With Chinese Golden Week just behind us and the big Singles’ Day shopping festival just around the corner, the month of October offered a lot of insights into the recovery of the Chinese economy and the ever-changing demands of Chinese consumers. This month, we take a look at the role KOLs to support China market entry for foreign brands in light of increasing competition for the attention and wallets of Chinese consumers. We also examine the different marketing strategies that helped both local and foreign businesses to get through the pandemic – from international luxury brands all the way to local Chinese apple growers.
Other topics that caught our attention are JD’s social ecommerce approach to gain traction in lower tier cities and some exciting developments aimed at establishing Shenzhen firmly as the country’s main tech hub.
1. Why most foreign brands become popular in China because of influencers
It’s no secret that China’s social media influencers (key opinion leaders) have a lot of power on consumer purchasing decisions. Their opinion about a brand or product can significantly sway public perception, making it one of the reasons why many foreign brands want to partner with KOLs as part of their market entry strategy.
Brands new to the Chinese market will undoubtedly have to contend and deal with cautious consumers due to the large amount of fake products. KOL endorsement can help building trust with their followers, as well as increase brand awareness. What’s more, with new international brands entering China constantly, competition between brands is also increasing. In the flood of advertising targeted at the affluent and middle-class Chinese buyers, KOL marketing can be an effective way for brands to differentiate themselves from the rest.
For example, Greek skincare brand Korres started to sell their products in 2018. Recently, the brand partnered with top Chinese KOL, Cherie, who promoted their face masks and Greek yogurt-based body lotion via her Weibo account. In a livestreaming session that attracted over 34 million views, Cherie also endorsed other top selling items in the brand, explaining their benefits and ingredients.
Read more at Jing Daily
Learn more about how to nail KOL marketing in China
2.Louis Vuitton, Prada, and Loewe: Three brands, three China content strategies
2020 has been and unusual year in every imaginable way for the global luxury industry. With Chinese consumers spending more time in shops closer to home, or even shopping online through Tmall’s Luxury pavilion, luxury brands have had to transition quickly to new shopping realities.
With in person events such as runway shows and celebrity packed parties put to a stop, three luxury brands switched gears allocation their marketing budgets more towards digital.
In August, Louis Vuitton showed off its new Spring / Summer 2021 menswear collection with a fashion show in Shanghai that was livestreamed globally. The show featured a limited amount of celebrities and guests seated along the catwalk wearing face masks, a heavily publicised livestream and full court social media press. As it was held outdoors, it gave the audience no indication that we were in the middle of a global pandemic!
Last month, Prada created an offline event at their exclusive Prada Rong Zhai space in Shanghai, the latest iteration of its Prada Mode private club pop-up. Around 2,000 guests passed through the venue over the course of the two-day exhibition, talks and parties. Prada also allowed the attendance of a virtual audience via a dedicated Prada WeChat mini program that drew an estimated of 200,000 views.
Recently, Loewe has gained in popularity, even though the company chose to completely opt-out of big budget runway shows. Tapping into the homebound state of the world, Loewe debuted their brands Spring-Summer 2021 line through an innovative “Show on the Wall” box. Packed with limited edition wallpaper, life size prints of models wearing the collection, scissors and Loewe branded paintbrush and everything in between, recipients were able to host their own runway show in the comfort of their home. With a little creativity, Loewe managed to create a relevant and timely online buzz.
Read more at Jing Daily
Learn more about how brands can deliver an exceptional customer experience in China
3.How JD penetrates lower-tier cities with social e-commerce initiative
JD has over 2 million WeChat groups for social e-commerce, claiming to be the largest scale among e-commerce platforms. This initiative has been put under the spotlight as social e-commerce provides individuals and brands with new opportunities during the pandemic.
Although social group e-commerce was already thriving, COVID-19 accelerated the expansion. JD data shows that 58% of shopping guides are from 3rd tier cities and below, usually within the ages of 30 to 50 years old. Initially, the development of social e-commerce was not developed for lower tier markets, but soon found that it is an effective way to attract customers. Because the sales promoters can invest more time on operations and the social ties are stronger in smaller cities, the concept thrived there.
Social e-commerce can be beneficial for diverse sellers. For example, Xiaolong Wu is an apple planter in Gansu province of Western China. When the pandemic hit, Wu realised that if those apples were not sold by the end of May, they would all rot.
Desperately looking for ways to sell his produce, JD’s social group e-commerce started an initiative to help farmers who were struggling because of the pandemic. Wu signed up for the initiative, and because of the recommendation of JD’s sales promoters around the country, the apples sold out.
Read more at China Internet Watch
Learn more about China’s most popular online shopping sites
4.How a brand can build a cliche-proof Chinese style
Due to China’s rising economic power in the world, many brands are looking to explore the Chinese identity as a popular theme for fashion media. Brands tend to look towards their local Chinatown as inspiration for their Chinese campaigns, but without proper research, these assumptions can be controversial.
So how can brands build cliche-proof Chinese style?
Forget about Chinatowns
The problem with drawing inspiration from Chinatown was not that it was a false culture but because it has become part of Western culture that makes no distinction between China inside the West and the always changing country on the other side of the world. To gain a full understanding of the culture and stop perpetuating a cycle of outdated images of China, brands must make an effort to spend time in China and experience the local culture for themselves.
Break down the big idea
When it comes to cultural themes, generalisation is often a bad strategy. Instead of focusing on a grand idea of China, brands would be better off thinking small, hyperlocal or even personal. China is a vast country whose luxury audiences are getting increasingly fragmented, diverse and demanding. A general simplistic cultural narrative no longer will do the trick.
Look beyond heritage
Despite China’s rich history, young affluent consumers are more interested in the present and future compared to their countries past. The term “digitised Chinese heritage chic” coined by netizens to describe a style that fuses technology, futurist fashions and traditional Chinese patterns come into play. Combined with the countries cultural pride, this style has gained traction in China’s Gen-Z circles.
Read more at Jing Daily
Learn more about Chinese millennial consumers
5.China’s ‘revenge consumption’ in Golden Week signals strong recovery
China’s tourism sector witnessed a strong recovery during the Golden Week holidays. Despite strict COVID-19 prevention measures, this event sends a clear signal that the Chinese economy is recovering quickly from the pandemic, with a GDP forecast to achieve 6 percent growth in the third quarter of the year.
Data from the ministry of commerce showed that major retailers and catering companies across the country posted combines sales revenues of 1.6 trillion yuan during the holiday season, with daily revenue of 4.9% year on year.
The ‘revenge’ rebound in consumption reflects China’s economy and shows the resilience of the Chinese people. Despite changes brought by COVID-19, data from the National Bureau of Statistics showed that China’s consumption market has steadily improved over the year.
Read more at Global Times
Learn more about what single’s day could mean for the global economy
6.Shenzhen given new powers to attract key foreign workers and develop new financial market tools under plans to develop role as China’s tech hub
Shenzhen will be granted autonomy to make it own laws on artificial intelligence and big data, relax foreign visa restrictions and start a stock futures index under the latest plans to boost its role as a tech and finance hub. The city has been marked as a model for the country’s development and new measures aimed to develop six areas: financial markets, business environment, technology, innovation, international cooperation, public services and city management.
In a press conference, Shenzhen’s mayor Chen Rugui states, “Our goal is that by the end of next year, Shenzhen’s business environment will be ranked in the top 20 in the world according to the World Bank’s standards. By 2025, we will need to make Shenzhen into one of the world’s most advanced cities and a top choice for innovative start ups and investments”.
Read more at South China Morning Post
Learn more about Made in China 2025: What is means for international manufacturers