All eyes are on the current lead-up to JD.com‘s 6.18 festival as China’s consumers look like once again defying the odds and continuing their notorious consumption habits. We have been looking at how brands are standing out, and what forms of retail marketing are spurring consumption. One such tactic is that of the ‘blind box’ – purchasing an unknown product from a brand for a set price whether for the mystery, or for the chance at something worth much more.
Mi (a mobile internet company who usually focus on phones, smart hardware and IoT) has been successful in this period – selling “Unknown Suitcases”. During Jun. 1 to Jun. 20, as long as you buy one of their suitcases, you’ll find something else in there when it is delivered. Given travel outlook is a bit bleak, this is a clever way of selling suitcases that may otherwise not be moving off shelves.
Other brands have definitely joined in of late – In April, Pringles launched an “mystery flavour” of chips. Whereas the flavour is normally on the package, with these products its hidden in the background words, or you can just taste it to find out. In May WAHAHA (a huge snack / F&B company) launched Dimoo “blind water”, which can only be bought by the box, with flavours not revealed until its opened.
Our recent article – MollyBox Case Study: Lessons Around Subscription Models and D2C in China details another successful form of a “blind box”. The box includes a main cat food that you specified and a random assortment of toys and snacks.
A Tmall X China Joy report from August 2019 showed nearly 200,000 consumers spent an average of ￥20,000 on collecting blind boxes, the top bracket of these consumer ‘thrill-seekers’ even reached ￥1 million!
So where did this all start, and why has the ‘blind box’ economy become so significant? One possible reason is the brand POP MART which was a pioneer in leveraging this tactic in China.
POP MART is a leading player in China’s pop culture and entertainment industry since 2010 and is known for toys (targeted at adults). It has held five successful international toy shows in Beijing and Shanghai attracting more than 100,000 visitors on average. It also has its own app called PAQU, a social media and e-commerce platform for designer toy enthusiasts and vending machines called ROBOSHOP, that serve as self-service retail channels. Pre-2016, POP MART was essentially a retailer of other brands, and hadn’t become the innovator it is today. Since that time, it has grown rapidly on the back of two core tactics:
1. Creating its own IP (famously started with the successful “Molly” toy)
2. Building and leveraging the ‘blind box economy’
The charm of blind box lies in the delivery experience: collection, surprise, social engagement and the packaging. It takes the western crazy of ‘unboxing’ videos to new heights when you’re part of a community who don’t know what they’ll get, and are eager to trade, make friends and continue the conversation online. Usually a POP MART blind box will contain several toys, the price/toy is not high, about ￥59, but if you want the whole set, you will spend thousands on it.
According to 2019’s Xianyu blind box economy report, SATYR RORY (the hidden toy on the right is the most rare one) rose by 39 times and one user made ￥100K through selling these toys.
As above, the gamification and digital community building of these toy ‘blind boxes’ have particular power in China. The subcultures have even developed further, with a strong subculture now modifying the toys. See below, the left one is original, the other is modified.
Ning Wang, CEO of POP MART confirmed,“75% of our consumers are female, usually 18-35, especially 26-27.” Years before, these kind of art toys, like Iron Man, Gundam, were mainly targeting males. At a toy show, maybe only 10% of visitors were female, but now through exciting consumer engagements like blind boxes, Ning Wang has propelled a toy business with￥1.6B ($230 million) revenue mainly from females.
Blind box is not new, having originated from Japan’s GASHAPON culture in the 1980s. However, only Ning Wang caught this trend and made it into an art toy empire. Brands would be wise to follow these evolutions closely and immerse themselves in potential opportunities that could help them separate from the masses in their retail engagements. China Skinny can assist with this.
Chinese livestreaming continues to soar, even as Chinese consumers get back to their busy lives as life returns to normal. Between January and March, over 4 million commerce livestreaming marketing activities were held, with 560 million livestream users in China by the end of this period.
Following on from my earlier post: China’s Soaring Livestream Trend: The What, Who & How, here is some new data and analysis on livestreaming:
Performance of some of the new kids on the stream
The buzz of livestreaming has seen many well-known Chinese throw their hat in the ring for a shot at livestreaming stardom. Two of the biggest successes have been older-than-the-usual internet stars and business people, Yonghao Luo and Mingzhu Dong.
We noted Yonghao Luo’s rise on Douyin back in April. Since then, his performance appears to be stabililizing, although on a steady downward trend.
On the other hand, Mingzhu Dong, businesswoman and chairperson of appliance retailer Gree, learnt from a lacklustre start and has soared since. After a poor pricing strategy and dubious internet connection which was not seen as “sincere” by audiences on Douyin, she worked with Kuaishou and JD to increase her revenue by 1,300 times for Gree. During a single livestream on JD she sold the equivalent of double Gree’s 2019 ecommerce revenue. Mingzhu Dong’s success on Kuaishou and JD can be put down to her established fame and fanbase, and high subsidies from the platforms allowing great pricing. And the Internet connection was fixed of course.
Electronic Vehicles Join the Feast
Of course it was only a matter of before the aspirational EV brands were in on the livestream act. Livestream sensation Viya reportedly did not charge Telsa to do a one-hour demo. Although the livestream has got a lot of airtime (anything with Telsa and Viya will), it was Telsa’s China challenger NIO who performed a lot better. 2,600 viewers (from a total of 4 million) paid ¥1 for a Telsa test-drive, whereas NIO, hosted by Han Wang and NIO’s founder Bin Li clocked 5,288 test drives and sold 320 cars worth ¥128 million ($18 million)
And Enter the Virtual Livestream Host
Top livestream anchors such as Yonghao Luo, Viya and Austin Li can command as much as ¥600K ($84K) just for a slot on their show, then 20%-40% commission. But virtual singer Luo Tianyi earned ¥900K ($127K) plus commission from French beauty brand L’Occitane.
Recently, virtual celebrity Luo Tianyi joined livestreaming king Austin Li’s show as a trial.
China has seen a rise in virtual celebrities who do everything a real celeb can do, such as sing, dance, do livestreams, have fan clubs and even do offline concerts.
Luo Tianyi’s image was released in 2012, followed by her voice in 2017. She stated a Bilibili account in 2016 and now has 185K followers, 1.9m likes, 22.8 million plays from 41 videos of famous songs such as PuTong Disco and DaLaBengBa.
Luo Tianyi has performed in many galas, including the 2016 Hunan TV New Year’s Eve Gala, 2016-2017 Hunan TV New Year’s Gala, 2017-2018 Jiangsu TV New Year’s Gala, 2018-2019 Jiangsu TV New Year’s Gala, 2016 and 2019 Bilibili Macro Link.
Luo Tianyi is owned by a company called Vsinger who has several singers. In 2017, they held a concert with virtual stars, and got 5m plays on Bilibili. The concert was not much different from a concert performed by a real singer, complete with crazy fans, but with technology that used advanced holographic projection to make it even more interesting. If a concert isn’t enough, she even hosted her own birthday party on the 94th floor of Shanghai World Financial Center.
Virtual stars are nothing new, Toyota engaged Miku as long ago as 2011. However the increased digitalisation and interactivity of platforms creates a ripe environment for such initiatives. Brands would be wise to follow these evolutions closely and see if they fit with their marketing strategies for China – China Skinny can assist with this.
Hive-Box runs the world’s largest express locker system, reaching 180,000 lockers in more than 100 cities across China serving 200 million people. In 2018, its users retrieved 2.5 billion packages – around 5% of China’s total parcel delivery.
The express lockers allow consumers to have packages/online purchases delivered close to their apartment, and then pick them up when you’re ready. If you’ve been for a walk in China, there’s a good chance you would have seen their distinct green lockers.
During these times of soaring ecommerce, supported by contactless delivery, Hive-Box should be on Cloud-9, but a series of business decisions over the past month have seen boycotts and belittling from Chinese consumers.
Here’s What Happened with Hive-Box:
Mid-Jan: Hive-Box’s service was free, however there was a function similar to WeChat original articles-“Like The Author”, where users can tip a delivery person. However the button to ‘skip’ the tip was somewhat hidden – many people didn’t see it and they thought they had to pay. When this issue went public, Hive-Box made the skip button bigger around the time of the outbreak.
April 30: Hive-Box launches a new membership service (¥5 (70c) /month) where member’s deliveries would be kept for 7-days for free. For non-members, deliveries would be held for just 12 hours, then charged ¥0.5 (7c) for every 12 hours thereafter, to a maximum fee of ¥3 (42c). Consumers were outraged given many consumers are often out from home for more than 12 hours due to long working hours, transport times and other interests, and office deliveries on the weekend would be caught.
May 4-7: A Hangzhou estate couldn’t come to an agreement with Hive-Box over the new rules, so send notice around the neighbourhood and powered off all lockers
May 5: SF-Group-backed Hive-Box announced it would be taking over China Post-owned Sudiyi, giving it another 94,000 lockers, taking its market share to around 70%.
May 6: Hive-Box started charging for their service for the first time. This caused an uproar on social media and from housing estates as the takeover of Sudiyi a day earlier effectively allowed Hive-Box to leverage its monopoly and force increased prices to users.
May 7: A Shanghai estate surveyed residents about whether to continue using the service in light of the new fees. 82% said no, so the neighbourhood halted the service on May 11.
May 8: Other delivery agencies (except SF, who own HB) announced they would raise their prices to pass on the higher fees. These were later withdrawn as they realised they could not compete with the superior SF-Best on anything but price, and lowered prices again.
May 9: Hive-Box formally explained their reasons for the unpopular decisions: 1. The short 12-hour period was based on big data and best for delivery folk; 2. After reintroducing the fees, 5% more people collected their parcels within 12 hours; 3. A 1% higher turnover rate of the 180K lockers can result in a significant rise in resource utilisation. Hive-Box also issues a letter to the Hangzhou neighbourhood claiming it had violated the contract and it will recover resulting financial and goodwill losses.
May 13: The PRC State Post Bureau urged Hive Box take active measures to shoulder social responsibility, develop a solution, improve the pricing mechanism and respond adequately to consumers.
May 15: That morning, the Hangzhou estate who was first to ban them, said that they were willing to discuss with Hive-Box about reopening. In the evening, Hive Box announced they’d: 1. Extend the free period from 12 to 18 hours; 2. Not charge during holidays; 3. Not charge in office buildings during the weekend; and 4. Existing members get a free month of membership. By this time, 115 estates in Shanghai had already said “No” to Hive-Box.
Backlash Against the Price Rise
Many consumers remain outwardly angered with Hive-Box. However the compromises announced on May 15 have helped temper the situation, particularly extending the free hours from 12 to 18. Many felt that it is was within Hive-Box’s rights to raise the price: they provide a service that costs money. Given they made a ¥700 ($98.1 billion) loss last year, many people realise that they can’t run at a loss forever.
The issue was the process, as delivery people would put parcels in lockers without notifying users … which Hive-Box already knew. On top of that, their timing was poor – announcing the price increase a day after taking over China Post-owned Sudiyi. Consumers were unhappy about having to pay twice for delivery. Hive-Box needs to figure out a way to make a profit, but it clearly needs to understand consumers better and deliver initiatives more thoughtfully.
The shenanigans have raised the threat of new competitors and alternatives and strengthening of others, with one Nanjing estate setting up lockers for themselves, and small shops who looked to store parcels.
Although many industries are consolidating in China and creating virtual-monopolies, the Hive-Box example illustrates that consumers will collectively vote with the their feet and force change, while potentially diluting the market as the result of poorly executed plans.
Following a few years of slow growth, China’s Internet added a staggering 75 million new Internet users in the first quarter of 2020, largely as a result of COVID-19. The country now has 900 million users – 64.5% of the population. The infographic below illustrates how Chinese internet users’ behaviour has changed as a result of the pandemic.
Walking through a mall in China, it is not unusual to see the quieter-than-normal stores buzzing with excitement. Key Opinion Leaders and animated shop assistants are discussing their merchandise while someone captures them on a smartphone, as retailers look to the livestream buzz to compensate for lower-than normal traditional sales.
Livestreaming was already on-trend in China, with Taobao Live revenue for Singles’ Day last year almost clocking ¥20 billion ($2.82b), almost 10% of total revenue. 10 livestream ‘rooms’ sold over ¥100 million ($14m) worth of goods and over 100 rooms topped ¥10 million ($1.4m), with 2018’s Singles’ Day livestream revenue surpassed within 63 minutes.
China is forecast to have 526 million live-streaming video users this year, up from 504 million in 2019, however this forecast is likely to be blown out of the water as a result of COVID-19. The lockdown has taken live-streaming to a new level, expanding en masse beyond the traditional ecommerce streams to everything from education to fitness workouts. Everyone from government officials and China’s most famous entrepreneurs are jumping on board the craze.
Few of China’s tech platforms haven’t jumped on the trend. With youth-focused Bilibili showing propaganda streams about hospitals in Wuhan, to Douyin helping farmers sell ¥320 million ($45m) worth of produce. Poly Group sold 102 houses worth over ¥200 million ($28m) over 10 hours of livestreaming and Land Rover attracted 6 million viewers through 30 hours of streaming, selling 2,300 coupons and 21 deposits on cars, just pipped by Geely who sold 25 cars – 5 times the volume offline. Between January and February this year, the number of pet anchors on livestreams grew 133%, and with it, 238% viewing growth. Even the ‘first Store of New China‘ Wangfujing (established 1955) live-streamed for 11 hours, attracting 830,000 viewers and ¥2.4 million ($340K) in sales.
What is Being Livestreamed in China?
There are few industries who aren’t jumping on livestream train, although some of the fastest growing categories still have much less broadcasts relative to the established categories such as culture & education and gaming.
Who are China’s Biggest Livestreamers?
There are two undistributed leaders in China’s livestream scene, Viya and Austin Li.
Viya was one of the first anchors of Taobao Live, joining in May 2016, less than one month after it was launched.
In 2019 she had:
19 million Taobao Live fans
¥2.7 billion Singles’ Day sales revenue (the equivalent of her 2018 sales in one day!)
Viya is often described as a “supermarket celebrity”, which means she covers the most categories among livestream anchors, calling her audience “Viya’s girls.” In 2018 alone, she worked with over 5,000 brands. She is even said to have sold out discounted rockets on her stream – ¥45 million ($6.4m) down to ¥5 million($710K) – said to attract more than 800 people to pay deposits of ¥500K ($71K) within 5 minutes.
Her success can be explained by marketing theory of ‘7-Ps’:
Product: common products from a wide range of categories with wide appeal.
Price: Making sure it’s the lowest. She even had an assistant threaten a supplier “Why I am going to let my audience down, let them buy expensive products, I want the lowest price, or I quit” in the livestream room, as a symbol of her bargaining power.
Place: Taobao Live (19.3M followers)
Promotion: Limited time, amount and price.
People: Nice appearance, great at talking.
Process: A strong team supporting her. From product selection to livestream preparation.
Physical evidence: A well-designed room, high quality for both picture and sound.
Austin Li has risen from beauty advisor to the “Lipstick King” of China.
23.5 million Taobao Live fans
42.8 million Douyin fans
Austin has learned his title as the “Lipstick King” have made the most lipstick applications in 30 seconds from the Guinness World Records in September 2018. That same year, he outsold Jack Ma in a lipstick-selling contest on Singles’ Day. He has promoted 380 different lipsticks in two hours, sold 15,000 lipsticks in 5 minutes and has many other claims related to the product category. And he works hard, having live-streamed 389 sessions in 365 days.
His success can also be put down to his approach with the ‘7-‘s’:
Product: Austin test all products personally before he recommends them, although he has been caught out in the past by not testing them.
Price: The lowest. He blocked LANCOME and Pejoy because the price offered to him was a little bit higher than that offered to other anchor.
Place: Taobao Live (23.5M followers) and Douyin(42.8M followers) for a second-round spread.
Promotion: Limited time, amount and price.
People: He is a genuine lipstick expert, a great talkerl, and will try products before recommending them.
Process: Team support. From product selection to livestream preparation.
Physical evidence: His famous tagline, “oh my god, buy it now” always triggers audience interest to buy. He’s also good at creating an atmosphere: “Attention! only 30,000 products available, ready, 3,2,1, link! 30k, 20k, 10k, ok sold out, next”. This leads to people buying products before they figure out what’s really happening – someone even bought a sofa after watching 5 minutes of his livestream.
The rise of livestreaming has seen the comeback of China’s original internet celebrities and entrepreneurs, such as Yonghao Luo. He was first famous online in 2005, known for his personal charm, which originates his previous experience as a teacher, setting up a blog, smashing Siemens fridge in front of the Siemens HQ and creating the Smartisan smartphone brand.
Luo’s first livestream on 1 April this year attracted 48 million viewers over the 197 minute show, sold 910 products worth ¥110 million ($15.5m), in addition to receiving and estimated ¥3.6 million in tips from almost 600,000 viewers, which he used to buy 300,000kg of oranges from Wuhan, selling them for ¥0.01/2.5kg (less than a cent) in the following show. Subsequent livestreams on April 10 and 16 sold ¥36 million ($5.1m) and ¥57 million ($8.1m) respectively.
Not All Livestreams Are Great
McDonald’s has joined thousands of other brands on the livestream phenomenum, with its first stream promoting new products on 15 April.
The 24-hour livestream was themed 5G. In Chinese, the “G” sounds similar to “技”, here refers to features. 5G introduces five features of the new products. Based on the Weibo hashtag, which saw 140m views and 132k discussion, the results were quite promising. However there are some lessons to take about what not to do on livestreams:
1. Before the livestream, McDonalds borrowed many other slogans to promote this livestream, i.e. Your next phone is not a phone (iPhone). Make a friend, very sincerely (Yonghao Luo). People considered this unoriginal rather than clever.
2. Coupon delivery: The livestream was broadcast on Bilibili, but coupons were sent on WeChat, which wasn’t smooth. Secondly, when asked how to get coupons on the livestream, they didn’t respond. Then, they promised to give coupons on time, but didn’t deliver in the promised time. As a result, few in the audience were shared their joy of them getting a coupon, which is usually the case on Chinese social media.
3. Inviting strangers to try new products. First, the anchors couldn’t chat fluently. When they changed the topic, things were quite unnatural. Finally, the strangers were quite unprofessional and many viewers found the greasy hands and mouths unbearable.
4. The anchor’s conversation was often awkward.
5. Viewers didn’t appreciate ads and a video of chickens running around when the the next round of the broadcast was being prepared.
Where to From Here for Livestreaming?
While live-streaming usage hit highs when consumers had plenty of time during the lockdown, livestream’s popularity is likely to track well above pre-COVID rates, in the medium term at least. Consumers are now in the habit of watching livestreams, and with more brands and personalities streaming, the breadth and quality of content has improved. These factors will encourage platforms to continually innovate creating a richer experience for viewers. Although the market is more contested than ever, brands should consider using the live-streaming platforms as that is where many of their customers will be.
Mollybox teaches us some valuable lessons about subscription models in China, D2C commerce, growing during the COVID-19 lockdown and some differences with pet ownership in China.
Imported cat food was the top selling category during last year’s Singles’ Day on Alibaba’s cross border marketplace, Tmall Global. Since then, Chinese consumers’ love of their pets has continued to accelerate. The COVID-19 outbreak saw a few pet owners abandon their dogs and cats out of fear that they would be little spreaders of the virus. But most pet owners became even more connected to their furry friends. During the lockdown, pets became a comforting influence in many households, and even more of a source of companionship when other connections were few far between.
With owners elevating their pets even further than before, there were a handful of brands who really capitalized on this and seized the opportunity delivered by the unique circumstances of the lockdown. Mollybox was one those brands.
Mollybox is an online subscription platform for pet products. With many of its customers facing the possibility of running out of pet food, MollyBox responded swiftly by implementing three initiatives:
1. Operations: Mollybox established a backup warehouse to increase city coverage
2. Delivery: Supported initiatives and teams to ensure delivery would continue as usual and as efficiently and fast as possible. When delivery was unable to reach cities due to the lockdown, they works with an NGO to find a solution
3. Consumer Service: Organized an online medical service for cats.
These initiatives were rewarded with positive comments on social media. Customers praised the company for getting them boxes in time, and averting a crisis of running out of cat food.
These comments helped inspire the MollyBox team to continue to work above and beyond the call of duty, and further increased consumer trust and loyalty to the brand.
Adapting to China’s Unique Pet Market
The MollyBox team launched WoofBox in 2015 in China. But when this failed, they transferred their focus to cats with its signature product MollyBox. The founder realized how different Chinese consumers keep dogs as pets to those in America. He realized that he couldn’t just create another “BarkBox” in China. What he needed was a deeper insight into consumer behaviour and psychology.
“Cat owners are different from dog owners,” said Mollybox founder & CEO Yi Ju in a Chinese language interview with BrandStar. “Dog owners are more like mothers looking after their children – they are willing to shop around and find the highest quality products that are best value for money. While cat owners are more like fathers looking after their children, who believe that they can find one solution that delivers to their needs.”
Launching in August 2017, MollyBox became the first subscription ecommerce platform for cats in China, focused on being a one-stop solution for cat owners. Their boxes contained at least one type of cat food and several snacks, alongside toys and other handy items. Pricing covered different customer willingness to spend on their felines, with packages costing ￥99 ($14), ￥199 ($28), ￥299 ($42), ￥399 ($57), with flexibility around subscription frequency. By last year, there were 350,000 customers subscribed to the service.
Acquiring Customers to the Service
Mollybox approach to acquiring new customers can be summarized by its three strategic pillars:“Create”, “Borrow”, and “Buy”.
“Create” is to create alluring content to attract consumers, such as the Christmas and Chinese New Year themes below. MollyBox aims to surprise and delight its consumers, so that they are always looking forward to their delivery. Below highlights the fun MollyBox had producing a new theme for each month in 2019, which delighted customers are were shared enthusiastically on social media.
“Borrow” is to borrow – or tap into – others’ momentum in the form of partnerships. An example of this is the partnership they did with Feline Natural X MollyBox X New Zealand Trade & Enterprise (Left) and ZIWI X MollyBox X New Zealand Trade & Enterprise (Right).
MollyBox also cooperated with other industries, such as gaming, ONMYOJI and culture such as the Xi’an Museum. The customizable boxes not only increased sales and revenue, but also provided relatively cheap method of maintaining consumer curiosity and loyalty.
“Buy” is paying for ads and key opinion leaders (KOLs). Mollybox found the return from advertising on WeChat was good, but cooperating with KOLs was even better.
“We found that the only way a KOL can be successful is when consumers believe that his/her way of looking after pets is the right way, and something these customers can relate to with their own pet ownership,” said Yi Ju.
Ensuring repeat custom for a subscription service
When MollyBox launched, it provided plenty of incentives to purchase a long term subscription through discounts: A one-off box is￥159, a seasonal subscription is ￥139/pack, six months’ subscription is ￥119/box and yearly subscription is ￥99/pack – a discount of almost 40%. Yet few customers opted for the longer, discounted subscriptions as consumers “did’t want to pay that much at one time.”
In answer to this insight, MollyBox implemented the WeChat credit and Zhimi Credit auto monthly fee deduction function during second half of 2018. By the middle of 2019, 40,000 customers were taking advantage of this.
I am a happy MollyBox customer, and my personal experience is a good example of the attractiveness of the fee-deduction feature. I saw this brand for the first time in 2017, but the pricing was over ￥2,000 ($284) for a whole year’s subscription – 12 boxes. So I tried a single box. I was very satisfied with it, but I still didn’t subscribe it again, as I thought the yearly subscription was large expense. As I was unable to enjoy the discount, I gave up. On Singles’ Day that same year, I saw the auto fee deduction monthly function, and purchased it without hesitation.
To summarize, understanding what consumers are thinking through big data, qual and quant analysis can assist brands in designing pricing structures that best address their pain points. This research can also provide insights into what consumers are expecting, and what will surprise and delight them, so as a brand, we can do just that. Talk to China Skinny about how we can assist with this.
There’s nothing quite like staying indoors for a couple of weeks to hone in on your gaming addiction. The coronavirus outbreak and resulting time people are spending inside their homes has seen a sharp increase in Chinese playing games. At the peak of the outbreak, Chinese were spending 6.11 billion hours a day online – over seven hours for each of China’s 840 million online consumers.
Of the online activities, mobile gaming attributed to the largest growth in daily users, with 20% of growth in users of the top apps coming from mobile games, and 38% of mini programs. Chinese spent an average of 159 minutes a day playing games over the Spring Festival period in 2020, versus just 113 minutes in Spring Festival in 2019.
Gaming has long been a popular activity for Chinese, with close to 600 million players before the outbreak. Yet the addictiveness of gaming is likely to see much of the increased popularity over the outbreak maintained when things turn back to normal. As a result, gaming will become an even more relevant channel to build your brand preference and ultimately sales.
Who are China’s gamers?
A quick look into China’s 600 million gamers shows a population representing a strong cross section of its lucrative millennial demographic. Females account for almost half of China’s players. If we take a look at NewZoo’s studies into three of Chinese biggest games: Dota 2 and Honor of Kings, we can see an average age of close to 30, with female participation of mid-40%.
Brand Affiliation with Gaming in China
There’s no shortage of case studies with brands partnering with games. We’ve selected a couple of games to illustrate what brands are doing – Honor of Kings and Game for Peace.
Launched: November 2015
Daily users during 2020 Spring Festival: 95 million
Average daily use time during Spring Festival: 194 minutes; 75.1% rise y.o.y
Honor of Kings has worked with beauty, accessories, food & beverage and luxury brands. With over 50% of players under 25, and 90% are under 35, the game provides an engaged and emotional channel for connecting to these millennials in the most crowded targeted demographic in China.
While many game collaborations in China target males, MAC cleverly reached the 44% of the games players who are female, and an increasing population of Chinese males wearing lipstick. Early last year, Mac launched five lipsticks themed on five Honor of Kings heroes, priced at ¥170 each ($25). The promotion also used five members from the band Rocket Girls 101 (of reality TV fame) to personify the heroes and expand the reach through their Weibo followings as high as 24 million.
MAC made a clever play on the Honor of Kings phrase “Hold still, we can win,” swapping it out for “Kiss still, we can win.” ‘Kiss’ and ‘Hold’ share the same pronunciation of Wen in Chinese.
The Diao Chan and Lu Na lipsticks sold out within seconds. Visitors to MAC’s official website grew by 3,000% with the topic “MAX X Honor of Kings” attracting over 35 million views and 40,000 discussions on Weibo.
A month after MAC’s successful collaboration was followed a month later Jewellery brand Chow Sang Sang partnered with Honor of Kings for branded products, and Netease’s Onmyoji game. The brand’s collaboration including naming jewellery pieces after the game and collaborating with famous Japanese animation One Piece and Naruto to bring them to life. A year later, all of the products are still available, with sales of some pieces over 1,000.
Even before MAC and Chow Sang Sang were on the Honor of Kings wagon, Parker Pens had partnered with the game to launch four branded pens characterised by four heroes: Libai (Honor), Di Renjie (Justice), Zhuge Liang (Wisdom) and Zhuang Zhou (Dream). The collaboration allowed the brand to reach young Chinese customer luxury consumers who account for a much larger portion of luxury sales than in western markets.
FMCG brand Meco launched five new products with branded packaging based on five heroes from the Honor of Kings. The five characters are part of an official group called “infinite kings” who have countless fans and even a fan club. Fans who buy the products can scan the QR code on the packaging to be rewarded with in-game items such as new costumes, virtual money, and so on.
Launched: November 2018
Daily users during 2020 Spring Festival: 80 million
Average daily use time during Spring Festival: 124 minutes; 24.6% rise y.o.y
Game for Peace has mainly workedwith films, TV shows and food & beverage, with luxury car brand Maserati also capitalising on Game of Peace top app ranking.
Maserati timed its collaboration with Game for Peace beautifully from the 24 Jan-20 Feb 2020, capturing the spike in gaming over this year’s Spring Festival. The partnership saw players able to skin their cars with a Maserati in the game.
The hashtag for the Game of Peace X Maserati took off on Douyin – another app which surged over the break. The hashtag saw 11,000 videos uploaded and received 86 million views.
Game of Peace has successfully partnered with popular culture including the Men in Black: International movie, Angry Birds, and Chinese variety TV program Who’s the Murderer.
FMCG brands Wang Lo Kat and Master Kong have also had placements within the game.
Takeaways for Brands
Although Beijing regulations trying to stall gaming popularity caused a couple of slow years in the industry, the coronavirus has seen the popularity of gaming soar. There has never been a more valuable time to reach the often-hard-connect with young demographics through the channel.
Clever collaborations with games can provide exposure and awareness when consumers are doing something they love. Gaming companies provide endless opportunities such as in-game placement and branded products. While these initiatives alone can be successful, a cross-channel promotion including key opinion leaders can amplify the benefits.
China Skinny can provide best practice advice on gaming promotions in as part of our overall marketing strategy, branding, product development advice and research. Contact us to find out more.
Times of crisis have shaped the retail industry in China. During SARS in 2003, JD was launched. Taobao wasn’t far behind, altering China’s retail landscape forever. Now with the COVID-19 outbreak, e-commerce platforms are seeing behaviour and demographics shift.
Daily Active Users (DAU) of ecommerce decreased from 398 million to 350 million during the Spring Festival holiday according to QuestMobile. Users bounced back to 383 million two weeks after the festival. This was a better result than last year as people were housebound during the outbreak, allowing them more time online.
One of the most notable changes is the user demographic of shoppers. More consumers than ever over 30 have started to shop online. The portion of tier 3 and lower cities shopping rose 12 percentage points to 70%. Similarly, the share of lower-income shoppers increased.
Of the main online shopping categories, fresh food was the standout winner. During the Spring Festival, daily usage time grew 56.2% above normal time. Two weeks later it was up 96.4% to 12.4 million minutes.
People over 40 years old have ordered fresh food online much more than normal due to restrictions in movement. Middle-aged users and above grew 237% on the MissFresh platform. As many as 90% of over-40s were estimated to place online orders for fresh food with help from their children.
The fastest growing search keywords on fresh produce platforms were common staples such as eggs and fruit – with searching doubling. Instant noodles also performed well according to QuestMobile.
On 8 February, the National Health Commission recommended consuming at least 300 grams of milk products a day as one of its dietary recommendations for fending off the coronavirus. Despite this, sales of every dairy category on Tmall (excluding infant formula) have dropped significantly according to China Skinny analysis – the likely impact of poor logistics and delivery performance. One interesting observation was that value per order grew notably, the likely result of consumers stockpiling for the outbreak.
During the outbreak, the large ecommerce platforms with stable supply chains and delivery services actively bore social responsibility to assist producers and consumers. This involved helping farmers with initiatives such as “Farm-Home”, increasing the ability to deliver produce directly from farms to apartments. This solved the problem of rotting produce that wasn’t being picked up, and got this produce to the spike in consumers who were seeking it. They also ran an online concert, donated ¥570,000 ($82,000) and helped farmers sell 380,000kg of agricultural products.
Possibly one of the biggest shifts in the retail scene is the rise of phystical retailers using digital channels to help counter the drop in brick & mortar sales and more traditional ecommerce vendors branching into more innovative sales channels. These saw strong growth in WeChat Groups, mini programs, live-streaming and contactless delivery.
The enduring trends of the coronavirus outbreak are likely to see many of the older and lower-tier city consumers who tried online shopping for the first time, continue to do so when things return to normal. Online sales of fresh produce is likely to be one of the beneficiaries. Similarly, many of the less traditional online sales channels used by retailers are likely to continue and evolve.
The coronavirus has kept much of China indoors since the Spring Festival, driving a notable increase in online usage, with Chinese spending 6.11 billion hours a day on the Internet. Yet the increase in app usage has been felt differently across different industries and across different apps based on the new features that have been launched. Medical service apps from Tencent and Dingxiang, for example, usage has soared with the addition of their “epidemic map” updated every day. Tencent’s mini program rose 70 times over 10 days.
Food delivery app usage has dropped, although contactless delivery is holding it up. With more people cooking, fresh food ecommerce is booming. Face masks offered on these platforms has always been met with a rise in active users. With schools remaining closed, education apps have been some of the biggest winners, launching non-traditional ways of learning which is proving more popular than off-the-shelf options such as Dingding. On the other hand, tourism and transport have seen the most noted drop due to people staying at home – the only bump coming from people requesting refunds and returning to work. Please see the infographic below for more details.
Isn’t it amazing what a coronavirus outbreak can do to online usage habits. The infographic below illustrates how China’s online millions (netizens) have altered their behaviour, with most of the country being homebound over the past few weeks. In the three weeks from Jan 14, online usage grew over 20% to 6.11 billion hours – over 6 hours per Chinese online.
The biggest winners for share growth for time spent are short video and news info – two sectors led by ByteDance apps. Users have become so obsessed with leading short video platform Douyin, that millions of people watched a host sleep, earning him which is about ¥37,000 ($5,300). Mobile games saw the greatest gains in daily active users (DAU) in both mobile apps and WeChat mini programs.
Short video app Douyin added 150 million daily active users in the 12-months between January 2019 and January 2020. With the launch of exclusive Douyin blockbuster Lost in Russia and Chinese bound indoors due to coronavirus, user numbers are likely to have shot up even more over the past couple of weeks.
Comparing Douyin usage in China with Tiktok usage outside of China, there are plenty of cultural differences. For example, 14.9 million videos with education/knowledge were shared on the app in China in 2019, but many less in the US. Users most likely to post dance videos in China were born in the 60s, whereas it was the teenagers in US. The below infographic provides a view into how the super-popular Douyin app is being used in China to assist with content creation and insights for 2020.