China News Brief
    March 29, 2024

    China opens door to Australian wine; Douyin launches budget mall; CDFG posts strong profit growth.
    South Australia's wine-producing McLaren Vale. Photo: Shutterstock

    China opens door to Australian wine#

    China today lifted  tariffs on Australian wine exports after a three-year trade dispute, which has sparked optimism for the revival of the billion-dollar industry. The Ministry of Commerce in Beijing announced the move, citing changes in the wine market conditions as the reason for discontinuing anti-dumping and countervailing duties on Australian wines. While the Australian government welcomed the decision and pledged to halt legal proceedings at the World Trade Organization, there's caution about a full return to the market, with expectations that some wine may seek other markets.

    Douyin launches budget mall#

    Douyin, TikTok’s sister app in China, has introduced  Douyin Mall, a new shopping-focused app. The launch allows Douyin’s e-commerce team to establish a unique brand identity, showcase e-commerce functionalities, and target international consumer markets. The app emphasizes ultra-low priced products. While the user experience remains similar to the main Douyin app, Douyin Mall features a “Flash Sale” section with products priced as low as 0.01 RMB ($0.0014). Despite lacking video shooting and editing features, users can access short video content and synchronized content preferences across both apps.

    CDFG posts strong profit growth#

    China Duty Free Group (CDFG), the world’s largest travel retail operator, announced  its full-year performance for 2023: the company maintained its focus on the duty-free business, achieving a revenue of $10.54 billion (67.54 billion RMB), up 24.1% YoY, and a net profit attributable to shareholders of $1.05 billion (6.71 billion RMB), up 33.5% YoY. Hainan remained the core region, contributing 58.7% of revenue, followed by Shanghai at 26.4%. China Duty Free operates about 200 duty-free shops across more than 100 cities in over 30 provinces, municipalities, autonomous regions, and countries.

    Inditex cautious on China expansion#

    Eugenio Bregolat Lukashov, the president of Inditex China, told  media that in 2024, Inditex’s subsidiary brands in China will maintain a relatively slow pace of store openings, focusing on expanding store size and enhancing consumer experience. He also revealed that Zara will increase its localization efforts, launching at least two seasons of collaborations with local designers every year and helping to sell products globally.

    Disney presents at Shanghai Fashion Week#

    Disney partnered  with eight independent designer brands in China to present a Disney Re:imagined fashion show at the 2024 Fall/Winter Shanghai Fashion Week, drawing inspiration from Mickey and Friends. Participating designers, including Ao Yes, Chén Sifān, Cplus Series, Linlin Chasse, Nan Knits, Shie Lyu, WMWM, and Yue, interpreted the characters’ personalities through clothing designs. Renowned designer Xander Zhou presented futuristic Mickey-themed works, while Chinchin Lab added whimsical Mickey-themed accessories to the showcase.

    Valentino holds collection showcase in Quanzhou#

    Shang Cheng Shi magazine recently partnered  with Valentino to hold the Shang Cheng Family Feast in Quanzhou, where guests including Li Qin and Tong Liya showcased the maison’s 2024 Spring/Summer collection. Participants explored traditional streets, experienced intangible cultural heritage, and indulged in a Minnan-style family feast. This event reflects the growing influence of Chinese culture in luxury markets, with brands like Valentino embracing cultural localization to resonate with Chinese audiences.

    Prada injects cash into China business#

    Prada Fashion Business (Shanghai) Co. recently underwent  a change in its business registration, with its registered capital increasing from approximately 920 million RMB ($144.88 million) to about 1.22 billion RMB ($192.13 million), an increase of approximately 32.4%. Established in October 2005, the company is represented by Wang Zhenzhen and its business scope includes wholesale and retail of clothing and accessories, wholesale and retail of shoes and hats, sales of bags, and leather products. Shareholder information indicates that the company is fully owned by Prada Asia Pacific Ltd.

    Lancôme appoints brand rep#

    Lancôme yesterday announced  that actress Zhang Jingyi had been promoted from her previous role of makeup and skincare ambassador to become its brand ambassador. The brand released a series of images featuring Zhang holding Lancôme's second-generation Aurora Water, the new Idole perfume, and the Lancôme Pure Lip Glaze.

    BYD delays Vietnam factory#

    BYD is delaying  its plans to build an electric car factory in Vietnam’s Phu Tho province due to strategic considerations and a sluggish electric car market. Gelex Group, the operator of the industrial park where the factory was to be established, revealed this development during a shareholder meeting in Hanoi. BYD and Gelex have reserved 100 hectares of land for the project, but are currently seeking an appropriate timeline for its initiation.

    Tesla readies for sales slowdown#

    Tesla is anticipated  to report slow first-quarter deliveries next week, reflecting diminishing effects from price reductions and stiff competition in a decelerating electric vehicle market. Following a period of rapid growth, Tesla is preparing for a slowdown in 2024, exacerbated by its delayed model refreshes amid consumer reluctance for large purchases due to high interest rates. Analysts suggest Tesla's relentless price cuts have led to margin erosion and decreased vehicle value, contributing to a nearly 30% drop in its stock value this year.