Finding Opportunity During the Coronavirus Outbreak

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It’s incredible to think that the majority of China’s 1.4 billion people were housebound last week, and many continue to be so. For a large number, it is self-enforced. Most Chinese are already health-focused and the real time coronavirus updates whirling around social media haven’t inspired many to take a trip to the cinema or gym.

For 60 million others, the ‘house-arrest’ is involuntary. In a watered-down version of Wuhan’s shutdown, the wealthy cities of Hangzhou, Ningbo, Wenzhou and Taizhou in Zhejiang have issued household “passports” which allow just one person per residence to leave home every two days to get supplies. Similarly, many residents returning to cities like Shanghai and Beijing from their Lunar New Year trip home are having to ‘quarantine’ themselves for two weeks before returning to the office. Companies must apply to their local government to open, and for those operating, employees must wear masks and not sit too close to each other. Remote working continues to be the choice for most white collar workers.

How do Chinese consumers pass the time cooped up in their apartments? By entertaining themselves on their devices of course. China’s tech companies have seen a spike in usage, with ByteDance particularly quick and smart with their response. ByteDance’s short video app Douyin (Tiktok) was always going to do well during periods of confinement due to its additive and entertaining nature. A pack of new KOLs have emerged on the platform as people seek knowledge and humour about the virus. Similarly, its AI-driven news and information source Toutiao is more popular than ever as people seek updates about the state of the nation’s health.

Not content with organic growth, ByteDance paid ¥630 million ($90 million) to distribute the Lost in Russia movie for free on its Douyin and Xigua platforms. Lost in Russia was likely to be a sensation at China’s box office, following on from the success of Lost in Thailand which grossed $200 million in China – the highest grossing movie of all time when it was released in 2012, and 2015 sequel Lost in Hong Kong, which also broke records grossing $255 million. Yet with China’s cinemas sitting empty during their usually-busiest week of the year over Chinese New Year, seven domestic premieres were postponed in what was a huge blow to the local industry. Not to leave the Chinese public hanging without their movie-premiere-fix, ByteDance swooped in with an arguably good deal, all in the name of acquiring users and adding prestige to its platforms. Some have likened it to the success of WeChat’s virtual hongbao (red envelope) campaign in Chinese NY 2014, which accelerated the rate of WeChat Pay adoption and had Jack Ma label the campaign a “Pearl Harbour attack” on Alibaba.

Douyin continues to win favour with Chinese consumers en masse. As of January this year – pre-coronavirus outbreak, 400 million were already using it daily. That is likely to have seen a large bump with the housebound nation glued to their screens and the Lost in Russia premiere.

Like most apps in China, Douyin has evolved into a sophisticated social commerce platform providing considerable opportunities as both a marketing and sales channel. Even after the virus has peaked, Chinese consumer behaviour will remain cautious for some time and online commerce will benefit as a result. With people relying heavily on social media for connection during these emotional times, social commerce will grow more than ever.

Last year, social commerce sales just on WeChat mini programs grew 160% to ¥800 billion ($114 billion). That’s over half of JD’s sales, reinforcing the legitimacy of the sales approach. Activity has increased over the past few weeks as brands such as Bestseller, launched and promoted mini programs to help counter the fall in physical retail.

To best capitalise on social commerce, brands should first understand each social channel, how they are being used, and how to best engage their users. Due to the rise of Douyin, we’ve put together an infographic to provide an overview about what people are doing on the platform. Like we noted last week, this unique period provides an opportunity to get the ship in order and engage consumers before everything returns back to the normal madness of business as usual. Digital channels are an area where many brands could do with a refresh, particularly as consumers are connecting more than ever from their apartments right now.

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