Why is she so popular? Well people were curious about this perfect-looking girl. AYAYI amazed people with her features and style. People were questioning whether she actually might be a real person. Many people began re-creating AYAYI’s content and imitating her look.

Business Potential of AYAYI

Among AYAYI’s followers, over half of them are the young generation between the ages of 18 to 24. They love chasing after fashion trends and show great interest in different types of art. Working with AYAYI can help brands to become younger and to reach the young consumer group.

Guerlain x AYAYI

Many brands “invited” AYAYI to their offline events, including Louis Vuitton, Guerlain and Disney. On June 15 and 16, Guerlain created a perfume garden in Shanghai, attracting many KOLs to visit.

Even though AYAYI can’t actually attend the event, her designers can create images that make it look like she was there.

What also help the event to generate buzz on social media was that many KOLs and celebrities were learning from AYAYI’s poses and took photos at the same scene with the same gesture. It used to be influencers imitating celebrities, now it’s the other way round, that celebrities are imitating influencers, not even real humans at that!

Principal of Tmall Super Brands Digital (天猫超级品牌数字)

What makes AYAYI different from other virtual avatars is her endorsement with Tmall. She visited Alibaba’s workspace and had her own name card like other employees.

AYAYI is not confined by either time or space, so she can travel anywhere. Because of this, she can be the one who guides people to different art exhibitions in the world and bring engaging visiting experiences for them with technical assistance.

AYAYI is also the representative of the latest trends and fashion. Brands are welcome to have jointly designed products with her. Together with AYAYI’s identity as a metahuman, they can bring novel shopping experiences for consumers.

During this year’s Mid-Autumn Festival, she introduced a mooncake gift set, co-designed by AYAYI’s team and Tmall. Consumers not only received a physical set, but also a NFT (Non-fungible Token) mooncake.

The Prospect of Virtual Avatars

In some way, real KOLs are the same as those digital human beings. KOLs have their own online characters set by MCNs or themselves. They are invited to events and post images on social media. They interact with followers in a digital world and followers don’t know if it’s KOLs themselves replying to their messages or someone else replying on the KOL’s behalf.

Virtual avatars are capable of doing the things above. They are created under a series of artistic analysis and their faces are more sophisticated than real people. Since they first show up on social media, they are born with discussion on whether they are real people. That discussion helps them grab attention and grow fan bases.

According to iiMedia Research, the domestic market of virtual idols reached 3.46 billion RMB, and it is expected that by 2021, the scale of the market will grow to 6.22 billion RMB.

However, though virtual avatars can do most of things the same with real human beings, some are not within their capabilities. Not long ago, a virtual influencer Ling (翎) posted on RED to promote a lipstick. The post was criticized for not being honest, because it described the texture of the lipstick. RED users felt that a virtual person can’t feel the texture personally, and it would be better if she recommends apparel instead of makeup or skincare products.

Read more: 首个超写实数字人入职天猫，撕开元宇宙入口？

The post Chinese Metahuman AYAYI: Redefining the Word Influencer appeared first on China Marketing Insights.

During Double 11 in 2020, XUELI achieved over 480 million RMB in sales. In 2020, the brand’s number of customers broke 27 million and it did a total of 2.3 billion RMB in sales. The XUELI Tmall store has almost 9 million followers.

In 2019, with the rise of Taobao livestreaming, Cherie also launched her career as a livestreamer, selling products for other brands as well as those from her own brands. She is now also one of Tmall’s top live streamers alongside Viya and Austin Li.

Cherie started as a small Taobao seller and now she has a multi-billion RMB apparel brand. What’s more, she has been able to survive in China’s tough fast fashion industry for 10 years. By looking at XUELI’s development, we can learn the development of the Chinese apparel industry.

Why Traditional Fast Fashion Fails to Reach Consumers?

In the past, fashion was not accessible to everyone in terms of decision making. Brands organized press releases to announce their new collections.

However, with the Internet and consumers’ growing confidence, consumers began to show and voice their aesthetics and opinions which can affect brands’ decision-making process.

As Cherie said in a documentary called Chaoliu China (潮流中国), though there are many apparel brands emerging in China every day, they may grow quickly but they can also die quickly, for the fact that the industry is changing too fast to satisfy young consumers’ needs.

Why Can Cherie Grow Her Apparel Business?

Capture & respond to consumers’ needs

Early on, Cherie noticed the trend that fashion brands are no longer the dictator, and they will need to value consumers’ opinions in order to survive. The main thing she has been doing for XUELI is to make the brand an accessible one by handing over some of the decision-making power to its customers.

She said herself in the documentary that she had been talked to “all the girls”. From Renren, Mogujie (蘑菇街), Meili Shuo (美丽说) to Weibo and to livestream, she’s always stepped into the newest platforms where consumers are gathering in order to connect with them.

Offering Styling advice

Cherie noticed that Chinese consumers want suggestions for entire outfits instead of brands’ presenting individual clothes. For example, when they were watching a popular TV series called My Best Friend’s Story (流金岁月), they wanted to immediately copy and paste one of the main actress’ outfits and purchase them.

Once she noticed this need, Cherie stared having XUELI present its products as a whole outfit. XUELI also has its own stylists to help consumers design their looks. This builds loyalty among consumers and increases the repurchase rate of the brand.

Actively working with IPs

Working with IPs has become a trendy thing among brands in China. It gives freshness to its consumers and has great potential to turn the IP’s fans into the brand’s customers.

XUELI is also actively collaborating with IPs. For example, it once worked with Warrior, a Chinese shoe brand that has 94-year history. Within 4 hours, XUELI sold more than 110k pairs, and it achieved over 20 million RMB sales in a week.

Develop Mature Supply Chains

This actually belongs under the previous section, “Why Cherie is Able to Grow Her Apparel Business?”, as it is a key element for XUELI’s success. But since there is so much to cover it demands its own section.

Why made Cherie decide to improve her supply chains?

Back in 2013 Cherie realized that if XUELI (back then called Chinstudio) solely relied on what was already available on the market, her brand wouldn’t be able to stand out.

First, Chinese consumers are pursuing personalized products instead of one that looks exactly the same as what other vendors are selling. Second, sourcing goods from apparel vendors makes it hard to control price and quality. And lastly, sourcing pre-designed apparel from vendors doesn’t leave room for creativity.

Since then, Cherie has been devoted to building and improving her supply chains. Her KOL incubator and e-commerce company Chen Fan has over 1,000 supply chain vendors. XUELI also has its own, and whenever Cherie’s team decides to launch new collections such as down jackets, jeans or jersey, those vendors react quickly and assemble their resources to accommodate Cherie’s needs.

It is known in the industry that Cherie’s supply chain system has big changes every year. This is because she keeps only 30% of her supply chain vendors and weed out unqualified ones.

Benefits of a mature supply chain

The most direct effect that the supply chain brings for XUELI is higher efficiency. For example, the preparation of this year’s 618.

It started on May 10, when the team began designing products. Two weeks later, the design work was finished. Since May 15 and the rest 5 days, supply chain vendors were preparing materials. In the next two weeks, manufacturers were busy mass producing the new designs.

In total, the whole process takes around 40 days. That’s very “China speed”.

This speed and control over the process also allows Cherie to change designs based on feedback from customers. For example, earlier in May, Cherie posted images of her wearing a dress on Weibo. In the comments area, she noticed a user saying that she’s not comfortable with a hole in back, because that looks backless, that she would prefer a version of the dress without a hole.

After Cherie saw the comment, she screenshotted it and sent it to her designer. The designer quickly removed the hole and update the design to the user’s preference. With XUELI’s supply chain, a new dress was quickly launched in the store.

At the moment, it only takes 5-7 days for XUELI’s team to restock spring & summer collections, and 15-20 days to restock fall & winter collections.

Tapping into the Guochao Trend

Most recently, XUELI launched a new line called CU focused on apparel that incorporates Chinese design elements, a trend called Guochao. The company teamed up with 11 artists, illustrators, and independent designers to create the first set of designs. Guochao clothing has become very popular among young Chinese consumers over the past several years and so far XUELI’s CU line has been well received.

Read more: 从仰视到平视，雪梨的十年猛进

The post Chinese Mega Influencer Cherie and Her XUELI Apparel Brand appeared first on China Marketing Insights.

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.

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. 

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.

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’.

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.

The post The Newest Buzzword ‘Involution’ and How Brands Have Responded to It in China appeared first on China Marketing Insights.

Sounds familiar right? Not long ago something similar happened with the Xinjiang cotton scandal. Every year brands get caught up in scandals. But with the correct response, it doesn’t have to mean the end of their China journey.

Coach is one of those brands. It took the slow road, but it has survived and found its way back from the scandal. Recently it held a large-scale show in Shanghai which helped the brand generate lots of buzz on social media. Though Coach still has a long way to reach its previous peak performance in China, it seems like the brand is getting there.

What happened to Coach in China in 2019?

The scandal started from Versace defining Taiwan, Hong Kong and Macao as individual countries on a T-shirt. Following it, many other brands such as Coach, Givenchy were discovered to have the same issue.

People were outraged and those brands’ ambassadors were busy distancing themselves from brands by announcing the termination of their contracts. A key reason why Coach was severely influenced was the cancellation of contracts by its two ambassadors: Liu Wen (刘雯) and Guan Xiaotong (关晓彤). Both of them are top celebrities and their actions drive massive amounts of attention and traffic.  Under the comment area of Coach’s apology announcement on Weibo, many people were asking the brand to get out of China and stop earning money from Chinese consumers. The future of Coach seemed dark back then.

Coach’s performance after the scandal

Social media engagement on Weibo

I choose Weibo as the subject to monitor Coach’s social media engagement. First, the platform is one of Coach’s official channels to present its brand image and announce big events. Second, Weibo’s statistics (including numbers of likes, comments and reposts) are more transparent compared with WeChat,

The data excludes posts involving celebrities and KOLs, as the engagement numbers usually go extremely high for those posts. Here is the average engagement prior to the scandal: 

And here is the average engagement after the scandal:

You can see from these two charts that Coach’s social media engagement fell dramatically after the scandal. People were reluctant to have interactions with the brand when it first started to post content again.

Sales performance after the scandal

From lack of social media engagement, it appears Coach might not survive from the scandal. However, after parent company Tapestry released its financial report of 2020, it seemed as if the effects weren’t as serious as they looked. The report shows that Greater China achieved $600.8 million in sales, accounting for 17% of Coach’s total sales. If we look at the percentage of Greater China’s contribution in 2019 and 2018, which were 18%, it didn’t make great difference.

Coach’s bags have also frequently shown up in top fashion KOLs’ posts. The event that it held on June 3 grabbed lots of attention. It seems that people have let go of the scandal back in 2019. How does Coach manage to do so?

How Coach Earned Back the Love of Consumers in China

The first Weibo post after the scandal

After its official apology on August  12, Coach didn’t post anything on its Weibo account and went silent on social media for two months.

The first post after the scandal was not until November 6, 2019. The post announced Coach’s participation in the second China International Import Expo. This is not some usual exhibition but a national-level expo, being recognized by the Chinese government.

By showing up at the Expo, Coach was delivering the message to Chinese consumers that it was making efforts to fix its mistakes and it has gained official approval to join such a government-run event.

We don’t want anything bad happens to brands. But if your brand happens to get caught up in any scandals, do keep quiet for a while. Nike hasn’t posted anything on its Weibo account since March 12, after the Xinjiang Cotton scandal, same with Calvin Klein and H&M.

Do the politically right thing

Besides the second China International Import Expo, Coach also participated in the third Expo in 2020. This shows Coach’s sincerity to please Chinese consumers and do the politically right thing in China.

Other than the Expo, when COVID first hit Wuhan in early 2020, Coach immediately donated 1 million RMB to the city. In the comments area on Weibo, people were saying Coach reacted fast and was being generous.

Celebrity and KOL strategies

After the two ambassadors terminated their collaboration with Coach, it would need to find a new one. This would be achieved once things cooled down and celebrities were willing to work with the brand again. The new ambassador it picked is Yang Zi (杨紫). She is a child star who became famous from a household TV series called Home With Kids (家有儿女). In recent years she has shed the child-star image and played the lead role in numerous romantic dramas. Yang has 57 million followers on Weibo and it is fair to say almost every young person knows her.

Before officially announcing Yang Zi as its ambassador, Coach had been interacting with her by having her appear in video clips. So on August 31, 2020, when Coach announced the collaboration, Yang’s fans were cheering up for her and the post gained 182k likes so far.

Other than Yang, Coach also actively worked with other celebrities and KOLs, including Ding Yusi (丁禹兮), Chen Yuqi (陈钰琪) and Dong Youlin (董又霖). You may find those names sound unfamiliar. And yes, they are not as famous as Liu Wen, Guan Xiaotong or Yang Zi. I think it’s not because Coach doesn’t have the budget to work with higher-level celebrities. It’s because the brand wants to be low-key for now instead of working with some big names and drawing lots of traffic all of a sudden. The brand wants to grow and recover steadily. It is playing a safe card.

Offline presence is necessary

If you follow the timeline of the Coach scandal, you will find the brand was a little bit lucky. The scandal happened in August, 2019. Coach kept silent for 2 months on social media, and then in early 2020, COVID hit the country and offline stores and events were shut down. Everything offline didn’t restart until March.

So during this period when Coach should be low-key and had better not hold any offline events, every other brand was doing the same thing because of COVID restrictions.

Even after COVID restrictions loosened, Coach stayed fairly quiet and it wasn’t until December 2020 that Coach held a big offline event. I believe December could be some people’s happiest month, as it has Christmas, and it is the end of past and a fresh start of a new beginning. Coach picked a good timing, when hate and negative voices of its past scandal might be less.

What it did for the event was to have 400 drones with lights create images of Coach’s bags and its iconic dinosaurs cartoon. The brand was wishing everyone a good holiday. The location that it chose was at The Bund, Shanghai, which is the most representative spot either in Shanghai or in China.

If The Bund event has somehow brought Coach back to the center of the stage, the following one publicly tells Chinese consumers that Coach has made its way back and it is doing better than ever.

On June 3, 2021, Coach invited top celebrities and KOLs to its Coach Winter Collection show in Shanghai. The brand designed its show place as a drive-in cinema with a vintage vibe. Celebrity attendees were diverse. There were top ones such as Yang Zi, Chinese singer Xiao Jingteng (萧敬腾) and Chinese actor Zhong Hanliang (钟汉良). Idols who become well-known to the public such because of those contestant show such as Liu Xiening (刘些宁) were also invited. In terms of KOLs, Coach mostly invited top ones such as Mr. Bag and AnnyFan.

Because of the amount of celebrities and KOLs that Coach invited and the brand’s promotion, the event drew lots of attention on social media. The tag #Coach秀场直击 (#Coach Winter Collection Broadcast) has more than 100 million views so far. Coach itself keeps posting images from the event on its official channels. KOLs who have attended the event also posted related content to further promote the show and the brand.

Our Thoughts

Well, ideally your brand doesn’t have a scandal. Though everything has two sides, and a scandal might boost your brand’s influence, in the end, it is more likely to bring negative impacts than loyal customers.

If your brand does get involved in a scandal, especially political ones which are more sensitive here in China, the first thing is always to SINCERELY apologize. Don’t just do it because you need it, such as the official apology made by Dolce & Gabbana’s founders, which worsened the situation instead.

The second thing is to keep silent. On one hand this gives your brand time to restructure and plan out next moves, and it also fades either the scandal or the brand for a while. As time goes by, with the massive amounts of information they take in every day, consumers are likely to forget the scandal.

If you strictly follow these two steps, it is likely the scandal will eventually pass.

The post China Marketing Case Study: How Coach Won Back Consumers After a Scandal appeared first on China Marketing Insights.

Those socks on Austin’s livestream were a collaboration with an IP called Wen Zang (纹藏). Wen Zang is an online platform that gathers traditional patterns and designs from different regions in China, aiming to protect intangible cultural heritage. Primeet collaborated with Wen Zang through IPmart.

Primeet finds IPs to work with through Tmall’s IPmart

Primeet is 8 years old. When the brand was first founded, at that time Chinese consumers were not open to socks with different patterns and colors, so founder of Primeet, Chen Cai (陈才), chose to sell his socks to the international market. It was not until 4-5 years ago that Chinese consumers, especially post-95s and post-00s started embracing the fun socks trend. Now the brand has over 940k followers on its Tmall flagship store.

Chen also spotted the trend of working with IPs. According to statistics provided by Tmall (2021天猫服饰白皮书), in the apparel industry, the growth rate of jointly-designed clothes reached 60%, which was far more than non jointly-designed ones in 2020. This has greatly encouraged Chen to seek suitable IPs for Primeet to collaborate with.

But this troubled him. On one hand, big IPs require a way higher minimum guarantee and packaging fees, which might not be affordable for small retailers. Small IPs, on the other hand, tend to have the history of not being trusted.

What also troubled Chen was the fact that he was not presented with many IPs to choose from, that he lacked a proper channel to learn more details about IPs in the China market. The situation didn’t last long until he learned about Tmall IPmart.

What is Tmall IPmart?

IPmart is a platform introduced by Tmall in March, 2021. The purpose of the platform is to be a bridge connecting IP designers and brands. It features more than 150 domestic and international IPs, allowing new designers to present their works and provide multiple choices for brands. IPmart is planning to introduce over 300 new IPs by the end of June.

What cheered up Chen was also the fee. Traditionally, IP owners charge high guarantee fee at the beginning all at once. The following sales are not their business and won’t affect their revenue for this collaboration. But on IPmart, things are different. Brands don’t have to pay for access to the entire IP, instead, they can only pay for a few designs that they like. This will greatly lower the cost for brands. IPs that the platform has included are B.Duck (a yellow duck that goes viral both online and offline), National Treasure (国家宝藏, a TV channel that dedicates to introduce treasures in the country), National Museum of China etc.

Why did Tmall create IPmart?

Just like Chen’s case, there are many other brands that having trouble finding the proper IPs to work with. On the other hand, there are many talented designers finding it hard to generate exposure for IPs that they’ve created.

Besides, IP is such a lucrative business that in 2019, the IP delegation business reached 99.2 billion RMB and it was anticipated to break 100 billion RMB in 2020. IP is a new and promising growing point in the China market.

The future of IPmart

In terms of scale, IPmart is planning to introduce more than 300 additional IPs by the end of June 2021. And in terms of depth, IPmart hopes to incubate Chinese traditional culture into its IPs. It is working towards the goal of creating over 500 domestic IPs and have them available at price points that are suitable even for small to medium enterprises (SMEs).

Our thoughts

At the moment, the IP business is booming. However, too many marketing campaigns and cross-collaborations will tire out consumers. In the end it may be hard for them to recognize your brand because you’re over-collaborating making it hard for them to capture the essence of your brand. Therefore, even though IPs are becoming more accessible, brands still need to consider which IPs are best suited for the brand and audience, as well as how they can leverage this cross collaboration to make them stand out.

Contact us for more suggestions!

Read more: 一款袜子在天猫618爆红，背后是一个千亿新市场

The post Tmall IPmart Behind the Huge Success Of A Sock Brand During 618 appeared first on China Marketing Insights.

Florasis (the avatar) is designed to be a personification of the brand and reflect the brand’s emphasis on traditional Chinese heritage and beauty.

Florasis was founded in 2017 and it has been growing fast. In 2019 it broke 1.1 billion RMB in sales, which was 25 times higher than its performance the year before. Florasis continued to make great progress in 2020, when it achieved over 3 billion RMB in sales, a 165.4% growth year over year.

How Will the Virtual Influencer Benefit the Brand?

Or a more direct way to say this is, will the virtual avatar help Florasis boost its sales? Having just launched, it is still unclear what role Florasis (the influencer) will play. Will she merely appear in brand content or they give her a voice and have her appear in videos and live streams? Will she have her own social accounts and appear alongside the brand’s ambassadors such as celebrity model Du Juan?

All of this has yet to be seen so it is too soon to say how or if she can benefit the brand. What we do know though, is that when used correctly, avatars such as this can help consumers feel closer to the brand and strengthen the brand’s image.

Other Brands Are Leveraging Virtual Influencers in China

Virtual influencers are already becoming quite common around the world, however, the majority of them are operated independently, not created by brands. For example, Chinese influencer Luo Tianyi (洛天依). She is a virtual singer born in 2012. Luo attended many offline events with real celebrities, such as appearing with Austin Li in his livestream. She has 5 million followers on Weibo and works with brands such as Huawei and Master Kong (康师傅), an instant noodle brand.

An internationally-known avatar is Miquela, from California. She used two years to build up her 2-million fan base on Instagram. She is a model and a singer, and she has appeared in luxury brands’ advertisements including Chanel and Burberry. Miquela even created her own fashion brand in 2019.

As for brands, in China, L’Oréal and beauty retailer Watson’s have created their own virtual ambassadors. The ambassador that L’Oréal has created is for one of its sub brand Mei Ji (美即) or MG. It was a Guangzhou-based beauty brand, and L’Oréal purchased it in 2014. The virtual ambassador is called Sister M or M Jie (M姐), a play on the name of the brand, and she was introduced to the public in 2020.

Sister M has participated in many events, such as MG’s Tmall and JD livetream during Double 11 Shopping Festival last year. She is also very active on Chinese social media. For example, M has her own column on Little Red Book called Sister M Talk (M姐TALK). It covers topics such as how should women face heavy working pressure, how to improve yourself, and how to maintain your body etc. M also has a series on Douyin called Sister M Visits Laboratory (M姐探秘实验室). It shows how the brand invent their products. Those videos are very informative and scientific.

Prior to Sister M, Waston’s introduced its virtual influencer Qu Chenxi (屈臣曦 or Wilson). It is a boy with those “fresh meat” looks. Wilson not only shows up as the ambassador of Waston’s, but also as a customer service representative with those CRM statistics backing him to better serve his customers and followers.

Wilson also has his Weibo account (@屈臣曦-Wilson) with more than 180k followers. He often holds lucky draw activities on Weibo, inviting his followers to either comments and like a post or to repost it so as to be chose to win gifts.

Why Are Brands Working With Virtual Avatars?

Compared with real celebrities, these virtual influencers are a lower risk alternative. Its less likely they will become involved in personal scandals that can ruin their career together with brands’ reputation. 

Prada and Zheng Shuang’s (郑爽) collaboration is an example. Zheng’s scandal caused the fashion group’s stock drop 1.7%. Another celebrity Show Lo (罗志祥), when his scandal went public dairy brand Chun Zhen (纯甄) immediately changed its ambassador, afraid of Show’s negative influence.

Compared with these real people, virtual avatars are easier to control either by its teams or brands. Their hobbies and personalities are shapable based on followers’ preference. They don’t get old, and they can maintain the body shape that they want. With the development of technology, they are able to have real-time interaction with their audience.

There Are Downsides of Course

A serious problem that no virtual influencer can escape is the potential for technical issues, especially during live streams. Luo Tianyi had a livestream in May 2020 where at one point during the stream there were over 2.7 million people viewing simultaneously, and throughout the course of the stream, nearly 2 million people either commented or sent virtual gifts to her. But because of a technical issue, she couldn’t sing when it was her time slot, and it remained dead silent, leaving a lot of viewers disappointed.

On her live stream with Austin Li, while I was watching it, I noticed the volume of the sound decreased a lot when Austin transferred to the scene with Luo, and many viewers were saying they can’t hear what they were talking about. If brands want to work with virtual influencer interactively, they will need strong technical support.

The other downside is that, though virtual avatars are controllable, they lack something real. They are not real people after all. Some people find it hard to connect with them. They know clearly that teams are controlling these avatars and the commercial purpose is too obvious for them to develop a connection with the character.

It will be interesting to observe how Florasis will make use of “Florasis” the virtual influencer.

Read more: 花西子虚拟形象“花西子”，首次亮相。

虚拟代言人出圈：人设不翻车，真人偶像的对手来了？

The post Chinese Beauty Brand Florasis Creates its Own Virtual Influencer appeared first on China Marketing Insights.

Who are they? Zhao Xiaotang (赵小棠) is a singer and dancer who became famous from a contestant show called Youth With You Season 2, and she is the representative of idols in the young generation. Yang Tianzhen (杨天真) is best known for her past identity: a top celebrity agent. Over the past year, she has become a celebrity in her own right after launching her own plus-sized clothing brand. And Chen Man (陈漫) is a successful photographer that many celebrities want to work with.

What message does Victoria’s Secret want to deliver through the campaign?

Three women in different fields. The combination shows great variety. The campaign is telling consumers to be themselves and be confident, regardless of jobs, labels, and their bodies.

The most mentioned ambassador in this campaign is Yang Tianzhen, and her name shows up in many articles. This is because her body doesn’t fit the traditional image of a Victoria’s Secret model. I think this is the same with VS’s decision back in 2019 when it had a plus-size model to present its products in the look book. It is saying that the brand is open to all bodies and there is no need to be anxious about your body.

But has Victoria’s Secret itself become anxious?

The anxiety began in 2017, when the audience rating of its always-popular Victoria’s Secret fashion show started to drop. In 2018, the number of people watching the show fell to 3.2 million. The number was way fewer than its golden age: 10.3 million audience in 2010.

A frequently mentioned phrase when people are commenting Victoria’s Secret’s decline is: too sexy. I can see Victoria’s Secret is trying to get rid of the traditional definition of sexy by hiring Zhou Dongyu (周冬雨) and Yang Tianzhen as its ambassadors. Opposite of Yang Tianzhen, actress Zhou Dongyu is very skinny and has a boyish figure. She was never linked with sexy before. Her image in the Victoria’s Secret China lookbook looks like a teenage girl with her hair tied up, instead of having long, wavy hair like other Victoria’s Secret’s models do.

It may seem like adding variety to the definition of sexy is a smart move for Victoria’s Secret. However, it feels like the brand is trying too hard to please consumers. If it hired plus-size models before the scandal discriminating them in 2019, it may have gained more trust from consumers. But the brand didn’t fix this problem until consumers critized it, which make those collaborations seem insincere and performative.

Victoria’s Secret Shouldn’t Shy Away From its Sexy Image in China

Victoria’s Secret can still maintain a sexy image. After all, it is something that the brand has been building for years, and consumers know it, that Victoria’s Secret equals being sexy. Consumers walk into Victoria’s Secret’s stores with the expectation to look for sexy lingerie, instead of seeking something like Ubras’ or NEIWAI’s products.

And in fact, it is important for Victoria’s Secret to emphasize its sexy image. There are many lingerie brands emerging in China and it is necessary to have your own uniqueness. Ubras has its one-size-fits-all bras, NEIWAI is known for its inclusiveness of different bodies (thanks to its “NO BODY IS NOBODY” campaign), and Victoria’s Secret is known for its sexy products. What the brand can do is to find different, more subtle ways to interpret the definition of sexy, instead of simply hiring plus-size models. What’s wrong if you want to look sexy, whether it’s to please someone you like or it’s to please yourself?

Read more: 维密变了，这波改变让杨天真都爱了

The post Victoria’s Secret a Little Too Eager To Please Consumers in China? appeared first on China Marketing Insights.

Here we’ll share some of the key changes and trends highlighted in the report, as well as a link to the full report below (in Chinese).

Live Streaming Has Become a Must-Have for New Brands

Over 90% of new brands on Tmall have livestreamed on Taobao Live. When it comes to live stream sales performance, in 2020, the top three new brands are Chinese beauty brand Florasis (花西子), underwear brand Ubras and another domestic beauty brand HELIUS.

But the top 20 brands weren’t just from beauty and fashion as you might expect. Number 8 was dairy brand Adopt A Cow and number 9 was robo vacuum Narwhal. Number 12 was meat brand Daxidi (大希地) and number 13 was a company Heibaidiao (黑白调) who makes ergonomic desks and chairs for children.

This really goes to show that brands from any industry can leverage live commerce. There are some more great stats on that below.

Brand-Run Live Streams Becoming More Popular

It’s also worth noting that, among nearly 1,000 livestream rooms that achieved over 100M RMB sales in 2020, 55% of them were brand-run livestreams (as opposed to live streams run by influencers at 45%). This shift from a brand relying on influencers to sell products to training its sales associates to become live streamers was a big trend in 2020 and is continuing this year.

Fake products are still a key issue in livestreaming, and brand-run livestreams erase consumers’ concerns. Personally, I would rather buy a product from a brand’s flagship store than buying it at a cheaper price from other stores.

Diversity in live streamers

Yet at the same time, as the industry has boomed, the number of live streamers is also rapidly increasing. In 2020, the amount of live streamers grew 661% compared with 2019’s.

Along with the increasing number is the diversity in live streamers. When Taobao just started the livestream business in 2016, only girls who looked good and understand well of Taobao can be live streamers. In 2019, many KOLs and celebrities were joining the industry, and in 2020, many brands were stepping in this lucrative market. Now, you can also see many CEOs showing up in livestream rooms.

Taobao has identified six categories of live streamer personas:

Taobao Live streamers:

• Such as Austin Li and Viya
• Entered Taobao Live early and have developed massive followings and lots of experience

Influencers:

• Such as Cherie and Zhang Mofan
• Came to Taobao Live with credibility and a large audience

Celebrities:

• Such as Liu Tao and Ji Jie
• Have a large fanbase and are liked by brands

TV Hosts:

• Such as Li Jing
• Come with very strong hosting skills

CEOs and Executives:

• Such as Dong Mingzhu (Gree)
• Well-known leaders, provide professional product insights

Sales Assistants:

• Such as the team at Intime department store
• Brands can leverage many of them, they have deep knowledge of customer needs and of the store’s products

Everyone can be live streamers. This is what is happening in China.

Product Categories with the Most Growth

The product categories that these streamers focus on has also become more diverse. In 2019, the four main categories the live streamers specialized in were beauty, fashion, jewelry, and food & beverage. While these are still the top categories, 2020 saw an influx of streamers in the home décor, furniture, sports, automobile, and home appliances categories.

When it comes to overall live stream sales, including both live streamers and brand-run streams, the industries that saw the biggest growth in sales in 2020 were cosmetic medicine, books and audio, electronics, auto, large and small home appliances, furniture, sports, local services, and food.

There were also niche subcategories that saw huge growth last year. For example, sales of Hanfu, or traditional Chinese clothing, on Taobao Live grew 753%. Hair removal products grew 203%, Italian pasta grew 1,485%, and massage guns 864%. Even crazier, the sales of motorcycles (the entire motorcycle, not just parts!) grew 185% and orthodontic braces (yes, braces!) grew a whopping 13,456%. If that doesn’t prove you can sell anything through live streaming, I don’t know what can.

The Number of Taobao Live Core Users is Increasing

Behind the rapid development of Taobao livestream is the increasing number of its core users. Core users are people who watch livestream on a frequent basis and they tend to watch the livestream for a long time. They also spend at least 3x more than average users each month.

According to the report, core users contribute 80% of the total watching time on Taobao Live, and drive 60% of the sales. In 2020, the number of core users grew 150%.

It is still not late to enter the industry. Though the buzz surrounding livestreaming has decreased a lot in 2021, it doesn’t mean the industry is saturated or in decline. It has just stepped into a mature and steady developmental stage.

Find the full report here: 重磅！淘宝直播2021年度报告发布，这些品类在直播间里大爆发

The post Key Takeaways From the Taobao Live 2021 Livestreaming Report appeared first on China Marketing Insights.

For many of these diary hobbyists, keeping a diary can be expensive. In addition to buying a nice journal, they also purchase many peripheral items such as tapes, pens, and stickers. Many people will spend several hundred to several thousand RMB a year on this hobby. 

Why Is Keeping A Diary So Expensive?

First, it’s the book itself. If you are looking for good quality, most of them will be from international brands. Countries such as Japan and the UK are well-known for producing high quality journals. Mine is very affordable, at 66 RMB while a journal from the popular Japanese brand knox costs 3,000 RMB. And it’s just the book.

Second, as we mentioned above, the term shouzhang doesn’t simply refer to writing in a book. It includes a lot of peripheral products such as a cover, washi tapes, stamps and stickers. If you want to draw, you also have to prepare gel pens and colored pencils. Some people will buy Nite Writer pens so they can write in the dark without keeping roommates awake. 

A popular Japanese brand called Hobonichi, its inner book costs over 100 RMB and together with its cover, a shou zhang can reach over 1,000 RMB.

Group Buying Washi Tapes

Washi tapes are especially popular and stationary brands frequently launch new tapes to grab customers’ attention. If you like collecting things, you will keep buying whatever is launched.

But they can be costly as well. A complete roll of tape might cost around 40-50 RMB. To save money and buy more tape designs, on some Taobao reseller stores, a complete roll of tape is divided into several parts, so that each one only costs 4-5 RMB.

Another way for those tape lovers to buy tapes at a lower price is through group buying. There are apps dedicated to this business, such as Sami (撒米) or Benben, or you can go to Weibo and put the key word “拼米团” on it and it will guide you to the forum or group.

Many museums and cultural sights, such as Beijing’s Palace Museum, have started producing their own washi tapes with designs from items in their collections. 

Influencers Getting in On the Trend

For several years now, popular fashion influencer Becky Li has launched a yearly planner/diary specially illustrated by her in-house illustrator. It comes with stickers and plenty of space to draw. 

Shou Zhang Communities

For many of these hobbyists, keeping a diary isn’t a private activity. Many of them will share their diary pages online, like a piece of art. Besides posting on mainstream social media platforms. There are also niche platforms that have popped up for shou zhang enthusiasts to connect with each other and also to purchase shou zhang products. 

There are also offline gatherings/markets for Shou Zhang lovers in different cities.

Read more: 比盲盒还烧钱！一个本子3000块，这个圈子有多“神奇”

The post A Popular (and Expensive) Habit Among Young Chinese People: Keeping a Diary appeared first on China Marketing Insights.

And this time it’s not beauty brands or clothing lines…it’s restaurants! 

In 2020, hot pot restaurant Xianhe Zhuang (闲和庄), which was founded by Chinese actor Chen He (陈赫 became very popular. Celebrity Sun Yizhou (孙艺洲) opened a barbecue restaurant in June, actress Guan Xiaotong (关晓彤) opened her milk tea store in September and actor Huang Xiaoming (黄晓明) opened a barbecue restaurant in November.

Whenever they opened restaurants, there were many related videos or posts on social media, especially on Douyin. For example, a Douyin foodie KOL @大LOGO吃垮北京, who has 23.6 million followers, often visits those celebrities’ restaurants when they are opened. Combining the influence of celebrities and KOLs, these restaurants indeed grew very well and stood out when physical stores were suffering after the effects of COVID lockdowns.

The Popularity Starts from an MCN

The big boss behind the prosperous situation is a restaurant MCN (multi channel network) called Zhishan (至膳). For usual MCNs, they incubate personal influencers/KOLs, and Zhishan is applying the same concept to incubate wanghong restaurants.

Zhishan was founded in 2011. Its most signature “influencer” is a hot pot restaurant called Tan Yaxue (谭鸭血). At Tan, customers are able to have super spicy hot pots and its hero product is duck blood. In 2018, Tan covered the market by opening 100 stores within 9 months. At the end of 2019, it already had 175 stores nationwide. Over 80% of its consumers are post-90s and post-00s.

A key reason for its quick expansion is, Tan uses a franchise model. It also leverages steep discounts during the initial launch period to get people in the door. For example, customers only need to pay 38 RMB for food that is actually worth 100 RMB. Tan often has celebrities show up in the store and help to promote the restaurant.

Other than Tan Yaxue, another hot pot restaurant that we mentioned at the beginning Xianhe Zhuang from Chen He, is also a successful case study from Zhishan. Xianhe was founded in 2015 but it didn’t start to become very popular until 2019 when Zhishan became involved in the business. Since 2019, many KOLs and celebrities actively show up at the store and post their experiences on social media. To date, it has over 600 stores nationwide.

The majority of Zhishan’s clients are hot pot restaurants. This is because Zhou Yang (周杨), founder of Zhishan, believes that hot pot is a very social and shareable food. Once you’ve provided customers with a busy and dynamic eating environment and those dishes are good-looking enough to motivate them to take pictures and share, the restaurant will organically be promoted on the Internet.

Franchise Fees are a Major Revenue Source for Those Celebrity Restaurants

Other than daily income from stores, the major income source for those celebrity restaurants is franchise fees. In terms of Xianhe Zhuang, if you want to open a 300-square-meter store, you have to pay 480k RMB as the franchise fee and 50k RMB as security fund. On top of that, you have to pay for decoration, interior design, material/food cost and marketing. In total, to open a Xianhe Zhuang hot pot restaurant, you have to spend at least 1.6 million RMB. 

Compared with Xianhe, another celebrity restaurant called Huofeng Xiang (火凤祥) costs less but it still requires a 280k RMB franchise fee and another 50k RMB as the security fee.

Xianhe currently has 685 stores, which means, solely from franchise fees, Chen He and Zhishan have 350 million RMB in total in their pockets. Huofeng was founded in 2019, and it has over 50 franchisees. It is expected to have 450 stores by the end of 2022.

Celebrity Restaurants Are Not a Lucrative Business to Join

According to an ROI sheet from Xianhe, franchisees are able to achieve over 24k RMB revenue per day. They claim owners can run their businesses at a 60% gross profit rate, and at this rate, franchisees will recover their investment in 9 months. And according to the ROI sheet from Huofeng, the period is only 7 months. 

But this is unlikely. 60% gross profit is a number that the majority of players in the dining industry are not able to achieve. It is impossible to be honest. One of the most popular hot pot restaurants Haidilao (海底捞), its gross profit is only between 18-25%, and another popular fast food restaurant Jiumaojiu (九毛九), its gross profit is between 15-20%.

Although these celebrities are able to drive a lot of traffic to these restaurants, a business can’t rely solely on that if it wants to achieve sustained growth. What’s more, being that closely tied to a celebrity is very risky. The celebrity could be an outstanding citizen today, but who knows what scandals will be revealed in the next minute.

The franchise model is also a risk. With such quick expansion it is easy for problems to arise. 

Once even one of them has a food safety issue, it will affect not only other stores but the celebrity as well.  

Read more: 明星扎堆开火锅店，这事不妙

The post Chinese Celebrities Dabbling in the Dining Industry appeared first on China Marketing Insights.