Exploring China’s Market: The Latest Updates

1. LinkedIn announced its decision to discontinue InCareer in China: 

  • Effective August 9, the decision was attributed to the fierce competition and challenging macroeconomic climate in the Chinese market, the firm stated. 
  • LinkedIn introduced the InCareer app for the Chinese market in December 2022. 
  • As of March of this year, InCareer had approximately 95,9600 monthly active users (MAUs), while its competitors 51 Job and Boss boasted 18.5 million MAUs and 17.3 million MAUs, respectively.
  • LinkedIn had previously expressed its intention to shift its strategic focus in the Chinese market toward assisting Chinese companies with overseas talent recruitment, brand marketing, and skill training.

https://www.ithome.com/0/711/201.htm

 

2. The Chinese short video platform Kuaishou showcased a new AIGC solution and AIGC digital human product called Kuaishou Zhibo:

  • The head of Kuaishou’s AI business highlighted that the AIGC solution is built upon Kuaishou’s self-developed foundational large language model. 
  • It will help creators in the generation of text, images, music, videos, and 3D works by providing them with inspiration, creative materials, and intelligent production services.
  • The company is developing technologies such as text-to-image creation, AI-supported cameras, and intelligent video scripting for its portrait camera app Yitian Camera, and its video editing app Kuaiying.

https://www.36kr.com/newsflashes/2381837287157001

 

3. Guochao brew: China’s Gen Z craves a cup of ‘Chinese-style’ coffee

  • More cafés have created a distinctly Chinese atmosphere by incorporating traditional architecture, such as a courtyard, decorating their interiors with antique furniture, and serving drinks in Gaiwans. 
  • They serve as popular spots for dates, chats, studying, and business meetings.
  • The localization goes beyond store aesthetics to infuse Chinese elements into the taste and preparation methods of the coffee as well. 
  • Because these specific product launches rely heavily on novelty, the buzz is often artificial and temporary. 
  • However, Guochao — or the integration of traditional Chinese elements in contemporary life — is no passing phase or gimmick.

https://jingdaily.com/chinese-style-coffee-guochao-gen-z/

Latest News on China’s Market

1. Estée Lauder taps Asia’s male beauty market with Manchester United partnership

  • Beauty and skincare giant Estée Lauder has inked an exclusive partnership deal with Manchester United in hopes of tapping the club’s fans in China and the Asia Pacific region.

  • In China alone, the men’s beauty market was projected to surpass $10 billion in 2022 and could reach $33.4 billion (240 billion RMB) by 2027.

  • Most male consumers may be relatively new to the skincare game, especially when it comes to premium products.

  • In the first half of 2023, the GMV of men’s makeup on Douyin surged by 364.6 percent year-on-year. With this market being especially open to beauty and grooming, we’d bet that a clever campaign could work wonders.

LINK: https://jingdaily.com/estee-lauder-manchester-united-collab-male-beauty/

 

2. Male beauty’s next growth engine: Douyin

  • In the first half of 2023, the gross merchandise value (GMV) of men’s makeup sold via Douyin surged 365 percent year on year – Tmall and Taobao combined achieved 6.7 percent growth in the same period.

  • Chinese male beauty brands are quickly expanding on the short video app. Domestic labels claimed seven spots on Douyin’s top 10 best-selling mens’ skin care list, whereas international brands took three places.

  • Male skincare buyers’ profiles: Last year, 70 percent of men’s beauty purchases were made by women, according to a 2022 report from Xiaohongshu. But male buyers have caught up, now accounting for half of male cosmetics purchasers on Douyin.

  • The average age of the male makeup user is between 18 and 30 with an average price of $9.7 (69.2 RMB), significantly lower than on other platforms like Tmall and JD.com.

  • Cooperating with KOLs has proven to be a quick and effective strategy for businesses that want to scale up brand awareness. These influencers are crucial for spreading knowledge about beauty routines.

LINK: https://jingdaily.com/male-beautys-next-growth-engine-douyin/

 

3. McKinsey: Chinese consumers, brands ‘cautiously optimistic’ on tourism and spending

  • Chinese consumers are looking for better deals and sales across platforms like Douyin and Pinduoduo, where products are often sold for “half or less” than on more established competitor shopping apps.

  • McKinsey found that while many remained loyal to their favorite brands, 47 percent of respondents reported switching retailers to obtain a “lower price/discount.”

  • Travel, restaurants and apparel were the top categories consumers were spending on, the survey revealed.

  • However, international travel in June was still 58 percent lower than pre-pandemic levels, though the number of outbound flights from China is “rising rapidly.”

LINK: https://jingdaily.com/mckinsey-report-cautiously-optimistic-tourism-spending/

 

4. China ecological transition: a green revolution led by consumers

  • Keeping balance between satisfying the demand of country’s market, while preserving sustainable standards is challenging

  • Chinese consumers are demonstrating a higher attention to environmental issues compared to the previous years, this trend being reflected in several factors, from carbon emissions to locally produced goods.

  • In this sense, the pandemic has represented a turning point for the development of this trend inside consumer’s mindset, many of which are now willing to pay more for environmentally friendly products.

  • Case study of KFC:  Thanks to “Exploring Carbon Reduction” and “The Journey to Carbon Neutrality” initiatives, introduced in their super App, KFC carried out a green rewards program that encourages consumers to not use disposable cutlery, favor in-store pickup, engage in waste sorting, etc.

LINK: https://mp.weixin.qq.com/s/HBf_m9WBZ2izfmQNFgOlvg

 

5. Pink burgers, platform Crocs and Malibu dream houses: Barbie’s global collab craze

  • Resale site StockX reported to Jing Daily it had seen more sales of Barbie products in July 2023 than any other month in the company’s history, double sales in July 2022.

  • Among so many names jumping onboard, from Vans, Kipling and Gap, to Pacsun and Nyx, one breaking through the Barbie collaboration noise online is Zara. The Spanish retailer launched a collection on July 21 (the movie release date) inspired by the fashion seen on screen, including a gingham dress, silk pajamas, and other clothing and accessories items

  • Though Zara, Vans, Nike’s Dunk Low sneaker, and Chanel’s themed efforts with the movie all made their way onto social media in China, the clothing and accessories collection from local fashion brand D’izzit is trending in the mainland.

  • Barbie mania is reaching all corners of commerce, from fashion all the way through to luxury hospitality. The W Hotel in Osaka, Japan, is one that’s proven a hit among netizens.

  • Thanks to Barbie nostalgia being at an all-time high, the IP’s pulling power feels unbeatable. Some consumers might be all pinked out, but this is definitely not the end of Barbiecore.

LINK: https://jingdaily.com/barbies-global-collab-craze/

Staying Up-to-Date with China’s Market: Updates and News

  1. Ctrip unveils an AI model that provides suggestions for tourism

  • Ctrip introduced a vertical AI large model designed for the tourism industry. The AI-driven model, called Xiecheng Wendao, allows users to ask Ctrip travel-related questions. The model is in its early stages and still requires a long process of iteration.”
  • Why it matters: To meet their unique needs, many businesses are modifying current large general models with information specific to their respective industries. As an example, Ctrip claimed that its specialized model, which filters 20 billion high-quality unstructured streams of tourism data along with its own structured real-time data and search algorithms, is based on an undisclosed general model.
  • Details: Ctrip’s AI model will offer recommendations on destinations, hotels, and sightseeing, the firm said at the Monday launch event, and also can offer real-time search results for flights and hotels.
  • In a variation on the race to develop artificial intelligence chatbots similar to ChatGPT, Chinese businesses are increasingly turning to sector-specific models. It seems safer for domestic companies to make use of the quickly-evolving technology, particularly in a nation that recently took a significant step to regulate generative AI content.

Link: https://technode.com/2023/07/18/chinese-travel-booking-site-ctrip-unveils-ai-model-offering-tourism-tips/

 

 

  1. Foreign credit cards are now accepted by WeChat Pay in China.

  • Tencent said that it now allows foreign tourists to link their international credit cards to its payment service WeChat Pay.
  • With the rise of digital payments in China, foreign visitors have sometimes encountered difficulty in the country as many shops and restaurants only accept digital payments. 
  • Tencent has published bilingual Chinese and English guidelines on how to add a card within its super app WeChat, with overseas card holders able to “pay like a local” via payment codes or scanning merchants’ QR codes
  • However, WeChat added that a 3% transaction fee will be charged when a single transaction amounts to RMB 200 or over.

Link:  https://mp.weixin.qq.com/s/Rm7rQBotG77SQmM6MMv75A

 

 

  1. The hottest summer trend in China? How Xiaohongshu made ‘jorts’ a thing

  • On June 29, lifestyle sharing platform Xiaohongshu launched a campaign to promote the over-the-knee jean shorts. 
  • #Jorts, which has over 520 million views on TikTok, is part of a larger “new vintage” style taking over China and the rest of the world. 
  • Xiaohongshu has over 80 official accounts that cover a range of topics which not only spotlight the hottest Gen Z happenings, but they also educate consumers on niche and emerging movements. 
  • Given these functions, Xiaohongshu is more than just a social media platform. It’s an information hub that keeps brands up-to-date and connected with young consumers.

Link:  https://jingdaily.com/xiaohongshu-jorts-china-fashion-trends/

 

 

  1. AI’s assistance in fashion design: Text-to-Design, Tommy Hilfiger, and AI Fashion Week

In this year’s Metaverse Fashion Week held in March, the American clothing brand Tommy Hilfiger hosted an AI design contest. The goal was to create a digital fashion item in the classic Hilfiger style.

 

  • AI Fashion Week 
    Events such as Maison Meta’s AI Fashion Week in New York have also turned the spotlight on the synergistic relationship between AI and fashion
  • Text-to-Design transforms the fashion industry
    Stitch Fix uses AI recommendation algorithms and data science to personalize clothing items based on a user’s preferences. With generative AI, advanced AI programs that are able to generate sophisticated content such as images, there’s the possibility of taking things one step further, to the product design level.
  • Leaks and limitations
    Generative AI for fashion design is showing promise, but challenges persist. One of those risks is leaks. Images uploaded to AI image generators are typically also added to the platform’s database, making leaks possible.

“In the end, the level of creativity and quality of the output will be determined by the skill of the individual. Image generation tools are still just that: a tool.

 

Link: https://jingdaily.com/artificial-intelligence-fashion-design-assistant-tommy-hilfiger-midjourney/

 

 

  1. What Should The Luxury Industry Expect From Post-Pandemic Chinese Travelers?

  • Outbound travel is expected to increase in 2023, boosting luxury spending in Europe, the United States, and the rest of Asia, while the lifting of COVID restrictions in China is set to fuel Chinese consumer confidence and stimulate the local market rebound.
  • The return of Chinese outbound travelers is facing obstacles, including limited seat capacity on international airlines, higher ticket prices, visa application backlogs, and concerns about a volatile social environment abroad, affecting their confidence to travel.
  • Despite the potential increase in luxury consumption abroad, the domestic luxury market in China is not expected to decline in the short term. Luxury brands have invested in expanding their store networks and have taken measures to reduce pricing gaps, leading to significant growth in mainland China’s luxury market. 
  • In this context, the progress made by luxury brands over the last three years cannot be understated: In China, nearly 50% of all luxury consumers in 2021 were first-time buyers.
  • However, luxury brands need to be agile and adapt to changing consumer expectations and preferences both inside and outside China, focusing on higher spending potential of Chinese travelers and catering to their expectations in terms of luxury purchase experience and digital services.

Link: https://www.luxurysociety.com/en/articles/2023/07/what-should-luxury-expect-post-pandemic-chinese-travellers 

 

 

  1. What is the latest ‘KOP marketing’ craze?

  • The emergence of Key Opinion Professionals (KOP) in content marketing is a new trend, where professionals with deep expertise in specific fields share professional content to influence user decisions.
  • Main characteristics of a KOP:
    • Have a high degree of education, such as the Ph.D. Kikuchi Tian Department of Chemistry at Tsinghua University, known as “Picket”
    • Rich  experience, such as bloggers who rely on science popularize and dismantling rumors 
    • Deep-cultivated original content in professional vertical fields such as health, technology, engineering, and humanities
    • In addition, KOP is not necessarily a specific person, but also an institutional blogger, such as @丁香Doctor This type of professional media sharing health knowledge.
  • KOP differs from Key Opinion Leaders (KOL) and Key Opinion Consumers (KOC) in that they focus on vertical, professional content, providing detailed analyses and comparisons of products and brands.

Link: https://mp.weixin.qq.com/s/m4trhMxKPqYrngn7VOtMdA 

 

 

  1. Can ‘Midsize Influencers’ Fix China’s Body Image Problem?

  • Many in China have reclaimed the term, weipang(midsized), confidently using it to set themselves apart from influencers with conventionally thin figures, and the hashtag ‘midsize outfit’ has accumulated over 7.8 billion views on Xiahongshu and over 38 billion views on Douyin (China’s TikTok).
  • In recent years, the body positivity movement has also gained some momentum in China, with brands like Neiwai pioneering inclusivity in their campaigns, plus-size models like Xu Ruoxin on the covers of high-profile fashion magazines, and rapper Chen Jinnan openly discussing body image in her songs.
  • A quick search on Douyin, (whose user base is mostly men, as opposed to Xiaohongshu where over 70% of the users are women) will reveal the term weipang is used by men to describe women with large breasts and booties, but thin waists and long legs.
  • On Douyin, weipang women are mistakenly identified with a ‘slim-thick’ body type rather than the diverse range of ‘midsize’ bodies displayed by influencers on Xiaohongshu, and many videos on the platform revolve around sexiness rather than fashion and style.
  • At the same time, douyin banned 22 big accounts with large following and aiming to ban more, deeming their content pornographic and vulgar.

WeChat: Your Ultimate Travel Planning Tool

WeChat, widely known as China’s all-in-one super app, has revolutionized the way people communicate, socialize, and conduct financial transactions, but now we’ve got yet another sector coming into the ring.

While it was not initially designed as a travel planning tool, recent developments within the platform indicate a growing appetite to venture into the market share traditionally dominated by Online Travel Agencies (OTAs). This shift is particularly notable, given the whirlwind of changes the travel industry has gone through in recent years. After three long years of restricted international travel due to the global pandemic, the world is witnessing a resurgence in wanderlust. As a result, there has been a noticeable surge in travel-related content on WeChat. Users are sharing their travel experiences, tips, and recommendations, transforming the platform into a hub for travel enthusiasts.

Moreover, recent statistics reveal that a substantial portion of the Chinese population is eager to resume their international travel plans. According to a survey published by Dragon Trail Research, an astounding 60% of Chinese individuals have expressed their intentions to travel abroad this year. This renewed enthusiasm for international tourism presents a unique opportunity for WeChat to leverage its existing user base and expand its influence in the industry.

In this article, we will delve into the emerging travel-related features on WeChat and analyze how they position the platform to potentially challenge the dominance of traditional OTAs. We will also explore the implications of WeChat’s growing travel focus, both for its user base and the wider travel industry, as we navigate the new landscape of post-pandemic tourism.

WeChat as a one-stop platform to organize a trip

Mini-programs are the core of any planning tools on WeChat. Chinese Travel Consumption Trends White Paper 2023, released by Tencent Marketing Insight and Tongcheng Research Institute highlight the value and popularity of WeChat mini-programs for Chinese travelers. According to the findings, 61% of respondents said they use WeChat mini-programs to purchase travel products and services while on trips. Additionally, 34% stated that they utilize mini-programs for accommodation, transportation, attraction tickets, activities, and/or F&B, while 24% each use the mini-programs of travel platforms and OTAs.

Brands can leverage mini-programs in many ways. For example by embedding a link within the articles, pin to their official account WeChat menus, and much more.

WeChat mini-programs are simply convenient and don’t require downloading additional apps. On top of that, since they are vetted by Tencent they are also perceived as more reliable.

Mini Programs Travel WeChat

👀 Discover more about WeChat Mini-Programs

WeChat Search is another amazing tool in the WeChat’s arsenal. Users can search for virtually any kind of information from quick results for the weather forecast at their destination to suggested flight routes or accommodations.  In the Search results, users can also browse through official WeChat accounts, video content, mini-programs, and more. Filtering option help them to find relevant information quickly.

One particularly eye-catching feature that can be leveraged by brands is ‘search takeover’ where brands can customize their result card and include buttons driving to different functions like booking.

WeChat Search Travel

🔍 A Quick Guide To WeChat Search

Travel Content on Official Accounts

WeChat Official Accounts, let’s not forget content published on official accounts. They remain the most important source of information and updates for Chinese travelers. That’s why it’s so important to keep them up to date. Menu, which is a close equivalent of a website, should be updated and make it easy to navigate for FAQ. Chinese customers will appreciate responsive customer service and auto-replies.

Articles can serve as a great source of inspiration. Taking into account that 17% of Chinese travelers admit that they use WeChat to plan outbound trips, there is a big chance that they might come across the content that spark their wanderlust within the platform. This rising interest in globetrotting content is already visible. According to Q1 2023 WeChat Rankings Report, average views per post on WeChat rose by 41% for airlines. Similarly, 30% for cruise trips, 42% for attractions, and 15% for hotels.

WeChat Articles Travel Tourists

✈️Reaching Chinese Tourists: Online Travel Agencies and Social Media Platforms [2023]

Last but not least, WeChat Channels can be used to find new inspirations. Viewers can discover hot spots in cities and unknown places worth a visit. With similar to Douyin’s algorithm-based feed, Channels are the must-have hub for visual video content on WeChat. Global and local attractions are already using built-in live-steaming features. Users can also browse content based on their location in order to find new hidden gems. They can also create their own content and raise awareness and promote places through UGC (user-generated content).

WeChat Channels Travel Tourists

🎥 WeChat Channels – How to Post for Success?

Conclusions

WeChat recently published a post on how the app can be used for planning a trip from the scratch. All without the need to download any other apps or leaving the platform. Click here to check it: 微信搜一搜是懂五一的. If you have any questions about leveraging WeChat for tourism, please contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their network among Chinese customers. For additional information, please contact at contact@thewechatagency.com.

China Marketing Strategy: One Size Doesn’t Fit All

China’s marketing strategy is a minefield. If you want to build a brand in the Chinese market, you need to know how to navigate it. 

Entering the Chinese market is not only intimidating for the newcomers but also for existing businesses. Rapidly changing tastes, the market’s vastness, and nuanced preferences of more than 1.4 billion consumers living in very differentiated geographic and socio-cultural environments can be daunting for well-established players as well.

This is especially true for FMCG that are hyper-sensitive to consumers’ evolving tastes. That’s why often there is no such thing as a one-size-fits-all marketing strategy in China. Actually having one monolith strategy for China can be more harmful than having no strategy at all. 

Brands must develop strategies for localized branding, communication, e-commerce, and traditional distribution in order to build a good business in China. These will necessitate a thorough awareness of consumer patterns and profiles, as well as familiarity with local marketing and operations. Otherwise, they will be unable to respond effectively to consumer desires and needs, increasing the danger of failing.

Why Is It Necessary to Localize?

The main point is that it’s easy for brands to assume that Chinese consumers are one homogeneous group of people with identical tastes and preferences. Also, most brands tend to focus on consumers based in China’s 1st tier cities like Shanghai or Beijing. 

The Chinese city tier system is an unofficial hierarchical classification of Chinese cities. Media often use it as a point of reference to illustrate their financial, commercial, and overall business attractiveness. Usually, there are 5 levels of so-called tiers with some outlets adding an additional classification for the most rapidly developing cities. These are called New Tier 1 cities with Chengdu, Chongqing, Hangzhou, Wuhan, Nanjing, and Tianjin among them. Only imagine that there are almost 150 cities in China that are bigger than Berlin (3.5 million). 

Every target audience has diverse needs and aspirations, and firms that don’t have a defined marketing plan will waste company resources chasing the incorrect demographics.

It’s a big misconception that consumers in those 2nd or 3rd-tier cities are the same as consumers in Shanghai or Beijing. A lot of reports on Chinese consumers often focus on the population samples from the biggest cities leaving the intricacies and local differences out of sight. People living in different Chinese provinces and locations will show different consumer behaviors and have varied income levels. Very often even the climate or weather patterns can play a big factor in their consumption habits.

KFC Pizza Hut McDonalds China

Examples of global fast-food chains adapting to local tastes: Mcdonalds’ pickle sandwich, KFC’s egg tarts, and durian pizza from Pizza Hut

Local Nuances

Just to give you an example, and of course, these are just exaggerations. E.g. Chengdu youth scene is famous for being among the most flourishing in China while people from Wuxi, an over 6 million people city near Shanghai, are renowned for their entrepreneurship spirit. Based on deeper research and local knowledge you can find a lot of nuances and specific interests that you can leverage in your brand communication, packaging, and pricing that will ultimately make a difference. 

So when you’re trying to figure out how to make your retail experience more Chinese-friendly, the first step is figuring out who exactly you’re trying to attract—and then how best to reach them. Some brands might find success by hiring local employees who speak the dialects of their target market(s) fluently. They can often offer their own personal recommendations; others might do better by partnering with influencers who already have strong followings among those groups of people. Surveys and local focus groups can also be of great help.

Competitors in the biggest Chinese cities are fierce and the market is well saturated with all kinds of goods readily available. Therefore brands now want to expand their reach and deepen their penetration of the Chinese market. Because of a lack of understanding and applying the same strategies that worked in the biggest Chinese coastal cities, foreign brands often fail and are reluctant to continue their expansion which doesn’t need to be the case. 

How to Localize – Things to Consider

Because of the local differences, you might rethink:

  • Brand message – is there some other unique selling point that could be more appealing to the local target audience?
  • Packaging – is the design and size suitable for local needs? Maybe the locals prefer smaller packages to have a try of the product?
  • Ingredients – can you add some local ingredients to make your product more appealing to the local palates?
  • Necessity – is your product adapted or even needed in the targeted location? Promoting stylish rain boots makes sense during the Shanghai rain season. However not so in Beijing where summers are usually hot and dry. 
  • Pricing – is the price too low or too high?
  • And more to consider. 

Strategy for China – Conclusions

Each country, market, demography, and way of life are distinct; it is the marketer’s responsibility to customize messaging and techniques to these diverse local trends. By recognizing these patterns and the economic, social, and technical influences that influence the Chinese customers, brands in China can better prepare for the future and succeed in the present. 

➡️Find out more about China’s core target consumer groups – Generation Z and Silver Generation.

If you wish to know more about marketing in China, please contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their network among Chinese customers. For additional information, please contact at contact@thewechatagency.com.

China’s Gen Z As Luxury Consumers

From Balenciaga to Gucci and Louis Vuitton, the Chinese market has become the most crucial driver of growth for European luxury brands. Nothing is more important for success in the Chinese luxury industry than capturing the hearts and minds of Gen Z. These are the Chinese consumer generation born after 1997.

Chinese Gen Z is growing as a diverse customer demographic that global brands want to understand more about. The luxury industry, in particular, given that China accounted for more than a third (32%) of the global market for luxury goods in 2020. It’s expected to surpass the US to become the world’s largest market for those products in the next five years.

Traditionally, luxury companies relied on an older, established, and affluent buyer base, with a minority of younger buyers keen to express wealth and status. While this buying pattern persists today, the luxury market has become significantly more democratic, younger, digital, and global in the last three decades, with luxury products considered not only as a method to indicate wealth but also as a way to represent one’s particular style.

What Makes China’s Gen Z Such a Good Target Group for Luxury Brands?

For luxury brands, Gen Z is a dream generation. They consider themselves to be “personal brands,” and spending up to nine hours a day online creating social media material qualifies them as expert brand builders. Many are familiar with crypto and NFTs, hastening a quick transformation in new luxury categories that earlier generations struggled with.

According to McKinsey, Gen Z, those born between the late 1990s and the early 2010s, represent 15% of China’s population. That equates to more than 210 million individuals. They grew up in China amid an unusual period of rapid social and economic development. Recently, Chinese brands have benefited from the country’s growing sense of confidence – and Generation Z may be the most confident of all Chinese generations.

This confidence translates into a more critical and outspoken approach toward foreign fashion labels. As a result, this generation may have a significant impact on the Chinese fashion and luxury sector.

They are brand sensitive, hungry for uniqueness, and wealthy, ticking all the boxes that luxury brands set out to offer. Winning over these key actors in high-end purchasing is the first step for global luxury brands to flourish in China.

What Works With Gen Z?

The growing influence of millennial and Generation Z consumers in the luxury business can be seen in how brands communicate their message and who they hire to speak it for them. WeChat, which is a one-stop platform that allows users to interact with friends and family, stay up to speed on the latest news, engage with one’s favorite companies, and pay for a variety of goods and services, also plays an important part in these conversations and sales.

For luxury brands, millennial and Gen Z spokespeople, brand ambassadors, and creative directors are becoming the standard. This is especially true in China. Gen Z celebrities such as Wang Yibo (born in 1997), Cai Xukun (born in 1998), Fan Chengcheng (born in 2000), and Ouyang Nana (born in 2000) are fronting advertisements for Chanel, Prada, Givenchy, and others. However, simply being present on social media, hiring young brand ambassadors, and dressing up popular celebrities is insufficient to reach and influence Gen Z customers.

For starters, like with millennials, rigid premium brand loyalty is virtually non-existent among Generation Z customers. This is especially true in China, where according to McKinsey & Company, 52% of consumers born after 1990 will purchase luxury goods other than their “favorite” brands.

Gen Z & Luxury – Do’s & Dont’s

The most common mistake in attempting to attract Gen Z is to appear as though a brand is particularly young or funky even if it does not fit the brand. “Young collections” are a good example of this. Many established fashion businesses attempted this and failed. When a company isn’t relevant to Generation Z as a whole, creating a purportedly youthful collection and hoping young customers will take the hook seldom if ever, works. To be relevant to Gen Z, brands must be present on platforms such as Bilibili, Douyin or Xiaohongshu. This is where they can better engage with the audience and create trending articles to attract the right audience. 

Learn more about What is Bilbili? and the main differences between Douyin and TikTok.

Generation Zers, on the other hand, value authenticity due to their easy access to information. People, in fact, expect brands to be brutally honest and truthful. As a result, many incumbent brands appear out of reach, inauthentic, and remote to younger audiences. A new, honest, inclusive, and spontaneous method of communicating with Generation Z is required. 

The implication for luxury brands is to be brave and unapologetic in their position for something. Clear values are what Generation Zers look for in brands. As a result, brand equity, brand positioning, and brand narrative are more important than ever. This might be putting many incumbent businesses at a considerable strategic disadvantage. 

According to reports, some of the most compelling reasons for Generation-Z customers to purchase personal luxury products in China in 2020 are:

  • Signaling social status – 6%
  • Gift – 20%
  • Identity statement – 24%
  • Uplift of confidence – 45%
  • Pursuit of fashion – 61%
  • A reward for self – 68%

Conclusion

Millennials (ages 26 – 41) are huge, but China’s Gen Z (ages 10 – 25) might be even bigger. As a new generation of consumers emerges, brands’ strategies and marketing must evolve to cater to this new demographic. This indicates that brands must be honest, truthful, and inclusive in order to reach out to the next generation, in addition to being trendy and developing products for the younger age.

Massive developments in the digital age indicate that generational divisions are narrowing, for better or worse. If businesses want to flourish and prosper in today’s ever-changing world and create a business in China, we believe they must discover more relevant ways to reach consumers of all generations. Check out our piece on China’s eldest consumers – Silver Generation

If you wish to know more about Gen Z consumers or need assistance in China, please contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their network among Chinese customers. For additional information, please contact at contact@thewechatagency.com.

China’s Personal Information Law

On August 20, 2021, the Standing Committee of the National People’s Congress passed the Personal Information Protection Law (PIPL), which became effective on November 1, 2021. 

Since its first version was revealed in October 2020, the PIPL in China has gotten a lot of attention as a basic law that is equivalent to the European Union’s General Data Protection Regulation (GDPR).

According to the PIPL, multinational businesses (MNCs) that move personal information out of the country will also be required to get data protection certification from professional institutes.

Individual consent is the primary legal basis for processing personal data under the Personal Information Protection Law. It states that personal data must be processed in accordance with the principles of legality, fairness, good faith, minimum necessity, openness, and transparency. There must be specific and justified processing purposes as well.

What Are the PIPL’s Fundamental Components?

The PIPL applies to all individuals and organizations managing the personal data of people within China’s borders, both public and private.

Notably, the PIPL broadens the scope of Personally Identified Information to Personally Identifiable Information. PII is defined as a company’s ability to create identification through profile stitching of non-identified data.

For example, a person’s purchasing habits and locations, together with other behavioral data, can be triangulated using third-party-appended data to profile the actual identified user – that is, even when their email or phone number was not collected.

In the processing of personal information, the PIPL refers to the following Basic Principles:

  1. The principle of lawfulness, legitimacy, necessity, and good faith: Personal information processing must not be misleading, fraudulent, or coercive. Furthermore, it requires a specific purpose for information.
  2. Clear and reasonable purpose: Information processing must be directly tied to a valid purpose, and data collecting must be limited to only that which is required for that purpose.
  3. In the processing of personal data, transparency is essential in terms of the norms, purpose, method, and extent.
  4. Accuracy – Information must be collected and stored in an accurate, comprehensive, and up-to-date manner.
  5. Security – Personal information handlers must ensure that all personal information they process is secure and take all necessary precautions.

How Does the PIPL Manage User Consent?

The type of data and the intended use of that data determine how to obtain the requisite consent. If the data is classed as Sensitive Personal Information, or if it will be used for:

  1. Operations i.e. transaction fulfillment,
  2. Subscriptions i.e. a memberships,
  3. Marketing, for example, sending promotional communication,
  4. Profiling, for example, personalization. Sensitive Personal Information, as defined by the PIPL, includes a person’s specific identity and location, as well as other factors. This category includes the following types of information:
  • specifically designated status
  • religious beliefs
  • medical/health
  • biometrics
  • financial
  • personal information relating to minors under 14

Before sensitive personal information can be processed, separate consent (rather than “bulk” consent) is necessary. Furthermore, there must be a particular, essential, and reasonable reason to process the data. Companies must make protective steps to ensure the security of such data (which may require requisitioning a Personal Information Protection Impact Assessment). Also, they should inform individuals affected by the processing of such data of the need for it and how it affects their rights and interests.

PIPL Permissions

What Does This Mean for International Brands in China?

Most significantly, the PIPL eliminates the binary nature of consent. For example, a user may have agreed to market but not to profiling (which means they will no longer receive personalized adverts). Furthermore, a brand’s consent levels from the same consumer on different platforms are likely to be varied. Each platform, from WeChat to Tmall to JD, might be unique.

Brands must ensure that every activity it does in the future is consent-compliant. Everything about a transaction, everything about marketing, and everything about profiling. To ensure that any action they’re conducting is genuinely compliant, brands must check at a user’s current consent status across these three criteria.

Furthermore, obtaining maximum consent from each user is not simple. Brands that aim to obtain full express consent, including cross-border, get roughly 2% of the market. 

Consent A/B testing will be required by brands to determine which consents individuals are willing to give. Consider consent in every software solution used by brands.

Personal information handlers – especially international brands with offshore headquarters – must now obtain and assess consent at a much more granular level, and consent must play a central role both in their customer interactions and tracking, as well as in their back-end data handling, ensuring security control and DSR compliance.

User Consent

Last, but not least, when asking for consent from users the following information must be highlighted:

  • Data receiver – is data for internal brand processing only? Does it involve a third party (third parties include brand headquarters outside of Mainland China)?
  • Data usage – how the data will be used? For marketing purposes or personalization content?
  • Data duration – how long the data will be kept precisely. 
  • Data location – location of the content storage and additional cross-border consent.

The last point is especially important for international companies which intend to move or store the data they collect in China abroad – this will be particularly complex as it will require several steps including but not limited to registering the data transfer with the government or completing an assessment certified by a third party; implementing technical security measures to prevent foreign-government access to the data, and tracking onward transfer to other entities. Companies should think of local-based solutions first. 

Conclusion

The PIPL is a major piece of legislation that has far-reaching consequences. There are parallels to the General Data Protection Regulation of the European Union. 

It is vital that enterprises take the required actions to prepare for the PIPL’s implementation, as it applies to data handling activities both in China and beyond China.

If you wish to know more about the PIPL, please contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their network among Chinese customers. For additional information, please contact us by phone – Shanghai or Hong Kong.

What Is Dewu?

You probably hear a lot about RED, one of the biggest UGC (User Generated Content) platforms in China. Well, there is another one that is super popular among Chinese millennials and Gen Z, that is DEWU (得物), previously known as POIZON or Du (毒).

Shanghai Shizhuang Information Technology Co., Ltd. launched Dewu, commonly known as Poizon, an online shopping app. It is China’s largest fashion brand exchange and trading platform, including features such as evaluating the validity of fashion labels and trend sharing. Product listings, trade mechanisms, and unified delivery are all subject to strict authenticity checks.

Poizon Dewu

Dewu’s USP

The “identify first, ship later” shopping approach is Dewu’s unique selling point. Trendy shoes, fashion, watches, accessories, gaming, digital and home appliances, beauty, vehicles, and more are among the product categories. At the same time, by consistently accumulating fashion content, Dewu is becoming a trend indicator and voice for young users as a trendy lifestyle network for young people. 

People can also share their impressions and discuss their purchases with other users. For example, the app boasts a thriving community of sneakerheads who discuss the latest releases on the platform. As a result, the most trending topics of discussion revolve around sneakers, fashion brands, celebrities, street culture, cars, watches, and fashion art, all of which are popular among young people.

Poizon Dewu Poizon Dewu Poizon Dewu

Growth of Dewu

Dewu App has become synonymous with “quality e-commerce”, leading the new demand for quality consumption

The Dewu platform’s total revenue in 2019 was 7 billion yuan, with sneakers accounting for the majority of that. The domestic second-hand shoe market was nearly monopolized by this app. In the same year, the app had accumulated 47 million product identifications. 

In 2020, the number of identifications will have expanded dramatically, surpassing 60 million, with roughly 40 million active monthly.

According to Fan Ruan, Dewu’s MAU (Monthly Active User) hit 81 million in May 2021, representing an increase of 8% month over month. 

Key User of Dewu

The structure and demographics of Dewu’s DAUs (Daily Active Users) is very interesting as the ratio of male to female users on Dewu is 52:48. This is in stark contrast to RED, which has a predominantly female user base.

Dewu has a sizable percentage of young customers. The post-90s generation accounts for more than 75% of the total. These young people are the driving force behind online consumption and the architects of the new online economy’s future development. They consume with strong personal qualities. They are not only open to trying new products, but they are also more willing to share their consumer experiences with others and strive for a positive consumer experience. 

When it comes to China, 61% of Gen Z is looking for brands that will set them apart. As a result, Dewu is a platform that assists Gen Z in meeting its needs. 

Why do more and more brands choose Dewu(得物)?

Dewu’s app store ranking has been in the top ten for quite some time. Dewu has now become a “platform level” product, based on the IOS store rankings and the average daily downloads of more than 100000 users. Because of that, Dewu is attracting an increasing number of companies and service providers.

At present, more than 5,000 brands have settled in, mostly fashion wear brands and high-end brands, such as sports brands Adidas, luxury brands such as Coach, Michael Kors, Armani, and so on.

The reason why high-end brands choose Dewu is mainly due to the following two points:

  1. The user group and consumer demand are expanding.
    The consumer demand of users grows as user groups expand: male users are interested in shoes, watches, accessories, and men’s apparel; female users look for more women’s clothing, beauty makeup, and skincare goods, among other things. There is space for brand development due to consumer demand.

    At the same time, the “post-90s” account for more than 80% of property users, according to the most recent government statistics. Young people are the target audience for high-end brands.
  2. The content community system is also good for the brand.
    The platform will guide customers to consistently develop high-quality content in Dewu’s content community system. When producing news on Dewu, for example, the platform will provide “high-quality strategic advice” to help people write high-quality news.

Dewu’s current content community, like Xiaohongshu’s, is in UGC mode, with many KOL and MCN institutions settling in. According to official public data, Dewu collaborated with approximately 100 MCN institutions in the first half of 2021.

Incentive for brands

The platform offers a number of benefits that attract top businesses to collaborate with the platform. They are as follows:

  • Discounted pricing for businesses (Lower cost and faster shipment)
  • The user interface is simple (high-speed operation)
  • Service of operation (New product launches, operation guidance, marketing activities, community promotions)
  • Customer service from a single merchant (Efficient response, fast payment)

Poizon Dewu Poizon DewuPoizon Dewu

Step-by-Step Process on Becoming a Seller on Dewu

The registration process for sellers is similar to that of other Chinese e-commerce platforms. There are various steps to it.

Step 1: Create an account and log in.

  • Register the personal user account for the platform
  • Create a password for your account
  • Go to the merchant’s registration page, select “I want to enter,” and read the instructions.

Step 2: Fill in the information

  • Complete the company and brand information, and then submit your qualifications.
  • Next, verify the accuracy of the information before submitting it for evaluation.

Step 3: Wait for the review

  • Within 7 working days, you will receive a response.
  • Check the status of the review, make any necessary changes, or move on to the next step.
  • Confirm the merchant’s agreement to participate.

Step 4: Make a deposit.

  • Go to merchant login backstage
  • Then make payment via online deposit or upload bank account details.

Conclusion

Dewu is a second-hand marketplace with strict anti-counterfeiting measures in place. Consumers are protected by these procedures, which provide them with psychological security by preventing them from spending money until the products have passed an authenticity check.

The platform is great for high-end, limited-edition items. Things such as co-branded items, luxury items, and collectors’ items are some examples. 

The platform also provides room for budding Chinese brands, making it an excellent starting point for those wishing to establish a brand in China.

Are you looking for setting up an e-commerce business on Dewu? Please get in touch with our team. We apply our knowledge and experience to assist businesses in forming meaningful connections and expanding their consumer base in China. For additional information, please contact us by phone – Shanghai or Hong Kong

China’s Latest Updates 

China’s first virtual magazine: a read in the Metaverse

Huasheng Media and Alimama have joined the newest Metaverse campaign in China. On February 9th, the two partners released MO Magazine, a virtual magazine that replaces traditional reading experiences with an immersive virtual reality environment.

This new medium is led by Ayayi, one of China’s most popular virtual KOLs, and Jing Boran, a Chinese actress, giving both hit figures even more clout in China while tapping into the need for Metaverse.

The digital area offers a futuristic sci-fi atmosphere in which spectators can learn about human civilisation in a digital museum that also includes an audio narrative about the earth’s evolution. This makes reading more engaging because viewers are not only players but also builders of the digital world, with the ability to contribute to the virtual “human evolution.”

Meanwhile, 88% of readers who completed the virtual reading were given a Metaverse Spaceship ticket, according to reports. In just two days, the virtual magazine has received over 400,000 views, with interest building when hashtags related to the launch of the magazine began trending on Weibo, attracting millions of views on the microblogging site.

Link: https://daoinsights.com/news/chinas-first-virtual-magazine-a-read-in-the-metaverse/ 

Shanghai Bans Effeminate Men, Money Worship in Commercial Ads

Shanghai’s market regulator released a new advertising rule on Wednesday, barring the representation of male characters in romantic relationships, effeminate men, and philosophies like money worship in commercials, among other things.

Advertisements are also barred from promoting ideologies such as “money worship, hedonism, extravagance, and soft pornography.” Also, to ensure that their communication is up to date, brands must be informed of new national and city-level legislation.

Link: https://www.sixthtone.com/news/1009633/shanghai-bans-effeminate-men%2C-money-worship-in-commercial-ads 

Alibaba: Consumption Trends for the Lunar Year of the Tiger

According to the short report, the event boosted ice and snow consumption when it coincided with the Olympic Games: over 1 million people visited the Olympic Games’ Tmall shop, and the mascot Bingdundun was sold out in one night.

In addition, there was a large increase in the sale of ski and ice sports equipment.

The festival became digital, ushering in a slew of new trends: Tiger-themed goods, such as backpacks, t-shirts, and caps, are quite popular. The search rate has climbed to 874%, while the number of people purchasing pre-cooked meals has increased by 345% via the Hema app.

Link: https://mp.weixin.qq.com/s/ZDzU2v1WeV7I42LkDeFSUg

WeChat: Keywords About the Lunar New Year of the Tiger

  • Over 5 billion WeChat hongbao with designed covers have been sent during the CNY, the total number of WeChat hongbao covers was 380 million.
  • The take out food order increased 13.8% compared to last year on New Year’s Eve and over 120 million people watched the Spring Festival Gala on WeChat Channels
  • The top 5 video themes on Moments were: fireworks, family reunion dinner, new year wishes, festival mood and count down
  • The Tiger welcome a new year was the top 1 WeChat status sticker 
  • Over 16 million coupons (over 800 million RMB) have been sent via WeChat pay and low carbon travel with Paperless boarding increased to about 82.3%

Link: https://mp.weixin.qq.com/s/FmxWAT-R8no-Gy-PxoL-9w

100 Keywords Forecast 2022

On January 27, 2022, Wunderman Thompson, a brand of WPP, released the future 100:2022 – trends and changes to watch in 2022.

This analysis projects 100 developing trends in ten categories in 2022, using 100 keywords: “culture,” “technology and innovation,” “tourism and vacation,” “brand and marketing,” “food and beverage,” “beauty,” “retail and business,” “new luxury life,” “health,” and “work.”

Brand and marketing 10 keywords:

Brandalism: In recent years, the advertising business has made significant attempts to achieve carbon net zero in its own operations. Activists argue that this isn’t enough and that the efforts pale in comparison to the carbon footprints of some of the advertising industry’s biggest clients.

“No matter how good the idea is, as long as it is to promote high-carbon products, provide misleading green packaging for oil companies, or use high-energy advertising screens, it is a kind of pollution and bad advertising.”

Co-creative platforms: The next generation of digital platforms puts the user in charge of their own creativity.

The new digital platform gives users more creative control, allowing them to take more initiative. They are a new set of creative people who meticulously develop virtual imagery, human designs, and self-expression.

Superfollowers: New in-app subscriptions on social platforms are allowing digital creators to monetize their work.

In terms of media content, social platforms are expanding to provide more than just amusement. Enhanced features and incentives to attract, gain, and keep a large following are fueling innovation and enriching social media dialogues for both producers and consumers.

Twitter, for example, allows authors to earn $2 to $10 per month by tweeting to their super fans; Twitter is also exploring business accounts to provide companies with special settings to display relevant information.

Branded virtual worlds: Gaming is increasingly displacing traditional advertising mediums, particularly among younger people.

As firms and marketers enter into this burgeoning field, expect to see more branded virtual worlds.

Allow users to compete in the virtual arena while wearing Nike apparel and equipment. P&G invites visitors to a virtual world where they may learn about the company’s product line, play games, and learn; BMW has established a virtual world that includes the IAA mobile 2021 International Auto Show and an exclusive Coldplay concert.

Users may learn about products, shop, and even watch movies in the virtual world thanks to SK-virtual II’s metropolis.

Euphoric ads: In brand advertising and engagement, happy moments are keeping spirits up.

Consumers value themes of optimism and unity, and businesses that emphasise these communal characteristics generate favourable responses from customers and increase involvement inside their branded communities.

Headless brands: A new wave of consumption creation is changing from the company’s control of the brand to the collective decision of brand, products and services

Regenerative brands: Across industries, more brands are stepping up to commit to regenerative practices, supercharging their sustainability goals.

Brands are acknowledging that doing less harm to the planet is no longer enough. Regenerating the world’s resources and repairing the damage is now the ultimate sustainability stretch goal.

New company manifestos: To stay culturally relevant and engage with today’s employees, companies are altering their internal brand messaging.

Companies are undergoing a rebranding process that aims to modernise internal rules to match today’s needs and prioritise employees. The move implies a new degree of regard for employee happiness and well-being, which necessitates a new level of understanding and empathy on the part of employers.

Dreamvertising: Brands and advertisers are looking to guide our dreams. 

77% of US marketers say they plan to use dream tech for advertising purposes in the next three years.

Augmented ads: With augmented reality, brands are taking their digital advertising to the next level.

AR ads are ushering in a new era of digital marketing and advertising—ads that people want to interact with.

To entice digital consumers, major brands are embracing augmented reality technologies to boost their digital advertising.

Link: https://www.oceanskycruises.com/sites/default/files/2022-01/The-Future-100-2022.pdf

Cross Border E-Commerce in China

China’s cross-border e-commerce has drastically matured in recent years. Thanks to the steady increase in industry size, greater integration of supply chain processes, progressive transition to more refined operation, and continued penetration of innovation models, the industry has boomed significantly. 

The import and export trade has existed since the dawn of time, yet despite the Covid-pandemic, the numbers are on the rise. The widespread adoption of online consumption patterns has fuelled the rapid growth of worldwide e-commerce. This has resulted in a steady increase in penetration and sales.  

According to eMarketer, China’s cross-border e-commerce became a new economic accelerator in China, as well as a hot investment and financing area in the capital market, thanks to its solid advantages in high cost-to-performance and high efficiency.

Cross Border E-commerce: What Is It?

Any international sale of a product or service between two parties on an online marketplace platform is referred to as cross border e-commerce. 

It can either be B2C (Business-to-consumer), B2B (Business-to-business), C2C (Customers-to-customer) or D2C (Direct-to-consumer)

Any seller can benefit from cross-border e-commerce if they want to expand their business, investigate new markets and purchasing patterns and/or export what they have to offer in order to reach a larger audience but it can be intimidating to start. 

Cross Border E-commerce in China

In China, cross-border e-commerce is distinguished by the fact that overseas companies are permitted to offer some goods to Chinese consumers online, through platforms such as Alibaba’s Tmall Global and Kaola, at favorable tariff rates and without the need for a business license.

Moreover, the majority of cross-border trades in China are carried out by corporations from other Asian countries, led by Japan and Korea, and closely followed by the United States.

The Chinese Ministry of Finance has implemented few regulations for cross-border purchases since January 2019. The following are the most important for CBEC in China:

  1. The maximum amount for a single transaction has increased from 2,000 RMB (291 USD) to 5,000 RMB (727 USD)
  2. The average annual amount spent across borders climbed from 20,000 RMB (2,909 USD) to 26,000 RMB (3,782 USD) per person.
  3. In China, 63 additional item categories have been added to the positive list for cross-border e-commerce purchases. Sparkling wine, beer, health care items, and workout equipment are among these categories.
  4. The number of cities eligible for the CBEC tax-rebate increased from 15 to 37, including Beijing and Shanghai.
  5. Because of the new regulation, it’s more difficult for Daigou to operate unlawfully. Daigous is a form of surrogate shopping in China as a means to receive cheaper or locally unavailable, often luxury goods, from duty-free shops and foreign countries. 

The Retail Marketplaces of the CBEC

In China, there are various platforms for cross-border e-commerce. Tmall and JD.com are at the top of the list. 

China’s consumers are more educated than they have ever been. As a result, they desire higher-quality goods and are willing to pay a higher price for them. They are educated and shop on the go using mobile devices. The majority of e-commerce shoppers are between the ages of 18 and 34. 

In 2017, the average Chinese online shopper spent RMB12,198 (S$2,558) (iResearch Consulting Group).

Some of the key marketplaces you could consider for cross-border e-commerce are:

  • Tmall & Tmall Global (Alibaba)
  • Kaola (Alibaba)
  • RED (Xiaohongshu)
  • JD Worldwide
  • VipShop
  • Pinduoduo

Most major global brands have a presence on one or more of these platforms because they provide high market exposure and allow them to benefit from the platforms’ high quality and exposure.

What are the benefits of cross-border eCommerce?

The most significant advantage of cross-border eCommerce is that it allows you to extend your business globally and gain exposure to new markets and audiences. Because of that, it will also assist you in increasing the appeal of your business.

With a larger audience, your company’s number of customers and potential consumers will increase, potentially leading to an increase in demand and customer orders. 

Products that are less popular in their home market have been discovered to be more popular beyond borders in some situations. As a result, cross-border e-cmmerce can help you sell slow-moving or outdated inventory.

However, there are a few things to consider before pursuing cross-border e-commerce for your business:

  1. Figure out the suitable platform to sell your products
  2. Know the latest trends and who your consumers are
  3. Understand the rules and regulations
  4. Read up on the geography of your audience
  5. Learn what various partners can do for you

End word

In conclusion, enterprises should prepare themselves by having a thorough awareness of trends, customers, location, legislation, platforms, and the ecosystem. Thank to this, they can effectively access China’s lucrative cross-border e-commerce sector. So there is a lot of homework to do, but there are also a lot of resources.

If you require further support with setting up your account or assistance in learning more about cross-border e-commerce in China,, please contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their network among Chinese customers. For additional information, please contact us by phone – Shanghai or Hong Kong

Read more such articles by clicking the links below:

What Are the Most Important E-commerce Festivals in China?
The Accelerating Growth of Niche Perfume Brands in China
A Quick Guide to Xiaohongshu (Little Red Book) Marketing
Establishing A Presence on Xiaohongshu, China’s Popular Fashion Platform