China’s Gen Z As Luxury Consumers

May 10, 2022

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.

You may also like

China’s Personal Information Law

April 14, 2022

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.

You may also like

What Is Dewu?

March 9, 2022

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

You may also like

China’s Latest Updates 

February 15, 2022

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

You may also like

Cross Border E-Commerce in China

February 7, 2022

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

You may also like

China’s Weekly Learnings

January 17, 2022

Xiaohongshu’s registers new trademark ‘Laohongshu’, eyeing Chinese elders

Xiaohongshu is now focusing on the elderly in China, a profitable customer segment that is mostly untapped.

More lately, elder generations have witnessed a surge in internet usage, becoming more tech-savvy as a result of the pandemic, to the point that a new wave of influencers over 55 has emerged. In the next few decades, China’s elderly population is expected to exceed 500 million. They are the generation that is catching up on social media and becoming more visible, particularly on short-form video platforms. 

Xiaohongshu justified the registration as a defensive measure after discovering that many other parties were attempting to register the Laohongshu trademark ahead of time. As a result, a defensive registration has been implemented to keep malevolent squatters at bay.

It all began when Youyou Video, a new app, was released in June, around the same time as the trademark application was filed. With features such as bigger fonts, voice remarks and feeds that include tips on age-reducing clothes and makeup, the app displays a focus to the middle-to-elite-class senior female users.

With the Chinese population rising and more people entering the digital world, Chinese elders are becoming a new market that Internet companies like Xiaohongshu are vying for.

Link: https://daoinsights.com/news/xiaohongshus-new-trademark-registration-approved-eyeing-chinese-elders/

Crackdowns in live streaming in China: how brands should approach it

Key takeaways:

  1. As the Chinese government promotes the ‘Common Prosperity’ concept, the government is cracking down on live streaming.
  2. Foreign brands should pay greater attention to the government’s live streaming laws and alter their tactics accordingly.
  3. Brands should ensure that their collaborating influencers follow the regulations of the government, or at the very least that the influencers’ personal behaviours do not have a substantial impact on them. Viya had to pay a record-high sum for tax evasion despite being the “live streaming queen.”
  4. Based on the restrictions issued by the government, e-commerce platforms are likely to tighten their regulations. Although the guidelines are still in the works, they are expected to limit live steamers the ability to use the platform in the way users are used to. They should, for example, speak Mandarin and dress more appropriately.

In China, crackdowns on live streaming do not always imply that the government is opposed to it. Rather, it means that businesses should ensure that their live streaming strategies are in line with, or at the very least do not contradict, government rules.

Link: https://daxueconsulting.com/chinese-livestreaming-crackdown/

How Do Brands Encourage User-generated Content On Bilibili?

Bilibili began as a video platform for anime, comics, and games. It is now one of the most widely used video platforms among Chinese Generation Z. It’s also known for having a very active community.

UGC is one of the most engaging mediums that companies can use (user-generated content). Because Bilibili users respect authenticity, high-quality user-generated content (UGC) can quickly go viral, allowing the business to reach thousands of new prospective customers, stimulate product development, and more.

Link: https://mp.weixin.qq.com/s/phbEIoaoBg7Ipik8F5YF_g

Tapping into the explosive growth of personalized beauty in China

In traditional offline beauty stores, sales associates greet customers, try to understand their needs and make product recommendations.

That has changed now. People may now access massive amounts of information with a few easy clicks at home thanks to modern technologies. Algorithms aid in the limiting of the knowledge pool, while other users’ ratings and reviews on social media assist in determining whether a product is truly effective. COVID merely accelerated the process.

They are guided by a variety of diagnostic tools, artificial intelligence (AI), widgets, applications, online quizzes, and online experts. However, in many cases, none of the items is actually individualised. The technologies under discussion are more concerned with speeding up the decision-making process of consumers than with meeting their actual demands.

WeChat’s powerful ecosystem provides a full data collection, branding, marketing, selling, and brand refresh cycle.

Link: https://beautymatter.com/articles/tapping-into-the-explosive-growth-of-personalized-beauty-in-china

WeChat Red packet cover

New shape: from rectangle to different other shapes

New ways to get: the users can get them from their Moments. 

Users who receive Moments ads with the label “shake out surprises” can shake and receive the red packet cover. If the sponsors give you “one more” chance, you can share the cover with one of your friends and they will receive one as well.

Link: https://mp.weixin.qq.com/s/3JzCpTEFbG7rQWPyvnVfow

Bilibili 2021 Top 100 uploaders

Bilibili selected 2021 Top 100 uploaders by their professionality, influence and creativity and will hold a ceremony this Friday at 19:00. It’s a good opportunity to know why they are outstanding from the uploaders.

Link: https://mp.weixin.qq.com/s/5PooWe308n67FhdD9fmW9Q

Wecom 2022 new product launch conference summary

At the new product launch in 2022, Wecom mainly talked about three major points. 

  • The first point is to connect the consumer market and bring businesses closer to their customers, as evidenced by the channel and WeChat customer care. When watching the video, watching the live broadcast, or on the main page, users can add Wecom personnel to the video number. WeChat customer service means that it can be customised whether it is in the official account channel mini programme or outside of WeChat.
  • The second point is to establish a connection between upstream and downstream partners. Companies from upstream and downstream can join the corporate address book and contact each other at any time. People from various companies can collaborate to produce papers that can then be shared with a single click.
  • The third point is that enterprise Wechat has partnered with Tencent to establish a new office function called Tencent document Tencent conference. Working on, viewing, and commenting on online papers is convenient for a large group of individuals. WeChat allows users from outside the company to collaborate on documents. Internal and external colleagues, partners, and other meetings can be invited to online meetings. There are further features like meeting minutes that can be sorted into text records automatically.

Link: https://mp.weixin.qq.com/s/5OKKBjZ5TMvg437xOQU0oA  

You may also like

WeChat Stats 2021

December 29, 2021

Weixin, which means micro message in Mandarin, was the name given to WeChat when it first debuted in 2011. It began as a simple communication programme, essentially a Chinese equivalent to WhatsApp, as its name suggests. The platform was developed and owned by Tencent, a Chinese internet giant and one of the world’s most valuable firms.

WeChat began as a simple messaging network, but it has evolved into much more. WeChat has basically become the home screen for many Chinese smartphone users thanks to its mini programmes platform, which allows almost any operation to be accomplished from within the app.

That being said, if you want to extend your business into the Chinese market, you’ll need a strategy that centres mostly around WeChat marketing, with an emphasis on WeChat users.

Here are some interesting WeChat statistics to help you see how powerful this platform really is. After all, there’s nothing like hard evidence, right?

WeChat: Active Users
WeChat has a monthly active user base of about 1.225 billion people.

Since its release in January 2011, it has grown by leaps and bounds. It evolved to become an important aspect of people’s lives, allowing them to communicate with friends and family via text messages, voice conversations, and video calls.

The aggregate monthly active users of Weixin and WeChat reached 1.225 billion in December 2020, up 5% year on year. Every day, 45 billion messages are sent and received on WeChat.

WeChat: User Demographics
Almost 40% of WeChat users are between the ages of 25 and 35 years old. Females account for 42.8% of users, while males account for 57.2%.

25 % of WeChat users in China are between the ages of 25 and 30, while another 13.8 % are between the ages of 31 and 35. Users under the age of 24 make up the greatest age demographic (33.5 %).

This is closely followed by users over the age of 41, who account for 19.1% of the total. If your company caters to these demographics, WeChat marketing could be very helpful to you.

WeChat Pay & Mini Programs Stats
WeChat Pay is used by 87% of Chinese consumers to make online payments and WeChat Mini Programs are used by almost 400 million people every day.

WeChat Pay is the second most popular online payment service in China, trailing only Alipay. Men and women make up an equal number of users, and the majority of its consumers (34%) are between the ages of 25 and 34, with the second-largest sector (28%) being between the ages of 35 and 44.

More than 400 million people utilise Mini Programs on a regular basis, resulting in total sales (GMV) more than double in 2020.  In addition, the average number of Mini Programs utilised per user climbed by 25% year over year, and the average transaction value increased by 67%.

WeChat: Market Share
WeChat probably accounts for 10-15% of the social media market, with over 1 billion active users. WeChat, on the other hand, is arguably the most popular social site in China, accounting for 34% of the country’s total data traffic

No other app in the world has this level of dominance in such a big market. In comparison, Facebook accounts for only 14.1% of North American traffic. In China, WeChat accounts for more than double that.

WeChat: Revenue
WeChat made 108.2 billion RMB in sales in 2020. In 2019, they received 82.3 billion RMB, compared to 72.7 billion RMB in 2018.

The 2021 stats for WeChat’s revenue is yet to be released, but with their constant innovation, its revenue is expected to rise again. This year, the Chinese messenger’s mini-programs facilitated 1.6 trillion RMB in annual transactions. If the increase in revenue attributed to their mini-programs is any indicator, they’ve had a fantastic year.

The Future of WeChat
WeChat will certainly be successful in China and will continue to expand. WeChat’s penetration rate in Western countries is expected to rise as well outside of the country. COVID-19 has hindered WeChat’s growth because of travel restrictions that prevent Chinese tourists from visiting. However, once the pandemic has passed, WeChat, particularly WeChat Pay, is likely to make a more serious foray into foreign markets.

In fact, Europe has been identified as a crucial growth region. WeChat Pay had been popular among businesses that serve Chinese tourists prior to the outbreak. As a result, the number of merchants accepting WeChat Pay in Europe climbed by 3.5% in 2019. Around 11% of Chinese overseas tourism was spent in Europe.

Conclusion
The stats presented above is rather remarkable and demonstrate how strong WeChat has proven to be. So, if you haven’t already considered incorporating it into your entire marketing strategy, now is the time to do so.

If you require further support with setting up your account 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

 

 

 

 

 

 

 

 

 

 

You may also like

China’s Christmas: How It Has Evolved Over the Years

December 21, 2021

Christmas in China

Christmas has grown in popularity in Mainland China in recent years, despite the fact that it is not a national holiday. Its “celebrations” have little to do with religion, but that hasn’t stopped it from becoming a huge annual event in China’s main cities. 

Chinese people saw it as a new form of entertainment, with decorated Christmas trees, Santa Claus, and reindeers adorning the streets and businesses. It’s fair to say that many young Chinese millennials and Gen Z see Christmas as another “Valentine’s Day.” It is the time of the year when men prepare heartfelt winter gifts to win over their partners, while girls dress up in a variety of fresh outfits.

Christmas in China is more of a fun day to spend with friends shopping, ice skating, or going to Christmas pop up markets and movie theatres than it is a day to go to church and spend time with family.

Various promotional events are held during this season at shops and shopping malls to increase sales. On Christmas Eve, restaurants serve Christmas meals. Intriguingly, one of the Chinese Christmas traditions is to send apples as gifts to friends on Christmas Eve.

What brands can do:

As a result, this is an ideal opportunity for brands to leverage on China’s buying spree. Retailers and businesses can also start off the winter shopping frenzy and sales season because of the festival’s proximity to the Chinese New Year. Domestic brands, on the other hand, can seize the opportunity to develop a successful brand positioning plan that elicits positive emotional responses and builds a cool global brand image.

Here are a few pointers for brands looking to attract Chinese customers during the holiday season:

  1. Concentrate on China’s major cities.
  2. Make use of a variety of digital marketing channels
  3. Targeted online advertising
  4. Make campaigns finite
  5. Customize messages and GIF’s for the audience 
  6. Use a nice static or GIF greeting card to make festive posts
  7. Create stickers for people to use in their chat sessions
  8. Create large-scale campaigns

Some previously done festive campaigns by KRDS

1. KRDS X Montagut Full-scale campaign
Montagut wanted to spend Christmas with their Chinese fans. The key objective was to engage the audience throughout the holiday season in order to promote the new FW 2020 collection and attract a larger set of younger consumers. They intended to debut new collections in order to announce the arrival of new items and trends before the end of the year.

Our solution for elegantly displaying both the new collection and the festive spirit was an H5 WeChat game set in a French winter paradise. Because of its customised and dreamy graphics mixed with a captivating tapping gaming mechanism, this game was an instant hit with Montagut’s existing fans as well as approximately 10,000 new fans.

Read more about the campaign – Montagut in Collaboration With KRDS Invited Fans To Winter Wonderland

2. KRDS x Montagut – Interactive Post
This year, together with Montagut we wanted to leverage new possibilities within the WeChat article and created this interactive, creative post – fans can engage with the post elements by clicking, swiping or double-tapping different parts of the Christmas card to open new functions and more.

 

 

Please visit Montagut’s official WeChat account and see the full post here – Montagut Interactive Christmas post

3. KRDS x BNP PARIBAS – Christmas Voice Card Campaign
During the festive season, we created and delivered a unique WeChat Christmas card that BNP Paribas’ team, their clients, and partners could share with their loved ones to wish them a happy holiday season.

The solution proposed by KRDS was an H5-based Christmas wishes voice card. The card’s lovely design and voice feature made it a simple but incredibly personal Christmas card that everyone could send to their contacts on WeChat.


Christmas Campaign for BNP Paribas – PostChristmas Campaign for BNP Paribas – Greeting Card Mechanism

WeChat Stickers Creation for BNP Paribas

 

 

4. KRDS x Procter and Gamble – WeChat Article Greeting

5. KRDS x AkzoNobel – WeChat Article Greeting6. Other Clients
KRDS have also worked with other clients like Vivo, Hong Kong Disneyland, Meiji, BreadTalk, Toast Box, Volkswagen, AIA, Unilever, Sony, WWF & Grand Hyatt.

If you’re looking for a brand collaboration or need any further assistance please contact our team. We use our knowledge and expertise to help businesses develop meaningful campaigns and develop their network among Chinese customers. For additional information, please contact us by phone – Shanghai or Hong Kong

 

 

 

 

 

 

 

You may also like

Top 5 alternatives for LinkedIn in China you need to know now

November 29, 2021

Linkedin, the world’s most popular professional social networking site, recently announced that it will cease operations in China due to a “significantly more challenging operating environment and greater compliance requirements in China,” according to Mohak Shroff, LinkedIn’s senior vice president of engineering. LinkedIn has been the only major Western social networking platform operating in China for nearly seven years.

China was LinkedIn’s second-largest market behind the United States, with over 54 million users. They would lose access to a platform for networking with professionals from other nations as a result of its departure. There are none with a similar global reach in China.

However, there are a few Linkedin alternatives to consider for users in the world’s most populous country, and here is a list of a few of them.

⚠️ August 2023 UPDATE: WeChat as a LinkedIn Alternative in China – Navigating Professional Networking Beyond Borders

Alternatives for Linkedin

Maimai

Maimai is a China-based career and social networking platform with over 80 million users. Lin Fan established the platform in 2013, and it is now China’s most popular professional social networking site, surpassing LinkedIn. 

You may acquire access to relevant firms, clients, and investors by using MaiMai instead of wasting time on other random and foreign platforms looking for the right partners. And since China’s corporate structure is so complex, such platforms make it easier to communicate directly with the company’s decision-makers.

 

Angelist

Unlike LinkedIn, Angelist focuses on entrepreneurs and industry newcomers interested in pursuing a new career path.

If you’re wanting to invest in a startup, raise capital for your own startup, or recruit professionals for your firm, AngelList is the place to go.

 

Xing

Xing is a European-Asian version of Linkedin, with over 200 countries represented and a multi-language (over 16 languages) interface to aid networking in a culturally varied world. 

Another appealing feature is the opportunity to attend events organised by Xing’s “Ambassadors,” where professionals may network, share ideas, and seek business guidance.

 

Hired

Hired is a great place to look for a job if you’re looking for one. They’re a two-sided marketplace that connects cool companies with tech talent while also providing free professional profile hosting.

 

Meetup

Meetup is the most preferred LinkedIn alternative because of its corporate features, social features, easy registration procedures, and new “virtual interview” tool for speeding up recruitment processes. 

Meetup will keep you up to date on any events that may be of interest to you and are strongly recommended when applying for jobs at startups. It is used by 16 million people in 196 countries throughout the world.

 

Conclusion

Overall, it is critical to emphasise the significance of networking in China. Many contracts and economic ventures are agreed upon based on people’s contacts. So, if you want to flourish in the very competitive Chinese market, you’ll need to make some “good friends” who can assist you and your company.

So, regardless of which platform you choose to join, social business networking is important and may assist you in developing these contacts, which can help you grow your business in China.

If you require further support with setting up your account 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

You may also like

Unusual Brand Collaborations In China

November 15, 2021

Whether your business is selling lipsticks, chicken wings, or museum tours, the topic of how to reach more new people – more customers – comes up in every marketing meeting, across every sector imaginable. So here’s a suggestion for you all – Why not tap into the audience of someone else? 

A collaboration with a competitor is obviously not going to work, but what about one with a brand that sells something completely different? 

To get noticed among China’s millennial consumers, businesses must take advantage of unusual collaborations. It may sound bizarre, but it has the potential to attract a new audience that was previously unaware of your existence. 

Here are a few examples of unusual brand collaborations in China

 

Perfect Diary – Cosmetics
Disney – Kids entertainment
Collaboration – Limited-edition line of amino acid-based facial cleaning products inspired

 

The C-beauty brand routinely leverages brand collaborations as part of its overall goal to appeal to China’s millennial and Gen Z audiences. In a recent collaboration with Disney, the company released a limited-edition line of amino acid-based facial cleansing products inspired by the Baymax character from the 2014 animated film “Big Hero 6”. Two of the makeup remover bottles are sealed with a Baymax head, while other goods include images of the character on the packaging, appealing to young buyers’ love of cuteness and blind-box style toys.

 

KFC – Fast food restaurant chain
Karl Lagerfeld’s – German fashion designer and photographer
Collaboration – Limited Edition Chicken Bags 

 

KFC China recently resorted to the luxury business to mark the company’s 80th anniversary. Karl Lagerfeld, the fashion mogul, was the chosen brand, and he created two limited-edition bags. The centre Karl Lagerfeld logo was replaced with Kentucky Fried Chicken, and Paris was replaced with Kentucky in the funny new rendition of the original Karl Lagerfeld design. The bags contain three red stripes, which are KFC’s signature colours.

Ikea – Furniture retail company
ROG – Gaming retail
Collaboration – Gaming Furniture and Accessories


Ikea presented an eagerly anticipated collaboration with the Asus Republic of Gamers (ROG) on a new collection of affordable gaming furniture and accessories, taking a “China-first” approach to product innovation. A sleek high-backed gaming chair, an adjustable table that can be used as a standing workstation, and a wall-mounted pegboard to keep gaming equipment organised are all part of the black-and-red collection.


Conclusion

Younger consumers, particularly Generation Z, are perceived as having a larger proclivity for purchasing from ‘collaboration’ collections than older consumers. According to Boston Consulting Group (BCG), Chinese Generation Z customers have the largest desire for cross-brand collaborations among this generation’s quest for newness from the brands they like.

These out-of-the-box collaborations demonstrate that the opportunities for co-branding in China are limitless. Why limit yourself to usual collaborations when you can have so much fun? Collaboration with other well-known brands across all industries may help businesses grow their audiences, increase sales, and establish a reputation as a creative and fun brand among Chinese customers.

While unique collaborations have a lot of promise for your company, getting started can be challenging. If you require further support, please contact our team. We apply our expertise and experience to assist firms in forming meaningful partnerships and developing a digital marketing strategy that better targets and connects with Chinese customers. For additional information, please contact us by phone or email.

 

 

You may also like