UMS Morning Brief monthly overview – June

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 April insights our team published. The Morning Brief reports on the latest buzz on social media and what topics have been discussed most in China’s market. Providing a broad reference for four different industries: education, travel, food and beverage, and health and wellness, the publication enables brands to make proactive strategic decisions. Let’s take a look at some of the themes that were highlighted in June’s publications.


1. Education industry

As the international student market shrinks, it is expected that billions of Australian dollars in income will evaporate in the next few years and aftershocks of insufficient funds may impact the research capabilities of Australian universities. Many Australian universities struggled with state officials to allow a proportion of international students to return during June. The Chief Public Health Officer of South Australia, Nicola Spurrier, was successful in approving a plan to allow international students in Adelaide to undergo a two-week quarantine at Palafield Airport after entering the country.

In the recently announced 2022 QS World University Rankings, the largest ranking in QS history which uses 6 indicators to evaluate, the Australian National University ranked 27th, an increase from 31 last year. A total of 5 universities in Australia entered the top 50 QS World Universities in 2022, and 7 Australian universities have entered the top 100. In addition, for the first time, two universities from mainland China made the top 20: Tsinghua University and Peking University.

The implementation of college entrance examination reforms in many places has made applications harder, which has made related services more popular such as professional career planning and one-on-one counselling. University is a “blind spot” for a considerable number of Chinese parents. They worry that their children’s prospects will be affected because of mistakes made in filling applications. It is not surprising that parents are attracted by the marketing of relevant agencies. Nevertheless, this industry lacks regulation, and the so-called experts might even misguide students and their parents to make money from the cooperation with privately-owned colleges.


2. Travel industry

The Asia-Pacific Travel Association forecasts in the region from 2021 to 2023 estimate that for the remainder of 2021 tourism will remain sluggish, but there will be a recovery afterwards. In June, China was approved as a country in EU’s “list of countries for safe travel” to promote the economic recovery of the tourism related industry. Experts say that when the Covid-19 pandemic subsides and Chinese tourists can travel more freely, they are most likely to choose destinations with high vaccine rates.

At the end of June, Ctrip released their 2021 dragon boat festival data which showed that as of June 12, volume of travel orders booked through the site exceed 135 per cent year on year. During the Dragon Boat festival, domestic air travel saw a significant spike, achieving domestic tourism revenue of 29.43 billion yuan.

According to a report on June 15, despite the increasingly cold Sino-Australian diplomatic relations, Australians still overwhelmingly support strong investment and tourism from China. When asked to characterize China-Australia relations, 87.5% of Chinese respondents believed that “for Australia, China is more an economic partner” than a military threat, which was the same as last year (87.6%).

The latest data shows that thanks to the Australia-New Zealand quarantine-free “travel bubble”, the sales of small businesses in the hotel and catering industry in New Zealand jumped to the highest level in more than a year. However, the New Zealand government announced on June 26 that due to the outbreak of Covid-19 in many places in Australia, the isolation-free “entry bubble” between New Zealand and Australia to be suspended for 3 days. Australia’s Covid-19 cases continued to increase severely. On the 29th, following Sydney, Darwin, and Perth, Brisbane, the capital of Queensland entered a three-day lockdown that night.


3. Food and beverage industry

Compared with traditional liquor, low-alcohol beverages without a strong taste are most popular among young people. From Berry Sweetheart’s financing to Coca-Cola’s launch of low-alcohol liquor, there are signs indicating that the low-alcohol market is once again growing. Words such as health and taste are used to entice young consumers.  However, in the domestic market, low-grade drinking only accounts for .3% of the market share of Chinas trillion-dollar liquor market.

To help recover its ageing population, on 31 May, China introduced the three-child policy, which encourages families to have a third child. Data from the seventh national census shows that China’s population has continued to maintain a slow growth speed in the past 10 years and the population growth will continue to slow if significant action is not taken. Under this policy, the children’s food market will flourish. Coupled with the fact that parents born in the 80s and 90s generally receive a higher average income and education, the awareness of “refined baby raising” has increased and parents are paying closer attention to what they give their children, both in terms of child nutrition and health care. Height, intelligence and immunity among the most important concerns for parents and the demand for milk powder is also expected to increase.

China’s energy drink industry also continues to expand, and the counterattack history of Monster Beverage shows that it is possible to squeeze competing products to obtain excess returns by closely supporting the most mainstream consumer groups and hitting product/brand/channel combinations. The consumer base of the energy drink industry has continued to expand, and the industry ceiling has gradually increased. Recently, Monster Drinks surpassed Red Bull to become the leader in energy drinks.


4. Health & skincare industry

The size of China’s pet market in 2020 nearly tripled compared to 2016. Chinas pet market is currently welcoming excellent investment opportunities, and the Asia-Pacific pet market has growth potential in the future. Brands that use celebrity endorsements have seen success. The aggressive celebrity marketing shows the trend of increasing competition in the pet-food industry which includes product and service segments such as breeding, training, food, supplies, medical, beauty, health care, insurance, fun activities, etc. However, compared with the United States, Australia and other major pet raising countries, it still has room for growth.

In recent years, the demand for Chinese medicine has been increasing and Chinese medical materials have developed rapidly. The size of Chinese herbal medicine market in china is expected to reach 191.89 billion in 2021. Traditional Chinese medicine has a long history, but under the impact of modernization, it faces many doubts. Traditional Chinese medicine is gradually opening up the international market through the construction of a standardized system.

At present, China has become the world’s largest functional food consumption market with an output value of more than 270 billion yuan in 2020, and the industry’s average growth rate in the past three years exceeds 15%. Young people born in 1990s are becoming a new force in purchasing functional foods. According to a report, consumers from Generation Z account for more than 50% of online VDS sales. There is currently no primary VDS giant, but it is expected that the one to come out on top will be accompanied by a major technological revolution and will have a disruptive business model.