3 Key Trends in the Chinese Market for 2023

3 Key Trends in the Chinese Market for 2023

1. The removal of the Covid-19 policy and measures to boost consumption means more market opportunities for African business

The Chinese government officially announced that it would downgrade its controversial “Zero-Covid Policy” on December 26, 2022. After waves of infections across the country due to the population’s lack of exposure to the virus, the first few weeks of 2023 have seen China returning to a level of pre-Covid normality with public spaces consistently opening up, and travel restrictions, testing, confinement and lockdown measures being lifted.

The most critical result of the end of the “Zero-Covid Policy” on consumption is bringing of certainty to consumers who no longer need to worry about losing their jobs due to unexpected city lockdowns. The data shows that repeated lockdowns and travel restrictions in 2022 dealt a huge blow to consumer confidence, which led to a continued decline in spending.

Africa Reimagined (AR) believes that due to the waves of infection and the need for China’s economy to recover, the population’s consumption of goods will not immediately return to pre-epidemic levels. According to international experience, the boost to consumption after the relaxation of the Covid-19 control policy will be seen after one quarter (consumption is still weak at the beginning of the relaxation due to the rise in cases). However, the end of the lockdown policy is expected to reduce the unemployment rate, which will boost consumer confidence and the willingness to consume will steadily increase. In addition, the Central Economic Work Conference, which is responsible for formulating work plans for the coming year, stated that promoting consumption will be a priority in 2023.

Under the combined influence of these factors, the Chinese market is showing a clear a recovery trend, which should be music to the ears of national and international business. In addition, the lifting of quarantine measures on arrival means that business travel will be more convenient, which will allow African companies to establish, resume or strengthen their ties with Chinese businesses. The elimination of lockdown and confinement measures also means that disruptions in Africa-China trade have also ceased and can allow African exporters to start taking full advantage of China’s market opportunities.

2. China’s diversifying e-commerce market

China’s e-commerce market has experienced rapid growth over the past few years, transfiguring into the largest e-commerce market in the world. Over the past year, however the share of online shopping in total retail sales has increased but at a slower pace, and the number of online shoppers has even decreased slightly, which means that China’s e-commerce penetration rate is close to saturation. The impact of COVID-19 on e-commerce is multifaceted. Firstly, consumers are more inclined to buy essential goods online due to city lockdowns and concerns about being infected. On the other hand, sales of major categories of online shopping, such as clothing, have declined due to reduced travel demand.

 

But simultaneously, China’s e-commerce market is also diversifying. Chinese consumers are shifting from the original major e-commerce giants – JD and Taobao – to WeChat stores and Douyin. Thus, with soon-to-rise consumer spending and a greater choice of e-commerce platforms to shop on, the China’s e-commerce market will no doubt rebound in 2023.

 

AR believes that in 2023, e-commerce remains a wise choice for African brands to enter the Chinese market, with its ability to help brands reach a large number of potential consumers at a lower cost. This year, African brands should consider exploring emerging e-commerce platforms and strategies such as social e-commerce and live streaming. Contact AR for advice and support on this.

3. Growing consumer spending and market opportunities in low-tier Chinese cities

AR believes that low-tier cities is a market worthy of attention by African brands and that consumers in low-tier cities are open and savvy to new products. Due to the limitations of offline consumption scenarios, consumers in low-tier cities are more likely to shop via e-commerce, especially through social e-commerce, which provides opportunities for emerging African brands. If the right partner can be found, direct access to the low-tier cities market through social commerce (group purchasing, WeChat shopping) may be a lucrative opportunity.

To learn more about how to take advantage of these trends, contact the Africa Reimagined team to receive a free consultation or learn more about our China market entry services here.

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Trevor Lwere

Research and Coordination Analyst

Trevor Lwere is a Research and Coordination analyst at Development Reimagined with a background in Economics and Global Affairs. His interests include geopolitics, geoeconomics and economic development. He holds a Masters’ degree in Global Affairs fro Tsinghua University and a BA Economics from the University of Notre Dame.

Yujie Shi

 Policy and Research Analyst

Yuejie Shi is a Research and Data Analyst at Development Reimagined with a special focus on Global Trade and China-Africa Trade.

Sena Voncujovi

Research Analyst

Sena Voncujovi is a research and policy analyst at Development Reimagined. Voncujovi specializes in global health issues, Japan-Africa relations, and China-Africa relations. He served as the Editor-in-chief of Peking University’s Africa Think Tank (PATT) during his master’s in International Relations & Politics as a Yenching Scholar. Voncujovi previously advised the Ghanaian government for the 2019 TICAD 7 Conference held in Yokohama. He is the co-founder of Jaspora, Tokyo’s largest community of African diasporan diplomats, changemakers, professionals, students, and business people.

Rugare Mukanganga

Economist

Rugare is an economist at Development Reimagined, providing economic and data analysis support across projects.

Yixin Yu

Research Analyst

Yixin is a Junior Research Analyst and her focus areas is on public-private partnership and entrepreneurship. She has over three years of working experience in both private and public sectors in Ethiopia. She was the China Liaison Officer for project ‘Partnership for Investment and Growth in Africa’ at International Trade Centre, where she accumulated rich experience in investment and trade promotion.

Ivory Kairo

Communications Support

Ivory is a Kenyan lawyer with experience in policy research and analysis. She also supports the communications team through liaising with African brands, creating graphic content and other external outputs at AR. Ivory speaks English, Swahili and French

Huiyi Chen

Partnership Development

Huiyi Chen is a Research and Coordination Analyst on China-Africa cooperation and leading the engagement with Chinese stakeholders at Development Reimagined.

Jinyu Chen

Research Analyst | Paris, France

Jinyu is a dual-degree Master’s student at Sciences Po & Peking University.  At Africa Reimagined, Jinyu produces research to foster better mutual understanding between African clients and Chinese consumers. 

 

Jade Scarfe

Communications Support
Jade is a research analyst and communication support at Africa Reimagined. She supports with liaising with African brands, creating content and gathering China market research.

Yike Fu

China-Africa Policy Analyst

Yike Fu is a Policy Analyst and has been responsible for leading numerous areas of work, including on debt analysis in Africa and beyond, and China-Africa trade and investment logistics and analysis. She is the co-author of “African Debt Guide”, in which she challenged the narrative that Africa is in the midst of a new debt crisis by analysing data back to the 1970s and adopting new metrics to present the real story behind the data. She also developed a benchmark to compare the financial distribution of development partners such as the UK, US, Japan, France and China in Africa. Prior to her role at DR she worked at the International Finance Corporation and African Union Representational Mission to the US. She holds a Masters in International Affairs from George Washington University.

Rosie Wigmore

Project Manager | Beijing, PRC

Rosie is the Project Manager of Africa Reimagined (AR) at Development Reimagined (DR) where she supports high-end African brands with entering the Chinese market by operating services such as trademark protection, Chinese market research, Chinese partnership building, and Africa to China logistical support and import/export services. Rosie has worked with DR for over two years now with proven success in helping high-end African brands navigate the Chinese market. She is extremely passionate about her work because more African brands selling in the Chinese marketplace means African countries can export MORE value-added goods, create MORE jobs and foster MORE innovation in African countries.

Leah Lynch

Deputy Director | Beijing, PRC

Leah Lynch is Deputy Director of Development Reimagined (DR), and head of the China office. Leah has over 10 years of experience in development and has lived in China for over 8 years. Leah has also travelled extensively around Asia and Africa for research. Leah supports the strategic direction of the team across China, with a mission to deliver high quality research on sustainable development and poverty reduction. Leah is also Chair of the Sustainability Forum at the British Chamber of Commerce in China, providing direction on sustainability initiatives for British and Chinese business. Leah has also consulted on various evaluations on UK aid (ICAI) and is a specialist on development cooperation from the UK and China. Leah has also consulted on various UN projects, including providing support to the UN China team during the COVID-19 Pandemic. Prior to DR, Leah was at the United Nations Development Programme (UNDP) China, supporting the UN’s portfolio on communication strategies, China’s South- South Cooperation and the Belt and Road Initiative (BRI). Before UNDP, Leah lived and worked in Kenya developing sustainable water policies for the Kenyan government.

Hannah Ryder

Founder and CEO 

Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE’s International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.

SUPPORT WITH SELLING ON CHINESE E-COMMERCE STORES

We support our clients throughout the whole onboarding and sales process on Chinese e-commerce platforms including registration, international and China-mainland logistics, storage, payment transfers, and marketing & advertising strategies.

In addition to supporting our clients with onboarding onto e-commerce platforms or developing their own WeChat stores, we also have our own Africa Reimagined e-commerce stores for our clients to sell on.
Kiliselect on WeChat Stores: Africa Reimagined launched on Kiliselect, which is a foremost e-commerce store for premium African products in China and the Chinese branch of East Africa’s Kilimall. It houses brands from a range of sectors including food and beverage, skincare and homeware. Kiliselect is found on WeChat Stores, which gives the store access to 1.2 billion active WeChat users across China.
JD-Worldwide: Next year, Africa Reimagined will open the first ever flagship, pan-Africa e-commerce store for premium African brands on JD-Worldwide, the cross-border e-commerce platform of China’s largest retailer, JD.com. It will sell exclusively luxury African brands from a range of sectors including, fashion and jewellery, food and beverage, skincare. and homeware.