September 8, 2022

China Marketing Insights Monthly Newsletter [July 2021]

Hello,

Welcome to our July Newsletter.

You might have read several news about stricter data privacy control in China, several apps removed from stores, no new user registrations, multiple companies have pledged to follow new guidelines, Alibaba and Tencent are opening up their respective ecosystem to each other. We are still waiting for clarification from government agencies and will provide more detailed insights and implications in the coming months.

In this issue, we look at new marketing updates – Apple search advertising is now available in China, Douyin has a new desktop website, content seeding strategy for Xiaohongshu.

As promised last month, we have done a deeper analysis into 6.18 festival and have 2 insights reports – E-commerce sales analysis and Douyin trends from 6.18 sales. We wrap up this newsletter with App of the month – Ctrip – as international travel starts to look likely, Ctrip is a definitive app in your arsenal to advertise to highly tuned travelers, we explore various content and advertising strategies using this app.

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

Sincerely,

Mia C. Chen

CEO & Co-Founder of OctoPlus Media

APPLE SEARCH ADS IN CHINA

Finally! Apple Search Ads has arrived in mainland China! On June 22nd 2021 Apple announced the long-awaited launch of Search Ads on the Apple App Store in Mainland China. With around 22% China mobile market share, taking advantage of Apple Search Ads now being available is critical for any developer or marketer concentrating on the territory.

However, China presents several considerations when it comes to running ASA.

Before developers and advertisers can launch their ads in China, they will need to have several permits and documents required by the Chinese government in order.

Ad Content Qualifications

Based on Apple guidelines for Mainland China:

https://searchads.apple.com/v/help/b/docs/apple-advertising-guidelines-for-mainland-china.pdf –

There are several documents requirements to advertise in China. Almost all of these licenses can only be held by a 100% Chinese-owned company (or in some cases a joint venture with Chinese shareholders holding 51% or more) and are therefore impossible for an overseas entity or wholly foreign-owned entity (WFOE) to obtain.

Advertising companies like us can help with this as we hold these licenses and can legally run search ads in China.

Confirmation of Valid Online Agreement

Customers located in mainland China (including advertisers and advertising agencies) must fill out and submit the Confirmation of Valid Online Agreement. This document provides written confirmation that the customer or the customer’s authorized representative validly agreed to the online Apple Advertising Services Terms of Service.

Apple Advertising Review Process

After creating your advertising account, you may be required to provide appropriate licenses and other relevant documentation. Make sure that all relevant documents match the Legal Entity Name that you provided during account creation.
Your ad content, submitted documents, and account details will be reviewed for approval to run campaigns on the App Store in mainland China.
You will be notified if your ad content, submitted documents, and business are approved or if additional information is needed.
Upon approval, your advertising campaigns in mainland China will be able to go live on the App Store as scheduled.

For more information about Apple Search Ads, see Apple guidelines or contact us to discuss further.

XIAOHONGSHU - CONTENT SEEDING STRATEGY

Xiaohongshu has a high-quality, high-net-worth, active user group in China, with 450 million registered users. In addition to younger users, female users account for 78%. They have strong spending power. More than 90% of users habitually learn about product information in Xiaohongshu. The biggest attraction of Xiaohongshu is to seed product content to make consumers willingly pay for the products that were promoted.

Key Strategies include:

1. Product launch strategy

Product characteristics are the underlying factors that help the popularity on Xiaohongshu. Users are planted with products that are just in demand + high value + low price + first-level e-commerce stores and DSR (seller service rating system) high scores. In addition to the characteristics of the product, the category is more likely to be actively discussed. In the second half of 2020, beauty and skincare products accounted for the highest proportion of the top 1000 products in Xiaohongshu’s popular Top 1000 products, as high as 67%, which shows that the content of beauty and skincare is more discussed. In second place is exquisite makeup, accounting for 21%, but there is still a gap compared with the top beauty and skincare products.

2. Keyword placement strategy

The search page is the key path to form the reputation of brand products and influence users’ minds. More and more users use Xiaohongshu as a search tool. According to statistics, 90% of Xiaohongshu users have searched for product reviews before purchasing. 60% of the traffic comes from search pages, including brand term collection, hot topic collection, category value keyword collection, and brand landing page operation management. Brands need to rationally arrange keywords to effectively increase the probability of content being actively retrieved.
Starting from the brand, product features, competing products, platform hotspots and e-commerce nodes, etc., carry out a radial expansion, derive keywords, and then use big data and manual analysis to understand the situation of keywords and users’ perception of related words, finally determine the brand keywords, filter layer by layer to ensure the best keywords.

3. Content delivery strategy

High-quality content and application routines can greatly improve the effectiveness and efficiency of delivery. According to the order transaction data of Xiaohongshu on the Weiboyi trading platform (January 1, 2020-March 31, 2021), evaluations, checklists, and dry goods content are the easiest to explode and make users be planted.

6 content seeding routines：

Find more integration points – you can focus on the user’s pain points, for example: take advantage of the celebrity, point to the user’s need for sunscreen but also “whitening” but looking “plain makeup”.
Pay attention to the first picture – use before and after comparison pictures, real-life scenes, avoid excessive alteration or steal pictures. For example: sunscreen brand, with a real and unpretentious back, the obvious sunscreen effect contrast.
Set contradictions – throw away the views or troubles of a certain issue, set up irrelevant points of contention on the product, or set up controversial comments in the comment area and put them on top. Good or bad reviews of products can be very polarized, bloggers can clearly express their personal attitudes, and allow users to lively discuss.
Attractive headlines – as the name suggests, use the title as a hot spot. It’s more intuitive to find the resonance, dig deep into the advantages of ingredients, and use more words to poke pain points. For example: to cooperate with younger users of Xiaohongshu, focus on the needs of subdivided scenes with “Top Ten”, “Fair” and “Student Party”.
Video + text combination – While using a video, add complete text content for easy reference.
Easy-to-understand copywriting – Use popular language to explain dry and professional views, be unique in point, and have a sincere attitude.

4. KOX Delivery Strategy

Choosing the right person can make the investment more effective. Different Xiaohongshu influencers have different advantages, such as KOC. These influencers usually promote products in a rough way. They are responsible for word of mouth, authenticity and atmosphere. Use the advantages of KOC to provide real feedback for posting orders, plus buyer show assistance, so that users can be planted.
“Waist KOL” is responsible for seeding and professionalism. This kind of KOL is a precision push method, vertical or middle seeding circle layer, their professional endorsement, can accurately touch the heart of users.
“Head KOL”, this type of KOL does not account for much in Xiaohongshu, but their strength should not be underestimated. This type of KOL can quickly build popularity, have a high degree of coverage, and then reach the fan following effect, thereby improving the tonality. This group of KOLs is responsible for the texture and influence of Xiaohongshu. One of their recommendations or negative reviews is absolutely capable of influencing product sales.

5. Schedule delivery cycle

Different brand maturity levels are different in Xiaohongshu’s deployment cycle strategy.

Cutting-edge brand: Makeup model (the release cycle is similar to the female makeup process, hence the name “makeup”)

The breakthrough of new and sharp brands is speed, the concentration of sales, and rapid formation of word-of-mouth effect and product recognition. From Xiaohongshu to purchase, it lays the foundation for the social explosion and then radiates social platforms in other scenarios.

Gathering momentum: use KOC to quickly shop as an “SEO” function, repeatedly brainwashed with multiple keywords, concentrate on big hits, and lay the cognitive foundation for new brands and new products.
Seeding: evaluation of the mid-waist hanging category, strategy-based dry-goods professional seeding, and strengthen the reputation.
Detonation: Introduce head resources + beauty image to improve texture.
Breaking the circle: The mid-waist influencers of the cross-sagging class has fun with creativity, and the broken circle is more eye-catching.
Posting orders: The amateurs follow the trend and post orders to create details and enhance the sense of hierarchy.

Mature brand: Sun model

Mature brands focus on daily steady investment and concentrated large-scale investment in nodes.

Daily steady investment: Mainly focus on mid-waist drape talents, and focus on maintaining the brand’s voice.
Centralized node investment: node global resource coverage, topic blessing, multi-level rapid mental planting.
For example: Tiffany creates Blue Valentine’s Day, on 214 Valentine’s Day, 520 Confession Day and Chinese Valentine’s Day. Tiffany focuses on the concept of Blue Valentine’s Day during Valentine’s Day, allowing users to regard Tifanny Blue as the best Valentine’s Day gift.

If you plan to promote your brand on Xiaohongshu, please contact us to customize an exclusive plan.

DOUYIN AVAILABLE ON DESKTOP

Douyin, the Chinese version of TikTok, is now available on the desktop. On June 21, 2021, Douyin officially launched the internal beta of the web version, and its official website page has also been revised. The new version can watch videos, like, view comments and share videos.

Analysts feel that Douyin website is an attempt by ByteDance to stave off plateauing traffic growth as its mobile user base approaches the total number of smartphone users in China. It is also encroaching on the turf of traditional video sites, like iQiyi and Tencent Video.

The operation of the Douyin web version is very simple. You can log in to your Douyin account to view your own work and favourite videos. Currently supports verification code, scan code login, and cannot log in with a password.

A search function is provided at the top of the homepage, you can search for videos and users. In addition, it also provides live broadcast, entertainment, knowledge, two-dimensional, games, food, sports, fashion, music and other tags.

On the video playback page, there are quite a wealth of functions, such as pause, drag and drop progress bar, double-speed viewing, floating small window, volume adjustment, full-screen viewing, etc. However, the Douyin web version has prepared an auto-play function for users. After the video is played, it will automatically switch to the next recommended video to experience automatic video refreshing.

Search function

The search function of the Douyin web version has a keyword association function, and users can filter the search results.

Publish Video

You can also publish videos in the Douyin web version, supports videos that do not exceed 4G and are within 15 minutes in length, support adding descriptions, tags, support associated hotspots, support setting cover, whether to allow videos to be saved and sync to other platforms. There is a preview area on the right side of the work release page, which is convenient for users to view the effect of the upcoming video on the mobile phone. The Douyin web version also comes with an extremely simple video editing tool. Currently, only video cropping is supported, and background sounds and special effects cannot be added.

Content Moderation

Douyin announced the launch of the “Summer Ecological Governance” special action, focusing on controlling and combating content infringement, vulgar content, false propaganda, inducing rewards, and obtaining traffic maliciously. According to the Douyin Community Self-Discipline Convention, the Douyin Live Broadcasting Code of Conduct, the Live Broadcasting Platform Commodity Sharing Community Code, etc., if there are relevant rules and agreements, they will be processed.

Douyin has been under fire, especially outside China, for failing to properly crackdown on violators. However, Douyin said it has been working hard and managing hundreds of millions of users is not easy. Every month, Douyin deletes millions of content. The company also disabled millions of accounts to combat violations.

For more information and to advertise on Douyin contact us!

INSIGHTS - 6.18 E-COMMERCE SALES

The 6.18 promotion is the last opportunity for merchants in the first half of the year. According to the analysis of Star Chart data, this year’s merchants on various platforms have not only increased their subsidies and discounts and increased their scale, but also launched a variety of characteristic services such as list recommendation, pre-sale speed, and after-sales guarantee, paying more attention to consumers’ shopping experience. The network-wide sales monitoring data shows that the total transaction volume during the 6.18 period this year was 578.48 billion yuan, a year-on-year increase of 26.5%.

As for the top three platforms on the entire network, as in previous years, Tmall is still at the top of the list, followed by JD, and Pinduoduo is third.

During the pre-sale and carnival period, the total amount of live broadcasts reached 64.5 billion yuan. Top 3 influencers by GMV –

Viya: 5.9 billion yuan
Li Jiaqi Austin: 5.4 billion yuan
Sydney: 3.2 billion yuan

During the 618 promotion event in 2021, the top category is household appliances, the second is mobile communication, and the third is clothing accessories. The TOP 3 with the fastest year-on-year growth in the industry are outdoor sports, home daily use and alcohol. During the 618 promotion period, new retail sales reached 17.8 billion yuan, and the top 3 new retail platform sales were JD Daojia, Alibaba Taoxianda and Meituan Flash Sale.

618 big promotion event new gameplay:

Tmall, JD, and Suning chose to announce the 618 big promotion game on the same day (May 20), and the pre-sale period also started on the same day. What is different from the past is that in this year’s 618 promotion, in addition to the preferential policies that consumers are most concerned about, major platforms also focused on live broadcasts, new products, and members.

Tmall keeps its lead in the 618 promotion:

According to research data from the Ebang think tank, 50% of the companies said that they currently have the highest conversion rate on the Tmall platform; 10.3% of the companies have the highest conversion rate on Douyin, and 8.6% of the companies have the highest conversion rate on JD.com. According to the annual report data of the three platforms of Alibaba, JD and Pinduoduo, their platform monetization rates are 3.74%, 2.73% and 3.22% respectively.

Corporate participation:

At 618 this year, nearly 80% of companies participated in Tmall promotional activities, the same as in 2019, but more than 60% of companies participated in JD activities, a decrease of 5 percentage points from 2019. According to the analysis of the report, 67.2% of enterprises believe that Tmall is the most important platform in the 618 events. With limited resources, 56.9% of companies choose to put Tmall first; 19% of companies choose to put Douyin first. However, less than 10% of the companies that choose to give priority to JD.com, Pinduoduo, Kuaishou and Suning.

Corporate result：

Companies that generate more than 50% of their sales on Tmall account for more than 40%, and companies that generate more than 30% of their sales on Tmall account for more than 70%.
JD platform sales accounted for 30% to 50% of total activity sales, 23.7% of companies expected 20% to 30%, and 28.9% of companies expected 10% to 20%
Douyin has also become a key launch platform this year. More than 15% of companies said that more than 20% of their sales will come from Douyin.

INSIGHTS - 6.18 DOUYIN E-COMMERCE TRENDS

According to the statistics of the Feigua data platform “2021 Douyin 618 Good Things Festival”, the volume of the Douyin 6.18 Good Things Festival in 2021 will be 36.04 billion, and the total live broadcast time will be 2,852 hours. Over 153 live broadcast room has a turnover of over 10 million yuan. The sales popularity of Douyin 618 this year has increased significantly compared with last year, and the average customer unit price of goods has increased by three times.

This year’s Douyin 6.18 Goods Festival is divided into two stages: the pre-sale period and the event period. Douyin provides a subsidy of 15%-30% to all merchants, combined with pre-sale deposits, interest-free instalments, etc., which greatly reduces users’ consumption costs, also increased the promotion of the pre-sale period.

Pre-sales Period Sales：

The pre-sales period saw an outstanding performance in 3C digital and local lifestyle categories. Leading the way during the pre-sale period, through new product pre-sales and interest-free instalments, to lock users in advance, driving the sales of high-customer unit price products such as mobile phones, major appliances and other 3C digital home appliances. At the same time, 3C Digital Home Appliances locked users in advance through the “Payment Full Reduction” campaign, with total sales exceeding 50 million in each of the 5-day pre-sale periods.

On the other hand, Douyin and JD.com reached an annual 20 billion cooperation on the eve of 6.18. All of JD’s products are connected to Douyin. Users who purchase JD products through Douyin will not need to jump and enjoy the logistics and after-sales services provided by JD. This greatly improved the user’s shopping experience. During the event, JD United Star and Million opened several brand live broadcasts, focusing on high-priced beauty makeup. Relying on the influence of the head anchor to quickly open the market and cultivate the consumption habits of fans. During the 6.18 period, more than 95% of JD’s sales came from celebrity promotions.

In addition, Douyin is also accelerating the promotion of local life business this year. It can be seen that during the event, the sales of tourism routes, movie performance ticketing, food card coupons and other categories have increased significantly, which effectively promoted offline store revenues and virtual recharges have also successfully entered the market to open new sales channels.

618 Sales growth category:

Hotel / Inn / Apartment Hotel
Local life services
Agricultural machinery/farm tools/agricultural film
Agricultural materials
MP3/MP4/recorder
Diamond/Emerald/Gold
DIY computer
Tablet PC
Health Food/Dietary Nutritional Supplement Food
Festival supplies/gifts

As self-broadcasting of brands gradually becomes popular, brand owners from various industries also entered the market during the 6.18 period to increase the frequency of promotion. For example, the traditional food brand “Wufangzhai” will use the traffic of “Douyin Super Product Festival” and “Dragon Boat Festival” to greatly promote the integration of traditional festivals. As early as 3 weeks before the event (May 25), the pre-heating promotion was carried out on Douyin, and it was co-branded with multiple products to obtain the help of the products to reach higher hot topics. At the beginning of June (before the Dragon Boat Festival), the promotion efforts were increased, such as brand self-broadcasting, top celebrities and celebrity promotion, with an average of more than 170 live broadcasts per day, and the use of holiday hot spots to increase brand sales conversion and obtain higher total sales.

Contact us for your Douyin E-commerce strategy.

APP OF THE MONTH – CTRIP

Ctrip Travel is the world’s leading online travel platform. It provides one-stop travel services from transportation tickets to hotels, and even tickets for scenic spots. The cumulative downloads of Ctrip’s APP have exceeded 3 billion, and the ratio of male and female users is relatively balanced, with 50% under the age of 29. The consumption power of Ctrip users has increased by nearly 10% annually, and the consumption power of high-end members is particularly strong. The average annual consumption of top membership level – black diamonds is over RMB 400,000.

Marketing Advantages – 3 core capabilities：

First core capability – Traffic:

Integrate global traffic, across media and Ctrip’s APP, and capture travel traffic on the entire network. Ctrip also uses big data to target the precise population in an all-round way, and uses a variety of targeting capabilities such as cross-targeting and lookalike expansion to improve product efficiency.

Ctrip’s latest advertising form-multi-screen joint investment and “One shot” can help the brand strongly expose and enhance users retention with immersive expression.

Second core capability – Content:

For a wide range of content, whether it is travel, fashion, or lifestyle, the top creators in the travel industry introduced by Ctrip cover 70% of the entire network, and the number of daily exposures has reached more than 3 million.

Third core capability – Scenarios:

Ctrip has a wealth of cooperation in travel scenarios, vivid experience forms make users feel and touch, and one-stop coverage of the user’s entire journey.

Ctrip’s Marketing Capabilities：

Marketing Ceremony: Seasonal platform-style festival event
Ace IP: A series of IP with maturity and market awareness
Industry event: annual influential event in the travel industry
Themed travel: personalized themed activities focus on travel circles of interest

Advertising Format：

There are many types of Ctrip advertisements, mainly in the form of CPD and CPM sales, and they are divided into PC and mobile APP. The multi-screen joint investment and One Shot mentioned above are innovative advertisements at the price of CPT.

The PC-side hard-broadcast is based on the homepage and different pages on the top and bottom or a few left and right sidebars for banner placement.

APP is the main launch page video (3-5s), the top/middle banner of each page, and of course also includes an interstitial pop-up window in the program.

Preferred purchase (PD advertising) can select the desired advertising location and orientation through CPM, where the advertising location includes the open screen (3-5s) video or picture, the APP homepage banner and the information flow advertisement.

In addition, Ctrip’s advertising also cooperates with multiple types of targeting, such as user location based on first-tier and second-tier city, or the user’s intentional destination, whether it is domestic or overseas. For example, users who have searched for Dubai travel must go attractions, bought tickets to Hong Kong Disneyland, booked air tickets and hotels to travel to Australia and other foreign countries, or browsed a lot of Singaporean food content on the Ctrip APP to grasp the destinations that users want to go or have decided to go to and their intention is to achieve the effectiveness of advertising more effectively, so that the best exposure and traffic can be achieved through Ctrip targeting to reach a precise audience.

In summary：