UMS Morning Brief monthly overview – January

To give a general idea of what’s in the UMS’ bespoke China Daily Morning Brief, a daily email service focused on four industry categories – Education, Tourism, Food & Beverage, and Health & Skincare, I decided to write a summary of the January insights our team published.

UMS’ China Morning Brief provides daily insights and social media trends relating to China’s market, which provides a broad reference of what the “hot topics” are on social media, enabling businesses to make informed and proactive decisions. It is a product UMS Establish Domain launched this year.

January proved to be an interesting month for many industries as they enter a new stage of recovery, as for others, the lack of vaccine availability and new community cases in China have made it difficult to move forward. Chinese netizens remained concerned about food safety and became more price sensitive due to the uncertain marketplace and subsequent economic downturn. Let’s take a look at how each primary industry faired last month:


1. Education industry

The education sector is set to face many more challenges this year as many countries scramble to get vaccines distributed to allow international students back before semester one starts. Victoria, Australia, warned that it could lose $8 billion AUD if international students were not allowed to return under exemption measures from the travel ban. However, New Zealand announced that 1000 international students would be able to return to the country to complete their studies this year, a topic that drove a lot of buzz on Chinese social media.

Although the prospect of overseas education is looking grim for many Chinese international students, many are choosing to take advantage of the online courses that overseas education providers and now offering. The benefits of this, means that international students can juggle work and study at the same time, allowing them to kick-start their careers. In addition, some universities, such as Massey University, have opened learning centres in China for those unable to return to study. It wouldn’t be amiss to assume that the interest in international education has dropped, but in fact, the desire to study overseas is still strong and education agencies are getting more enquiries from students and parents than ever before. Education providers can be sure that when international students can travel, there will be no lack of interest.


2. Travel industry

While many industries are beginning to slowly recover, the travel industry continues to suffer from an estimated $300 billion loss. Planes around the world have been abandoned, while others have been converted to cargo planes, contributing to the growth of the cargo aviation industry. However, the improving pandemic situation in Australasia has seen borders between Australian states open, and quarantine free travel resume between New Zealand and the Pacific Islands.

Countries around the world continue to investigate the legitimacy of a “vaccine passport” which would enable those with a COVID-19 vaccine to travel freely, but many are failing to acquire legal support for what is considered a very controversial subject. In a recent study 97% of interviewees from China said they would get the vaccine if available, with Australia and Brazil coming in behind at 88% respectively.

It would be hard to imagine that many trends would be emerging from such a stagnant travel market, but with public transport and facilities greatly affected by the pandemic, many Chinese travellers are getting into their cars and setting off to explore the great outdoors. During last year’s May vacation, 75% of Chinese tourists chose road trips to enjoy outdoor scenery. Other trends include, health and wellness tourism (which focuses on internal feeling, mind and health) and underwater tourism (underwater hotels, restaurants, etc.).


3. Food and beverage industry

Trade wars between China and Australia have significantly shaken the food and beverage import market, with countries wrestling to take advantage of Australia’s export freezes. New Zealand has become the preferred supplier of lobster for Chinese retailers and Russia will issue a fishing quota of 100,000 tons of king crabs to supply to China in 2021. In addition, the popularity of cherries, a fruit once outreach for many Chinese consumers, has surged due to a 50% price drop. Chile exports 90% of its cherries to China, but due to good weather, has increased its exports by 30%, which has led to the significant price drop. This has also led to an import decrease of cherries from Australia.

In the alcohol market, the beer industry is set to shift in 2021 with consumers looking to purchase better quality products and low-alcohol beer. This will raise the competition between premium quality brands. In addition, dealcoholized or “low alcohol” drinks are rising in popularity due to growing health trends. China’s year-on-year exports have increased to 33.17% and over the next five years, the low alcohol product market is expected to grow by 50%. Other F&B trends include oat milk, sparkling water, grass-fed butter and convenient frozen meals.

The COVID-19 pandemic continued to have a significant effect on the F&B market in January and concerns grew after reports that traces of COVID-19 were present on imported goods. To tackle this, a “code pass” was created that enabled consumers to scan the code on a product to see its country of origin, when it was imported, and if it had been tested for traces of the virus.


4. Health & skincare industry

In January, offline sales of cosmetics continued to be severely impacted by the COVID-19 pandemic, despite life returning to a new normal in China. It is clear that consumers now prefer to buy through e-commerce channels and there is a rising appetite for live streaming, where consumers can watch an “influencer” review or test a product, and buy it in real-time. Because of this changing consumer behaviour, brands are looking for new ways to run digital campaigns that capture the audience of consumers, such as ones that incorporate games, education and audience interaction. Geoskincare’s popularity significantly increased during the pandemic in China and many products now how over 500,000 sales per month. Their success can be put down to their early Douyin (TikTok) campaigns, e-commerce channels and strong sales network.

The COVID-19 pandemic has made Chinese consumers increasingly health-conscious, which has encouraged many to take taking health supplements. In China, only 20% of the population takes nutritional supplements daily, but this number is expected to significantly rise over the next few years. Functional food brand, BUFFX, announced that it has received tens of millions of yuan in series A financing. This company has successfully raised money three times as the demand for functional gummies including vitamins is rising.