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

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

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

How did Presales Originate in China?

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

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

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

Why Merchandisers are Embracing Presale on E-commerce Platforms?

Avoid overstocking and anticipate demanded volume

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

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

Factories can’t meet large orders

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

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

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

Market acquisition

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

Other reasons

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

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

How do Presales Drain Chinese Consumers’ Patience?

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

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

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

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

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

The truth behind presales

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

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

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

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

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

The Background of Dewu

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

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

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

What Makes Dewu a Gen Z Hub?

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

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

What’s the Commercial Prospect of Dewu?

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

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

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

Not much advertisement

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

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

Lower cost to work with KOLs on Dewu

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

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

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

Read more: Z世代为什么中了「得物」的毒？

The post Chinese Young People’s New Love: E-commerce App Dewu appeared first on China Marketing Insights.

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.

To drive even more consumption on the platform, Douyin has created its own shopping festival: 818 (August 18). It is sandwiched between China’s two major shopping festivals, 618 and Double 11. The first-ever 818 shopping festival was last year, right after Douyin launched e-commerce features on the platform. So this was Douyin 818’s second year.

How Did the Douyin 818 Shopping Festival Perform This Year?

The 818 Shopping Festival on Douyin lasted from August 1 to August 18. Its main format was e-commerce livestreaming. Throughout the course of the festival, there were a total of 23 million hours of live streams, among which 11 million hours were from brand-run livestreams.

177 livestreams surpassed 10 million RMB in sales and 8 of them made it to 100 million RMB. Together, the total sales from the Top 100 livestreams during 818 reached 9.1 billion RMB in sales.

Compared with last year, where the total sales for the entire festival were 8 billion RMB, Douyin 818 has made great progress this year!

Top Live Streamers

Who was the live streamer that achieved the best result during 818? No surprise here. It was Luo Yonghao (罗永浩), founder of Smartisan, a technology company. Luo was one of the first celebrities/CEOs to do e-commerce live streaming on Douyin and he drew a lot of attention in his debut stream when he achieved 110 million RMB in sales. Sine then, he has become a popular streamer on the platform.

Following Luo, the next two top streamers were two male celebrities: Zhu Zixiao (朱梓骁) and Jia Nailiang (贾乃亮).

New Changes for This Year’s Douyin 818

Below are new changes in the event’s format as summarized by Today (今日网红), a livestream monitoring platform.

Change No.1: Prices are lower than Taobao

Main types of discounts during the 818 shopping festival were fan coupons, flash sales, and bonuses for newcomers. Adding these discounts, prices could be way lower.

For example, Ulike’s hair removal tool, with the original price of 2,499 RMB, was only 1,599 RMB in the livestream during 818. Its usual price on livestream was 1,769 RMB. That’s a good deal to buy it on 818.

Another type of hair removal tool whose original price was 2,499 RMB, was sold at 1,699 RMB on 818, which was the same price as on two top live streamers Austin Li and Viya’s livestreams. Usually Austin Li and Viya claim to have the lowest prices.

Other stores, such as apparel brand EGGKA, which requires Taobao users to pay 8 RMB shipping fee doesn’t ask the same thing for Douyin users during 818.

Changes No.2: Live performance by celebrities

To create buzz and grab as much as attention as possible for the 818 shopping festival, Douyin spent a large amount of budget to create a concert for its users (kind of like Alibaba’s 11.11 gala). Many top celebrities were invited, together with video calls with several Tokyo Olympic champions.

Other than the entertainment part of the gala, there were live streams with celebrities going on. In total, the gala has over 80 million viewers that night.

Changes No.3: 10 billion RMB in subsidies

This is very similar to Pinduoduo, an e-commerce platform known for its extremely low prices. By clicking “My Orders” (我的订单), users can see a page with lists of products that are subsidized with discounts from Douyin. Many of them were food & beverage, digital products, and books.

Will Douyin’s 818 Become the Next Double 11 Or 618?

It may. But there are already many e-commerce shopping festivals filling up the year, it is challenging for Douyin to create buzz and achieve the same scale that either 618 or Double 11 does.

And it seems like at the moment the goal of 818 is really to drive consumers to develop the habit of shopping on Douyin, not to create a shopping festival that will rival the big ones. The subsidies and discounts may convince consumers to make their first purchase on Douyin, or to buy more expensive items on Douyin for the first time, but will consumers continue purchasing on the platform after the festival is over? And besides that, what did Douyin do differently in this festival that makes it stand out from the other major shopping festivals? There wasn’t much innovation when it came to the festival content or shopping experience.

Read more: 亲测，抖音818真的会比淘宝双11便宜吗？

The post Can the Douyin 818 Shopping Festival Convince Consumers to Shop on Douyin? appeared first on China Marketing Insights.

When do men start preparing for the festival?

It is estimated that 27.1% of men start preparing only 1-2 weeks ahead. 15.4% of them start before 2-4 weeks, and there is a small group of men start preparing even a month ahead. One third of the men surveyed (34.7%) had no intention to prepare ahead and just want to let it go naturally.

In terms of different relationship statuses, married men and dads have the least intention to prepare gifts for wives, while men who are in a relationship but unmarried are most active in the preparation. (no surprise here hahah)

Key takeaway:

• Create multiple campaigns with different messaging and launch them at different times based on the age and relationship status of your target consumers

Selecting restaurants

The number 1 element that has the power for men to choose restaurants for Qixi dates is whether the restaurant serves dishes that match with their taste. This is 49.5% of men’s top reason for choosing a restaurant. Following this, men also want to know the cost performance of the restaurants (46.1%) and whether it has been mentioned by their partners (34%).

Men are also prepared to wait in line for the dinner on the day. Only 18.1% of men don’t want to wait. Heads up for brands, waiting might be a beautiful thing to show one’s sincerity. Half an hour, I think this is the longest period that most people would be open to waiting, beyond that, they might get annoyed.

Key Takeaway:

• Think about what men want to eat when promoting your holiday menus! haha

Where do men seek advice on gifts?

When Qixi is around the corner, men tend to seek advice on selecting gifts on different online platforms. 13.8% of men visit Hupu (虎扑, a sports information platform), Douban (豆瓣, a forum platform) and Zhihu (知乎, a forum platform as well).

When men are searching what to buy for women, the most frequent phrase they type is 七夕 (Qixi), followed by 礼物 (gifts), 七夕礼物 (gifts for Qixi), 口红 (lipsticks), 精致 (sophisticated) and so on. A phrase that is worth noticing is 面子 or face, meaning the gift can help the man earn dignity and have his partner worship him for choosing a good gift.

Key takeaway:

• Brands should incorporate these keywords in their product names and descriptions as well and KOL posts on social media to help to get more exposure for the products you would like to promote during the holiday.

• Work with KOLs on platforms that male consumers are most likely to use.

Men love gifting entry luxury products

52.1% of men go for entry luxury products on this big day. They don’t cost as much as high-end luxury, but they are not cheap either, which shows their sincerity. In a word, this is a safe choice for many men.

Following this, 38.1% of men choose international brands. Though Chinese brands are developing fast, yet only 12.5% of men buy them as gifts.

What I think about this is that the majority of Chinese consumers choose domestic brands mostly for their own daily activities, but when it comes to festivals, domestic brands may not be their first choice to send as gifts. Time for domestic brands to think about how to win more attention in such big gifting-focused festivals, and for international brands to grasp the opportunity to get more exposure and boost sales.

Key takeaway:

• For entry lux brands, this festival is a huge opportunity. If you have limited resources, it may be more relevant to focus on marketing for this holiday than some of China’s many other holidays and shopping festivals.

What gifts do girls love to receive?

While this article is focused on male consumers, the report also had some great insights on females’ preferred Qixi gifts that can help you select which items to include in your Qixi collections next year.

The top 5 gifts that girls love to receive are watches and accessories, red pockets, shoes/apparels/bags, skincare products, and makeup products.

You may have already noticed, that while one of the top searched gifting terms for men is lipstick, lipstick actually doesn’t appear on women’s TOP5 list. This is because women are picky when it comes to shades of lipsticks, and they often don’t like the shade that men select for them. Well, if men buy a whole set, that’s another story.

The other two of the TOP 3 least-liked gifts from men are snacks and toys.

Also, 44.3% of girls don’t directly tell their partners what gifts they want to receive. They feel that gifts can show whether the man is detailed-orientated when he’s with her and pays attention to what she says and does or how she usually dresses. It’s a test for the man. If girls don’t tell their boyfriends what to buy, then who to tell boys? The Internet. So, brands, improve your SEO and get as much as exposure before the festival, especially when it’s around the corner.

The post How do Chinese Male Consumers Prepare for Qixi? appeared first on China Marketing Insights.

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

So What Is the Kris Wu Scandal?

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

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

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

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

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

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

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

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

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

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

Quick reaction to Kris Wu’s scandal

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

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

Two live streamers did a good job to personalize the brand

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

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

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

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

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

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

Two live streamers are trained well with their livestreaming skills

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

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

Support from the livestream system on Taobao

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

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

What Can We Learn from KANS’ Success?

Quick reaction

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

Closely monitoring the situation

It’s what people want to see that matters.

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

Livestream: crisis preparation 

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

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

Maximize the influence of the livestream

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

Read more: 吴亦凡事件发酵后，韩束直播间为何能一夜爆红？

与吴亦凡解约后，韩束直播间一场卖出500万，居然还卖起了牙签

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

While this news is not necessarily a consumer trend, a person’s job and work environment have a large impact on everything else in their life, from what they purchase, to what they do in their free time, and how much free time they have!

Working for Internet Giants Has Become Many People’s Goal

Working for these Internet big names such as Meituan, ByteDance, Alibaba, and Tencent is something that most people in China, especially young graduates, would love to have on their resumes. Even internship experience at these companies will make you stand out among the competition.

Not only job seekers, when it comes to blind dates, or when parents are rushing to introduce their children to other parents to seek potential marriage chances, working at these companies often impresses people.

Big Internet companies often offer better salaries, and they have all sorts of fancy facilities to please employees, such as canteens, gyms or leisure areas. They also have yummy afternoon tea to feed employees’ stomachs. These benefits often show up on social media, especially on Little Red Book, making viewers envious.

Yet Working for These Big Companies Like Bytedance Isn’t All Sunshine and Rainbows

Like the old saying says, every coin has two sides. Though working for these Internet giants does gain you glory and a higher salary, it has many downsides that smaller companies are doing better at. Working overtime every week is only one of the issues.

• Your Scope of Work is Very Limited

Because there are so many employees, you’re essentially h a cog in a wheel. It’s like a factory, only white collar. You are hired to do one thing, and just need to do that one thing well. For some people, this is a good thing as they will do less work and face less challenges.

But trust me, just because you finish your work doesn’t mean you can go home, especially if everyone else is still working. Plus sitting at the office not doing anything feels quite strange, and you may want to learn new skills and build up more personal connection through projects. But you won’t have the chance to be in charge of a whole project, and instead, you are only responsible for some paperwork.

Things could be worse for interns. Their daily tasks might just be ordering milk teas and booking meeting rooms. What they can gain from the internship is a nice title in their resumes.

• Lower chances to meet the management team

Because in those big companies, your supervisors have more supervisors above. It would be hard for you to meet them personally, not to mention the big boss of those Internet companies.

This is not a big issue for many people. But if employees get the chance to see the top management team, they may have more sense of belonging to the company, and they can directly express their needs without passing through several people.

• More bureaucratic

More employees tends to mean more processes. Something simple that should just be a short conversation on WeChat or Teams, must be filed with paperwork to get approved. Also, there are endless meetings. Daily, weekly, monthly and quarterly meetings. Sometimes, lunchtime is being converted into meetings.

Why Some of ByteDance’s Employees Are Not Happy About the Cancellation

Despite all of this, yes, there are people who want to work for extra hours, even on weekends.

Having this big and small weeks policy allows ByteDance’s employees to have subsidy, and it was a generous amount. If you earn 40k RMB a month, working an extra day on weekends will help you get 3,600 RMB. In small Internet companies, the amount is likely only a day’s salary at most.

Money is one thing, but the key and most important thing is that the workload is still there. If there is no decrease in the workload, that means employees still need to work extra hours to complete their tasks. And this time, it is without being paid for that extra time.

Read more: 从取消大小周，联想到互联网英雄主义时代的落幕

你在大厂赚得像CEO, 我在小厂忙得像CEO

The post ByteDance Cancels its “Big & Small Weeks” Work Schedule appeared first on China Marketing Insights.

What’s more, there are so many new “successful” brands out there, but it is actually quite hard to differentiate them. Their marketing tactics and product designs are quite similar. It seems that now the key factor in a new brand’s success is not the creativity of its marketing, but the size of its marketing budget.  

So what are some of the issues behind the rapid growth of Chinese brands? And how can brands avoid making the same mistake?

Brands are too eager to present a healthy lifestyle

Three most frequently seen phrases when it comes to food products are zero fat, zero sugar and zero calorie. Some are true, while some are just using those phrases to win love from consumers while not being honest.

We talked about Genki Forest’s scandal before. It is a domestic beverage brand that developed very fast. 4 years after it was founded, the brand achieved over 2.5 billion RMB in sales. (Gossip: Genki Forest’s sale performance goal in 2021 is 7.5 billion RMB. I really doubt it can achieve it.)

However, it was caught in a scandal for lying to its customers that its drinks were zero sugar. It was kind of using people’s blind spot of equaling zero cane sugar to zero sugar and making use of it. Though Genki Forest apologized after it was discovered, it was a terrible and insincere apology.

Genki Forest isn’t the only example. Wine and alcopop brands are joining the trend, saying they are in the “three zero” healthy team. However, wine is either made from rice or grapes, how can they possibly be without any sugar? Many electronic cigarette brands are being ridiculous as well. Some of the domestic e-cigarette brands claim that their products are healthier than traditional ones, that they contain zero tar.

Excessive use of China Wave or Guochao (国潮)

Guochao is the use of Chinese cultural elements in products. It is true that many Chinese consumers have embraced the Guochao trend, especially Gen Z and millennials. And some brands have done very well leveraging this trend. A few representative brands are new tea brand Sexy Tea or Chayan Yuese, beauty brand Florasis, and sportswear brand LiNing.

Another good example would be a barbecue brand or a chuan brand called Kuafu Zhachuan (夸父炸串). Kuafu is a character from a Chinese ancient fairy tale. Barbecue or chuan is the food that most young people would prefer. If the brand does the same thing as Florasis by adding those ancient Chinese elements on its packaging, it would seem very odd.

So to make the brand appeal to young people while remaining in the Guochao trend, Kuafu twisted those elements a little bit and had the image of Kuafu appear to be a cartoon character.

But it seems that some brands understand the trend superficially by simply slapping Chinese elements on their packaging. This is a quick way to be on the trend, but brands really need to think about their brand and whether or not those Chinese style elements make sense. What’s more, brands need to be more thoughtful and creative about the designs they use. Just adding the characters for “China” onto something is already cliché.

Are you Really a Winner if There is No Competition?

While reading some of the analyzing articles in Chinese, I usually get caught up with catchy phrases such as “how does xxx manage to become the TOP 1 in xxx category with just xyz years”.

These saying are true. Those brands did manage to become the TOP1 in certain category. But the number of product categories on marketplaces such as Tmall are also expanding. If you compared the number of new Chinese brands that came in first in their category during 618 this year (459) with last year’s (360), you will find that nearly 100 more brands become product category champions.

Being able to call yourself #1 in a category is key to a brand’s success these days. So marketplaces are creating more and more niche categories for brands to compete in. For example, the Food & Beverage category has been classified into coffee, tea and snacks. But they don’t stop there, they are further divided into chicken snacks, sparkling wine, rose tea etc.

This makes it easier for brands to become the champion in certain category. The more detailed the category, fewer competitors will they face. Besides, they only have to be #1 over the course of the festival in order to earn the title. So anyone with a large marketing budget can become #1.

While this may be a good tactic for now, consumers may eventually catch on to the fact that everyone seems to be the best. Then being the best will gradually lose its meaning.

Everyone is Using the Same Factories

One of the key reasons why there are so many domestic brands emerging in recent years is that they don’t need to spend time building factories. There are many manufacturers that will work with small brands and can handle all the manufacturing and logistics. The brand’s founders only need to think of a brand name and its design, and later, the marketing part.

This kickstarts a brand, but it also results in similarity among products. Brands are also aware of the drawback, and they are figuring out ways to make themselves stand out. One of the ways is the shortcut we mentioned above, to redefine or specify their product category, and announce themselves as a forerunner in the industry.

Our thoughts

Chinese brands indeed develop very fast. New brands are quickly emerging seemingly nonstop.

But behind this, is their large spending on marketing and promotion. Perfect Diary is often mentioned when talking about this issue. While its products are often ranked #1, in 2020 its net income was -$412 million USD and its sales & marketing expenses as percentage of revenue was 70.3% in Q4 last year.

What brands really need to focus on is the quality of their products and services. Consumers are smart and they know when a brand is trying hard to show its presence without solid products and services to back it up. While many of these smaller new brands are getting flooded with money from investors right now and can pour large amounts into marketing, you can only get so far by burning cash.

Read more: 网红品牌，都是”营销狗”？

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So how did yoga pants become publicly accepted in China?

While the rise of athleisure and growing interest in sports and fitness has fueled some of this change, one of the main drivers behind Chinese consumers’ acceptance of yoga pants, especially in lower-tier cities, was the re-framing and re-naming of yoga pants by top fashion bloggers into just another type of pants, removing the athletic connotations.

Let’s take a closer look.

Lululemon Drove Popularity in 1^st Tier Cities

The brand entered the Chinese market in 2016, with the athleisure trend. Many of China’s 1^st-tier fashionistas knew about the popularity of Lululemon abroad and were quick to embrace the brand. Plus, because of Lululemon’s fashionable design, for example, its pants don’t show underwear lines and they have a butt-lifting effect, people start wearing those pants in public places. Around this time, fitness also started becoming trendy in China, mainly among white-collar workers in 1^st-tier cities. Wearing yoga pants showed you were part of that trend.

Giving Yoga Pants a New Name Helped Them Go Mainstream in China

But at that point, yoga pants were still only being worn by a small group of people. One of the limiting factors keeping them from going mainstream was the price (we’ll talk more about that in a moment). The other was the name “yoga pants” or “exercise pants”.

This name signaled that one needed to be exercising in order to wear them. But at that time, the vast majority of women in China, especially in lower-tier cities, didn’t have the habit of going to gyms or doing yoga. This means they didn’t have a reason to wear yoga pants.

So in 2016, popular Taobao fashion influencer Eve Zhang (Zhang Dayi) gave them a new name: Shark Skin Pants or Shayu Ku (鲨鱼裤). The name described the look and texture of shiny, thick yoga pants and the tightening and slimming effect they have.

Because it is such a fashionable and easy-understanding name, it took off. Many Taobao stores started following Eve and referring to their yoga pants as shark pants.

Now with the new name, wearing yoga pants was no longer confined to a specific occasion. People started wearing them with their everyday looks.

They really went mainstream in 2020. I remember in winter last year, I saw so many girls wearing them on the street. Girls love matching shark pants with an oversized hoodie or a sweater on top. They also wore long socks with a pair of sneakers.

Top Chinese celebrity Yang Mi (杨幂), whose street looks influence fashion in China, wore shark pants in one of her airport looks, causing them to become even more viral. But the funny thing is that she was wearing Lululemon’s yoga pants when the picture was being taken.

Nowadays there are many KOLs promoting yoga pants such as Douyin influencer Hu Chuliang (胡楚靓). Hu launched yoga pants in her store last year. She managed to sell 253 million RMB worth of yoga pants within the first year.

Mass production makes prices affordable

Now alongside the new name, another key reason why yoga pants were able to go mainstream was that they became cheaper. At around 800 RMB a pair, Lululemon is expensive which made it hard for the trend to spread to the mainstream.

Before 2016, only a few factories in China produced yoga pants. But after Eve Zhang introduced the name shark pants and the trend started taking off, some factories spotted the potential popularity of yoga pants and started transforming their business.

For example, a factory called Mutuzhe (沐途者) used to mostly produce swimwear (80-90%) and yoga clothes (10-20%), and most of its products were sold overseas.

With the history of producing swimming wear, Mutuzhe easily shifted its business into yoga pant production for the domestic market. Because the needs for yoga pants grew dramatically, Mutuzhe opened another two new factories in 2018 and 2020.

To create ordinary yoga pants, it doesn’t require expensive materials and high-end technology. It only costs around 45 RMB to produce one pair, and that’s why there are many cheap yoga pants on Taobao or Pinduoduo.

E-commerce platforms are speeding up the yoga pants trend

Besides the new name and lower prices, e-commerce and social channels such as Taobao Live, Douyin, Kuaishou and Pinduoduo really helped spread the trend to lower-tier cities.

Live streaming has become a key sales channel for yoga pants, especially those that promise slimming or lifting effects. Unlike skincare products, which require days to see its effects, or bras, which are not appropriate to wear outside publicly, yoga pants, on the other hand, are easy to show viewers their effect.

For example, a Chinese yoga clothes brand molyvivi, which was just founded in 2020 managed to achieve over 5 million RMB sales through its livestream. It has a store on Pinduoduo, and the best selling pants in the store are only 49 RMB.

Key Takeaway

While price, sales channel, and product quality are all important – sometimes these alone are not enough to make a new trend take off. Cultural factors need to be considered as well. Reframing yoga pants as shark pants changed consumers’ perception and made them a product anyone could wear at any time. This case study is important to keep in mind when bringing any product to the China market. 

Read more: 下沉的【瑜伽裤】|趋势分析

The post How Yoga Pants Finally Became Popular in China, Even in Lower-Tier Cities appeared first on China Marketing Insights.

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.

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.

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.

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.

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’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.

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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