Emotional marketing: Connecting beyond the product

In recent years, the importance of building emotional connections with consumers has gained prominence, especially for brands targeting younger consumers. Products that offer emotional fulfilment, such as hobby-related purchases and even blind boxes, have become central to the purchasing logic of Gen Z. During the Singles’ Day shopping festival, surveys showed that more than 40% of young consumers prioritised emotional value when making purchasing decisions.

Brands can tap into this trend by creating products and marketing campaigns that resonate emotionally with consumers. A strong example of this is brands finding a way to speak to female empowerment, an increasingly important topic among China’s younger generations. Jack Porteous, Commerical Director, TONG Global (who will be speaking at the UK-China Business Forum on 5 March), points to Aesop, which leveraged its International Women’s Day campaign by spotlighting a diverse range of female authors and distributing their work. This type of meaningful storytelling aligns with consumer values and aspirations, enhancing emotional connections and brand relevance.

Building trust to appeal to cautious consumers

Economic uncertainties and shifting social attitudes have led to more cautious consumption patterns among Chinese consumers. A type of “luxury shame” has emerged, where individuals refrain from luxury purchases (or at least showing them off) due to economic slowdowns and government crackdowns on extravagant displays (including shutting down the social media accounts of influencers considered to be flaunting their wealth). Consequently, consumers are becoming more discerning, opting for value-retaining, recognisable luxury items over trendy purchases.

To build trust and demonstrate value, brands should focus on transparency, quality, and sustainability. Communicating the enduring value and craftsmanship of products can appeal to consumers seeking long-term value. Moreover, aligning with cultural values and offering localised products can enhance brand relevance. That being said, brands should avoid superficial attempts at localisation, such as merely adopting traditional Chinese motifs for the Lunar New Year. Stanley Mugs, for example, failed to create a meaningful connection with the festival in their Chinese New Year collection. “British brands should first be confident to express their own brand identity and what makes them unique, localising the tone and presentation to best suit a Chinese audience,” Porteous advises.

Understanding niche consumer segments

China’s consumer market presents a unique blend of tradition and innovation, with opportunities across multiple sectors. The country’s evolving consumer behaviour is guided by trends toward wellness, premiumisation, and lifestyle enrichment, driven by urbanisation and changing family structures.

A recent report by WPIC Marketing +Technologies highlighted the beauty, personal care and fashion segments, which have shown robust growth in 2024. Driven by post-pandemic demand, beauty product sales increased by 6%, personal care by 2.3%, and fashion by a remarkable 14.4% in 2024. This resurgence is accompanied by trends such as creative makeup, scientific skincare, “quiet luxury” and athleisure wear.

For early-stage brands in the market, brand relevance means finding the right channel and having an extreme focus on their niche – connecting the brand’s proposition to a consumer need. More established brands can focus on building community as a way to establish deeper relationships. Porteous points to Brompton Bicycles as an example of a brand that has done this well, hosting a “Brompton World Championship” in China in 2024, which leaned into the lifestyle aspect of the brand and fostered a passionate community.

The key role of social commerce

Social commerce has become a crucial component of China’s digital retail landscape. Platforms like Xiaohongshu (also known as RED or Little Red Book) and Douyin have successfully integrated e-commerce with social media, allowing users to seamlessly share and read product experiences and make purchases within the app. Unlike traditional e-commerce platforms, many of which emphasise volume and discounts, Xiaohongshu, in particular, focuses on aspirational lifestyles, attracting financially independent users who are less price-sensitive.

Brands should establish a strong presence on platforms like Xiaohongshu and Douyin, collaborating with influencers (especially so-called niche or micro-influencers, also called key opinion consumers (KOCs) in the Chinese context) and creating engaging content that encourages user interaction. Live streaming, mini-dramas, and key opinion leader (KOL) marketing are essential strategies to convert social engagement into sales. Additionally, successful brands have adapted to shifts in channel preferences and societal changes among their consumers, ensuring they communicate with their audience on their own terms.

Conclusion

Building brand relevance and customer loyalty in China’s consumer market necessitates a deep understanding of evolving consumer behaviours and strategic engagement across various platforms. Whether through emotional marketing, addressing cautious consumption, targeting niche segments, or leveraging social commerce, brands must remain agile and consumer-focused. Furthermore, long-term success hinges on ensuring that consumers buy into and love the brand, not just its best-selling product. As major luxury houses like Loewe and Louis Vuitton have demonstrated, effective localisation involves cultural co-creation – partnering with local artists and talents, for example, while retaining the brand’s core identity.

In a highly competitive and rapidly evolving market, brands that prioritise relevance, authenticity, and long-term connection will be best positioned to achieve sustainable growth.

The 2025 UK-China Business Forum is a full-day conference focused on the theme of UK-China partnerships and the opportunities for growth in both markets through export and investment.

During the morning session, the Forum will explore how to develop these opportunities, analysing both the benefits and challenges from a practical point of view, with senior businesspeople sharing their valuable insights through real-life case studies.

In the afternoon, the Forum will examine four key areas:

• Ageing populations, which require a different approach to healthcare, with more focus on prevention rather than cure, there is huge scope for UK-China academic and business collaboration.
• The Chinese consumer, amongst which there is undoubted interest in UK brands, where engagement is built on cultural relevance and emotional connection.
• Smart transport solutions, which have the potential for tremendous benefits, both for the UK as a whole, as well as for businesses and their employees.
• Green transition, an area where China and the UK are both looking for wins and where there is potential for cooperation and growth in both markets.

The event will be followed by CBBC’s Spring Reception.

Click here for more information and to register for the UK-China Business Forum

The post How to build brand relevance and customer loyalty in China’s consumer market appeared first on Focus - China Britain Business Council.

With the US Supreme Court seeming increasingly likely to uphold a law banning TikTok over national security concerns unless parent company ByteDance sells the platform to a non China based company by 19 January 2025, many of TikTok’s 170 million US users have been preemptively downloading Xiaohongshu.

In a twist no one saw coming, content creators say they are checking out the platform as a potential alternative to share their content and maintain their communities, while others have done it to point out the irony of being able to download and use other Chinese apps just days before TikTok could be removed from US app stores.

What is Xiaohongshu?

Xiaohongshu, also known as Red or Rednote in English, began life in 2013 as an online overseas travel guide for Chinese shoppers. Often compared to Instagram (but more realistically a blend of Instagram, Pinterest, Amazon and TripAdvisor), today, the platform incorporates a range of functions, including text and image posts, videos, live streaming, and social commerce. Targeting 18-to-35-year-old Chinese urban females, the platform is known for its strong interest-based communities and high-quality, trustworthy user-generated content. It has around 300 million monthly users.

Will Xiaohongshu become more popular than TikTok?

While Xiaohongshu’s current surge in US popularity is significant, with the number of posts on the app tagged ‘#tiktokrefugee’ now well over 60,000, it is likely to be relatively short-lived. The platform was not designed with English speakers in mind (although many bilingual Chinese users have shared guides for new US users), and it will take time for creators to build up the kind of communities that they had on TikTok. Moreover, the law banning TikTok states that any “foreign adversary controlled application”, like Xiaohongshu, faces a similar ban in future. Nonetheless, the trend underscores a growing user desire for diverse social media experiences and the resilience of online communities in the face of regulatory challenges.

The post What is Xiaohongshu and why is it attracting TikTok users? appeared first on Focus - China Britain Business Council.

Social commerce combines social interaction with online shopping, leveraging platforms where users can share, discuss, and directly purchase products. This seamless integration has created an engaging and influential ecosystem that appeals to the digitally savvy Chinese consumer. As a result, social commerce has seen exponential growth in recent years, reaching a gross merchandise volume (GMV) of RMB 3.42 trillion (£373.5 billion) in 2023, and expected to exceed RMB 4.8 trillion (£524.2 billion) in 2025.

This article explores what social commerce is, examines the platforms leading the trend, and uncovers why it has become a cultural and economic phenomenon in China.

What is social commerce?

Social commerce allows users to shop directly within social media platforms or through community-driven e-commerce platforms. Unlike traditional e-commerce, which primarily focuses on transactions, social commerce thrives on interaction, personalisation, and trust. It integrates elements such as live streaming, short videos, influencer endorsements, and group buying into the shopping experience.

Compared to traditional e-commerce platforms like Taobao/Tmall, which depend on consumers actively seeking out products through search queries (as you would on Amazon), algorithms on social commerce platforms serve content and product listings to users tailored to their preferences and behaviours.

For example, if a male user browses several exercise-related videos every day, Douyin can display product listings for protein powder, athletic apparel, or other supplements, and when the user sees those products offered to him for purchase, he can make the purchase instantly within the app. Once they are converted on one purchase, Douyin will expose that user to additional fitness, sports, and healthcare content and products. 

In China, this dynamic approach resonates strongly with consumers who value authenticity, convenience and social connection. Social commerce platforms empower buyers to discover new products through peer recommendations, influencer campaigns and interactive experiences, all while completing their purchases without leaving the app.

What are the main social commerce platforms in China?

China’s social commerce landscape is diverse, with various platforms driving the trend. Here are some of the most prominent players:

WeChat
WeChat, owned by Tencent, is China’s ubiquitous super-app. Its WeChat Mini Programs enable businesses to create e-commerce stores directly within the app. Social sharing, user reviews and group-buy features make it a powerful social commerce tool. Many brands use WeChat to launch flash sales and engage their communities.

Xiaohongshu
Xiaohongshu (pronounced “shao-hong-shoo”) allows users to share product recommendations through photos and short videos. With its focus on beauty, fashion, and lifestyle, Xiaohongshu has become a trusted platform for millennials and Gen Z users seeking authentic reviews before making purchases. During the 618 shopping festival in 2024, the order volumes from the platform’s livestreaming sessions increased 5.4-fold, and GMV from in-store broadcasts grew by five times.

Pinduoduo
Pinduoduo (“pin-door-door”) epitomises social commerce in China with its innovative group-buying model. It encourages users to team up with friends to secure discounts on products, creating a communal shopping experience. Pinduoduo also leverages gamification to engage users and drive purchases.

Douyin
Douyin (“dough-yin”), China’s version of TikTok, merges entertainment with shopping. Through live-streaming e-commerce, influencers and brands showcase products in real-time, interacting with viewers and offering exclusive discounts. Douyin’s short video format also facilitates product discovery and impulse buying. During 618 in 2024, Douyin short videos featuring shopping cart links garnered 115.1 billion views.

Why is social commerce thriving in China?

Social commerce has found fertile ground in China for several reasons:

High smartphone penetration and digital adoption
China boasts one of the world’s largest smartphone user bases, with over 1.2 billion active internet users. The ubiquity of smartphones, combined with affordable mobile data, ensures that social commerce platforms are accessible to a vast audience.

Integrated digital ecosystem
Chinese consumers are accustomed to using multifunctional apps. Platforms like WeChat and Alipay eliminate friction in the shopping process by allowing users to discover, interact, and purchase without switching apps.

Cultural emphasis on community and trust
The Chinese consumer market values trust and authenticity, often seeking recommendations from friends, family, or influencers. Social commerce taps into this cultural tendency by fostering a sense of community and relying on user-generated content to promote products.

Rapid growth of live streaming
Live streaming has become a cornerstone of China’s social commerce. Consumers are drawn to the immediacy and interactivity of live stream sessions, where they can ask questions and receive real-time feedback. Influencers and celebrities often host these sessions, further enhancing their appeal.

Conclusion

Social commerce is transforming the way people shop in China, blending the social and transactional aspects of digital life into a cohesive experience. Platforms like WeChat, Xiaohongshu, and Pinduoduo are at the forefront of this evolution, leveraging China’s unique digital ecosystem and consumer behaviour to redefine e-commerce.

As social commerce continues to grow, it is setting a benchmark for other markets worldwide, demonstrating the power of integrating social interaction with online shopping. For brands looking to enter China, understanding and leveraging social commerce is no longer optional – it is essential for success in one of the world’s most dynamic retail markets.

The post Your super simple guide to social commerce in China appeared first on Focus - China Britain Business Council.

The role of e-commerce in China’s consumer landscape

China’s e-commerce ecosystem is the primary sales driver across consumer categories, with digital platforms accounting for over half of retail sales. As the report highlights, this ecosystem includes well-known search-based platforms like Tmall and JD.com, as well as fast-growing social commerce platforms like Douyin. Tmall remains the largest, commanding 33.7% of the market with nearly 895 million daily users. JD.com follows with a focus on quality and logistics, holding a 19.9% share. Meanwhile, Douyin, with its attention-capturing blend of short-form video content and commerce, has gained substantial traction and now claims 16.9% of the market.

Notably, livestream shopping has become a popular method for purchasing goods, now accounting for 26% of all e-commerce sales, a dramatic increase from just 5% in 2019. Although pioneered by Tmall, Douyin is now leading the shift to livestream shopping, with personalised content delivery through algorithms that connect consumers to relevant products.

Key trends across consumer segments

Beauty, personal care and fashion

The beauty, personal care and fashion segments have shown robust growth in 2024. Driven by post-pandemic demand, beauty product sales increased by 6%, personal care by 2.3%, and fashion by a remarkable 14.4% in 2024. This resurgence is accompanied by trends such as creative makeup, scientific skincare, “quiet luxury” and athleisure wear.

Douyin’s social commerce approach has proven particularly effective in this sector, where the platform saw growth rates of 44% in fashion, 40% in beauty, and 26% in personal care. With its focus on visual and interactive content, Douyin connects users to new brands and trends, fostering rapid adoption of products through influencer reviews and real-time product demos. For British brands, Douyin offers an excellent platform to promote high-engagement products like colourful cosmetics and functional, trendy clothing.

Nutraceuticals, outdoor, and sports

As Chinese consumers become more health-conscious, the nutraceutical sector has seen exponential growth. The health and wellness market has grown by 12.8% to reach $874 billion (£673 billion) in 2024, with expectations that it will nearly double by 2030. Within this sector, vitamins, target supplements (for example, for bone health or aesthetic purposes), and protein powder for sports nutrition are surging in popularity.

Outdoor sports and fitness-related products have also flourished. This sector, valued at $50.9 billion (£39.5 billion), grew by 22%, with items such as cycling, camping and hiking gear gaining traction. Douyin’s role as a trend amplifier is evident here as well, with 89% growth in the GMV sports and fitness products on the platform, as is Xiaohongshu’s role as a platform for sharing tips and itineraries. Outdoor sports are becoming more accessible and appealing to a broad demographic, particularly among urban dwellers seeking both fitness and social engagement.

Pet industry

A reflection of broader lifestyle changes, the pet care industry has witnessed an extraordinary 18.3% year-over-year growth, reaching $99 billion (£76 billion) in 2024. Factors such as increased urbanisation, delayed family milestones and a shift toward “pet parenting” have driven this growth. Chinese pet owners, predominantly young urban women, are investing heavily in premium pet care products, including vitamins and grooming supplies.

Home, mother and baby

The home goods category has shown continued growth, driven by the rising demand for high-quality, convenient home improvement solutions. In 2024, online sales of appliances hit $70.2 billion (£54.1 billion), marking an 11.9% increase. Household cleaning products also saw 9.5% growth, reflecting a strong focus on cleanliness and convenience in daily life.

Interestingly, despite a declining birth rate, the mother-baby category remains robust. With a 7.3% increase in online sales, the market for baby products reached $12.2 billion (£9.4 billion). Douyin now leads this category, holding a 45.5% share, as a new generation of parents turn to social media for recommendations and product reviews from parenting influencers. Premium baby skincare and vitamin products have emerged as high-growth sub-categories, highlighting a willingness among parents to invest in their children’s wellbeing.

Strategic insights for brands entering the Chinese market

For brands seeking to capitalise on these trends, WPIC’s report underscores the importance of a multi-platform approach. Traditional e-commerce platforms like Tmall and JD.com are indispensable for product distribution and visibility. On the other hand, social commerce platforms like Douyin and Xiaohongshu offer unique, high-engagement opportunities. The success of influencer-led and livestream shopping highlights the value of content-rich, interactive marketing strategies.

Why social commerce matters

The shift toward interest-driven and social-based commerce is reshaping consumer expectations and purchase behaviours. As the report explains, consumers on platforms like Douyin are not only shopping but also seeking inspiration and community interaction. By integrating brand content within consumers’ social feeds, brands can reach potential buyers in their moments of discovery and inspiration, which significantly improves conversion rates.

Category-specific growth strategies

While social commerce should be a part of the strategy for all consumer brands in China, the most effective ways to grow and expand differ by category.

In beauty and fashion, brands should emphasise self-expression and personalisation to engage Chinese consumers effectively. For example, this could involve showcasing user-generated content (UGC) from independent makeup artists. Meanwhile, in the nutraceuticals and sports sectors, brands can appeal to rising health-consciousness by showcasing product efficacy and aligning with wellness influencers.

Key takeaways for British brands in China

China’s consumer market presents a unique blend of tradition and innovation, with opportunities across multiple sectors. The country’s evolving consumer behaviour is guided by trends toward wellness, premiumisation, and lifestyle enrichment, driven by urbanisation and changing family structures. For brands, an omnichannel strategy that encompasses both established marketplaces and emerging social platforms will be essential.

As WPIC Marketing + Technologies notes, navigating this vibrant market requires a nuanced understanding of platform dynamics and category trends. Brands that embrace this multifaceted approach and stay attuned to consumer shifts will be well-positioned to thrive in China’s rapidly evolving landscape.

The post Which of China’s consumer segments is growing fastest? appeared first on Focus - China Britain Business Council.

In stark contrast to the overcast outlook of China’s overall economic recovery, the luxury sector has seen positive signs after what has been described by Vogue Business as “expectation-beating growth” in the second quarter of 2023, retaining the momentum gained in Q1.

This is evidenced by Burberry’s 46% sales growth in the mainland in the first three months of the year. Similar traction was also captured by heavyweight LVMH, which clocked sales growth between 40% and 45% in the first half of the year.

Nevertheless, the resumption of offline vitality in the luxury market doesn’t seem to have stolen the thunder of digital practices looking to energise the revival of the sector, as signposted in the China Luxury Market Digital Trends 2023 Report released by Tencent Marketing Insight with additional analysis provided by Boston Consulting Group.

Douyin (the Chinese version of TikTok), which is home to more than 600 million monthly active users, 150 million of whom show a strong appetite for extravagant purchases, has become increasingly important for facilitating the growth of luxury in China. According to the 2023 Douyin Luxury Industry White Paper jointly published by Ocean Engine, Douyin E-commerce, Trend Insight and Deloitte China, the viral short video app has now become a marketplace for over 70% of China’s luxury buyers.

The platform expects to see its most heavyweight luxury consumers increase their annual spending by 7% from RMB 600,000 (£66,470) to RMB 643,000 (£71,234) in the coming years, while moderate and light luxury buyers, who are more price-sensitive, are expected to reduce their yearly consumption of luxury items by 5% to RMB 112,000 (£12,497) and 15% to RMB 16,000 (£1,772), respectively, reflecting a more cautious consumer behaviour.

While stylishness/trendiness and the ability to cater to the pursuit of individuality remain core considerations for Chinese consumers, the overall trend of making purchases for self-satisfaction is growing in relevance for luxury consumption, and has been shown to be a priority for almost half (47%) of Douyin’s luxury seekers. Luxury products are also expected to be more compatible with daily life, as agreed by 49% of 1,590 respondents, while allure is enhanced for those seeking items for more diverse occasions.

Meanwhile, due to ongoing economic uncertainty, the attribute of preservation of value has been growing in appeal to luxury shoppers, resulting in items such as jewellery, watches and luggage seeing the fastest growth in sales. The subcategory of bags and suitcases, which currently has a market share of 35%, drew the most interest from Douyin users who fall under the age groups of the post-80s and post-90s generations (i.e. Millennials and Gen Z).

These demographics are paying more and more attention to product quality and are more likely to immerse themselves in short video content focusing on product attributes, as well as evaluations or reviews from key opinion consumers (KOCs).  Sixty four per cent of these demographics endorse mainstream luxury brands, and 66% invest in classic designs, with affordability for varied use scenarios, including work and life, being the most valued. This indicates that collaborating with KOCs who can share their user experience in a way that is viewed as “more genuine and authentic” should be a core strategy for luxury brands in leveraging Douyin’s ecosystem, to not only resonate with their target audience but pull off sales growth in the discussed category.

Jewellery contributes to nearly one-fifth (19%) of Douyin’s luxury market space, thanks largely to the youngest cohort: post-00s shoppers. Characterised as “trend chasers”, this demographic is interested in branded marketing events, such as fashion shows, exhibitions and pop-ups, while crossover and artistic collaborations are also likely to turn their heads. In this vein, luxury brands are advised to take agile actions in tapping into topical events in their marketing executions, while online synchronisation of offline activations is the rule of thumb for brands looking to expand their traction amongst the younger generation of luxury shoppers.

While watches comprise 15% of the digital marketplace at present, that figure is expected to rise to 18% as users born before the 1980s – who are deemed to be “lowkey” shoppers who pursue a sense of value – become the backbone consumers for the watch segment. Owning watches is intended to portray a sense of “quiet luxury” on special occasions, which is in line with their consumer persona.

The content interests of this consumer demographic appear to be centred around brand culture and history, and they are also more likely to follow brands’ official accounts. This gives luxury timepiece makers a special edge in capitalising on the “closed loop” e-commerce system in Douyin, enabling a seamless online purchasing experience while deepening their relationship with luxury watch fans.

The phased rebound in the luxury sector has boosted confidence in China’s consumer market, leading to a prediction of an annual market growth of 18% to RMB 580 billion (£64.25 billion) this year, per Deloitte. As a digital space, Douyin will play a greater role in assisting luxury players in connecting with and further engaging China’s potential luxury buyers who are digitally savvy,  continuing to act as a centrepiece for the industry to follow the same trajectory.

The post How luxury brands use Douyin to achieve growth in China appeared first on Focus - China Britain Business Council.

China is the world’s leading e-commerce market, generating 50% of all global transactions. Attempts to pin down the value of the country’s e-commerce market vary, but they are always in the trillions, with estimates suggesting the market will be worth over US$3.5 trillion (£2.8 trillion) by 2024.

It’s clear that Chinese consumers are very comfortable buying online, but how and where they buy is continuously in flux, presenting both challenges and opportunities for international brands. The rise of over 200 million Gen Z’ers as a driving consumer force is setting new trends in communicating with target customers, the most salient of which is the decentralisation of the e-commerce landscape.

For years, Alibaba’s Tmall and rival JD.com have been the first port of call for both consumers and international brands. But the winds of change are increasingly blowing consumers towards social commerce platforms like Douyin, Xiaohongshu (RED) and Kuaishou, that bring together entertainment and shopping. And brands are having to follow suit.

In this article, we review some of the latest developments in the social commerce field so that you can choose the right platforms for your brand.

Foreign brands can now sell directly through Douyin

In the past few years, the social commerce platform Douyin (China’s version of TikTok) has been making waves as it establishes itself as a leader in e-commerce live streaming (also called live commerce) and short videos. Douyin was already a top player in this category, having reached a GMV from live streaming of $1.5 trillion in 2022 and launched Douyin Mall, a shopping interface like Tmall that can be accessed directly from the app. And Douyin’s share of the pie is only going to get bigger as it has now started allowing all brands – including foreign brands – to apply to sell products on the platform directly through cross-border e-commerce.

As Sandra Weiss from RedFern Digital notes, “Brands can now sell directly on Douyin without setting up a domestic entity or establishing a business license within mainland China. This means that they can take advantage of Douyin’s massive social influence and link products directly in short videos and live streams, decreasing the loss of traffic when driving customers to make purchases.”

Weiss adds that the ability to sell directly on Douyin emphasises the need to explore brand-run content, especially live streams, rather than relying solely on influencers. “Over 50% of sales on Douyin among the top 500 brands on the platform came from brand-run live streams in February 2022, and in 2023, the market share of brand live streaming is estimated to exceed 50%.”

Kuaishou records first profit in several years

China’s second-largest short video company and major Douyin rival, Kuaishou, recently realised its first quarterly profit, reporting an adjusted net income of RMB 42 million (£4.8 million) for Q1 2023 compared to a loss of RMB 3.7 billion (£423 million) in 2022, according to Technode. A large portion of this success can be attributed to the platform’s e-commerce business, which achieved total sales of RMB 2.25 trillion (£257.45 billion) in Q3 last year.

Kuaishou users are typically located in lower-tier cities (think Shijiazhuang, not Shanghai) and have a fairly even age spread – while most of the users are young, like any app, just under a quarter are over the age of 50. They are also on the lookout for bargains, with lower-priced clothing and cosmetics and everyday household items selling well in Kuaishou KOL live streams (note: unlike Douyin, Kuaishou doesn’t have its own built-in mall yet).

This means that Kuaishou won’t necessarily be a good fit for every international brand looking to enter the Chinese market, but it could work for budget-friendly products or companies that already have a fun, tongue-in-cheek brand aesthetic (think along the lines of what Duolingo has been doing on TikTok).

Xiaohongshu remains a game changer for product discovery

Xiaohongshu, on the other hand, is the perfect launch site for boutique high-end brands. Its main users are affluent, educated women who are actively looking for new products to try, using it to share product and brand experiences and give and obtain recommendations and tips. As one of the most popular platforms in China, Xiaohongshu currently has over 150 million monthly active users, representing a 50% growth in traffic compared to January 2020.

Xiaohongshu has introduced commerce to the platform, allowing users to either buy directly from a brand-owned Xiaohongshu store or by linking externally to a Tmall or WeChat store to purchase. However, as Mark Bellamy from Aiken Digital cautions, “user-generated content (UGC) is still the lifeblood of Xiaohongshu, so when it comes to standing out and succeeding, recommendations are everything. To get brand exposure, it is not about how much you pay, but how big your brand’s tribe of followers is.”

Don’t forget to localise your branded website

An often-overlooked channel is direct sales through brands’ own global .com sites. Consumers often visit retailers’ and brands’ websites to cross-check information they have seen on platforms like Xiaohongshu. While many customers will then move on to an e-commerce platform to make their final purchase, having a good localised website is still an important part of creating a complete brand experience.

“Unlike Amazon platforms, with their quick-in-and-out transactional stores, China’s e-commerce stores are much more information-rich and as much a marketing channel as a sales channel. Many consumers still look up products on e-commerce platforms, even if they are buying it somewhere else,” notes Mark Tanner from the China Skinny.

However, many brands are still not making simple adjustments, such as adopting Chinese payment methods like WeChat Pay and Alipay or ensuring sites load quickly in China. The relatively low-cost investment in these adjustments is often well worth it because they typically have a higher conversion and average basket than in the home market.

What does the social commerce revolution mean for your brand in China?

“There is no golden rule for determining which e-commerce platform to sell on in China, and brands should evaluate the platforms based on their target audience, category and objectives,” says Mark Tanner from China Skinny.

It is also essential to look for growth opportunities across all platforms to meet the consumption patterns and preferences of a changing shopper. As emerging platforms look to expand their brand portfolio, there is a burgeoning opportunity for international merchants to diversify their sales channels.

From a risk management perspective, a decentralised approach to e-commerce avoids the difficulties of being overly reliant on one channel or influencer to drive revenue. Different challenges arise around pricing management and ensuring no SKUs become over-distributed and devalued. Both can be managed with adequate planning and resource.

China Consumer 2023

This article was produced as part of a series for China Consumer 2023.

Learn more about CBBC’s flagship consumer event of 2023 here.

The post E-commerce in China: Tmall, Douyin or both? appeared first on Focus - China Britain Business Council.

China is a global leader in influencer marketing, with the market for key opinion leaders (KOLs) – 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, with Chinese consumers ranking the opinions of influencers such as live streamers almost as highly as recommendations from family and friends when it comes to making purchasing decisions.

Li Jiaqi competing with Alibaba’s Jack Ma to sell the most lipsticks during a live stream (captured from Youku)

Austin (Jiaqi) Li: Big isn’t always better

Taobao Live followers: 73.4 million

Known by the moniker “the lipstick king” after selling more than 15,000 lipsticks in five minutes on Taobao Live, Austin Li is one of the most prominent faces of China’s live commerce revolution. The former shop assistant first gained fame for his marathon live streams, where he would apply hundreds of different lipsticks, and he soon became Taobao Live’s most lucrative seller, playing a key role in the rise of shopping festivals like Singles’ Day and 618. In 2021, Li was one of the few Chinese people to be included on the Time 100 Next list.

The charismatic star’s selling power has attracted many of the world’s biggest brands, including NARS, Hilton, and Coach. However, the success of major streamers like Li has drawn increased scrutiny from the authorities and led to several uncomfortable scandals.

Li became a cautionary tale in early June 2022 when one of his live streams abruptly went off the air after he presented an ice cream cake resembling a tank the day before the anniversary of the Tiananmen Square protests (although his team blamed the outage on technical issues). Li was nowhere to be found on social media for several months, before making a triumphant comeback in the run-up to Singles’ Day 2022, with his first stream clocking up over 50 million viewers.

His successful return put paid to speculation that the era of the live streaming megastar was over; however, his absence served as a reminder that hitching your brand’s bandwagon to an internet celebrity can leave you open to being tainted by association if a scandal ensues. Moreover, while working with a superstar like Li can help raise demand for hero SKUs for brands with an established presence, it is unlikely to be an accessible strategy for brands that are still building awareness, which may be better served working with smaller KOLs on platforms like Xiaohongshu.

A Kuaishou video from Dandan advertising a live stream for the 618 shopping festival

Dandan: The importance of multi-platform coverage

Kuaishou followers: 86.3 million

China’s e-commerce ecosystem – traditionally dominated by Tmall and JD.com – is becoming increasingly fragmented, with social commerce platforms like Douyin, Xiaohongshu and Kuaishou representing an ever-growing proportion of total sales. Short video platforms, in particular, are seeing massive growth, with China Skinny reporting that Douyin and Kuaishou’s combined sales in Q1 of 2023 made up 97% of the value of all sales on Tmall, with fashion and personal care and cosmetics demonstrating particularly high merchandise values.

Kuaishou KOLs like Dandan may not attract as many column inches in the West as superstars like Li, but they have immense selling power. Trendy, fast-talking Dandan reportedly generated a staggering 17.8 billion units of gross merchandise volume in 2022, becoming Kuaishou’s top seller.

Unlike many KOLs, who tend to focus on one product category, Dandan and other top sellers on Kuaishou hawk a wide variety of items, from litre bottles of soy sauce to mid-range cosmetics brands. This appeals to Kuaishou’s user base, who tend to be located in 3rd or 4th tier cities and are looking for discount prices as much as branded products. As a result, Kuaishou KOLs can be a useful tool for testing the waters outside of big cities like Beijing and Shanghai, and often have lower fees.

Ayayi in a campaign for a contact lens brand (Photo:@ayayi.iiiii/Instagram)

Ayayi: Is it better to go virtual?

Real-world KOLs are facing increasing competition from an unlikely source: virtual influencers. “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.

One of China’s best-known existing virtual influencers is the so-called ‘meta-human’ Ayayi, created by Ranmai Technology in May 2021. Hoping to capitalise on the virtual idol, whose debut on Xiaohongshu attracted more than two million views and garnered over 95,000 likes, Alibaba ‘hired’ Ayayi as a digital manager for Tmall Super Brand, where she curated campaigns and even created NFTs.

Virtual influencers tap into the desire for novelty among Gen Z Chinese consumers, as well as their willingness for the latest tech to be integrated into their day-to-day lives. Using a virtual influencer can show that a brand is forward thinking.

From a business perspective, virtual influencers could be less risky than traditional influencers, especially in the wake of scandals like the one that embroiled Li Jiaqi in 2022. “Virtual influencers … reduce the risks of general agency operation issues and PR crises for IP owners and brands,” says Robin Liu, co-founder of Influencer Hub International. So while they may not be able to build ‘authentic’ or ‘emotional’ relationships, they can be effectively programmed to fit in with a brand’s aesthetic or values without the risk of dealing with a chaotic celebrity personality.

The CBBC view

Working with KOLs should be a key part of any consumer brand’s marketing strategy in China. Still, with potentially huge amounts of money at stake, it is worth considering whether engaging a major KOL is the right approach.

Many brands are increasingly finding success working with mid-size KOLs or micro-influencers (content creators with a small but highly-engaged following in a niche segment, sometimes referred to as Key Opinion Consumers (KOCs) in the Chinese context, especially if they are new to the market.

Brands should also consider cultivating owned channels on platforms such as Douyin rather than relying entirely on third-party creators. This removes the risk of becoming embroiled in a scandal if controversy arises around a popular KOL while also giving the spotlight to the people who know the most about your brand. When tied together with product seeding via more-established KOLs, this creates a more well-rounded, sustainable brand strategy.

China Consumer 2023

This article was produced as part of a series for China Consumer 2023.

Learn more about CBBC’s flagship consumer event of 2023 here.

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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.

The post What are the differences between influencer marketing in the UK and China? 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.

The post How to sell in China: E-commerce platform or branded website? 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. 

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