Category: Uncategorized

RAW MATERIALS INDEX RATE – MAY 2019

Here-under, the index rate of raw materials in China throughout the last 6 months.

Available in PDF : Download Newsletter VVR 2019 MAY

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THE ROBOTICS EMPIRE

Subtitle

 

The seventh China Information Technology Expo took place between the 9 and the 11th of April 2019 in Shenzhen. In this event which gathered the World leaders of technologies, the visitors could discover and try the news and innovation like the Youxiaomei robot of the that served cups of tea. Although the exhibitors were from different nationalities, this event was a veritable vitrine for the Chinese progress in this sector.

According to the « made in China 2025 » which objective is to make China become a leader in the high-tech industry, investments are colossal in the Research and Development field. China would like to establish in the Global market of the innovation and strategic sectors. China has the ambition to export their technologies designed and developed nationally in order to put an end to their role of “world factory” that was occupied so far in the international trade. Thus, the high-tech is on the way to become the motor of the Chinese economy. The country counts the strongest growth of the world in the Robotics sector and would largely dominate it in the coming years. Even if the International Robotic Federation (IRF) pointed a delay for China in 2013 based on the number of robots per worker (25 units for 10 000 workers), the progresses were considerable as in 2016 it already counted, 68 robots for 10 000 workers. In 2018, 340 000 were employed in the Chinese factories. The number of companies which activity is linked to the robot construction is rising: in 2017, the country already counted more than 6500. But the Robotics field take off does not only concern Chinese companies, numerous foreign groups interested in the Robotic industry growth and the opportunities that offer the Chinese market set up their manufacturing workshops in China.

In the services sector, the Robotics field records in China the most important growth thanks to the Artificial Intelligence progresses and would represent a market of more than USD 2.9 billion by 2020. The strong enthusiasm of the companies for those technologies fulfils their will of performance and rentability also contributes to the sector dynamism.

Even though the robots are expensive to buy, they quickly permit to make significative cost reduction and improve efficiency. There are a lot of examples of uses in the services sector. The RobotHe restaurants of the Alibaba group only employ robots for the service permitting to increase the speed and save a considerable amount of money from employees. The robots are also used in the post services. Since 2016 they do the parcel sorting for one of the dominating mails operators of the country. In the distribution field, the e-commerce company JD.com significatively uses the robotization. It has warehouses all robotized. To deliver the orders, the company also uses robots, drones or autonomous vehicles. Thanks to those innovations, the group has improved its sales performances and delivering times. The robotization extends to the Health field. In some hospitals in Bejing or Shanghai, robots work at the reception desk: they have the capacity of answering thousands of questions and guide the patient to the required service. Operational since 2018, the robot developed by the Chinese group iFlytek is able to identify the diseases and realize the diagnosis. The education field gives way to the Robotics. In 2018, almost 600 nursery schools in China were using the teaching assistant Keeko developed to interact with pupils.

Finally, in the industry field, China is also leader in the Robotics market.  In 2016, the country represented 30% of it. The IRF plans that in 2020, China will use 950 300 robots in their factories and will produce 150000. The country is already a leader in the purchase and the use of robots and is about to lead the design and production.

From the daily life to the industry, the use of robots is massive. There would be approximately 3 million robots in the world in 2020 only in the industrial sector. The Chinese contribution to the development of robotics is huge. This increasing importance shows the change of the country position in the international market: once “workshop of the world”, it is today one of the leaders. The Chinese progress in the field of high technologies is living up to the desire of industrial development and the will of expend its influence in the key areas of the global economy.

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LISTE 2019 DES SALONS A VENIR EN CHINE

Ci-dessous, une liste des salons qui auront lieu en Chine début 2019. Ne manquez pas ces rendez-vous dans votre secteur d’activité !

Juin

3-5 juin –BUILDEX CHINA 2019– Shanghai

3-6 juin –AQUATECH CHINA 2019– Shanghai

3-6 juin –SNEC 13th (2019) International Photovoltaic Power – Shanghai

4-6 juin –TOPWINE CHINA 2019– Beijing

9-11 juin –EC EXPO 2019– Beijing

9-12 juin –GUANGZHOU ELECTRICAL BUILDING TECHNOLOGY 2019– Guangzhou

11-13 juin –AIE (AIRCRAFT INTERIORS EXHIBITION) CHINA 2019– Shanghai

11-13 juin –The 7th Shanghai International Aviation Services Trade Fair 2019– Shanghai

11-13 juin –FMA CHINA 2019– Shanghai

11-13 juin –INTERNATIONAL CES – ASIA 2019– Shanghai

11-13juin –WIRE & CABLE GUANGZHOU 2019– Guangzhou

11-14 juin –ASIAN ATTRACTIONS EXPO 2019– Shanghai

11-15 juin –DIE & MOULD CHINA 2019– Shanghai

12-13 juin –OPTINET CHINA CONFERENCE 2019– Beijing

12-14 juin –15th Asia International Industrial Automation Exhibition,2019– Beijing

12-14 juin –CIEPEC 2019– Beijing

13-15 juin –CHINA (GUANGZHOU) INTERNATIONAL DIE-CASTING, FOUNDRY & INDUSTRIAL FURNACE EXHIBITION 2019– Guangzhou

13-16 juin –ITE & MICE 2019– Hong Kong

15-17 juin –THE KIDS EXPO 2019– Guangzhou

18-20 juin –CPhI & P-MEC China 2019– Shanghai

18-21 juin –CERAMICS CHINA 2019– Guangzhou

19-21 juin –China International Starch and Starch Derivatives Exhibition– Shanghai

19-21 juin –THE 25TH INTERNATIONAL PROCESSING & PACKAGING EXHIBITION– Shanghai

20-23 juin –CHINA INTERNATIONAL BOAT SHOW 2019– Shanghai

20-23 juin –EXPO LEISURE 2019– Shanghai

20-23 juin –HONG KONG JEWELLERY & GEM FAIR 2019– Hong Kong

25-28 juin –BEIJING ESSEN WELDING & CUTTING 2019– Shanghai

26-28 juin –The 19th China (Guangzhou) International Food Exhibitions and Import Food Exhibitions– Guangzhou

26-28 juin –INDUSTRIAL AUTOMATION SHENZHEN 2019– Shenzhen

26-28 juin –INTERNATIONAL HIGH-END DRINKING WATER EXPO – IHWE 2019– Guangzhou

26-28 juin –MWC (MOBILE WORLD CONGRESS) SHANGHAI 2019– Shanghai

26-29 juin – CIAAF – CHINA INTERNATIONAL AUTO AFTERMARKET FAIR 2019– Zhenzhou

27-30 juin –ASIA OUTDOOR TRADE SHOW 2019– Nanjing

Juillet

1-3 juillet –CIAACE 2019– Guangzhou

4-6 juillet –INTERTEXTILE PAVILION SHENZHEN 2019– Shenzhen

5-7 juillet –HONG KONG BAKERY CARNIVAL 2019– Hong Kong

5-7 juillet –ISPO SHANGHAI 2019– Shanghai

5-8 juillet –TAICHUNG WINE & SPIRITS FESTIVAL 2019– Taiwan

5-8 juillet –TCFB 2019– Taiwan

8-11 juillet –HONG KONG FASHION WEEK 2019– Hong Kong

10-12 juillet –ALUMINIUM CHINA 2019– Shanghai

10-13 juillet –PHOTO & IMAGING SHANGHAI 2019– Shanghai

11-13 juillet –CEF – CHINA ELECTRONIC FAIR – CHENGDU 2019– Chengdu

17-19 juillet –CHINA DIECASTING 2019– Shanghai

17-19 juillet –ESBUILD 2019– Shanghai

17-23 juillet –HONG KONG BOOK FAIR 2019– Hong Kong

18-21 juillet –QINGDAO PLASTICS & RUBBER EXPO 2019– Qingdao

18-22 juillet –JINNUO MACHINE TOOL EXHIBITION – QINGDAO 2019– Qingdao

18-22 juillet –QINGDAO INDUSTRIAL AUTOMATION & INSTRUMENTS EXPO 2019– Qingdao

24-26 juillet –CBME CHINA 2019– Shanghai

24-26 juillet –COOL KIDS FASHION 2019– Shanghai

25-27 juillet –LUXEHOME SHANGHAI 2019– Shanghai

30 juillet-1 août –CHINA SMART CARD AND RFID TECHNOLOGIES 2019– Shenzhen

Août

15-16 août –INTERNATIONAL CONFERENCE & EXHIBITION OF THE MODERNIZATION OF CHINESE MEDICINE & HEALTH PRODUCTS 2019– Hong Kong

15-17 août –HONG KONG INTERNATIONAL TEA FAIR 2019– Hong Kong

16-18 août –GUANGZHOU INTERNATIONAL DRINKING WATER & PURIFICATION FAIR – DWP 2019– Guangzhou

16-18 août –GUANGZHOU INTERNATIONAL SOLAR PHOTOVOLTAIC EXHIBITION 2019– Guangzhou

19-21 août –The 17th China International TIRE EXPO 2019– Shanghai

21-23 août –CNIBF SHANGHAI 2019– Shanghai

21-25 août –PET FAIR ASIA 2019– Shanghai

22-24 août –CHINA GLASSTEC EXPO – CGE 2019– Guangzhou

23-25 août –CHINA LEATHER 2019– Wenzhou

23-25 août –FISHEX GUANGZHOU 2019– Guangzhou

28-29 août –IBTM CHINA 2019– Beijing

28-29 août –VALVE WORLD EXPO&CONFERENCE ASIA 2019– Shanghai

28-30 août –AIFE (ASIA INTERNATIONAL IMPORT FOOD EXPOSITION) – SHANGHAI 2019– Shanghai

28-30 août –CFIE 2019– Shanghai

28-30 août –CHINA INTERNATIONAL GREEN FOOD & ORGANIC FOOD EXHIBITION – SHANGHAI 2019– Shanghai

28-30 août –NATURAL AND ORGANIC PRODUCTS ASIA 2019– Hong Kong

28-30 août –NEPCON SOUTH CHINA (SHENZHEN) 2019– Shenzhen

28-30 août –SBW EXPO – SHANGHAI 2019– Shanghai

28-30 août –10th Shanghai International Catering and Ingredients Exhibition– Shanghai

28-30 août –WORLD SEAFOOD SHANGHAI + SIFSE 2019– Shanghai

Septembre

30 août-1 septembre –HCI EXPO 2019– Guangzhou

30 août-1 septembre –第十九届国际果蔬•食品博览会– Guangzhou

3-5 septembre –ALL CHINA LEATHER EXHIBITION – ACLE ‘2019– Shanghai

3-5 septembre –SIBT – SHANGHAI INTERNATIONAL BUILDING TECHNOLOGY – NEW 2019– Shanghai

3-5 septembre –SPINEXPO SHANGHAI 2019– Shanghai

3-5 septembre –SEAFOOD EXPO ASIA 2019– Hong Kong

3-7 septembre –HONG KONG WATCH & CLOCK ‘2019– Hong Kong

12-15 septembre –CHINA HELICOPTER EXPOSITION 2019– Tianjin

4-6 septembre –ASIA FRUIT LOGISTICA 2019– Hong Kong

4-6 septembre –CAFE SHOW CHINA 2019– Beijing

4-7 septembre –CENTRESTAGE 2019– Hong Kong

4-7 septembre –CIOE 2019– Shenzhen

9-12 septembre –FMC CHINA 2019– Shanghai

9-12 septembre –FMC PREMIUM 2019– Shanghai

9-12 septembre –FURNITURE CHINA 2019– Shanghai

11-13 septembre –INTERIOR LIFESTYLE CHINA 2019– Shanghai

17-21 septembre –CIIF – SHANGHAI INTERNATIONAL INDUSTRY FAIR 2019– Shanghai

17-21 septembre –FACTORY AUTOMATION ASIA 2019– Shanghai

17-21 septembre –IAS – INDUSTRIAL AUTOMATION SHOW 2019– Shanghai

17-21 septembre –METALWORKING AND CNC MACHINE TOOL SHOW 2019– Shanghai

18-20 septembre –CHINA ADHESIVE 2019– Shanghai

18-20 septembre –CHINA PAPER CHEM+TECH 2019– Shanghai

18-20 septembre –ICIF CHINA 2019– Shanghai

18-20 septembre –LED CHINA 2019– Shanghai

18-20 septembre –RUBBERTEC CHINA 2019– Shanghai

18-20 septembre –SIGN CHINA 2019– Shanghai

18-20 septembre –UWT CHINA 2019– Shanghai

18-20 septembre –WATERCHEM + TECH 2019–  Shanghai

18-20 septembre –AIRPORT & AIR TRAFFIC EXPO CHINA 2019– Beijing

18-20 septembre –AVIATION EXPO CHINA 2019– Beijing

18-20 septembre –WATEREX BEIJING 2019– Beijing

18-20 septembre –SEMICON TAIWAN ‘2019– Taiwan

19-21 septembre –CHINA HORSE FAIR 2019-Beijing

19-21 septembre –VIV CHINA ‘2019– Qingdao

23-25 septembre –CHINA INTERNATIONAL BLOCK AND BRICK TECHNOLOGY & EQUIPMENT EXHIBITION – BBE 2019– Guangzhou

24-26 septembre –AUTOMOTIVE TESTING EXPO CHINA 2019– Shanghai

25-27 septembre –LASER TAIWAN 2019– Taiwan

26-28 septembre –TAIWAN AGRICULTURE WEEK 2019– Taiwan

26-28 septembre –TAIWAN FISHERY AND SEAFOOD SHOW 2019– Taiwan

27-30 septembre –OUTDOOR SHOW 2019– Taiwan

Octobre

10-12 octobre –CHINA INTERNATIONAL INTERNET & E-COMMERCE EXPO (CIE) 2019– Shenzhen

10-12 octobre –CIHS – CHINA INTERNATIONAL HARDWARE SHOW 2019Shanghai

10-13octobre –MUSIC CHINA 2019– Shanghai

16-18 octobre –AGROCHEMEX 2019– Shanghai

16-18 octobre –CHINA KIDS EXPO 2019– Shanghai

16-18 octobre –IPB 2019-Shanghai

16-18 octobre –TAITRONICS – TAIPEI INTERNATIONAL ELECTRONICS SHOW ‘2019– Taiwan

17-19 octobre –THS – TAIPEI HARDWARE SHOW 2019– Taiwan

20-23 octobre –HONG KONG MEGA SHOW PART 1 2019-Hong Kong

23-25 octobre –TPCA SHOW 2019-Taiwan

26-28 octobre –CIAME 2019-Qingdao

27-29 octobre –HONG KONG MEGA SHOW PART 2 2019– Hong Kong

30 octobre-1 novembre –ILTM CHINA 2019-Shanghai

Novembre 

1-4  novembre –CCVS – CHINA COMMERCIAL VEHICLES SHOW 2019– Wuhan

15-18 novembre –KAOHSIUNG WINE & SPIRITS FESTIVAL 2019– Taiwan

15-18 novembre –TAIPEI INTERNATIONAL TEA & COFFEE EXPO 2019– Taiwan

15-18 novembre –TAIWAN INTERNATIONAL BEST FOOD PRODUCTS & EQUIPMENT FAIR 2019– Taiwan

15-18 novembre –TAIWAN INTERNATIONAL COFFEE SHOW 2019– Taiwan

15-18 novembre –TAIWAN INTERNATIONAL FOOD INDUSTRY SHOW 2019– Taiwan

15-18 novembre –WINTER CHAIN STORE SHOW 2019– Taiwan

5-7 novembre –ELECTRICAL SHANGHAI 2019– Shanghai

5-9 novembre –EP CHINA 2019– Shanghai

12-14 novembre –METRO CHINA EXPO 2019– Shanghai

13-15 novembre –CIAAR 2019– Shanghai

25-27 novembre –BOILER SHANGHAI 2019– Shanghai

25-27 novembre –HEATEC 2019– Shanghai

25-28 novembre –SWOP 2019– Shanghai

7-9 novembre –VINITALY INTERNATIONAL HONG KONG 2019– Hong Kong

13-15 novembre –COSMOPROF ASIA 2019–          Hong Kong

20-22 novembre –ASIA BLECH 2019–       Chengdu

28-30 novembre –CITE – CHENGDU INTERNATIONAL TOURISM EXPO 2019– Chengdu

Décembre

3-6 décembre –AUTOMECHANIKA SHANGHAI 2019– Shanghai

3-6 décembre –MARINTEC CHINA 2019– Shanghai

11-13 décembre –EDME EXPO 2019– Shanghai

12-13 décembre –TIM EXPO SHANGHAI 2019– Shanghai

9-12 décembre –CINEASIA 2019– Hong Kong

RAW MATERIALS INDEX RATE – MAY 2019

THE ROBOTICS EMPIRE

The VVR International activity in short

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The VVR International activity in short

Overview of the year 2018 and perspectives for the year 2019

According to Camille Verchery, CEO of VVR International, “2018 was a very interesting year that saw a lot of projects achieved. On the industrial front, the essential of the VVR International activity focused on the negotiation of strategic partnerships and on the support of the negotiations for the creation, the organization and the wage portage of team which will follow the projects and ensure their development. Concerning the B to C, the key mission of VVR International was helping our clients to understand the complexity of the Chinese market from connecting the distribution channels to the building of the team”.

First, about the industrial B to B, the comeback of the Franco-Chinese partnership combining French equipment and needing of a local industrialization of all or part of the production was observed in 2018. This type of partnership shows difficulties for the small and medium-sized businesses. “The set up and the fast rentability are difficult challenges for the companies. Then it is about organizing the distribution to ensure a successful commercial development”. To enter the Chinese market, the realization of a partnership with distributors mastering the product type and sales network is essential. In many sectors such as the pharmaceutical one, the aeronautics, railway or nuclear where most of the actors are Chinese, the partnership is compulsory. Nevertheless, these actors have a limited capacity of production. The association of the industrial competence of the French companies with the knowledge and the skills in the Chinese market for these actors is a relevant strategy of development that benefits to both parts. Frequently used, those partnerships, often capitalistic, enable a local industrialization of the French companies and contribute to the industrial competence-building of the Chinese actors. “The mission of VVR is here to ensure the building of the business model of partnership, the progress of the negotiation.” It is a matter, on one hand, of preventing the risks of technological pillage that the French compagnies would face. On the other part we have to guarantee to the Chinese partner a sustainable benefit. “After the structuration of the partnership, VVR International plays a central role in the recruitment of the team adapted to the ambitions of the project. It is about recruiting a technical but also Franco-Chinese sales competence that will have to quickly be operational to support the different phases of the project”.

About the B to C, the distribution of agri-food, cosmetics, food supplements, household, interior decoration products in China is one of the main activities of VVR International in 2018. The Chinese distribution network is more complex than in Europe. In fact, its organization isn’t limited by the simple division between the Offline and the Online but is composed of other ramifications. The Online sale is for instance divided into market places with other actors like WeChat. This new landscape highlights alternative models of distribution. “VVR International helps the companies to understand the distribution channels, define a strategy and set up a brand which does not go through internet automatically”. If internet can be seen as the channel to privilege for selling a product quickly and at lower cost, it is not always the most adapted channel in this complex network. Its use can present advantages, but the risk of an ephemeral success leading to a durable loss of credibility can be considerable. “The Online channel should be considered as a complex tool to deal with but not as a solution. Without a structured and marketed Offline, the Online can’t be develop in a sustainable way. Once the development strategy is defined, the different distribution channels determined and organized, VVR International helps companies to choose the suitable actors.” Considering the Chinese distribution network spreading, a global knowledge of its work is impossible, and specialized actors for each chosen distribution channel are needed. The team responsible for supervision is then chosen.

“Moreover, thanks to the development of the Talent Acquisition Services department, we help our clients in the recruitment and the skill improvement of their teams. That is why VVR International has invested in a Labor dispatch license and a portage license. Those tools permit to legally recruit the new employee without the burden of hiring him/her in our client’s Chinese legal entity.”

The VVR International activity in the past year traduces the underlying trend of the Chinese market and highlight its new issues. According to the observed evolutions, the VVR International activity in 2018 was focused on the understanding of the Chinese market mechanisms, the strategic diagnosis and support of the implantation of the small and medium-sized French businesses in China. The partnership made with the Région Nouvelle for the set up of companies in China is part of this. VVR International, and our numerous partners & professionals work together to propose solution and support. By combining the will of French companies development with the reality of the Chinese market, they ensure the achievement of their projects. The activity for the year 2019 will be similar with last year’s. It will be based mostly on the negotiation and the support of the implantation project to produce and sell locally and on the development of distribution projects in China of food industry, luxury, cosmetics, medical products fully made in France. The potential comeback of more capitalistic acquisition partnership, less frequent in 2018, would be observed.

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SPOTLIGHT ON THE “TAOBAO VILLAGES”

Taobao : It is Alibaba’s e-commerce platform, launched back in 2003. This C2C platform gathers today over 500 millions of active users. Besides, they also developed a B2C platform in 2008 called T-Mall. These two platforms saw the transaction of some 3 trillion yuans over the year 2017.

It is very likely that a large part of the Halloween costumes worn this year in the coastal cities all come from the same place: a small village in a rural province of China, which specialized in the confection of costumes that they then sell online. This is what we call a “Taobao village”, another aspect of the retail revolution taking place in China. In this month’s article, we provide you with a reading of this phenomenon, which we hope can also be a source of inspiration for your approach of the Chinese e-commerce. What are exactly these “Taobao villages”? How rural entrepreneurs with few resources at hand managed to appropriate these tools and how do they use it? Knowing about “Taobao villages” and these micro-enterprises can be of interest, especially for European retail companies who also need to appropriate themselves the Chinese e-commerce.

A rural community geared towards e-commerce

The official definition of a “Taobao village” is a rural community in which at least 10% of the families use Taobao for retail, or where 100 online shops were open; and where the trading volume reach at least 10 millions of yuans. This definition is given by Aliresearch, the research department from Alibaba, whose mission is to collect and make use of the enormous amount of data Alibaba have at hands. The “Taobao villages” developed themselves firstly with Alibaba (hence their names, from Alibaba’s famous e-commerce platform). The Chinese authorities were then prompt to support these initiatives as they contribute to reach primordial goals set in the 13th Five-Year Plan: eliminating poverty, developing the Western provinces and slowing down the rural exodus. As a matter of fact, 45% of the Chinese population still lives in villages (often much bigger than our European villages). The dose of personal entrepreneurship at the roots of “Taobao villages” is seen very positively by the authorities: seen as one of the key of the development success of coastal cities in China, entrepreneurship now moves to the countryside. Today, JD.com are promoting their own platform to rural communities.

Increasing by 25% in 2015, the number of “Taobao villages” reached 2 118 in 2017, with a total of 120billion of yuans in sales (Aliresearch). Overall, 1.3% of the Chinese population is involved in some e-commerce activity in 2017 (approximately 10 millions). Alibaba’s support is concretized in a 2017-2019 investment plan amounting to 1.6 billions of dollars. Their objective is to open 100 000 Taobao centers in rural places. The Chinese government also makes substantial investments (for the reasons mentioned above). It claims 300 millions of dollars allocated to 200 rural counties to build warehouses, train skilled manpower… The government overtly encourages young Chinese to come back to their native villages to open businesses. It seems so far to be working as 52% of these online entrepreneurs are less than 30.

An experimenting field for micro-enterprises

These statistics seem to point at the success of a rather new business model, with a unique management style: these micro-enterprises are often run by people will low qualification level, who seize the opportunity of low entry barriers to experiment, test their products with the market and adapt them, thanks to the statistics provided by Taobao and the customers feedbacks available. Most of these micro-enterprises produce in the villages and then sell in the cities, but some are the other way around. For those who sell in the cities, e-commerce brought them a significant improvement as it abolishes distances and they could get access to markets where consumers have more purchasing power. Regarding what is sold, there are different strategies. Some villages get specialized in the local food products (Ningxia’s Goji berries, Suichang’s bamboos shoots, tea and sweet potatoes…) while some others get specialized in a product that is not related at all to their localization (outdoor equipment, costumes…) An interesting pattern then stands out: most of the time, the online shops of a village all get involved in the same activity, bringing the specialization to the level of the village (and constructing thereby a sense of identity within the products). The very denomination “Taobao villages” implies an organization to the level of the village. Lastly, it seems that local food products are more successful as consumers await local products that are cheaper and potentially healthier (organic agriculture).

Regional specialization?

Not only do “Taobao villages” bring new products to the coastal cities’ consumers, but it also impacts on the very structure of these villages, creating new associations. In order to guarantee a certain quality for instance, some villages put in place “Taobao associations”, in a way similar to the industry chambers. Moreover, “Taobao villages” require a development of the tertiary sector (sales, delivery, storage), which in some cases amounts to 50% of the local gross product. At last, other activities develop, such as the eco-tourism. This last aspect is all the more interesting as it is also readily observable in Europe. Not mentioning the thematic travels around Europe (such as “Grands Crus tours” in Fance), every year more numerous, one can think of this small Bulgarian village, Momchilovtsi, which local yogurt became extremely popular in China recently, albeit because of a company and not because of e-commerce. As a result, this village now sees buses of Chinese tourists coming to visit. This example is telling as it shows the strength of local identity in nowadays branding in China.

How to fight competition on these platforms

“Taobao villages” actually do not alwqys run so smoothly, and they do encounter some difficulties. First of all, access to digital technologies is still limited in rural China with 1% of the families having a broadband connection in most of the villages (the official goal announced in “Internet+” is a 98% coverage by 2020). Another limit which is more closely linked to the e-commerce characteristics: branding remains limited and many businesses suffer fakes issues. Thus, in Qingyangliu, a “Taobao village”, only 20% to 30% of the businesses are making profit. The identified cause is the fact that the market is saturated and dominated by large companies.

Seeing either as an opportunity, or as a concept with a debatable long-term profit, “Taobao villages” nonetheless are a characteristic trait of the revolution of retail in China. They picture the dynamic entrepreneurial mindset of Chinese businessmen. They also confirm the analysis that e-commerce in China do open many opportunities because of the low entry barriers and larger access, but that many challenges remain when it comes to build a brand image on this already saturated market.

By Manon Bellon

Image credits: Greg Jenkins

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RAW MATERIALS INDEX RATE – DECEMBER 2018

Here-under, the index rate of raw materials in China throughout the last 6 months. Available in PDF : Download Newsletter VVR 2018 NOVEMBER Ask us your questions VVRParis, France 6 passage Tenaille, 75014 Paris +33 1 42 93 45 81 contact@vvrinternational.com VVRShanghai, Chine 14# Shanghai Garden Phase Ⅰ, 7888 Humin Road, Minhang District +86 21 3422...

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