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Period: August 1, 2016 to December 1, 2016
Comment & Opinion or Companies, Organizations or Consumers or Controversies & Disputes or Deals, M&A, JVs, Licensing or Earnings Release or Finance, Economics, Tax or Innovation & New Ideas or Legal, Legislation, Regulation, Policy or Market News or Marketing & Advertising or Other or People & Personalities or Press Release or Products & Brands or Research, Studies, Advice or Supply Chain or Trends

China Lowers Taxes On Imported Beauty Products

China cut the country's consumption tax on imported beauty products. Effective at the start of October 2016, the total effective tax rate, which includes the import tariff, VAT, and consumption tax, will be lowered from the current 84 percent to 29 percent for most cosmetics and 51 percent for luxury beauty brands. Aimed at encouraging Chinese consumers to spend more on local stores instead of leaving the country to shop, the new rules, however, include unchanged tax rates for skincare products and higher rates for premium skincare brands from zero tax to 15 percent.

"Cuts in make-up tax beautiful in the eyes of US and European brands", South China Morning Post, October 11, 2016

Walmart Invests $50M In China’s Big Online Grocery Retailer

Just one day after Walmart and China’s JD.com revealed they would collaborate on three new online services, the U.S. retailer announced a $50 million investment in New Dada, the country's largest local on-demand logistics and grocery O2O e-commerce platform. The investment enables grocery delivery from certain Walmart stores. The earlier announcement focused on Sam’s Club and Global Imports stores on JD.com, and two-hour grocery delivery through New Dada, an independent joint venture of JD.com and Dada. New Dada has more than 25 million registered customers and provides local on-demand delivery in 300 cities in China. Walmart has 426 stores in 170 cities.

"Walmart Announces Strategic Investment in China’s largest on-demand logistics and O2O Grocery platform New Dada", News release, Walmart, October 21, 2016

Sam's Club China Offers More Expensive Products; Aims For Country's High-Spending Consumers

Walmart has revised the merchandising strategies at its Sam's Clubs members-only warehouse chain in China. During the past two years, the retailer has added more expensive products, such as Zojirushi rice cookers, which cost $3,200 each, and diamond rings that cost $295,000, to the product collections of the 14 Sam's Club stores in the country. Walmart believes China offers big growth potential, with the company's Sam's Club in Shenzhen being the best-performing among the retailer's locations worldwide. Also, as part of efforts to attract more high-spending customers, Walmart increased the club's annual membership fee in April 2016 to 260 yuan, or $40, almost double the previous fee.

"China’s High-End Retail Emporium", Bloomberg Businessweek, November 04, 2016

L'Oreal Set To Reap Rewards Of China's Beauty Sales Growth

Market analysts Trefis highlighted a Morgan Stanley report on China’s beauty products market, which the authors believe will become the world’s largest. It was L’Oréal’s second largest market in 2015, behind the US, and the company’s leadership in digital gives it an advantage in a market where e-commerce sales of beauty items rose from 3% of the total beauty market in 2010 to 19% in 2015. Online sales account for over 20% of the company’s Consumer Products division’s total sales in China. Morgan Stanley notes the growing demand for premium cosmetics by Chinese consumers online or through travel retail channels, and L’Oréal’s luxury products division is well placed to capture this sales growth. Trefis said that skin care is L’Oréal’s most valuable segment and it expects the company to expand its share in global skin care, with China playing a major part in that.

"Here’s How L’Oreal Can Benefit From The Booming Beauty Market In China", Trefis , November 22, 2016

China Continues To Embrace Online Shopping

In the second volume of a report on shoppers in China, Kantar Worldpanel and Bain & Company highlight continued rapid growth in online sales and expansion in the number of categories bought online. Online sales of FMCG products grew 36.5 percent last year, with volume up 69 percent. A decline in the average selling price came from the broadening of product options beyond the expensive original categories, baby care and beauty. It also found that physical stores are trying to complement online shopping, with the growing popularity of convenience stores driven by urbanization, for small baskets and top-up shopping. The authors believe that online and offline channels need to adapt to the changing reality to stay competitive. The growth in online shopping was demonstrated by the 11/11 Singles’ Day promotions. This year, Alibaba drew sales of $17.8 billion in the day, and the report suggested reasons for this sales splurge: existing shoppers choosing to spend more on the day; shoppers ...  More

"Dealing with Two-speed China", Kantar Worldpanel, November 24, 2016

Market News  

Majority Of Millennial Consumers In Asia-Pacific Still Living With Parents, Survey Reveals

In Asia-Pacific, 63 percent of millennials 22‒29 years old are living with their parents, according to a CBRE survey. In China, more than 60 percent of millennials are staying with their parents, the third highest in the region after Hong Kong and India, which both had around 80 percent. Data from the report revealed cultural norms and high property prices are keeping Chinese millennials from buying their own place, with 28 percent of respondents claiming it would take them 2‒5 years to afford to move out. Almost 90 percent of Chinese millennials dream of buying property, compared with the Asia-Pacific average of 55 percent. Millennial consumers in China spend 14 percent of their incomes on non-food purchases, the highest rate in the region.

"Study: Chinese Millennials Spend Big on Shopping Because They Live with Their Parents", Jing Daily, October 30, 2016

Unilever China Wins Sustainability Award From British Chamber Of Commerce Shanghai

Unilever China won the Sustainable Business Award of British Business Awards 2016. Created by the British Chamber of Commerce Shanghai in 2008, the Awards highlight and promote “excellence in innovation, enterprise, and endeavor in the British and Chinese business communities.” Among the criteria of the award are the presence of “identified vision and set of values” and integration of sustainability in business strategy and practices in the country.

"Unilever Wins Sustainable Business Award of British Business Awards 2016", PR Newswire, November 10, 2016

Walmart Invests $50m in China Online Grocer New Dada

Cosmetics Business, October 21, 2016

Expanding Our Routes to Market in China Through eCommerce

Mondelēz International, November 23, 2016

Dealing with Two-speed China

Kantar Worldpanel, November 24, 2016

China Economic Outlook: Q4 2016

Euromonitor International, November 26, 2016

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