Rolex, Omega, Patek Philippe, Cartier, Channel, Longines, Tissot, Rado, Blancpain and Piaget are the top ten luxury watch manufacturers ranked in the Chinese market in 2019. The luxury market in China has been soaring from 2017 to 2018 with a compound growth rate at 40%, which makes China a big potential market for luxury manufacturers to acquire and compete. The luxury watch market in China is estimated to be worth 19.4 billion RMB.

Men between the ages of 25 to 40 are the main consumers in the luxury watch market in ChinaLuxury watch consumers in China buy watches as to depict status and consider 5,000 RMB as an entry price for luxury watches. Consumers learn information online but tend to purchase luxury watches in physical stores. “Swiss Made” watches are the first choice for luxury watch consumers in China.

[Data source: Forward the iresearch ‘luxury watch consumers gender/age distribution in China (2019)’]

Celebrity Endorsement and Soft Marketing

According to the research result given by the market research company Synovate, wealthy Chinese people like to purchase luxury with distinct visual logos and high brand awareness. Therefore, brand awareness becomes a key factor of Chinese consumers’ purchasing decisions. As data provided by iresearch, the most efficient strategy to enter and occupy the luxury watch market in China is celebrity endorsement.

[Data source: Forward the iresearch ‘The marketing strategies of luxury watches in China that are popular among consumers (2019)’]

Chopard China marketing strategy

In May 2018, a Swiss luxury watch brand, Chopard in China declared Wang Yuan (Roy Wang), a pop star, as its ambassador. The declaration Weibo was reposted over one million times.

[Source: Weibo ‘Chopard declares Wang Yuan as its ambassador’]

However, the celebrity effect is not always long lasting. As of January 19^th, 2020, only 7 of Chopard’s Weibo that were related to Wang Yuan were reposted over 100,000 times. They were usually reposted  around 20,000 times. Chopard’s brand exposure grows when Wang Yuan has TV shows or films on and when Chopard in China has special campaigns with Wang Yuan, such as the Valentine’s Day event with Wang Yuan. If Chopard in China uses celebrity effect as its primary market strategy in the luxury watch market in China, it needs to adopt the most popular celebrity as its ambassadors and keep him active in the public eyes to maintain the brand exposure in luxury watch market in China.

Soft marketing of luxury watches

Some famous brands prefer to use soft marketing in the luxury watch market in China. Although they do not sign any celebrity to represent their brands specifically, they ask celebrities to be guests at their brand events, sponsor film festivals, or plant ads in films to enhance the brand publicity. In 2012’s Cannes Film Festival, two Chinese film stars Chen Kun and Qing Hao were wearing Dior wristwatches. What’s more, many other Chinese film stars were wearing luxury watches too: Zhou Xun with Channel, Gong Li with Louis Vuitton, and Liangchao Wei with Cartier. These are all parts of the soft marketing effort made by luxury watch brands. It is obvious to see soft marketing has become a sustainable marketing strategy widely used by luxury watch manufacturers to better compete in the luxury watch market in China.

Status and Rolex in China

Rolex watches are meant to represent the upper-class income group individuals who live a lavish life. Therefore, unlike Chopard, it uses undifferentiated niche strategy all over the world, including the luxury watch market in China.

Chinese netizens responses to the Zhihu question  ‘what was the experience after purchasing your first Rolex in your life’. The response with the most upvotes said he had looked for a Rolex Yacht-Master watch for three years in many different countries and finally got it in a small Rolex exclusive store in London. He felt purchasing a Rolex watch was a turning point in his life. Whenever he had the urge and pressure to make a decision, the Rolex reminded him to calm down because people who wear Rolex watches have to be sophisticated. When he noticed other people were staring at his Rolex, he felt proud and extraordinarily satisfied. Rolex was the first luxury watch brand that entered the luxury watch market in China after the Chinese economic reform. Rolex in China has a special place in the hearts of luxury watch consumers in China. They do not only treat Rolex as a symbol of luxury and prestige as other luxury watches in China, but also a timeless masterpiece. Although, some of the luxury watch consumers in China do not buy Rolex in mainland China because of the limited supplies and relatively higher price.

[Source: sina.com.cn ‘Rolex with Li Na’]

Brand awareness without social media

Rolex in China does not focus on short-term brand exposure or social media marketing since its brand awareness is high in China and its target segment is concentrated. Rolex’s marketing strategy focuses more on advertising artistic and athletic activities. Rolex has continued sponsoring tennis tournaments for many years and aligns with excellence in tennis. In 2011, Rolex signed an endorsement contract with Li Na, a trailblazer for tennis in Asia. Li Na referred Rolex as a booster for the tennis development in China. Rolex is driving the technological advancement, state of design and positive brand image to be ahead in the luxury watch market in China.

Luxury Watch market in China Faces counterfeiting

[Source: xw.qq.com ‘Guangzhou Customs seized counterfeit watches’]

Switzerland and Guangzhou Customs made an alliance against counterfeit watches. They destroyed a large number of counterfeit watches at the end of year 2019, which were worth around 350 million dollars. Experts said those counterfeit watches bore a remarkable resemblance to the authentic watches. The counterfeit watches caught in Guangzhou were not sold in China, but exported to Europe.

[Source: xw.qq.com ‘foreigners buy counterfeit watches’]

Many people buy counterfeit goods at Xiushui Street in Beijing, which is famous for its fake but good quality products. Counterfeit luxury watches from Xiushui Street are one of the most popular goods among foreign visitors.

Luxury watch brands should put more efforts on content marketing about the value of authentic watches and encourage consumers to buy watches at authorized stores. On the other hand, brands should also ally with government organization to seize counterfeit watches and strength punishments against counterfeiters, authorized dealers and counterfeit buyers.

Let China Paradigm have a positive impact on your business!

Listen to China Paradigm on iTunes

This article The Luxury Watch market in China: Status, sophistication and counterfeiting is the first one to appear on Daxue Consulting - Market Research China.

Lancôme Paris, better known as Lancôme, is a cosmetics brand founded by Armand Petitjean in 1935. As a French luxury cosmetics house, Lancôme is part of the luxury products industry, which offers skin care, fragrances, and makeup at higher-end prices. Its brand has operated under L’Oreal since 1964. The beauty philosophy of Lancôme is simple: deliver the beauty and elegance of France to the rest of the world. The iconic golden rose of the Lancôme logo is inspired by the roses of Le Château de Lancôme. Lancôme in China has notched up 22 years of profit, which makes worthy of understanding as a successful cosmetics case study in China.

In 1997, Lancôme became the first high-end overseas brand entering the cosmetics market in China. In 2018, Lancôme China had 272 stores in 115 cities. Additionally, Lancôme has been the No. 1 best seller of high-end cosmetics market in China since 2005. “The sales revenue of Lancôme in China has increased 400 times in 22 years” according to Ma Xiaoyu, the GM of Lancôme China. The high growth revenue has proved the economic boom of China and Lancôme’s ability to keep pace with the times.

How Lancôme leverages celebrity endorsements in China

Lancôme is known for its use of very influential celebrities as endorsers, in the West this includes Kate Winslet, Anne Hathaway, Julia Roberts, Penelope Cruz, Emma Watson, Lily Collins, Lupita Nyong’o, and Zendaya. Clive Owen was the first male spokesperson for Lancôme’s Men’s skincare products and the fragrance Hypnôse Homme to explore the male market.

The cosmetics brand has localized their celebrity endorsement strategy to the Chinese market. Kris Wu, a Chinese singer and actor who is very popular among young women, has become the first Asia-Pacific Lancôme brand ambassador since 2019. This news was explored among millennials and received good responses. Up to January 16^th, 2020, the topic of “Kris Wu, the new face of Lancôme China (吴亦凡代言兰蔻)” has 400 million views and 71.6 thousand discussions on Weibo, one of the biggest microblogs in China.

[Source: Weibo ‘Kris Wu endorsing Lancôme in China’]

Lancôme China tests the E-commerce waters through Rosebeauty and Weibo

Although Lancôme remains a major player in China’s traditional media market, it has created China-specific sites of its own as well. Lancôme’s e-community site in China, Lancôme Rosebeauty, was one of China’s top online beauty forums in terms of website traffic, according to CIC, a company that tracks the social media impact and gives strategic advice. Lancôme’s e-commerce site was one of Lancôme’s biggest point-of-sale venues, reaching over 1,000 cities throughout China. From 2009 to 2010, online mentions of the Lancôme brand rose from 5,000 to 50,000 a month (a number almost directly related to the rose in popularity of the Rosebeauty e-community) and the Lancôme e-commerce site in China was one of the brand’s largest points-of-sale. However, Rosebeauty is no longer a popular platform, and rather platforms like Xiaohongshu and Weibo have taken its place.

Xiaohongshu Marketing

Xiaohongshu had 200 million users in 2019. The platform uses KOL marketing to create an interactive social-commerce experience which focuses on the fashion and cosmetics market in China. Both professional makeup artists and cosmetics consumers in China share their product evaluation and shopping tips on this platform. To satisfy consumers’ demand on import goods, Xiaohongshu has established strategic partnerships with many overseas brands, including Lancôme.

Weibo Marketing

Lancôme owes a significant success on Weibo as well. In 2019, Lancôme launched a campaign themed “May I Pink You” on Weibo for the “520 Festival”, the Chinese cyber Valentine’s Day. Lancôme reached over 140 million potential cosmetics consumers in China, and its media interaction hit a million landmark through this campaign. Lancôme did not only complete its sales goal for “520” limited pink boxes but also won good reputations within the Weibo platform.

L’Oreal officially authorized Jumei (聚美优品) Lafaso (乐蜂网), another step to E-commerce in China

In 2012, L’Oreal authorized jumei.com(聚美优品) and lafaso.com(乐蜂网) to sell its products on their website, which represented another step towards the increasing use of ‘e-commerce’ by the cosmetics industry. This meant brands under L’Oreal like Lancôme could be bought directly on these sites. Cosmetics consumers in China began favoring to go to shopping mall counters to try the products and then go on jumei.com(聚美优品), lafaso.com(乐蜂网) and Taobao.com(淘宝网) to screen the prices, sales promotions and peers reviews. More and more consumers are buying their products from these sites. However, these sites must ensure that there are no questions or concerns about the products they sell. Once one consumer claims that a product is not what it seems, consumers will choose not to buy that particular product from the site no matter how much cheaper it is than the ones sold in shopping malls.

Taobao (淘宝) and VIPSHOP(唯品会) start a new E-commerce era for Lancôme in China

Lancôme opened its Taobao flagship store in 2014 to extend its consumer segment to younger age and nurture more potential consumers. The online flagship store melts away the mistrust from consumers and guarantees product quality and service, which is another successful cosmetics case study in China of Lancôme. Taobao flagship store is more than a distribution channel for sales, but also a promotion channel. Lancôme has joined the “Double 11”, a Chinese shopping carnival since 2015 on Taobao. It opened shopping strategy and pre-sale subpages for the shopping spree, and also released “Double 11” limited gift boxes.

Lancôme’s 11.11.2019 Drone light show

On October 11^th, 2019, Lancôme warmed up the shopping carnival with a combination of light show and drone, flew over Paris and four Chinese cities with the countdown of November 11th. Lancôme reached ¥100,000,000 sales revenue in two hours after the “Double 11” started.

[Source: CBO News “Lancôme China recreates Double Eleven miracle: French romance flying from Paris”]

Jumei.com(聚美优品) is fading away from cosmetics consumers in China, and Lafaso.com(乐蜂网) was merged by VIPSHOP and closed down in September, 2019. VIPSHOP is a Chinese website specialized in discount sales online. Lancôme succeeds cooperating with VIPSHOP by selling the excess inventory at discounted prices.

Lancôme China emphasizes deep-level service mode

Meanwhile, Lancôme China is accelerating its offline development. It declared to open two more offline flagship stores in Beijing in 2020 to satisfy consumer demand. In the first China International Import Exhibition in 2018, Lancôme revealed a new technology, Le Teint Particulier color customization foundation. Consumers could customize their perfectly matched foundation on site by taking a simple skin tone test. Compared to online platforms and counters, offline flagship stores would create more value and provide better service, like customization for consumers.

Let China Paradigm have a positive impact on your business!

Listen to China Paradigm on iTunes

This article Lancôme in China: Case study is the first one to appear on Daxue Consulting - Market Research China.

Burberry Wants to Expand to 100 Stores in China

Burberry is a British luxury fashion house, distributing clothing and fashion accessories and licensing fragrances. Its distinctive tartan pattern has become one of its most widely copied trademarks. After the Lehman crisis, the world luxury brands all shifted their sales center to China, hoping this growing consumer entity can pull up their sales figure. Like most of the luxury brands, Burberry chose Shanghai to be its base in China. On April 13^th 2011, Burberry opened its Beijing flagship store. According to the CEO Angela Ahrendts, Burberry already has 63 stores in China and plans to expand to 100 stores.

Burberry Sales Decelerate in Asian-Pacific Region

According to Burberry’s quarterly business report, this year from April to June, sales in the Asian market increased by 18 percent, showing a abrupt deceleration from the 34 percent growth rate between October 2011 and March 2012. Because the Asian-Pacific market takes up 40 percent of its sales, the biggest share of all its markets, this deceleration led the Burberry stock go down by over 7 percent in London Market. It is easy to see that as 90 percent of the world’s well-known luxury brands come to China, this soon-to-be biggest luxury market provides these brands with huge business opportunities as well as underlying risks. The GDP growth rate of China between April to June this year for the first time in three years comes down below 8 percent. This may work as a signal to ask whether all these luxury brands should still rely on China to give them their biggest prospective growth.

Chinese Shoppers Became the Kings of Consumers in London Olympics

Although the luxury market may slow down its growth here in China, Chinese people’s desire for luxury goods still shocks the world. The just-ended London Olympic Games surely brought the UK enormous amount of travelers and consumers. According to statistics, 250 thousand Chinese went to London to watch the Olympics and the average spending of Chinese tourists exceeds that of UAE(United Arab Emirates) tourists by 10 percent. Most of the famous luxury stores were equipped with Chinese shopping guides waiting for the large streams of ‘generous’ Chinese customers and Unionpay, the widely used Chinese credit card, can be used almost in every one of the stores. You can guess which brand drew the highest attention. Of course it is the British traditional luxury brand Burberry. Almost every model that was on sales was sold out in a few seconds. That’s the purchasing power of the ‘fashion crazy’ Chinese.

Sources:

•  Official website
• The Independent
• Forbes
• CNBC
• Market Research services China

This article Mkt Research on Burberry in China is the first one to appear on Daxue Consulting - Market Research China.

The Great Firewall started since 2002

The name ‘Great Firewall of China’ came from an article written by a man called Charles R. Smith on May 17^th 2002 about the internet censorship in China. It is another name for China’s national public network monitor system, also called GFW for short. GFW is a sub-function of China’s Golden Shield Project.

How the Great Firewall Works

The “Golden Shield Project” is a nationwide public security information project aiming at informationizing the public security work and setting up a quick responding coordination mechanism with unified command. The project mainly includes the construction of public security integrated service communication network, the general information system of public security, the public security command and dispatch system and national public network control center. The project became effective in 2003. The GFW mainly refers to the public network monitoring system, especially referring to the filtering of the sites, IP address, key words and address involving sensitive content.

The Effects of the Great Firewall

The effects of the GFW usually are that the home network users cannot access foreign websites or webpage; or the foreign network users cannot access some websites or webpage in China. There are usually two ways to do that. One is to completely block the IP address or DNS poisoning; the other is to temporarily disable access by sensitive keyword filtering (by sending TCP command). The two effects use two different ways of blocking. The former is more convenient and more widely used while the latter is only used in a minority of some designated site such as Google.

GFW—Result of National Security

National firewall is not only confined to China. Many countries such as the United States has their national network monitoring systems as well. For example, the US scans every email sending to or out of the country. Recently in an interview, when asked about the opinion towards China’s Great Firewall, the CEO of Tencent, Mr. Ma Huateng responded, ‘The internet is like a virtual world. Only with an orderly management, can the virtual world keep its sustainable development. Every country’s management of the internet is greatly of the concern of security, only defers in degrees. China is still developing, facing many new situations, so it is constantly making new rules. However, as a whole, the network management standards are the same to both domestic companies and international companies.

Stefanie for Daxue Market Research China

 Documentation:

http://blog.sina.com.cn/s/blog_4a7a70350100085w.html

This article The Great Firewall of China is the first one to appear on Daxue Consulting - Market Research China.

The Big Giants—China Mobile, China Unicom and China Telecom

Today, three big state-controlled corporations, China Mobile, China Unicom and China Telecom, dominate the Chinese telecommunications industry. There used to be two additional players in the industry, China Netcom and China Tietong. However, on June 2, 2008, China Netcom merged into China Unicom and became its subsidiary after the latter sold its CDMA network to China Telecom. In addition, on May 23, 2008, China Tietong, which used to be the third largest fixed-line internet service provider in China, was taken over by China Mobile leaving only three players in the industry.

China Mobile—the World’s Largest Mobile Phone Operator

China Mobile was founded on April 4, 2000 and now boasts the world’s largest network. In 2011, China Mobile ranked number 87 in the Fortune 500. Its major service includes mobile voice and multimedia services. It operates a GSM network which encompasses all 31 provinces in China. Some of its well-known brands include Easyown, Go Tone and M-zone. As of January 2012, China Mobile is the world’s largest mobile phone operator with about 655 million subscribers. The acquisition of China Tietong added internet services to its core business. In addition, the 3G network it provides utilizes the TD-SCDMA standard, a 3G air interface that China Mobile helped develop.

China Unicom—Great Potential in China 3G market

China Unicom was originally founded on July 19, 1994 by the Ministry of Information Industry and kept its name after the merger with China Netcom. The company began as a wireless paging and GSM mobile operator, but now provides a wide range of services including nationwide GSM mobile network, long-distance calls, local calls, data communication, internet services and IP telephones in mainland China. Today, the company’s biggest advantage is its world-leading 3G license of the WCDMA network that it currently operates on. This differs from the TD-SCDMA that China Mobile uses and the CDMA2000 that China Telecom uses for their respective 3G networks. 77 percent of the world’s 3G market uses the WCDMA network. It also is the most commonly used 3G interface by most terminal providers in China in the manufacturing of their new mobile phone models.

China Telecom—Largest Fixed Line Service Provider in China

China Telecom;s strength lies in its fixed-line internet service and the construction of CDMA2000 network. Because the equipment it purchased for its former 2G network all support CDMA2000 standard, all it needs to do in theory is upgrade its software to build a 3G network. On March 30, 2011, China Telecom’s customer base of CDMA users surpassed 100 million, making China Telecom the world’s biggest CDMA operator. However, the company also faces a great challenge in developing its users for the 3G network.

Daxue Consulting China Blog

Sources:

• Deloitte
• Ministry of Industry and Information Technology of the People’s Republic of China
• Technology Channel 1
• Technology Channel 2

Picture: Chinese Telecommunications

This article Market study: China telecommunications providers is the first one to appear on Daxue Consulting - Market Research China.

Authoritative Report from CNNIC

On 17^th 2012, the China Internet Network Information Center (CNNIC) released the 29^th China Internet development report, taking a sample of a total 6000 users, comprehensively covered fixed phones, PHS families, dormitory fixed phones and mobile phones. The report gave a comprehensive and detailed investigation and analysis on many aspects of internet usage in China in 2011. We abstract the information that mainly focuses on the usage rate of different kinds of network applications.

Microblog (Weibo) Rose Abruptly

In 2011, one of the biggest hit in China’s internet world is the Microblog (weibo). The weibo user reached 250 million, an increase of 296 percent campared to the same period in 2010. netizen user rate reached 48.7 percent. But after the booming growth in the first half of the year, growth rate decreased. The real-name registration policy will further affect the development of weibo.

Other Various Aspects

• The ways and habits that the Chinese netizen communicate and interact have appeared quite some changes. The usage rate of instant messaging experienced rapid growth and reached 80.9 percent. E-mail, forum and BBS all experienced different levels of dropping. Social Network Site (SNS) appeared apparent dropping of four percent.
• Search engine obtained 407 million users, with netizen usage rate of 79.4 percent, and became the second largest internet application. Internet shopping kept increasing and reached 194 million users.
• Group-buying became the second fast-growing internet application, only second to Weibo, with a growth rate of 244.8 percent.
• Web game players reached 324 million, an increase of 6.6 percent compared to 2010. Among all the online games, casual games such as chess and cards attract most players.
• Online literature websites attracts users of 203 million, but its development is slower than the whole internet development.
• Online video users reached 325 million, a rapid growth of 14.6 percent. Online video has become the 5^th biggest online application. However, the online video industry as a whole is still in deficit. The situation is not easy to be changed at present.

Stefanie for Daxue Consulting China

Documentation:

http://www.guokr.com/article/89693/

This article Internet Usage in China is the first one to appear on Daxue Consulting - Market Research China.

With its many significant advantages over the feature phones, including which the high-speed data access via Wi-Fi and the capability for running third-party applications, smartphone has penetrated the mobile phone market in many countries, further changing the way people communicate. By 2012, about 18 percent of the total world population possesses some sort of smartphone, compared to 12 percent in 2010 and 8 percent in 2008. China seems to be one of the biggest markets. In fact, reports show that 23.9 million smartphones shipped in China during the third quarter of 2011, slightly above the 23.3 million shipments in the U.S. Now China is already the world’s largest smartphone market based on shipment volumes and device activation numbers.

Samsung take the Lead, Apple Occupies 9.5 percent of the Market

In 2012, China’s smartphone market is still in its growing stage. According to China Internet Network Information Center (CNNIC), the user attention for smartphone in China’s mobile phone market has exceeded 90 percent in March 2012. The top three vendors are Samsung, HTC and Motorola. Nokia dropped out of the top three and the major local vendors such as Xiaomi, ZTE and Coolpad all gained rise in their user attention rank. As the graph shows, Samsung becomes the most popular brand in China’s smartphone market, taking 22.1 percent of the market attention. As for the price level, statistics shows that the Chinese consumers are mainly looking at smartphones ranging from 1000 to 2000RMB. The search volume reaches 34 percent. The price level above 3000RMB only accumulates 31 percent of the search volume which indicates that phones with price below 3000RMB still occupy the mainstream of the China smartphone market.

Android is the Big Boss

As is shown in the graph, Android has become unquestionably the most popular mobile operating system in the China smartphone market. With the attention ratio of 74.5 percent, Android exceeds others whose ratios are all below 10 percent. The reason for Android’s popularity partly owes to the adoption of it by some of the low-cost local brands such as ZTE. And as we mentioned above, as the majority of the Chinese people still prefer to phones priced below 3000RMB, it is easy to see Android winning most people’s preference.

Documentation:

http://en.wikipedia.org/wiki/Smartphone

http://micgadget.com/27390/sub-200-smartphones-expecting-to-proliferate-in-china-by-2015/

http://zdc.zol.com.cn/287/2877615_all.html#p2877759

This article Smartphone Market in China is the first one to appear on Daxue Consulting - Market Research China.

As statistics shows, for the past few years, the traveling industry in China has been growing steadily. In 2011, the total revenue for China’s traveling industry reached 2.25 thousand billion RMB. Riding on this wave of industry prosperity, many travel sites have appeared among which Ctrip.com, elong.com and Qunar.com take the leading positions with the largest number of users. The service they provide includes information about travel destinations, online booking of train tickets, flight tickets and hotels.  As China’s leading travel new media, Qunar.com advocate a “self-serving, self-managing, and free” travel style, enabling users to choose personalized travel products according to their specific needs after searching and comparing information on their website.

Ticket Group-buying and Experience Sharing—lvmama.com, mafengwo.cn

Lvmama.com was founded in 2008, specializing in DIY tours. It sells discount entrance tickets to attraction spots which is also called ticket group-buying and designs DIY tour routes for its users. Unlike ctrip.com, who mainly focuses on getting tourists to their destination, which in other words, making possible the trip, lymama.com focuses on helping its users better enjoy the trip by offering detailed contents about where to see, what to see and how to get there cost efficiently.  Different from lvmama.com, mafengwo.com is more like an online society for travel enthusiasts.  People post and share blogs, photography works and videos. The sharing of experience and happiness in traveling is what makes this site resourceful and popular.

52huzhu.com—Mutual Help in Traveling

Another popular site among young people is 52huzhu.com. Its core value is based on mutual help. The site provides a platform for its users to make friends and then offer help to each other in traveling and job-searching. It blends the elements of traveling, job-hunting, friend-making and mutual help altogether to create a channel and access to easier and more enjoyable life. For example, it I participate in this site, I will receive others who travel to my hometown, take them to the best cuisine and show them around. In return I will be able to receive help from other users when I travel as well.

Written by Amy Wang for Daxue China Marketing Research

Our report on Chinese travellers:

This article Marketing Research in China on: China Travel Websites is the first one to appear on Daxue Consulting - Market Research China.

3G or third generation mobile telecommunications is increasingly becoming the standard for mobile phones and global mobile telecommunication services. Services offered through 3G access include wide-area wireless voice telephone, mobile internet access, video calls and mobile TV, all in a mobile environment. On December 31, 2008, the China State Council approved licenses for 3G mobile phone services in China. This marked the birth of third generation mobile communications in China.

China Mobile, China Telecom and China Unicom are the three major players in China’s telecommunication industry. According to statistics, in the first half of 2012, there were 17.51 million, 15.86 million and 14.67 million new subscribers for 3G service from China Unicom, China Mobile and China Telecom respectively. The total number of 3G subscribers in China reached 176 million by the end of this June, according to the Ministry of Industry and Information Technology.

China Mobile lags behind in 3G penetration

Today, there are roughly 1.12 billion mobile phone subscribers in China today. About 250 million of these mobile phone owners are 3G subscribers, comprising about 22% of total mobile phone subscribers in China. This number is expected to increase to about 33% of total phone owners by the end of the year. Although China Mobile has the highest number of mobile phone subscribers, it has the lowest penetration rate of 3G phones among its customers. A mere 13% of China Mobile’s customers are 3G subscribers, compared to the 33% and 44% for China Unicom and China Telecom respectively. If China Mobile hopes to take advantage of this rapidly growing and lucrative market, it must find a way to increase its penetration rate for 3G phones.

China Unicom takes new policies and hopes to realize profitability in 2012

As the smartphone market for phones priced between 1000 to 2000 RMB enters its maturity stage, China Unicom is actively making adjustments to its operating strategies to adapt to the market change. With the big increase in the sales of 1000 to 2000 RMB phones, the subsidy cost for 3G phones spent by China Unicom increased as well, which in some degree affected its profit. According to statistics published in 2011, the subsidy spent on 3G mobile phones by China Unicom reached 5.79 billion RMB and its net profit was 4.21 billion RMB. China Unicom sees 2012 as the key year for the realization of profitability in its 3G segment.

3G in China holds much potential

With the rise of the 3G era in China, the direction of companies in China’s telecom market must be adjusted. Soon, more telecommunication operaters may appear in the market, bringing with them more competition. However, what matters most to the Chinese people is more access to the rapidly developing technology and better services. With 3G technology, people are able to more freely embrace the world they live in and physical distances become shorter.

Daxue Consulting Market Report in China

Sources:

• Forbes
• 3G中国
• 中国3G市场分析报告
• 中国3G市场新闻

Picture Source: China Mobile

This article Market report: 3G in China is the first one to appear on Daxue Consulting - Market Research China.

Foreigners buy Chinese Products Online

As online shopping became rather popular in China, many Chinese online shoppers also reached out to the international market. Thus, the term foreign purchasing agency appeared on major online shopping sites like Taobao.com and many online luxury shops. But recently another kind of website which helps overseas customers reach the Chinese online shops also appeared. Many of these purchasing agencies were transformed from foreign trade corporations and oversea study agencies in China.

Overseas Chinese Want Hometown Goods

Gotodaigou.com is one website that takes part in this purchasing agency business. Its customers mainly lie in Chinese people in America, Australia and New Zealand. The marketing director Robert said that they first found on the overseas students BBS that many Chinese overseas students expressed how much they missed their hometown products. But the purchasing and mailing procedures were rather complicated so they wished for some kinds of companies to realize this. In February 2011, Gotodaigou.com was founded, helping overseas customers purchase products from Chinese online shopping sites and mailing them altogether abroad.

10 Percent Commission for Oversea Purchases

Robert said that overseas customers purchase from China mainly for the sake of the low price. For example, an iphone case priced 20RMB from a Chinese shopping site will cost a customer in the US 40RMB to buy after shipping cost and commission is added. However, the same looking case may cost 200RMB even if he/she buys it on ebay. Apparently it is much cheaper to buy it from China. In addition, some buyers want products that only can be found in China, such as Chinese books or national decorations which are not exported. Many buyers purchases together with their friends or relatives to save shipping cost. One way to make a profit for these purchasing agency sites is commission. It usually takes up 10 percent of the total purchase. If the total purchase is too small, there will be a minimum amount of commission. Another way is to find long-term suppliers and to negotiate a lower price so that they can earn the price difference.

The Worldwide Economic Downturn Gave Rise to Purchasing Agencies

According to industry insider, countries in the Middle East, European Union and ASEAN can be the potential market for overseas purchase agencies. Because countries in these areas either have higher price in their light industry or have incomplete industry chain. However, when it comes to practical operations, agencies still face a lot of challenges. They need good partners in other countries to better solve problems such as currency exchange, customs related problems and after sale services.

This article Shopping from China Online is the first one to appear on Daxue Consulting - Market Research China.