:

1. Clearly define the concept and scope of cross-border e-commerce retail imports.

According to the Ministry of Commerce, the Ministry of Finance, the General Administration of Customs and other six ministries and commissions issued the “Notice on Improving the Supervision of Cross-border E-Commerce Retail Import Supervision”, cross-border E-commerce retail import refers to consumers’ behaviour in China who purchase goods from overseas through cross-border e-commerce third-party platform operators, and through “net purchase bonded import” (customs supervision mode code: 1210) or “direct purchase import” (customs supervision mode code: 9610) Commodities shall be: 1. Subject to the “Cross-Border E-Commerce Retail Import Goods List”, limited to personal use and meet the requirements of the cross-border e-commerce retail import tax policy; 2. through the e-commerce trading platform networked with the customs, able to realize the “three documents” comparison of transaction, payment and logistics electronic information; 3. Not through the e-commerce transaction platform connected with the customs, but the inbound and outbound express operators and postal enterprises can accept the entrustment of relevant e-commerce companies and payment companies. Committed to bear the corresponding legal responsibilities and transmit electronic information such as transactions and payments to the customs.

According to the above definition, if the goods are not within the scope of the list or exceed the scope of personal use, the enterprise cannot transfer or entrust the relevant enterprises to transfer the transaction, payment, and logistics “three-documents” information to the customs, regardless of whether or not the e-commerce form is adopted. The relevant policy provisions for cross-border e-commerce retail imports cannot be applied (for example, the cross-border comprehensive tax for most commodities is 11.9%).

That is to say, at present, many consumers on the overseas e-commerce platform websites (such as Amazon USA) “Hai Tao” goods can only be regulated according to the postal items, and need to pay the postal tax, such as the tax rate of the cosmetics is 50%, of luggage is 25%, for food and electronic products is 15%.

2. The import tax policy: increase trading limits, emphasizing personal use.

According to the Customs Tariff [2018] No. 49 “Notice on Improving the Cross-border E-Commerce Retail Import Tax Policy”, cross-border e-commerce retail imports are the final products used by consumers. , cannot enter the domestic market for resale. At the same time, the single transaction limit has been raised from the current 2,000 yuan to 5,000 yuan, and the annual transaction limit has been raised from the current 20,000 yuan per person per year to 26,000 yuan; for the duty-paid price exceeding the single transaction limit of 5,000 yuan but lower than For the annual trading limit of 26,000 yuan, and only one commodity under the order, it can be imported from the cross-border e-commerce retail channel, and the customs duty and import link value-added tax and consumption tax shall be levied in full according to the cargo tax rate; but the annual transaction total exceeds the annual transaction limit. , in accordance with general trade management.

  Notice on cross-border e-commerce retail import tax policy (current policy) Notice on Improving the Tax Policies for Cross-Border E-Commerce Retail Imports （new policy 2019）
Single Transaction Limit 2000 Yuan 5000 Yuan
Annual Transaction Limit 20000 Yuan 26000 Yuan
A single item that exceeds a single limit but does not exceed the annual limit in accordance with general trade management Full taxation according to cross-border e-commerce channels and cargo tax rates
Goods that exceed the annual limit in accordance with general trade management in accordance with general trade management

This adjustment is a major positive news for Haitao consumers and imported cross-border e-commerce. For consumers, the ceiling is increased, and a single over-capture product can be purchased through cross-border e-commerce channels, which will further meet the demand for imported consumption; For cross-border e-commerce, especially for cross-border e-commerce that sells 3C products, clothing, cosmetics, etc., which often exceed the original limit, the increase in quota means the expansion of the market and the higher value of goods. The single item fully enjoys the tax benefits of cross-border e-commerce.

3. Strengthen the ” bonded internet shopping + offline self-delivery” model supervision.

The “bonded internet shopping + offline self- delivery” model means that the experimental e-commerce enterprise can display and sell online shopping bonded imported goods in the “experience store”, and consumers complete online ordering, after checking and paying a series of compliance purchase procedures such as authenticated, cross-border payment, three-in-one information verification and cross-border tax payment, you can pick up the goods on the spot of “experience Store” or use other domestic logistics methods to complete the purchase.

At present, most of the cross-border e-commerce “Experience Stores” are set up in the bonded area, but some cross-border e-commerce companies will solve part of the operation dilemma in the bonded area, where the experience store is far away from the consumption centre and the customer experience rate is low. The “Experience Store” is located in the downtown area away from the Customs Bonded Zone. This model certainly brings more business opportunities, but it also puts higher demands on customs supervision. In practice, it is difficult for Customs to completely prevent cross-border e-commerce companies or cross-border e-commerce platform enterprises from operating the “bonded internet shopping + offline self-raising” model, and using ordinary imported goods instead of cross-border retail imports to evade taxes. Based on the above considerations, “Notice on Improving Tax Policies” emphasizes that “in principle, it is not allowed to conduct “net purchase bond + offline self-raising” mode outside the special customs supervision area. After the introduction of this policy, how do cross-border e-commerce companies apply for “net purchase bond + offline self-raising” outside the special customs supervision area, and whether the existing “experience store” needs additional review, waiting for further review.

By King & Wood Mallesons 

Catch Chinese middle-class women’s heart, grab the market

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Nielsen released the China Consumer Trends Index Report for the first quarter of 2019. The report showed that the China Consumer Trend Index for the first quarter was 115 points, up 2 points from 113 points in the previous quarter and close to historical highs.

Zhao Xinyu, President of Nielsen China, said: “With the continuous advancement of the national regional economic development strategy, the construction of the “One Belt and One Road”, the coordinated development of Beijing-Tianjin-Hebei, the development of the Yangtze River Economic Belt, and the construction of the Guangdong-Hong Kong-Macao Greater Bay Area. With the accelerated cultivation, the potential of the new urbanization market has been continuously released, and the vitality of the development of market entities has been further enhanced, effectively promoting the steady, healthy and sustainable development of China’s economy.”

The Nielsen report shows that compared with the overall population, the middle-income new female consumer trend index performance is the most eye-catching, 130 points, far higher than the national average of 115 points.

Middle-class new women are generally high-income, highly educated and highly qualified, with autonomy, self-confidence and self-confidence as their exclusive labels. Among them, autonomy is mainly reflected in its strong self-worth and deep cultivation of personal social circles. Nielsen data shows that 47% of middle-class new women are more concerned about their own pay and return, 60% of middle-class new women are more committed to the values ​​they believe are right, 42% and 24% of middle-class new women hope to though afternoon tea/dining spend time with socializing in a particular circle; self-expression is about seeking self-investment and focusing on spiritual life. Nielsen data shows that if there is spare cash, middle-class new women are more likely to spend money on investment and financial management (36%), children’s education (46%) and travel vacation (57%); in the choice of leisure time in the coming year, They are more willing to choose self-improvement (29%), cinema/concert/art exhibition (44%), vacation/hiking (54%). Confidence is characterized by more choices in financial management and stronger risk tolerance. In addition to regular savings, Internet financial wealth management products (40%), fixed income investment products (32%), funds (28%), and insurance investment products (27%) are important choices for their investment and financial management. In the future, 29% of them hope to continue to increase investment in internet financial products, and 31% want to increase investment in fund products.

The autonomy, self-confidence and self-confidence of middle-class new women are also reflected in their consumption attitudes and purchasing behaviours. Their personal consumption grows significantly. Nielsen data shows that compared with last year, 65% of middle-class new women have new consumption, and their new consumption is mainly spent on children’s education (40%), skincare/makeup/beauty (29%), investment and wealth management (25%). Fitness exercise (11%) and first purchase of cars (7%). In the coming year, 57% of them are willing to pay for their favourite products/interests, and 44% are more focused on pursuing quality life.

They use “heart” to consume, interest and emotion are the biggest drivers. In the coming year, in addition to holiday tourism/hiking camping (49%), in concerts/art exhibitions (19%), social/activities in specific circles (12 %) The proportion of new middle-income women who are willing to pay more is nearly twice the overall average.

They pursue an all-round quality upgrade from the inside out, from the family to the individual. Nielsen data shows that in the next year’s buying tendency, they show a stronger willingness to upgrade their quality in terms of food, clothing, housing and transportation. In addition, their willingness to purchase jewellery and furniture in the next year is higher than the entire female group, 36% and 19% respectively, and their shopping incentives are more to show their status.

They spend money to pursue healthy beauty and create a charming self. Nielsen data shows that the proportion of middle-income women who are concerned about health issues is up to 22%. Therefore, in the future consumption plan, 35% of middle-class new women will choose physical fitness, 37% will choose to buy health care products/medicines, and in sports and fitness, middle-class new women will buy professional equipment and personal training courses such as treadmills. The willingness is 27% and 36% respectively, which is much higher than the overall level of 15% and 11%.

They are pursuing shopping convenience and are increasingly inclined to consume online. Nielsen data shows that 54% of middle-class new women have increased online fast-moving consumer goods consumption in the past three months, 41% higher than the overall population, and 42% of people maintain high-frequency consumption, averaging more than 2 times per month. In addition to FMCG, they also buy high-quality goods online, 65% buy cosmetics and personal care products, 45% buy fresh and 40% buy personal electronics. In addition, 66% of middle-class new women have plans to increase online consumption.

They understand time value and are smart life advocates. The Nielsen report shows that 63% of middle-class women have smart TVs, 39% have Internet TV boxes, 22% have children’s smart watches, and 19% use housekeeping robots to better liberate their time and energy with technology.

Zhao Xinyu said that “the new female group of the middle class is growing and the power of innovation cannot be ignored. It is an important force to promote the development and progress of all fields of society. They have high education, high income and pursue independence; they advocate self-confidence, autonomy and self, and pursue high quality, its consumption concept and consumption behaviour have distinct characteristics, and they are often the dominant players in household consumption. They have become the main force to lead the future consumer market. It has become an inevitable choice for all brands to pay attention to and meet the needs of women.”

Resources from Nielsen

The Impact for Aussie Dairy of Domestic Infant Formula Milk Powder Enhancement Action Plan in China

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The Chinese National Development and Reform Commission, the Ministry of Industry and Information Technology and other seven ministries and commissions recently jointly issued the “Domestic Infant Formula Milk Powder Enhancement Action Plan”. The plan proposes to vigorously implement the “quality improvement, industrial upgrading, brand cultivation” action plan for domestic infant formula milk powder, and strive to stabilize the self-sufficiency level of infant formula milk powder by more than 60%. However, at present, the domestic market share of domestic milk powder is only about 40%, and 60% is imported milk powder.

At present, the price of domestically produced milk powder is generally high, and everyone is pushing high-end products to curb consumption growth. In comparison, imported milk powder prices are cheaper, especially for cross-border purchases of milk powder.

In addition to the price, consumer trust in domestic milk powder needs to be improved. Statistics show that imports and joint venture milk powder accounted for 80% of the first- and second-tier markets. Dairy experts believe that to improve the trust of domestic milk powder, it is necessary to increase transparency and allow consumers to access this information.

In this regard, it is also mentioned in the plan to further improve the food safety information disclosure system for the formulation of infant formula milk powder, sampling results, supervision and inspection.

In addition, the plan also mentioned the merger and reorganization of milk powder production enterprises, and clearly encouraged local governments to carry out mergers and acquisitions and eliminate backward production capacity through various methods such as mergers and acquisitions, agreement transfer, joint restructuring and shareholding.

From the perspective of the external environment, many experts believe that the decline in population growth in China is the biggest challenge facing the milk powder industry. If enterprises vigorously develop markets below the third-tier cities, this gap can be made up.

The plan also requires strengthening imported milk powder and cross-border e-commerce management to support domestic milk powder and standardize and promote industry development.

Resource: http://www.caijing.com.cn/

CMA 2019 China New Export Delegation

Foreign brands enter the Chinese physical store channels under new “filing system”

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With the rollout of the registration system and the filing system, foreign capital is accelerating its layout in the Chinese market.

Under the dual-track system, foreign capital has accelerated its distribution in the health care products market in China.

On May 14th, at the 2019 International Health and Nutrition (Spring) Expo, the Canadian dietary supplement brand Jamieson announced that the company will further explore the Chinese market in the form of general trade, to pharmacies, shopping malls, high-end supermarkets and expansion of physical store channels such as maternal and children stores. International giant health products companies accelerated gold digging in the Chinese market after China’s implementation of the new “reporting system” for the health care products industry.

According to Euromonitor data, the market size of China’s health care products industry reached 162.7 billion RMB in 2018, a year-on-year increase of 9.8%. The compound annual growth rate (CAGR) of 2018-2023 years is expected to be 9.10%. The huge market size and the introduction of a series of favorable policies to encourage imports have attracted international brands to come to China.

As the first international brand to enter China, from 2015 to 2018, the Jamieson and the Tmall International, JD International, Vip International, and NetEase Koala and other e-commerce platforms formed strategic cooperation, the proportion of sales in cross-border e-commerce channels increased from 0 to 90%, the CAGR boomed 136%, and the product repurchase rate reached 30%.

Although the cross-border e-commerce has opened channel resources for imported health products, however, with the gradual disappearance of online bonus and the escalation of consumption, it is difficult to continue to rely solely on online sales. The offline market has become one of the strength tests of whether overseas brands can take root in China. Since July 1, 2016, the “Regulations on the Registration and Recording of Health Foods” has been implemented, and the health food industry has officially entered the era of “registration system” and “filing system”.

According to the regulations, overseas manufacturers of health foods can be filers for the first time. Health foods supplemented with vitamins, minerals, and other nutrients, and nutrients have been included in the list of health food raw materials can be submitted a health food filing application to the State Food and Drug Administration. The implementation of the new policy has greatly shortened the time for approval of health products. Enterprises can enter the offline channel after filing, which will greatly improve the pace of health food entry into the market, especially imported health food.
The introduction of imported health care products in the retail channel can enhance consumers’ intuitive perception of the brand and stimulate consumption; on the other hand, it can also avoid the impact of cross-border e-commerce policy changes on the brand. However, if you want to ‘the land’, for overseas brands, the company must first face the increasingly strengthened supervision of the Chinese health care products market. How to quickly review the “blue hat” is the first problem to be faced in the offline layout.

According to the person in charge of Jamieson China, vitamins and minerals are the advantage products of Jamieson. Canada has a very strict health food supervision system, and Jamieson has created a “360-degree ultra-purity quality control system” to ensure that all production is beyond the pharmaceutical standards. Now, the company is following the registration and filing procedure of vitamin and mineral products in accordance with relevant regulations. A number of record products including vitamin C, vitamin C+D and vitamin E have been successfully approved, and more than 20 registered products have been obtained during the year.

Although the policy is favorable, the domestic consumption structure in China is upgraded, and the industry normative adjustment has given birth to new opportunities, for overseas brands, as the health foods listed through the filing are gradually increasing, the product differentiation is small and the competition will be more intense. Companies must rely on their brands, channels and terminal services to gain consumer recognition. “On one hand, we have accelerated the filing and registration process of health foods; on the other hand, in addition to healthy foods, we have developed and introduced regular foods that do not require registration.” The above-mentioned person in charge of Jamieson mentioned that the number of online players is increasing and the market is getting saturated, Jamieson made a bold attempt on new retail projects, such as the establishment of offline channels, integration of resources, and keeping up with the trend of online and offline integration.

CATIC this year is teaming up with Complementary Medicine Australia hosting the “CMA 2019 China New Export Delegation” for companies who are in the health products industry and willing to explore or obtain the latest industry updates of the Chinese market. To Join this delegation, please follow the link to register: http://www.cmaustralia.org.au/event-3375304