Uncovering Opportunities: Exploring Recent Developments in China

May 27, 2024

1.”Domestic pride”: growing preferences for domestically made products

  • Among the top 10 most popular movies in 2024 so far, only one is a foreign movie (Godzilla vs. Kong).
  • The topics related to “intangible cultural heritage” have been trending up on social media platforms, with many netizens discussing China’s traditional craftsmanship, art, and artisan designs.
  • The growing preferences for domestically made products are influencing the business environment and marketing strategies of merchants. Many historic and cultural institutions, such as the Forbidden City Palace and local museums, are introducing their own creative products.
  • Various international luxury giants like LVMH are integrating Chinese elements into their product designs to attract Chinese consumers, and “intangible cultural heritage” is just becoming the new localization strategy of these international brands.
  • Even if a business does not directly sell intangible cultural heritage products, they are leveraging its popularity for its own marketing strategies. For instance, Chinese retail chain MINISO ran a marketing campaign where consumers could experience writing the 江永女书 (Jiangyong Women’s Script) in their offline retail stores. The successful marketing campaign combined two elements that have become very popular in China’s consumer markets in recent years: “women empowerment” and “intangible cultural heritage.”

Link: https://www.baiguan.news/p/chinese-consumers-real-estate-market-job-trend

 

2. Is luxury missing out on China’s cycling boom?

  • China is historically known as the “kingdom of bicycles,” with young people carrying on the movement as streetwear infiltrates the space and brands amp up the elegance of their offerings to cater to this new more fashion-conscious demographic.
  • On Xiaohongshu, the hashtag “my cycling log” (#我的騎乘日誌) takes you to 1.17 billion photos, starring millions of outfit posts by Gen Z cycling fanatics.
  • While specialized brands thrive, luxury houses should look to the space for collaboration opportunities, whether through ambassador partnerships with established domestic cyclists or clothing capsules to cater to the major trend in China.
  • For brands looking to enter new markets like China, leveraging existing fanbases, as seen with Rapha’s recent entry, can instill confidence; however, ensuring long-term success requires strategic planning for maintaining engagement and relevance

Link: https://jingdaily.com/posts/chinese-streetwear-s-biggest-craze-cycling

3. What is the “twenty minutes in the park” theory? Brands are holding outdoor activities to connect with consumers

 

  • As more and more young people flock to parks, brands are following suit to find new marketing opportunities.
  • Young people who are overwhelmed by reality and can’t catch their breath find spiritual healing in the park.
  • From 22 March to 22 April, Xiaohongshu partnered with Nanjing’s Xuanwu Lake Park to launch the “Hanging out in the park matters a lot” (逛公园才是正经事) campaign, inviting Nanjing residents to spend time in the park.
  • In addition to sports and camping, mart brand plant b’s “Urban Forest Project” was held in mid-April this year at the Great Lawn of Hangzhou Botanical Garden’s Botanical Area, inviting more than 100 brands to participate.
  • In many cases, purchases are based on emotional judgement, especially when consumers are feeling relaxed, and a natural product placement is more likely to receive positive feedback.

Link: https://daoinsights.com/works/what-is-the-twenty-minutes-in-the-park-theory-brands-are-holding-outdoor-activities-to-connect-with-consumers/

4. Scratch card effect? Young people find solace in instant lottery as cards sell out

  • Scratch cards have seen a significant rise in popularity among young people in China, transforming from a pastime of older generations to a social activity embraced by the younger demographic. This surge is fueled by influencers on social media platforms like Weibo and creative uses of scratch cards in livestreams and DIY prize draws.
  • The appeal of scratch cards lies in their instant nature, providing immediate results and gratification. This aspect has made scratch cards a popular social activity, even being incorporated into venues like coffee shops. High-profile wins, such as a young person winning 1 million RMB, have further amplified interest and engagement on social media.
  • Despite the skyrocketing demand, the supply of scratch cards is limited due to strict regulation and a slow production turnaround. This has led to widespread shortages, with shop owners struggling to restock. The Ministry of Finance’s data shows a dramatic increase in sales, yet the supply chain is unable to keep pace, leading to empty shelves and a competitive restocking process.

Link: https://daoinsights.com/opinions/scratch-card-effect-young-people-find-solace-in-instant-lottery-as-cards-sell-out/ 

 

5. Weibo, Douyin, Xiaohongshu remove displays of wealth

  • Influencers Wang Hongquanxing, Baoyujiejie, and Baigongzi had their accounts banned across all platforms on May 21st.
  • These influencers were known for showcasing luxury items and boasting about their wealth to attract attention and drive sales through live-streaming e-commerce.
  • The bans are part of a government campaign to clean up online content that promotes materialism and unhealthy values.
  • Such displays of wealth can exacerbate social inequality and negatively influence youth.
  • The situation highlights the need for better content moderation and stricter platform policies to foster a healthier online environment.
  • From a luxury brand point of view, perceived value on the secondhand market can have direct repercussions on reputation and desirability in the eyes of consumers.

Link: https://jingdaily.com/posts/chinese-social-media-remove-displays-of-wealth 

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Uncovering Potential: Evaluating the Most Recent Developments in China’s Sector

December 6, 2023

1.Alibaba is being urged by Jack Ma to “change and reform” 

In an internal memo, Alibaba founder Jack Ma made an infrequent appearance and urged the e-commerce behemoth to “change and reform” following rival PDD’s stronger earnings report, which almost brought Alibaba’s market capitalization within striking distance. 

Ma called on Alibaba staff members to return to the company’s mission and vision to reform in order to secure “tomorrow and the day after glory,” while congratulating the eight-year-old PDD for its decision-making, execution, and efforts over the previous few years. 

Even though Taobao and Tmall Group are the most profitable divisions of Alibaba, new players in the e-commerce space, such as PDD and ByteDance’s Douyin, are posing a threat. 

Ma continued, saying he believed AI e-commerce was only getting started, which offered both an opportunity and a challenge. This statement aligns with Alibaba’s primary strategic focuses, previously disclosed by the new Alibaba CEO Eddie Wu, which prioritise being “user first” and “AI-driven.”

LINK: https://36kr.com/p/2538801460323843 

 

2.Prada showcases beauty and power with women’s national football players 

Three players from China’s women’s national football team—Yang Lina, Chen Qiaozhu, and Dou Jiaxing—participated in the launch of Prada’s newest campaign on November 21. This campaign followed the format of their campaign with 4 other Chinese women athletes early last year. Prada and Douyin, the Chinese counterpart of TikTok, collaborated to release a fashion shoot video and two clips featuring football players conducting one another’s interviews.

Prada officially partnered with the women’s national football team in July, just before the FIFA Women’s World Cup. 

The players and the Chinese national team received a resounding reception online, garnering over 35,000 likes across the three videos and hundreds of comments, proving that their efforts were worthwhile.

LINK: https://daoinsights.com/news/prada-showcases-beauty-and-power-with-womens-national-football-players/

 

3.Virtual bling takes over Chinese social media

Young Chinese consumers have discovered a creative way to enjoy a luxurious lifestyle without having to pay the price tag, in an era of digital technology where image frequently takes precedence. With photo editing, users can virtually try on and showcase luxury items like jewellery, handbags, and cosmetics without having to pay for the real thing. This new trend is called dianzi dapai, or “digital high-end brands” in English.

Because it gives young people an alternative to traditional luxury consumption, this newly discovered virtual luxury experience is appealing.

Mixing irony and fun, the trend indicates a shift in how the younger generation perceives and interacts with luxury brands. 

Given that numerous luxury brands own patents on their designs, legal experts caution against possible infringement issues.

It sends a strong message to luxury brands hoping to get into or grow in the Chinese market: success in this market will largely depend on how well they can combine the appeal of their goods with the technological sophistication of this market.

LINK: https://daoinsights.com/news/virtual-bling-takes-over-chinese-social-media/

 

4.What luxury brands can learn from Zara’s new China livestream concept

Zara is setting the bar. At first glance, the brand’s most recent broadcast could be mistaken for a movie or music video backdrop thanks to its 9,000-square-meter set, 12 cameras, and 50 professionals.

 Zara’s was much more controlled and orchestrated. The presenter demonstrated the brand’s sophistication and style by taking her time while posing for the products.

With no live broadcasting noise or sales, the anchors were conversing casually about merchandise, coordinated looks, and fashion.

Luxury brands could integrate interactive elements into their broadcasts, like live Q&A sessions with designers or virtual tours of ateliers, for a more holistic brand experience. Making the livestream not just informative but also engaging and memorable.

The goal should be to create a memorable brand experience that resonates with the audience, fostering loyalty and elevating the brand’s status in the consumer’s mind.

LINK: https://jingdaily.com/china-hard-luxury-report-promo/ 

 

5.WeChat Index Adds Live-streaming as Data Source

WeChat Index added livestreaming as a new source to help users better understand the popularity of keywords within the WeChat ecosystem.

WeChat index live-streaming source data will be factored into the computation starting on October 1, 2023. 

The following changes are expected to be observed: 

-The index number of keywords will increase.

-Records of changes in keywords may disappear or be added.

-The data source chart adds “live” sources, and the proportion of each source channel will change.


LINK: https://mp.weixin.qq.com/s/lzNt8iVAgwRygrfmclrM5w

 

6.Luxury Lessons From China’s Singles’ Day 2023

Luxury Brands Adapt to Consumer Behaviour:

Acknowledging the growing trend of “exquisite poverty” (精茴穷) among younger consumers, luxury brands deliberately engaged in Singles’ Day promotions. Companies that understood changing consumer tastes, like Gucci, Balenciaga, and Max Mara, provided exclusive items and interest-free instalment plans.

Trends and AI Integration:

During the event, Gen-Z consumers demonstrated a preference for jewelry, home furnishings, and wedding products. Their skill at taking advantage of platform discounts presented difficulties, though. Additionally, the integration of AI and the promotion of China-focused products emerged as prominent trends, indicating a shift towards technologically-driven shopping experiences.

AI produced virtual try-ons for MCM and Ralph Lauren, using the “Miaoya Camera” to create consumer avatars for clothing try-ons. Tmall (and Taobao) introduced 10 free AI features for merchants and launched a generative AI chatbot named Wenwen to address user queries.

The vulnerabilities of the platform have grown to be a serious problem. By employing reverse bundling strategies to take advantage of sales on high-end merchandise from labels like Dior, Versace, Burberry, and Ralph Lauren, young consumers are gaming the system. These tactics are widely discussed on social media platforms like Xiaohongshu, and their prevalence has disrupted business operations.

It’s a key occasion for consumers in China’s fourth- and fifth-tier cities who lack access to physical luxury brand stores in their areas.

While Tmall and JD.com accounted for the majority of sales during the event, orders across other social commerce platforms were up significantly: 20% on Pinduoduo, 50% on Kuaishou—and Douyin saw a jump of 119%. Xiaohongshu was a big winner too. According to the company, live-streaming sales saw an astounding 420% increase in addition to a 380% year-over-year increase in GMV. 

LINK: https://www-forbes-com.cdn.ampproject.org/c/s/www.forbes.com/sites/gemmawilliams/2023/11/15/luxury-lessons-from-chinas-singles-day-2023/amp/

 

7.Douyin’s e-commerce clampdown: platform cancels controversial sales star Xinba

Popular livestream anchor Douyin banned Xin Youzhi, also known as “sales king” and Xinba, at noon on November 2 for repeatedly posting misleading content, demeaning others, and inciting strife on China’s version of TikTok.

Douyin unveiled new rules earlier this year that prohibit offensive language, unfair competition, and malicious speculating among anchors’ online conduct. 

The move against Xinba is an indication that the industry leader in social commerce is taking tough measures against vendors in an effort to raise the caliber of its live streaming offerings.

LINK: https://jingdaily.com/douyins-e-commerce-clampdown-platform-cancels-controversial-sales-star-xinba/ 

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Unveiling Prospects: Delving into the Newest Advancements in China’s Market

October 9, 2023

 

1. Mainland Chinese tourists flock to Hong Kong for first post-Covid National Day holiday, but do not plan to stay long

 

  • Chinese tourists who were asked about their travel plans in the city said they would rely on travel articles posted on the Chinese social media and e-commerce platform Xiaohongshu, which is becoming more and more well-liked among young mainland Chinese people looking for interesting places to visit. 
  • A tourist referred to the impression she had of the city while scrolling through Xiaohongshu and said, “We are looking for a nostalgic feeling in Hong Kong.” 
  • Compared to pre-pandemic levels, travelers were considering shorter trips. Spending by visitors from the Mainland China had also decreased. 
  • The decline was attributed to both China’s economic slowdown and the Yuan’s depreciation, which is the country’s currency. He asserted that he thought spending would pick up once the Yuan gained strength.

LINK:https://hongkongfp.com/2023/10/01/mainland-chinese-tourists-flock-to-hong-kong-for-first-post-covid-national-day-holiday-but-do-not-plan-to-stay-long/

 

 

2. RED private message function“Sixintong”

 

 

A professional platform of XiaoHongshu called Sixintong offers features like welcome messages and automatic replies to greatly increase the brand’s marketing and operation efficiency in XiaoHongshu.

  • In order to encourage users to engage in deeper communication, it is possible to edit the relevant greeting so that it is automatically sent when a user sends a private message. Examples of this greeting include a basic introduction to the service or recent promotions and events. 
  • For some high-frequency basic private messages, we can set up menu to encourage users to click, such as phone calls, product inquiries, joining group chats, filling out forms, sending post links, and so on. 
  • Find potential customers in the comments section right away, actively seek out their needs, and help with conversion by doing so. 
  • The initial prerequisite is that there must have been more than 3,000 media purchases made overall over the previous 30 days.

LINK: https://www.niaogebiji.com/article-636629-1.html

3. How brands can best maximiae Chinese apps Xiaohongshu, Douyin, Weibo and Zhihu

 

 

  • Douyin

 

 

The platform with the most monthly active users (MAU) among the four is China’s TikTok Douyin, with 759 million. Short videos that are primarily intended for entertainment make up its content. The majority of internet users spend their free time there looking for both entertaining and educational content.

 

  • Xiaohongshu

 

Users on Xiahongshu are primarily drawn to articles about beauty and fashion. Small- and medium-sized KOLs, KOCs, and KOPs dominate the platform.

 

  • Weibo 

 

For news, announcements, product launches, celebrity endorsements, and apology posts, brands use the Chinese microblogging app Weibo as their official website. Weibo is used by many businesses when launching new products and collaborating with celebrities to gain traction because the platform attracts a sizable following of celebrity fans.

 

  • Zhihu

 

Zhihu is not a social media app like the aforementioned channels; rather, it is a Chinese translation of Yahoo! Answer. When they have questions or doubts about anything, from beauty tips to medical treatments, people look for reliable answers.

LINK:https://jingdaily.com/xiaohongshu-douyin-weibo-zhihu-how-can-brands-best-leverage-these-platforms/

 

4. From Jennie to Zendaya to Fan Bingbing: Chinese and global stars dominate Paris Fashion Week

 

 

  • With Hollywood heavyweights like Zendaya at Louis Vuitton, Pamela Anderson at Vivienne Westwood, Kylie Jenner at Schiaparelli, and Jennie Kim at Chanel all attending, Paris once again demonstrated how global celebrities are a vehicle for visibility across social media.  
  • Also making a splash was Chinese homegrown talent. Following her comeback to the spotlight, actress Fan Bingbing walked the Mugler runway alongside stars like Paris Hilton and Angela Bassett, while domestic babes Angelababy and Dilraba Dilmurat attended shows at Roger Vivier and Dior. 
  • The most effective marketing strategy a designer can use today is getting an A-list celebrity to support your brand, whether they are a member of the Kardashian-Jenner family or the internet’s current “it” person. And the metrics reflect that. 

LINK:https://jingdaily.com/jennie-zendaya-fan-bingbing-chinese-global-stars-paris-fashion-week/ 

 

 

5. China’s ‘Super Golden Week’ breaks records amid mounting economic challenges

 

  • Starting September 29, the eight-day ‘Super Golden Week’ is this year’s most popular holiday.
  • Over 2 billion people moved across regional boundaries in the nation, or 257 million people on average each day.
  • Thailand is expected to become the preferred destination for Chinese outbound tourists (partly due to its visa-free policy), followed closely by South Korea, Malaysia, Singapore, Australia, and the UK.
  • Apps like Fliggy, Ctrip, and Xiaohongshu make it simpler than ever for younger travelers to plan and book travel without using a traditional agent because they cater to their desire for authentic travel experiences.
  • As a way for young people to decompress, temples have also become very popular. 

LINK:https://jingdaily.com/china-super-golden-week-breaks-records-amid-mounting-economic-challenges/

 

 

6. The Daigou Index 2.0 The biggest threat to luxury in the next five years

 

  • The Daigou market in China is thought to be a problem worth $81 billion USD.  
  • Since 2019, the market’s growth is estimated to have exceeded 40%. Professionalization levels have increased, and more platforms have emerged to serve the expanding market.
  • Instead of your typical Chinese international student earning a little extra money on the side, a typical Daigou today is more than likely a large organization with significant purchasing power.  
  • But brands are not always cognizant of the scope and dynamics underlying this segment of the Chinese gray market.

LINK: https://mp.weixin.qq.com/s/YvJCarTqbyBjyZAN1Pv3mQ 

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The Evolution of Xiaohongshu, RED, into a Travel Platform

September 4, 2023

China’s Gen Z has found Xiaohongshu, also known as “RED”, to be a distinctive platform that resonates with them in the rapidly changing world of social media and e-commerce. Xiaohongshu stands out for its clever integration of influencer culture and retail. This is what draws in young customers looking for inspiration and authenticity. RED began as a shopping guide for wealthy mainlanders traveling abroad in 2013, but its development has been characterized by seismic shifts. This article will delve into Xiaohongshu’s evolution from a cross-border shopping platform to a thriving hub for travel inspiration, highlighting its impact on China’s digital landscape and the broader tourism industry.

📕 Little Red Book: Main Functionalities

Xiaohongshu RED Travel Tourism Content

From Shopping Guide to Social Travel Hub

RED embarked on its journey as a shopping guide, providing valuable insights to Chinese travelers visiting international destinations like Hong Kong, Thailand, Japan, and South Korea. Gradually, it embraced a new dimension by acknowledging users’ desires to do more than just window shop. The company capitalized on the growing trend of users wanting to purchase products endorsed by influencers and. celebrities. Then everyday consumers started to share their experiences on the platform. This transition led to the birth of a social e-commerce ecosystem, enabling Xiaohongshu to position itself as a pioneer in this emerging industry.

The platform’s evolution didn’t stop there. Over time, it expanded beyond its initial shopping-focused approach, transforming into a digital haven for travel and lifestyle enthusiasts. The 2020 China Tourism Industry Report revealed that Xiaohongshu had secured its position as the go-to platform for 64% of China’s wanderlust-driven individuals. This staggering popularity catapulted Xiaohongshu beyond conventional online travel agencies, underscoring its potential to redefine the market.

🌏 Reaching Chinese Tourists and Top Online Travel Agencies in 2023

AI-Powered Growth and Expansion

Firstly, Xiaohongshu harnessed the power of artificial intelligence and machine learning to enhance content distribution since 2016. This strategic move proved instrumental in captivating the preferences of young consumers, effectively driving the platform’s popularity. Two years later, the platform expanded its horizons by launching Puzhen Xiangli, a travel agency rooted in Shanghai. This venture showcased the platform’s commitment to becoming a comprehensive travel resource, offering services ranging from travel consulting and hotel management to catering and tourist site operations.

Fast forward to 2023, Xiaohongshu solidified its authority by forging a strategic partnership with Tourism New Zealand. This collaboration, announced during a high-profile event in Shanghai, exemplifies Xiaohongshu’s ability to foster alliances that amplify its impact and influence.

New Zealand Xiaohongshu RED

A Catalyst for New Behavior Patterns

Xiaohongshu’s influence extends beyond commerce and travel, shaping the behavior patterns of its users. Online travel agencies remain pivotal for trip planning and booking. However, Xiaohongshu emerges as a frontrunner during the pre-planning phase, catering to nearly 40% of travelers seeking outbound experiences. Notably, travel content occupies a significant position on the platform, showcasing remarkable growth alongside beauty-related content.

Data Travalers China 2023

Subsequently, The COVID-19 pandemic catalyzed shifts in travel preferences, favoring short-to-mid-distance trips. In this landscape, Xiaohongshu demonstrated its prowess in driving conversions for lesser-known and budget-friendly travel offerings, reflecting its adaptability and agility.

However, Xiaohongshu is not without its critics. The platform’s embrace of user-generated content transformed picturesque locations into influencer magnets, yet this practice also attracted criticism. Accusations of heavily filtered and stylized content raised questions about authenticity. Notably, during the National Day holiday, influencers’ images on Xiaohongshu faced scrutiny when compared to real-life experiences. It prompted a candid discourse about the platform’s portrayal of destinations.

In conclusion, Xiaohongshu’s evolution from a shopping guide to a diverse platform blending commerce, travel, and social interaction demonstrates its user-focused agility. Through AI, strategic alliances, and embracing changing travel trends, it has firmly established itself in culture and commerce. Xiaohongshu’s enduring legacy lies in its adaptability, innovation, and bridging digital and real-world experiences.

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

July 25, 2023

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

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

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

 

 

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

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

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

 

 

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

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

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

 

 

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

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

 

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

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

 

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

 

 

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

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

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

 

 

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

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

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

 

 

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

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

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Keeping Up with China: Latest Market Updates and News

June 9, 2023

iFlytek demonstrates new AI writing tools based on its own language model, claims it outperform ChatGPT

 

With the release of its own AI language models and associated applications, iFlytek is continuing the contribution of Chinese tech companies to the global AI development initiative sparked by ChatGPT.

An artificial intelligence writing tool called the iFlytek AI Writer aids users in quickly creating articles based on given information and prompts. On May 6, the product had its initial release.

According to the chairman of iFlytek, the model has surpassed ChatGPT in the areas of Chinese long-text generation, medical knowledge, and mathematical prowess but still falls short of ChatGPT in this area.

Three upgrades will be made to the model soon. On June 9, the model will be improved with code and multimodal interaction skills, and on August 15, it will be improved with open-ended question, multi-round dialogue, and mathematical ability capabilities. He added that by October 24 the model will be on par with ChatGPT’s current level in English and surpass ChatGPT’s current level in Chinese.

https://technode.com/2023/05/10/iflytek-demonstrates-new-ai-writing-tools-based-on-its-own-language-model/

 

 

Xiaohongshu tests new feature enabling influencers to add shopping links to posts

 

As part of its push towards e-commerce transactions, Xiaohongshu is enabling a select group of merchants to invite platform influencers to include shopping links when they post recommended content.

Instead of connecting to external e-commerce platforms, the links are directly connected to stores within Xiaohongshu.

In January 2021, the feature was initially accessible to all platform creators, but it was removed six months later due to “unsatisfactory link conversion rates.”

Xiaohongshu, which is frequently compared to Instagram, has been refocusing on e-commerce in recent months. It tested a group-buy feature last month and found success with livestream shopping earlier this year.

https://mp.weixin.qq.com/s/FTb_v-_vYsghkMr454iNtg

 

 

LinkedIn to shut China app, cut over 700 jobs

 

 

InCareer, the Chinese version of LinkedIn, will shut down its job board in August. Thanks to our strong China-based team, InCareer had some success over the past year, but it also faced stiff competition and a difficult macroeconomic environment.

LinkedIn stated in October 2021 that the Chinese-language version of its services would be discontinued due to “a more difficult operating environment” and “greater compliance requirements.”

Instead, the Microsoft-owned company introduced InCareer, a stand-alone employment app. InCareer had 57 million users as of July 2022 and was linked to 875 million members globally via LinkedIn.

700 employees in China will lose their jobs as a result of InCareer’s decision to change its business strategy and assist Chinese companies with recruiting, marketing, and training personnel abroad.

https://news.linkedin.com/2023/may/a-message-from-linkedin-s-ceo

 

 

Dazi culture in RED

 

 

Users of Xiaohongshu list the “professional” connections they require to expand their personal social network beyond simple acquaintances.

Recently, the “Dazi Culture” has become a trend on the internet. Finding a partner for a certain activity or pursuit—be it a study partner, a travel companion, a movie buddy, or a workout partner—is central to “Dazi” culture.

“Da Zi” is a colloquial term for a friendship. They do provide a relationship that people are eager to have, especially when you just want someone to eat or shop with but not share your most private secrets with. Despite the fact that they are not close friends.

“Da Zi” may be the reason why young people associate with one another because they have common interests, taste, or preferences.

The “Voice Live” feature, which focuses on voice social networking and lets users create open rooms and have conversations with random people about a variety of topics of interest, was internally tested by Xiaohongshu in October.
In February this year, 小红书 launched a “group chat” function, continuing to break the reality-based social networking model of acquaintances and connecting strangers by interests.

https://mp.weixin.qq.com/s/rWi4TqsjEsMSXrk7uLMtew

 

 

Balenciaga gives a nod to sustainability for 520 festival

 

 

Balenciaga, a luxury French fashion house, is leveraging Chinese Gen Zers’ growing passion for sustainability in advance of the 520 shopping festival (also known as Internet Valentine’s Day).

Chinese Gen Z consumers’ attention to brands’ social responsibility has emerged as a defining characteristic. With the recent launch of 500 new sustainable products on Tmall Luxury Pavilion, luxury brands have made sure to stay on top of this trend.

Along with the launch of the line, Balenciaga also published an interactive mini-program on the messaging app WeChat. On the microblogging platform Weibo, as of May 10, the hashtag “Balenciaga 520” had accumulated 17 million views.

Balenciaga gives a nod to sustainability for 520 festival

 

 

Chinese Tourists’ Spending In Europe Rises, But Visitor Numbers Remain Weak

 

 

The return of Chinese tourists to foreign countries began closer to home, with Asian locations like Thailand, Japan, South Korea, and Singapore emerging as early favorites, according to data from several Chinese travel agencies. Richer Chinese tourists appear to be among the first to travel back to Europe.

Chinese consumers now pay much more to travel to Europe, and demand is still below pre-pandemic levels. Those who do make these lengthy trips, though, are spending more money than before.

Europe will likely have to wait until the end of 2023 or 2024 to see the return of large-scale Chinese tourism.

https://jingdaily.com/chinese-tourist-europe-spending/

 

 

Lancôme spotlights Chinese ceramics in eye cream campaign

 

 

For the promotion of its Absolute Eye Cream, Lancôme examined the beauty of conventional Chinese ceramics. The campaign uses the restoration of old objects as a metaphor for rejuvenating sagging or aging skin.

Chinese consumers’ desire for goods that honor their country’s rich cultural heritage, both old and new. Foreign brands can take advantage of this trend with clever product design and local partnerships, making it far from the exclusive domain of domestic brands.

According to the study, half of Chinese women between the ages of 25 and 30 use anti-aging products like skin-lifting creams, serums, and eye creams.

Lancôme spotlights Chinese ceramics in eye cream campaign

 

Court Ruling Sparks Debate Over Promoting Work on Social Media

 

 

Luxury brands are embracing the concept of “virtual luxury” more and more in order to appeal to younger, digitally savvy consumers who value sustainability and one-of-a-kind experiences. To engage customers and create fresh opportunities for brand interaction, this entails using virtual experiences and products.

But the question still stands: Is authenticity still important in marketing? While virtual luxury might be alluring in the short term, brands shouldn’t discount the value of authenticity and quality when fostering long-term consumer trust and loyalty.

Given these trends, luxury brands should think about how to strike a balance between the advantages of virtual luxury and the requirement to uphold a strong brand identity and reputation. This might entail coming up with inventive ways to combine tangible goods and services with digital ones, all the while upholding the brand’s commitment to excellence and authenticity throughout.

https://www.sixthtone.com/news/1012863

Checking the performance of prior posts within the last 30 days is now possible in the WeChat backend, which is a new data point available.

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Recent Updates and Industry Highlights

June 9, 2023

Face-swapping fraud sparks AI-powered crime fears in China

 

China is dealing with a major deepfake scam, which has raised concerns about an increase in fraudulent activities utilising AI tools such as face swapping and voice mimicry.

The case revolves around a prominent tech firm in Fuzhou, whose legal representative was reportedly swindled out of RMB 4.3 million ($610,000) after engaging in a video call with an imposter posing as a “friend” through the exploitation of AI face-swapping technology.

This incident has triggered extensive discussions on the ability of AI to deceive well-educated individuals in a matter of minutes. While China is still in the early stages of formulating regulations for AI, the nation’s internet regulator recently released a draft regulation addressing the use of generative AI and invited public input on the proposed measures.

The initial enthusiasm surrounding advancements like ChatGPT in China has been overshadowed by apprehensions regarding the potential misuse of AI to facilitate criminal endeavors.

https://technode.com/2023/05/24/face-swapping-fraud-sparks-ai-powered-crime-fears-in-china/

Tencent’s super app WeChat announced the official introduction of palm payment

 

WeChat’s palm pay feature demonstrates its adaptability to varying lighting conditions and the unique physiological characteristics of individuals’ palm lines.

This innovative payment method has been initially introduced on the subway line that connects to Beijing’s Daxing Airport. By utilizing this newly launched feature, users can now complete their entire boarding process without the need for their smartphones.

https://mp.weixin.qq.com/s/z664BYdriVy1_tbwSSHbWA

 

China Social Media In 2023: The Brand Guide To WeChat, Douyin, Xiaohongshu And Other Platforms

 

In China, the luxury goods market is flourishing, offering a significant opportunity for brands to captivate the interest of Chinese consumers. It is crucial for luxury brands to carefully select the appropriate social media platforms to establish connections with younger demographics.

By actively participating in relevant discussions and fostering a community centered around broader themes, brands can easily connect with users on platforms such as Xiaohongshu. To resonate with Chinese consumers, luxury brands should strive for subtle, sincere, and locally tailored storytelling.

Incorporating gamification elements on platforms like WeChat can enhance a brand’s social standing and create exciting opportunities beyond traditional features. Furthermore, leveraging short videos with compelling narratives on platforms like Weibo can establish profound emotional bonds with audiences and effectively convey brand messages.

https://jingdaily.com/chinese-social-media-xiaohongshu-douyin-wechat-weibo/

Strong Domestic Travel Rebound In China Foreshadows Return Of Global Chinese Tourism

 

Chinese Gen Z individuals are embracing the trend of “Dopamine Dressing Style,” which aims to embody joyfulness through clothing choices.

This new fashion phenomenon, characterized by vibrant and vivid colors, is believed to have originated among university students.

One of her short videos, featuring five colorful outfits representing different moods throughout the weekdays, has gained significant exposure and attention.

The popularity of the “Dopamine Dressing” style reflects the increasing significance of emotions in the fashion industry’s consumer journey, particularly among the post-90s and post-00s generations.

By utilizing colors as a medium for emotional expression, individuals can experience an enhanced sense of pleasure, effectively triggering the chemical messenger of happiness.

How has China’s Gen Z turned the happy chemical Dopamine into a fashion fad?

 

The Chinese Traveler Is A Global Luxury Consumer

 

The post-pandemic luxury industry will continue to witness a significant presence of Chinese travelers, and luxury companies should be prepared for their return.

In light of the three-year-long COVID-19 restrictions, brands must adapt and comprehend the changes in Chinese consumer behavior and expectations.

To strengthen customer relationships and ensure consistent experiences, it is crucial for luxury companies to utilize Chinese digital platforms such as WeChat, RED, and Dianping.

Emphasizing digital capabilities that facilitate product searches, store appointment bookings, and seamless integration with popular payment platforms like WeChat Pay and Alipay is of utmost importance.

Collaboration between global brand teams and local Chinese teams is necessary to cater to the needs and expectations of Chinese travelers, viewing them as a global consumer profile and delivering coherent experiences across the digital landscape.

https://www.luxurysociety.com/en/articles/2023/05/chinese-traveller-global-luxury-consumer?ueid=3a844b2001

 

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What’s happening in the Chinese market

May 10, 2023

China’s answer to ChatGPT? Baidu shares tumble as Ernie Bot disappoints

The introduction of Ernie coincides with Google and Microsoft upping their AI game. As the CEO of Baidu makes brief video presentations in which he makes it abundantly clear that the AI still needs many improvements, Baidu shares fall.

Analysts claim it was a staged event with pre-recorded videos of the test and showcases, proving they were hesitant to perform it live. As a result, rumors claim it is not yet operational (Baidu stock fell by 6% following the presentation).

The public still cannot access AI. Ernie is able to create images and videos, speak and understand various Chinese dialects, write poetry, and perform math.

https://www.reuters.com/technology/chinese-search-giant-baidu-introduces-ernie-bot-2023-03-16/

 

Top Chinese PR agency to replace copywriters and designers with ChatGPT-like tech

Since securing Microsoft as a client, BlueFocus, which was ranked first among its Chinese peers and 11th overall among public relations firms worldwide in 2022, has made significant investments in AI. The company has also worked with Chinese ChatGPT substitutes, such as Baidu’s Ernie Bot, for use in online persona development and other forms of digital marketing.

It will do away with outside copywriters, designers, and temporary workers in favor of generative AI like ChatGPT. Up to one-fourth of current work could be replaced by ChatGPT-like technology, particularly in the fields of office administration and legal services.

https://hr.economictimes.indiatimes.com/news/industry/top-chinese-pr-agency-to-replace-copywriters-designers-with-chatgpt-like-tech/99470589

 

Notice on the Compliance of WeChat Official Account Marketing Content

The Measures for the Administration of Internet Advertising were recently released by the Market Supervision of China and will go into effect on May 1.

The official account operators, who advertise goods or services in various ways and include shopping links and other ways to make purchases, are, in my opinion, the most crucial factor for us. The term “advertisement” needs to be clearly identified.

https://mp.weixin.qq.com/s/R6FoptfmnOiLZPFMTh2uLw

 

A 80 year old grandmother be MIUMIU brand ambassador

When choosing an ambassador, many brands today, particularly luxury brands or high-end new consumer brands, are edging closer to middle-aged and older artists and models.
This 80-year-old grandmother appeared in a Miu Miu fashion advertisement.

In contrast to earlier fashion posters From the posters, we can sense the appeal of the past and another interpretation of fashion.

In order to reach a wider audience and draw in more young customers, brands like Lululemon are starting to favor middle-aged and elderly spokespersons. Fashion does not only belong to young people; it is about exploring individual fashion attitudes at any age.

https://mp.weixin.qq.com/s/Lr4XlQiekcj7ALMhXDVAJA

 

Xiaohongshu decodes the urban core fashion trend through the sports market in Shanghai

Xiaohongshu visited a sports market in Shanghai over the May Day weekend that was showcasing the new fashion craze Urbancore. Participating brands and fashion KOLs organized a variety of outdoor sporting events, capitalizing on China’s enduring fitness craze to increase engagement.

In order to promote participation, a number of live streams with giveaways and prizes of urbancore-inspired clothing were combined with the offline market.

Xiaohongshu decodes Urbancore fashion trend through sports market in Shanghai

 

Xiaohongshu to launch group buying function

This is the most recent action taken by Xiaohongshu to expand her reach in the “local life” market.

Xiaohongshu has been working to strengthen the link between online peer-to-peer recommendation and offline services in users’ local areas ever since the launch of the “Nearby” feed in 2019. Consumers can be encouraged to spend money locally by offering discounts for group purchases, which must be made.

Online group buying penetration in China was only 12.7% in 2021, and this number is only anticipated to rise, creating an untapped market.

Xiaohongshu to launch group buying function

 

China’s May Day Holiday Reveals New Favorite Tourist Destinations

The price of admission to scenic areas increased 1,000% from the same time last year, exceeding pre-pandemic levels. From April 17 to May 7, Macau was the most popular travel destination for Chinese tourists in Asia, a 32 percent decline from visits to Hong Kong.

Other than these well-known tourist destinations, obscure places saw growth over the holiday. Particularly for its inexpensive barbecue food and good value for money experiences, Zibo has become extremely popular on social media. May Day hotel bookings soared 800 percent from 2019.

Labor Day saw an all-time high in international excursion bookings on Fliggy, more than tripling the previous record set during this year’s Spring Festival. However, the number of available international flights continues to restrict travel abroad.

https://jingdaily.com/tencent-douyin-content-agreement-copyright/

 

For Marketers, Does It Even Matter If It’s Not Real?

Luxury brands are embracing the concept of “virtual luxury” more and more in order to appeal to younger, digitally savvy consumers who value sustainability and one-of-a-kind experiences. To engage customers and create fresh opportunities for brand interaction, this entails using virtual experiences and products.

But the question still stands: Is authenticity still important in marketing? While virtual luxury might be alluring in the short term, brands shouldn’t discount the value of authenticity and quality when fostering long-term consumer trust and loyalty.

Given these trends, luxury brands should think about how to strike a balance between the advantages of virtual luxury and the requirement to uphold a strong brand identity and reputation. This might entail coming up with inventive ways to combine tangible goods and services with digital ones, all the while upholding the brand’s commitment to excellence and authenticity throughout.

https://www.luxurysociety.com/en/articles/2023/04/marketers-does-it-even-matter-if-its-not-real

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Latest Updates on China’s Market: ByteDance’s Language Model, Uncle Stars, Xiaohongshu Trends, Douyin’s PC Shopping, and More

March 2, 2023

ByteDance to emphasize search and imaging as it develops ChatGPT’s rival

 

ByteDance, the owner of TikTok, has assembled a sizable language model team and plans to integrate the technology into its search and advertising businesses as the hype surrounding ChatGPT, an AI-powered chatbot service, continues to encourage Chinese businesses to create analogous products of their own.

When ByteDance launches its large language model, which is anticipated to happen in the middle of this year, it will put a particular emphasis on language and imaging. 

The large language model team and the image model team will be managed by Zhu Wenjia, head of global search and development for TikTok. 

https://mp.weixin.qq.com/s/pGREeoSC6v-tf2zALdWZBQ

 

The Rise Of China’s ‘Uncle Stars’: How Middle-aged Men Are Taking The Spotlight

 

Idol scandals have tarnished China’s entertainment sector in recent years. 

As was the case with Louis Vuitton and rapper Kris Wu, luxury brands associated with wrongdoing (“little fresh meat”) were forced to act quickly to sever their endorsement agreements in order to allay public outrage.

People in their mid-forties, also referred to as “uncle stars,” provide a safer option for brands and have a wider market recognition among both young and old consumers. 

Brands are testing a new cast of ambassadors due to the expensive unpredictability of “traffic stars,” who heavily rely on the fan economy to push the sales of the products they promote. 

Huang Bo, a 48-year-old actor, was named the ambassador for Shiseido’s high-end line on February 9.  

These celebrities typically don’t have Xiaohongshu or Douyin, only Weibo. “By making extra efforts, brands need to increase their influence,

https://jingdaily.com/china-uncle-stars-middle-aged-men-ambassadors-shiseido-fresh-the-knockout/ 

 

2023 Xiaohongshu Annual Life Trend Analysis

 

To observe and research young people’s lifestyles, Xiaohongshu and the Institute of Sociology, Chinese Academy of Social Sciences, published the “2023 Life Trends” report with the theme “Into Real Life.” 

The report divides various life keywords, identifies, and analyzes life trends in 2023 using Xiaohongshu’s data statistics and topic content from the previous year. An excerpt from the report is given below. 

Warming up the neighborhood: Due to the scarcity of supplies during the epidemic, many residents got to know their neighbors by searching for those who lived “nearby” to shop with and trade goods with. Young people are therefore more likely to actively participate in community activities.

Eat authentically local flavors: Young people are starting to prefer regional specialties and regional traditions, 

  • On a trip: Due to the extended stays at home brought on by the epidemic, many people seek compensatory travel in the new year. They value the chance to travel more and are prepared to spend more effort, time, and money on travel.
  • Stress relief: Due to environmental impact, the majority of people felt helpless and unable to control their destiny, so they needed to decompress quickly and easily. Simple techniques for stress relief have become more popular in recent years.

Overall, investing and participating in real life will be more popular in 2023. The new trend among young people today will be actively experiencing and pursuing an innovative life, which is also Xiaohongshu’s wish for 2023 in this report.

https://www.chinatradingdesk.com/post/2023-xiaohongshu-annual-life-trend-analysis

 

Douyin tests out PC shopping feature to boost e-commerce

 

Douyin, a popular video-sharing website in China, is currently testing a PC shopping feature that will let users have a similar shopping experience to that of its mobile app.

The live broadcast room on Douyin’s website now features a product mounting function that enables users to view available products right away. However, direct orders and payments are still not supported on the PC version of the live streams. 

Users must scan the code with their Douyin app before they can finish their purchases. 

https://daoinsights.com/news/douyin-tests-out-pc-shopping-feature/

 

Xiaohongshu doubles down on social networking with group chat feature 

 

Users can access the new feature under the “group chat” drop-down menu accessible from the Messages tab on the app. Here, users have the option of starting a brand-new group chat or going to the “group chat plaza,” where they can peruse various discussions in a grid format.  

Users can join group chats on Xiaohongshu with just one click, unlike private Facebook groups where they must submit a request to join and have it approved by an admin.  

Users will have the chance to create communities to connect over specific interests thanks to the new feature. Influencers and retailers also profit from the new feature because the buzz created in group chats can boost traffic to their profiles and aid in turning that traffic into sales. 

https://daoinsights.com/news/xiaohongshu-doubles-down-on-social-networking-with-group-chat-feature/ 

 

China’s Tourism Rebound Faces a Roadblock: A Lack of Travel Agents

 

Some predicted a “big bang” for the global tourism industry when China abandoned its “zero-COVID” regulations as Chinese tourists flocked abroad.

Millions of Chinese tourists are eager to resume their international travel. But the tourism sector isn’t prepared for them.

The number of people leaving China increased to 676,000 on February 6 when outbound package tours resumed, which is the highest number in three years but only about one-third of the pre-pandemic levels. 

In many cases, travelers are prepared to return to foreign countries, but travel agencies are not. 

Currently, there aren’t many options for outbound group tours, and most of them are quite expensive. Rebuilding the international teams and the supply chain takes time.

Chinese tourists still favor joining group tours over planning their own trips.

https://www.sixthtone.com/news/1012339/chinas-tourism-rebound-faces-a-roadblock-a-lack-of-travel-agents?source=channel_deep

 

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Top Chinese E-commerce Platforms and Fees to Expect

August 11, 2022

The Chinese e-commerce market is the largest in the world and generated €867 billion in revenue in 2019. From 2020 to 2024, the annual growth rate of e-commerce in China is projected to be 6.9%.  Obviously, many overseas companies are tempted to enter the market and cater to millions of potential new consumers. Be it the youngest Gen Z or Chinese grandmas who are eager to spend more during their retirement, with a great product and market strategy it’s a great chance for brands to tip their toes.

👵🏻 Read more about China’s silver generation and their growing purchasing power and habits

This appeals to international businesses as well as the local business community, resulting in cross-border online trade. In 2022, it was estimated that the import e-commerce retail market would be worth close to 559 billion yuan. The most popular e-commerce platforms are Tmall, JD, Xiaohongshu, and WeChat. However, you will see there are plenty more e-commerce sites in China.  

No matter the size of your brand, the first step and choosing the right platform can be paralyzing. Companies quickly realize that the entry barriers to the biggest Chinese shopping platforms are challenging starting with the paperwork to e-commerce fees, steep deposits, and commissions.

One of the most attractive e-commerce models especially for niche or small brands that want just to test the waters would be cross-border e-commerce. Therefore more platforms offer this option now.

In China, cross-border e-commerce is distinguished by the fact that overseas companies are permitted to offer some goods to Chinese consumers online at favorable tariff rates and without the need for a business license. However, solution comes with some limitations we highlight in our previous article but nevertheless, it can be a very attractive way to kick off in China.

🇨🇳 Learn more about cross-border e-commerce and if it’s a solution for your brand

Let’s look at how much it costs to sell goods on these platforms in China, the pros and cons, and see which one can be the best fit for you.

Tmall

Tmall, formerly Taobao Mall, is a platform for business-to-consumer online retail, spun off from Taobao, and operated by Alibaba Group. It’s a highly reputable marketplace where all sellers are verified by the platform. In addition, Tmall has several solutions for brands that want to sell on the platform including cross-border sales.

 

Tmall General:

  • For Tmall general trade, the security deposit is $7,500. 
  • A deposit is required from vendors to open a Tmall store. The deposit is primarily used to ensure that retailers follow the Tmall Service Agreement and Tmall Rules so that expenses are covered in the event that retailers break any rules.
  • To use Tmall, an annual e-commerce fee of $4,500 must be paid. Depending on the merchant’s category, a yearly fee is paid at the time of settlement.
  • Suitable for brands that have Chinese business license.

Registration fee: USD 7,500 deposit + USD 4,500 annual tech support fee

Commissions:  8-12%

 

Tmall Global:

  • Cross-border solution
  • Suitable for overseas brands
  • Doesn’t require a local warehouse in China
  • Access to Tmall’s services including live-streaming and advertising

Registration fee: USD 7,500 deposit + USD 9,000 annual tech support fee

Commissions:  8-12%

 

Tmall mini-store:

  • Cross-border solution
  • Suitable for niche or small brands
  • Listed as sub-store on Tmall direct flagship
  • Suitable for smaller collections or products that can be shipped to China separately (maximum 3 products)

Registration fee: USD 4,500 deposit

Commissions:  4-12%

 

JD:

As Tmall, JD also offers solutions both for brands that have legal entity in China and cross-border players.

 

JD General:

  • When creating a new account, JD.com requests a deposit starting from USD 4,500 and higher.
  • For the majority of categories, the commission is between 2 and 5%.
  • Suitable for brands that are already in China

Registration fee: USD 4,500 deposit+

Monthly fee: USD 150

Commissions:  2-10%

 

JD Global:

  • Through a new partnership between JD and Shopify, merchants on that platform now have access to a new sales channel with a simpler onboarding process and better exchange rates through the marketplace.
  • Fees and requirements appear to be more demanding than Tmall

Registration fee: USD 15,000 deposit+

Monthly fee: USD 1,000+

Commissions:  2-5%

 

Xiaohongshu / RED

  • Suitable for lifestyle and fashion brands
  • Recently, RED tries to be more brand-friendly and lower the commission costs. These do not include marketing expenditures, influencer commissions, or fulfillment fees.
  • Account set-up guide >>> here

Registration fee: Case-by-case basis (normally USD 3,500)

Monthly fee: None

Commissions:  5% (reduced from 20% before)

Recently, we covered another quickly expanding platform dubbed ‘the RED but for men’.  You might have heard of Poizon also called Dewu on the Chinese market.

WeChat Mini-Programs as Alternative to Big Platforms

purchasing journey wechat mini programs

WeChat’s own mini-program-based online shop can be a great solution for brands that are not keen on costly registration fees and commissions. However, on the other side if you decide to go with the mini program you will have to figure out the storage, deliveries, refunds, and other logistics by yourself which the big platforms usually cover.  Due to that, you will need to build the mini program by yourself.

In addition, another amazing advantage of a mini program store is that you are the owner of the data. Also, WeChat users who are already your followers are more known to be more likely to convert to customers and normally the average purchase is bigger than those on other platforms. We covered the pros and cons and how the most successful brands do it on our blog.

🛍 Why selling on WeChat can be better than selling on Tmall and other platforms?

In conclusion, the Chinese e-commerce market is in a fascinating state right now. And platforms are vying to have the best appeal to clients and businesses. However, nothing seems to be offered for free. In other words, brands must invest in order to sell products on these e-commerce platforms because of the publicity and sales they generate. Above all, China’s famous e-commerce festivals like 11.11 called Singles’ Day or 6.18 are a great opportunity for brands to generate more sales.

If you wish to know more about e-commerce and cross-border e-commerce in China or other marketing techniques, please contact our team. We use our knowledge and expertise to help businesses build meaningful partnerships and develop their networks among Chinese customers. For additional information, please contact us at contact@thewechatagency.com.

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