Most brands nowadays will be familiar with China’s unique social media platforms – WeChat, Weibo, Xiaohongshu, Douyin – and how they compare to their Western counterparts like Instagram and Facebook. While there are many similarities between Chinese and Western platforms, particularly in terms of their young, entertainment-hungry audience, their differences mean that marketers need to subtly shift their strategies when creating content for the Chinese market, particularly when it comes to influencer marketing – or KOL (key opinion leader) marketing, as it is usually known in China.

Chinese consumers have traditionally been seen as being very receptive to seeking recommendations for new products and ideas online. This has been reflected in the format of user-generated content-driven platforms like Xiaohongshu and also in the degree of acceptance and importance given to influencers. “Chinese consumers are more receptive to promotional content because it is more of a guide,” says Robin Liu, co-founder of social media marketing agency Influencer Hub International.

“They are used to searching for information about the products on social media, which is the start of the customer purchasing journey.” Liu notes that OgilvyOne reported that over 55% of Chinese users had participated in online discussions about brands and that these discussions are able to directly affect businesses. It can be difficult for audiences to discern the extent of promotional content because people naturally trust and accept the influencers.

In either market, influencers from famous media or professional backgrounds or with a large number of loyal followers will automatically win more trust. Liu notes that the biggest difference between Chinese and UK influencers is professionalism, and the emergence of multi-channel networks (third-party services that work with multiple channels and creators to develop content), also known as MCN, is the key reason for this difference. Thousands of MCNs in China, such as Dayu Media, Mei One, and Hive Media, offer professional training and a variety of resources to influencers. More importantly, this number is still growing. According to iiMediaResearch, there were 30,000 MCNs in China in 2021, responsible for some of the country’s biggest internet celebrities, such as ‘Lipstick King’ Li Jiaqi (prior to a recent controversy that saw him disappear from the internet) and Papi Jiang.

As a result of this “content factory” structure, there is less pressure on influencers to be “authentic” or anti-commercial, especially since their careers were often started on social commerce platforms, as WWD China Markets Editor Tianwei Zhang noted in an interview with High Snobiety. That being said, the most popular influencers are still those that have successfully blended their own unique style and topics that genuinely move them with relevant brand partnerships.

Clearly, the ecosystem for influencers and brands is much more mature and well-regulated in China, as Jake Xu, co-founder of Shakeup Cosmetics, points out. Based on Shakeup’s experiences, this means that “Chinese social investment is much more costly than in the West, but this is in proportion to the size of the market. Commercially, influencer campaigns in China generate more tangible and visible monetary return… and brands get better control of their ROI.”

“Consumer awareness and mature warehousing and logistics infrastructure have played a big role in the rapid growth of [the influencer ecosystem] in China,” adds Liu. This infrastructure has been particularly beneficial to social commerce, with more than 70% of Chinese consumers saying that they are likely to shop on social media platforms, far ahead of the 42% worldwide average. But the UK is catching up, with social commerce expected to grow by 37.5% to reach over $21 billion (£17.3 billion) by the end of 2022.

But with so much content being churned out every day, consumers in China and the West are starting to complain of “influencer fatigue”. So how can companies keep working with influencers while making sure that the content is true to their brands and also appeals to consumers?

“Simply put, it is about improving creativity,” Liu says. “Rather than direct sponsored content, brands should consider product placement with well-selected influencers based on the target audience. Brands should also consider giving the influencer more artistic control over the content to make it more authentic and engaging for their audience. For long-term projects, such as launching a new brand in the China market, companies can consider identifying and developing a key opinion consumer (KOC) (the equivalent of a “micro influencer” in the Western market) that can grow alongside the brand and build following and reputation organically.

Many of the lessons learned from influencer marketing in the West can be applied to KOL marketing in China, and vice versa. Whatever market you are working in “make sure the size of the prize can justify the risk before you commit,” cautions Xu.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can further help you identify the best social commerce platforms for your brand and target market in China.

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China’s major e-commerce platforms sold approximately RMB 695.9 billion (£84.7 billion) of goods during China’s annual 618 shopping festival (measured in gross merchandise volume from 31 May to 18 June) according to data monitoring firm Syntun. Tmall was the top-performing traditional e-commerce platform, but live streaming e-commerce platforms like Douyin and Kuaishou exhibited strong growth, generating a GMV of RMB 144.5 billion (£17.5 billion) up from RMB 64.5 billion in 2021. 

Despite these huge numbers, JD.com sales only rose 10.3% compared to last year, a sharp decrease from the 2021 event’s 27.7% increase on 2020. As a result, some have suggested that consumers in China could be reining in their spending following strict Covid-19 lockdowns in cities like Shanghai. As Sixth Tone noted, the lockdowns muted sales in the period leading up to 618, hurting the platform rankings that get merchants onto consumers’ homepages on apps like Tmall and JD. 

Platforms had recognised this potential turn down in spending prior to 618, and many shifted from a sales-driven to a service-driven strategy that aimed to retain customers through value-added services rather than capture new ones. For example, JD promoted the reliability of its in-house logistics solutions in response to supply chain disruption caused by lockdowns. It also launched a “green impact initiative” to label products that conform to a set of environmentally friendly standards, with the hope of appealing to shoppers put off by the rampant over-consumption associated with shopping festivals in China. This is a useful insight for brands looking for ways to stand out from the noise during shopping festivals. 

Many categories still saw strong sales growth during 618. Household appliances/electronics were the most popular sales category, followed by skincare, then sports and outdoors. However, skincare sales were down 18.9% year on year according to Syntun, as some consumers simplified their skincare routines as a result of not seeing other people face to face during strict lockdowns. Frozen food and ready meals, on the other hand, saw a year-on-year increase of 27.5%, driven by sales via new “immediate consumption” delivery services such as JD.com’s JD to Home (京东到家).

Data from Alibaba also showed niche hobbies driving consumption trends, consistent with the wider shift towards interest or need-based shopping among increasingly wallet-conscious Chinese shoppers. For example, Tmall saw sales of skateboarding gear jump nearly 300% in the 618 festival warm-up period (31 May-June 3). Camping-related products also saw strong growth.   

618 is now the second-biggest shopping festival in China, dating back to 2004 when it was a simple one-day festival to celebrate the anniversary of JD.com. Today, the festival is no longer confined to a single day or platform, with promotions starting as early as 1 June and extending beyond 18 June (this year’s event on JD lasted from 23 May to 20 June).

While sales may have taken a hit this year, the scale of the 618 festival remains huge, once again highlighting the need for brands to stay on top of the shopping festival calendar in China. In addition to 618 and Singles’ Day, other key shopping festivals include Lunar New Year in January/February, Women’s Day on 8 March, and the 12.12 festival on 12 December.

The post China’s 618 shopping festival results and trends, 2022 appeared first on Focus - China Britain Business Council.

China is a global leader in influencer marketing, with the market for key opinion leaders (KOL) – the more common term for influencers in the Chinese context – reaching RMB 340 billion (£41 billion) in 2021. The Covid-19 pandemic has significantly increased the amount of time people spend online, and KOLs have become a crucial part of successful marketing in China. Today, Chinese consumers rank the opinions of influencers such as live streamers almost as highly as recommendations from family and friends when it comes to making purchasing decisions.

However, with so many companies using paid influencer partnerships to promote their products or brand, some Chinese consumers are starting to get tired of the same old influencer content. As China’s technology sector continues to develop rapidly, some have suggested that digitally generated ‘virtual influencers’ could be the future of influencer marketing in China and beyond.

What is a virtual influencer and how are they used?

“By definition, a virtual influencer is a computer-generated fictional character who has the realistic characteristics and personality of a human. They can be used for a variety of marketing-related activities and are becoming a real force in the influencer marketing industry,” explains Arnold Ma, CEO of digital creative agency Qumin. Famous Chinese virtual influencers include Ayayi, created by Ranmai Technology, and vocaloid Luo Tianyi , who has even performed in concert with Chinese pianist Lang Lang.

Unlike real-life influencers, virtual influencers are AI-powered, meeting the expectations of Chinese consumers for the latest tech to be integrated into their day-to-day lives. Experts predict that the engagement rate of virtual influencers could be three times higher than that of their human counterparts, and the market is expected to be worth RMB 1.5 billion (£182 million) by 2023.

Virtual influencer Ayayi (image captured from Instagram @ ayayi.iiiii)

Virtual influencers may be unable to build ‘authentic’ or ‘emotional’ relationships for themselves, but since they can be effectively programmed to fit in with a brand’s aesthetic or values, the possibilities with a virtual influencer are endless. “Virtual influencers increase the imagination and diversity of the influencer ecosystem. They could be an animal or a cartoon character, which would provide more potential for the format of content creation and business collaborations,” says Robin Liu, co-founder of Influencer Hub International.

What are the risks and rewards of partnering with a virtual influencer?

Marketers believe virtual influencers could be less risky than traditional influencers, especially in the wake of several high-profile celebrity scandals in China, including China’s ‘Queen of Live Streaming,’ Viya, being hit with a £160 million fine for tax evasion. “Virtual influencers … reduce the risks of general agency operation issues and PR crises for IP owners and brands,” says Liu. In addition, virtual influencers give brands more creativity and flexibility as shooting campaigns become less time-consuming.

However, as Ma comments, “virtual influencers could cause people’s self-esteem to plummet as most virtual influencers have [a] perfect appearance and body shape.”  Brands that work with virtual influencers that have been created to fit in with a very tight set of beauty standards could find themselves accused of encouraging negative body image or disordered eating.

Angelababy with her virtual alter-ego, Angela 3.0 (image capture from Weibo @Angela3-0)

Beyond the social implications, the cost of creating or using a virtual idol is not cheap. Although they do not need to be paid a salary, money is needed to develop or recruit an established virtual influencer through an agency. Ma adds that the cost can stretch to several hundred thousand RMB, and if brands consider developing their own virtual influencer, it could reach over RMB 3 million (£356,000). Creating a virtual influencer is a long-term investment, but if executed successfully, such an approach has inherent advantages because it allows brands to add value and demonstrate their technological prowess too.

Partnering with an influencer can certainly translate to increased sales, but as technology moves on, influencers may find it difficult to directly compete against virtual humans, especially when it comes to social media content. Indeed, some influencers have already collaborated with virtual partners. For example, at its pre-autumn 2021 fashion show, Dior created a virtual double of its regional ambassador, Angelababy. The virtual version of the actress and singer was a huge hit, with fans praising her virtual outfit.

Will virtual influencers replace traditional influencers?

The reign of the KOL is likely to continue for some time, with successful celebrity endorsements still making huge waves in the Chinese market. “KOLs remain mainstream due to the importance audiences place on emotion building and technology barriers,” says Liu.  However, the traditional influencer model has the potential to become outdated.

Gen-Z Chinese consumers were raised on technology and have a strong desire to experiment and try new things. Therefore, the demand for real influencers might decrease as marketers try out virtual methods. As Arnold Ma comments, “the market is seeing more diversity, with more KOLs rushing into the battleground as well as virtual beings gaining traction, especially in Chinese digital marketing scenarios.”

Brands operating in China in all industries should take note of the rise of virtual influencers and of their impact as metaverse-related marketing gains more traction.

Entering China is a key decision for businesses of all sizes. Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can provide you with the platform to unlock your potential.

The post Should your next influencer partnership in China be virtual? appeared first on Focus - China Britain Business Council.

Singer Faye Wong is one of China’s most recognisable style icons. Her stratospheric rise in the 1990s as one of China’s first musical superstars made her a household name. Decades after she first rose to fame, hundreds of millions of women across China have wondered how this woman in her early 50s has retained her youthful looks.

All was revealed after her daughter posted a picture to social media of her mother’s dressing table, featuring a mysterious elegant black jar. The little black jar contained an anti-ageing serum by boutique British skincare brand Argentum – and just like that, the company became something of an overnight success in China.

“We have a really distinctive black shaped jar that really stood out in the photograph,” explains Argentum’s founder Joy Isaacs. “Suddenly everyone was clamouring to get hold of this product,” she says.

Isaacs’s company uses a patented combination of Silver Hydrosol and DNA HP (thus the Ag in the name) to create natural, restorative and super-hydrating anti-ageing skincare products. The brand has built a strong presence in China, where the demographic of luxury skincare spans a much broader age range, with more and more younger people investing in the future of their skin, says Isaacs. “In China, there is an understanding of silver and a focus on luxury skincare that delivers results. Our formulas score particularly high when targeting acne and blemishes which is a common skin concern in this part of the world.” But the demand created by Wong’s daughter’s social media post took Isaacs by surprise.

“We had two Chinese team members in London and Shanghai who were both helping us work with a number of different distributors in China, [but] it was very hard to align multiple distributors on different platforms and across different regions,” explains Isaacs. This made it difficult to effectively manage the growth they were seeing.

Joy Isaacs, Founder and CEO, Argentum Apothecary

“Large online retailers and cross-border sellers would have as many as 200 authorised resellers, and multi-brand stores would have sub-distributors,” says Isaacs. With so many different resellers, keeping up with pricing and offers was very challenging. Furthermore, UK or Europe-based retailers and distributors would resell to China too.

Sometimes resellers would discount products, not only affecting pricing but also making it difficult to control brand image, a common concern for luxury brands. “Some of our China distributors were investing tens of thousands into a campaign only for it to be undercut by external wholesalers, undermining the whole campaign,” she explains.

Eventually, after a number of meetings and working with one impressive distributor, they decided to create a more permanent partnership, selling a minority stake in the company. Having a local stakeholder means Isaacs and her UK team don’t have to get bogged down navigating regulations and controlling pricing. What’s more, now, “everyone is on the same train and heading in the right direction.”

“It really has accelerated our growth in China enormously. They have been able to support in registering our products on the ground and growing sales in a sustainable and authentic way. For example, we are launching in China Duty Free, which enables us to sit alongside the biggest international brands,” says Isaacs. “It also enables us to concentrate on our creativity.”

Isaacs has diluted the company by selling a portion to a Chinese distributor and growth accelerator, but, she says, “it was absolutely the right thing to do. When you see what they achieved for our brand in just one year – there is no chance we would have been able to grow this complex and fascinating market alone.”

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can help you find the perfect partner or supplier to support the growth of your business in China.

The post How a British skincare brand made it big in China appeared first on Focus - China Britain Business Council.

Like people in countries all over the world, Chinese consumers are concerned about pollution, waste products, and the environment. To varying degrees, these concerns are now translating into greater awareness of the sustainability credentials of brands and, ultimately, purchasing intentions. 

Pressure to change is coming from more than just the consumers themselves. Governments around the world are introducing new regulations regarding how products are produced and what materials can be used. At the same time, Environmental, Social and Corporate Governance (ESG) factors have become a key focus for the investment community. 

 

Given the well-documented need of young people to have as much information as possible about their purchases, companies will not only have to take full responsibility for how their products are made and the conditions under which they are made, but also to tell the story of how all this happens in a transparent way

“Walking the talk on sustainability issues is something that [brands] can no longer afford to ignore. Consumers nowadays have so much more information on the sustainability credentials of products, as well as the companies behind them and their impact on the wider community,” says Anson Bailey, Head of Consumer & Retail, ASPAC, KPMG China, commenting on a recent research report by KPMG and Serai on sustainability in the apparel industry. The report, entitled ‘Moving the needle: Threading a sustainable future for apparel,’ offers insights that can be applied to a wide range of industries. 

How much do Chinese consumers care about sustainability?

Changing consumer attitudes are a major reason why sustainability has risen up the agenda in China for many businesses in the apparel industry and beyond. 

When thinking about what defines sustainable products, Chinese consumers point to factors such as high-quality, durable materials that require little after-care, chemical and pollutant-free products and processes, the use of resource-saving technologies, and the use of recycled materials.

Consumers are increasingly willing to pay more for sustainable products, so it can be potentially lucrative for brands to differentiate themselves in this way. This trend appears to have accelerated during the Covid-19 pandemic, with consumers having taken the opportunity of closed stores and more time at home to reassess their consumption habits. For example, a KPMG study in 2021 found that since the beginning of the pandemic, 68% of Hong Kong consumers and 65% of those from Greater Bay Area cities in mainland China have become more conscious of a product’s origins. According to a 2019 survey by Fashion Summit and KPMG, consumers in Shanghai ranked a brand’s environmental friendliness message higher than any of the other cities surveyed. 

Walking the talk on sustainability issues is something that brands can no longer afford to ignore.
– Anson Bailey, Head of Consumer & Retail, ASPAC, KPMG China

However, there are still differences between the environmental considerations and the actual behaviour of consumers. Cost can be a key obstacle to consumer adoption of sustainable products. The Fashion Summit and KPMG survey found that worldwide, only 13% of people are willing to pay more for sustainable fashion (the figure was slightly higher for consumers in Shanghai at 22%). Nevertheless, research indicates that businesses with higher sustainability scores have a lower cost of capital — savings that can then be passed on to consumers — and according to analysis by KPMG, a sustainable apparel business can expect to have an average increase in their net profit of 1-1.5% for brands, and 1.5-2.5% for suppliers.  

How to create supply chain transparency to build consumer trust in sustainability

Supply chain transparency is increasingly becoming a key part of any industry’s efforts to become more sustainable. It is therefore not surprising that KPMG and Serai’s survey found that executives ranked achieving end-to-end supply chain transparency as the single biggest issue that their company needs to solve in the short to medium-term.

“Consumers are asking more questions about not just where the product was manufactured, but also the raw materials that were used and where these came from. Being 100% transparent will lead to more orders for suppliers,” says Edgar Tung, COO, Esquel Group, quoted in the KPMG/Serai Report. Indeed, a 2021 survey by The Silk Initiative found that ‘supply chain transparency’ was one of the sustainability claims that resonated best with Chinese consumers, ranking far above ‘fair-trade products’ or ‘safe working conditions.’

To start moving towards a sustainable future, companies need to adopt a comprehensive, structured and systematic approach to change. KPMG and Serai’s report suggests that companies take into account five key considerations: 

1. Make sure all stakeholders are on the same page 

To actually achieve sustainable growth, every relevant process, function and relationship in the business should be aligned towards the same clear goal. Business stakeholders across the entire organisation need to be involved in setting enterprise-wide aligned transparency targets. 

2. Create an achievable framework 

Once an overall vision for supply chain transparency has been defined, a strategic framework needs to be designed. A detailed and practical approach to how to achieve the desired goals is also key. For example, data structures and formats need to be drawn up and minimum data requirements set, the type of solutions needed should also be agreed on and potential partnership or outsourcing requirements laid out. 

3. Construct a fact-based supply chain 

Companies should start by gathering information on the origins and network flows of all materials, as well as map out supply chain trading partners and how they work together, to create a detailed picture of the supply chain. Connecting with related parties can be highly impactful in building trust and strengthening relationships across the supply chain, which in turn will facilitate the willingness of stakeholders to share information. 

4. Collect and consolidate key information

The gap between intent and achieving transparency is driven by a lack of access to quality and consistent data. Companies need to identify where and how data is collected – both internally and externally – and create rules for storage/sharing rules so that data can be accessed by all participants of the supply chain. This process should be supported by relevant technologies and tools. 

5. Use data to identify and manage risks 

Consolidated data and clear protocols should give companies the information they need to take concrete actions and manage any risks arising during the process of supply chain transparency. This can be achieved with tools from third-party solution providers or in-house systems. 

The future of sustainable consumption in China

“The COP26 climate summit has highlighted the need for change. Greater transparency means that brands will be held accountable, however, it also opens up opportunities to better manage inventories, introduce more agility, and achieve greater collaboration across the entire supply chain,” says Bailey. 

Like many consumer segments in China, young people are driving increased interest in sustainable products and brands. As Fashion Summit/KPMG’s report ‘Sustainable Fashion: A Survey on Global Perspectives’ concludes, “Given the well-documented need of young people to have as much information as possible about their purchases, companies will not only have to take full responsibility for how their products are made and the conditions under which they are made, but also to tell the story of how all this happens in a transparent way.”

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s market research services can help you build knowledge and understanding of the Chinese market prior to investment.

Portions of this article were adapted from KPMG and Serai’s 2021 report, Moving the Needle: Threading a Sustainable Future for Apparel

The post How to meet the sustainability demands of Chinese consumers appeared first on Focus - China Britain Business Council.

Created with information provided by cross-border e-commerce company Samarkand Global

The post What are China’s main e-commerce platforms?  appeared first on Focus - China Britain Business Council.

China has the largest population of digital buyers in the world – 780 million people in 2021 – and the e-commerce market is projected to reach $3 trillion in 2024. That’s a huge market, but it’s also a market with an entirely different landscape from the Western world. As a result, many brands and businesses find it difficult to navigate the Chinese e-commerce landscape due to budget and resource constraints, and most of all, a lack of local knowledge.

If you are operating an e-commerce website in Europe, it’s likely that you have some cross-border orders from China already, so may be considering creating a ‘.cn’ website as a next step. However, particularly as an SME, it is prudent to be mindful of the commitment required to create a website infrastructure in China (including tackling the firewall issue) and engage with local logistics. Most importantly, however, Chinese customers are much more accustomed to shopping from giant e-commerce platforms or social e-commerce, rather than individual brand websites.

The e-commerce giants

Tmall
Tmall Global is China’s largest cross-border B2C digital marketplace, enabling brands without operations in China to create virtual storefronts and ship products into China. Tmall Global offers one-stop solutions for inventory and logistics management, providing options such as bonded warehouses and consolidated shipping from overseas, with Tmall Partners (certified third-party operators) managing the business locally and providing customer support. Some companies use Tmall Global as a stepping stone before committing to a store on domestic brand-focused platform Tmall for more established brands.

JD
JD runs a substantially different business model to Tmall Global as it takes ownership of merchandise sold and is directly responsible to customers for product quality, authenticity, and any after-sales service. JD has its own logistics system, with a vast network of distribution stations and warehouses to fulfil orders quickly. Traditionally known for consumer electronics, the platform has also built up a luxury fashion portfolio in recent years.

However, working with the above platforms comes with cost implications and reduced control over your brand, something that not every business is ready for. Other challenges include gaining and maintaining visibility on a competitive platform and building brand equity in a sales-driven environment.

Social commerce platforms

For SMEs, social commerce platforms can be an effective way of establishing roots in China whilst providing more brand control and ways of building brand equity.

WeChat Mini-Programs
Hosted within Tencent super app WeChat (which has 1.15 billion monthly active users), WeChat mini-programs boast 400 million active users and facilitate one-to-one communication with consumers. They create a powerful platform with multiple features beyond pure e-commerce. Being within the WeChat ecosystem is a distinct advantage, and as such, it is suitable for brands that prefer more autonomy in terms of CRM, CMS, and content marketing.

Xiaohongshu (aka RED)
Popular with Gen Z and millennials, particularly young women, Xiaohongshu (RED) is an important platform for consumers to discover information about trending topics and brands, particularly in the fashion and beauty fields – effectively a search engine. This is also a platform seeing a strong market value for KOLs/KOCs, which brands can work with for product trials and reviews if they have an official account.

Douyin
Owned by ByteDance, Douyin is one of the fastest-growing social media platforms and is primarily focused on short video sharing (it’s China’s version of TikTok). For brands who are ready to connect with Gen Z and ready to invest in video content, creating a Douyin Store enables a seamless online experience from product discovery via videos to landing on in-app shopping pages.

Other platforms including Weibo and Bilibili also have e-commerce functions. These social platforms are touchpoints to build market awareness and engage with potential customers. As a result, social and marketing strategies should be considered in tandem with e-commerce capabilities if you are looking to build a sustainable brand presence in China.

Case study: Emma Bridgewater

Emma Bridgewater is a handmade and hand-painted homeware brand from the UK. It has an e-commerce store on Tmall Global supported by a social media presence on WeChat, Weibo and RED. It has no physical stores in China.

Challenge: Maintaining engagement with Chinese consumers during Covid-19 lockdowns as a niche brand entering the Chinese market through Tmall.

Approach: Give consumers a way to feel good and have fun at home with Emma Bridgewater products during lockdown through a marketing campaign, driving purchases on Tmall.

Making it happen: Launched a product giveaway on Weibo and RED with the message that even though you’re at home you can still feel ‘lucky’. Built affinity with followers by sharing relatable content and positive messaging through creative campaigns.

Results: 122% increase in followers across three social platforms during the campaign. Emma Bridgewater launched on Tmall in 2019 as part of an international strategic growth plan. Sales have reached 10% more than the forecasted figures for the past financial year, and there has been 49% growth compared to 2020. More than 20,000 mugs have been sold in China so far.

Case study: Estée Lauder

Estée Lauder is an international company with a diverse portfolio of makeup, skincare and fragrance brands. In addition to physical outlets in China, Estée Lauder operates e-commerce through Tmall and WeChat Mini-Programs, supported by social media marketing on WeChat, Weibo, RED and Douyin.

Challenge: Attracting the audience’s attention during one of the biggest shopping events (Singles’ Day) and stand out from other promotional activities in the market.

Approach: Use tier-one KOLs to connect with audiences.

Making it happen: Engaged KOL Li Jiaqi (China’s ‘Lipstick King’) for live streaming activities and actor Xiao Zhan for the promotion of ANR Eye Cream. Used strategic paid media to amplify social campaigns.

Results:

• $70 million in transactions
• More than 8.9 million core products sold in one hour
• 15,000 lipsticks sold in five minutes by influencer Li Jiaqi
• 400,000 units of eye cream sold out in 36 minutes

Reading about e-commerce in China can leave you with more questions than answers, and that’s perfectly normal – navigating e-commerce in China is a huge task and the case for each company is unique. The challenges of local operations, Chinese content production and the cultural gap mean that you should be sure to do effective research before you enter the market.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can further help you identify the best e-commerce platform for your brand and target market in China.

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In the West, consumers often ask for samples prior to purchasing an item to try before they buy, whereas in China brands tend to give out samples only once a shopper has purchased a full-sized product. To Chinese consumers, samples or gifts are no longer a feel-good treat or an unexpected bonus, but instead have grown to become a key selling point driving consumer behaviour and spending.

Chinese consumers who regularly visit official branded stores on Tmall or JD will often expect samples to be full-sized, particularly during major retail events such as the annual Double 11 Shopping Festival (also known as Singles Day). High-end brands will often give away a selection of sample-sized products that add up to the volume of a full-sized product. Chinese shoppers may also rate their shopping experience based on the quality of the sample received. This is similar to the “blind box” phenomenon (where consumers purchase a package from a brand containing unknown contents), where the game-like element of opening the boxes stimulates buyer curiosity, and the unwrapping experience is tailor-made for sharing on social media.

The fact that samples are usually only received after the purchase of a full-sized product has created a thriving market of multi-brand sample stores, the most famous of which is Harmay. According to Jing Daily, Harmay was valued at RMB 500 million in early 2021 and has expanded rapidly in recent years, opening branches in major cities including Beijing, Shanghai and Hangzhou. Shopping at Harmay is somewhat of a ‘blind box’ experience; the store doesn’t necessarily always stock the same products or brands, promoting revisits. This appeals to young consumers who are enthusiastic about discovering new products from international brands but may not have the cash to throw away on products they may not like.

Chinese consumers have literally hundreds of consumption channels at their fingertips, leaving them constantly on the lookout for added-value, experiential spending opportunities 

While beauty samples of all kinds are popular, brands should be careful not to underestimate the sample quantity and design detail demanded by Chinese shoppers, so as not to receive negative feedback and damage to brand reputation. Frequent changes to the type or quality of samples offered can also work against brands and reduce profit margins.

Skipping samples completely is a difficult move to make — even if you are not in the beauty sector — as gifting something extra has become a key marketing tool used to tempt new customers, as well as maintain current customers’ loyalty. So think twice when planning your budget for samples, and consider gifting in a sustainable and innovative way to best connect with your Chinese consumers whilst driving your success in-market.

The post China Consumer 2022: Why is China crazy for beauty samples? appeared first on Focus - China Britain Business Council.

Where can businesses sell on WeChat?

Mini-programs and mobile websites are both used to host e-commerce stores within WeChat. Both can be accessed from Official Accounts, articles, users sharing to individual or group chats, or by scanning QR codes.

WeChat mini-programs for New Balance and KFC

Mini-Programs

WeChat serves as an app store for Mini-Programs, which are apps that function inside of WeChat. This often gives the best experience for users accessing your e-commerce store through WeChat.

Pros:

• Development is usually faster than with a comparative e-commerce website
• Access to Subscribe Messages to send service notifications to users
• Recent and bookmarked Mini-Programs are easily accessed
• Quick access to the user’s phone number without sending a verification code by SMS
• Can access advanced phone features such as Bluetooth, accelerometer, gyrosope, WiFi etc.
• Larger and more aesthetic appearance when shared to chats

Cons:

• Cannot be accessed outside of WeChat. This limits advertising on third-party platforms.
• Code updates must pass verification before going live, which can take 1-48 hours
• Currently cannot be shared to WeChat Moments on iOS devices (likely to change)

Mobile websites for Pinduoduo and Lululemon, usually accessed via a link from a brand’s official WeChat account

Mobile websites

Mobile websites, known as H5s in China, are accessed via WeChat’s built-in web browser and usually function almost as well as Mini-Programs.

Pros:

• Can be accessed outside of WeChat

Cons:

• Do not appear directly in search results (but Official Accounts, articles, and Moments posts can be searched)
• Less attractive when shared to chats

Store Providers

There are also several ‘no code’ platforms that allow sellers to open WeChat store websites without developing their own platforms – a kind of ‘Shopify for China’. The leading providers are WeiDian, WeiMob and YouZan.

What functions can be used to promote WeChat stores?

The official WeChat Accounts of food brand Bob’s Red Mill and Nike

WeChat Official Accounts

Official Accounts let sellers post articles about their brand and direct users to their store. Articles can be shared to individuals and group chats, as well as WeChat Moments, and users follow the account to receive notifications for new updates. Depending on the type of account, they can post daily or weekly and can appear directly in WeChat’s list of chats alongside the user’s friends and group chats.

A branded live stream with products listed for purchase

WeChat Channels

Channels allow brands to post videos and live stream. Product demonstrations, tutorials and comparisons are effective ways of engaging the audience and communicating product quality.

Compared to features offered by other short video platforms, Channels is an especially effective marketing tool because it leverages WeChat users’ contacts to push content viewed by their friends directly to their daily feed

How can businesses ensure they are legally compliant?

All websites and Mini-Programs in China require an ICP Filing to operate and depending on the scope of your products, additional licenses such as the B25 Value-added telecommunications license, EDI license and industry-specific licenses may be required. Certain products face limitations (such as baby products, milk powder, pet products, alcohol) and if you are offering products from multiple brands, you will need to qualify as an e-commerce platform. More information on the licenses required for different stores can be found here in WeChat’s support documents.

The most recent rules on personal data privacy require Chinese user data to be stored on servers within China. Since local servers are needed for the best user experience anyway, this shouldn’t be a problem for new store owners.

WeChat also has clear and effective rules to protect users from unethical business practices such as scams, spamming, and false advertising. A self-review conducted according to the WeChat Mini-Program Platform Operation Rules is recommended before submitting for approval.

How can businesses take payments through WeChat?

WeChat Pay functions smoothly within Mini-Programs and mobile websites, and can be set up with a business license, required industry licenses, a corporate bank account and real-name verification.

Companies without a legal presence in China may be restricted in business scope and cross-border payments, so it is often recommended to partner with a local company that can assist in obtaining necessary licenses.

Now that we’ve covered the tools provided by WeChat to power your e-commerce business in China, it’s a straightforward formula: Mini-Programs and mobile websites showcase your branded products like a physical store, whereas WeChat Official Accounts and Channels are where effective marketing occurs. Finally, it is beneficial to find a Chinese partner like AppInChina for streamlined compliance fulfilment, cross-border payment setup and customs clearance so that your e-commerce business with WeChat can run legally and smoothly.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can further help you identify the best social media platform for your brand and target market in China. 

The post How to use WeChat for e-commerce appeared first on Focus - China Britain Business Council.

Live streaming first became a buzzword in China around 2015-2016. During its initial growth period, this new form of social media saw only 300 million active users – a number which has now doubled to over 600 million, with a service sector of over 47,000 multi-channel networks there to service its ever-growing needs.

In recent years, live streaming has become an increasingly popular way to drive sales and conversion for brands. Companies that get it right can benefit greatly from the fast-paced live streaming content ecosystem – as well as China’s ever-growing influencer culture – to engage with consumers in a more authentic way.

In the early days of live streaming, using influencers was seen as a way for brands to promote products and drive traffic to e-commerce platforms where they could further cultivate and sell products to consumers.

However, the unprecedented consumer demand for live streaming has led to a much more integrated approach, with mainstream e-commerce platforms opening live streaming channels or social media platforms embedding e-commerce into their offer. The trend has seen particular growth around platforms driven by user-generated video content.

What kind of customers watch live streams and what are they looking for?

In 2021, 60% of the users of internet live streaming were 27-39 years old and had a relatively even gender balance (47.1% male; 52.9% female). The three key factors that motivate purchase are products on promotion matching consumer needs (63.2%), strong discounts (61.7%) and a charming and persuasive host (56.9%).

What are the key live streaming platforms in China?

There are six categories of live streaming in Chinese digital marketing: e-commerce, gaming, entertainment, sports, B2B and finance/economics. Brands focusing on the B2C market can primarily focus on live streaming e-commerce, which can generally be divided into two types of platforms: social media e-commerce (e.g., Douyin, KuaiShou and Xiaohongshu/RED), and e-commerce with embedded content and social functions (e.g., Taobao, JD.com and Pinduoduo).

Douyin, Kuaishou and Taobao are the three leading platforms with strong propositions that drive most of the attention in the market and will, therefore, be beneficial to British businesses.

Herborist, a premium skincare brand inspired by traditional Chinese medicine, streaming on Douyin

Douyin: The young, impactful platform

Key demographics: Sister app to TikTok, Douyin is a global and vibrant user generated content (UGC) platform with solid growth in follower numbers and young user demographics; people born between 1980 and 1995 form the majority of users. Most users are based in Tier 3 cities in China, but Douyin also shows fast growth in Tier1, new Tier 1 and Tier 4 cities.

Proposition: Douyin is focused on shared interest, presenting top traffic and volume on content but at a lower repurchase rate. The platform sells a mix of products of different qualities and price points, and demonstrates a strong trend of bringing the newest products to the market.

Customer behaviours: 380 million daily active users with an average of 102 minutes of screen time.

Gross merchandise value: RMB 500 Billion (2020)

Famous pop star Jay Chou (second left) live streaming on Kuaishou

Kuaishou: The communal, local experience

Key demographics: Kuaishou has a solid user base in Tier 3-5 cities with a majority female user base aged 31-40. The customers are ‘lower end’ compared to the other two platforms.

Proposition: Kuaishou is focused on building trust and customer relationships, demonstrating diverse and robust traffic and a higher repurchase rate. Mixed quality clothes and bags are the mainstay on Kuaishou.

Customer behaviours: 220 million daily active users with an average of 103 minutes of screen time.

Gross merchandise value: RMB 381 Billion (2020)

One of beauty influencer Li Jiaqi’s live streams on Taobao

Taobao: More options for brand-driven live streaming

Key demographics: Taobao is the largest e-commerce platform in China, with a robust supply chain and a diverse range of products. Taobao has the top end of customers compared to the other two platforms, and demonstrates a substantial user base among customers born between 1980 and 1990, as well as Gen Z consumers.

Proposition: Taobao is focused on exploration, presenting official online stores selling everything from female fashion to electronics to food and drink. Put simply, if you can imagine it, you can find it on Taobao.

Customer behaviours: Taobao’s key channel has 340 million daily active users with an average of 23 mins of screen time. The video content channel has 3.34 million daily active users with an average of 52 minutes’ screen time.

Gross merchandise value: RMB 400 Billion (2020)

How do you choose a host for live streaming events?

Over the past few years, concerns about the authenticity and quality of live streaming have been growing due to bad shopping experiences, low-quality products and the tax avoidance scandals that have tainted famous live streaming hosts. The market is demanding change.

New trends are now emerging: 79.3% of customers are more likely to open a live streaming channel hosted by a brand itself, with 58.1% of customers enjoying live streams led by trusted public figures in conjunction with brands.

79.3% of customers are more likely to open a live streaming channel hosted by a brand itself, with 58.1% of customers enjoying live streams led by trusted public figures in conjunction with brands.

The age of brand-led live streaming is here, where customers request a higher quality of content with a trustworthy voice and genuine high-quality products. This change requires companies to switch their mindset from expecting fast turnover to investing in long-term influence through live streaming channels.

Despite increased brand-driven investment in live streaming, word of mouth is still one of the strongest factors that influence consumer decision making. KOLs (key opinion leaders) and KOCs (key opinion customers) that present a down-to-earth tone of voice are still great mediums to connect brands with customers. Choosing the right figure is becoming extremely crucial since authenticity is critical in creating consumer advocacy.

The other way to drive strong word of mouth referrals is to establish a community and encourage sharing between friends on social networks. A successful example of this is Pinduoduo, a low-price, group purchase e-commerce platform that leverages its partnership with Tencent to tap into the WeChat ecosystem, where a huge volume of friend-based conversations and group chats give it enormous sharing power that perfectly combines word of mouth with a genuine need for the item in question.

What’s next for the Chinese live streaming market?

For many in China, live streaming (and buying products direct from inside live streams) is a form of entertainment these days. The live streaming market in China has already passed its early stage and is moving into a phase of refinement and maturation, where competition becomes stronger and more creativity and investment are required to catch people’s attention. The age in which anyone could become a live stream host is no more, and the new growth point will be at a more corporate, brand-led approach, where customers can enjoy a better experience, better product quality and cutting-edge interaction driven by technology.

Add to the mix the development of 5G, augmented reality, virtual reality and the metaverse, and the future of live stream shopping will only become more dynamic and creative. Watch this space!

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can further help you identify the best social media platform for your brand and target market in China. 

Founded in 2016 in Edinburgh, RED Unit supports public sector organisations and private businesses to thrive in the Chinese market and the local market in the UK with cultural intelligence and a unique approach, combining innovative visions and a commercial mindset. It is an intercultural strategic and digital agency that brings creativity, quality and clarity to initiate sustainable growth for brands.

The post How to choose the right live streaming platform in China appeared first on Focus - China Britain Business Council.