One of the groovy innovations we spotted at the Taobao Maker Festival last month was from Wu Qiuqiao, the Hunan-based cat hanfu designer.
After graduating from university in 2016, Qiuqiao moved to Beijing to start her career. A couple of hardworking years and endless overtime in her advertising job, she quit and moved back home to Hunan with thoughts of starting her own business, but what? Qiuqiao married her love of her cat and Chinese traditional clothing. Blessed with having a clothing manufacturing factory as the family business, the circumstances drove her to begin creating customized miniature ‘hanfu for cats’ – selling them to cat lovers around the world.
For three months, Qiuqiao drew designs, picked out materials and built prototypes for production. In 2019 she opened a Taobao store and managed to list five clothing items at once, all of which were immediately bought by a single customer. Following the small yet confidence-inspiring debut, she quickly increased the production and expanded her portfolio.
Her Taobao store now has over 25,000 royal fans (frequent buyers who had subscribed to the store for updates) from across the globe. Qiuqiao was recently awarded with the innovation award at the 2020 Taobao Jiyoujia Merchant Conference.
As one of the main featured vendors on the 2020 Taobao Maker Festival tour, Qiuqiao’s act of marrying a prospective market trend and subculture together has been highly praised by the Alibaba CMO Chris Tsung. Her seemingly “out there” initiative is now being regarded as one of the up and coming trends in the China market.
Hanfu (“汉服” hàn fú) is Chinese traditional-style clothing dating back to the Han dynasty. As more than 90% of the Chinese population are Han (the world’s largest ethnicity), hanfu is also considered symbolic of traditional culture.
At the beginning of the 21st century, the “hanfu movement”（汉服运动）started to surface. As more people started having access to the internet and social platforms in the late 90s, netizens started a movement to ‘bring back hanfu’, even as daily wear. Thanks to government-backed nationalism supporting cultural identity and sense of belonging praised by the younger generation, hanfu is on its way to become one of the top subcultures in China.
According to a report by CBNData and Tmall, hanfu buyers have increased 74.4% YoY to 3.6 million in 2019, generating ¥2 billion ($290 million) in sales on Taobao and related platforms. Some active followers of the hanfu culture say they spend more than ¥1,000 ($146) a month on hanfu related products alone, making hanfu more than just a fast-growing subculture, but a commercially-beneficial section.
Pets were not just the heroes of quarantine proving unconditional love, companionship and source of comfort much needed during a tough time, pets in general are now a major part of Chinese people’s lives. In 2018, 100 million Chinese families already had pets. In 2019, many pet fashion accessories and beauty product categories saw triple-digital growth on Tmall Global in the second half of year, with premium imported pet food growing 400% year-on-year in 2020 January.
This trend isn’t slowing down post-COVID – just take a look at the stats from the 2020 Pet Fair Asian took place in Shanghai two weeks ago: more than 2000 exhibitors and 80,000 professional buyers attended the fair and is the largest exhibition for pet supplies globally. The $223.1 billion pet care market in 2019 is expected to grow to $327.7 billion by 2026, making Chinese pet owners a new breed of power purchasers.
Although dog owners are also eager to buy some hanfu for their furry friends, Qiuqiao’s store mainly targets cats. Not just because she is a hopeless cat lover, but also the fact that she thought cats’ smaller body size would be perfect for adorable mini hanfu outfits (or dogs who are the size of cats).
What Qiuqiao did not anticipate was that the pet industry would experience another bloom during the COVID-19 pandemic. According to CBNData, the sales for cat-related products rose 37% in the year ended June 30, 2020 – double the growth rate of dog-related products. It suggests that cats are getting more popular as a pet choice which may be a key contributor to Qiuqiao’s major success.
The rapidly-evolving China market has changed more than ever in the post-COVID new norm. It is essential for brands and business owners to track it carefully and act swiftly along with the market trends and emerging subcultures in order to stay relevant. As Alibaba CMO Chris Tsung stated, cross-industry collaborations are emerging quickly and are more innovative than ever. Brands should to consider these elements and market phenomena when planning their NPD plans, marketing campaigns and even messaging to stay relevant.
If you are interested in learning more about the current China market trends or emerging subcultures, or if you are searching for marketing inspiration, we at China Skinny are happy to help! Contact us today for more!
Alibaba kicked off its fifth Taobao Maker Festival last Thursday, July 31, to showcase the latest and coolest innovations in China. Due to the Covid outbreak, Alibaba was forced to do something different with the festival this year, using innovative pop ups in the back of a big truck touring Chinese cities before ending in Wuhan. Caroline and I were at the launch of the festival in Hangzhou where we spoke to Alibaba’s CMO Chris Tung for his views into trends in China.
For folk unable to be see the Taobao Maker Festival in person, we’ve created this 5-minute video sharing our experience and views of the event. Enjoy!
Analysis of three additional buzz words that are commonly used in Chinese product marketing approach and that they mean for brands.
Unlike the buzzwords we covered in last week’s article which are more commonly used in Chinese consumer journey, the following are more product-specific. With the Chinese market changing so rapidly, it is essential for brands to understand the lingo and their root meaning, allowing us to have a glimpse into the complex Chinese consumer mindset.
爆款 Bào Kuǎn (The “Explosively-Popular” Item)
同款 Tóng Kuǎn (“The Same” Item)
网红款Wǎng Hóng Kuǎn (The “Web-Famous” Item)
These three terms can be seen in product communications on popular ecommerce (eg. Tmall, JD) and social ecommerce channels (e.g. Little Red Book, Douyin, WeChat). Although these three buzzwords seem similar – all sharing the same ending character – their root meaning is drastically different depending on which consumer groups are being targeted.
Vya used爆款( Bào Kuǎn) when promoting New Zealand’s GeoSkincare on the brand’s Douyin ad feed. The product generates 400k+ monthly sales on a single top-selling product listing on its Tmall flagship store.
爆款Bào Kuǎn literally means an “explosively-popular” item, referring to a product that continuously generates high sales volumes. 爆款(Bào Kuǎn) means “trusted by countless other people” in the minds of Chinese consumers, who know other consumers will only purchase this item because of its high quality and trustworthy brand. However, this term has been overly used and manipulated by many sellers and KOLs in the market, causing some consumers to become suspicious of commercially-forced terminology. Hence, when used unattentively, the usage of the buzzword could be counterproductive, leading to negative associations of the product and brand.
Takeaways For Brands:
- With the right marketing approach to emphasize positive associations of a country’s origin, 爆款 Bào Kuǎn (The “Explosively-Popular” Item) can be a very useful term for brands that have hero products selling extraordinarily well in their home countries
- When used half-heartedly and unattentively, the term can sometimes bring negative associations that will impact the brand image.
When searching 同款 Tóng Kuǎn on popular UCG social commerce platform Little Red Book, 800K+ notes (posts), 20k+ items show up as results, demonstrating the high consumer demand.
同款Tóng Kuǎn means “the same item as someone else.” In the world of marketing in China, “someone else” refers to celebrities and idols – good-looking celebrities usually from outside of China, such as Korea and Japan. China’s idol market is forecast to be worth ¥100 billion ($14 billion) by 2020 and half of that is expected to be contributed by fans consuming products and services related to the stars. The term “Celebrity Same Item” (明星同款) is highly lucrative and has similar effects to having celebrity ambassadors.
Besides idols, celebrities and KOLs, “same item” with characters on TV shows can largely affect consumer shopping behaviour as well. Yao Chen with her tough female character in the TV drama All is Well spurred a sharp increase in female consumers buying suits – taking over men as the main suit purchaser on Taobao in 2019.
Takeaways For Brands:
- Brands should carefully consider the hero products and a suitable ambassador and channels to take advantage of the “someone else” attraction.
- Brands need to stay on top of market shifts, monitoring the usage of “同款” relating to its products and managing poor representation of the brand.
网红款 Wǎng Hóng Kuǎn means an item that is praised online by KOLs or is trending on social commerce platforms such Douyin/Little Red Book. 网红(Wǎng Hóng) refers to “influencers” which is the forerunner for KOLs these days and drives sales. These days, term has become a little outdated and has mostly negative associations, with Wǎng Hóng products perceived to not have genuine qualities, rather just popularity through marketing. The term used to mean something different and eye-catching that makes people want to go try it out; Now, since everything and everyone can be 网红(Wǎng Hóng), it has lost its edge.
Takeways For Brands:
- For newcomers in the market, we’d recommend staying away from this type of clichéd, outdated term, even if it might seem to generate considerable sales for some products. Also be wary of those perceived large sales, as they too can be a part of the promotional strategy – fake sales number on Taobao stores.
- Again, it is essential for brands on stay relevant in the market and current with newly-emerging trends to capture consumers’ changing interests. Stay on the cool side!
As you will realize, marketing buzzwords in China – like most things in the Chinese marketing world, are double-edged swords. Only by using them carefully and strategically can they be profitable and contribute to a high ROI.
Thank you for reading this week’s article. If you have any questions on finding the right buzzwords, communications or marketing channels, please feel free to contact us at China Skinny!
Take a tour of the Shanghai shopping mall Crystal Galleria and Coucou restaurant at 7pm on Tuesday 3 March as the coronavirus outbreak still looms. The video compares footage from the same mall and restaurant two weeks earlier and notes an increase in people, although not yet back to normal levels.
Follow Sheryl as she enjoys her favourite hot pot restaurant, following having her temperature tested, forms filled out and sitting a table apart from other diners.
Stay up to date by exploring current buzzwords covering the whole consumer journey: from product discovery to final purchase.
Following the sudden COVID-19 virus outbreak, many brick-and-mortar stores in China have been forced to remain closed for the safety of employees and customers alike. Smart brands have been exploring ways to diversify their revenue stream and keep cash flow coming in. While some businesses are suffering a tremendous hit without options for their employees to work remotely, some are quickly adapting to the surging “Cloud Economy” (云经济) online business modules. TAXX, one of the most popular night clubs in Shanghai has started a “Cloud Rave” (livestream clubbing) on Douyin which is said to have generated around ¥1 million ($143,000) through “gifts”, via a virtual tipping system on the app.
With many brands jumping into the ocean of social commerce and new trendy platforms such as WeChat Channels emerging every day, ‘consumer lingo’ used in the Chinese digital landscape is now more relevant than ever. In this guide, we will analyse the roots and meaning behind these words and what they mean for brands in their approach in the face of marketing campaigns or new product development.
Initial Discovery and Research of Products
种草 Zhòng Cǎo (The “Planting Grass” Phase)
With the high penetration rate of social media and ecommerce in China, the shopping habits of Chinese consumers differ substantially from the rest of the world. The “Planting Grass” phase is known as the very beginning of this unique consumer journey. “Grass” is in reference to one’s strong shopping desire: an analogy of Chinese consumers’ never dying, always growing desire for purchasing products. This “grass” can be planted deep in the mind through different touchpoints such as through KOLs (Key Opinion Leaders) on Little Red Book, a short video on Douyin or a product livestream on Tmall. The “grass” will then spread rapidly by sharing with friends and family via social media. Before you know it, there is a luscious garden from which to springboard.
Brands’ Takeaway: Choosing the right “grass-planting” channels for your brand is essential, given the vastly different platforms in China. For your brand, KOLs post ads on the right social platforms such as Little Red Book, WeChat, or niche platforms such as Baby Tree (Mom & Baby category-focused), or video platforms such as Douyin (a short video platform) can be utilized to increase consumers’ “grass-planting” and achieve high ROI.
安利 Ān Lì (The “Amway”-Style Recommendation)
Chinese consumers browse through social media religiously on a daily basis. Over 61% of WeChat users say they check WeChat Moments every time they open the app (there were over 1.15 billion monthly active users in 2019). 安利 is the Chinese name for the US brand Amway, which is known for its unique multi-level product distribution methods and individual distributors who make emphatic recommendations to their friends and family. As a result, 安利 has now been re-invented to mean “to strongly recommended from the bottom of the heart”. It is now a common term used by KOLs/KOCs, celebrities and brands in their posts and campaigns when promoting products.
带货 Dài Hùo (The Act of “Bringing Up Goods”)
With the surge in the livestreaming industry and KOLs generating mouth-watering sales by 安利-ing their followers to different brands’ products on shopping festivals such as 618 and Double 11, the term 带货 has caught on. 带货 describes the ability of certain KOLs and celebrities to attract sales. No.1 livestreamer Viya and her close-second long-term rival, Li Jiaqi, have broken the records again with their ¥2.7 billion and ¥1 billion individual gross merchandise sales during 2019 Single’s Day festival (Double 11). KOLs’ 带货ability should be a measurable KPI when choosing the right representative for your brand’s products.
Brands’ Takeaway: After choosing the right “grass-planting” advertising channels, it is important to choose the right representative for promoting your products. Although not every brand can afford a legendary top-seller like Viya or Li Jiaqi, the KOLs’ ability to attract sales should be a top KPI when choosing the right promoter on top of their category-compatibility.
Making A Purchase
拔草 Bá Cǎo (The Final “Pulling Out Grass” Phase)
After planting, growing and spreading the “grass”, comes the final phase, known as “pulling out the grass”. 拔草 commonly refers to making the sale on whatever product that caught one’s eye as a result of the initial consumer phases. This can go one of two ways: either the consumer simply loses interest after reading posts with negative opinions on the products; or they finally make the purchase.
秒杀 Miǎo Shā(The “Second-Kill” Purchase)/ 团购 Tuán Gòu (“Group Buying”)
These two are very common promotion methods on ecommerce channels such as Tmall, JD and social ecommerce. 秒杀is a limited promotion with an attractive price that often makes consumers stay up late to snag the deal. During the Single’s Day promotion, an even lower price will be available in the first hours on the day with a limited order number.
China takes 团购, also known as group-buying, to the next level. Interactive and visual mini-programs are developed for consumers to effectively share and invite more potential consumers to purchase a good. A successful example would be Pinduoduo (PDD), a group-buying social ecommerce platform, that effectively attracted “untouched” consumers from lower-tier cities by offering deeper discounts on generic products for groups. Pinduoduo is now said reported to have 483.2 million active buyers in June 2019 in comparison to Alibaba’s 672 million.
剁手Dùo Shǒu (The “Wanting To Cut Off Hand” Regret)/ 吃土 Chī Tǔ (The Post-Shopping “Mud-Eating” Phase)
With an abundance of promotions and product ads richly saturating social media these days, the “grass” (consumers’ shopping desire) just seems to never die nor stop growing, but the wallet is in the victim. “To buy or not to buy” is a daily question. 剁手 describes the feeling of wanting to cut off your hand that made the purchase on the phone which has made you resort to “eating mud” (吃土) for the rest of the month before you can afford proper food after your next pay day.
Brands’ Takeaway: China ecommerce market is highly competitive across numerous marketing channels, but if you are able to strike when the iron is hot, your brand can still be competitive in the crowded space. Even though consumers’ wallets may have already been emptied by the other brands, they always still have the desire for more if marketed right.
Thank you for reading this week’s article, if you need help with finding the right channel and/or the right representative for your brand, please contact us at China Skinny!
Take a tour of Hema (Fresh Hippo) supermarket in Shanghai at 5pm on Monday 24 February as the coronavirus outbreak still looms. Despite the customers wearing face masks and hand sanitisers throughout the store, there is plenty of activity in the shop.
This Hema store has remained open since the outbreak and, despite rumours of empty supermarkets, has been well stocked throughout. Nevertheless, consumers ordering delivered goods from Hema are recommended to make their orders just after midnight to ensure that the products are available.
WeChat has finally created its answer to the gaping hole in its content ecosystem. WeChat Channels provides Tencent’s answer to the short-form video/image content dominated by the likes of Douyin, Kuaishou and Little Red Book.
About a month ago, WeChat launched a semi-internal testing trial for its new feature – WeChat Channels. Although still in its early stages, many content creators such as WeChat Public Account bloggers, celebrities, KOLs (Key Opinion Leaders), and professional sellers of brands couldn’t wait to get their hands on the new feature and give it a shot.
There was speculation that WeChat Channels would be the Easter egg that the founder of WeChat, Mr. Zhang Xiaolong, hinted at the end of his new year speech through WeChat Open Class. He stated that the new feature is designed with the aim to fill the short content space that he believed WeChat has been missing.
Meanwhile, the “Quarantine Economy” – an operating model where sellers need nothing but their phones to operate their businesses – has surged in the past month since the coronavirus outbreak. People are starting to recognize the variation of content marketing and the importance of operating in such channels. This new WeChat feature might be just the right tool at the right time. With high hopes, it might grow to be essential for brands to succeed in the China market.
What is WeChat Channels?
WeChat Channels is a new feature which appeared on WeChat in late January 2020. It is still under testing and not yet available to the general public wanting to be creators.
However, there has been a way to participate in the trial. Content creators could scan a QR code leading to an application page and submit a trial request. Proof of content-creating ability and follower numbers was requested to ensure the success of the application. Successful applicants were then granted full access, which included being able to create their own accounts and upload new content. However, as of last week, the portal to the application was “temporarily closed”, although there is speculation it will resume soon. You can also participate in the trial thanks to random selection.
Through their Discover menu, users can view, like, comment, follow and share content but not create their own.
Now, let’s take a closer look at the feature itself:
- WeChat Channels is located right below WeChat Moments, the most frequently-used feature on WeChat. Many say, by placing it in the “golden location,” WeChat demonstrates their high expectations and signals Channels’ potential significance in the future. Easy access to the feature guarantees considerable amount of daily active users (DAUs); checking Channels every time they open the app might become part of a WeChat user’s daily routine.
- The Instagram-like operating page of WeChat Channels is a simple one-page scroll down of contents made up mostly of videos and photos followed by short caption text. A hyperlink to posts/articles (generally text-based content) on WeChat Public Account can be added to drive new traffic to an existing account, ultimately to increase the account’s exposure and popularity.
- A creative user generated content (UGC)-style video posted by Tencent on WeChat Channels for Valentine’s Day. In the video, a Tencent programmer complains about her boyfriend for not replying for almost an hour on the big day. She is surprised by a video conference meeting in which her boyfriend gives her a sweet surprise with the help of some colleagues on the call. In this video, Tencent cleverly achieves two things: increasing positive association with the brand, showing how to leverage the feature’s unique public-yet-intimate setup to create relatable content that appeals to consumers.
WeChat Channels provides an opportunity for traffic
Over 300-million people used mini-programs daily last year, and their spending on mini programs “was close to triple 2018’s total.” This is one reason for WeChat’s colossal aim to help businesses perfect “their own closed business loops” in the coming year. As part of the execution plan, WeChat is prepared to better develop the WeChat Mini Program Search feature to amplify exposure of both Mini-Programs and Public Accounts to increase users. With WeChat Ads looking for more room to grow, and the talk of WeChat Livestream in the making, Channels may also play a big role in WeChat’s holistic approach to achieve this aim.
Mini Programs and Public Accounts are plagued by limited points of discovery besides direct search, QR code scan or WeChat ads. WeChat Channels can help drive traffic as users start their consumer journey from discovery and research (a term known as “种草”which will be covered in a future article), to purchase decision through seamless switches between different in-app features such as Public Accounts, Mini Programs, and WeChat Pay.
A growing mountain to climb
In theory, WeChat Channels could become the vital link that completes the closed loop that WeChat is aiming for, and push WeChat to be one step closer to becoming the all-in-one marketing tool for brands. However, just as we have witnessed in the past, the obstacles to success in the digital marketing world of China are extremely complex and competitive. With so much saturation in the market, consumers are exposed to countless online ads on a daily basis, so much so that many subcontiously ignore them. This makes traditional ad-based marketing on short content digital platforms difficult to maintain a healthy ROI. Even on Douyin, China’s top short video platform with more than 400 million DAUs, it is not uncommon for major brands to have almost no traffic on their official account and yet hundred thousands of likes on the KOLs’ posts/livestreams, promoting the same brands’ products.
However, there are still opportunities to woo the target market on short content platforms such as WeChat Channels. With the right relatable content and messaging targeted at the right consumers and frequent traffic, a high ROI may not be an unachievable dream, even for small to medium-sized companies.
Brands should pay close attention to the development of WeChat Channels, and consider incorporating this into their marketing strategies. This feature could just be another failed project for WeChat such as the short-lived Weishi video-recoding feature. Or it could be like Public Accounts – which was initially designed as just a tool to replace spam ads but turned into something that now generates billions of yuan in revenue and serves as the must-have for any brand. We will keep you posted!
“450 million Chinese trips were expected to occur during 2020 Chinese New Year,” according to Ctrip forecasts in the beginning of the year. Due to the sudden outbreak of the novel coronavirus, the majority of Chinese citizens were grounded, taking refuge in their homes in hope of staying safe. The Government’s CNY holiday “extension” did not see travel rates spike, in fact, millions of travel plans were cancelled as result of the outbreak. Disney believes it will lose $175 million if its parks remain closed for two months. Thailand expects to lose $9.7 billion in tourist income from Chinese travellers through June. US airlines alone, will lose $1.6 billion this year because of lost business to and from China.
The similarities of the virus’s severity and timing brings the all-too infamous 2003 SARS outbreak back into memory. From April to June 2003, China’s inbound, outbound and domestic travel markets faced a challenging time. However, shortly after the end of the epidemic, an explosive rebound happened as Chinese consumers could finally unbottle their long, built-up passions to travel. The whole market quickly recovered as a result.
Similar to the current decline in travel bookings that we are witnessing due to the novel coronavirus, flight and hotel bookings experienced a significant decline during the 2003 SARS outbreak. Flight and hotel bookings on Ctrip in 2003 suffered a 33.4% and 25.1% decline respectively over the outbreak, compared to the same period in 2002. Ctrip reported a loss of ¥29.2 million income within the 6-month period ending September 2003, solely as a result of the SARS outbreak.
However, a surprising pattern emerged as the battle against SARS was gradually being won. What began as a strong recovery in China’s travel industry, turned into a surge in sales. In July 2003, Ctrip flight bookings saw a 200% increase in sales from the same month in 2002 , an 82% increase since June 2003, and a 31% increase compared to the month right before the outbreak.
China’s enthusiasm for travel did not stop there. During October’s “Golden Week” in 2003, the first major national holiday after SARS, Ctrip’s flight bookings continued to maintain its 200% increase compared to the same period of time in 2002. During the 2004 Chinese New Year, flight bookings increased once again by 201% compared to the month before the 2003 outbreak. And just when people thought this “post-trauma reaction surge” was over, Chinese consumers surprised the world once again. For the Labour Day holiday in May 2004, travels skyrocketed one more time. Ctrip’s flight booking alone had increased 511% from than the year before. For 2004, the 1.1 billion travellers had generated an income of ¥471.1 billion setting a new record for China travel.
The current period has been difficult and taxing on the travel operators and most other businesses, however, we can try focus on some positive aspects to take from this. First and foremost, these surprising statistics demonstrate Chinese consumers’ strong, positive optimism during a tough period – compounding their need and desire to travel. As we closely follow the outbreak, Beijing’s response and consumer sentiment, China Skinny believes the spring bloom after this wintery period in the China travel industry will come and a similar surge is likely.
According to Ctrip, the travel boom that ensued following the 2003 epidemic was largely contributed by male, post-70s consumers who had most of the purchasing power at the time, followed closely by the post-60s and the first generation of post-80s who had just entered the work force. Now with females born in the 80s and 90s being the new force of Chinese travellers, we expect them to lead the bounce back post-coronavirus. Japan, Thailand, South Korea, Singapore, France, the United States, Maldives, Indonesia, Malaysia and Canada were the most popular international destinations during the 2003 rush.
China has changed dramatically in the 17 years since SARS, and tourism operators will need to play by a whole new set of rules to connect with and appeal to Chinese travellers. Understanding these changes and characteristics will help prepare operators to best take advantage of the expected surge and advocacy that will follow.
At China Skinny, we aim to provide answers to these questions as we continue to closely monitor this period and provide latest updates and insights through our weekly newsletter, research and strategic projects. Please contact us to find out more.