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Weekly #2: canned peaches 🍑 Abbott Labs 🍼NIO 🚗 Alipay 🤑 Lanvin Group 👗 | Following the yuan
Getting Covid has continuously been normalized in China, and people are ready to fight this collective battle with Vitamin C, functional drinks and smuggled Ibuprofen.
How have times changed? For the past month, I’m in the U.S. for a visit and watching China from afar through WeChat feeds.
Before I left, the atmosphere was suffocating, I was at the world’s largest import & export fair in mid-Nov and I was overwhelmed by 5 types of different police and intense Covid restrictions.
Almost overnight — thanks to the brave protesters — it changed. Getting Covid has continuously been normalized, and people are ready to fight this collective battle with Vitamin C, functional drinks and smuggled Ibuprofen (I was asked to bring back meds by someone I’ve never met).
1. Sold out canned yellow peaches & functional drinks 🍑
What happened: Canned yellow peaches and functional drinks are sold out in Chinese supermarkets and e-commerce sites including Taobao and JD.com amid nationwide Covid cases surge.
Why? There is no scientific data backing up the belief that it can prevent people from getting Covid or helping with recovery. China’s middle class (e.g. my mom) distinctively does not like canned foods, believing all nutrients are lost during production and they’re also high in additives.
Who’s winning? Pictured Pingyi county, which produces 1/3 of China’s canned yellow peaches.
For functional drinks: the good ol Gatorade, Japan’s Pocari Sweat, and domestic brand Genki Forest 元气森林’s Alien Electrolyte Water are among the top sellers.
2. Abbott Labs’ baby formula to exit China 🍼
What happened: US healthcare giant Abbott Laboratories will stop selling baby formula in mainland China before the end of 2023 amid stiff competition, the company recently said.
Not the only reason: You don’t just break up with someone because of ‘stiff competition’ while everything else is going well, do you?
China is dragging down Abbott’s sales in the Nutritional Products category and offsetting high growth in other regions.
As Abbott’s baby formula was recalled in the U.S. this February due to contamination, China’s General Administration of Customs issued a warning for consumers to “stop purchasing [any Abbott infant products] from any channels” and “stop consuming immediately”. In 2021, Abbott was also fined 9.1 million yuan in Shanghai over small amounts of vanillin, an additive, in its baby formula.
3. NIO hit a new milestone by producing 300,000 car 🚗
What’s to celebrate: On Dec. 12, Chinese electric vehicle darling NIO (NYSE: NIO; HKEX: 9866; SGX: NIO) celebrated a new milestone of its 300,000th car being rolled off the production line since 2018. The Shanghai-based company announced to enter Germany, Netherlands, Denmark and Sweden this October.
Zoom out: NIO reported an operating loss of 3.87 billion yuan (US$544.1 million) in the third quarter that ended Sep. 30, 2022, which almost tripled compared with the same time in 2021, as gross profit dropped 13% to US$243.9 million.
NIO’s production is still far behind Tesla, whose Shanghai Gigafactory has delivered more than 650,000 vehicles this year.
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4. Alipay connected with digital yuan 🤑
What happened: Alipay has joined the digital yuan processing network, making it the first payment platform to support China’s national digital currency.
Alipay users will be able to use the digital currency on Alibaba-affiliated platforms, including e-commerce site Taobao, food delivery service Ele.me, and grocery chain Freshippo.
What does it mean: It means a great deal to the mass adoption of digital yuan, which is supposed to be the underlying currency in China’s metaverse (according to my personal, prejudiced views).
Ant Group-owned Alipay, first created by Alibaba 2004, amassed nearly 1 billion users in China as early as 2019. It has remained one of the most widely used mobile payment apps today along with Tencent’s WeChat Pay.
4. Fosun’s Lanvin Group goes public via SPAC 👗
A tumultuous day: Lanvin Group, Chinese conglomerate Fosun International’s fashion arm, made its debut on the New York Stock Exchange last Thursday via a SPAC merger. Its stock price shot up from US$10 to US$22.81, before plunging to $7.63 before market close, as the S&P 500 fell more than 2% on that day.
Tough road ahead: Previously named Fosun Fashion Group, Lanvin Group constitutes European and American brands including Lanvin, Sergio Rossi, Wolford, St. John Knits, and Caruso, which the group started acquiring in 2018. The group has been facing industry-wide skepticism of whether its finance-minded executives can turn around the brands that some say already past their prime.
Lanvin Group (NYSE: LANV) shares closed at US$7.34 on Tuesday.
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