Food & Beverage Archives - China Marketing Insights https://chinamktginsights.com/category/industries/food-beverage/ Sharing the top news, reports, and trends in China’s marketing industry. Tue, 05 Apr 2022 07:44:15 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.2 https://i0.wp.com/chinamktginsights.com/wp-content/uploads/2020/03/wechat-OA-logo.png?fit=32%2C32&ssl=1 Food & Beverage Archives - China Marketing Insights https://chinamktginsights.com/category/industries/food-beverage/ 32 32 Air Fryers Evoke a Cooking Wave Among Chinese Consumers https://chinamktginsights.com/air-fryers-evoke-a-cooking-wave-among-chinese-consumers/?utm_source=rss&utm_medium=rss&utm_campaign=air-fryers-evoke-a-cooking-wave-among-chinese-consumers Tue, 05 Apr 2022 12:16:00 +0000 https://chinamktginsights.com/?p=3966 Air fryers have become a trendy home appliance for consumers in China.

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Air fryers have become a household home appliance in China. Statistics show that the demanded quantity of air fryers in 2016 was 743k, and the number grew dramatically to 16.3 million in 2020. Air fryers also show up frequently on Chinese social media, and KOLs educate users on how to use them and showcase dishes that they make.

home appliance china
Air fryers have become a trendy home appliance in China. Source: WeChat Official Account: 来设计.

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.

home appliance china
People are being creative in using air fryers. Source: Little Red Book.

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.

People have great enthusiasm to share their dishes on social media. Source: Little Red Book.

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.

home appliance china
Brand-run live stream of air fryers on Tmall. Source: Tmall.
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%.

Source: data.iimedia.cn.

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.

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People Waited for 8 Hours at Blue Bottle Coffee Shanghai Store https://chinamktginsights.com/people-waited-for-8-hours-at-blue-bottle-coffee-shanghai-store/?utm_source=rss&utm_medium=rss&utm_campaign=people-waited-for-8-hours-at-blue-bottle-coffee-shanghai-store Sun, 13 Mar 2022 13:02:00 +0000 https://chinamktginsights.com/?p=3926 Blue Bottle Coffee had its first Chinese mainland store opened in Shanghai.

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The other day I was in the office, and my colleague excitedly shared the news that Blue Bottle Coffee would be opening on the weekend. I was confused, not knowing who the Blue Bottle Coffee was.

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 shanghai
The long line at the Blue Bottle Coffee Shanghai store on its open day.
Source: WeChat official account: 企鹅吃喝指南.

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.

blue bottle coffee shanghai
Source: bluebottlecoffee.com.

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.

Blue Bottle Coffee Shanghai
Blue Bottle Coffee Shanghai store. Source: nestle.com.cn.

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.

blue bottle coffee shanghai
Shanghai has a strong coffee culture. Source: Red @鹿女侠爱旅行.

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.

Blue Bottle Coffee Shanghai
Blue Bottle Coffee Shanghai store serves local snacks. Source: WeChat official account: Blue Bottle Coffee蓝瓶咖啡.

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.

blue bottle coffee shanghai
Baristas at Blue Bottle Coffee Shanghai store.
Source: WeChat official account: Blue Bottle Coffee蓝瓶咖啡

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.

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Hey Tea Ventures Beyond Tea, Investing in Coffee Brand Seesaw https://chinamktginsights.com/hey-tea-ventures-beyond-tea-investing-in-coffee-brand-seesaw/?utm_source=rss&utm_medium=rss&utm_campaign=hey-tea-ventures-beyond-tea-investing-in-coffee-brand-seesaw Wed, 18 Aug 2021 10:00:00 +0000 https://chinamktginsights.com/?p=3770 It is to everyone's surprise that Hey Tea joins the crazy coffee industry by investing in Seesaw Coffee.

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Not long ago, there were rumors saying top Chinese tea brand Hey Tea would acquire LELECHA, who is also one of the competitive players in the new beverage industry. Instead, it recently invested in up-and-coming coffee chain Seesaw. What happened?

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.

Hey Tea Seesaw coffee
Source: Weibo@路西路西.

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.

Hey Tea Seesaw coffee
Seesaw’s creative coffee. Source: Weibo@菇一坨.

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.

Hey Tea Seesaw coffee
Seesaw Coffee in Pudong, Shanghai. Source: Weibo@SeesawCoffee.
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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How Manner Coffee Broke Through China’s Crowded Beverage Industry https://chinamktginsights.com/how-manner-coffee-broke-through-chinas-crowded-beverage-industry/?utm_source=rss&utm_medium=rss&utm_campaign=how-manner-coffee-broke-through-chinas-crowded-beverage-industry Tue, 20 Jul 2021 00:04:18 +0000 https://chinamktginsights.com/?p=3648 How did Manner Coffee become a breakout star in China's increasingly crowded coffee industry?

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The Manner Coffee x Beast collaboration has recently been one of the hottest topics among white collar workers in Shanghai. Manner is an up-and-coming Shanghai coffee brand and Beast… well Beast started as a flower store, and later, it expanded its business to home textile, furniture, beauty, fragrance and other categories.

Manner Coffee
Manner’s special decoration for the collaboration from July 8 to July 18. Source: WeChat account: Manner Coffee.

The collaboration was to launch Beast’s new fragrance Panda Poo Poo (not sure who thought of that name…). Consumers who bought Manner’s Panda Latte and post its picture on WeChat can get a small bag, I mean tiny bag, with a sample of the fragrance.

I saw it on social media and decided to buy a cup of coffee and get the bag, because it is so cute! At first, I went to the Manner store close to my workplace, but I was told that they had run out of the gifts. I was so disappointed, but this made me even more motivated to get the gift. And I did it, at another store.

Manner Coffee
Inside those tiny bags are samples of Beast’s Panda Poo Poo perfume. Source: Weibo@灰灰不要再吃啦.

Why Was the Manner Coffee x Beast Campaign so Popular?

Why did this campaign become so viral both online and offline?

One reason is the drink itself. The Panda Latte is inspired by Beast’s new fragrance collection Panda Poo Poo (熊猫噗噗, maybe better translated as “a Puff of Panda” or “a Whiff of Panda”). The Manner coffee drink is a translation of the fragrance’s smell into flavors.

The scent of “Panda Latte” is divided into top, middle, and base:

  • Top: Green apple, banana, and pear
  • Middle: Elderberry and gooseberry leaf
  • Base: Honey, vanilla, and wood

Another reason the campaign got so much buzz is that Manner Coffee is popular among white collar workers in top tier cities, and anything the brand does easily grabs people’s attention.

We’ve talked a bit about the brand in our previous article when mentioning competitive players in the beverage industry in China. Today, we want to dig more into the brand, and find out why white collars favor it so much.

About Manner Coffee

Manner was founded in 2015. Before that, its founder Han Yulong (韩玉龙) opened a coffee store in Nantong (南通), but it turns out that people in Nantong didn’t have that much passion for coffee, so Han moved to Shanghai.

With limited budget and considering the fact that the coffee business has a lower table turnover rate, Han’s first Shanghai coffee store was only 2 square meters, with very simple decoration.

Manner Coffee
The first Manner Coffee store. Source: wearemanner.com.

But despite the small space, it did well. In 2019, Manner started marching aggressively, opening more stores in Shanghai as well as in other cities. Now the brand has 137 stores in Shanghai and 14 additional stores in Beijing, Suzhou, Chengdu, and Shenzhen. 

Manner is getting noticed by investors. In 2018, it received its A round of financing. And just recently, it was financed by H Capital and Coatue, and Manner Coffee is now worth 1 billion USD.

What Makes Manner Coffee So Popular Among Chinese White Collars?

High quality and good taste of Manner Coffee

Though Manner’s stores are often tiny, Han has strict requirements for Manner’s products. Those stores are equipped with expensive coffee machines, such as La Marzocco gs3, Mahlkonig and Robur from Mazzer. They even have a professional water filter to provide clean and free drinking water for customers.

Manner launches seasonal drinks once a month. This makes sure that customers can always taste something new from the store and they won’t get bored with Manner and turn to other brands.

Affordable prices

Han does whatever he can to lower costs for his stores and products, so as to provide affordable prices for Manner’s customers.

To reduce the spending on coffee cups, Manner offers a 5 RMB discount if customers bring their own cups. That is a pretty motivating offer! And it also ties into young consumers’ growing interest in sustainability. And if you want to buy its coffee beans, which are mostly from Yunnan Province (云南), you can have an 18 RMB discounts on the beans.

Manner Coffee
Consumers are welcomed to bring their own cups. Source: Weibo.

The average price of Manner’s coffee is around 15-20 RMB. It is way lower than other players in the market such as Starbucks, Peet’s or Costa. One of the benefits of having a lower price is that it actually lowers consumers’ expectations so that then when they first try out the coffee they are pleasantly surprised that the quality is better than what they thought they would get for that price. And if they feel that the coffee is not tasty, it’s fine. After all, it only costs around 20 RMB.

No delivery service

Han knows clearly that as time goes by, the flavor of coffee changes. As the temperature decreases, the sour taste becomes stronger and the smoothness decreases. The cup of coffee is very likely to become bitter.

Though offering delivery service will definitely bring more sales for Manner Coffee, Han doesn’t feel the benefit of additional revenue is worth risking the reputation of the brand.

Plus, if a coffee store wants to have good delivery service, it must be equipped with fast logistics. For example, Starbucks has its own takeaway service called Zhuan Xing Song (专星送), which is the collaboration with Eleme (饿了么). From ordering to receiving coffee, it only takes 18 minutes. However, not every coffee house is capable of achieving this speed as it requires more capital investment.

Location & decoration

Most of Manner’s stores are small and they are located either near or inside office buildings. This allows white collars to order first on their phones and pick up their coffee on their way to work.

Manner Coffee
Manner’s locationa are always accessible for white collar workers. Source: Weibo.

With its affordable prices and good taste, and attention-grabbing, convenient locations, Manner quickly became many people’s go-to choice.

Our Thoughts

While the coffee industry is still in a nascent stage in many other cities in China, it has already been incorporated many Shanghai city dwellers’ daily lives. Based on a Shanghai coffee report published by CBNData (上海咖啡消费指数), for every 10k people Shanghai has 2.85 coffee stores. The number has reached the coffee consumption level of London, New York and Tokyo.

While it seems ambitious to launch a new coffee brand in an already crowded market, Han knew from initially launching the store in Nantong that the brand would never succeed in a market where he also had to create demand and educate consumers. Instead, he made the right choice by going into a crowded market but then finding clear ways to differentiate his brand.

Read more:

从2㎡小店到估值超10亿美元,Manner Coffee 经历了啥?

四年开店超50家的manner coffee,做对了什么?

Manner火爆,瑞幸的另一个极端

MANNER 联名野兽派推出熊猫拿铁

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Honey Snow City Viral Song Overshadows Nayuki Tea IPO https://chinamktginsights.com/honey-snow-city-viral-song-overshadows-nayuki-tea-ipo/?utm_source=rss&utm_medium=rss&utm_campaign=honey-snow-city-viral-song-overshadows-nayuki-tea-ipo Wed, 07 Jul 2021 00:26:01 +0000 https://chinamktginsights.com/?p=3592 Tea brand Honey Snow City has been in the spotlight recently after an old brand jingle went viral on Douyin.

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On June 30, Nayuki Tea became the first tea house in China to file an IPO (2150.HK). As one of the most popular tea brands in China, Nayuki Tea has over 562 stores nationwide. But the listing didn’t have a happy beginning. On its first day, its stock price fell 10%, which is very unusual for any company. What’s more, while Nayuki was celebrating its IPO, Chinese KOLs and consumers were preoccupied with another tea brand – Honey Snow City (蜜雪冰城).

Honey Snow City
Honey Snow City’s stores are often located in lower tier cities. Source: guandata.com.

But before we get into Honey Snow City and its viral song, a bit more about Nayuki.

Not long ago we wrote an article about what future may hold for Nayuki Tea with only 0.2% net profit margin. The main reason why the net profit margin is so low is that operating costs of its stores remain too high, and yet both the daily sales and average order amounts have been declining.

Another key reason for the lack of confidence from investors is that Nayuki Tea is facing too many competitors in the new beverage market. Its biggest opponent is Hey Tea, who is rumored to be on its way to file an IPO as well. The other is Sexy Tea or Chayan Yuese (茶颜悦色). We once mentioned the 6-hour line at Shenzhen Wenheyou, a great motivation is that the superfood court has a pop-up Sexy Tea store to attract visitors to come.

Honey Snow City
Chayan Yuese in Shenzhen. Source: WeChat account: 深圳文和友.

And recently another competitor has emerged. You guess right, it’s Honey Snow City. I came across the store quite often when I was having my undergraduate study in Guangzhou, but I never tried it. Until recently, when a song from the brand changed my mind…

About Honey Snow City 

The brand was founded by a student in Henan Province (河南省) in 1998. In most consumers’ minds, the first word they think of when they hear Honey Snow City is cheap. According to Essence Research (安信证券研究中心), at the top of the new beverage pyramid are players such as Nayuki Tea, Hey Tea and LELECHA ( (乐乐茶). The average of the amount per order are over 30 RMB. Following this, are brands with prices between 16-20 RMB, then those with prices between 10-16 RMB. At the bottom, are Honey Snow City and Yihetang (益禾堂) etc. Their prices are extremely low, under 10 RMB.

Honey Snow City
Honey Snow City is at the bottom of the China new tea beverage price pyramid. Source: Essence Research.

But it’s not only about its prices. The way Honey Snow City promotes itself is also very xiachen (下沉) or lower-tier city style. For example, they will play music and have dancing in front of stores and give out leaflets.

Yet despite its low image, the brand is doing well. It uses a franchisee store model, and the number of Honey Snow City’s stores are increasing rapidly. In 2018, the number of offline stores was 4,500; in 2019, the number was 7,050; and by June 2021, the number had already reached 15,000.

Honey Snow City’s Viral Song

But despite its growth, Honey Snow City was not seen as a trendy brand, until recently, when an old jingle from 2019 was resurfaced by a KOL on Douyin and went viral.

The song has become so viral that people are joking no one can say “你爱我,我爱你,蜜雪冰城甜蜜蜜” (I love you, you love me, MIXUE ice cream & tea) in a normal way. You always end up saying it with the melody. The jingle is so catchy you just can’t stop singing it once you’ve heard it.

Honey Snow City
Click here to listen to the viral song. Don’t blame us if it gets stuck in your head!

The melody is the same with the household song Oh! Susanna. You can see on different platforms that people are so enthusiastically translating the song into different languages and singing it with different styles.

So what made the song suddenly go viral now instead of when it first came out?

Behind The Huge Popularity of The Song

Step 1: Choose a repetitive melody

When the song was first created, there were a lot of negative reactions. Some were saying the melody was too simple and not many lyrics were in the song, which made it very low. Some of the Honey Snow City stores even received complaints from customers saying something bad about the song.

But the brand was smart to choose the melody of Oh! Susanna since the tune is familiar to almost everyone. Honey Snow City doesn’t need to spend the time having people getting familiar with it. Another good example recently is another song called 热爱105度的你. Many people are posting videos of them singing the song with cute filters. But in fact, this is a song that Watsons used to promote its distilled water.

Honey Snow City
The original video was posted back in 2019 and the song didn’t go viral until recently. Source: Douyin.
Step 2: Starting from offline to online

Usually, brands grab attention online and guide those traffic to their offline spots. But Honey Snow City did the opposite. The team decided to start offline and then move to online.

Why? Because they have more than 15k stores nationwide, and in total, the brand is able to reach over 10M customers every day with them. Ever since the song was created, it has been constantly played in those stores, waiting for a good timing to march online.

Step 3: PGC and the use of Douyin

In fact, the marketing team behind this song never expected it to go viral. Then at the end of May 2021, they spotted a UGC post on Douyin related to the song that was played over 100k times. The team thought this was a good time to push the song online.

When it comes to promoting the song, Honey Snow City’s marketing team heavily focused on Douyin. The decision is after careful comparison among different platforms. The team felt that WeChat is more suitable to announce official information, Weibo on the other hand, it suitable for images and words, while Douyin is a short video platform, and it is a better platform to deliver Honey Snow City content to its potential customers. 

Honey Snow City
The use of social media by different tea houses. Source: Gloden Mouse.

Honey Snow City’s team has been developing its Douyin account since 2019 with different hashtags and activities to grow fan base. Now, it has over 2M followers on the platform, which is a solid base for the viral of this song. The brand started working with KOLs to invite them to recreate the song and visit its stores.

Bear in mind, most of Honey Snow City’s consumers don’t have high income, and they tend to have less educational background, so videos would have lower threshold for them to understand. But after the song, because it is so viral, I think even those high-income groups have started noticing this brand and trying it out.

Step 4: UGC to further develop the song

After those KOLs posted content about Honey Snow City, soon enough, netizens began having fun with the song, making their own videos.

Except this, a popular hashtag on Douyin is #蜜雪冰城社死现场# (embarrassing moments at Honey Snow City). This is very fun. Because after the song becomes viral, a rumor came out of nowhere saying that if you sing the song at the store in front of the brand’s staff, you can have a free drink.

Honey Snow City
#embarrasing moments at Honey Snow City# Source: Douyin

But there is no such policy at the beginning. So it turns out that after you sing a song in front of the staff and other customers waiting in line, you are told that there is no such thing. It is really embarrassing but entertaining, so the hashtag also gets lots of attention on social media.

Honey Snow City notices this and quickly responded to it. The company notified its offline stores that if customers really sing the song, staff can give them either ice cream or coupons, encouraging people to keep visiting the store and creating content about them.

Then the brand leveraged this trend further. On Father’s Day, it sent gifts to customers who sang the song to their fathers and uploaded the video on social media.

With all these UGC promotions, Honey Snow City has been on the hot topic ranking board on Douyin at least 6 times recently. This is incredible performance for a used-to-be low-key brand known for cheap tea and xiachen marketing tactics.

As you can see, the buzz about Honey Snow City was badly timed for Nayuki’s IPO. But can Honey Snow City make this viral song turn into long-term growth? Or will the brand quickly be forgotten? We’ll have to wait and see. 

Read more: 奈雪的茶上市首日破发

奈雪上市新征程:凡是过往,皆为序章

蜜雪冰城主题曲爆火背后:二创、抖音与十万铁军

蜜雪冰城出圈始末

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10 Chinese Brands That Excelled on Tmall During This Year’s 618 Shopping Festival https://chinamktginsights.com/10-chinese-brands-that-excelled-on-tmall-during-this-years-618-shopping-festival/?utm_source=rss&utm_medium=rss&utm_campaign=10-chinese-brands-that-excelled-on-tmall-during-this-years-618-shopping-festival Wed, 30 Jun 2021 00:56:39 +0000 https://chinamktginsights.com/?p=3571 We selected 10 Chinese brands that performed well in this year's 618 shopping festival.

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This year’s 618 shopping festival went above and beyond previous years, truly claiming its spot as the second largest shopping holiday in China. In total, the GMV generated from the shopping festival reached 578 billion RMB. In addition to those traditional players such as JD, Tmall and Suning, more platforms joined the game, such as Douyin and Kuaishou. For example, the number of brands that participated in Douyin’s 618 activities was 2.9X higher than last year.

Tmall turns out to be the main battlefield for most brands. This year, it attracted 250k brands to join, which was 2.5 times the scale of 2020. Among them, 8,200 brands participated in the Tmall 618 shopping festival for the first time. A lot of brands used the holiday not only as a chance to boost sales, but also as a chance to test out new products. In fact overall there were 1.4 million newly launched items.

Today’s article stems from a report published by Alibaba’s Alimama marketing platform. The report shares 618 case studies from 100 global and Chinese brands. Here we’d like to highlight 10 of the Chinese brands included in the report and share their results.

For brands that we didn’t mention in our previous articles, we will start close monitoring them.  Subscribe to our newsletter and stay tuned!

1. Breo (倍轻松) – Massage Devices

Breo is a Shenzhen-based brand founded in 2000. It is well-known for its massage devices which combine traditional Chinese medicine with advanced technology.

Tmall 618 Shopping Festival
Xiao Zhan speaking for Breo. Source: Weibo@breo倍轻松.

What makes the brand known to the public is its ambassador Xiao Zhan (肖战). He has 29 million followers on Weibo. Xiao once had a massive scandal for allowing his followers to start an Internet war with a platform that presented Xiao’s image negatively. He was criticized by news outlet People’s Daily (人民日报), the mouth of Chinese government.

Even though many thought his career must be ruined from the scandal, after laying low for a while, Xiao magically recovered and has begun working with numerous brands. The most buzz-about one is his appointment as ambassador for Li Ning (李宁), a Chinese sports brand that is often compared with Nike. Xiao is definitely a person that is always in the spot-light and Breo has benefitted from it. During 618, the number of new customers grew 150%. Its neck massage device, eye massage device and scalp massage device all ranked TOP1 in their corresponding product category on Tmall.

2. Xiao Mi (小米) – Technology

Xiao Mi is first known for its mobile phones. It successfully expands its business categories into digital home appliances. Like its phones, the prices of its appliances are more affordable compared with other products in the same category.

Tmall 618 Shopping Festival
Xiao Mi sells more than just mobile phones. Source: mi.com.

During the 618 shopping festival, Xiaomi’s sales on Tmall broke 3 billion RMB. On June 1, an hour after the first round of 618 began, its sales were already higher than its sales from the whole first day last year.

3. Xiao Xian Dun (小仙炖) – Supplements

Chinese people have always been very focused on anti-aging, and birds’ nest supplements are seen as one of the most effective supplements.

Tmall 618 Shopping Festival
Two top celebrities the work with Xiao Xian Dun. Source: takungpao.com.

During the 618 shopping festival, Xiao Xian Dun ranked TOP1 on Tmall in the birds’ nest category. The number of customers that purchased its annual set grew 113% year-over-year. The annual set, which has 336 bottles, cost 27,591 – 84,405 RMB.

You may wonder why there is such a big price disparity for one set. This is because Xiao Xian Dun doesn’t want to scare its customers with extremely high prices. So it has different portions for several sets, such as the 100g x 336 bottles, 70g x 336 bottles or 45g for each bottle.

Live streaming played a huge role in Xiao Xian Dun’s success. In total, its brand-run live streams contributed 21 million RMB in sales during the 618 campaign.

4. Adopt A Cow (认养一头牛) – Food & Beverage

Adopt A Cow is a Chinese diary brand that managed to surpassed two giants, Mengniu Diary (蒙牛) and Yili (伊利), and ranked TOP1 in its category during last year’s Double 11.

Tmall 618 Shopping Festival
A2 milk from Adopt A Cow. Source: Tmall store 认养一头牛.

24 hours into the presale of this year’s 618 shopping festival, Adopt A Cow achieved over 13 million RMB in sales on Tmall, which was already more than the total sales amount during last year’s presale. It also gained a lot of new followers during this year’s shopping holiday, helping its Tmall store to pass the 10 million followers milestone. In terms of the amount of average per order, it improved 120% compared with the same time last year.

Why has the brand been so successful? To compete with Mengniu and Yili, Adopt A Cow introduced a new way to approach its customers. It is also building relationship with customers through customer feedback groups, livestream and farm visits and allowing customers to actually adopt a cow.

5. Genki Forest (元气森林) – Food & Beverage

Not long ago, we just wrote about Genki Forest’s scandal. Genki Forest is a soda water brand known for its super healthy ingredients with zero sugar and low fat. But it turns out the brand was misguiding its customers to think it’s zero sugar which in fact, it contains sugar.

Tmall 618 Shopping Festival
Beverages from Genki Forest. Source: Weibo @元气森林.

However, it seems that consumers quickly forgot the scandal, or maybe they have chosen to ignore it because they love the brand’s drinks too much. During 168, Genki Forest managed to obtain 20 million new customers. It ranked in the TOP 10 in the beverage industry during presale period. Its 618 advertisements also helped the brand increase traffic to its Tmall store by 30%.

6. Toffee (奶糖派) – Underwear

We’ve talked a lot about Ubras, which is a young and fast-growing domestic underwear brand. It’s best known for its one-size-fits-all bras. Well, Toffee is the opposite. Instead of targeting the masses with a one-size-fits-all product, Toffee specifically targets large-chested women.

Tmall 618 Shopping Festival
Toffee’s bras. Source: Toffee’s Tmall store.

The brand distinguishes itself with its thoughtful designs and the close relationship with its end users. During the 618 shopping festival, it managed to grow its number of Gen Z customers by 645%. Only 40 minutes after the sale began, the sales amount already surpassed what it achieved in a whole day last year.

Toffee also successfully gets itself enter the TOP 10 in the underwear category on Tmall and it is the TOP 1 in the large chested bras category.

7. Urban Revivo – Apparel

While many international fast fashion brands’ results in China are declining, Chinese brand Urban Revivo is thriving. And it’s not only succeeding in China, but also doing well abroad in many international markets.

Tmall 618 Shopping Festival
Some of Urban Revivo’s dresses. Source: Weibo@UrbanRevivo.

During 618, just 11 hours after the shopping festival began, its sales amount already surpassed the sales that it took 3 days to achieve last year. Statistics also show that, the number of customers between the ages of 18-24 grew 8% this year.

8. Warm Studio or Guliang Jiji (古良吉吉) – Bags

Warm Studio or Guliang Jiji was founded in 2012 in Hangzhou, China. The brand’s Chinese name comes from the names of the creators of the brand who also happen to be a couple. Jiji, she is the designer of the brand, and Guliang, who oversees the business side of things, aka, everything else except design.

Tmall 618 Shopping Festival
Source: Tmall: 古良吉吉旗舰店.

The price of Warm Studio’s bags are on the pricier side for a Chinese bag brand, almost that the entry lux level. They are sold between 500-2700 RMB. Those bags are very recognizable either in terms of their materials, texture or their designs. I bought a very tiny one which can only store airpods inside, and I was very surprised by how the bag looks and feels. It surpassed my expectations. This is my favorite Chinese bag at the moment!

During the 618 shopping festival, the number of its Gen Z customers on Tmall grew 670%, and its active customers grew 145%. In terms of ROI, it improved 90%.

9. Boohee (薄荷健康) – Food & Beverage

Boohee first started as a platform that provide healthy consultations but now it has expanded into products, specifically, meal plans. Its Tmall flagship store sells low fat, low sugar food, such as chicken breast, pre-made meals, etc. 

Tmall 618 Shopping Festival
Boohee provides healthy diets for its customers. Source: Tmall: 薄荷健康旗舰店.

Just an hour after the 618 shopping festival began, the brand’s sales already surpassed what it did last year for a whole day. It has also successfully lowered the cost to attract new customers to the store, and its ROI improved 15% this year.

10. KEEP – Fitness

KEEP is first known as a fitness app. It was founded in 2015. I use it a lot as it has many tutorials for different levels and different body parts that you want to target. To enrich its monetization methods, KEEP sell peripheral products on its Tmall store, including clothes and fitness equipment.

An hour after 618 began, it managed to sell more than what it did last year in a day. By 23:59 on June 1, the GMV of KEEP grew 104% compared with the same time last year. Its JD Tmall store’s GMV achieved great progress, with 323%. Not only domestically, the brand’s sales grew over 50% when it comes to international orders.

Read more: 618收官,最值得看的TOP100营销案例|alimama超级秀可思Vol.05

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The Newest Buzzword ‘Involution’ and How Brands Have Responded to It in China https://chinamktginsights.com/the-newest-buzzword-involution-and-how-brands-have-responded-to-it-in-china/?utm_source=rss&utm_medium=rss&utm_campaign=the-newest-buzzword-involution-and-how-brands-have-responded-to-it-in-china Fri, 25 Jun 2021 13:35:14 +0000 https://chinamktginsights.com/?p=3505 Learn how brands such as Luckin Coffee are trendjacking involution,
a popular buzzword in China.

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‘Nei juan (内卷)’, also known as involution, has become a trendy word among young netizens as of late in China. In contrast to ‘evolution’, involution refers to an inward overelaboration due to hypercompetition. As the “996” working schedule (nine in the morning to nine in the evening, six days a week) and even “007” (working online twenty-four hours a day, seven days a week) became the norm among large tech firm workers, many felt the feeling of anxiety, stress and endless race. Such phenomenon fuels an opposite concept named ‘Being Buddhist (佛系)’ that the young generation rejects the ‘victory or death’ ethos, while embracing a chilled, laid back lifestyle. It further develops into a ‘sang (丧文化) culture’, the celebration of sardonic apathy and nihilism.

Involution is felt by citizens everywhere in China

According to a popular thread on the Chinese question-and-answer platform, Zhihu (知乎), involution happens almost everywhere. It is in every sector and business in China. For example, a netizen shared her experience of socializing with ‘Shun Yi Moms (顺义妈妈)’, who are similar to mothers in the Upper East Side in Manhattan (if you’ve ever read Wednesday Martin’s ‘Primates of Park Avenue’). When with these women, she realized that many of them trained their children way advanced than the standard requirement of their age group. For example, they speak three languages in kindergarten.

Another story came from a recent graduate from an Ivy league university who just returned to China. The graduate remarked, “It’s harder to find a job as a haigui (海归, an overseas returnee) in big cities nowadays. Even a taxi driver in Beijing has a university certificate.” People are pushing themselves to the extreme to succeed, yet they feel like they are going nowhere. They also feel all the work is still not enough.

Involution has undoubtedly resonated with China’s millennials and Gen Z. According to BBC China, involution was the Top 10 hot topics in 2020. It also gained 10 billion searches on Weibo in 2021. So, how have Chinese brands responded to the wave of discussion around ‘Neijuan’ or Involution?

Involution Trendjacking

For content marketers, trendjacking is an effective way to reach new customer segments, while still retaining the core values of their brand. It requires them to constantly keep an eye on hot topics and respond quickly to capitalize the buzz. Many times, human or human-related events are at the center of the discussions. For example, #FriendsReunion and Bernie Sanders at the inauguration in the western world. Similarly, celebrity-led trends appear quite often in China’s marketing scene.

Lelush on Produce Camp 2021

If you follow Tecent’s reality show ‘Produce Camp 2021’ (or ‘Chuang 2021’), you should be familiar with the name ‘Lelush’(利路修). Lelush’s real name is Vladislav Ivanov. The Russian model ‘accidentally’ joined the competition for the next generation boy band with 90 contestants. Not long after the competition began, Lelush relaized he didn’t want to be there. But he had signed a contract and could only leave if the show producers kicked him off or the audience voted him out. So, he began trying hard to make that happen.

Compared to his other peers who show proactivity and diligence in the training programs, Lelush often had a ‘sang’ face and took every opportunity to slack off. He told the producers and the audience that he ‘wants to leave’ and asked, ‘When is it my turn to be weeded out?’. However, things went against his wishes and many people started voting for him to stay in the game. People resonated with his involution attitude. His fans called themselves ‘Sun si (笋丝)’ and voluntarily created many online memes about Lelush.

Involution China
Netizen-created memes of Lelush saying ‘too tired’ and ‘Sun si’ voting for him. Source: bbc.com.
Brands Begin Collaborating with Lelush

Luckin Coffee (瑞幸咖啡) was the first brand that reached out to Lelush to collaborate. The campaign was launched after a short 13 day’s preparation from signing the talent, creating the script and actual production. Carrying a slogan ‘YYDS (永远滴神)’, a buzzword that means ‘greatest of all time’, the campaign launch video had almost two million times on Bilibili within 24 hours and the official hashtag #瑞幸冰咖推荐官利路修 (Chief Recommendation Officer Lelush) broke a billion mention record on Weibo. The brand was riding on the social hype of the campaign. Its sales also reached a historical high since its scandal in 2020. 

Involution China

In my opinion, the reason behind Luckin’s success is not only the high agility and efficient execution, but also it truly paid efforts on understanding the trend. This allows it to maximize the uniqueness of Lelush as an influencer while still keeping the essence of its brand.

The advertisement’s storyline matched well with several iconic scenes of Lelush in Produce Camp. As a result, it perfectly picked up on the fans’ ‘deja vu’ moments and created brand advocacy. Because the concept of involution was smartly reflected in the ending scene when Lelush said ‘can I leave work now?’ in his typical tired, emotionless voice, even his non-fans can resonate with the campaign and get a laugh out of it as well.

Involution China
Matching memorial moments in the reality show with advertisement.
Source: digitaling.com.

Not everyone is able to correctly capture the involution trend

Involution is such a hot topic among millennials and Gen Zs that many brands want to tap on it in China. However, not everyone did it well.

Earlier in May, a post by Zhang Jun, Head of PR at Tencent received over 60k angry reactions on Weibo as he posted about staying late for the Youth Day campaign whilst the real youth were asleep. Su Mang, former chief editor of Harper’s Bazaar China, recently apologized for her ‘inappropriate interpretation’ of involution as ‘a reflection of high desire but low willingness to put in the work among the young generation’.

Involution China
The Weibo post by Tencent Head of PR triggered intensive online discussion. Source: cnbata.com.
Involution China
Former fashion editor Su Mang apologized for misinterpreting ‘Nei Juan’. Source: sohu.com.

Both were pointed for being ignorant of the real societal state the young workforce is in and the living pressure brought by endless competition. Apparently, the concept of involution is a double-edged sword, only those who truly understand its meaning and impact on the younger groups can capitalize off its influence. The same applies really to any controversial topics. Brands must rely on their marketers to determine which trends are appropriate to associate the brand with.

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China Post Joins the Milk Tea Industry! https://chinamktginsights.com/china-post-joins-the-milk-tea-industry/?utm_source=rss&utm_medium=rss&utm_campaign=china-post-joins-the-milk-tea-industry Mon, 21 Jun 2021 11:00:00 +0000 https://chinamktginsights.com/?p=3437 China's national postal service opening a milk tea store?! Sure! why not?

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It is surprising, yet also not so surprising, to see China’s national postal service, China Post, open a milk tea store in Fujian Province. It’s not surprising because milk tea or “new tea” beverages have become such a promising market that consumers love having it and companies love investing in it. It’s surprising because even China Post, a state-owned enterprise, wants to grasp this lucrative market.

China Post Milk Tea
Post Oxygen of Tea at Xiamen (厦门). Source: sohu.com.

China Post is everywhere in Mainland China. It has over 9,000 spots to collect and allocate parcels, plus 54,000 post offices. If China Post let every one of its spots open a milk tea store, there is no doubt that it could soon become the NO.1 in the milk tea industry, in terms of offline footprint.

About The China Post Milk Tea Store

The store is called Youyang Decha (邮氧的茶) in Chinese or “Post Oxygen of Tea” (even though that’s what’s on the store sign its better translated as Tea Full of Oxygen). It plays a little bit with the Chinese pronunciation and characters. “Youyang” (有氧) means aerobic or full of Oxygen, however they replace the “you” character with a different you character邮 which means postal or mail.

Yellow and green are two main colors for the store’s decoration palette, which are also the iconic colors of China Post. Prices of tea rank between 7 – 23 RMB, which is very affordable compared with the average price of those new beverage tea brands: 25-35 RMB. The menu includes pure tea, milk tea, fruit tea and fruit milk.

China Post Milk Tea
People are sharing the store on social media actively. Source: Little Red Book.

On Little Red Book, many people already posted their visits to the store. Some are saying that they were not expecting those drinks could be tasty, but it turns out they were surprisingly good. In comments areas of related posts and articles, people are saying the milk tea store should open its takeaway service. And some are suggesting they should place a mailbox beside the store, as a fun prop for people to take photos, causing the store to become more viral on social media. There are also voices saying Xinhua Bookstore, which is the largest and only country-wide bookstore chain brand in China, should open a milk tea store as well.

China Post Is Expanding Its Business

You can see this as China Post’s strategy to reduce risks and prevent the giant from falling down. After all, it was created in 1949, and it is already 72 years old. So of course, post office is its basic business. But with people sending less mail and the rise of many very fast and affordable logistics companies, this business is not as good as before. Even with the support from the Chinese government, it still needs to find ways to increase revenue, otherwise it will only be cash-burning.

Prior to opening the tea store, it had also opened a coffee shop. At the moment, it only has one, which is located in Xiamen (厦门), Fujian Province, founded last year. The store is not big, but with very strong vintage vibe, and it has attracted many people to visit and take photos. The average price is between 20-30 RMB. Again, not as high as other mainstream coffee shops in China.

China Post Milk Tea
China Post’s coffee store. Source: Little Red Book.

Besides its latest experiments with milk tea and coffee, China Post once tried out the supermarket business back in 2010, trying to become the “countryside Walmart” in China. It opened nearly 100 supermarkets and was expecting to have more than 10k stores by 2015. But in 2014, the dream ended because those supermarkets were not bringing profits for China Post.

The giant didn’t give up on trying. In 2019, it opened a pharmacy in Ning Xia (宁夏). So when a customer enters the store, s/he can not only buy medicine, but also mail and receive their parcels. The milk tea store in Fujian has a China Post pharmacy behind it.

China’s Beverage Industry Is Experiencing a Golden Age

Especially after I move to Shanghai and have colleagues, I can feel people’s craziness towards both milk tea or coffee. Whenever there is a new product of a beverage brand, or a store is having discounts today, or a new drinking store opening, people love trying them out. I used to be the type of person that only has one bottle of milk tea or coffee a week, but now after being in this environment, I gradually feel like having one each afternoon.

Two representatives in the new tea industry are Nayuki Tea and Hey Tea. Nayuki is filing an IPO in Hong Kong, and Hey Tea is said to be on its way too. Sexy Tea or Chayan Yuese is expanding its stores out of Changsha (长沙), which used to be its only location for 7 years.

China Post Milk Tea
3 main new tea brands in China. Source: Weibo.

When it comes to coffee, two players are worth noticing: Manner Coffee and Peet’s Coffee. Manner is a Shanghai-based coffee brand founded in 2015. It aims to bring coffee into people’s daily life so its prices are more affordable, between 15-20 RMB. It is also focused on sustainability, which has become increasingly important to Chinese consumers post-COVID. If customers bring their own cups, they can have 5 RMB off.

China Post Milk Tea
Manner often has a small store on streets. Source: wearemanner.com.

With high cost performance, white collars love Manner. In 2019, LV named the brand to be its beverage providers for its show VVV. In the early 2021, Manner received financial capital from H Capital and Coatue, making it worth 1 billion USD.

Peet’s Coffee, on the other hand, is a San Francisco brand and it entered the China market in 2017. People often compare it with Starbucks. An important reason which is also a fun fact is that, three founders of Starbucks were Alfred Peet’s apprentices, who is the founder of Peet’s Coffee. Besides this, I guess people relate these two brands together also because their prices and flavours are similar. 

China Post Milk Tea
Peet’s Coffee is also very popular among Chinese consumers. Source: Little Red Book@李小祺!

Well, that’s the round-up of the beverage market in China. I notice that we have yet to see a juice brand become extremely popular among Chinese consumers. Is it because the costs are too high? I am very curious to see what will happen next and if one will emerge.   

Read more: 没想到,中国邮政卖奶茶,很可能当上全国第一

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Body Anxiety Driving China’s Latest Diet Trend: Light Food https://chinamktginsights.com/body-anxiety-driving-chinas-latest-diet-trend-light-food/?utm_source=rss&utm_medium=rss&utm_campaign=body-anxiety-driving-chinas-latest-diet-trend-light-food Tue, 01 Jun 2021 10:00:00 +0000 https://chinamktginsights.com/?p=3357 Light food has become a popular diet trend among Chinese consumers.

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Here is an effective way for you to find out what kind of food is currently trending among Chinese white collars or young people. Simply go to the B1 level of popular shopping malls or office buildings, which is typically the level with the fast food restaurants and other food and drink vendors, and see what the newest offerings are. Nowadays if you go, you will discover the latest diet trend in China, “light food” or 轻食.  

Over the past several years, “light food” has become very popular among young people in China. A search for light food on Xiaohongshu brings up over 190K results. A light food diet is essentially just healthy eating – low salt, low sugar, low oil meals with a focus on protein and vegetables.

China diet trend
Light food is a very popular topic on Little Red Book, even celebrities are talking about it. Source: Little Red Book.

A Growing Business

While some people will make their own meals, many people who want to eat light are busy and would rather order takeout. According to Qichacha Database, there are now around 10k light food companies in China. Based on the light food consumption report published by Meituan (美团) in 2019 (轻食消费卡大数据报告), the amount of light food orders increased 98% compared with the same time in 2018, and the number of light food retailers on Meituan grew 58%. Euromonitor Consulting expects that by 2022, the scale of Chinese light food market will reach 12M RMB.

Why is this diet trend so popular in China?

In China, there is a phrase referring to having light food or salad, which is “eating grass”. The phrase contains sympathy and self-irony. Despite the fact that having “grass” is not a pleasant thing in most people’s minds, they are still willing to pay for it. Because behind this is people’s growing anxiety towards their bodies.

Read more about appearance anxiety here: Appearance Anxiety Driving Chinese Consumers to Take Loans to Pay for Cosmetic Procedures

A report published on May 11, which is Obesity Prevention Day, showed that 54.3% of Chinese women feel they are too fat. And while many women want to lose weight there is also a growing number of skinny people that are pursuing a curvier body type.  

Body related hot topics on social media also increase people’s body anxiety. For example, at one time, there was a challenge where people were crazy enough to see if they can reach around their back and touch their belly buttons. There was also a test to see if the width of your waist can fit into A4 paper. Those who can do these “challenges” post their evidence on social media which gives other pressure and body anxiety, and many people start choosing to go on a diet and eat light food after seeing these images.

China diet trend
Viral body challenges on Chinese social media.

Who is embracing the diet trend in China?

According to the report published by Meituan, among light food consumers, 62% of them are post-90s, and 26% of them are post-80s. Female consumers take up 70%.

That’s the statistics back in 2019. I haven’t found the latest light food consumer demographic reports, but based on my personal observation, consumers in those top tier cities are more open to light food. They embrace it as a way to guide them to a healthy lifestyle. City dwellers show great commitment to having light food, regardless of young or old.

On the other hand, in lower tier cities, most light food consumers are people who work out frequently. Their expectation for having such food is very pure: lose and control weight. The majority of them are young people, because for the older generation in lower tier cities, they can’t accept having such food while paying higher prices.

Why light food is expensive?

Light food is often very simple, yet the price for a portion of light food is typically three times the price of a hamburger.

It should be cheap theoretically for these reasons:
  1. The industry has lower threshold to enter. For people without any light food management background or even dining background, they can still enter the industry with simple training. Besides, a light food restaurant requires simple processes to go through to receive a business license.
  2. Lower input cost. There are two options to open a light food restaurant. One is by opening your own store and the other is to open a franchisee store. The franchisee fee is between 80k to 180k RMB, which is way lower than opening a hotpot franchisee store or a milk tea franchisee store. It costs no more than 200k RMB to open a light food restaurant in first tier cities.
  3. Light food is easy to cook. This food is light because they are either steamed food or boiled food. A chief only needs to select ingredients, cook simply, place them nicely on a bowl or a plate, and pour sauces on it.
China diet trends
The diet trend is especially popular among white collar workers in China. Source: Little Red Book.
So why light food is not affordable to everyone?
  1. High requirement for ingredients. Since light food is not cooked with complicated processes, and little to no oil, it maintains the original flavor of its ingredients. If the food is not fresh, it can be easily distinguished. How to maintain the freshness of ingredients? An effective way is to have those food transported by cold chains, and this adds extra cost.
  2. High commission rate taken by takeaway platforms. The average commission rate taken by Eleme (饿了么) is 20% for light food retailers. The platform usually charges its retailers 15-20%, so you know light food retailers’ rate rank high on the platform. On Meituan, the rate is as high as 23%. High commission rate leaves small profits for retailers and they can only raise prices of their products to make up the gap.
  3. Vendors are investing more to attract new consumers and maintain old ones. As we mentioned before, the number of light food retailers is increasing sharply in China. This means more competition. To differentiate their stores from others, retailers are investing more on the ingredients, the packaging and the quality of their service. All of these add to the price that consumers pay for in the end.
  4. Vendors know consumers will pay a premium. Consumers want this specific type of food and they will pay more to get it rather than eating another type of food that is cheaper.

Light food is a trend. It has history in China and it is being accepted as a healthy lifestyle. On the other hand, plant-based meat might not. As it is very new and many people still don’t like paying a large amount of money for this not-tasty fake meat.

Traditional restaurants are joining the industry

Many traditional restaurants spot this trend and they are adding light food as an option for consumers. For example, Pizza Hut opened a light food restaurant in Beijing. McDonald’s launched its Ciabatta collection featuring light food in February 2021. At the moment, only Shanghai and Ningbo (宁波) offer these menu items, since McDonald wants to see how consumers react to its light food in these two cities first.

China diet trends
The Ciabatta collection from McDonald. Source: Little Red Book.

Chinese traditional noodle restaurant Xibei Youmian (西北莜面) opened its first yogurt dining restaurant in the CBD of Beijing in 2019. Its target consumers are young people including white collars. Founder of Xibei, Jia Guolong (贾国龙), said this was their experiment and testing of the light food market. But in early 2021, the Beijing store closed down. It appears consumers couldn’t accept the high price of its yogurt, which was 3-4 times higher than the usual price on the market.

Though light food is known for having a higher price than regular food, brands also need to figure out the acceptable price range for consumers.  

Read more: 中国女孩的身材焦虑,养活了这门40000亿的“昂贵生意”

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The post Body Anxiety Driving China’s Latest Diet Trend: Light Food appeared first on China Marketing Insights.

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This Year’s 520 Campaigns Overshadowed by 618 Presale Kickoff https://chinamktginsights.com/this-years-520-campaigns-overshadowed-by-618-presale-kickoff/?utm_source=rss&utm_medium=rss&utm_campaign=this-years-520-campaigns-overshadowed-by-618-presale-kickoff Mon, 31 May 2021 15:38:00 +0000 https://chinamktginsights.com/?p=3346 Despite being one of China's Valentine's Days, this year there were few 520 campaigns.

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It feels as if brands are so busy preparing for this year’s 618 Shopping Festival that they didn’t put much effort into this year’s 520 campaigns. I didn’t hear lots of buzz about 520 campaigns, but rather, by mid-May my phone was already being bombarded with tons of 618 advertisement messages.

These are just some of the message that I received about the 618 campaign.

I think there’s also getting to be too many shopping holidays in China, especially during the first half of the year. The timeline goes as: CNY, Valentine’s Day, Women’s Day, Double 5 (5.5), Mother’s Day, 520, Father’s Day, 618, Qixi and Double 11. And these are just those big ones, there are many other smaller festivals.

What’s more, 618 used to be a smaller shopping holiday, and 11.11 was the biggest one, but ever since last year, the length and effort of promotion seems nearly as big at 11.11. Last year China was starting to recover from the COVID pandemic in late Spring, and the 618 shopping festival was used as a way to stimulate and kickstart the economy. Well now marketplaces and brands seem to think that after last year’s huge performance, they must do even better this year. In a recent article we shared that the major commerce platforms kicked off their 618 presale in late May.

Back to 520 – it appears that with the growth of 618 and the overwhelming number of festivals, brands are cutting out some of the smaller festivals and to focus on the major ones. Leaving us with fewer 520 campaigns this year.  

For those who aren’t familiar with 520, it is one of China’s many “Valentine’s Days”. In Chinese, the numbers 520 sound similar to the words “I love you”.

Domestic Brands’ 520 Campaigns

NAYUKI TEA x Roberts Rūrāns

This is Nayuki Tea’s sixth collaboration in its artist series. In the past some of the artist is worked with include Japanese artist PePe Shimada, Cinyee Chiu, American artist CDR. All of them turn Nayuki’s bottles into their canvas and put their creativity on it. Customers don’t have to go to these artists’ exhibition because they are viewing it from the bottle.

Nayuki Tea x Roberts Rūrāns: The Holding Hands collection. Source: WeChat official account: 奈雪的茶.

This year, the brand work with a Latvian artist Roberts Rūrāns. His works are very recognizable with bright colours and strong geometrical shapes. The theme that Nayuki features this time is “Holding hands”.

Instead of only focusing on lovers, Nayuki interprets the theme into six sections. They are “Dear family, hold hands”, “Lovely puppy, hold hands”, “Best friends, hold hands”, “Teammates, hold hands”, “The one, hold hands”, “Soulmate, hold hands”. Besides bottles, Nayuki also has those drawings on its vacuum cups and mugs. They are really cute and their colours are healing.

Mugs from the collection. Source: WeChat official account: 奈雪的茶.
Perfect Diary and its lipstick box

For 520, the brand launched a sophisticatedly-designed box with its iconic high heel lipstick in it. It also plays a bit with the Chinese pronunciation of box, which is “xiang”. The pronunciation is the same with “miss” in Chinese. So in Chinese, “I miss you” is the same pronunciation with “The box wants to see you”.

Perfect Diary and its box collection. Source: Weibo @PerfectDiary完美日记.
POPMART VIP Day

Blind box toymaker used 520 as a way to express its love for its loyal followers, holding a VIP day where members could use points to get exclusive discounts on products. In its WeChat post promoting the event, the brand said that love makes your heart beat excitedly, and so can these discounts and opening blind boxes from POPMART.

520 campaigns
Source: WeChat official account: 泡泡玛特POPMART.

Luxury Brands’ 520 Campaigns  

Prada

Prada didn’t’ play seriously with the 520 campaign. On May 20, it simply posted on Weibo promoting its iconic inverted triangle shape, including its Leather Hair Clip and Symbole Earrings. Along with a 3-second video showing these two products, Prada was saying “The classic inverted triangle marks the date of a relationship”.

520 campaigns
Prada’s post on May 20. Source: Weibo@PRADA普拉达.
Gucci

On the contrary, Gucci gave special attention to this year’s 520 campaign. Part of the reason might be the decline (22.7%) of it sales performance in 2020 and the brand wanted to make the best use of this festival to boost sales.

Gucci launched a collection dedicated to this festival, most of the items are in a red colour tone. It also created a 520 video featuring several Chinese celebrities, Ni Ni (倪妮), Lu Han (鹿晗), Song Zuer (宋祖儿) and Lai Guanlin (赖冠霖). The video was posted on April 29 both on Weibo and its WeChat official account. From then until May 20, Gucci constantly used the hashtag #Gucci520# in its Weibo posts.

520 campaigns
Gucci’s 520 campaign. Source: Weibo@GUCCI.

The brand also did a great job on Qixi Festival (which is another Chinese Valentine’s Day) in 2020. Check out our article to see how it unfolded the campaign.

Tiffany and the 520 Key 

Tiffany’s preparation for its 520 campaign started from May 1. To show its sincerity, it launched a new and limited product for 520 only: a Tiffany Keys necklace with a bright red colour. To increase exposure for this special product, Tiffany invited several celebrities to wear it, including Gong Jun (龚俊), who is the main ambassador for this product as he was the first celebrity announced by Tiffany on Weibo to wear it. Austin Li, Cecilia Song (宋妍霏), Ou Hao (欧豪) also joined in to promote the 520 key necklace.

520 campaigns
Tiffany 520 collection. Source: Weibo@TiffanyAndCo蒂芙尼的微博.

Read more: 奈雪CUP美术馆|520,每一次牵手,都是一句我爱你

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