China News Roundup

January 25, 2022

Shopify and China’s JD.com team up to capture cross-border sellers

JD.com, a major Chinese online retailer, has partnered with Shopify to let global firms harness China’s massive desire for imported goods, as well as Chinese merchants, sell internationally:

  • The first part of the deal will put the JD-Shopify alliance in direct competition with Alibaba (which counted 35,000 international and more than 6,000 brands entered China via Alibaba)
  • JD’s account creation process will take 4 weeks instead of 1 year for Shopify-powered firms to start selling. The platform will leverage technologies like automated translation and price conversion, as well as cargo aircraft to transport items.
  • Using Shopify’s direct-to-consumer approach to export Chinese goods competes directly with market leader Amazon, which has been establishing itself as a gateway for Chinese exporters. 
  • The two e-commerce giants appear to complement each other — Shopify brings the range of products and JD offers its extensive global warehousing and shipping infrastructure.

Link: https://techcrunch.com/2022/01/18/shopify-jd-china-partnership/

Alipay unveils NFT-powered museum collectables in honour of Chinese New Year

Alipay is bringing a series of NFT-powered digital collectables inspired by the 12 Chinese

zodiacs, with the tiger – the Chinese New Year’s zodiac sign – as the star of the show.

A total of 24 institutions around the country are anticipated to take part and release NFT work featuring tigers. Topnod, a mini-program integrated into the Alipay app that collects, discovers and shares digital collectables, powers these NFT collectables. This new NFT marketplace was launched last year and is seen as another move into blockchain technology and NFT trading by the tech giant.

The Fortune of Patriotism, the Fortune of Prosperity, the Fortune of Harmony, the Fortune of Kindness, and the Fortune of Dedication are all represented by digital collectables.

To target a younger audience, almost 2,000 museums in China have established their own mini-programs on the site. The internet market for NFT has proven to be a successful means of bringing these cultural artefacts to China’s tech-savvy youth.

Link: https://daoinsights.com/news/alipay-unveils-nft-powered-museum-collectibles-in-honour-of-chinese-new-year/

[Xiaohongshu] 6 Lessons from Chinese Beauty Brands

 In 2020 China’s Beauty market was valued at USD 6.34 billion with an average growth rate of 12%. 

Thanks to KOLs and KOCs, RED is the key platform for product and brand discovery. 

  1. The Diamond-Shaped Seeding Method
  2. Male influencers
  3. Ingredients & Routine
  4. Meeting Needs at Speed
  5. High Quality & Informative Content
  6. Posting Frequency & Topics

Link: https://mp.weixin.qq.com/s/_LpvQ7sJnjIqLgyG-qFYQg

How Have Brands Used Channels Since Its Launch Two Years Ago?

WeChat has prioritised Channels since its launch two years ago. The following are some of the most important updates:

  • In December 2020, live streamers can use live streaming filters, host lucky draws, and connect with other live streamers. 
  • In May 2021, Channels finalized its commercial function by adding a product tab on videos. Users can watch videos/live streams while placing orders. 
  • Later in October, Tencent connected WeCom and Channels so that brands can maximize the conversion opportunities of their video content. For example, sales associates can share brand Channels videos with their clients. 

The 3 types of favoured content are:

  • Emotion-based
  • Professionally-generated content (news, official announcement)
  • Entertainment

The 3 types of channel live stream are:

  • Complements OA performance
  • Education content
  • Fashion & entertainment

Link: https://mp.weixin.qq.com/s/nieKtQ-z8ID1K8fIgkC1dw

Top 10 global consumption trends in 2022

  1. Stock goods: Because they couldn’t get the products and services they required on a regular basis, hoarders began to buy similar items or come up with inventive solutions.
  2. Low-carbon lifestyle: As public awareness of climate change grows, customers are making attempts to reduce their carbon footprint by purchasing ecologically friendly goods and taking other practical steps, and they want brands to play a role in environmental protection.
  3. Older consumers get involved in digital: they are comfortable with and adapt to new technology, and they can shop and use a variety of services via digital platforms.
  4. Rise of financial enthusiasts: Consumers’ investment confidence has gradually increased, and they know better how to improve economic security through financial management.
  5. Interest and purpose-oriented behaviour: The pandemic has made great changes for consumers – people have re-examined their values, lifestyles and life goals.
  6. Rise of the metaverse: As consumers pay more attention to the metaverse in 2022, businesses will have the opportunity to build brand value in this new digital ecosystem, promoting e-commerce and virtual goods sales.
  7. Second-hand consumption: With the increasing awareness of sustainability and personalization, people have gradually eliminated the prejudice against second-hand goods and promoted the development of point-to-point platforms.
  8. Urbanized pastoral life: More environmentally friendly activities, such as indoor agriculture and roof gardens, can be integrated into urban areas to better complement the pastoral city trend.
  9. Self-love: Self-acceptance, love and tolerance have become the most important life attitude of consumers. If the product can make consumers feel optimistic and confident, the brand influence will also increase.
  10. Return to the new normal in diversified ways: When consumers consume online for convenience or safety, they are also eager for meaningful social connections. Therefore, it is very important to adopt the mode of combining the two to meet the new normal of consumers.

Link: https://mp.weixin.qq.com/s/DnE_rpUlgWI-gi_G2NWZDg

The more social, the more social phobia, how does online social lower people’s social ability?

We constantly emphasise the Internet’s convenience and fun, but the reality is that people are becoming increasingly fearful of social situations. Although, in many situations, online social networking can efficiently overcome the inconveniences of time, geography, and form. However, an increasing number of people are avoiding face-to-face social situations.

Take a look at the social phobia search index over the last ten years, which has been steadily increasing. According to Guangming Daily’s social terrorism statistics, more than 62% of people have a clear social terrorism tendency.

Social phobia manifests itself in a variety of ways. When people meet up with acquaintances, they are hesitant to say hello and hide silently; they are also hesitant to talk in public and avoid doing so. Dinner is shared among friends, but everyone bows their heads and plays with their phones; Even the salesperson doesn’t want to ask questions when you are shopping.

The network allows for greater self-presentation: people used to try hard fitness, beauty, makeup, and plastic surgery to improve their charm and image. All problems can now be readily solved using social support software. The external image created by software will have a significant gap, in reality, causing people to be afraid of revealing their true self’s real life.

The Internet provides more social forms: they can escape the anxiety and fear of social interaction with the help of takeout, express, WeChat and games without being exposed to the sun.

The network provides stronger communication ability: on the Internet, we have more time to package our behaviour. We have enough time to think about the content of each other and trigger more interesting topics; To sort out the words you respond to.

Link:https://mp.weixin.qq.com/s/xvuPAPcWmGByKhzA20NOfg

 

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Weekly China Review

January 4, 2022

Baidu unveils China’s first metaverse platform ‘Xi Rang’

Users can create avatars, connect with other players, and explore the virtual world of XiRang using Baidu’s new metaverse platform.

It is available in China and lets you create avatars, chat with other users, and even build your own place on the platform. Players can explore Creator City, XiRang’s first city, as well as the surrounding virtual natural landscapes and other traditional Chinese settings.

Unlike Meta’s ‘Horizon Worlds,’ which is only available to Oculus Quest 2 headset owners, XiRang may be accessed via a smartphone, a computer, or a virtual reality headset. Baidu hopes to encourage creators to develop new activities on its platform in a variety of areas, including gaming, entertainment, education, advertising, and events, by making it easily accessible.

Link: https://www.scmp.com/video/technology/3160931/baidu-unveils-chinas-first-metaverse-platform-xi-rang

What Will Travel Retail Look Like in 2022?

The Chinese Duty-Free Group’s priority in 2022 and beyond will be on finding new ways to deliver more commodities choices to travel retail shoppers.

The travel retail industry should focus on rising market prospects in newly opened duty-free zones including Qianhai Pilot Area, Henan Pilot Free Trade Zone, and Pudong New Area in 2022. To further its retail growth beyond the pandemic, China wants Hainan to become a key holiday destination for both Chinese and overseas visitors.

Link: https://jingdaily.com/china-travel-retail-trends-hainan-shanghai/

What is exactly a metaverse and why does it matter? Report

By the end of 2021, the term “metaverse” had become a buzzword that was all over the news. However, the concept might be perplexing, and different stakeholders will understand it differently. 

Mark Zuckerberg, for example, refers to it as the “embodied internet.”

Although the metaverse is still in its infancy, some existing technologies and platforms already provide many chances for businesses to exhibit themselves there, demonstrating their digital innovation and readiness to interact with users online. Building a 3D presence can also open new revenue streams.

Interoperability, or the seamless connectivity between digital experiences, is a key feature of the metaverse. Closed platforms, on the other hand, are the rule right now.

Link: https://media.monks.com/articles/report-make-sense-metaverse

Who are KOCs and how do you work with them?

KOCs means Key Opinion Customers. Compared to KOLs (Key Opinion Leaders) they are individuals with relatively strong influence over their peers, family, friends and group of potential followers.

Because they are not paid, they are more genuine, making KOC marketing a low-cost marketing method. This means fewer people will see your content, and you’ll have less control over it. You’ll also have less tracking.

 Platforms: Xiaohongshu, Dianping, WeChat, Douyin.
Methods: asking for feedback, personalization, product seeding, live streaming, focus groups. 

Link: https://mp.weixin.qq.com/s/u9IQ3gyL_tR0-COMeniOBw

2021 Top 4 trendy scenarios for brands

  1. Metaverse: As a result of the post-pandemic increased social virtualization, marketers sought out new scenarios to expand their commercial opportunities.

    Xirang (希壤)is the name of Baidu’s social metaverse app. In the app, users can make friends and trade. Xirang will become a major site for life, work, and recreation in the future due to its strategic location. The ambition of Baidu is to become the Metaverse’s infrastructure platform, providing AI, cloud computing, and other technical engines for Xirang and other Metaverse businesses. Xirang’s version number is currently – 6.0, which is still negative after more than a year of development and testing. It’s not ideal, and there’s still a lot of opportunity for improvement. Many brands, including Burberry, Oreo, and OPPO, have developed their own NFT variants.

  2. Outdoor camping: People are increasingly interested in outdoor activities as a result of the disease, and they want to get in touch with nature. According to Alibaba research, the number of reservations for tents and camping on their travel platform surged by more than 14 times month over month
    – CTI magazine worked with Milklad and Red to host a “City coffee camping season” offline event.
    – Adidas teamed up with Camplus, an outdoor lifestyle platform, to host an outdoor hike at the Great Wall’s base.

  3. New consumer brand stores (Concept store or crossover): This type of store helps communicate the brand’s distinct concept to a younger audience.

    – Ice cream brand Zhongxuegao collaborated with coffee shops
    – Coffee brand Saturnbird collaborated with lifestyle brands and organized a pop-up market. It will become a dancing party at night.

  4. Creative Livestream: The brands tried different formats like talk shows or created new formats to attract potential users.

    – Down jacket brand went to Tibet
    – Milk brand showed the audience the cattle on the grassland

Link: https://mp.weixin.qq.com/s/cfi9hkzjXVOs1rJpwMw9-g

Why don’t young people pay for the “internet celebrity brand” anymore?

Last year, an Internet celebrity brand Zhong Xuegao developed a “lixiangguo” dumpling brand. The price of a single dumpling was around 3 yuan, with the hopes of attracting customers’ attention through “high price,” however it had had little success.

Why don’t young people want to pay for the “internet celebrity brand” anymore?

  1. For internet celebrity products, most customers think that the products are expensive. Consumers will choose them because of their temporary popularity, and give them up because of the influence of product quality.
  2. In most cases, High-cost investment and huge risks make brands unbearable. They focus on Marketing which can bring a lot of traffic in the short term, so brands spend money on famous platforms like Douyin, they only pursue marketing and ignore products.
  3. Many internet celebrity products generally have a weak foundation, the team and products are not mature enough and will not be finely operated.

If a wanghong brand wants long-term development, it should pay attention to promoting product design;  it should also pay attention to user experience. Continue to innovate and create new value.

Link::https://mp.weixin.qq.com/s/-J95lxEC7zOS3b-wAI__2A 

 

 

 

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This Week’s China Roundup

December 21, 2021

Insights Report – Leverage China GenZ Consumption Behavior

How can Marketers use these trends?

  • Social: Brands must broaden their brand influence to fulfil the needs of young people who enjoy socialising and building a stronger readiness to share, thus interactive innovative marketing is appropriate
  • Personalized: To better stimulate Gen Z’s attention and readiness to seed material, brands must integrate their interests and hobbies, which is ideal for vertical marketing that blends interests and hobbies.
  • Impulsive Micro-moment: Brands must leverage the power of a strong social chain and community to lead and expedite Generation Z’s purchasing decisions, which is ideal for precision marketing embedded in social occasions or private traffic via WeChat private groups.

Link: https://www.chinatradingdesk.com/post/insights-report-genz-consumption 

 

Could Sustainability Messages Sour Chinese Consumers on Your Brand?

For years, the fashion industry has associated Chinese customers with constant sales growth while also thinking them to be behind the trend in most global sustainability discussions. Luxury and fashion must avoid falling into the trap of “educating” China’s youthful, environmentally sensitive buyers from a condescending, Western-centric perspective.

To compete with the ruthless competition, brands must integrate sustainability messaging with outstanding aesthetics, competitive prices, and impeccable service. Sustainability alone will not be enough.

While 71% of those surveyed claimed they wished to support sustainable products, just 29% actually purchased them. When it came to sales conversions, buyers prioritised good design, long-lasting quality, and overall e-commerce experiences.

Link: https://jingdaily.com/chinese-sustainability-messages-greenwashing-everlane/ 

 

Brands are pursuing sustainability

According to Mckinsey research, over 80% of Chinese interviewees would pay for environmentally friendly packaging. Green buying is popular among Chinese shoppers. As the government promotes the concept of sustainable consumption, brands are paying more attention to it.

In fast fashion, the brands start from the fabric, using degradable materials:

  • Blue skylab (belong to car brand NIO): Used the remaining materials after the car production to make shoes.
  • Timberland: Built a pop-up shop by using the Sugar cane. The pop shop itself and the decorations in the shop were made of sugar cane. They use sustainable and recycled materials to create goods.
  • Adidas: Leveraged the recreation of the old clothes. They invited hundreds of designers and students from art colleges to join the campaign.

In the food and beverage industry:

  • Starbucks: Opened the world’s first environmental protection experimental store in September, the furniture was made by recyclable materials; in the shop, you can see the artworks created by the coffee grounds
  • Jindian (a Chinese famous milk brand): Did a 3 monthly live-stream in Bilibili and invited people to watch the grassland, 
  • Budweiser: Collaborated with the Bilibili’s KOLs and made artworks by grain waste 

Link: https://mp.weixin.qq.com/s/L1K7OHmCQ4vErU9k29mGnA


Douyin launches a graphic plan on the content!

Douyin launched official activities of the images and text. The activity rule is that the creator must release at least three photos with copywriting and include the topic’s hashtag. 

Only creators with less than 10,000 fans are eligible to participate. This is a great option for flat bloggers who don’t know how to make short films but want to show off their douyin skills.

Advantages:

  • It will make it easier for graphic bloggers than short video bloggers.
  • For those who are good at copywriting and pictures, it is very beneficial.

To improve the platform’s content ecology, Douyin wants to draw back some of the most unique and capable graphic KOL from red book. Douyin has also provided specific awards for graphic creators in order to encourage them to be more active. It can be identified and rewarded as long as the image is clear and normal, the text is rich, and the information communicated is useful.

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China Happenings This Week

December 7, 2021

Why Online and Offline is a Must to Meet Chinese Consumers’ Retail Expectations

There is no opposition between Onlive VS Offline: most Chinese consumers do not make ‘either-or’ shopping decisions. They may shop online or go to the store, depending on their current needs. They do, however, desire a consistent and integrated experience regardless of where they are. More physical establishments are enhancing customer experiences with tech-driven services such as live streaming, as well as physical forms such as workshops and event spaces that are also connected to technology.

Retailers are successful if they 1. make it more entertaining, 2. make it more pleasurable, 3. make it more reliable, or 4. take away the agony.” It used to be enough to be the best in one of the four quadrants. However, as the retail industry has gotten more competitive, retailers must now cover all four quadrants. Alibaba, for example, not only addresses the problems (like Amazon does), but it also adds a lot to make purchasing enjoyable.

Consumers now regard shopping as a pastime or a form of entertainment, with the goal of not just getting goods but also being entertained and learning new things. And making some purchases along the way.” Consumers, on the other hand, have high expectations for the entire customer journey. They are looking for something more than just a transaction. Consumers expect experiences that are enjoyable, meaningful, and connected to their values. It doesn’t have to be a high-tech augmented reality game all of the time.

Link: https://www.chinaskinny.com/blog/chinese-retail-expectations/

 

Why China’s Idol Economy is at its Turning Point

With a few significant scandals and strengthened controls and actions by the Chinese Cyberspace Administration, 2021 was a year full of changes for Chinese influencers and KOLs. Following the “227 Event,” which involved actor and singer Xiao Zhan and his adoring followers and resulted in the entire suspension of a website in China due to its widespread reporting, a barrage of criticism erupted.

Furthermore, many followers will go to any length to support their idol. To stimulate irrational consumption, brands exploited this mentality by linking their products to their idols’ “reputation.”

The “Qinglang Campaign” is a broad crackdown in China against “fan culture.” To begin with, Chinese authorities have stated unequivocally that they “do not support” unreasonable fan behaviour. Because of this stern stance, brands were forced to reconsider their cooperation with Chinese idols. The old idol economy model, which is based on the purchasing power of fans, would plainly put companies in danger. 

Finally, numerous fan organisations have been subjected to direct limitations on Chinese social media platforms. On Weibo, certain well-known musicians’ online fan groups were banned for a month. As a result, nearly all fan groups are now attempting to find ways to avoid the storm. They’re altering their social media accounts usernames and advising their fans to keep a low profile.

The current state of the idol economy does not imply that idols will vanish in China; fans still adore their idols, but extreme forms of fandom have been prohibited. When possible, fans can still find fresh ways to show their support for their favourites.

Link: https://daxueconsulting.com/china-idol-economy/

 

5 Emerging Cities in China Luxury Brands Cannot Overlook

When it comes to marketing, global luxury companies concentrate on first-tier cities, yet brand strategies in emerging markets must be distinct from those in Tier-1 cities. Young shoppers in lower-tier cities are less concerned about living costs and saving challenges than those in top-tier cities. As a result, they have more money to spend.

The 11/11 Shopping Festival confirmed that China’s lower-tier cities are a promising market for luxury products. Between November 1 and 3, when Tmall began selling luxury items, the number of luxury customers in smaller cities increased by about 50%. Tmall’s Luxury Pavilion received orders from YOY and shoppers from nearly 400 different cities.

In emerging nations, the “invisible rich person” has become a critical consumer category. 5 non-top-tier cities with a high concentration of high-net-worth individuals: Ningbo, Suzhou, Xi’an, Shenyang, and Wuhan are all cities in China.

Link: https://jingdaily.com/lower-tier-cities-high-net-worth-luxury-ningbo-wuhan/

 

Baidu App launched the first metahuman based on celebrity 

GONG Jun, the first star in the metaverse with a metahuman IP, has joined the Baidu app as an AI explorer. This metahuman is distinct from other virtual idols in that he can interact with app users. You can talk to him and ask him questions, and he will appear when you call his name and answer your inquiries.

Baidu used Text To Speech to make the metahuman’s speech sound as real as possible. Users can allow him to read the news during his commute. A metahuman IP might give celebrities more options and set them apart from the competition. It can also be used in a variety of situations, such as customer service, tutoring, and so on.

Link: https://mp.weixin.qq.com/s/NZGaFUjT1PWRBsAA3m9ZwQ

 

WeChat external links regulation

In a private message, the users can send the external links they want.In the group chat, the users can share the eshop(Taobao, JD etc) links and open them directly (test stage). It plans to let the users manage the external links in their WeChat.

Link: https://mp.weixin.qq.com/s/7zxqex8DuuWj8cFfDhz2bw

 

Why do luxury brands like marketing crossover?

  • Ferrari held its first fashion show by inviting Armani’s creative director to design clothes. 
  • LV opened its first coffee shop in Japan at the beginning of the year. The high-value design attracted many people. Although the price of LV coffee is higher than the market price of other coffee, the price is very cost-effective for the luxury brand image left by Lv to users.
  • Hermes opened a gym in Chengdu this year. Hermes has grasped the concept of an active and healthy life of people, sending the positive life spirit of the brand in addition to fitness.
  • Prada opened a vegetable store in the centre of Shanghai and covered the whole vegetable market with logos. The highlight is to provide Prada packaging bags for offline consumers.

The purpose of luxury play cross-border marketing is to pursue freshness and use “small money to get large traffic flow”. In addition to taking care of their own consumer groups, brand culture can be extended to life.

Cross border marketing not only retains the luxury temperament of the brand but also provides users with different luxury product experiences. Compared with sports cars, clothing can also expand the range of consumers. It injects interest into the brand and allows users to understand the value point and culture of the brand in an all-round way

In fact, every cross-border brand has insight into the current popular life and combines the tonality of the brand with marketing to form a higher degree of discussion, but also seize more consumer groups.

Link:https://mp.weixin.qq.com/s/vqBhla4FeAkX62gwVMg09g

 

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Weekly China Oversight

November 30, 2021

WeChat’s latest update signals support to China’s first personal information legislation

Tencent’s WeChat received a fresh update for its 8.0.16 version recently. Users can now discover a new page in the settings menu called “Personal Information and Authorizations” by going to Settings -> Privacy.

This modification is in reaction to the publication of China’s first Personal Information Protection Law, which requires businesses to process personal data publicly and accurately. 

WeChat’s latest update gives users four alternatives for swiftly viewing and changing the personal information they’ve submitted to the app and other third-party platforms:

  • System Permissions
  • Authorisations
  • Personalised Ads
  • View and Export My Information

Link: https://daoinsights.com/news/wechats-latest-update-signals-support-to-chinas-first-personal-information-legislation/

 

Should Brands Distance Themselves From ‘Controversial’ Celebrities?

Apart from extreme cases like Kris Wu should brands be quick to cut ties with their brand ambassadors?

“In the digital era, people who agree do not speak as loud as those that disagree, but those who disagree may not be the brand’s actual consumers”

As a result, companies can only get an accurate answer through surveys and research. Luxury firms are selecting many ambassadors for their ranges to limit risk, with Dior leading the way with 14 spokesmen and numerous house friends.

With increasing calls for diversity and inclusion in China, local customers are demanding a more diverse cast of brand ambassadors. The local market has shown signs of fatigue towards pretty ambassadors, now preferring more intriguing backstories and deeper connections with their brands.

Link: https://jingdaily.com/luxury-brands-distance-controversial-kols/

 

Five consumption trends in China in the next 10 years (by Mckinsey)

China’s emerging consumer class has become the growth engine of many global consumer goods: in the next decade, middle and high-class consumers may become the main force to promote China’s consumption growth. 

Non-first-tier cities may become a source of power: cities are expected to account for over 90% of China’s future consumption growth. Different urban consumer marketplaces have significant disparities. The rise of Chinese local brands is fueled by a shift in consumer attitudes: Chinese consumers’ brand preferences are shifting, and consumer support for local brands has aided the rise of some local businesses. Chinese brands are gaining market share in domestic consumer goods and electronic devices, with a market share of more than 50%.

More than 70% of Chinese digital customers consume both online and offline, resulting in large data pools. Consumption data is exploding thanks to the burgeoning digital economy. A new market consumption curve is emerging: the consumption curve in the Chinese market is shifting as a result of the confluence of variables such as business model innovation, technology-driven unit cost reduction, and new purchasing behaviour. Chinese technology companies are at the forefront of the global curve shift.

Link: https://mp.weixin.qq.com/s/XjHKuMtKKb7zEOb4rcY5Cw

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China Roundup This Week

November 16, 2021

What can Europe learn from China’s live e-commerce boom?

Consumers in the United Kingdom, Spain, France, and Poland expressed interest in live e-commerce for online shopping, with 70% expressing interest. In 2020, Western brands will see 15 times more engagement in live e-commerce than they did on traditional social media, three to five times more sales, and a 50% increase in customer numbers.

If China’s growth trajectory is followed, Europe has the potential to reach over 160 million live streaming e-commerce consumers by 2024, with about 100 million of them making purchases while viewing live feeds.

China is about five years ahead of Europe in terms of economic development. China’s experience may provide us with valuable lessons. It took China a few years to turn live e-commerce into a popular format used by both companies and consumers on a regular basis. Europe is currently in the research and development phase, but we can anticipate some significant changes in style and approach:

 

Link: https://technode.com/2021/11/04/what-can-europe-learn-from-china-livestreaming-ecommerce-boom/ 

 

Can C-Beauty Brands Cultivate Loyal Consumers?

Florasis, which ranked third on Tmall’s “Double 11” best-selling brands list in 2020, has dropped out of the top ten this year. Local beauty brands frequently spend more than 65% of their income on marketing, substantially exceeding the market norm of 30-40%. Although their massive advertising, KOLs, and live streaming budgets quickly generated social buzz and attracted new customers, they failed to maintain user loyalty.

“Through data analysis from ByteDance, we found out that most international companies work on the branding side, while Chinese brands focus more on the performance side,” Hwee Chung, Kantar Worldpanel’s head of the China beauty market, stated. That is, Western brands employ influencers to create a desirable atmosphere around their products in order to attract customers. Domestic brands, on the other hand, use low pricing and KOL promotions to entice customers to buy specific products. R&D and licencing are not addressed by C-beauty brands. Yatsen Group, for example, holds 38 licence patents, but Procter & Gamble files 3,800 licences each year.

Link: https://jingdaily.com/c-beauty-brands-loyal-chinese-consumers/

 

Changing Attitudes Towards 11/11 Shopping Festival?

Despite setting new sales records, Alibaba and other e-commerce companies are keeping their sales figures quiet this year.

Alibaba attempted to rebrand “Double Eleven” as the Chinese government pursued attempts to regulate big digital businesses and wipe out the worst excesses of economic inequality. The company’s annual promotional extravaganza lacked the star power of prior years, with green efforts, homegrown companies, and rural products taking centre stage.

Link: https://www.sixthtone.com/news/1008954/alibaba-tries-an-unfamiliar-new-singles-day-strategy-restraint

 

Douyin City

This is a big IP from Douyin. This offline event was held for three years by Douyin in collaboration with local tourism/brands. Every time they visit a city, they should promote both the place and the companies. They’ve visited over 70 cities, and this time they’re in Sanya. Its goal is to raise awareness of Douyin through various activities such as dreamland, a music festival, and a webcast. People will also learn about the city, where to go, and what distinctive foods they have, among other things. They built six blocks for Sanya’s Dreamland, where players can take on various identities, complete stages, and win prizes.

They used VR, AR broadcast, and the Douyin micro application to create interactive and social situations. People would be able to see brand information through virtual reality and augmented reality interactive experiences. Celebrities and musical KOLs were also asked to attend the festivals. This is a win-win idea for both Douyin and the cities; by uploading short videos with #Dou In the City, KOLs will encourage more people to come and visit. This effort will give the KOLs more exposure.

Link: https://mp.weixin.qq.com/s/Imd1eRm2LYkcR9auoLWXKA

 

Singles’ Day posts record haul despite slower pace, as China’s antitrust moves dampen world’s biggest online shopping event

The world’s biggest online shopping event recorded a slower pace of annual growth after Alibaba Group Holding swapped the usual razzamatazz of Singles’ Day for a more down-to-earth event that stressed sustainability.

The gross merchandise value (GMV) for this year’s Singles’ Day reached a new high of 540.3 billion yuan (US$84.5 billion) across the 11-day campaign, representing an increase of 8.45% year on year. Since Alibaba launched Singles’ Day in 2009, this is the first year of single-digit GMV growth.

  1. This year’s Singles’ Day was weighed down by China’s slowest economic expansion pace in decades, as growth slowed to 4.9 per cent in the third quarter
  2. This year, Tmall issued 100 million yuan worth of ‘green vouchers’ to encourage purchasing decisions that ‘contribute to an environmentally friendly lifestyle’

Link:https://www.scmp.com/tech/big-tech/article/3155762/sales-growth-alibabas-singles-day-drops-amid-chinas-crackdown-big

 

How to Recontextualize Brand Narratives in China

The house’s 70th-anniversary campaign, which featured Max Mara’s iconic Teddy, was a major hit in China, driving organic social traffic to offline footprints.

Image courtesy of Max Mara’s Mini Program.

  1. With a sophisticated understanding of China’s digital ecosystems, Max Mara has successfully built up a content-to-commerce loop.
  2. Luxury brands need to tailor social currency that can be showcased and shared with users’ friends via social platforms, per each campaign’s themes, as well as each platform’s user demographics and capabilities.
  3. Global HQs of luxury brands need to be aware of the uniqueness of China’s ecosystems and allow higher flexibility in experimenting with innovative approaches in the market.

Link:https://jingdaily.com/max-mara-70-anniversary-campaign-china/

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This Week’s China Learning

November 9, 2021

2021 Beauty Industry White Paper

Although this white paper focuses on China’s cosmetics industry, many of the conclusions are applicable to China’s other industries.

Main takeaways:

  • A content-focused strategy is becoming increasingly important, rather than a price-focused strategy.
  • Brand building has been a priority for both foreign and domestic brands. They are increasingly focusing on long-term brand equity/notoriety rather than short-term ROI.
  • In China, young internet customers remain the most significant market for most brands. Women under the age of 40 account for approximately 70% of the global cosmetics market, significantly outnumbering their demographic share.
  • As the appeal for transactional techniques fades and becomes increasingly unsustainable, younger consumers are more affected by brands and content that resonate on an emotional level and match with their value system. As a result, marketing is far smarter and more fascinating now than it was in the days when all you had to do was decrease the price.

Link: https://www.kantarworldpanel.com/cn-en/news/2021-Beauty-Industry-White-Paper?utm_source=news_chinaskinny_com&utm_medium=email&utm_content=The+Weekly+China+Skinny&utm_campaign=20211102_m165346214_20211102+-+1&utm_term=2021+Beauty+Industry+White+Paper

 

B2B Marketing in the Post-LinkedIn Reality

Maimai 脈脈 is a homegrown social-networking platform for professionals to create business connections, the Chinese equivalent of Linkedin. It now has more than 80 million high-value real name users with more than monthly active users of 30 million.

Through Maimai, marketers can convey their advertising message into different types of Ad formats including Splash Ad, Native Ad, and instant message, etc. Additionally, marketers could target the audiences in different positioning based on their geographic location, gender, career position (C Levels/ Directors / Managers grade), job industry (Business / Legal / Finance/ Design/ IT, etc), and even their specific company.

Link: https://www.xinergy.global/maimai-the-chinese-linkedin/

 

The older Chinese consumers turning silver into e-commerce gold

A few months ago, the Chinese government was encouraging the biggest Chinese apps to prepare elderly-friendly versions. More than 264 million people, or 18.7% of China’s population, are aged over 60 in a country that is ageing rapidly, according to census results published in May.

COVID-19 forced many Chinese 60+ online making for an expanding population of “silver-haired” internet users who have made the move to online shopping in China in the past year, nudged by the coronavirus pandemic, government policy and e-commerce giants. JD reports that retirees living in major cities, with money to spend and plenty of time, were some of the most prolific shoppers since the pandemic, with over half of the goods catering to the elderly bought by users themselves this year.

In the first three quarters of this year, purchases by the silver-haired demographic grew almost fivefold year on year, with users focusing on leisure purchases, such as gardening supplies and package tours. To really tap this market, online vendors need to simplify their designs or offer user-friendly guides for their apps or websites.

Link: https://www.scmp.com/news/china/article/3153456/older-chinese-consumers-turning-silver-e-commerce-gold

 

GUCCI– burst game

For its product burst, Gucci, a worldwide luxury brand, devised an innovative H5 game that allows users to engage, comprehend items, and expose brands by avoiding obstacles in the tunnel.

Burst’s shoes “gallop” in a 3D three-dimensional colour tunnel. At the 8m position, there are two operation guide arrows. Users can use the up and down arrows to directly drag bursts around the tunnel to escape impending obstacles by clicking and dragging it. There are timers and score reminders in the game. If you run into any barriers, the game will automatically finish and the game results page will appear.

 

Luxury brands are ditching KOLs for virtual influencers in China: how Alexander McQueen, Dior and Prada are turning to digital avatars and AI idols to woo millennials

Making their way from music to fashion, virtual idols are paving the way for mixed reality initiatives, increasingly appealing to younger, digitally native consumers.

As more consumers move online, they will increasingly demand compelling narratives like Maie’s from their virtual idols. It seems, every luxury consumer will be able to hatch their own virtual idols in the future.

Link: https://www.scmp.com/magazines/style/luxury/article/3153210/luxury-brands-are-ditching-kols-virtual-influencers-china

 

 

 

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What Happened in China This Week?

October 19, 2021

Chanel Takes on the Resale Market With One Bag per Person per Year Policy

Chanel limits the number of purchases for its most popular handbags to one of each per customer per year. The move is aimed at preserving the uniqueness of luxury goods, since the resale market has exploded in recent years, with proxy purchasers buying out stocks and diluting the brand experience when reselling to their own clients. Furthermore, China’s second-hand market is expanding.

China is well-known for its vast resale grey market, which is overseen by plenty of daigous. According to BCG estimates, Chinese consumers will spend $35 billion in the global luxury market in 2020, with $28 billion (80%) paid through the usage of a daigou service.

Link: https://jingdaily.com/chanel-limit-purchases-handbags-resale/?utm_source=Jing+Daily+Subscriber+List&utm_campaign=b5b170f8dd-EMAIL_CAMPAIGN_2020_03_12_06_39_COPY_01&utm_medium=email&utm_term=0_8dec01cd8d-b5b170f8dd-408268421 

 

Taobao launches a new feature to embrace Double 11 shopping festival

Taobao launched a new feature called “Planting Grass Machine” 种草机 where users can browse product recommendation reviews that are posted by other users. It’s supposed to help consumers make better consumer decisions based on peer recommendation and it’s supposed to offer more variety of content and reviews than just KOL endorsements.

Any keyword typed in the “Plant Grass Machine” will take the user to a page of relevant lifestyle-sharing content.

Link: https://daoinsights.com/news/taobao-launches-a-new-feature-to-embrace-double-11-shopping-festival/ 

 

Double 11 x KOL’s reality show

In China, Livestream shopping has become a new trend, with more and more firms using it to market their products. This year, Austin, a well-known KOL, debuted a reality show called the Girls’ Offer. We can watch the show on Weibo, the Red and Douyin. During the show, we can see how he negotiates the price with the brands (most of them are cosmetics brands) and how the brands react to the challenges.

As the double 11 is coming, this show is like a teaser. The brands can get exposure before the big event, Austin will enhance his image and bring more traffic to his Livestream thanks to his professionality, the consumers can know in advance which brands will have the best offer for them.

Link: https://video.weibo.com/show?fid=1034:4690150597525601 

 

Tencent’s WeChat to stop routinely accessing photos after a tech influencer publicized the behaviour on Weibo

WeChat’s background scanning for new photos was said to run every few hours and found using Apple’s new “Record App Activity” feature in iOS 15. The company said the behaviour will be removed from the app in a future update, but other apps have been found to do the same thing

Background scanning for new photos “will be cancelled in the new version”, a company representative said. 

In recent years, China’s big tech businesses have been under increasing pressure to address privacy concerns. In 2019, the Ministry of Industry and Information Technology began checking apps for privacy issues on a regular basis. To date, it has identified over 1,300 apps for having too many permissions, illegally gathering user data, and misrepresenting customers.

Link: https://www.scmp.com/tech/big-tech/article/3151762/tencents-wechat-stop-routine-scans-photos-after-tech-influencer 

 

LinkedIn’s China retreat stems from regulatory and competitive pressures as local recruitment platforms prosper

The decision comes only two weeks before China’s Personal Information Privacy Law, which is one of the strongest data protection laws in the world, goes into force. In China, where job seekers and professional networkers have a variety of options, LinkedIn had only made a limited impact.

LinkedIn first entered China in 2014, and with its partial exit, it has become the final big US social media company to leave the nation.

Link: https://www.scmp.com/tech/tech-war/article/3152526/linkedins-china-retreat-stems-regulatory-and-competitive-pressures  

 

Why Brands Need WeChat Index

Based on the official explanation from WeChat Index, there are two main ways:

  • Brands can create related content on WeChat, such as WeChat articles, videos, or advertisements, to increase their exposure.
  • Brands can improve the quality of content that is related to the keyword.

Brands may assess their level of popularity on WeChat and so determine whether they are top-of-mind for Chinese customers by watching the WeChat Index. Brands may also determine the return on investment of marketing campaigns by comparing their WeChat index records to the campaign dates and determining which days have the highest search volume.

Link: https://www.luxurysociety.com/en/articles/2021/04/wechat-luxury-index-2021-social-commerce 

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Weekly China Insights

October 12, 2021

WeChat Launches Easy Mode for Elderly

The older generation, even though relatively mobile-savvy, faces a lot of challenges when it comes to mobile services, especially those related to COVID-19. By the end of 2020, more than 123 million Chinese netizens were aged over 60, accounting for 12.3% of the overall internet users. We can expect this trend to grow in the coming years.

That’s why the Ministry of Industry and Information Technology ordered 43 of the most used applications to take the lead in adapting to the needs of elderly users – Wechat, Taobao and other apps are launching ‘Easy Modes’ to cater to older netizens.

However, these improvements seem to be rather limited with a focus on bigger fonts and brighter colours instead of simplifying the user journey or incorporating voice assistant. 

Link: https://daoinsights.com/news/wechat-launched-easy-mode-to-target-chinas-123-million-elderly-users/ 

 

Alipay consumption report during National Day holiday

Theme parks are the latest trend: visits soared 936% over the previous month. Fantawild, Disneyland, Universal Beijing Resort, Happy Valley, and Chimelong Resort are the top five parks. Museums, zoos, and resorts were among the top five mini-programs for picturesque areas.

The amount spent in duty-free stores and offline boutiques has surged: in Hainan duty-free stores, the amount spent has climbed by 87%t since 2019. In comparison to last month, the amount spent in boutiques and shopping centres jumped by 40%. Xi’an, Taiyuan, and Zhengzhou, all tier 2 cities, ranked first, second, and third, respectively.

Convenience Store consumption met the peak. Consumption at convenience stores has reached an all-time high. During the holiday, the most popular mini-program was about anti-covid-19, Travel tracking cards; others were about “Order by mobile phone” and Old clothing recycling.

Link: https://mp.weixin.qq.com/s/V_j7k4GjvAUjD-OKmHsj8w 

 

National Day WeChat status

During the National Day holiday, “wishing the motherland” was promoted as the top WeChat status NO.1. The top three are: wishing the motherland, fighting and the unknown.

Wechat status data show that girls love “chilling at home” more and boys “having fun” more. With the decrease of holiday balance, and the set amount of “exhausted” and “worried” is increasing.

More than 3 million WeChat users take more than 30000 steps a day, and more than 4.13 million WeChat users take less than 100 steps a day.

Link: https://mp.weixin.qq.com/s/TtcEqzmS0WTRscFz6wLJ4g 

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