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Digital Marketing in China: our top stories for May 2020

June 2, 2020 |   Christine Lee

This month, we highlight articles about how livestreaming usage has increased significantly in China and also how luxury brands have used this tactic to create lasting impressions on their customers. We also talk about taboo topics brands should avoid in the future, and Chinese international students being a financial pillar to American post secondary institutions. Finally, we talk about Tmall’s new release of their Luxury Soho channel.

1. Livestreaming booms in China as the country comes out of lockdown

With limited face to face interactions and subsequent lockdowns due to the pandemic, livestreaming has risen in popularity and has shown massive potential for the future. During the lockdown, China’s largest retailers, Taobao sees a seven time increase and Pinduoduo’s livestreaming sessions rose five times between February and March.

Due to the ongoing popularity and the potential seen in this sector, Baidu announced it will further invest $70.5 million to grow its livestreaming services following sudden increase in online users.

Read more at WARC

Learn more about WeChat mini program live streaming

2. Taboo subjects that brands must avoid in China

Cultural appreciation, nationalism and respect to the Chinese population have always been important for international brands to be successful in China. In the past, luxury brand specialists listed ten subjects’ brands are advised to avoid in order to connect effectively and successfully with Chinese consumers. Topics included Tiananmen Square, human rights, and environmental degradation to name a few.

Because of the tension surrounding COVID-19, this list was recently updated to aid brands in avoiding several more topics. Topics like the origin of the virus and degrading Chinese eating habits are highly frowned upon. Celebrity brand endorsements also need to be carefully considered.  In China, an accepted celebrity endorser is one who is patriotic, diligent, family oriented and morally upright. Furthermore, brands are also advised to implement a cultural proofing process to ensure high content quality and accuracy.

Read more at WARC

Learn more about how foreign brands can successfully position themselves in China

3. How luxury is reaching consumers during lockdown

During the COVID-19 pandemic, luxury retailers have been put on hold due to store closures. But brands are now using this time to create deeper connections with their audiences in China and the rest of the world. Screen usage time has increased 40% because of the spare time now available. Luxury brands have shown unprecedented effort in keeping up with their audience during this troubled time. Here are some creative campaigns that provide entertainment and cultural value to their consumers.

Loewe en Casa

Loewe en Casa have hosted a series of online events and workshops that take place on Instagram live. The projects focus on arts and crafts and features past collaborators and prized alumni. Demonstrations on the live include studio tours and weaving demonstrations. Loewe en Casa gives their audience a behind the scenes look at the care and craftmanship behind its people and brand.

Prada

Along with studio tours, Prada has also livestreamed studio talks with their audience. The goal of this initiative is to connect great minds in fashion, art, cinema, and architecture. The brand  placed great emphasis on creating a personable environment for their audience, which resembled a personal zoom call more than a typical broadcast. Previous livestreams have featured filmmaker Francesco Vezzoli and philosopher Emanuele Coccia.

Gucci

As one of the few luxury brands with their own app, Gucci has shown much consistency in improving their app for better user experience. With the closure of physical stores due to the lockdown, Gucci released a new AR feature that allowed users to try on their lipstick. Along with that, users can use AR to try on new sneakers, eyewear, and hats.

Manolo Blahnik

Manolo Blahnik released some of their original shoe sketches for fans to color to their own liking. The campaign was a success on multiple fronts. Not only did these sketches showcase the brands identity and history, they also helped to build a better connection with the brand’s Millennial and Gen-Z customers. What’s more, the campaign leveraged the current adult coloring trend to promote the work of their, non-profit partner, the Mental Health Foundation in the UK, which offers insight and tips on how to manage anxiety amid a global pandemic.

Yves St. Laurent

YSL have significantly boosted the volume of content for their followers. On their Instagram, the luxury brand has shared short tutorials, beauty tips and make up skills using their own makeup line. They have also created a hashtag, #daringtogether, where on Saturday’s fans come together to learn and experiment with new looks.

During a time of stress of uncertainty, luxury brands have come together to create a community for their followers to occupy their time. The content shared by luxury brands creates a space for users to spend their time, while brands can develop everlasting connections.

Read more at Jing Daily

Learn more about managing a business through COVID-19 in China

4. Tmall announces its online market, luxury Soho

On April 20th, Tmall released it “Luxury Soho” channel. This channel has been created for high end to increase the sales post pandemic.

Due to the pandemic, many luxury brands are having to deal with overstocked inventory. Essentially, T-mall wants to capitalise on this with the launch of luxury Soho, where brands can sell unsold products without diluting the brands identity.

Read more at Jing Daily

Learn more about the Tmall ecosystem

5. Perils of shutting Chinese students out of US varsities

The global pandemic has forced many international students to return home with little to no notice. Across the United States, institutions have announced moving classes online, raising questions about the impact this will have on the student experience have been raised. The move triggered lawsuits and demands for tuition refunds, given that the cost of studying overseas can easily exceed $70,000 per year.

The development could spell trouble for institutions who depend heavily on income from international students. And this is especially true for China.

Even before the pandemic, families and student counsellors in China were having doubts about sending their children to America in pursuit of higher education due to a rocky relationship between the Chinese and US government. If students stop enrolling because of travel restrictions and rising tensions, many institutions would be unable to continue operating.

Another concern is that in many fields, international students take up the majority of PhD positions. If challenges to advance further along the academic career path continue to rise, the consequences for many research fields could be significant.

Read more at Strait Times

Learn more about the experience of a Chinese international student

6. Why luxury will never be the same

With the pandemic causing hardship to all socio-economic levels, luxury fashion is no exception. In recent weeks, practically all luxury brands posted negative numbers regarding the loss they incurred during this time. Brands lost over 80% during the first quarter with numbers continuing to drop. Some popular brands have been silently firing staff, but those drastic results could have been avoided if brands had a better action plan. To make up for the loss in revenue, brands have been increasing their prices between 10%-20%. This plan of action could backfire or work in their favour only if it does not exceed the perceived value proposition. In order to keep a positive brand perception, managers have to understand how to balance short term priorities versus long time goals.

Luxury brand Neiman Marcus, filed for bankruptcy during this time but researchers the pandemic was only a catalyst and rose underlying issues to the surface. For example, the lack of digital innovation for the brand created a divide for a new generation and no longer became relevant to young luxury shoppers.

In order to stay relevant, luxury brands need to digitise and stay competitive in the industry. The luxury industry will be forever changed because consumer expectations have been shifted over the past couple years. Brands need to remember that the entire user journey is now digital. There are many initiatives brands can start, like tracking online consumer data and competitor activities. But one thing that is for sure is that brands cannot stay stagnant.

Read more at Jing Daily

Learn more about how luxury brands can successfully position themselves in China

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