2024 Calendar Week 29

Posted on July 22, 2024

China’s GDP Grows by 5.0% Year-on-Year in First Half of 2024

On July 15, data released by the National Bureau of Statistics showed that China’s Gross Domestic Product (GDP) for the first half of 2024 reached CNY 61.6836 trillion, representing a y-o-y increase of 5.0% at constant prices. By industry, the primary sector contributed CNY 3.066 trillion, up 3.5% y-o-y; the secondary sector added CNY 23.653 trillion, up 5.8% y-o-y; and the tertiary sector accounted for CNY 34.9646 trillion, up 4.6% y-on-y. On a quarterly basis, GDP grew by 5.3% y-o-y in the first quarter and by 4.7% in the second quarter. On a quarter-on-quarter basis, GDP grew by 0.7% in the second quarter

In the first half of the year, the added value of industrial enterprises above a designated size grew by 6.0% y-on-y. The added value of the service sector increased by 4.6% y-o-y, while total retail sales of consumer goods amounted to CNY 23.5969 trillion, up 3.7% y-o-y. The total value of imports and exports of goods was CNY 21.1688 trillion, representing a y-o-y increase of 6.1%. The national consumer price index (CPI) rose by 0.1% y-o-y, Remaining stable in the first quarter.

Data Source: https://www.stats.gov.cn/sj/zxfb/202407/t20240715_1955618.html

Price Cuts in Nongfu Spring’s Purified Water Trigger Industry-wide Reaction

On July 14, it was revealed that Nongfu Spring has reduced the price of its purified water products, with prices on its official Douyin flagship store dropping to CNY 0.82 per bottle, and offline supermarket prices as low as CNY 0.66 per bottle

Industry insiders note that Nongfu Spring’s price reduction is significantly impacting other brands in this segment. In response, Wahaha and C’estbon have also lowered their prices: supermarket price tags now show Wahaha’s 596ml purified water in packs of 12 selling for CNY 11.9, C’estbon’s 555ml purified water in packs of 12 also priced at CNY 11.9, and Master Kong’s 380ml Liangbaikai in packs of 15 selling for CNY 9.8, bringing the price per bottle down to as low as CNY 0.65.

China food industry analyst Zhu Danpeng commented that Nongfu Spring’s strategy of launching low-priced purified water products this year may lead to market disruption and damage the brand’s image.

Nongfu Spring’s stock price has dropped from a market value of HKD 535.8 billion to approximately HKD 394.7 billion since May 2024, resulting in a loss of HKD 141.1 billion. Meanwhile, Nongfu Spring has announced a stock buyback plan: its controlling shareholder Yangshengtang plans to acquire additional H-shares of the company within six months, with the total amount not exceeding HKD 2 billion

Glopen delved into the incredible journey of Zhong Shanshan, the wealthiest person in China and founder of Nongfu Spring. Check our video to explore the secrets and strategies that propelled him to the top, breaking barriers and setting new standards in the process: https://www.youtube.com/watch?v=AdET6eICL9g

Baidu’s Apollo Go Deploys 500 Robotaxis in Wuhan, Boosting Stock Prices and Stirring Industry Concerns

In July 2024, Baidu’s Apollo Go made headlines by deploying 500 robotaxis in Wuhan, triggering a surge in intelligent driving-related stocks. This strategic move boosted Baidu Inc.’s share price, helping it recover from recent losses in the stock market. Apollo Go now services an area of more than 3,000 square kilometers in Wuhan, covering a population of 7.7 million, including core business districts, residential areas, industrial parks, and universities

Apollo Go’s success in Wuhan can be attributed to its competitive pricing, elimination of platform fees, and absence of driver costs. Offering lower rates compared to traditional taxis and ride-hailing platforms, the service has become an attractive option for local commuters, with fares as low as CNY 4 for 6 kilometers (after subsidies). While pick-up times may be longer, the significantly reduced prices have appealed to consumers.

However, the rise of robotaxis has raised concerns about potential job losses in the taxi and ride-hailing sectors. There have been widespread concerns over incidents where Apollo Go vehicles caused traffic congestion in Wuhan. This has sparked public concern about the safety and reliability of self-driving technology.

As the industry grows, robotaxis are set to become increasingly prevalent in the Chinese market. Apollo Go is not alone in this space; other major players include Didi Chuxing, Pony.ai, and WeRide. At the World Artificial Intelligence Conference in Shanghai, Pony.ai received a license to operate driverless vehicles in the city’s Pudong district, allowing customers to book robotaxis through their app

The rapid expansion of robotaxi services in China, exemplified by Apollo Go’s roll-out in Wuhan, marks a significant milestone in autonomous transportation. It remains to be seen how this business expansion will unfold and what impact it will have on the local job market.

Inbound Tourism Soars to 94% of 2019 Levels in China

In the first half of 2024, China experienced a remarkable 152.7% year-on-year increase in inbound travel, with 14.64 million trips made by foreigners. This surge demonstrates a strong rebound in international interest in visiting China.

  1. Holiday period performance: The May Day holiday in 2024 saw a significant uptick in foreign tourist entries, with a 35.1% year-on-year increase in entries and exits by both Chinese and foreign nationals, totaling nearly 8.47 million. Inbound tourism bookings during this period soared by 105% year-on-year.
  2. Regional growth: Certain provinces, such as Xinjiang, Shaanxi, and Zhejiang, have witnessed rapid growth in inbound tourism bookings, indicating a diversification of tourist destinations within China.

China’s inbound tourism sector is experiencing a robust recovery, supported by government policies and growing international interest. The country’s efforts to simplify visa processes and enhance the visitor experience are likely to further stimulate this growth in the coming years.

Representative Brand of China’s New Tea, HEYTEA is Entering the French Market along with the 2024 Olympics

HEYTEA, a prominent Chinese new-style tea brand, is making its landmark debut in mainland Europe by launching a pop-up store in Paris during the 2024 Olympics. This strategic move marks a significant step in the brand’s international expansion and introduces Chinese tea culture to the European market. HEYTEA is collaborating with BAO Family, a trendy Chinese restaurant chain, to set up a pop-up location in the heart of Paris’s 11th arrondissement. The pop-up will be open from July 5th to August 15th, 2024, coinciding with the Olympic Games. This timing is strategic, as the Olympics will bring global attention and numerous tourists to Paris.

HEYTEA will introduce its signature beverages, including the original Cheese Tea, Grape Boom, Mango Grapefruit Boom, and Supreme Brown Sugar Bobo Milk. With over 100 million customers globally, HEYTEA aims to leverage its popularity and innovative products to attract French consumers. The brand sees this as an opportunity to introduce Chinese tea culture to the French market, known for its appreciation of fine food and beverages. This pop-up also serves as a test to gauge local customer preferences and address any potential issues before considering further expansion.

HEYTEA’s international growth strategy is poised to enhance revenue and brand visibility. Adapting to local market specifics such as rent, labor, and consumer preferences is crucial. HEYTEA’s strong performance, including a 2,500-cup sale on its New York launch day, signals promising growth potential in global markets. As the eyes of the world turn to Paris for the 2024 Olympics, HEYTEA’s pop-up store represents not only a business venture but also a cultural exchange, introducing the innovative Chinese new-style tea concept to the discerning palates of Parisian consumers.

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