2019中国新消费品牌研究报告及TOP100榜单.pdf

Chinas New Consumer Brand Report 2019&Top 100 Brand List2019中国新消费品牌研究报告及TOP100榜单October 2019Photo by Lucrezia Carnelos on UnsplashEqualOCopyright 2019 EqualOcean.All rights reserved.EqualOcean may currently and/or seek to do business with companies covered in its research report.Asa result,investors should be aware that the firm may have a conflict of interest that could affect theobjectivity of this report.Investors should consider the report as only a single factor in making theirinvestment decision.For other important disclosures,see the Terms of Service and Disclaimer.The report is bilingual in English and Chinese,with page 1 to page 38 in English and page 39 to page 60 in Chinese.特此说明，该报告为中英双语版本，1到38页为英文版，39到60为中文版。Why read this report?2The wealth of Chinese consumers is changing rapidly,despite the new normal stage of the countrys economy and the geopolitical uncertainties.Consumer-facing companies should show keenness for this market in order to power their growth over the coming decades.The development history of the worlds famous consumer brands has repeated itself but varies from region to region.From both a macroeconomic and cultural confidence perspective,todays China resembles Japan in many aspects from the 1970s to the 1980s.Only the country now boasts a much greater middle-class population than anywhere else in the world and expects an unprecedented wave to come in the consumer market.This report will unveil the factors underpinning the unstoppable trend of consumer upgrading in China and will also showcase of the TOP 100 new consumer brands1list,with a special look at trailblazing cases in the Chinas diverse fast-growing market.Grasp it the foreseeable big bang in Chinas consumer brands 1The TOP100 newconsumerbrandsareselected on three basic criteriaareillustrated on P19.Source:AliResearchEqualO18401900 1960 2015Industrial revolution in EuropeRise of industrial AmericaGrowth of middle class in JapanRise of new middle class in China,digitalization.European consumer brandsAmerican consumer brandsJapanese consumer brandsChinasconsumer brandsExhibit 1:Global consumer brands development timeline 240 million singlesSingles represent 15%of population in 2018.Most of them like convenient and fast living,keeping fit and pretty,eating out alone or ordering takeout,and they are pet-lovers.Seniors are wealthier and have stronger consumer awareness.At the same time,information technology and high-tech medical care companies are becoming the main driver of senior care industry.Only 15%of tier-one city singles cook three times or more per week.12.314.517.221.326.82013 2014 2015 2016 2017Market size of high-tech devices for seniors(BN CNY)378 million Gen ZAffluent in life and well-educated,Gen Z are the main consumer force of China.They are more diverse,progressive,rational,global-minded and patriotic.Most importantly,they are digital natives.Exhibit 2:Three main types of future consumers in ChinaSource:EqualOceananalysis EqualONew technologies have been making the time varying trends more exciting.The implications for both companies and investors are crucial for finding solutions to build stronger brands in the consumer market in China.A brands positioning,personalization,customization,digitalization and experience-orientation are all areas where future revolutions will take place.3An understanding of Chinas changing demographics and the impact of these changes on the profiles of consumers helps to identify some key trends in consumption patterns likely to follow in succeeding decades.Four types of new consumers middle-class,singles,seniors and generation Z1are selected as representative of the future.However,the diversification of population,along with geographic and Internet clusters,will eventually generate a much more complex matrix of consumer types such as small-town youth,urban middle-class and so on that will pose both opportunities and challenges for brand merchants.Know it the features of future Chinese consumersThink it implications for the future 1 The consumer features is not selected from a categorization based of MECE,but a cross-analysis onconsumptiontypes and branding logic.1/3of the population will be over 60 by 205070%of them are happier than their parentsThe macro context of ChinaGovernment support on domestic brands and the consumption upgradeDemographic shiftTechnological innovation05Factors shaping Chinas consumer marketContentsThe explosive middle-class in new tier-one citiesSingles economy:a group of hikikomori or independent individualThe wealthier silver hair cohortGeneration Z:the expressive and rational digital natives11Features of Chinas new consumersBrand mapSelecting criteria Case study 18List of TOP 100 New Consumer BrandsBrand positioning to be 100%sure about what brand stands forPersonalization,customization and experience-driven orientationAll things digital36Implications for Chinas new consumer brands4Factors Shaping Chinas Consumer MarketAt the 19th National Congress of the Communist Party of China(CPC)in October 2017,Chinas leadership announced that the country had entered a new stage of development.One of the priorities stated is to transform into a society that fosters innovation while improving peoples well-being.President Xi Jinping remarked that the government will improve systems and mechanisms for stimulating consumer spending and will leverage the fundamental role of consumption in promoting economic growth.Facing the ongoing trade turmoil with the United States and a slowdown in the economy,China is looking increasingly inward to domestic consumption to counter the downside pressure on the growth of manufacturing activity,car sales,exports and gross domestic product.In the quarterly economic meeting of Chinas top leadership,chaired by President Xi on July 30,2019,the Politburo rejected the use of the large-scale stimulus employed in 2008 or the idea of easing restrictions on the housing market to boost activity.Instead,Xi urged officials to raise their“anxiety awareness”and to turn a“crisis into opportunity”by continuing targeted support and reliance on consumer spending.The consumer market,from both the supply end and the demand end,has been elevated to the level of national development strategy to bear the brunt of all the negative indicators.12019 Chinas New Consumer Brand Report&Top 100 Brand List5Factors Shaping Chinas Consumer Market5.315 5.475 5.584 5.685 5.827 6.002 5.112 5.291 5.466 5.778 6.090 6.412 55.25.45.65.866.26.420182019E2020E2021E2022E2023EUSChinaExhibit 3:Total retail sales in China mainland(in trillions,USD)Source:eMarketer EqualOThe macro context of ChinaEven with the economic headwinds that were escalated by the trade war,China is still expected to overtake its rival and become the worlds largest retail market(see Exhibit 2)in the coming three years.Based on a report from eMarketer,China and the US currently represent 21.1%and 21.9%share of the global retail market respectively,while China has an estimated retail sales growth rate double that of the US.22019 Chinas New Consumer Brand Report&Top 100 Brand List6Factors Shaping Chinas Consumer MarketIn addition to mixed private estimates,the National Bureau of Statistics of China announced that the total retail sales of consumer goods(TRSCG,a major indicator of retail markets)reached CNY 19.5 trillion(USD 2.87 trillion)in the first half of 2019,with an increase rate of 8.4%,higher than previous projections.The TRSCG,which accounted for more than 43%of GDP in the second quarter of 2019,is the stabilizer of Chinas economic growth.200982,07513,3052012201018,721201121,44324,28464,128201327,190201430,093201548,79415,801201636,626201738,09968,599201841,5322019E34,85241,21253,85859,29674,00690,03197,23133,232TRSCGGDPSource:National Bureau of Statistics EqualOExhibit 4:Total retail sales of consumer goods and gross domestic product(GDP)in China,2009-2019E(in billions,CNY)Government support on domestic brand and the consumption upgradeAs China has entered a new normal stage of economic development,overseas consumption continues to rise.According to the United Nations World Tourism Organization,Chinese outbound tourism expenditure surged from USD 13 billion in 2000 to a staggering USD 258 billion in 2017.3The National Bureau of Statistics also reported that,in 2018,overseas consumption represented 2.2%of Chinas GDP and 5%of TRSCG.Encouraging overseas consumption is of great benefit to promoting the balance of international trade and reducing foreign trade frictions.However,considering the current situation of Chinas economy,ensuring stable growth is an imminent and important task.In order to open up new spaces for drivers of development,the 13th Five-Year Plan released by Communist Party of China on March 2016 clearly points out that the government will actively work to encourage those who commonly choose to shop overseas to buy domestic products.Policies have been made intensively since 2018 to attract overseas consumption to domestic spending.For example:cutting taxes for imported goods,raising purchasing quotas for cross-border e-commerce platforms and improving the distribution of duty-free shops across major tourist destination cities and developing international consumption centers have all played roles in the drive.More importantly,the return of overseas consumption will push the domestic consumer market to upgrade.Increasing variety,improving quality and fostering brands are crucial for the consumer market to promote the upgrading of product supply structure,assist the rise of the domestic market and brands amid the new normal.The Party Central Committee and the State Council have attached great importance to brand development.On May 10,2014,President Xi proposed to promote the transformation from Made in China to Created in China,from China Speed to China Quality,and from Chinese Product to Chinese Brand.On April 24,2017,the State Council approved the establishment of China Brand Day on May 10th every year.2019 Chinas New Consumer Brand Report&Top 100 Brand List7Factors Shaping Chinas Consumer MarketDemographic shiftAnother significant factor that affects the consumer market and brands is a slow variable demographic shift.By applying the Leslie Model,a population forecasting model based on birth and death rate,we can deduct the demographic structure for the decade ahead.EqualOcean adopted the estimates of Zhongtai Security4and focused on three demographic trends that will contribute most to influencing consumption in China.2019 Chinas New Consumer Brand Report&Top 100 Brand List8Factors Shaping Chinas Consumer MarketFirst,China will become a deep aging society in two years.According to Zhongtai Security,when a country or region has more than 7%of the population aged 65 or over,it means entering an aging society;reaching 14%is a deep aging society;exceeding 21%is a super aging society.China is expected to become a deep aging society by 2021 and the population will continue greying.By 2050,over one third of the population will be people over 60 years old.050,000100,000150,000050,000100,000150,0000-410-1420-2430-3440-4450-5460-6470-7480-8490-941002050Source:National Bureau of Statistics EqualO2015Exhibit 5:2015&2050 population distribution in China(in thousands)Challenges coexist with opportunities.The Japanese government,a forerunner in tackling its demographic time bomb,is picking up on aging and technology changes to turn a negative into a positive and shed light on the consumption opportunities among elders.Second,less newborns and a shrinking populationTo help address the aging issue in China,the universal two-child policy was proposed in October 2015.Nonetheless,the incentives are not good enough to engineer another baby boom akin to the one that happened three decades ago.In 2018,newborns in China numbered 15.23 million5,a drastic decrease by 2 million compared to the previous year.The birth rate of 10.94%hit a record low since 1949.Demographers estimate the number of babies born in 2019 will slump to 14 million;later the downward trend of birthrate will be sustained and the number of the newborn will fall under Third,most skewed sex ratio generates more singles The traditional preference for boys in China has encouraged selective abortions with the result of a serious imbalance of sex at birth.The ratio peaked in 2004 when every 100 girls were born for 121 boys.Though the imbalance declined after,the sex ratio stands over 1.1,high than the normal range from 1.02 to 1.07.But that might not be the whole picture.Due to the one-child policy,some families who had a girl may hide her from the authorities,only to be included later when she grew older.Therefore,the skewed sex ratio caused 30 to 40 million more males than females at marriage age.With this discrepancy,plus the millennials no-rush attitude towards marriage,the number of single people in China reached 240 million in 2018 or triple the population of the UK.2019 Chinas New Consumer Brand Report&Top 100 Brand List9Factors Shaping Chinas Consumer MarketTechnology innovation The consumer market is transforming rapidly through the game-changing technologies sometimes called the Fourth Industrial Revolution.According to a World Economic Forum(WEF)Report6on consumer markets,to successfully navigate through the changes,a premium will be placed on innovation,the willingness of organizations to disrupt themselves,a quest for active collaboration and a commitment to advance inclusive growth strategies.The WEF report stated that China will leapfrog from being a participant to a leader in technological innovation via three factors:1)a strong technological infrastructure;2)a supportive policy environment and active investments in leading-edge technologies;and 3)the transition of domestic companies from copier to innovator.While technologies will affect the consumption value chain from production to distribution,retail and finally to consumption,we focus on the consumer end in this report.Below shows how technological applications will affect consumer behavior and needs.(It turns out that future consumers will want it all.)2019 Chinas New Consumer Brand Report&Top 100 Brand List10Factors Shaping Chinas Consumer MarketExhibit 6:Disruptive technologies on consumer end Source:World Economic Forum EqualOAI/Machine LearningAR/VRIoTRobotics3D printingAutonomous VehiclesBlockchainGenomicsResource allocation,personalizationAsset status checkingShared autonomous taxi fleetUser behavior learningPredictive monitoringRevolutionary gaming and entertainment systemsService robotics in public areasPurchase designs online through idea sharing platformsSharing products traceabilityDiagnosis knowledge sharingTechnologies will create tremendous implications for companies by giving consumers more choices,convenience and better experiences thanks to the new models of consumption.The new technologies will create powerful ecosystems around consumer data as well as major pote