“Sex sells”. For any marketer it’s an adage as old as time. Even through waves of body positivity movements and #MeToo campaigns the western marketing world has and will continue to fall back on the familiar staple of sexual allure. But where the West has had periods of sexual liberation, lax censorship, and (in more secular areas) a greater commitment to sexual education, China has always landed on the opposite end of the spectrum. Yet, as we are a month out from China’s Valentine’s Day (Qixi Festival) it is important for Western brands to reflect on the changing nature of sex, love and relationships in modern China.
In May a survey of nearly 55,000 university students in China laid bare some fascinating insights. Those traditional upbringings were clear to see with half saying they’d never received any sex education in school – but of most interest, nearly a quarter recorded being non-heterosexual (mostly bisexual, homosexual and uncertain responses). This generation is feeling the full gender-imbalance effects of the one-child policy, with 2000s birth statistics showing some provinces like Guangdong having as many as 131 men for every 100 women. In 2017 China’s Ministry of Civil Affairs stated there were 200 million single adults and with this year’s People’s Congress prioritizing addressing the skyrocketing divorce rates in China one can assume the number has grown since.
Of course, the gender-skew likely plays an influence on the growing LGBT movement in China sparking sizeable culture shifts in China’s traditional multi-generational family units as this story about parents shelving their disapproval of a gay son in favor of doting on their new grandchild tells. In January Alibaba decided to use a gay couple at the centre of its Chinese New Year ad and was widely praised, reflecting a change in attitudes in this younger demographic. Less than two decades ago homosexuality was still classified as a mental disorder in China – showing some remarkable social progress. One only needs to look to the story of Blued, China’s gay dating app/community platform recording 49 million registered users in June’s IPO application.
So what does that mean for Western brands looking to connect with this growing trend? The LGBT movement in many ways it is a positive, as Western brands are now well-trained at inclusive marketing tactics and understanding this segment’s needs and can look to localise these strategies. Platforms like Blued and LGBT influencers are gaining more of a voice, and know how to delicately balance the tone of progression, but not activism. With LGBT NGOs still getting shut down and movies like Bohemian Rhapsody having all scenes with gay content removed – it is still a tricky space to navigate. Working with these Platforms and influencers can be a powerful string to your bow, as these communities can often be more interested in and aligned with Western brands and their values.
With regard to the singles phenomenon, we expect to see a big rise in ‘self-love’ campaigns this Qixi Festival. China Skinny research this year has shown a noticeable shift in young people’s priorities. Particularly in Tier 1 and 2 cities, aspirations for children have plummeted – and to a lesser extent dreams of marriage. Instead, self-improvement is on the rise (accelerated through lengthy lockdowns and self-reflection) be it in fitness, picking up some extra studies or turning oneself into a home chef.
We’ll be reporting back on what we see come Qixi on August 25th, but to make sure your romantic marketing campaigns resonate in today’s China, get in touch with China Skinny to talk all things marketing, strategy and branding.
Click/tap here to see this week’s most important China market and marketing news.
This week’s China market and marketing news:
JPMorgan Says Chinese Consumers are in ‘Reasonably Good Shape’ Despite Miss in Retail Sales: Strategists at JPMorgan Asset Management predict a relatively robust purchasing power of consumers in China despite the fall of retail sales in June (down 1.8% YoY). Chinese citizens are feeling increasingly comfortable to travel domestically again, which reflects in the increased chatter surrounding topics such as summer holiday bookings and cheap airfare deals.
Silver Linings in Covid-19 Crisis for China’s Department Stores: Chinese department stores’ long-term outlook remains positive despite being greatly impacted by Covid-19. According to a report by Fung Business Intelligence, 75% of department store operators use social media as a marketing and promotional platform, chiefly WeChat. And 78.9 per cent have already fitted technology elements such as virtual dressing mirror/fitting room, customer service robot, self-service cashier and real (AR) & virtual reality (VR) shopping experience to their physical stores, with close to 80% confirming that these technology elements have helped to improve customer traffic and sales.
Beijing to Lower COVID-19 Emergency Response: The Information Office of Beijing Municipality announced to lower its emergency response from level II to level III which was initially implement following a second wave of COVID 19 outbreak that has seen 335 new cases from June 11th to July 19th. After effectively containing the infected area, Beijing has not reported a new case over the last 14 days, which should result in eased restrictions as per the announcement on Sunday.
Urumqi Shuts Down After First Coronavirus Cases Confirmed: Xinjiang’s capital was said to restrict more than 3 million people from leaving their compounds and hotel since Thursday night, following the first recorded cases of COVID-19 in the province. Xinjiang was the only province that managed to stay COVID-free for nearly five months. Since the lockdown over 600 flights to and from the region have been cancelled with passengers required to show a negative nucleic acid test as well as a green health code for all flights to Urumqi.
Europe and US Can Still Compete with Chinese Tech: Earlier this year, USA, Europe, and China seemed to be moving in separate digital directions, but with the recent Privacy Shield data sharing agreement between the US and EU, Western democracies have found common ground on how digital business should be governed. Their approach is vastly different from China, which is rolling out 5G telecoms systems globally much faster than either the US or Europe. The liberal democratic West needs to build a stronger alliance in order to offer an alternative to China’s digital surveillance model [paywall].
Bilibili Wants to Help Brands “Sparkle” With Content: Previously only used internally, popular video platform Bilibili is now opening up its new service “Sparkle” with the goal of matching brands with its content creators. Creators will now be able to use functions such as pricing recommendations, a means to showcase samples of their video work, and access to data on followers and audience engagement that can be used to develop monetization strategies.
Food & Beverage
Cultivating Future Stars: No Funding Shortages for Food Tech and Alternative Protein Start-Ups Despite COVID-19: The coronavirus outbreak has not stopped F&B supply chains and alternative protein start-ups across the Asia Pacific region from attracting investment. Many investors in APAC today are looking into new companies that use technology to target pain points for physical store operators. Supply chain disruption is especially relevant in China where there is even greater urgency to provide direct-to-consumer services. Another major area of focus in the country is plant-based food, which has attracted international firms Beyond Meat and Impossible Foods to enter the market.
Domestic Travel Set for Summer Boom: China’s travel agencies have reported a huge public interest in domestic tours that cross provincial boundaries. According to Trip.com, search volume for tours, hotels, and flights on its platform increased dramatically after The Ministry of Culture and Tourism announced the easing of travel restrictions due to COVID-19. Travelers will be required to show their health QR code when signing up for a group tour, and it will be checked multiple times throughout their journey.
British Museum Pops Up in Shanghai: In its first offline event since lockdown ended, the British Museum pop-up in Shanghai’s Shimao Festival City welcomed an estimated 6,500 visitors. The Museum has also tapped into China’s ‘blind box’ phenomenon, i.e. selling a collectable art toy as a ‘mystery product’, alongside Osiris mugs, scarab beetle trinkets, and replica Rosetta Stones. Playing into local trends and tastes, the Museum has also introduced a ‘punching the card’, the practice of customers proving visits to a popular site, often with a social media post.
Brands are Ramping Up for a ‘Cruelty-Free’ China but Do Consumers Even Care?: With an avenue in place for foreign cosmetic brands to offer their product through general trade in China without testing their products on animals to come in January 2021, China Skinny ran an initial fire poll to grasp the sentiment on how consumers feel about these developments. Responses were generally met with caution and a lack of interest with consumers main concern being around ensuring the product is not harmful to themselves. Educating around new testing protocols will be a major talking point for brands to reassure consumers on product safety leading up to these new regulations being implemented early next year.
How Brands Can Take Advantage of the Male Beauty Boom in China: Chinese males are among the biggest contributors to the growth of the male cosmetic market with is expected to reach $166 billion globally by 2022 according to CNBC. Among the key drivers for male cosmetics sales in China are a new generation of boyish men gaining traction on a variety of social media channels posting beauty tutorials and skincare routines. Dubbed as “little fresh meat” (小鲜肉) these influencers command high engagement and push male beauty trends forward which particularly appeal to Gen-Z and millennial men passionate about grooming. However, several brands are failing to see the potential in this growing segment, continuously pushing stereotypical gender roles which are getting increasingly fluent among Chinese consumers.
In Rural China, Schools Tackle a New Subject: Sex Ed: Sex education has long been neglected by schools across China, but the problem is far worse in rural areas thanks to lower local living standards, traditional social attitudes, demographic dislocation, and a lack of educational resources. While educators have found it difficult to introduce a more comprehensive curriculum, the situation is slowly starting to change as forward-thinking teachers work with charities to promote new sex education programs at their schools.
Xpeng Raises $500 Million Even as China EV Market Sputters: The Chinese electrical vehicle manufacturer Xpeng managed to secure $500 million from a group of venture investors strengthening its position as a viable global contender competing with the likes of Tesla, BMW, Mercedes Benz as well as domestic competition NIO Inc. The fundraising follows a $400 million round in November 2019. Despite a slow year for China in EV sales – which dropped 35% last month – Xpeng was able secure the funding, giving hope to domestic start-ups for a brighter outlook for the second half of 2020.
Last week I made a note of the updated CSAR (Cosmetic Supervision and Administration Regulation) release which caused much fanfare in the beauty world. It was an anti-climactic announcement which leaves much still unknown, but it did promise that by 2021 there will be an avenue to general trade (read: not just cross-border ecommerce) for the bulk of cosmetic and skincare products.
For those brands whose moral compasses have remained steadfast in the face of a booming Chinese beauty category this is big news. Domestic competitors and less-principled foreign brands have reaped the rewards of an increasingly dynamic retail space and the opportunity to have flexibility by offering offline experiences and tapping into agile domestic online channels.
One hardly thinks Mr François Nars and NARS’s parent company Shiseido are kept up at night by their 2017 decision to start testing on animals for the golden goose of China. Some outraged brand loyalists yes, but within months of the move a strategic partnership was in play with beauty/photo-filter app Meitu (so culturally significant it spawned the verb ‘to Meitu something’ akin to ‘to Photoshop’) seeing a variety of loudly branded NARS products ready for virtual trial and seamless purchase. There have been no shortage of creative and engaging activations since that 2017 initiative, and this should get soon-to-be-market-entrants excited.
This does beg the question however, with the rampant success of brands who haven’t put a single dollar into advocating non-animal-testing practices – does anyone in China care about this issue, and more importantly are they comfortable with their products not being tested on animals? Many brands are expecting to charge into the market on a glorious wave of positive cruelty-free sentiment and might be in for a rude awakening.
Everyone should know a few key relevant underlying values of Chinese people: realistic (often begetting cynicism), self-preserving and fairly un-PC to a degree that drops a westerner’s jaw. We touched on this recently in our newsletter which highlighted the bewilderment at Colgate’s famous toothpaste brand ‘Darlie’ (formerly ‘Darkie’ but still retains Chinese brand name of ‘Black People Toothpaste’ although with an updated logo) undergoing an entire rebrand under the current BLM movement. Common sentiment followed – “god these Americans are so PC, we call ourselves ‘yellow’ all the time – what’s the big deal?”
And here we have the animal testing issue. We ran a small quick-fire poll on one of our panels asking about how consumers felt about a brand NOT testing their products on animals. Predictably, it was met with caution, and then a lack of interest. It all boiled down to a message: “I don’t particularly care as long as I can know the product won’t harm me.” Some showed a desire for the removal of animal testing, but would need to be educated and feel comfortable with the testing protocol put in place to replace it.
This kind of sentiment is hardly surprising when you have a read-through of online discourse. In April China’s Ministry for Agriculture released its list of what is deemed ‘livestock’. For the first time ever, dogs weren’t mentioned. This prompted a discussion on Zhihu (a Quora-like platform) about what people thought about the potential incoming ban on dog meat – this then held the highest engagement on the platform for a few days.
None of the top-voted answers supported the banning of dog meat consumption. The lead answer goes into detail scoffing at the perceived ridiculousness of living in a world where pets are castrated and purposefully inbred and yet eating them is suddenly outlawed. This discussion invokes a Chinese term that is thrown around every time the ‘animal testing’ issue comes up, with proponents of change labelled 圣母婊 (ShengMuBiao) – borrowing the characters for the Virgin Mary (ShengMu) coupled with a much more unsavoury one (Biao). The popular term speaks to those Chinese realist values – thinking these proponents will advocate for animal rights but then just as likely go home and crack open some battery-farmed eggs.
After the 4+ years I’ve spent living in China, there are few non-political hegemonic viewpoints that are as out-of-sync between China and the West. I have no doubt that this will change with a barrage of ethical messaging soon to ramp up in China. However hopeful brands must take a step back and think about what exact qualities of this ethical messaging will resonate when the market becomes available, lest the hefty marketing spend that is required in this category falls on deaf ears.
Since early January when the draft to update China’s CSAR (Cosmetic Supervision and Administration Regulation) was passed to the next stage – beauty brands world over have been waiting for the official version to be released alongside the guidelines to implement it. On June 29th, we got part of this but still don’t know all the answers. It was a somewhat hollow announcement, as we know many brands are wanting to know if and how they can enter general trade in China without the archaic requirement to test on animals.
The main takeaways on animal testing you need to know are this:
– There will be an avenue to general trade in China by Jan 2021 that does not involve testing on animals
– This ‘exemption’ will be granted to brands whose products have a ‘GMP Cert’ and a ‘Safety Assessment’
– Calls with the NMPA (National Medical Products Association who govern safety filing) have gone round in circles about what is actually needed for this standard of ‘GMP Cert’, and the ‘Safety Assessment’ is still vague in its detail. We have been told that the definition behind these two items will be delivered within the next 2-3 months.
– Brands can feel more comfortable preparing for a China launch (in general trade) in 2021, but there is still the unknown of the exact timeline/cost/extent of what the safety certs will be.
The animal testing component is just a section of a much larger update to the regulation, which covers new filing methods for ingredients and efficacy claims amongst other updates. With guidelines and implementation documents to come over the coming months we will be publishing any major updates as and when they are delivered.
On a quiet Sunday afternoon after new year festivities had concluded, several Chinese media accounts published a short edict on a proposed amendment to the Party’s constitution. The following 24 hours saw an explosion in online discussion, banned posts, censored search terms, controlled comment sections and an email update from just about every ‘China Watcher’ in my inbox. The wheels are in motion for Xi Jinping to lead China for as long as he sees fit, and anyone with an interest in China and its consumers should take note of its ramifications.
Of course, the scene was set in October’s National Congress, where Xi Jinping was made the first living leader since Mao to be written into the constitution with his “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”. The resulting effect of Xi’s position was not at the time clear to the general Chinese public, who were swept up in the general pomp and celebration of his much praised first stint and the promise of his ‘New Era’. At the time, seasoned China expert Bill Bishop succinctly noted its magnitude;
“The enshrinement signals that it is Xi’s Party and makes the question of succession while Xi is alive a moot issue. So long as Xi has not yet met Marx he is the man with an eponymous theory in the Party Constitution, which means no other official will have more authority than he does.”
And now, at next week’s National People’s Congress, the State Constitution will likely be changed to no longer contain a two-term limit for the President and Vice-President of the Party. The proposed change passed through the 2nd Plenum in January only to have its very low-profile announcement held-off until now, buried in amongst a raft of minor amendments (here on Xinhua at number 14 of 21).
So, beneath all the political intrigue and Game of Thrones-esque moves to bring us here, what does it mean for the public/consumers and those who wish to understand them? Firstly, the characterization that Chinese are mute and uninterested in public discussion has continued to fall away as of late, but the reaction here is unprecedented. The Chinese public, particularly those 772 million online, are becoming far more vocal about their views – even boldly stepping out in their opinions concerning their leadership. Weibo has jettisoned this discussion across the net. Censorship has quickly jumped to levels almost matching the Beijing kindergarten scandals of last year, with terms like “two-term limit” and “continued rule” unsearchable within hours. Any negativity however has been strongly drowned out by commentators lauding the move on official posts and embracing their now long-term leader. Of course, also good to keep in mind that ~40% of Weibo ‘users’ are generally accepted to be manufactured.
Even with a rising minority speaking out against technically unconstitutional behavior (as Xi himself even made reference to recently), they are still just a minority. Since last October’s Congress, the Xi Jinping propaganda machine has been in overdrive. Only looking back over the last couple of weeks, headline stories each day in Chinese media have ranged from his poverty alleviation battle, to his recount of 2017’s glory, through to his position on family values; pictures and videos of him holding his mother’s hand were promoted everywhere in a wide-reaching new year campaign.
Opinions the world over are fearful of repercussions that will come of this, many lying in human rights issues and China increasingly influencing the world’s moral code. Yet what are the positive takes that someone as invested in China as you or I should look to?
There is no doubting that Xi Jinping has revitalized China, reflected in the newfound pride that I discussed a few weeks ago. He has kept the keenly observed GDP growth at unimaginable levels – and received general praise from economists globally. Yet there are huge concerns bubbling under the surface – Angus Grigg’s excellent article upon his China departure brings much of this to light.
China has some turbulent waters to navigate in the coming years, and a strong, stable and proven leadership will be critical in ensuring a successful course. China’s reliance on fixed asset investment to spur growth (it accounted for 41% of all economic activity in 2017) is a measure that cannot be sustained. 2019-2020 is thought of as a ‘crunch period’ for many, with a 2-3% drop in growth forecasted at current trajectory. Assured of his tenure, Xi is likely to prioritize economic growth, which will make some ugly sacrifices no doubt, but his stay at the helm can only hearten those who want to see a strong Chinese consumer.
Where real potential for growth lies, is in household consumption. The World Bank states the average contribution of household consumption across 200 countries’ economies hovers at 58%. China’s falls far behind, at 39.3% in 2016 (Chinese government reporting puts this higher). It is little wonder that Xi Jinping has stoked the fires of consumption as much as possible attempting to “foster new growth areas” (like the sharing economy models) and “grow mid-to-high end consumption” – of course in many situations this has seen China’s macro debt issues spill over into personal accounts – another intriguing consumer trend to explore.
The news of Xi Jinping’s establishment as the face of China for what could be decades brings fear to some, and joy to others. His leadership has been, bar a bolder online community, overwhelmingly supported by the public and incessant propaganda leading up to any notable announcement only cements this. The Xi Era is here to stay, and those invested in China should be heartened that there is a stable hand guiding through an uncertain economic future, but aware of the unique situation that now befalls China’s people.
Right now millions of young Chinese are anxiously fidgeting with their phones hoping for a very specific notification. They have spent hours fretting and preparing their ‘pet’ frog for his next jaunt across Japan and are worried sick about him. ‘Why haven’t I received a postcard yet? Has he made any friends? When will he return to me?’
Mobile game Tabi Kaeru currently sits atop the Apple App Store in China, as its younger demographic is swept up in the next entry on China’s long list of hugely popular fads which bemuse Western watchers.
The game works like this; you are given a frog who likes to travel around Japan and visit certain attractions. Your job is to ensure he is well-fed and looked after, with anything from sandwiches to sleeping tents – spending in-game currency to support him. But after you send him off…you wait…and wait. You can only hope your bond with your frog was strong enough to warrant a short missive or a snap on the road. Users online have shared their experience, with some detailing the sleepless nights they have spent waiting in earnest for an update.
Tabi Kaeru’s popularity is indicative of a wider cultural phenomenon concerning China’s youth, and one that the Party is very wary of. Only a few days ago, state-run People’s Daily urged their followers on Weibo to “Enrich yourself, don’t spend your youth raising frogs” – lecturing on 18 ways to do so. The most popular response reads, “I don’t break the law, I don’t hurt anyone, I don’t cause the government any trouble doing this, so what’s wrong with raising a frog?”. Interestingly, my Chinese colleague’s first reaction to reading that response was, “I wonder if their account has been blocked yet.”
The dictum from the People’s Daily echoes similar reactions seen at huge e-sports tournaments where government officials will open proceedings by stating that gamers should look elsewhere for fulfilment. The gaming issue is pervasive, with mobile gamers to number 699 million in 2021. Last year Tencent had to answer the outcry from parents countrywide who were frustrated by their offspring’s obsession with Honor of Kings. Restrictions were set to one hour per day for those under 12, with 12-17 year olds allowed 2 hours.
The infatuation with Tabi Kaeru and Honor of Kings is just one characteristic of China’s youth which is ringing alarm bells for China’s leadership. The country’s supercharged rise to global leadership and the ensuing economic and social outcomes have combined to subdue its youngest generation and breed an attitude to life which can best be described as apathetic.
Integral to this trend is a culture known as sang (丧). The dissemination of sang culture has been prolific amongst the younger ranks of China.
The term evokes the sense of disenfranchisement that certain young people feel as a result of being excluded from some of life’s supposedly greater pursuits, such as home ownership, the accumulation of personal wealth, and the attainment of social mobility.
This widespread demotivation characterizing China’s youth is palpable. In a life which has only known China’s golden years, abundant overt displays of wealth and a molly-coddled upbringing at the hands of the one-child policy, great expectations have been fostered. But reality has not been so sweet.
How is one supposed to stand out of the 1.4 billion and be the next Jack or Pony Ma? The next Fan Bingbing? The average monthly wage for a graduate out of university can’t even buy the latest iPhone. In Shanghai, it takes 42.5 years’ worth of average household income to afford the average living unit – a middle of the road 90sqm apartment wedged in an expansive complex.
Another term you may hear alongside sang is diaosi. This word arrived on the internet in 2011 and became ubiquitous shortly after as it struck a chord with so many. It roughly translates to ‘loser’; no money, a menial job, no romance – a failure. A 2014 Peking University study of 213,975 21-30-year-olds across 50 cities saw 62.2% of respondents consider themselves diaosi.
As many have shared in their reflections on 2017, there has been growing unrest in the divide between the haves and have-nots, much of it spilling out onto the millennial domain – social media. This has inevitably allowed these feelings and attitudes to form the backbone of a community of sorts, the disillusioned and defeated youth.
And of course, brands are taking note. A highly successful branding initiative targeted this ‘community’ in mid-2017. ORZ Tea or ‘Life Sucks Tea’ (the ORZ is meant to look like a person on their knees) served up rather depressing beverages. How about a ‘Sit Around and Wait to Die’ milk tea for ￥21? Or a “Can’t Afford a House” Macchiato for ￥23? The pop-up cafe saw lines down the street, abundant internet chatter, and of course, the ire of the government.
The Xi Era has arrived and with it a re-energized ambition for seeing China’s return to supreme glory. China’s youth are central to this objective, but are the most fickle cog of the machine. This story serves as a reminder that despite China’s meticulous plans to continue its rise to world leader, there are hurdles that aren’t as tangible as a poverty line, or a university ranking list. In this case, the lost ambition of a generation.
Detailing marketing initiatives that helped us to understand Chinese consumers better.
In April 2017, Dolce & Gabbana released a series of images invoking its “D&G Loves China” campaign. Beautiful models adorned in the latest D&G releases were snapped intermingling with the public, often in front of landmark backdrops; the Great Wall, Beijing’s hutongs, and the Forbidden City among them. What was (I can only imagine) devised as a fun, light-hearted display of how D&G ‘knows’ China backfired tremendously.
China’s netizens took to social media, condemning D&G for its apparent espousal of backward and racist associations with China. The overwhelming sentiment was that the China photographed perpetuated Western viewpoints of an underdeveloped, dirty and inferior land. The people wanted to know: why was their country still represented by tuk-tuk drivers and pudgy, awkward tourists? The photos had gone global, posted on D&G’s western media like Instagram and Facebook, and the people were mad.
And not without reason. A short drive from the scene of the Beijing photos could take you to the site of a $2.1b A.I. research park to host 400 businesses and churn out $7.6b in annual output by 2023. The chair of the US Defense Innovation Advisory Board recently spoke plainly on the subject of the rise in China’s A.I. capabilities; “By 2020, they will have caught up. By 2025, they will be better than us. By 2030, they will dominate the industries of A.I.”
Or you could pop down to the Beihang University and its School of Astronautics and discuss China’s plans to have nuclear-powered space shuttles by 2040 which will “colonise the solar system.” These feats are just a drop in the ocean of advances which have driven China’s rise on the world stage and a fiercely proud population that no longer sees a reason to back down.
Why was this response meaningful?
The passionate response to D&G’s campaign reflects an empowered Chinese citizen. Not too long ago the campaign may have been well-received, but today’s China is a different story. Kaiser Kuo recently summed up this shift in his weekly column;
“China has only begun to actually think of itself as a superpower. I think historians will look back and see 2008 as an important inflection point, and 2017 perhaps as the year that China’s arrival as a superpower was generally acknowledged.”
Not only was it acknowledged abroad, but 2017 saw China’s superpower status embraced by its people; All predictions point to China overtaking the US economy as number one in 2032; China’s consumer confidence is riding at the highest since 2013; The Chinese passport is the strongest in ten years as countries keenly pursue the growing outbound tourist base; Where countries would yell and shout about China’s human rights record they now fall silent in fear of economic retribution, resulting in many cases of moral deference; Xi Jinping has vocally put his country at the forefront of globalization, seeing foreign leaders utter “now China leads” in the wake of America’s stagnation.
Brands and companies looking to understand their consumers must be aware of the shift in how Chinese see themselves, and the world outside of them. China’s rise mixed with a cultural belief that China is the centre of the universe and an increasingly controlled flow of information at the hands of censorship culminates in a unique and singular confidence shared by China’s people.
Approaching Chinese consumers with a ‘China-proud’ tact can be more than just emotionally valuable. China’s ‘red tourism’ industry is booming as old Communist Party stations and key PLA areas host surging numbers of visitors. ‘Wolf Warrior II” smashed all China’s box office records as a Chinese hero dismantling an American mercenary operation in Africa drew crowds that brokeout into the national anthem upon its closing image; a Chinese passport with the words, “Don’t give up if you run into danger abroad. Please remember, a strong motherland will always have your back.”
2018 will only see this sentiment grow in the hearts of China. With the Xi Era firmly in place, China’s consumers will be more sensitive to national affronts and eager to see their status respected.
A weekly blog detailing marketing initiatives with meaning.
A mid-2017 campaign from SK-II took the risk of putting a voice to social issues in China. Where many similarly directed campaigns have prompted backlash (IKEA and Audi spring to mind), the Japanese skincare brand has found a resonant stance.
In China, an ever-present stress in women’s lives is the engrained expectations around marriage, children and the type of life a woman should lead. The term 剩女 (shengnu) is a common reference to women who hit the age of 30 and are still single, dubbed ‘leftover women’. It is such a pervasive stigma that unmarried or childless women country-wide are currently dreading next month’s new year festival interrogation at the hands of their family members.
SK-II’s campaign centred around the video below, which went viral on Chinese social media and summoned an inspired outcry. The video follows three women’s lives, all born in 1987. In the video they are born with a stamp on their wrist – a 2017 ‘expiry date’. The voiceover translation (video under):
Are we all born the same?
Should we have the same dreams?
What are others’ expectations of us?
Can love just be ‘love for love’?
Do we have to define ourselves by others’ judgement?
Does our life have to have an expiry date?
If we have not completed our “Aged 30” checklist – does that mean that we are useless?
Maybe we can change our way of life?
Can we make the decision for ourselves?
Decide who we are
Decide for ourselves what is the most meaningful thing in life
Decide what kind of information we want to tell each other
If you change your way of thinking you will change your destiny
Age is just a number
Don’t let others limit you
SK-II’s campaign is highly relevant to its core consumers. These consumers are female and ~30-40, slightly older because of its top-end pricing. It is famous for one of its lotions, referred to as 神仙水 (shenxianshui – ‘immortality water’). SK-II supported the video by inviting KOLs to discuss age pressure as a theme, livestreaming from their platforms, both social and ecommerce.
The campaign has led SK-II to position as a voice for these ‘leftover women’. Despite some cynical viewpoints casting the brand as hypocritical given its perpetuation of female beauty standards, it has become synonymous with the empowerment of women in China and won a deeply loyal group of consumers.
Why is it interesting?
Attempts to tackle social issues can be hit and miss in China marketing, especially ones as close to home as these. SK-II’s success with this campaign reflects a changing attitude amongst China’s consumers, which has seen them far more empowered, especially in their discussions online. The last year has seen a surge in social discourse, one needs only look to the memes speaking to a divided population, or a disenfranchised youth so prominent that they have become the focus of brands’ strategies.
During the turbulent weeks of social media late last year when a Beijing kindergarten was under investigation for child abuse and communities of migrant workers and their children were falling victim to Beijing’s population capping measures, censorship on Weibo was greater than during the 19th National Congress – which is unprecedented.
Marketing to the modern Chinese consumer is increasingly complex with a large number of pitfalls, but in turn offers greater opportunities to build a connection, as SK-II has shown.
The annual Singles’ Day festivities often have a showcase feel to them. November 11 does not only ensure a frantic scramble of ravenous deal-seekers and brands beckoning consumers, but a chance for Alibaba to flex its technological muscle. 2016 seemed to demonstrate the pinnacle of Alibaba’s capabilities; $17.8b spent over 657m orders, handled by the Alibaba Cloud which processed up to 175,000 orders a second at peak times. So those with an eye on the China market have waited to see what Alibaba would do to maintain the buzz and fresh excitement that keeps Chinese shoppers willfully emptying their wallets each 11/11.
This year Alibaba is capitalizing on trends which China Skinny has been noting for some time. With ecommerce evermore cluttered, China has seen a resurgence in the power of bricks & mortar, and this will be at the heart of this year’s Singles’ day. Ecommerce makes up around 18% of China’s total retail. Instead of growing that number, Alibaba is motivated to digitalize the other 82%.
This weekend will offer a glimpse into how this will come about. Over 1 million merchants will be using O2O initiatives – namely in the form of in-store games and special online discounts and giveaways that can only be fetched from offline events. Hype has been building with the AR “catch the cat” in-app game dotted throughout major shopping malls giving juicy discounts for the big day.
The highlight will come in the “smart stores”; over 100,000 physical stores driven by over 1000 brands have converted their premises to connect completely with Alibaba. Full details were withheld at last week’s press conference, but promised a truly “special experience” for those who shopped in-store. We do know that these stores will incorporate RFID tech, a “cloud shelf”, facial recognition, mobile gamification, AR product info displays, cashier-less purchasing, virtually trying on make-up/clothes and location-based discounts and recommendations.
Location-based retail is an area which Alibaba is pushing to integrate with its wealth of big data. Trial convenience and grocery stores have been running in Ningbo that analyse the preferences of consumers living in the nearby apartment blocks. This tailors the stores’ offering to best suit its customer. The Hema stores finding success in Shanghai are another extension of Alibaba’s retail dream. Using consumer purchasing history and their own digital tools it promotes a personal and fully integrated experience for consumers, from scan-able product details to membership benefits.
Of course, all this comes on the back of the heaving activity the day brings to China’s online channels. It will fuel the spending which Alibaba hopes can eclipse last year’s growth of 32%. Seeing the reception and relative success of these offline experiences will speak volumes about how the Chinese consumer is tracking and give a look into the future of retail in China.
If anyone harboured any doubts about the mouth-watering growth expected of China’s pet market a stroll through Shanghai’s New International Expo Centre last week would’ve quelled those concerns. Pet Fair Asia 2017 came to a close on Sunday bringing roughly 250,000 visitors over the four days, the hordes of accompanying animals not included. The magnitude of the event reflected the industry’s rapid growth. 2017 saw an upgrade in venue to cater to the surge in exhibitors, visitors and events, and notably powerful air-conditioning following the death and heatstroke of several dogs at the 2016 edition.
A striking feature of the exhibition centre was just how much of it was occupied by high-end products. But it wasn’t just the leashes embezzled with Swarovski jewels gleaming at passers-by, pet food brands were notably pushing into the premium range. High meat content, targeted diets, animal ancestry and scientific benefits were messaging widely seen. The New Zealand booth was chief amongst them, building on their safe and healthy perceptions with freeze-dried products maximizing nutrient intake, to flax-seed oils ensuring omega-3, to air-dried lamb and venison offerings, to green-lipped mussel powder supplementing a healthy diet.
In a market where 40.9% of dog owners take their companions to beauty salons, the strength of these booths was unsurprising. Deluxe baths endlessly lined walls and high-end shampoos, soaps and scissors/trimmers drew the crowds. Stylists went to work with all the tools on display – no doubt in preparation for the ‘catwalk’. It wouldn’t have been a China event without a constructed arena for a pet fashion show.
There were of course a stream of niche products dotted around the place. In a market which has expanded so quickly it will continue to see these niches grow. Whether it be for more irregular animals or for particular needs of animals across different climates or just for the luxury lifestyles owners want to create. A patisserie for dogs gave a glimpse into that luxury pet world which is seeing industries sprout to support it – just look at the rise of pet hotels.
As the pet becomes more and more a part of the family in China, and living spaces keep growing, brands are looking to capture some of that space with an ever-growing assortment of machines and devices to make life that much better. There was a lot of buzz surrounding the self-washing cat toilets almost bigger than your own. Then there were the more quirky devices – dogs were cooped up in what looked like incubation units pumping out Mozart and filtered, purified air. I was told they had other features, blow-drying and mood lighting amongst them.
In China, pets are on the up. Owners are trading up at a blistering speed and opportunities are presenting themselves in both traditional and non-traditional ways. The industry has become far more sophisticated since the 2016 fair. In 2017 those brands not holding a unique position or offering uninspiring cheap food mixes found themselves pushed to the edges of the halls. The humming middle was the domain for the sleek and informed – some expansive booths felt like strolling through an Apple store, a world which their affluent and doting target consumers aspire to.
“The arc of history is long and it bends towards justice” – yet sometimes it needs a little push to get there. Invoking the spirit of Martin Luther King, Jr., World Bank Group president Jim Yong Kim framed the outlook from Monday’s She Era 2017 Conference hosted by Alibaba in Hangzhou.
The day pulsed with positivity as noteworthy speakers spurred on the largely female crowd with news of programmes to fund female-owned businesses, assurances of change in the business environment and interactions with female icons. High achievers filled the speaking line-up; Vera Wang and Miroslava Duma from the fashion world, political figures Bardish Chagger and Lakshmi Puri, and actress Sun Li – a surprise guest.
A Woman’s Worth
By no means a problem specific to the Mainland, gender equality in China’s business world is far from realized. Whereas Maoist sentiment denotes that “women hold up half the sky”, they only hold 9.2% of board positions. This places China firmly behind the global average of 14.7% and far behind leader Norway who can claim a 46.7% presence. The Norwegian ratio is much closer to Jack Ma’s vision and Alibaba’s current staff gender ratio was keenly promulgated; women held more than 50% of Alibaba’s staff positions until some months ago when pesky acquisitions of male-dominated companies dragged it down several percentage points.
Cultural factors persist in limiting the ascension of Chinese women up the business ladder. We are only several months removed from the founder of a Beijing venture capital firm stating females as CEOs or board members as one of his 10 ‘no-investment principles’ – attaching the loathsome rhetoric, “Just think about it carefully, what else do women do better than men other than giving birth?” Social pressures for women to get married early and a focus on motherhood are seen as contributing to an ‘unfocused’ attitude, and a limit in acquiring ‘guanxi’ – a key failing in a world where networking is vital.
A Leader in the Home, if not in the Workplace
Whereas their plight in the business world is the issue at hand, women in China hold influence in other ways. They account for 41% of China’s GDP – a ratio outweighing any other region, according to McKinsey. When China entered the world stage in 1979, women contributed to just 20% of household income; by 2013, that number had reached 50%. The role a mother plays in household decisions is particularly strong in the Mainland. China’s mothers number roughly 320 million. Not only are they vast, but they are wealthier. The last decade has seen the average age Chinese mothers give birth grow from 24 to 27, and it continues to climb. A 2010 Mastercard survey found that 75% of mothers controlled the family budget. Maybe that is why women make up 22% of China’s CFO positions – a world-leading ratio, and one that stands head and shoulders above its other gender equality statistics.
A Stubborn Path Ahead
If gender equality in the workplace is achieved by 2025, there will be another $12 trillion added to world GDP. The barriers to achieve this are immense however, both culturally and regulatory. A strong Canadian perspective was brought to the event with Prime Minister Justin Trudeau adding his thoughts through video, and Bardish Chagger speaking with passion. Because of the unaffordability of childcare, 25% of Canadian women are forced to give up fulltime work. Women earn 70% of a man’s wage and thus hold a lower bargaining power, squeezing participation rates. 155 countries still hold laws limiting female economic ability in some fashion.
The World Bank Group Fund will address some of these factors, but will also look to further social norms. Kim spoke of a fascinating programme run in Togo to see if personal initiative trainings (concepts like self-starting and persistence) would boost female success – it did. The 40% bump in profits for women-owned business far-eclipsed the efforts of traditional courses. These programmes are now being rolled out to other areas with similarly reserved roles for women in business.
Brother Jack, Champion of Womanhood
If you get the chance to see Jack Ma speak in China, I would urge you to do so. His arrival on stage was met with a reverence that transcended that of a famous celebrity – familiar, but at the end of the day very much removed from our lives. So it was little wonder that come question time, audience members prefaced their queries with a respectful “马哥哥” – ‘Brother Jack’.
What undoubtedly set the mood for his speech was his statement that in his next life he hopes he “can be born a woman, so he can build two successful companies, and not just one.” Whereas earlier speeches leaned towards ideas, numbers, funds and future plans, Jack Ma finished proceedings with a bit of flair. He knew his audience, and his repeated acknowledgement of how the world would be a much better place if women were running things was received with rapture.
But if Credit Suisse’s 2016 report is to be believed – he may have a point. Between 2013 and 2016, when 25% of management roles were filled by women, companies averaged 2.8% growth, with 33% – a 4.8% growth, and when more than 50% of managers were female – a 10.3% growth.
Once his presentation transitioned to Q&A the focus shifted somewhat. Questions around gender equality and Alibaba’s role subsided in favour of overawed audience members requesting advice on anything from business to their personal lives. Mr Ma spent the last 20 minutes speaking on leading a spiritually-rich life and admonishing a woman’s husband for spending too much time drinking with his business partners.
This biennial conference ended with much hope for a more balanced future. Alibaba ventures forth teamed-up with like-minded establishments such as the World Bank Group to provide the backbone in overcoming a glaring failing of most all societies worldwide. The example will be set, and its progress come 2019’s She Era conference will take its measure.
With the heralded Singles’ Day looming over the minds of anyone with an ear towards China, Alibaba’s gargantuan sales machine has primed its engines. With its fashion week in the rear-view mirror, a gloomy Sunday in Shanghai saw the Oriental Sports Stadium play host to the Tmall Collection, China’s ground-breaking fashion show, or maybe more accurately, ‘fashion festival’.
Built upon Tmall’s live-streaming platform, the event provided a celebration of offline-to-online innovation. It did so within a market it dominates; Tmall holds a near 80% market share in online B2C sales of apparel and accessories, an industry set to exceed RMB1 trillion in sales in 2017. The 8-hour fashion show was watched by 1.3 million consumers on a specially designed interface. If the viewer liked what they saw on the screen, a couple taps would take them to a product page to proceed with their purchase; the impulsive shoppers among us heavily preyed upon.
The money-spinning slogan of the day, often lit up across the colossal stage, shouted “See Now, Buy Now”. Chris Tung, Chief Marketing Officer of Alibaba Group, coined a subtler turn of phrase, hoping to see Tmall achieve the status of a lifestyle trendsetter with “a fashion week at your fingertips”. It was a recurring theme on the day, with consumers prompted at every turn to get on their phones and take advantage of the discounted garments set to be fulfilled on Singles’ Day. The platform played perfectly for its target audience with endless comments and ‘likes’ flying through the screen, spiking in accordance with celebrities or notable moments. These interactive live streaming events are a phenomenal way to get your consumers interested, as we recently found out with Comvita.
The day was poised to kick-start the build-up to 11/11’s consumer mayhem, serving up a sometimes confusing but fascinating blend of incredible consumer trends and the aspirations of a premium fashion show.
The morning press conference had the big names behind the marketing efforts of Alibaba coupled with the fashion expertise of ELLE and WGSN duly paying lip-service to the event. They noted Shanghai’s fashion week as one of the top-5 in the world, spoken in the same breath as the likes of Paris and Milan. Numbers and names flew around the room for this event; over 150 international models, over 80 brands on display, with Maye Musk and Nick Wooster headlining the foreign influence. As always with this audience, bigger is better, and 8 hours of fashion action promised to sate their hunger.
Of course, this all played into the Singles’ Day hype with those targeting the day with a special release brought to the stage. As is tradition we weren’t short of some mind-bending stats. Both Maserati and New Balance aim to break records. Maserati hope to beat the 100 SUVs sold in 18 seconds at their Tmall launch in March. New Balance, not to be outdone, quickly noted that last year’s Jay Chou collaboration reached 100 sales in 9 seconds.
With the press conference behind us we pressed on to the main event. Alibaba’s ploy to interact its audience with everything wasn’t limited to their online platform. A gauntlet of products, prize draws and even hairstyles drew our attention as we pushed onwards to our seats, all available for the time it took to scan a QR code. The advent of live streaming was clearly on display even before reaching the show. Alibaba’s slick transformation of advertising into an eagerly consumed form of entertainment was rampant.
Dolled-up models temperately displayed their wares amongst the throng, fielding live questions and catching passers-by for an interview. This set the scene for what was to come in this increasingly festival-like atmosphere. It may have missed the sleek and exclusive appeal of their ‘peers’ in New York and Paris but in doing so became an entirely different experience. Like a festival-goer with his favourite artists, the programme prompted attendees to note down which brands they wanted to see and come and go as they please.
The show operated on the 6 hottest trends identified by fashion authorities ELLE and WGSN. Developed under the empowered umbrella term “Boundless” these covered “genderless”, “fun is everything”, “athleisure”, “power dressing”, “the Eastern character” and “a curated life”. Even though these trends played a part in the proceedings they took a backseat to the festivities. The experience was partly a digital one and the glitz and the spending is what won the day. A highlight of the day was the much-awaited Burberry show. Announcing a new scent, a mist cloud of the fragrance diffused over the stage and into the audience while an umbrella-wielding model strutted out underneath – a sight surely set to send social media accounts buzzing.
The day proved interesting, and built upon the growing expectations for Singles’ Day. Less than two weeks away and murmurs of savvy consumers crafting their plan of attack for the 11th November have grown stronger. For some greater insights into this unparalleled event or how to resonate with Chinese consumers get in touch with China Skinny. With a deep understanding of the Chinese market we can help you take advantage of events like Singles’ Day.