Unlike the US and many other Western countries, China’s cultural stigma against used things has prevented the majority of car buyers from purchasing used cars in the past. Is the chip shortage “chipping” away at these long-held beliefs? It appears so. Second-hand car transaction data released by the China Automobile Dealers Association shows that in the first half of 2021, a total of 8.4342 million vehicles were traded in the second-hand car market, a year-on-year increase of 52.89%.

Altering the “Must Buy New” mentality among younger generations

As we mentioned above, “new” plays an important role in Chinese traditional concepts. Wearing new clothes for bring in the New Year, buy a new house when getting married, if you pay attention, you will find that “new” often appears in the Chinese language. Clothing rental platforms have struggled to take off, and while gaining some momentum, thrift stores are nowhere near as popular as they are in the US. Therefore, in order for China’s used car market to become more mainstream, the first thing it needs is to defeat the “new is better” tradition.

As Gen Zs consumers gradually enter the market and become the main consumer group, the traditional concept of “buying new and not buying old” is being eroded. In contrast to previous generations, contemporary young people pay more attention to value for money, making them more open to buying second-hand. A great example of this is the second hand marketplace app Xianyu, which has become quite popular among Gen Z consumers.

While young consumers’ attitudes towards used things may already be changing, when it comes to cars, the shortage of new vehicles may be accelerating this shift.

Supply and demand imbalance brings business opportunities for China’s used car market

The market is mainly composed of two parts, supply and demand. Opportunities arise when demand exceeds supply. Affected by the global epidemic, a large-scale chip shortage in the automotive industry has led to a decline in automotive production capacity. On average, a semi-conductor disk needs 3 month to “age” if not longer. On top of a chip shortage, other factors like the supply chain back ups and covid lockdowns in China and the Ukraine war shutting down factories, are further delaying new cars from rolling down the assembly lines.

However, the market demand did not decrease with the decline in the supply of new cars, so consumers have been forced to turn their attention to the used car market.

In addition to the supply and demand gap caused by the decline in production capacity, the reduction in income caused by lockdowns in China and a sluggish job market have also lowered many consumers’ budgets for a new car, but it did not decrease consumers’ expectations.

While there is a stigma against used cars in China, consumers are also worried about appearances. In the “face” driven Chinese culture, a vehicle’s brand is very important. To many people, a used Audi is still better than a brand new Toyota. With this mentality, many Chinese consumers are finding themselves in the used car market.

Policy changes and digitization promoting market development

In addition to the market opportunities brought about by the imbalance between supply and demand, the introduction of favorable policies has also contributed to the development of the used car market.

On the one hand, the cancellation of the relocation restriction policy has made the transaction and circulation of used cars more efficient. In the past, considering the pressure of environmental protection and complicated procedures, local governments usually restricted the inflow of second-hand cars from other provinces, which made it difficult for the second-hand car market to circulate throughout the country. The cancellation of the relocation restriction policy not only increases the circulation rate of used cars, but also further improves the value of used cars.

On the other hand, the reduction of value-added tax on used cars has also reduced the financial pressure of dealers to a certain extent and promoted healthy competition in the industry. Since personal transactions can be exempted from VAT, many used car dealers choose to conduct transactions through “scalpers”, which results in an overall VAT burden well below 2%. The reduction of value-added tax makes the tax burden fairer and healthier development of the market.

What’s more, online apps have also provided a platform for used cars, so that used cars are no longer confined to the small trading market, but can be noticed by more consumers through the Internet.

More information

The post Will the Global Chip Shortage Rejuvenate China’s Used Car Market appeared first on China Marketing Insights.

How does Jiao Xia tap into this lucrative market in China? What are some of the key takeaways brands can learn from its success?

About Jiao Xia

Jiao Xia was founded in 2013. It specializes in sun-protective items, including umbrellas, hats, gloves, jackets, and shoes.

The brand grows wildly. From its prospectus, it managed to achieve annual revenues of over 380 million RMB, 790 million RMB, and 2.4 billion RMB from 2019 to 2021. With a gross profit rate of over 50%, Jiao Xia has become a vanguard in the industry.

Tap into the Hard Sun Protection Trend

“Hard sun protection” or physical sun protection is a trendy concept among Chinese girls, thanks to the education finalized by many online publications. It delivers the message that physical items, such as umbrellas, hats, and gloves, are better at preventing sun than sun cream.

With growing awareness of physical sun protection, China Insights Consultancy estimates that the market scale of sun-protective clothes grows from 45.9 billion RMB to 61.1 billion RMB from 2016 to 2021. It is expected that by 2026, the number will reach 95.8 billion RMB in China.

Jiao Xia has met its golden growing period when anxiety and solutions both exist in the market. Most Chinese consumers want to have fair skin and they’ve been educated to embrace the hard sun protection. Jiao Xia, an expert specializing in sun-protective products is there to solve their issues.  

Dare to Change Hero Products  

Sun-protective umbrellas have been Jiao Xia’s hero products for a long time. It is sold at 179 RMB, not cheap in the China market, but with its creative paintings on the umbrellas, a UPF (Ultraviolet Protection Factor) above 50, and its carriable size that can be easily put in a pocket, it wins love from many Chinese girls. Based on Jiao Xia’s Tmall statistics, the brand sold more than 4.5 million umbrellas.

What makes the brand continue to grow is that it doesn’t stand where it was but keeps exploring new opportunities. It sounds cliché, but in practice, not many brands dare to lower the contribution percentage of a lucrative business section to their annual revenues.

In 2019, it introduced new product categories, including sun-protective face masks, jackets, and hats. Moving to 2021, the brand expanded its business to a broader range, such as sunglasses, leggings, and Martin boots.

With new product categories, the contribution of the umbrella has gradually decreased from 86.9% in 2019 to 20.8% in 2021. What replaces the umbrella’s iconic position are clothes and accessories (sunglasses, face masks, and gloves), with growing percentages from 0.8% and 5.3% in 2019 to 29.5% and 25.4% in 2021 respectively.

Use Numeric Facts to Convince Consumers

According to Jiao Xia’s prospectus, the brand has worked with more than 600 KOLs by 2021, among which 199 of them amass over 1 million followers. Together they brought over 4.5 billion traffic for Jiao Xia on the Internet.

Since the prices of Jiao Xia’s products are higher than the average, KOLs often tell the brand’s stories from different angles based on their follower’s profiles. Jiao Xia also scientifically frames its products with hard facts, such as its competitive UPF index, reports from professional assessment organizations, and customers’ feedback.

Our Thoughts

Spotting the trend and leveraging it to expose the brand name and keep introducing new products to satisfy the market’s ever-changing needs secure Jiao Xia’s position in the China market. The brand also has KOLs to tell its story and uses numeric facts to convince consumers.  

With growing numbers of players in the sun protection industry, it requires more for brands to stand out and let consumers see them and try them.

The post How Does Chinese Brand Jiao Xia Tap into The Sun Protection Market In China? appeared first on China Marketing Insights.

Unlike in western countries, pet-friendly employers are not common in China. The culture of pets in the workplace is forming, and the related management system is not ready yet. Because of this, when pets are with humans in one place, the relationships among accompanying, management, and work create a series of new stories.

Why Do Employees Bring Pets to Office?

The phenomenon is mainly seen in some Chinese Internet companies, such as Bilibiil and Little Red Book. It’s a great honor to be hired by those companies, but the downside is that employees often have to work extra hours. It has become common for them to leave the office after 8 pm.

Because of the long working hours, many people can only watch their pets through CCTV applications on phones. Some rent houses near their offices so that they can go back home to feed pets during the lunch break.

The Pros and Cons

A tip for brands: being a pet-friendly employer has become a competitive factor in attracting talents in China! But it’s not always brownie points.

Pros

Compared with worrying about pets being alone at home, having them around and seeing are easier for pet parents at work. In some way, it helps to improve work efficiency.

Uban, “Chinese WeWork” exclusively for Internet companies, carries out research (办公室宠物报告) among 10 companies. It is found that 38% of employees feel that by bringing pets to offices, their working pressure can be eased, while 36% think it is good to keep their pets accompanied. The research also shows that pets at the office increase chances for colleagues to communicate with each other, which accounts for 15% of respondents.

Cons

Since taking pets to workday is just at its kickstart stage in China, there are issues to be addressed.

For example, what pets are allowed for employees to bring to offices? Dogs and cats are accepted. But what if your colleague brings a spider with dark furry tentacles to their seat? A user on “Chinese LinkedIn” Maimai(脉脉), complained that after his colleague brought a spider to the office, he would rather message him than go to his seat to discuss work.

Another issue is transportation. Since public transport doesn’t allow pets, options left for people are limited. If they live close to offices, they can walk. But if they need to hail a taxi, that’s big trouble. Many drivers don’t want to have pets in car, and as a result, it might take them half to an hour to get a car. And don’t forget that some people are allergic to pets’ hair.

International Pet-friendly Employers

More companies are open to pets in offices in western countries compared to China.

Amazon, the best dog-friendly US company of 2021, supports 7,000 registered dogs with an on-campus dog park and plenty of free poop bags and treats. Discounted pet insurance is also available to pet parents.

The leading tech company Salesforce allows employees to book designated areas for dogs in advance, namely puppy force. It has beds, water bowls, cages, and noise barriers to avoid disturbing employees.

Google, VMWare, and WeWork are also famous pup-friendly companies.

While the discussion of bringing pets to offices happened a couple of years ago, it is just brought to the table in China. What pets can employees bring and how to take care of pets at offices are yet to be clarified. 

Read more: 大厂员工带宠物上班之后

The post Chinese Employees Bring Pets to Offices Including Dogs, Cats, Rabbits, And Lizards… appeared first on China Marketing Insights.

Check out why it is a big hit among Chinese consumers. You may draw some inspiration on communicating with the group, especially on how to leverage Chinese social media to create buzz.

How Popular Is Air Fryer?

The popularity of air fryers not only exists in China, but it is also a global phenomenon. Based on Euromonitor’s data, the market scale of air fryers reached $2.3 billion in 2021. It is expected to be $3.6 billion by 2026.

In terms of the China market, JD sold over 1.2 million air fryers in January 2022. It was a 360% YOY growth with sales revenue over 460 million RMB. It turned out to be the peak of JD air fryers in the last two years.

Chinese young people show great interest in home appliances. GKURC finds that in China, dish-washing machines (37.41%) and air fryers (25.11%) are the two home appliances that most Gen Z desire to buy. They may not be good at cooking but are looking for homemade food, and air fryers satisfy their needs perfectly.

Why Have Air Fryers Become a Trendy Item for Chinese Consumers to Have?

Air fryers were created in the 1990s in America. It was not until 2015 that the home appliance was introduced to the China market by some of the leading companies in the industry, such as Joyoung (九阳) and the Midea Group (美的).

The first couple of years after it was brought to China, most people didn’t hear of air fryers. The turning point came to 2020 when it started to be massively mentioned on Chinese social media. Why?

The Outbreak of Covid-19

Covid-19 resulted in the lockdown of many places back in 2020. While staying at home, people started to pay attention to health, and homemade food became popular. The demand for small home appliances increased significantly during this period, with a sales volume rising by 11% globally.

China recovered from Covid earlier than most countries did, and thus, international production orders were handed over to Chinese manufacturers. This boosted the development of many OEM (Original Equipment Manufacturer) and ODM (Original Design Manufacturer) home appliances factories in China.

Social Media Spread

Social media has become an effective way to educate people on a new product. When platforms such as Little Red Book, Douyin, and Weibo are talking about air fryers and seeing how easy it is for freshers to start with, people are flipped.

While browsing related content online, people tend to think that they can make such a dish by themselves. Social media content delivers the message to people that air fryers are easy to control and everyone can be a chef by using them. After successfully making a dish with air fryers, people are often cheered up and tend to “brag about” their experiments on social media. So air fryers-related UGC (User-generated Content) keeps coming up on social media to increase its exposure.

Besides traditional formats, air fryers are also presentable on livestream. It is easy for brands to showcase the steps to operate an air fryer and to present their “magic power.” On one of Austin Li’s livestreams, air fryers were sold out in one second after the sales began.

The Booming of Single Economy

The number of people who live alone in China has increased rapidly. About 92 million Chinese people live by themselves, which equals the population in Germany. Based on a Cyanhill Capital (青山资本) report, it only took 20 years for the percentage of solitude to grow from 6% to 25%.

To please themselves, they are seeking choices more than having instant noodles or ordering takeaway foods. People want to cook something at home that is healthy, delicious, and doesn’t take too many steps. Air fryers seem to be a perfect choice.

Other Reasons

Air fryers are healthier than the traditional ways of frying foods. Philips claimed that the fat from the French fries that its air fryers made is 80% less than the fryers.

Compared with ovens, air fryers take less space. It also frees users’ hands, who can continue their work, read books, and play games while the air fryer is cooking.

Concerns Chinese Consumers Have for Air Fryers

Due to the rising demand and imitability of air fryers, many factories joined the industry. But some of them pursue quantity over quality, which results in their air fryers’ poor performance. Since their production processes are simplified, they sell air fryers at way lower prices, which disrupts the industry with a price war.

Accompanied with air fryers’ prevalence in China, voices are questioning the health issue of the home appliance. In 2021, the Hong Kong Consumer Council pointed out that foods cooked by air fryers can lead to cancer. Though many KOLs stand out to clarify that it is not necessarily true, it still concerns many Chinese consumers.

The post Air Fryers Evoke a Cooking Wave Among Chinese Consumers appeared first on China Marketing Insights.

Presales are losing consumers’ patience in China. On Little Red Book, the hashtag #讨厌预售 (I hate presales) has over 2k posts, and related content was browsed more than 600k times.

@温仙女, who has over 7.7 million followers on Douyin, posted a video complaining about the presales on Taobao, criticizing the selling mode totally ignoring consumers’ eager need to receive parcels, and it will result in more people shopping offline. Another KOL @冉高鸣, who becomes well-known because of a debating show U Can U Bibi (奇葩说), also posted a video to express his dislike towards presales. He bought a sweater, and it showed that the item wouldn’t be shipped until two months later. Ran was teasing that he was “happy” to help the brand raise sheep at the beginning of the production.

Presales used to be only applied on big e-commerce shopping festivals such as 618 and Double 11 so that brands could have a better idea of the number of stocks they should prepare for. But it seems this selling mode is no longer welcomed among Chinese consumers nowadays.

How did Presales Originate in China?

According to Ran Finance(燃财经), presales first showed up in 2012 on Tmall. It aimed to help brands estimate the demanded quantity and avoid overstocking.

Presales are commonly seen in Hanfu, JK uniforms, and Lolita costumes, which are called “Three Broken Sisters” among Chinese consumers. They usually need to wait a long time for their beloved dress. It takes two months to two years, depending on the number of people waiting in line and the manufacturing process that a dress needs.

These are product categories that consumers are okay to accept presales in China. The mode has expanded from big e-commerce shopping festivals to daily shopping, and from the three broken sisters to clothes, food, electronic devices, and even daily supplies such as tissues.

Why Merchandisers are Embracing Presale on E-commerce Platforms?

Avoid overstocking and anticipate demanded volume

Overstocking hinders the flow of capital. The C2M (Customer-to-Manufacturer) mode can help brands predict the quantity demanded. Due to Covid-19, people also become cautious when making choices, so they seek safe choices that won’t cause them to lose too much.

Merchandisers also use a small quantity of products to learn consumers’ reactions. For example, if dresses in blue colors sell well or shoes in sizes 36 sell well, they will order factories to produce more.

Factories can’t meet large orders

Factories are short of raw materials. Take the example of apparel stores. Factories often have to wait in line to get fine lining. Even their production speed can keep up with the large order; they don’t have many raw materials to work on.

The limit of power supply also affects production. Since September 2021, many Chinese provinces have restricted electricity use, especially those in the south of China. Before the restriction, factories operated for six days and took a day off. Now workers work for five days and have two days off. As a result, their production capability is shrunk by two-thirds.

Another factor that results in the production issue is the lack of labor. Statistics show over 1.5 million people have left the manufacturing industry in the recent 5 years in China, resulting in a job vacancy of 22 million people in 2020. That’s why a rep suggested that the Chinese youth should be encouraged to join the manufacturing industry during the last session of the National People’s Congress.

Market acquisition

With a limited number of consumers and a growing number of brands, it has gotten harder for brands to acquire customers online. Presales allow brands to use a small number of products to “lock” customers in China. After paying deposits, consumers will likely think twice when they visit another e-store with` similar products or services.

Other reasons

Homogenization is common on e-commerce platforms, leading to a high return rate. Popular items attract merchandisers to mimic, and what makes things worse is that those copies are often sold at lower prices. So why not buy a similar one with lower prices? That results in many returns.

The return rate is growing wildly on Chinese e-commerce platforms. Take the example of apparel. In 2014, the return rate on Taobao’s apparel stores was less than 10%. Now the number has risen to 30%, and Douyin’s return rate is up to 50% – 60%. The benefit of brands’ having presales is that they can buy themselves time to receive those returned items and send them out to customers who have paid deposits.

How do Presales Drain Chinese Consumers’ Patience?

Chinese consumers are okay with the following circumstances for presales. One is for some big shopping festivals on e-commerce platforms, and the other is more like a customized service. For example, an apparel store that specializes in Hanfu called Minghuatang (明华堂) often takes a year to deliver what consumers ordered on its website. Such customized products deserve a long wait.

Consumers don’t think the product is worth waiting for a long time

Consumers can’t stand the fact that after waiting for several weeks or months, they receive a dress that doesn’t have any customization. It is just an ordinary piece!

The long waiting time also kills their excitement to open a parcel. What consumers really want the moment that they place an order online is that they can receive the parcel immediately. But after many conversations with brands’ customer service agents and the disappointment, it’s not that fun anymore.

And sometimes, consumers just want a nice dress to wear, have photos taken and posted on social media. Consumers complain that “Presales have them miss the whole spring,” meaning they don’t take any pictures because there are no nice clothes to wear in the spring.

The truth behind presales

Superficially, it seems presales satisfy both brands’ need to avoid overstocking and consumers’ need to purchase products at lower prices, but it is in fact, a “lose-lose” situation.

Presales transfer brands’ risk of overstocking to consumers’ side by having consumers pay money first and wait for some time. Because of this, consumers are not only losing their patience but also trust in brands. Consumers are also re-adopting their habits to shop offline as it is quicker for them to have an item.

The post Chinese Consumers Are Losing Patience with Presales on E-commerce Platforms appeared first on China Marketing Insights.

What makes it a learnable case study for brands is that the lotion successfully attracted new customers to La Mer. It helped raise the percentage of new customers to nearly 70%, among which was a 10% growth in the Gen Z consumer group.

What marketing strategy did La Mer apply to launch this lotion? How did the lotion bring young consumers to La Mer?

Product Targets at Young Generation

The hydrating infused emulsion is La Mer’s first lotion for anti-aging, which helps to build up the brand’s products team.

Most lotion has the issue of being too sticky to the skin, and they are not suitable to be applied either in spring or summer. La Mer spotted the problem and decided to create a light and hydrating lotion and, at the same time, has the ability to combat the aging issue for consumers.

Based on research conducted by Mintel, over 60% of Chinese consumers choose high-end skincare products because of the anti-aging need, such as tightening the skin (63%) and antioxidants (60%). Post-85s and post-90s are the most generous groups in spending money on anti-aging skincare products.

La Mer planned to use the lotion to bring consumers aged between 25-30 to the brand in China.

“Young as Me” Campaign

To make sure the brand reach the young consumer group, La Mer launched a “Young as Me” campaign (hashtag #年轻由我#).

The brand filmed a series of mini-movies featuring Chinese millennials and Gen Z. Scenes in the movie echoed with young people’s interest, such as surfing, camping, and skiing, showcasing the characteristics of the young generation: carrying clear goals and keep exploring the unknown, regardless of traditional boundaries.

Another hashtag that La Mer used when introducing the lotion was #轻启年轻#, meaning becoming younger. Either the campaign or the hashtag delivered the message to consumers, especially young consumers that by using La Mer’s hydrating infused emulsion, you can look younger.

Celebrities and KOLs Helped Bring More Traffic

To show La Mer’s sincerity for its new lotion, the brand invited Chinese Victor Ma (马伯蹇) to show up at its launch event with Tmall. Victor created a song dedicated to La Mer, which shared his attitude towards being young. The event was livestreamed on Weibo, generating more buzz for the new lotion.

In terms of KOLs, La Mer invited KOLs whose fans are the young generation to offline glamping, including top fashion KOL Yuanlanshi Ximendasao (原来是西门大嫂), fitness KOL Zoey (周六野), and travel KOL odin and kitty. La Mer coupled the lotion together with its iconic serum and educated KOLs on their effects.

Couple The Lotion and Serum

CP, or couple, is a hot word among Chinese young people. The term originated from actors/actresses, whom fans wish to have real relationships in life, other than in films or TV series. When it comes to marketing, everything can be coupled. Brand A can couple with Brand B to bring more attention. Similarly, Product A can couple with Product B to get a better effect.

La Mer has educated KOLs about the effect brought by the coupling of its lotion and serum. In March 2022, La Mer launched an upgraded serum and officially and publicly announced the combination of its two products.

Our Thoughts

La Mer smartly uses the hydrating infused emulsion to fill the gap in its product team, which mainly serves the young generation. Through its online channels and offline events, the brand successfully targeted Chinese millennials and Gen Z and educated them about its anti-aging effect.

The post How Did La Mer’s New Product Grow Its Gen Z Consumers in China? appeared first on China Marketing Insights.

Over the weekend, my WeChat subscription posts were bombarded by related articles of Blue Bottle Coffee. Some talked about its taste, and more were analyzing the reasons behind its overwhelming popularity in China.

Curious about the brand, I researched and decided to find out what made people wait in line for eight hours on its first day.

Blue Bottle Coffee’s Debut in Shanghai

The coffee store opened on February 25. Some people woke up at 6 am just to get a cup of Blue Bottle coffee, and on average, it took 3 hours for consumers to get in line and enter the store.

Scalpers took advantage of this chance, and some of them even ordered 60 bottles at a time, reselling each cup at 150 RMB, which was 4-5 times the original prices.

Blue Bottle Coffee’s Mini Program on WeChat also had a harvest time. Within less than one hour after launch, all of the brand’s coffee beans sold out.

About Blue Bottle Coffee

It is a coffee roaster and retailer headquartered in California, United States. In 2017, Nestlé acquired around 68% of Blue Bottle Coffee’s stake. By then, the brand had 40 stores worldwide. Five years later, its number of stores has been expanded to 100, and the Shanghai store is the first one that Blue Bottle Coffee opened in the mainland of China.

What Makes Blue Bottle Coffee A Big Hit Among Chinese Consumers?

Hu Jun (胡骏), CEO of Greater China from Blue Bottle Coffee told YiMagazine (第一财经) that it was easy to open a store, and Shanghai was the city that had new coffee stores open every day. But what made it hard were all infrastructure behind a store, such as the supply system, the IT system, the e-commerce system, and the training system. It was getting all these ready before opening was not easy.

Location

The Blue Bottle Coffee team had a very clear goal when selecting the location. The location needs to have the capability to bring the brand to a local market, and it needs to carry the Shanghai culture. The building of its Shanghai store was a flour mill, built in 1926 and refurnished in 2019. It combines the western and eastern cultures and reflects the construction style back in the Qing Dynasty. It is also located near the Suzhou River (苏州河), bringing beautiful views for customers.

Why Shanghai? If you have been to the city, you will notice how open it is. Either niche or common groups can find a place in the city.

Shanghai is also a huge coffee fan base. According to the Shanghai coffee consumption report in 2021 (上海咖啡消费指数), it is the city that has the most coffee stores in the world. Shanghai citizens love drinking coffee and trying out new flavors.

Shanghai is also many international students’ go-to city to seek job opportunities after graduation. For them, the name Blue Bottle Coffee is not strange, and they can help advocate its opening, just like my colleague did.

Localization  

If the brand just copies and pastes its menu from California, that won’t show much respect for Chinese consumers. As a result, at the Blue Bottle Coffee Shanghai store, consumers can have local snacks to match the coffee, such as mung bean pastry (绿豆糕) and mahua (麻花), a kind of fried dough food.

Since it is a historic building, Blue Bottle also has its sketch on the brand’s canvas and pasters. In the future, it is likely that the brand will collaborate with local brands to drive more attention in the China market.

Quality is the key

There is a saying that Blue Bottle Coffee is the Apple in the industry. Baristas are trained at least two months before they serve customers. In terms of coffee beans, the brand selects beans that have an SCA score over 84 (The Speciality Coffee Association created the score. Coffee scoring from 80-84.99 is graded very good, and coffee scoring from 85-89.99 is graded excellent, and 90-100 means the coffee is outstanding). Blue Bottle Coffee also has a strict rule that the coffee beans need to be used within 45 seconds after they are ground. On average, it takes 15 minutes for a barista to make a coffee.

Can Blue Bottle Coffee Continue Its Popularity in the China Market?

A food publication called Penguin Guide (企鹅吃喝指南) commented after visiting the store on its first day that “It feels like a ‘bug’ that we had to wait for all the drinks that we ordered to get ready before being served. ”

After tasting the coffee, Penguin Guide also felt that the quality was, without doubt, above the middle level in the chain specialty coffee market. Still, it’s not outstanding if you compare it to some of the local independent specialty coffee brands on top.  

The team also found out that the Shanghai store sells the highest price of Blue Bottle Coffee globally. The price is 35% – 40% higher than in Japan or South Korea. In terms of the coffee bean, mixed beans are sold at 138 RMB for 200 grams, while single beans are sold at 168-188 RMB for 200 grams. These prices are 2-3 times higher than the domestic market prices.

The number of coffee stores in China is booming, especially in Shanghai. But we still can’t conclude that Shanghai’s coffee has stepped into a saturated stage. With players such as %Arabica, Peet’s, and more local players such as Manner Coffee, M Stand, and Seesaw, it will be challenging for Blue Bottle Coffee to stand out neither in terms of its in-store decoration nor its taste.

The post People Waited for 8 Hours at Blue Bottle Coffee Shanghai Store appeared first on China Marketing Insights.

One month after she appeared publicly, she was on Weibo’s hot topic ranking board more than 32 times. That popularity is something that not many celebrities or KOLs are able to achieve in their entire career. Yet LinaBell made it just in one month.

Who is she? What makes her a huge superstar among Chinese people, especially girls? What commercial plans are hiding behind her?

New Member of the Duffy Family from Disney: LinaBell

LinaBell is a fox! She’s a new member of the Duffy Family from Disney, introduced in September. Here is her cute background story. So Duffy was playing around in a forest and he got lost. When he was about to panic, LinaBell showed up with her iconic magnifier, and guided Duffy out of the forest.

Her character is set to be brave, outgoing and she’s a fox with endless curiosity to explore the world. She loves adventures.

Currently, you can only find LinaBell in Shanghai Disneyland. She will be introduced in Hongkong and Tokyo Disney in the near future.

What Makes LinaBell a Huge Celebrity?

Her Popularity

On the first launching day of LinaBell’s products, people had to wait in line for seven hours so as to get one. And to take a picture with LinaBell, people often line up for three hours.

LinaBell’s products are ALWAYS out of stock, including her dolls in different sizes and her blankets. People’s crazy desire to get her products are often taken advantage of by “Huang Niu” or scalpers. A keychain of LinaBell doll which is 119 RMB, is sold at nearly 2,299 RMB on collectible resale platform Dewu.

On November 24, Shanghai Disney published the announcement that the Christmas collections of Duffy Family would be launched on November 29, along with LinaBell’s dolls! That’s a big news for LinaBell’s fans and the scalpers. Immediately, scalpers were hiring people in WeChat groups, looking for people to rush to Shanghai Disney on the launch day. 

Some people go the opposite way to produce fake LinaBell merchandise. There are people on social media platforms to help LinaBell’s lovers to identify the authenticity of their dolls.

Cute Look of LinaBell

LinaBell is cute. She is a fox with a soft pink color and fluffy clothes. Her big and seemly-warm tail also makes girls scream every time she turns her back to the audience and shakes it. But obviously, what makes LinaBell’s popularity last long and continue to increase is her character.

LinaBell’s Brave Character

Unlike many other Disney characters, the setting of LinaBell’s personality is different. She has many dimensions. Sometimes she is being cute, shy, and sometimes she’s being angry to show her dislike.

When visitors say something that she doesn’t like, she would pretend to pull out her sword. When she sees handsome boys, she becomes shy and wants to hug them. She’s also very sporty, showing fans how she lifts dumbbell to strengthen her body. When fans are complaining that her products are often out of stock, she pretends to write letters to the manufacturer and call related people. She even starts to thread the sewing machine and pluck out her own fur to shape a small LinaBell.

She’s alive for fans.

Disney’s Commercial Plan behind LinaBell

Creating Idols without Film and Television Works

Think about classic Disney characters such as Mickey Mouse, Donald Duck or Simba, they all have movies to complete their personalities. Yet, the Duffy Family doesn’t. They were created and rely on people who play inside the costumes to make them alive.

Duffy’s story is a good example for LinaBell. He first showed up in an American Disneyland in 2004, and he wasn’t even had a name back then, and was called “Disney Bear”. After he was introduced to the Tokyo Disney, the local team proposed a new name for him: Duffy, and put him in sailor suits. Together with fabricated stories behind the bear, Duffy quickly gained huge popularity and it continues nowadays.

Disney realized that a character doesn’t necessarily need to appear in movies, a character just needs a personality.

Following Duffy, we see more and more family members being created. So now, the Duffy Family has seven members, or “idols”. Those characters help Disney make great revenues by selling their peripheral products. It is estimated that the amount of StellaLou, the purple rabbit in the Duffy Family, sold by Shanghai Disney in three years is equal to 119 Mount Qomolangma if you pile them up. This rabbit even has its own color named by its fans, which is called the StellaLou Purple.

An Effective Weapon against the Beijing Universal Studios

The opening of the Beijing Universal Studios in September 2021 definitely drags away lots of traffic from Shanghai Disneyland. What might also become threatening for Disney is that, the Megatron in the Universal Studios is so talkative when taking photos with visitors, and thus, he has attracted many people to go to the park and interact with him. He is popular as well.

StellaLou is still popular and yet, people were not as crazy as before. Disney needs a new character to give visitors more reasons to come and spend money on its products. According to The Paper, the revenue of Disney’s tickets only takes up 30% of its total revenue, and the park largely depends on second consumption, which is by selling its IPs’ products. 

A nice try, Disney!

Our Thoughts

Though without film works, an IP has a lower threshold for fans to get to know them. What it requires for them to become popular is mostly their looks. However, without background television works, fans might not have as deep engagement with those IPs as they have for Mickey or Donald Duck.

(But with LinaBell in Disney, I am planning to buy an annual card of the Shanghai Disneyland and to visit her frequently!)

The post Who Is LinaBell And Why Is She A Big Hit Among Chinese Girls? appeared first on China Marketing Insights.

Data shows that Tesla still has an absolute advantage with 276,000 vehicles sold, nearly twice as many as SAIC-GM-Wuling which came in second with sales of 162,000 vehicles. Wuling was followed closely by Volkswagen, BYD, and BMW. The cumulative sales of new energy vehicles of these five car companies in the first 5 months exceeded 100,000 units. It is worth mentioning that BYD’s latest ranking rose by one place, successfully squeezing out BMW to rank fourth with a gap of over 5,000 vehicles.

The second and fourth place rankings of SAIC-GM-Wuling and BYD, together with the eighth-ranked SAIC Group, mean that Chinese brands now account for 3 of the top 10 new energy vehicle brands in the world. In the top 20 we find more Chinese brands, with Great Wall Motor, NIO and Guangzhou Automobile Group also on the list, ranking 14th, 17th and 18th respectively.

On the best-selling model list, Tesla Model 3 ranked first, with a cumulative sale of 173,000 units in the first five months of this year, followed by SAIC-GM-Wuling Hongguang Mini EV with 153,000 units, and Tesla Model Y ranked third, with a sales volume also exceeding 100,000 vehicles.

In the top 20, in addition to SAIC-GM-Wuling Hongguang Mini EV, BYD Han EV, Great Wall ORA Black Cat, GAC AION S, Changan Benben EV, and Li Auto ONE also entered the list. 

In the Chinese market, new energy vehicle sales are still dominated by Chinese brands

Tesla may be the best-selling new energy vehicle in the world. However, It not the most popular brand in the domestic Chinese market. In the first five months of this year, SAIC-GM-Wuling Hongguang Mini EV ranked first in sales, with a cumulative sale of 152,700 vehicles. Tesla’s Model 3 and Model Y ranked second and third, with sales respectively. 68,300 vehicles, 34,600 vehicles. If you want to know more about the Wuling Hongguang Mini EV click here. 

In the Chinese market, sales of new energy vehicles are still dominated by Chinese brands. In addition to the three models mentioned above, the top 10 brands in sales in the first five months of this year are BYD Han EV, Great Wall ORA Black Cat, GAC AION S, Changan Benben EV, Li Auto ONE, Chery eQ, SAIC Roewe Clever EV.

This means that in the Chinese market, the top 20 best-selling models are all occupied by Chinese brands, except for the two Tesla models that are also made in China and the BMW 530Le plug-in version. 

With Chinese brands having such a tight grip on the local EV market, we predict it will be difficult for western brands to break into these rankings, largely because without manufacturing in China like Tesla does, it will be hard to bring the price down enough to sell the volumes needed to enter the top 10. 

The post Chinese Brands Wuling and BYD Knock BMW Down to No. 5 on the Global New Energy Vehicle Sales Ranking appeared first on China Marketing Insights.

According to a data monitoring platform Fan Ruan (帆软), the MAU (Monthly Active User) of Dewu in May 2021 reached 81M, which was 8% month-over-month growth. Over half of its DAU (Daily Active User) are post-90s. On Dewu, the percentage of male and female users is 52:48. This is very different from Red, whose majority of users are females.

Who is this competitive player in the industry? Why can it attract so many young people to download and actively engage with it? And how can brands leverage it?

The Background of Dewu

One of the reasons why the app gained so many male users is that it used to be mainly sneakers and toys oriented. Not children’s toys, but art toys and collectibles that only “it” people would have, such as the popular bearbrick.

In 2015, the app was created. In the same year, it launched a new function, which was not common at that time, identifying shoes. This appeals a lot to people, especially boys who love sneakers, no matter if they are collecting, or wearing, or buying and selling them. Two years later in 2017, Dewu introduced the sales function. Users were able to buy not only sneakers and toys, but also apparels, beauty products, bags, watches or even home appliances on it.

There are gossips about why the platform changed its name from Du to Dewu in 2020. My thinking is, Du represents poison in Chinese. This is not cool as the name is suggesting something that the law forbids. Second, by reading Du, potential consumers won’t know what the platform is about. By giving the name as Dewu, which in Chinese means someone buys/gets something, it is easy to understand what the platform is. Your thoughts?

What Makes Dewu a Gen Z Hub?

As mentioned, the majority of Dewu’s users are young people, which are the Gen Z. Based on McKinsey’s report of Gen Z in APAC, 40% of the group love brands that can make them different from others. The percentage is twice the scale of Gen X (people born between 1965 to 1980). It is 1.3 to 1.5 times the scale of Gen Y (people born between 1980 to 1995).

When it comes to China, 61% of Gen Z are discovering brands that can make them different. Therefore Dewu is a platform that helps Gen Z satisfy their needs. Most of the brands on Dewu are streetwear brands. Some of them are niche ones that only a small group of people know. This gives this group of people a sense of belonging to find someone that is also paying attention to these niche brands.

What’s the Commercial Prospect of Dewu?

Liu Jianhai (刘建海), founder of a creative agency White Wall, believes that at the moment, the style of short videos on Dewu is still in the early development stage. Image and word posts dominate the Dewu UGC community. However, there is a rise in the number of user-generated videos. In the future, videos might be the mainstream content on Dewu, and users will spend more time on the platform.

Officially, Dewu is encouraging users to create more high-quality content. Recently it just launched a plan named “Giving Video MCNs Bonus”. If videos posted by MCNs satisfy Dewu’s rules, it will offer the MCN a maximum of 8.5 million traffic every month. As individuals, if you have a follower base somewhere over 500 people, Dewu might offer your video at most 600k traffic in the first month after you register on the platform.

This is a big opportunity for content creators. Unlike Red or Weibo and many other social media platforms that are now saturated, Dewu is still in its early stage of business development, which means that it is still providing incentives to both content creators and brands to share content on the platform.  

Not much advertisement

Dewu won’t define your content as hard advertisement even you talk a lot about a specific product in the post. Instead, your post might have a chance to be recommended by the system because of the authenticity and useful information that it delivers. Dewu would love to define your post as viral content.

On Dewu, posts with over 1,000 likes are counted as viral.

Lower cost to work with KOLs on Dewu

To work with a KOL that has around 60k followers on Dewu, it only costs 500 RMB for brands. With such a lower price, the conversion rate could be impressive as many users have the habit to purchase products through links provided by the KOL at the bottom of the post.

For every order that users purchased through links that KOLs provide, the source and amount can be tracked, and thus, KOLs can have commission from users’ buying behaviors. Some KOLs have half of their monthly income through commission.  

I would say Dewu’s users are younger than Red’s, and most of them are also active Douyin users. If your brand targets millennials or Gen Z, Dewu is an ideal platform to consider, with a lower budget. 

Read more: Z世代为什么中了「得物」的毒？

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