China still faces many potential obstacles in its attempts to foster a deep and lasting culture of innovation and creativity.
However an avalanche of Chinese brands are already catering to an increasingly large and sophisticated internal market, and competing with and even beating established incumbents from all over the world at their own game.
Just think what the future will hold when China is truly unleashed!
Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
trendwatching.com's MADE BETTER IN CHINA
1. trendwatching.com/trends/madebetterinchina/
June 2012
trendwatching.com’s free Monthly Trend Briefing
MADE BETTER IN CHINA
Brands and innovations from China are going global. You ain’t seen nothing yet!
2. Definition
China still faces many potential obstacles in its attempts to foster a
deep and lasting culture of innovation and creativity (State economics!
Politics! Demographics! The environment! Intellectual property!).
However an avalanche of Chinese brands are already catering to an
increasingly large and sophisticated internal market, and competing
with and even beating established incumbents from all over the
world at their own game. Just think what the future will hold when
China is truly unleashed.
No wonder then that examples of top quality, innovative Chinese* products Watch out for the following sub-trends:
and services brands are easier to find than ever. And if Chinese creativity ever
DESIGNED BETTER IN CHINA /
gets truly unleashed, well, then we ain’t seen nothing yet! Hyper competition
may need a new definition, as MADE IN CHINA is traded in for MADE BETTER
MADE BETTER BY CHINA FOR ALL /
IN CHINA. MADE GREENER IN CHINA /
MADE ONLINE IN CHINA /
* In this Trend Briefing, Chinese means mainland Chinese. We’ve filtered out
MADE STRANGER IN CHINA /
many excellent examples from Hong Kong and Taiwan, as well as American
Chinese entrepreneurs, powerful Western brands intensely partnering with Chi-
MADE TOGETHER IN CHINA /
nese ventures, and so on. MADE bigger IN CHINA /
MADE EASIER IN CHINA /
MADE FASTER IN CHINA /
MADE MORE LUXURIOUS IN CHINA /
MADE BETTER IN CHINA FOR A WHILE NOW /
w w w. t r e n d w a t c h i n g . c o m made better in china 2
3. drivers
Here are just three forces driving the MADE BETTER IN CHINA phenomenon:
The lure of rapid riches is drawing Chinese to urban areas in droves. Just two recent stats to illustrate
1.urban boom the mind-blowing scale of China’s urban consumption boom:
Urban household disposable income is expected to double between 2010 and 2020 (Source:
McKinsey, March 2012).
In 2010, China had 18 million households with an annual income above USD 16,000. By
2020, this number will be 167 million households. That’s nearly 400 million people (Source:
McKinsey, March 2012).
The outcome? A massive, sophisticated urban Chinese class of CITYSUMERS, with a massive
demand for high quality goods and services.
The demand for high quality goods and services has been met (more often than not) by Western
2. best of the brands trading on the status that comes with their heritage. Indeed, Western brands have
scrambled to not only sell to Chinese consumers, but to pay homage to them. With special
west in the east ranges or products that are MADE FOR CHINA, or by rolling out the RED CARPET to Chinese
consumers around the world.
Both of which have set the expectations of Chinese consumers, and given Chinese brands and
entrepreneurs the inspiration and confidence to step forward, while still remaining mindful
of the need to match – or exceed – the standards of quality set by the very best of their Western
counterparts.
3. global brain The impact of the Great Firewall of China is well-documented, but China is connected. With over
513 million Internet users (compared to 245 million Americans online)*, Chinese entrepreneurs and
consumers are part of the GLOBAL BRAIN: frantically feeding off (and adding to) global
consumer culture and creativity. * Source: www.worldinternetstats.com, December 2011
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4. DESIGNED You know you’ve truly arrived as an economy
when local art, architecture and design move
BETTER IN
from functional to desirable:
CHINA
Brand New China Store: Wang Shu: Wins 2012
A design store for and by Pritzker Architecture
modern China Prize
The Brand New China Store, situated in Beijing, Chinese architect Wang Shu was awarded
is a fashion and lifestyle store that focuses the 2012 Pritzker Architecture Prize in May 2012
exclusively on Chinese designers. Selling clothes, in Beijing, the first Chinese architect to win the
accessories, furniture, home décor items and prize for work on the Chinese mainland.
paintings at a wide variety of prices. It’s owned
by Hong Huang, a major celebrity (media figure,
blogger, television host and publisher) in China.
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5. DESIGNED
BETTER IN
CHINA MAD Architects
Due to be completed in 2013, the Sinosteel Hexagonal windows of various sizes create a
International Plaza in Tianjin, China, was designed pattern across the surface of the Plaza, and
by Chinese architect Ma Yansong, of MAD also improve energy efficiency. Their strategic
Architects. The Plaza’s steel façade ensures positioning will help to preserve heat during the
that no internal columns are needed within the winter, and keep residents cool during the summer.
structure, meaning more space can be used within
the building. Above: a global selection of designs from Beijing-
based MAD Architects. These designs are all
under construction or completed.
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6. MADE BETTER Despite China’s growing economic power,
there are still hundreds of millions of Chinese
other emerging market consumers, making the
rewards for Chinese brands which bring high
BY CHINA FOR
with relatively modest incomes. And alongside quality, yet low cost products to market almost
this huge domestic market, there are billions of endless.
ALL
China Unicom: JAC Motors: First
Low cost smartphones overseas factory in Brazil
In December 2011, China Unicom announced that At the end of 2011, China’s state owned JAC
they would distribute Xiaomi’s MI-ONE, featuring Motors announced an investment of USD 500
a 1.5GHz processor, a four inch display, and an 8 million in Brazil, the world’s fourth largest car
megapixel camera. Designed to capitalize on the market. The company’s first overseas factory is
growing domestic demand for reasonably priced expected to produce 100,000 cars per year.
smartphones, the MI-ONE costs CNY 1,999, less
than half what comparable smartphones from
Apple or Samsung usually cost.
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7. MADE BETTER
BY CHINA FOR
ALL Meters/bonwe:
Chinese fashion with an
Warrior Shoes: The
everyman’s shoe
international feel everywhere
Operating around 1,800 stores across mainland The sneaker brand Warrior (‘Hui Li’ in Mandarin),
China and catering to the country’s increasingly originally created for Chinese athletes, has
fashion-conscious youth, retailer Meters/ been a household name in the country since
bonwe has proved very popular. The brand the 1950s. The brand keeps its designs simple
offers reasonable prices and an international feel; and unpretentious, maintaining its status as ‘the
indeed it’s often assumed not to be Chinese by everyman’s shoe’. While the footwear retails for
consumers. EUR 50-120 overseas (and features in publications
such as GQ and Vogue), it is still affordable in the
domestic market.
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8. MADE GREENER
With the Chinese government pushing the green environmental degradation, expect to see
agenda hard (for both reasons of economics a steady stream of Chinese planet-saving
and national pride), and both urban and rural innovations and initiatives:
IN CHINA populations mindful of increasingly visible
BYD: Electric taxis take to ENFI: World’s largest solar
the streets of Shenzhen tracking station
The city of Shenzhen boasts a fleet of electric taxis. At the end of 2011, China ENFI Engineering
The fleet was supplied by Chinese automobile Corp completed work on the world’s largest
manufacturer BYD, and the pilot project has seen solar tracking station in Ningxia. The plant’s
50 electric taxis take to the streets. There are plans solar tracking systems deliver a 25% increase in
to add a further 250 vehicles to the fleet during capacity over traditional solar power stations.
2012, as well as 200 electric buses.
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9. MADE GREENER
IN CHINA
Tianjin: Eco-city
experiments with practical Suntech Power leads
solutions for greener living global solar panel market
The Tianjin Eco City, a joint initiative from the Chinese Suntech Power is the world’s largest
Chinese and Singaporean governments, has producer of solar panels, now totalling over 20
invited brands from around the world to help solve million panels in over 80 countries. In early 2012,
pressing environmental issues. In the next 10 the company was named one of the world’s 50
years, 350,000 people are expected to move to the most innovative companies by MIT, partly due to its
city, trialing new systems and technologies. The Pluto cell processing technology, which has since
government hopes that many of these will have the achieved a world record 20.3% efficiency.
potential to solve the environmental issues facing
China’s huge cities.
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10. MADE ONLINE
Driven by a massive online population and world. Instead they are often showing their
the censorship of key Western online brands, better-known counterparts the way forward by
Chinese services are not simply imitating integrating, if not adding to and enhancing,
IN CHINA the Googles, Facebooks and Twitters of the popular online services.
O.cn: Maps China’s cities WeiLingDi: Check-in and
in illustrated 3D review local businesses
O.cn is a stylized online mapping service that In 2011, Sina, the Chinese web portal, launched
covers 38 of China’s largest cities. The 3D maps a check-in service called WeiLingDi via their
interface with social networks, and users can click resident Twitter-like website Weibo. Users are able
on individual buildings and areas to access user- to check-in at locations using WeiLingDi, earn
created and curated content. badges, write reviews about local businesses, and
connect with 60,000 verified Chinese celebrities.
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11. MADE ONLINE
IN CHINA
Renren: Networking site Yikuair: Daily deals site
launches social travel app offers micro group buying
In early 2012, Chinese social network Renren Chinese group buying site Yikuair is tapping
launched a travel journal service, available online into the microblogging service Sina Weibo.
or as an app. The Fengche service allows users The service carefully curates daily deals, and
to create image-rich ‘sets’ detailing their travels, then lets Weibo users place a small deposit to
ready to share with friends and family. secure the offer. Deposits can even be made
using Weibo’s own virtual currency.
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12. MADE ONLINE
IN CHINA
Tencent: Weixin app offers
QQ instant messaging and Buykee: Pinboards and
more purchasing power
IIn April 2012, the latest version of Pinterest–inspired Buykee launched in China in
Tencent’s Weixin instant messaging app April 2012. The pinboard-style site differentiates
introduced users to its English-language name: itself from its predecessor, by focusing
WeChat. The app offers login via the vast QQ exclusively on luxury products and offering users
messaging network, which boasts over 700 the ability to buy what they are seeing.
million users, and a range of additional features.
These include recent features familiar to
Facebook and Google+ users, such as Timeline
and Circles, as well as QR tags, location-based
services, voice messaging and a ‘Game Center’.
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13. MADE
The rise of consumer culture in China
has inevitably led to the creation of some
‘remarkable’ products and services. However
STRANGER IN unusual consumers’ tastes, they are being met
by Chinese brands.
CHINA
The Kiev:
Former Soviet aircraft China Post: Letters routed
carrier transformed into via spacecraft with
luxury hotel ‘galactic postmark’
In 2011, former Soviet aircraft carrier, the Kiev, China Post offers a service enabling individuals
was converted into a luxury hotel by its new to send letters from space, with a ‘Space City 1′
Chinese owners. The ship has 137 standard hotel postmark. Users send an email to Tiangong-1, a
rooms, three VIP guest rooms, two presidential Chinese spacecraft orbiting the earth, which is
suites, and a luxury restaurant. then rerouted to a special China Space Post Office
branch in Beijing. The emails are printed, placed in
space-themed envelopes, stamped with a ‘galactic
postmark’, and sent in the mail.
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14. MADE
STRANGER IN
CHINA
Learn Mandarin the sexy
way Tao Girls deliver
Offering a memorable learning experience, the Chinese online shopping platform Taobao
conspicuously named Sexy Mandarin is an online (commonly referred to as the Chinese eBay or
service that teaches users to speak Mandarin Amazon), is reportedly working on an unusual
via YouTube and YouKu (the former’s Chinese initiative to spice up e-commerce – Tao Girls.
equivalent) videos, for free. The twist? All the Customers will be able to choose (at a slightly
teachers are attractive, sexily dressed women. higher cost) attractive women living in their city, to
deliver their web purchases to the door.
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15. MADE
As the most populous country in the world,
and one with a strong collectivist culture, it’s no
surprise to see a wave of innovative Chinese
TOGETHER IN products and services that bring consumers
together.
CHINA
Handsup.cn: Hands stock
and pricing suggestions
over to customers CreditEase: P2P lending
Handsup.cn aims to hand power over to the In late 2011, Chinese P2P lending
consumer by asking them to recommend products site CreditEase secured a round of funding,
and services they want to buy, as well as the price while founder Tang Ning was honored by the
tag. The more users that want a particular product, Communist party. Both achievements signal the
the higher the chance of it being available, and the dramatic impact of P2P lending in China, where
lower the price. there are now over 100 sites offering services.
CreditEase has become one of the country’s
largest independent financial service providers,
with more than 5,000 workers.
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16. MADE BIGGER
Whether it’s the size of the population, the
cities, or the economy, China means ‘big’, if
not ‘biggest’. Just three consumer-focused
IN CHINA examples to illustrate:
Beijing & Hangzhou: Beijing Daxing: ‘World’s
‘World’s largest bus’ largest airport’
The Youngman JNP6250G is believed to be the Construction of Beijing Daxing International
largest bus in the world, capable of transporting Airport is due to begin in late 2012. By the time
up to 300 passengers. The first of the buses will it’s completed in 2017, the airport’s planned
be deployed in Beijing and Hangzhou, using capacity is 200 million passengers per year. It will
dedicated highway lanes. be connected to Beijing via a new high-speed rail
link.
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17. MADE BIGGER
IN CHINA
SM Tianjin: World’s
largest shopping mall
opening 2013
“Chinese brands are
already catering to
demanding consumers,
both at home and
increasingly abroad.
Including yours.”
2013 will see the opening of the world’s largest
freestanding shopping mall in the Chinese city
of Tianjin, which is just 30 minutes from Beijing
by high-speed train. The SM Tianjin Shopping
Center will cover 530,000 square meters, an area
larger than 74 football fields.
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18. MADE EASIER
All of the pressures that lead global consumers
to seek convenience are amplified in Chinese
cities. A couple of Chinese innovations
IN CHINA leading the way when it comes to ease and
convenience:
Ubox: App enables mobile
payments at vending Hai Di Lao: Video links for
machines connected dining
The Ubox mobile app for Android, iPhone and In September 2011, Sichuan hotpot chain Hai
Java-based phones enables users to select and Di Lao and Chinese technology firm Huawei
pay for snacks using their mobile device. It also announced a partnership to install telepresence
includes a discount on the cash price for users. screens in restaurants across China. Thanks to
the screens, customers can enjoy their meal with
faraway friends and family – via a video link.
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19. MADE FASTER
Everything is going, has to be and can be
done faster, worldwide. Something Chinese
companies are very much aware of.
IN CHINA
Broad Group:
Huawei: ‘World’s fastest Builds 30-story building
smartphone’ in 15 days
The Huawei Ascend D Quad was launched in In 15 days at the end of 2011, Chinese
early 2012, claiming to be the world’s fastest manufacturing and construction firm Broad
smartphone. The company’s first quad-core Group built a 30-storey hotel in China’s
smartphone features a 720p HD touchscreen and Hunan Province. The aim of the project was to
an 8 megapixel camera. demonstrate the company’s Broad Sustainable
Building technology. Needless to say we hope we
can file this example under ‘MADE STRONGER
IN CHINA’ too.
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20. MADE FASTER
IN CHINA
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w w w. t r e n d w a t c h i n g . c o m made better in china 20
21. MADE MORE
Of course, luxury is a key part of the China cravings for luxury goods shows no sign
story, and one that could take up many future of slowing. Relevant here: wealthy Chinese
Trend Briefings ;-). From ‘Chinese’ sub- splurging on an increasing number of home-
LUXURIOUS IN brands (e.g. Hermes’ Shang Xia) to Chinese
brands being made in Italy (e.g. China
grown Chinese luxury brands and services.
CHINA
Garments’ Sorgere) Chinese consumers’
China Railways: Business
Shanghai Vive: Heritage, class beds on Beijing –
relaunched Shanghai ‘Harmony Express’
Originally launched in Shanghai in 1898, cosmetics China Railways Group has created the world’s
brand Shanghai Vive was recently re-launched longest high-speed rail network with about 7055
to appeal to luxury consumers in China and the km of routes in China, and trains topping speeds
West. The brand hopes to tap into its heritage and of 350 km/h. The Beijing – Shanghai route was
China’s growing global cultural identity. opened in 2011 with business class travelers
being waited on by uniformed stewardesses, and
enjoying LCD TVs.
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22. MADE MORE
LUXURIOUS IN
CHINA
NE-TIGER: Chinese luxury
fashion house
“Spending on personal
luxury goods on the
Chinese mainland
rose from EUR 7.1
billion in 2009 to EUR
12.9 billion in 2011”
(Source: Bain, December 2011).
China’s NE-TIGER is a leading luxury brand that
has found global success. The brand hosted
the opening show of China International Fashion
Week in late 2011, showcasing designs reflecting
Chinese tradition and heritage.
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23. MADE MORE
LUXURIOUS IN
CHINA
P1.cn: Invitation-only Ctrip: Travel service for the
social network very wealthy
P1.cn is an invitation-only social network for well- In early 2012, Chinese travel website Ctrip
connected or fashionable Chinese, that claims to launched their new site, HHtravel. The site is
have over 1.2 million members. Invitations can only designed to offer packages to Chinese tycoons
be obtained by knowing five existing members, or with disposable assets of more than RMB 10
by being approached by one of the site’s staff. million. A typical trip includes business class
travel, Michelin-starred dining, and award
winning hotels and attractions.
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24. MADE MORE
LUXURIOUS IN
CHINA Ba Yan Ka: ‘Pure water.
Natural elements.
Chinese Wisdom’ Swatch and Uma Wang
Personal care brand Ba Yan Ka offers Chinese Swiss watch brand Swatch invited Chinese
consumers totally natural skin, body and hair fashion designer Uma Wang to create two
care products. Formulas are free of chemicals, limited edition wristwatches. One is plastic and
not tested on animals, and all packing is branded with Uma Wang’s name, while the other
biodegradable. uses traditional Yunnan Province embroidered
print and coloring. Both designs retail for GBP
44.50.
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25. MADE BETTER
While many of the brands in this Trend Briefing
have only relatively recently made waves, there
are of course plenty of established Chinese
IN CHINA FOR brands already operating comfortably on a
global scale:
A WHILE NOW
Li Ning: Straight Out of
New China Haier: Brain Wave TV
Sportswear brand Li Ning launched its US retail In January 2012, Chinese consumer electronics
site in March 2012, heavily branded with the giant Haier demonstrated their ‘Brain Wave TV’,
slogan ‘Straight Out of New China’ and featuring a which allows users to control the action on their
number of high-profile endorsements. A promotion TV sets using their minds. The experimental
at the end of the month for special-edition ‘Year of technology was showcased alongside consumer-
the Dragon’ shoes caused the site to crash due to ready innovations such as 3D TVs with 2D to 3D
demand. conversion.
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26. MADE BETTER
IN CHINA FOR
A WHILE NOW
Herborist: Takes Chinese
cosmetics global Ochirly: LVMH Investment
Personal care brand Herborist incorporates In February 2012, French luxury giant LVMH
traditional Chinese medicine with contemporary purchased a 10% stake in one of China’s top
cosmetic science to create its range of products. luxury fashion brands, Ochirly. The deal values
The brand has been expanding global distribution, the brand at over USD 2 billion, as it considers an
and is now available in Paris, and across a range IPO.
of European retailers.
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27. MADE BETTER
IN CHINA FOR
A WHILE NOW
PEAK: Opens first US Lenovo:
sports store Yoga laptop/tablet hybrid
Following Li Ning’s creation of a US headquarters In early 2012, Chinese computer
and retail operation, fellow Chinese sports manufacturer Lenovo announced the Yoga.
brand PEAK opened a US headquarters in 2011, The device is a hybrid laptop/tablet which uses
and its first US store in Los Angeles in early 2012. a 360 degree dual hinge design to allow for
The brand ranks third in NBA endorsements, and use in four different configurations. Meanwhile,
has over 6,000 authorized retailers globally. the company’s shipments grew by 43.7% over
the first quarter of 2011, extending Lenovo’s
lead over Dell as the world’s second-largest PC
manufacturer.
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28. MADE BETTER
IN CHINA FOR
A WHILE NOW Not always enough
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(Aug-Oct 2012)
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Aspiring to represent the ideals of China’s Give us half a day of your time, and leave the
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and Europe, including retail stores in London and
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later this year.
w w w. t r e n d w a t c h i n g . c o m made better in china 28
29. IMPLICATIONS
Forget the ‘Made in China’ stigma. It should be clear by now that ambitious
and confident Chinese brands are already catering to demanding
consumers, both at home and increasingly abroad. Including yours.
And if you’re a non-Chinese entrepreneur, why not get in touch with some of
these brands to see if you can help them roll out globally even faster?
Again, these brands and innovations are just the start. Fuelled by constantly
improving technologies, a higher quality workforce and booming domestic
consumption, Chinese brands are just warming up.
Which is why all brands need to keep both eyes firmly on China, a market
that will increasingly define consumer culture. With Chinese brands
exporting goods and services to the rest of the world (not to mention Western
brands rolling out the RED CARPET for Chinese consumers around the
world), expect to see Chinese tastes and preferences exert ever-
greater influence on consumer products and services, and on a global
scale too (yes, that’s a Trend Briefing in itself!).
Of course, we’ve said it before and we’ll say it again: the rise of Chinese
brands does not signal the end for more traditional brands from
Western economies. Brilliance and heritage, from whatever corner of
the world, will continue to have a global appeal. Things will ‘just’ get more
competitive, meaning you will have to work even harder and smarter. Hey,
c’est la vie ;-)
Oh, and while you’re busy preparing for the globally hyper-competitive future,
we’re hard at work on our next Trend Briefing. Make sure you’re subscribed!
w w w. t r e n d w a t c h i n g . c o m made better in china 29
30. NEXT
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