China Marketing Insights Monthly Newsletter [May 2021]

Hello,

Welcome to our May Newsletter.

Labour Day holiday in China has recently ended and once again we are seeing encouraging signs based on domestic travel. Ctrip data shows an increase of 30% from pre-pandemic levels, 2 key trends include more luxury travel and group tours giving way to more private tours as family & close friends create their own bubble.

In this issue, we provide updates on new Chinese regulations and their impact on marketing – China has been cracking down on monopolistic behaviour, excessive data tracking & aggressive user retention tactics.

We have a number of Insights report in this issue – Travel Live Streaming – the rise of live streaming in tourism & where it is headed; Labour Day app usage – close to 82 Million users were active during the holiday season on travel-related apps; “Net Generation” Consumer trends – insight into the growing background, group characteristics, and online social behaviour of the Net generation (1995s and 2000s); and 2021 consumer trends – identifies the areas of development that are expected to become a trend in Chinese consumer culture.

We wrap up this newsletter with App of the month –Dewu or Poizon – a leading fashion brand exchange & trading platform.

From all of us at OctoPlus Media – Stay safe & take care.

Sincerely,

Mia C. Chen

CEO & Co-Founder of OctoPlus Media

Mobtech and TT Voice recently released the “Online Social Behaviour Insights Report of Net Generation in 2021”, which provides insight into the growing background, group characteristics, and online social behaviour of the Net generation (1995s and 2000s).

This report defines the 1995s and 2000s generation as the “Net Generation”. The number of Net Generation has exceeded 300 million, accounting for nearly 30% of all Internet users, making it a well-deserved new force in the growth of the mobile Internet. They grew up with the Internet and are digital natives.

Analysis of group profile of Chinese Net generation:

• They are freedom-loving, independent, and have a strong sense of individuality. They focus on self-perception and self-expression. They are not willing to be constrained and are willing to take the initiative to consume to please themselves. They are more willing to show their real selves in the virtual world than in the real world.
• The 1st-tier cities are under great economic pressure, and the fertility desire is relatively weak. Nearly 60% of the net generation is distributed in 3rd-tier cities and below.
• In terms of their educational background, 38.9% have a bachelor’s degree, and 40.9% have a high school degree or below. Nearly 70% have a monthly income of less than 5,000 RMB.
• Online games are their favourite online entertainment, followed by short videos and online music.

Online Behaviour Insights of Chinese Net Generation:

• Nearly 90% of them use social networking tools to make friends, and spend more than 2 hours a day on social apps, which peaked during the epidemic.
• Online social products are diversified, which can be divided into two categories: acquaintances and strangers. Acquaintances’ social products include WeChat, QQ, Yixin, etc. Stranger social products are diversified, including social games, knowledge social, music social, dating social, etc.
• They prefer to socialize with strangers rather than their social circle of acquaintances. Lonely net generations are anxious to be accepted by their peers, preferring to associate with people who share the same interests rather than physical or physical attractiveness.
• Verbal communication has become a common form of online socialization among the Net Generation, who believe that verbal communication is more accurate and warmer than written language. In addition, similar interests are the primary criteria for choosing voice communication partners, and they are also important topics to get familiar with quickly.
• Among all kinds of interest social apps, heterosexual social and game social stand out.

Insights on social behaviour in games by Chinese Net Generation:

• Net generations send emojis in social games to promote friendship and encourage friends to warm up.
• Men are the main spenders, accounting for 70%. Mainly pay for game scripts, game skins, etc.
• Social gaming has become a new form of social networking among the Net generation. They play every week, and the average duration is 1-2 hours.
• The game social time period is consistent with the daily work and rest. The active game social time is noon and lunch break and evening respectively, and the peak is from 6 pm to 10 pm.

Future trends:

• Net generation has a unique “circle culture”, the trend of circle social will become more obvious in the future, the common circle has become a social pass.
• Net generation consumes social interaction and their own happiness, so all kinds of social platforms will become the main channels for “seeding”.

A new report from Analysys indicates that the scale of China’s network live stream users increased by 55.5% from 2018 to 2020, and the individual live stream market also grew gradually, thus laying a user base for the development of tourism live stream. In recent years, the transaction scale of the live-streaming e-commerce market continues to rise, which is not limited to the traditional offline channels.

However, the Chinese tourism market was affected by the epidemic in 2020, and the online tourism economy will be under great pressure. Therefore, it is urgent for China’s online tourism to take advantage of the live stream mode to activate the popularity, and increase order, help suppliers and platforms recycle funds and predict the future market, and promote the recovery of tourism destinations.

Under the epidemic situation, top platforms have taken the lead and led tourism enterprises to join the live stream industry, Ctrip’s online travel platform has achieved a record of 5 billion yuan for high star hotels.

Scenarios analysis of online travel decision making in China

Various factors, such as information resource collection, product attributes or brand concepts, travel reviews, and unexpected risks, are involved in the decision-making process of travel users, which will affect their final travel decision. In order to shorten the decision-making period, we must actively strengthen the deployment of each link of the user’s tourism decision-making. Online travel decision making has developed rapidly and is now at stage 3.0:

• 1.0: Note guide — build note-taking strategy community with massive picture and text information of tourist attractions
• 2.0: Short video — reach users with trendy short videos, “feeding” online and bring the user to travel platform for booking
• 3.0: Tourism live stream — watch the content of tourism products in the live -streaming and quickly trade and place orders. Users can also make an appointment for consumption.

Compared with note guides and short videos, travel live stream has a stronger transaction attribute, which can shorten the travel decision-making cycle of users and show the effective ability to sell goods. Although note guide and short video have a strong “feeding” ability, the conversion ability of internal trading is relatively weak. Tourism live stream makes use of marketing and pre-sale to improve the decision-making efficiency of users’ travel transactions by cooperating with the traffic resources of live stream platforms.

Analysis of the value of live stream to online travel decision-making scenarios

Various factors drive users to reduce their satisfaction with live streaming e-commerce shopping or increase the return rate of live streaming goods. Among them, quality and after-sales guarantee are the core demands of consumers, which have also become the pain point of the tourism live streaming market. According to the data, Ctrip leads the market in the write-off rate of nearly 50% of live stream products, and quality has become the guarantee-basis for core competitiveness. The live stream of major tourism brands on their platforms was excellent. The following are some cases to share:

• Ctrip’s “BOSS Live” cooperation with Chimelong Group generated over 100 million RMB GMV;
• The total transaction amount of Meituan’s “One Thousand and One Nights” super group-buying day exceeded 5.72 million yuan
• Ctrip did HNA summer special live-stream marketing; Fliggy did HNA live-streaming and amount of more than 100 million yuan sales on 11.11
• Ctrip launched more than 2,800 ski vacation products through its ski channel on the platform. In November, the number of bookings for ski-themed trips increased by over 350%
• With the cooperation of “Ding Zhen’s World” activity, Fliggy set off a tourism boom in Ganzi destinations, and the bookings of some scenic spots in Ganzi increased by more than 50% in the week compared with the same period last year.

Trend analysis of online travel live broadcast in China

The rapid implementation of 5G technology, coupled with AI intelligence, further expands the live stream scene and user viewing experience, meets the application needs of travel live stream + specific business scenarios, attracts a large amount of traffic and interaction, and strengthens the impact of travel live stream.

With the epidemic under control in China, the tourism industry has entered the stage of recovery. In the future, the boom of live-stream will be flat. Compared with the epidemic period, the product marketing mode of live-stream pre-sale will fall back somewhat. In the post-epidemic era, a combination of pictures and texts, short videos or live-stream can be used to build content consumption scenarios to provide consumers with auxiliary decision-making information.

In addition, using private traffic to operate tourism content can reduce the cost of customer acquisition. Compared with public traffic, private traffic has high controllability and precise access, and high-frequency interaction enhances user stickiness and generates more transaction behaviours. Finally, the tourism traffic pool can be expanded through social sharing to disseminate consumer decisions within the radiation circle.

According to QuestMobile data, during the May 1st period, travel services and other industries ushered in substantial growth. The average daily active users of the travel service industry increased by 81.776 million compared with the same period last year, with a growth rate of 48.5%. The number of users increased by 13.081 million compared with the same period last year, with a growth rate of 83.1%.

Key Insights：

• Compared with last year, the number of users during the May 1st holiday this year has returned to normal growth;
• Driven by the holiday tourism economy, the average daily active users of photo beautification and travel-related apps have doubled, including apps such as Ctrip, Douyin, and Tencent Sports
• The scale of users of small programs such as life services and travel services has increased significantly, such as Meituan Group Purchase, Same Trip Travel, etc.;
• The average daily active scale of the travel service APP industry has increased significantly by 83.1%. Among the top 10 rankings, Ctrip, Qunar, Fliggy, Same City and Mafengwo occupy the top five;

• Users’ attention to consumer products was concentrated on cosmetics, maternal and child and other female products.
• Compared with normal days, clothing, maternal and child, and cosmetics paid more attention during the holidays;
• The uncertainty of overseas epidemics has restricted outbound travel, and tourism consumption at duty-free shops on Hainan Islands has rebounded strongly.

Data released by the Macau Government Tourist Office also shows:

• The average number of tourists visiting Macau per day and the average occupancy rate of hotel establishments both increased significantly compared with this year’s Spring Festival Golden Week and April.
• From May 1st to May 5th, the total number of tourists visiting Macau reached 167,000, and the average hotel occupancy rate exceeded 80%, reaching 83.2%.
• On May 1st, the number of inbound passengers reached 45,000, a new one-day high after the epidemic was contained.
• During the May 1st holiday, there were 33,000 visitors to Macau every day, a sharp increase of 158.2% compared with this year’s Spring Festival Golden Week, and an increase of 25.4% from April.

To get a deeper understanding of travel resurgence, Contact Us.

2020 has presented a new series of challenges to companies all over the world. As domestic demand recovers and evolves through 2021, Chinese consumers have shown remarkable resilience. The report by Tong and Jing Daily identifies the areas of development that are expected to become a trend in Chinese consumer culture, as well as the accelerating speed of such trends and adoptions, which are critical for brands to understand.

Why Does Luxury Brands Need China’s Presence?

• Emotional responses to Covid-19 can be found in three places: the body, culture and environment. This set of priorities forms the rise of new generation of impact-conscious consumers in the Mainland.

• Young shoppers are increasingly interested in cultivating a sense of self-awareness by prioritizing wellbeing and body optimization, as well as endorsing brands that align with those values and intentions. During the pandemic, body positivity has been at an all-time high, and certain local brand have played a key role in spreading positive body messages.
• Environmental issues are on the minds of younger generations, from government policies to local start-ups.
• Tech giants were proactive and responsive, demonstrating a more caring attitude towards the community.

Why is Cultural Content So Important For Short-Form Engagement?

• Short-video apps, most notably Douyin, Kuaishou and Xigua have emerged as vibrant new spaces in China for culture content and art consuming. This trend is expected to accelerate beyond 2020.
• In China, short videos have become the most effective communication method for brands to reach new audiences and potential customers. Among all the short video platforms, Douyin has proved to be the most effective.
• The pandemic has accelerated the consumption of short videos. Almost 90% of internet users in China now use short-video platforms on a daily basis, averaging more than 100 minutes per day.
• Many creators were gathered on Douyin as a result of the pandemic, from street artists and iPad illustrators to calligraphers and traditional woodworkers. Chinese cultural institutions are following the trends with many offering virtual tours and livestreams on Douyin.
• Douyin is on the verge of saturation in the Chinese market, with over 600 million daily active users.
• In 2021, video length and the connection between short video and e-commerce are bound to grow. Douyin has enabled longer videos as a part of a drive to improve content quality and broaden the usage.
• As of 2019, ByteDance has helped 22 million of creators to generate over $6.9 billion and is expected to offer long term support for content creators.

Why Do Young Chinese Consumers Enjoy Brand Collaborations?

• In China, the Gen Z and Millennial consumers are looking for exclusive products that stand out from the crowd. Thus, fuelling a rapidly evolving culture of innovative “mega-collaborations” between brands to surprise consumers.
• The concept of branding is still a relatively new phenomenon in China as compared to the West, and young consumers have shown an openness to the role of brands in daily life. For example, television in China, where sponsor logos are displayed prominently on the reality shows and brands are written into storylines of dramas.
• The report highlights – “The emergence of direct-to-consumer (DTC) domestic brands such as Perfect Diary has sparked competition to stand out via innovative collaborations that propel newcomers to “internet-famous” (wanghong) status with the ability to iterate signature products through creative derivatives.”
• Brands leverage collaborations in order to deliver digital and physical interactions, as well as content, for broader reach and greater impact. Consumers can connect and engage with brands through special events, gaming features and other opportunities.
• Several popular and successful mega-collaborations have leveraged the current taste for “national trend” goods, “cultural creations” and nostalgia to tap into China’s distinct heritage.
• International brands may find that collaborating with local partners is a good way to interact with the young audiences in China as more young consumers are showing a preference for “Made in China”.
• The challenge for brands is to go beyond to ensure that the collaborations represent brand values rather than merely generating buzz.

How Do Luxury Brands Help China’s Creative Communities?

• Brands that can reflect their personalities, creative cultures and hobbies are welcomed by the young consumers in China. Hence, focus on younger consumers and their desire for belonging will be critical in the future.
• Many global brands see community-building as a quick way to win the hearts of young consumers.
• When it comes to Luxury Brand’s target audience, it is likely that fashionable young women are the first to come to mind. Luxury brands have started to concentrate on the untapped potential of younger males in recent years as gaming has rapidly established itself as the most effective platform to deliver targeted brand awareness and exposure.
• China has the world’s largest video game industry, which attracts brands due to the high volume of traffic. Brands like Gucci, Balenciaga and Burberry have been eager to incorporate gamification into their seasonal campaigns.
• However, the ROI is still difficult to estimate since it takes courage and experimentation to tap into previously underserved demographics. But brands may need to get started first to avoid having to wait in the line later.
• Brands need to build immersive scenarios for their potential customers, whether by offline events or online events (live streaming), to reach consumers and encourage them to try the products within the immersive scenarios.
• Local brands, on the other hand, have become more daring to embrace historically underserved communities, such as the LGBTQ+ community, which has tremendous creative capacity and purchasing power. Domestic brands will shine when customers need to express their personalities, by demonstrating their knowledge of these scenes.
• By 2021, domestic brands may outperform their global counterparts in some regions, such as the culturally sensitive issues of sexual orientation and gender identity.

Well-known streamer Xinba came under fire after the market watchdog in the southern city of Guangzhou found that he had promoted fake bird’s nests, an expensive Chinese delicacy. Authorities fined Xinba 900,000 yuan, while Kuaishou blocked him from streaming on the platform for 60 days.

In order to prevent and stop monopolistic behaviour in the platform economy; promote the sustainable and healthy development of the online economy and platform economy to operate in compliance with laws and regulations – relevant Chinese authorities have recently taken a series of measures, including live broadcast, APP personal information scope. We detail out some of these measures below.

One:  Live broadcast

Recently, the State Internet Information Office and six other departments jointly issued the “Administrative Measures for Webcast Marketing” to standardize the order of the live-streaming market, and put forward specific requirements for platforms and live broadcast operators engaged in live broadcast marketing, and it will be implemented from May 25, 2021.

Key highlights of the new measures:

• The live broadcast marketing platform shall establish and improve mechanisms and measures such as account number and live broadcast marketing function registration and cancellation.

• The live broadcast publishers engaged in live marketing activities are subdivided into live room operators and live broadcast marketers.

• The live broadcast marketing platform shall actively assist consumers in safeguarding their legitimate rights and interests and provide the necessary evidence and other support.

• Live streamers and account holders must be aged over 16, with those under 18 required to obtain their guardians’ consent.

• Live-streaming service providers to keep the records of their sales videos for three years.

• All localities and departments should strengthen supervision and inspection, and carry out joint punishments in accordance with the law on live broadcast marketing market entities that seriously violate laws and regulations.

Two: Personal information in App

In response to the occurrence of certain apps that infringe on personal information such as illegal acquisition, over-range collection, and excessive claiming of rights, the relevant Chinese authorities have tested the personal information collection and use of some apps that are widely used by the general public such as input methods and map navigation. They found that 33 input method apps illegally collected and used personal information, including Sogou input method, Xunfei input method, Baidu input method, etc.

They tested the personal information collection and usage of some apps that are widely used by the general public, such as security management and online lending, and found 84 apps that illegally collect and use personal information, including Tencent Mobile Manager, 360 Mobile Guardian and other apps.

Relevant Chinese authorities have recently notified the list of 93 apps that violate user rights and interests. These apps have repeatedly encountered similar problems, such as forcing users to use targeted push functions, collecting personal information in violation of regulations, and using personal information in violation of regulations. Therefore, Tianya community, Damai, Tuniu Tourism, VIP training, Maimai and other companies’ APPs were directly removed from the app store.

The delisting of the APP involved may cause some trouble to advertisers. If there are advertisers who plan to place advertisements on platforms such as Maimai and Tuniu, please contact us to provide you with exclusive advertising campaign alternatives.

Dewu (Poizon) is China’s leading fashion brand exchange and trading platform. It also provides a series of fashion brand services, including the authenticity of fashion brands and trend sharing services. Dewu has gathered a large number of fans who love sneakers, fashion brand wear and fashion culture. Topic discussions focused on hot topics that young people pay attention to, such as sneakers, fashion brands, figures, street culture, car watches, and fashion art.

According to Analysys Qianfan data, as of November 2020, the monthly active users of Dewu App reached 4.846 million, a year-on-year increase of 102%.

User structure:

• The post-90s and below accounted for more than half of the users, and the gender ratio was relatively balanced. Among them, women accounted for 50.3%; men accounted for 49.7%.
• Post-90s and below (below 30 years old) users accounted for more than 57% of the total, of which 24 years old and below accounted for the highest proportion

Marketing collaboration opportunity：

Dewu App provides the following advertising options:

• Open screen
• Homepage ads
• Official push, product detail page communication, search hot word recommendation

In addition, Dewu will also provide operational tools and data systems to help brands reach target customers, quickly understand user preferences, and find the next opportunity.

To learn more about advertising on Poizon, contact us.

– End of the Newsletter –

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