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More publicly listed Chinese companies are adopting in-kind dividends, replacing cash payouts with products ranging from gourmet food gift boxes and cosmetics to theme park tickets, as a means of rewarding investors and boosting their brand visibility. However, industry experts caution that while this strategy may lead to short-term increases in stock prices, its long-term effects on company valuations remain uncertain.
This year, over 30 companies across sectors such as cultural tourism, consumer goods, healthcare, and technology have distributed their products and services as in-kind dividends to shareholders, according to available data.
Consumer brands have traditionally led the way in offering non-cash dividends, especially within the food and beverage sector. For instance, a well-known snack company sent shareholders gift boxes containing traditional zongzi—glutinous rice parcels filled with sweet or savory fillings. A condiment manufacturer curated assortments of their products for distribution, while a ready-meal company provided investors with product bundles valued at roughly $28 USD.
Cultural tourism companies have also participated actively. A scenic area operator provided discounts on tickets, cable cars, hotels, hot springs, and skiing activities. Another tourism enterprise allowed shareholders to purchase three tickets to its attractions for just 99 cents each and stay at a designated hotel for only CNY99, or about $14 USD.
Even firms in the technology and healthcare sectors are involved. A producer of smart display devices gifted products in sizes proportional to shareholders’ ownership stakes. Similarly, a medical device company supplied some of its home healthcare products free of charge to investors.
This trend reflects a growing synergy between investor relations and experiential brand marketing, according to a researcher at Nankai University’s Institute of Finance and Development. Companies seem less focused solely on boosting their share prices and more interested in establishing emotional bonds with their shareholders.
“When tourism companies give away tickets, or consumer brands offer trial clothing, shareholders can become influential advocates through word-of-mouth,” the researcher added.
Experts at SMB, a digital bank, believe that non-cash dividends are an innovative approach to deepen brand engagement and attract customers, serving as an adaptable supplement to traditional cash dividends. Smaller- and mid-cap consumer companies are most likely to adopt this approach, as it helps ease financial pressure, facilitates low-cost market expansion, and increases investor loyalty by treating shareholders like consumers.
Additionally, in-kind rewards tend to generate extensive media coverage at minimal additional cost, transforming shareholder giveaways into public marketing opportunities.
However, the longevity of this approach is questionable. Experts emphasize that sustained marketing success depends on maintaining ongoing buzz, and if a company’s core business fundamentals are weak, any short-term stock price increases gained through in-kind dividends may quickly fade.
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