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.

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.

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.

China is Building its Hypercar in Italy

The S9 is a joint venture between the start-up Silk EV and the Chinese automotive manufacturer FAW (First Automotive Works). Silk is an international automotive design and engineering company and FAW is China’s largest and the oldest automotive manufacturer (and parent company of Hongqi). FAW currently has joint ventures with Audi and Volkswagen Group, Toyota, GM and many more.  The joint venture with Silk plans to build a full range of models called the S series under the Hongqi brand in Italy and China. 

China’s S9 hypercar is expected to be built in the “Motor Valley” of Italy – Reggio Emilia. The joint venture’s new factory is only 27 miles away from Ferrari and an hour by car from Lamborghini. 

Why would they build it here? Well besides the obvious, that Italy is known for making exotic supercars and hypercars, the most important factor was that Italy was the first G7 nation to endorse China’s Belt and Road Initiative. 

The S9 is special and here is why

The S9 isn’t the first super/hypercar to come out of China. The NIO EP9 and the Qiantu K50 have already made little waves in the automotive world. However, the NIO EP9 isn’t street legal and the Qiantu K50 has already gone bankrupt. 

Also both are full electric. The S9 is going to be a plug-in hybrid and is expected to use a newly developed 4-liter V-8 with electric turbocharged gasoline engine capable of 880 hp. It is also expected to have two electric motors to further boost its combined output up to 1,400 hp. 

What makes the S9 special is China is willing to compete in the internal combustion engine segment, which has always been dominated by other countries. Even with all the joint ventures from other western and Japanese brands, making large displacement engines was never China’s strong suit. In comparison to EVs, internal combustion engines are more complex. A 2-liter 4-cylinder engine has on average around 3000 parts in comparison to EVs electric motor with only has a rotor and a stator, so for China to develop this 4-liter V8 engine is showing its engineering capability. 

Where is the market for China – made hypercars?

China has long dominated the cheap and affordable consumer goods market, and countries like Germany, Italy and Japan have long been regarded as the producers of high-end, high-quality products. 

So, will anyone pay $1.8 million for a car from China? The answer is yes. It will probably be sold out before it leaves the factory. There probably will be several groups of buyers and it is highly likely most of them will be Chinese.

Red Rich

The first group could be the “red” rich (descendants of members from the Red Army). These are the people who have become rich by remaining closely associated with the Chinese government. Some may also be the heads of state-owned enterprises. Hongqi has always been regarded as the symbol of the Chinese communist party.  Owning the S9 can be interpreted as being the ultimate supporter of the CCP.

Second Generation Rich

The second group might be the second generation rich, most often their parents are the ones that are paying the bill. Buying a Ferrari or Lambo might project a rich brat image. Buying a Hongqi Hypercar doesn’t change the brat image but at least you’re a patriotic brat.

Investors

The third group will be investors, those who buy ultra-rare Ferraris and other exotic cars. These buyers buy cars purely for investment purposes. If you don’t know too much about the automotive market, typically cars are depreciating items, the moment you drive off the dealer lot you lose 20% of its original value. But that only applies to mass production vehicles, simply because anyone can buy it. 

It’s a different world when you are purchasing a Ferrari or other exotic cars that have extremely low production numbers, typically less than 500 vehicles per model, and brands like Bugatti, which only produce around 70 cars per year. And all of them will be sold long before production. 

Silk-FAW is also planning on only make 70 copies of the S9. With a market as enormous as China, I truly don’t see any reason why the S9 will have “leftovers”. 

And there will also be buyers from other parts of the world to buy the S9 simply based on personal interest and likings. However, it might take some time to build the brand image on the world stage.

The S9 isn’t a car, but an image of a nation

Since its early days, the Hongqi brand has been regarded as a symbol of China’s ruling Communist Party and has always been the brand of choice for Chinese leaders throughout history. For FAW to announce a hypercar under the Hongqi name indicates China’s reputation is on the line, there is no room for failure. 

Read More:

https://www.autonews.com/cars-concepts/us-chinese-challenger-ferrari-picks-italy-debut-18m-hypercar

https://www.motorauthority.com/news/1132544_silk-faw-hires-its-second-ferrari-veteran

https://www.silkfaw.com/

https://en.wikipedia.org/wiki/Hongqi_S9

https://en.wikipedia.org/wiki/Bugatti_Automobiles

The post China’s Auto Industry Takes on its Biggest Challenge Yet – Building the Silk-FAW S9 Hypercar appeared first on China Marketing Insights.

Well, we don’t know who started the rumor, but both sides deny that Hey Tea was ever going to acquire LELECHA. LELECHA said it is performing well and had no intention of being purchased. In fact, it is seeking another round of financing. While denying the acquisition rumors, LELECHA also announced it would open up to 140 stores before Chinese New Year in 2022.

On the other hand, Hey Tea, the big boss in the new tea or even the beverage industry in China, is valued at 60 billion RMB. The brand keeps expanding its business by opening more stores and discovering new growth areas, such as seltzer and bread. Recently, it just announced that it has become an investor in domestic coffee brand Seesaw.

About Seesaw

Seesaw is a coffee brand founded in 2012 in Shanghai. Currently, it has 33 stores located in Shanghai, Beijing, Shenzhen, Suzhou and Hangzhou. By the end of 2021, it plans to expand to over 100 stores.

Seesaw is different from other coffee houses as it is not making traditional coffee, instead, they are introducing creative coffee. Its drinks are still based on coffee, but they have other unexpected ingredients added, such as soda water, tea, juice and dried fruit. This is regarded as a new growing point for the brand.

Statistics show that from November 2020 to March 2021, the sales volume that those creative coffee contributed grew from 10% to 40%, and the number has surpassed 50% in May this year. The number of its repurchase rate is also very nice, 40%. Gen Z customers make up 17% of repeat consumers.

What Attracts Hey Tea To Invest In Seesaw and the Coffee Industry?

Of course, it is not comprehensive to summarize Seesaw’s success in a few bullet points, but I want to point out what differentiates it from its competitors, and some of the key things that Seesaw has done right.

Opening big offline stores

This reminds me of another coffee house that we’ve covered before, Manner Coffee. The brand is well-known for opening small stores in CBD, making it convenient for white collars to order first and pick up on their way to work.

Well, Seesaw has the opposite opinion on offline stores. It is making them big, many of which are over 200 square meters. The brand wants customers to sit inside the store and have conversations with either friends or colleagues. Big stores are also easier to catch people’s eyes.

Shaping stores as a workplace

While I was doing research and learned that Seesaw has a store at Réel (芮欧), a high-end shopping mall, I was a bit surprise and able to recall that while I was working nearby, I often saw people working in that store.

That’s what Seesaw wants to build, making its store a go-to place for white-collars or whoever working from home and wants to find a decent environment.

It also collaborates with WeWork to consolidate the ambition of shaping its stores as workplaces.

Introducing new business models

Big offline stores may not work in some places due to site limitation. On the other hand, smaller stores can save budgets on renting.

Seesaw opened its first mini store in Nanjing at the beginning of 2021. It is also exploring more sales channels such as the online channels, for example, ordering online and picking up at the store, and the takeaway business as well. Currently, over 60% of Seesaw’s orders are from online channels.

It is also very bold to try out a new mode that serving coffee during daytime and drinks/alcohol in the evening. I am not sure about this idea. After all, consumers come to Seesaw’s stores expecting coffee, not alcoholic beverages. If they want drinks, why don’t they go to bars or restaurants?

Coffee Craze in China

It seems that coffee has blended within Chinese consumers’ daily lives, and it is getting down to lower-tier cities as well.

The industry has gained so much attention that even Internet giants such as Tencent, ByteDance and Bilibili have invested in coffee brands.

Many other industries are joining the craze as well. Tong Ren Tang, a Chinese pharmaceutical company founded in 1669, introduced its coffee line! Sinopec, a Chinese oil and gas enterprise did the same thing. Luxury brands such as Louis Vuitton are joining as well.

Read more: 喜茶放弃乐乐茶却战略入股Seesaw，咖啡赛道就这么诱人吗？

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SuperMonkey is a fitness gym founded in 2014 in Shenzhen. At the moment, it has covered top-tier cities including Beijing, Shanghai and its birthplace.

Business Model

SuperMonkey’s business model appeals to many white collars. You don’t have to buy an annual card nor a seasonal one to have the training, instead, you pay each time whenever you feel like visiting. In some way, this helps people save money, as most of them pay a large amount of money but only visiting the gym once or twice. On the flipped side, for consumers who have unlimited passion to work out, it is a big number if they pay each single time.

Prices of SuperMonkey range from 89 RMB to 109 RMB. It used to be less, which was 69 RMB, SAD. As a newcomer, you can get a discount of 30 RMB and that makes it 59 RMB to join. If you share the mini program, you will also have further bonuses of 10-25 RMB as discounts. But still, I think this is a bit expensive.

Automatic Check In

What also makes SuperMonkey different from other gyms is the fact that no staff is required to be there. This is because everything is robotic. Once you make the payment successfully, you will receive a WeChat notification with a password. The password is used to open the entrance door to the gym, and the door to the training room that you’ve booked. There are many activities that consumers can choose from. For example, Body Combat, Zumba, Body Step, Body Jam etc. After the training, people will take a selfie picture together in front of the mirror. Later, the image will be embedded in another notification message to your WeChat. People like to save these images and post them online to show off that they went to a SuperMonkey class.

I am getting fond of this business model, though I have to pay every time. But actually, because of it, I pay and I work out, it feels like the money is totally worth it, and the sense of accomplishment is growing! What are other interesting facts about SuperMonkey? Check out our video to find out more about one of China’s most popular fitness companies.

Video footage source: 我调查了北京最帅的超级教练

The post Why Are Chinese White Collars Obsessed with SuperMonkey Gyms? appeared first on China Marketing Insights.

At the moment, the only way to purchase the new product line is through JD. Even the Mini Program that Perfect Diary guides readers to is JD’s Mini Program, not its own. To me, this shows that the brand wants to see how its male line goes. If its sales perform well, the brand will spare budget to create a separate MP. It was smart of them to choose JD.com as the majority of the platform’s users are male, unlike Tmall.  

Perfect Diary has been smart to grasp trends. It introduced color contact lenses in March, and now, the brand wants to benefit from the growing male cosmetics industry.  

Male Cosmetics Market is Booming in China  

In fact, male cosmetics have been around since the 1920s, but remained low-key for a long time. Well, since the market for girls has become saturated, brands are searching for new growth opportunities, and they see boys are paying more attention to their looks.  

The number of companies dedicated to male cosmetics is increasing in China. According to a corporation monitoring platform Qichacha (企查查), the amount of companies registering in a year has grown from 1,105 in 2017 to 3,141 in 2020.  

Not only more players are joining the industry, but also many investors see opportunities in it and actively investing in those companies. A domestic male skincare brand Make Essense (理然), founded in 2019, has received six rounds of investment so far, among which, the highest amount was up to 300 million RMB. Not long ago, Bilibili showed up in the brand’s info as one of its stakeholders.  

Since 2017, there have been over 18 financing cases in the male cosmetics industry, with a total amount of over 1.8 billion RMB. Heads up, 11 of those 18 happened in 2020.  

What Type of Consumers are Buying?  

Based on a male consumer behavior report published by QuestMobile, over 185 million males are following beauty KOLs. People who age 25 to 30 make up 25.2%, and people who aged over 45 make up 13.5%. That leaves Gen Z as the main consumption group.  

Another report which shows the trend of the development of domestic beauty brands indicates that the consumption of male cosmetics through online channels grew 24.5% in 2019. The GMV that male cosmetics shoppers contributed grew 41.5% on Tmall in the same year.  

Over 60% of men buy skincare products on their own and the number of men buying cosmetics products is 20%. Only 2.5% of men have the habit to wear makeup daily. But this percentage is growing. It is estimated that the rate of growth for the Chinese male cosmetics market is 13.5%, which is twice the scale of the global market.  

Why There Is No Unicorn Male Cosmetics Brand Yet?  

Men’s habits of consuming cosmetics is still in very early stages 

Though people are getting open with men having skincare routines and putting makeup on, the majority are still conservative towards it. Men don’t have the habit yet, and are in a period of testing and trying out.  

There is no top beauty KOL whose majority of fans are males  

You might say what about top live streamer Austin Li? He tests the colors of thousands of lipsticks in front of the public. But most of his followers are females. They are not boys.  

Male beauty KOLs whose majority of fans are males haven’t shown up. No one is there to educate Chinese males about cosmetics.  

A failed example  

In autumn 2018, a male grooming brand HOUSE 99, co-founded by David Beckham and L’Oréal entered the Chinese market, bearing the hope to benefit from the male cosmetics market. Its presence was mainly online, both on JD and Tmall. However, HOUSE 99 exited the Chinese market in less than 3 years.  

Someone needs to educate Chinese male consumers about cosmetics and how to use them before any brands can profit from the market.  

Who are Perfect Diary’s Competitors In The Male Cosmetics Industry?  

Though male cosmetics is a New World waiting to be developed, there are already many players joining the trend.  

Dior, Armani, Chanel, Tom Ford, SK-II and many other international beauty brands have launched their male collections, including skincare and makeup products. L’Oréal has two brands dedicating to the industry, Biotherme Homme and L’Oréal Men Expert. They are smart to directly name the brand with “men” in it, letting consumers know they are brands serving men.  

Besides international brands, Chinese brands are emerging and booming. Martin, Make Essense and dearBOYfriend. However, I think one thing that they fail to achieve is to show they are a male cosmetics brand from their names. Simply reading their Chinese names won’t let consumers know what this brand is doing.  

While it is a long way ahead for men to form their skincare and makeup habits, Perfect Diary takes a shortcut. It directly skips the process of education, as the brand hands it over to men’s partners, aka women who are their existing customers. They encourage their female customers buy the new male products and send them as a Qixi (Chinese Valentine’s Day) gift to the men in their life. 

Read more: 

男士赛道跑不出“完美日记” 

男士理容赛道火热，完美日记也来分“一杯羹” 

男色经济来袭：一年3141家男妆品牌涌入，有公司两年融五轮 

The post Perfect Diary Launches Male Cosmetics Line appeared first on China Marketing Insights.

However, the rules for getting into the EP Club seem a bit like multi-level marketing, causing some people to poke fun at the brand. Let’s take a look. 

You need to help NIO sell 25 vehicles to join NIO EP Club

Recently, a salesperson at one of NIO’s stores shared that when a customer has purchases, repurchases, or recommends others to buy a NIO, that customer will get NIO points. When the points have reached a certain level, NIO will recommend the customer to enter the high-end EP Club. 

Doesn’t sound too complicated. However, the caveat is, just how many NIO vehicles does a customer needs to purchase or refer others to buy?

On July 22, a NIO spokesperson told media outlet Red Star Capital Bureau that, according to the data from February this year, current members of the EP Club on average have purchased/helped sell 25 NIO vehicles. The spokesperson went on to say that, “Some owners have sold and purchased more than 160 cars.”

Based on the average starting price of NIO at 400,000 yuan (62k USD), if the average car owner bought/sold 25 cars, then the average EP Club car owner has driven 10 million yuan (1.6 million USD) in sales for the company. In other words, if you want to enter the EP Club you have pay more than 10 million yuan to buy NIO vehicles or created more than 10 million yuan in revenue for NIO.

What are the benefits of joining this “high-end community”?

According to NIO’s official introduction of the club, members of the EP Club can enjoy EP9 (the company’s crown jewel race car) driving experience, get formula-E racing tickets, join overseas ‘study’ tours, and business resource sharing. However, many members believe that EP Club is more like a “tour group” of the wealthy and powerful.

In November last year, many social media influencers shared EP Club’s trip to Lijiang, in Yunnan Province. According to one blogger, in addition to club members, NIO also invited some media outlets to join the event.

After arriving in Lijiang, the members dressed in formal clothes to attend the dinner on the first day, watched some members perform and CEO Li Bin also attended the dinner.

The activity on the second day was to climb the Yulong Snow Mountain in the morning and in the afternoon, members did some activities in the ancient city of Lijiang. In the evening, they held a martial arts-themed cosplay (role playing). Li Bin also dressed up and took a group photo with the members.

According to the Blogger, members only need to buy their own plane tickets, while the hotel and event expenses are all covered by NIO.

A member of the club also published a video revealing more details about the EP Club’s trip to Lijiang, including staying in a five-star hotel with gorgeous view, an EP9 track day driving experience and an interview with the CEO Li Bin. In the video Li Bin said: “the EP Club is a gathering of NIO’s most die-hard users.” Notably, he said the word users, not fans.

Is the NIO EP Club worth it? 

NIO CEO Li Bin once bluntly said that buying NIO vehicles is not just buying a car, but “a ticket to a new lifestyle.” 

From very early on, Li Bin learned from the success of Starbucks that no matter how advanced the Internet is and how developed e-commerce is, people’s inner demand for social interaction will not decrease, and they are willing to pay for services beyond the functionality of the product.

Another aspect of this is the people in this group are either wealthy or well-connected. So, for some, this group isn’t just a “tour group” – it is more like a Country Club. The only difference is Country Club is a lot cheaper.

The resources from social connections formed at the EP Club may allow some to gain more wealth and connections, so the 10 million yuan may be well worth it. 

But some netizens have reacted unfavorably to information about the club, saying that NIO is not an EV manufacturer but a multi-level marketing (MLM) company. Others have said it seems like a high-end social networking company where the membership fee is cars. 

But this isn’t the first time NIO has been called an MLM company, the brand has been dealing with this nickname for several years now due to its ongoing referral incentives and the natural passion its owners have for their vehicles. NIO’s response? “These types of rumors exist, mainly because people don’t have a deep enough understanding of our brand.” 

The post Will NIO’s Newest Marketing Tactic, the NIO EP Club, Help or Hurt its Brand Image? appeared first on China Marketing Insights.

On July 22, Hong Xing Erke posted on Weibo saying the company donated 50 million RMB for Henan. The post has 9.5 million likes so far and it quickly became number 1 on the hot topic ranking board.

What happened? Why did Hong Xing Erke’s donation receive such overwhelming passion from people? What can brands learn from the situation?   

On The Crazy Night of Hong Xing Erke’s Livestream 

According to Huitun Data (灰豚数据), a Taobao livestream monitoring platform, the average views of Hong Xing Erke’s livestream during the past 6 days before its Weibo announcement was only 11k, while the views on July 22 reached 2 million. The sales amount that it achieved that night (10 million RMB) was way more than what it had done on the day of 618 Shopping Festival.  

The craze continued to July 23. The number of viewers rose to 7.5 million and received more than 50 million likes, which was way more than top live streamer Viya’s performance that day.  

In the livestream, many products were quickly out of stock. And because there were too many people watching, the livestream froze sometimes, and was not able to load images of products.  

Live streamers were telling viewers to shop rationally, and to only buy what they need. But viewers were too enthusiastic, and they wouldn’t listen to live streamers. When the live streamer told them that if the shoes don’t fit their feet, they can return them. And people responded to her saying, if their shoes don’t fit their feet, that’s their feet’s problem not the shoes’, and they will make their feet to fit their shoes.  

Viewers were even asking when Hong Xing Erke would start selling their down jackets, that the air conditioner is making their home so cold. And if the brand doesn’t prepare to sell down jackets, they can just send them ducks and they will start pulling out feathers and making their own.  

One man said he bought a whole set of clothes for his son offline at a Hong Xing Erke store and his son didn’t like them. He said he decided to change a son.  

I mean, this is really crazy! For the first time ever, I saw so many people support a brand! And not even a trendy one.  

Why Hong Xing Erke?  

This is because of contrast, in two ways. 50 million RMB isn’t a small number, yet you didn’t see the news on Weibo’s hot topic ranking board. Instead, the ranking board was filled with “xyz celebrities donated 500k or 1M RMB for Henan” and other companies’ contributions. However most of these companies, bought themselves onto the ranking board to promote their brands. So, they gave money, but they wanted to be praised for it, so it didn’t seem sincere. Compared with them, Hong Xing Erke donated 50 million but it was being low-key and other that posting on its own Weibo account it wasn’t trying to promote itself for donating.  

The other comparison comes from the most liked comment in Hong Xing Erke’s Weibo post, saying the company was about to bankrupt but still made such generous donation. In 2020, the revenue of Anta, a domestic sports giant, was 35.5 trillion RMB, while Hong Xing Erke earned 2.8 trillion, yet they both donated the same amount of money.  

Being low-key and being generous quickly gained the brand lots of attention and consumers’ sympathy, respect and trust.  

Hong Xing Erke Has Been Underperforming in Recent Years  

The brand was founded in 2020 in Fujian Province. Its slogan shows great ambition: To Be NO.1, yet from its performance during the past several years it seems it still needs to work a lot harder to achieve this goal.  

With the competition from international players such as Nike and Adidas, together with the growing popularity of other domestic sportswear brands such as LiNing and Anta, Hong Xing Erke has been struggling to keep up. Many cite its lack of creativity. For a long time, people linked its shoes with plagiarism and outdated fashion.  

To combat this, instead of improving products and marketing, the brand changed markets, targeting lower tier cities. The average prices for its products range from 150-400 RMB, which is also more affordable compared with other sports brands.  

Brand Livestreams Have Become a Forum for People to Express Their Feelings  

From the Xinjiang Cotton Scandal (when many people were flocking to Nike and H&M’s livestream to criticize them for what they have done), to KANS’ livestream and to Hong Xing Erke’s livestream, we can see that livestreaming has become a platform for consumers to express their feelings towards brand’s responses to cultural events.  

In terms of KANS’ and Hong Xing Erke’s cases, one of the reasons why they’ve received massive support from consumers is that they both quickly responded in the correct manner to a trending public affair.  

A recap of KAN’s case – It was evoked by a top Chinese celebrity Kris Wu’s scandal. Before the scandal, Kris represented many international brands such as Louis Vuitton, Bvlgari, Porsche, and many FMCG giants such as detergent brand Liby and instant noodle Master Kong. KANS was not as eye-catchy as the other brands that Kris represented.  

However, it is the first one that bravely stood out and said it would terminate its partnership with Kris. Compared with some of the brands that hesitated to do so, KANS’ quick reaction earned itself attention and favorable impression. Together with the push from its two live streamers that night, KANS has greatly promoted itself from the PR crisis.  

Back to Hong Xing Erke’s case. Its low-key and generous behavior encouraged many people to support the brand in its livestream. What also impressed consumers was that the live streamer kept telling them to shop rationally, and don’t buy anything not needed.  

Both brands’ CEOs went to their livestream afterwards, to express their gratitude and to show their faith in Chinese brands. Having CEOs show up in livestream somehow personalizes brands and it makes sure that brands are leveraging the sudden attention.  

Read more: 鸿星尔克低调捐款5000万，网友冲进直播间”买买买” 

捐款5000万”被倒闭”的鸿星尔克，劝网友”理性消费”，直播卖货破亿？

鸿星尔克低调捐款，200万网友冲进直播间”野性消费” 

The post Chinese Sports Brand Hong Xing Erke Sees Surge in Popularity After its Donation to Henan Flood Relief appeared first on China Marketing Insights.

It was a skincare brand KANS (韩束). This is a great case study of how to leverage ecommerce live streaming to avert a PR crisis.

So What Is the Kris Wu Scandal?

Kris Wu is a singer and an actor. The whole scandal started from one of the victims Du Meizhu’s (都美竹) Weibo post. In the post, Du was saying Kris often hooked up with girls, especially teenage girls. He often select women as commodities to decide which one to sleep with.

Following Du, there were other girls posting their chatting history with Kris, which were really disgusting and alike. The key point is, these girls were underage and many of them said they were forced to do things while under the influence of alcohol.

The scandal and related topics covered most of Weibo’s hot topic ranking board and have continued to stay there for quite some time as the situation continues to unfold.

KANS’s Live Stream Situation On The Night the Kris Wu Scandal Broke

The night Du posted about Kris’ behaviors, many netizens rushed to the live streaming rooms of brands that Wu works with and began criticizing the brands for working with Wu. This was what happened to KANS’ livestream that evening.

That night, KANS’ live stream had two co-hosts, a male and female. Neither live streamer know what had happened and had no idea why people were upset. After the boy searched on Weibo and learned what had happened, he told the girl that it was disgusting. The two live streamers were a bit panicked, and they encouraged each other not to be afraid. Of course they are saying all this live.

Shortly after this, they saw the hot topic on Weibo saying KANS has terminated its collaboration with Kris Wu due to the scandal. Their first reaction was, would KANS fire them as well? Haha, of course not.

As the first brand to bravely announced it had canceled its contract with Wu, KANS started receiving support from people. Thousands of people flocked to the livestream room and they actively shared the livestream with their friends.

The live stream lasted until 2am and the total amount of viewers reached 3.7 million. They’ve also achieved a sales amount that they would never expect: over 5.4 million RMB. That the sales from that live stream, combined with the rest of KANS’ sales in July, were more than KANS had sold over the course of 6 months the year before.

So How Exactly Did KANS Managed To Benefit From the Kris Wu Scandal?

Quick reaction to Kris Wu’s scandal

Brands that were hesitating to terminate their contracts with Kris were not able to continue their livestream that night because of too many angry netizens flooding the comments. For example, Lancôme only ran its livestream for 2 minutes before it chose to shut down.

KANS on the other hand, didn’t shut down, allowing a large amount of people to gather at a place and let off their anger. And then, when KANS announced it had canceled the contract, the stream gave people a place to come support KANS.

Two live streamers did a good job to personalize the brand

This may not be intentional, but two live streamers worked very well with each other and their interactions attracted many viewers to follow with them.

The average amount of viewers of KANS’ livestream before the scandal was not even 300. On that night, the amount became overwhelming and when the number surpassed 300, the girl asked viewers how to turn on the beauty filter so to look better.

When a serum, whose original price was 299 RMB, was auctioned to 1,200 RMB, the girl told viewers to spend their money rationally and not to keep raising prices, as it would waste their money.

And because they stayed cool-headed and performed well during the livestream, the boy received a call from their boss saying that both he and the girl would get reward for this. He looked so happy and surprised, and he excitedly shared the news with the girl and viewers.

Viewers were cheering up for them and they were encouraging the boy and girl to get married if the number of viewers reached 500k. Those two live streamers were joking that they didn’t even know each other for 3 days. After the stream, two lives streamers were titled KANS Couple.

Usually, we see live streamers recommend products, reading scripts in front of them. But this time, the KANS Couple acted like “real people”, and it really created closeness with viewers.

Two live streamers are trained well with their livestreaming skills

The first reaction that these two live streamers saw so many people coming into the livestream room, they were shocked. But they quickly presented their livestream skills: recommending products.

They stayed coolheaded and did a great job of grasping this opportunity to get in front of so many people. They told viewers that KANS’ new collection would show up in Austin Li’s livestream on July 19. Then after canceling its contract with Wu, KANS quickly announced that it appointed the National Swimming Team as its new ambassadors, and the two live streamers shared the announcement, and their joy, with viewers. 

Support from the livestream system on Taobao

Many factors influence Taobao’s live stream ranking board including the length of time that viewers’ stay in the livestream, the length of the livestream, the number of viewers, and the likes, comments and other interactions.

In total, the livestream lasted for nearly 23 hours, with different live streamers. KANS’ performance also helped the brand to stay on top on the livestream ranking board for which it got more exposure.

What Can We Learn from KANS’ Success?

Quick reaction

KANS’ quick reaction and the corporation between two live streamers really earned itself a favorable impression. On the other hand, Lancôme was under severe criticism by netizens because of its hesitation to terminate the contract.

Closely monitoring the situation

It’s what people want to see that matters.

Brands need to monitor how the whole situation goes and make decisions that will please people. The earlier they show their attitude, the less harm will occur. They may even gain bonus from it, such as KANS.

Livestream: crisis preparation 

In this incident, we can see that KANS’ live streamers are well-trained and that’s why they were able to drive so many sales in a night.

As livestream has become a necessary sales and marketing channel for many brands, brands often approach livestream agencies to look for live streamers, instead of cultivating their own. It is important that brands educate them about brands’ basic information and how they should behave if any scandal happens.

Maximize the influence of the livestream

KANS didn’t stop at that night’s livestream and has continued to ride the wave of attention. Since netizens named those two live streamers the KANS Couple, the brand has had them do more livestreaming to capture people’s enthusiasm and curiosity to watch them. Also, KANS’ CEO will appear in an upcoming livestream to meet consumers.

Read more: 吴亦凡事件发酵后，韩束直播间为何能一夜爆红？

与吴亦凡解约后，韩束直播间一场卖出500万，居然还卖起了牙签

The post How Chinese Skincare Brand KANS Actually Benefitted From the Kris Wu Scandal appeared first on China Marketing Insights.