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.

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.

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.

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”？

The post Are Chinese brands developing too fast? appeared first on China Marketing Insights.

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.

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

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

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

1. Breo (倍轻松) – Massage Devices

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

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

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

2. Xiao Mi (小米) – Technology

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

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

3. Xiao Xian Dun (小仙炖) – Supplements

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

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

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

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

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

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

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

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

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

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

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

6. Toffee (奶糖派) – Underwear

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

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

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

7. Urban Revivo – Apparel

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

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

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

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

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

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

9. Boohee (薄荷健康) – Food & Beverage

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

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

10. KEEP – Fitness

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

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

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

The post 10 Chinese Brands That Excelled on Tmall During This Year’s 618 Shopping Festival 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.

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.

Timeline of Douyin’s 618 Shopping Festival Promotions

The shopping festival will start on May 25 and end on June 18. The total process will be divided into two phases.

The first phase will be from May 25 to May 31, and it is the preheat for the whole event. The second phase starts from June 1 to June 18, and this will be the highlight of the whole event.

Deposit presale

During the first phase, users can put down deposits first to lock in the items they’d like to purchase during the actual shopping festival, which is the second phase. Before the start of the second phase, users will receive messages reminding them to pay the rest.

Paying deposit will help merchants get an estimate of potential customers. They can also predict GMV generated from the event, and it can also help them to prepare stock and improve logistics ahead of time.

Gamify the 618 shopping festival

To increase users’ engagement and bring entertainment for the event, Douyin will launch a game called “The Interaction City”. The game is mainly asking users to finish tasks and they will be rewarded with tools in the game. When the number of those tools reach a certain level, users’ can only pay 0.1 RMB to buy specific products.

Featured Livestreams

Douyin will support three kinds of livestream during the 618 shopping festival: KOLs, brands, and featured livestreams. The last type of livestream are about different topics and festivals, such as Children’s Day and the Dragon Boat Festival. These two holidays both fall within the 618 shopping festival period.

Provide discounts for Douyin’s service fee

During the second phase of Douyin’s 618 event, if brands offer prices which are lower or equal to the lowest price they’ve offered during the past 30 days, the platform will reward those brands with cheaper service fee of just 1% of the total sales amount.

Work with other platforms from ByteDance

Douyin is also leveraging other Bytedance-owned apps such as Toutiao, Watermelon Video, Douyin Huoshan and Douyin Jisu, to drive as much traffic as it can for this big event and prove its place in the ecommerce industry.

To improve users’ shopping experience on the platform, Douyin is introducing the fast refund function, shortening users’ waiting time for their refund request to be checked. One of the reasons that Douyin does this is to reduce users’ complaints regarding refunds.

Taobao Live has released its 618 plan as well 

Different from Douyin, Taobao Live’s 618 campaign period will start earlier, and it is divided into more detailed phases.

The whole event will last for a month, starting from May 20 and lasting until June 20. In general, Taobao Live will two main promotional cycles. The first round is from May 20 to June 3, and the second one will be from June 4 to June 20. Each round will have a presales and sales period.

To help brands generate more GMV, Taobao Live customizes plans for different accounts, including top and Tmall flagship store accounts, mid-tier accounts and small accounts. Other than this, Taobao also has plans for different types of livestreams, such as new products livestreams, celebrity livestreams and CEO livestreams.

Our take

It is fair to say this year’s 618 shopping festival is a big test for Douyin. If it does well and can prove strong results, it will be able to persuade more international brands to open up flagship stores on the platform. 

And it’s not only Douyin, many ecommerce platforms are seriously preparing for the 618 event. It seems it is really becoming the second 11.11.   

Read more: 抖音618活动怎么玩？看完就知道了

淘宝直播618活动总贴

The post Douyin is Going All In For This Year’s 618 Shopping Festival 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.