Why Did Little Red Book Make this Decision?

Little Red Book’s community manager He Tong explained that this is not a banning on luxury. He feels that if a user shares tips for getting the best price on a luxury bag or how to pick a luxury bag, that’s helpful and beneficial for the Little Red Book community. But if the user only presents bags that s/he has bought, that’s meaningless and provides no value.

What is the Ultimate Reason for Little Red Book’s New Regulations?  

Besides wanting to control the quality of the content on the platform, Little Red Book is also aware of the negative effects that it has on society when users open social media platforms and constantly see lavish displays of wealth. It’s similar to the current ‘appearance anxiety’ issue that is plaguing many young people in China who are constantly bombarded with images of beautiful people on social media.

Not everyone is as rich as those wealthy users and people feel pressured to keep up with others and go into debt trying to buy luxury goods they can’t afford. What’s more, many of the posts are fake, yet consumers aren’t aware of it.

Last year the “Shanghai debutante” WeChat groups caused a huge buzz on social media. It was revealed that there are people who fake their life or try to present themselves as being super rich when they in fact are not at all. These staged posts are all over Little Red Book and are misleading for its users.

Another rule that was already in place, but the platform is emphasizing, is that KOLs need to make it clear when a post is sponsored. This adds transparency to the content and context to the situation. For example, if the post is sponsored, users know that the luxury bag may have been gifted or loaned to the KOL by the brand, instead of thinking that other people can afford to buy so many luxury products.

But will marking the post as sponsored affect the marketing value of the post? Whether users will still buy the product if they know the post is sponsored remains uncertain.

But Little Red Book is a Favorite Platform for Luxury Brands

Little Red Book was founded in 2013. Since then, it has been known as a lifestyle sharing platform, especially for fashion. With users’ excessive passion to share their luxury life and the great popularity of those posts, luxury brands started using Little Red Book for marketing.

Louis Vuitton became the first major luxury brand to launch an official brand page on the platform in 2019. The brand also held its first ever live stream on Little Red Book. Currently, the account has 230k followers and 494 posts.

Following Louis Vuitton, Little Red Book attracted nearly 30k brands (both luxury and non-luxury) to open their official accounts on the platform. This includes many major brands such as L’Oréal, Unilever, Estée Lauder, Dior, Givenchy and Chanel. Besides running their own accounts, all of these brands frequently work with influencers on the platform.

What Do These Regulations Mean for Little Red Book Marketing?

Well, in some ways, these regulations could be good for luxury brands marketing on Little Red Book. By restricting those ostentatious displays of wealth, it will increase the exposure for content from brands’ official accounts.

It also shows Little Red Book’s strong determination to create a healthy and high-quality content community. In fact, this is not the first time Little Red Book has restricted something that would affect its own traffic. Back in 2019, Little Red Book upgraded the threshold for KOLs to work with brands. A KOL must have 5,000 followers and an average post exposure of at least 10k in order to collaborate with brands. This rule hurt the advertisement income for many micro influencers on Xiahongshu and made them upset. But the regulation also filtered almost 70% of unqualified KOLs.

According to Qu Fang (瞿芳), co-founder of Xiaohongshu, 70% of the platform’s content is UGC. She believes that high-quality content is the base for monetization.

Competition from Other Social Media Platforms

Superficially, it may seem that Little Red Book is cutting its fashion-related content, and negatively affecting fashion marketing on the platform. But in fact, it is improving fashion content. One of the motivation behind this comes from other social media platforms’ ambition to enter the fashion industry. 

As we mentioned in our previous post, top video platform Douyin has its sights set on the fashion industry. In early April, Douyin launched a new function: Douyin flagship store. At the moment, there are over 220 brands running a Douyin flagship store. While brands across many categories are able to launch stores, it appears that Douyin is most eager to get fashion brands on board.

Bilibili is targeting fashion as well. Back in 2020, it actively attracted fashion KOLs to open accounts on the platform with 5 billion traffic as support. In June 2020, it successfully had Dior opening an account and publishing its 2020 autumn collection.

Our Tips for Brands

At the moment, there is no need for brands to panic. Because Little Red Book’s aim is to provide a healthy and high-quality content community for its users.

For brands that want to seek KOLs to collaborate with on the platform, one thing they can do is to check whether the KOL has posted violated content before, such as those lavish lifestyle. It is likely that Little Red Book will send less traffic to such KOLs in the future. But then it is also highly likely that the KOL would delete such content. So it might take extra time to figure his/her history out.

If a brand wants to post content on its official Little Red Book account, it just needs to follow the truth and don’t be exaggerated.

What do you think? What are your thoughts on Little Red Book’s new regulations?

Read more: 深度 | 禁止炫富的小红书还能“红”下去吗？

The post Little Red Book Marketing Must-Know: Platform Bans Excessive Displays of Wealth appeared first on China Marketing Insights.

As we just hinted at, what is especially interesting is this vehicle’s consumer base. 72% of Wuling Hongguang Mini EV owners are born in the 90s. And 60% of Wuling mini owners are females. They proudly call themselves the Wuling girls.

The Origins of the Wuling Hongguang Mini EV

Many years ago, not long after China imposed restrictions on car buying to reduce pollution and traffic congestion, a new form of transportation emerged, which Chinese people refer to as an ‘elderly mobility vehicle’. The elderly mobility vehicle was originally designed as a small electric vehicle for elderly people to go to places such as hospital, pharmacies, and grocery stores. It is typically allowed in bike lanes and small roads and doesn’t require a license plate (although in some cities that is now changing.)

However, the industry took an interesting turn. As China imposed more and more restrictions on car ownership, young people who hadn’t yet won a license plate in the lottery or couldn’t afford a real car started to use elderly mobility vehicles as daily commute transportation.

And the industry saw this as an opportunity, and the design of these vehicles has also changed from tailored to elderly people to more modern, futuristic design to draw more younger buyers. So, the mobility vehicles went from simply an electric wheelchair type thing to become full blown mini EV cars. And because they are not classified as real cars, there are no restrictions on design, copyright and safety standards. Manufacturers started to come up with outrageous designs. Some even started to copy popular luxury cars, you can find yourself a nice “Hummer H2” for a fraction of the cost.

Transformation From ‘Elderly Mobility Vehicle’ to Trendy Mini EV

But not to confuse you – we are not saying the Wuling Hongguang Mini EV is an elderly mobility vehicle. We are just explaining its origins. This vast market of mobility vehicles has been around for at least a decade if not more.

Wuling’s moto is “We build what people need.” So Wuling did not make something new, they just saw the demand for these types of vehicles and made one that is road worthy. They transformed the elderly mobility vehicle to a safe and trendy vehicle that can be driven on the highway.

Now the Wuling Hongguang Mini EV is a huge step up from an elderly mobility vehicle. The Mini EV is equipped with two options, a 9.2 kWh battery capable of 75 mi (120 km) or a 13.8kWh battery capable of 110 mi (170 km) on a single charge. The Mini EV seats four and is equipped with air conditioning, stereo with USB hook up and antilock braking system. All of this makes it the perfect city car.

The Advantages of Buying a WuLing Hongguang Mini EV

The Mini EV cost between $4,162 – $5,607 making it super affordable. What’s even better is that many large cities in China are making exceptions for the Wuling Mini because its small and it’s an EV. For example, in Shanghai license plates cost 15,000 RMB on average. But if you buy the WuLing Hongguang Mini EV you do not need to pay for the license plate, it comes with the car. And because it is an electric vehicle there’s also subsidies from the government and no sales tax. In major first tier cities, the Wuling Mini also does not have driving restrictions.

From a drivability standpoint, consumers tend to shy away from micro cars, because they tend to feel unstable at high speeds or when cornering. However, the WuLing Mini EV doesn’t have this issue because it utilizes the popular EV ‘skateboard’ design where the heavy battery packs are located within the floor of the vehicle, making it heavy on the bottom, giving it a low center of gravity. It is a small car but stable to drive on the highway.

First time car buyers are now frequently choosing the WuLing Hongguang Mini EV because of its maneuverability and because it is easy to park. Inexperienced drivers can navigate the busy city streets with ease. And if accident does happen, because it is a cheap car, owners often just use fun decals to cover it up, instead of going to a paint shop have it repaired.

How else are they attracting young consumers?

Fun Designs

Younger generations want to express their individuality and personality, and WuLing has made the HongGuang Mini EV the perfect canvas. The auto maker is constantly debuting new colors, especially ones that are popular among female consumers. For example its newest series of ‘macaroon’ colors are avocado green, peach pink, and lemon yellow.

It also encourages buyers to take it a step further, with fun aftermarket modifications such as customized wheels, spoilers, roof racks and colorful wraps and decals. There are tons of posts on social media with car owners sharing their modifications.

Last year Wuling held a Wuling Mini Day, inviting tons of popular Chinese fashion and lifestyle influencers to come take pictures with dozens of themed Minis, including Doremon, Pikachu, panda, etc.

For another event, Wuling collaborated with popular new tea brand Hey Tea to create a special Wuling Mini design.

Social Media

Wuling is extremely active on key social media channels such as Xiaohongshu that are popular among its core consumer base of Gen Z females. Besides constantly publishing content on Xiaohongshu, the brand has also held many product giveaways contests on the platform. For example, they ran a campaign where customers had to take a picture with their keys and tag the brand account.

Wuling is currently holding a campaign to promote their new macaroon colors. Going on picnics and being in nature has become more popular among young consumers in recent years, so Wuling is holding a contest where people post pictures of themselves having a picnic or camping and use a specific hashtag for a chance to win a new Mini EV. It is running from April 2^nd-25^th already 61K people have participated and over 67 million have viewed content from the campaign.

Cheap But Cool

What’s really interesting about this vehicle is that even though it is EXTREMELY affordable, it has also become very trendy. In China, most of the time when it comes to cars, expensive is considered better. But this is not the case with the Wuling Mini. Wuling has done an incredible job with the car’s design and branding, making it a sought-after vehicle among China’s Gen Z and millennial females.

The post China’s Gen Z Females Love the Wuling Hongguang Mini EV appeared first on China Marketing Insights.

60% of Chinese Sneakerheads are GenZ

According to iiMedia’s “2019 Global and Chinese Sneakers Secondary Market Status Analysis and Market Outlook Analysis Report”, in 2019 the global second-hand sneaker market was 6 billion U.S. dollars, of which the Chinese second-hand sneaker resale market has exceeded 1 billion U.S. dollars.

CBNData’s “China’s Trend Consumption Development in 2019” white paper found that, compared with other consumption trends, there are more Gen Z consumers in the sneaker market. According to the report, post-95s and post-00s accounted for more than 60% of Chinese sneakerheads.

Why does this matter? Gen Z also happens to be the consumer group that is most patriotic. Unlike previous generations, they don’t automatically assume that because a brand is foreign, it is better. They are increasingly willing to purchase local Chinese brands and like items that incorporate Chinese design elements.

Resale Prices of Li-Ning and Anta Have Skyrocketed

Since the Xinjiang cotton scandal erupted two weeks ago, Chinese domestic shoe brands like Li-Ning and Anta have reported shortages of popular sneakers. People are lining up at Li-Ning stores to purchase the latest sneakers and basketball shoes, a scene usually seen in front of Nike store.

Online resell apps are also seeing prices of Li-Ning products surge. On China’s most popular sneaker resell platform DeWu (formerly known as Poizon), Li-Ning’s NBA superstar Dwyane Wade endorsed Wow4 sneakers in silver/white have been reaching prices as high as a whopping 48,889 RMB ($7,455 USD). That’s 31x the original selling price of 1,499 RMB.  

Part of the same series, the Wow7 The Moment sneakers have been reaching prices of 29,999 RMB ($4,500 USD). That’s nearly 17 times higher than the original 1,699 RMB price tag. According to the app, 270 pairs sold within six days.

Originally priced at 499 RMB, Anta’s popular Doraemon co-branded sneakers shot up to 4,599 RMB on Dewu. While not quite the massive price increase of the Li-Ning shoes, they have been selling like crazy. Nearly 9,000 pairs have been purchased recently.

But Most Sneaker Resellers Are Suffering

On the surface it seems like this shift in consumer spending would be boosting the Chinese domestic brands and economy. However, for those whose livelihood depends on western brands like Nike and Adidas, the situation it’s quite different. Local sneaker store owner Lao Wan has been reselling limited edition sneakers in the secondary market for many years and has become one of the top ten resellers in the country. He said that there is only one word to describe the past few days: difficult! “I can’t eat or sleep, and I cry without tears looking at our full inventory of Nikes and other used-to-be-popular brands.”

Previously, Lao Wan’s store mostly sold Nike, Adidas and sneakers from other international brands. When the business was at its best, annual sales could exceed 100 million RMB. But now store visits and sales are declining sharply. Tens of millions of RMB of inventory is piled up in the warehouse. He conservatively estimates his business will lose a few million RMB in this anti-Nike wave.

Another sneaker reseller who has been in the sneaker industry for many years, said that sports brands generally use future-based ordering methods, and the volume is fixed. When they are sold out, they are gone. Now, shoe dealers are rushing to buy out inventory from domestic brands and holding onto it to drive up the price and demand so they can sell it at high profit.

Moreover, because it is uncertain how long this situation will last, and the market is unstable. Brands are reluctant to increase production and stores are reluctant to increase order volume for fear that demand will suddenly drop. This continued scarcity further fuels this buying frenzy.

The post Chinese Sneakerheads Turning to Li-Ning and Anta Amidst Nike Scandal appeared first on China Marketing Insights.

But why is this a problem? A sale is a sale right? 

Correct, Uniqlo has no issue with adults purchasing childrens clothes, the problem is adults trying on children’s clothes. It turns out that when many women try on children’s clothes, they have been popping the seams, stretching them out, and getting makeup on the collar. And then not buying them. Leaving Uniqlo with a pile of unsellable clothing. 

While some netizens have said that Uniqlo stores are now stopping adults from trying on children’s clothing, according to an interview between a Uniqlo employee and the Global Times, that’s not true, “We’ve heard this news, but we do not stop people from trying on children’s clothing at our store, and will give them a face mask when they try clothing on to prevent unwanted stains.” 

What is BM Style and why do they want children’s clothing?

Over the past year “BM style” or “BM girl” (BM风/BM女孩) are some of the trendiest words in China’s fashion industry. BM refers to Italian fast fashion apparel brand Brandy Melville. Its style is very recognizable. The brand only produces apparel for size 0 girls. Its clothing is very 90s style, short and very tight, a lot of crop tops (maybe BM could also stand for bare midriff haha)

Unless you are super skinny, you won’t be able to fit in BM clothing. This has created a lot of controversy around the style as many people say it promotes a very unhealthy body image. 

The style became popular after many international and Chinese celebrities and influencers were seen wearing it, such as Kendall Jenner, Kaia Gerber, Hailey Bieber, Nana Ouyang (欧阳娜娜), Song Zuer (宋祖儿) and members of Blackpink. 

Xiaohongshu is also trying to help stop this purchasing behavior

As Chinese women’s favorite social media platform to learn about fashion and beauty trends, there are over 140,000 posts on Xiaohongshu about BM style, from tips on how to put together a BM style outfit to where to buy BM style clothing. So of course, there over 5,000 posts all about creating BM outfits with Uniqlo clothing. 

To help Uniqlo stop women from trying on kids clothing, now when you search the term “Uniqlo kids clothing” (优衣库童装) on Xiaohongshu, there is a banner at the top of the page to tell people to be respectful and choose the right size clothing when trying out products at Uniqlo. Xiaohongshu has also created a post pinned at the top of the search results page saying similar things. Other users have also created posts urging people to stop trying on and damaging kids’ clothing. 

The post Uniqlo Kids Clothes Being Damaged by Gen Z Consumers Chasing BM Style appeared first on China Marketing Insights.

But things are rapidly changing, and the Chinese tropical island of Hainan is now being referred to by many as “the next Hong Kong”. But what exactly does this mean and why is it happening? 

Let’s take a look: 

Isn’t Hainan “China’s Hawaii”?

Hainan has often been referred to as China’s Hawaii. A large tropical island with beautiful beaches, it’s not hard to see why. While it has always been a top domestic travel destination, in 2020 Hainan tourism took off. 

Domestic tourism in China flourished in 2020 as China quickly brought the COVID-19 pandemic under control. Citizens weren’t able to travel abroad, so they started to explore what China had to offer. 

As China’s only domestic tropical island destination, travelers who would have usually opted for international beach destinations such as Thailand or the Maldives rushed to Hainan.

So, if Hainan is “China’s Hawaii”, why is it now also “the new Hong Kong”?

Free trade, tax free zones, and business incentives! 

The Master Plan for Hainan

On June 1, 2020, the Central Committee of the Communist Party of China and the State Council of the People’s Republic of China issued the “Overall Plan for the Construction of Hainan Free Trade Port“, proposing the principle of zero tariff and low tax rate, and increasing the tax-free shopping quota for Chinese citizens to 100,000 RMB per person per year (up from the previous 30,000 RMB), while expanding the types of duty-free goods. 

China wants to make Hainan a shopping paradise for Chinese consumers, and its working. Social media platform Xiaohongshu has numerous posts of consumers sharing their “shopping guides” for the best deals in Hainan. I asked Kejie, my fellow content creator here at China Marketing Insights, if she had ever been to Hainan and she immediately responded, “No but I really want to go. Its a shopping Heaven.”

The plan also includes plenty of incentives for businesses and workers. Not only can consumers purchase products duty free, but businesses can also import products and raw materials tax free. The goal is to incentivize cross-border trade, not only to increase import and export capabilities, but also to boost trade on foreign and domestic investments, data, capital, and talents. 

And by 2025 China wants to reduce the corporate tax rate by 15% for enterprises that are registered in Hainan. And employees of these companies residing in Hainan will also have an income tax cap of 15%, much lower than many other provinces, especially the more you earn. 

The government will also allow foreign personnel to act as legal representatives of statutory institutions, public institutions, and state-owned enterprises and ease restrictions on work permits for foreign personnel.

People who live on the island also get to enjoy the duty free and tax-free benefits as long as the things they buy don’t leave the island, which may motivate more people to move there and enjoy a higher quality of living for less. A great example of this are cars. An imported car in China is subject to taxes and tariffs that can easily add up to 40% or more of the car’s value. So for example, purchasing a $40,000 vehicle in other parts of China would be $65,000, but in Hainan should still be $40,000. 

Isn’t one Hong Kong enough? Why build another one?

There are many reasons, but the simple answer is more ports and free trade zones equals more growth. If you look on the map, Hong Kong is a lot smaller then Hainan, and at this point a lot more expensive. So, for businesses, there is not a lot of room for growth in comparison to the largely untapped Hainan. 

Number two…. Well I am not going to dig into the political issues here, you can do a simple Google search if you don’t know what I’m talking about, but politics are also a major factor. In 2019, tourism to Hong Kong saw a dramatic drop due to anti-government protests. 

Hainan, on the other hand, has always been completely part of China, there is no debate about that, and it is fully aligned with Chinese government, so building duty free shops and tax-free trade zones on Hainan carries much less risks and push-backs.  

Third, Hainan has become one of China’s most popular domestic travel destinations, adding in duty free shopping zones and dramatically increasing duty free shopping limits will ensure that travel to Hainan continues to prosper even after the COVID pandemic has passed and international travel has reopened. 

What does it mean for brands?

With China boosting domestic travel to ease the economic impact from the pandemic, more Chinese consumers are choosing to travel within the country, domestic flights have picked up from a low of 5,824 flights to 7,003 daily flights (up 20%) on average per week. 

Many international hotel chains have resorts in Hainan and more are sure to come. 

Pre pandemic we have already seen a steady increase in the housing market in Hainan, more people are moving to Hainan to retire because of the Sandy beaches and good air quality. For brands that want to thrive in China, Hainan might be a good starting point.

Conclusion

I do not think of Hainan as a replacement for Hong Kong. Hong Kong has been a long established economic, finance, and trading hub of the East, and that did not happen overnight. However, Hainan is more moldable in comparison, and there is more room for growth, any mistakes that Hong Kong made in the past, Hainan can learn from and avoid it, so that the speed of development for Hainan will be dramatically shortened compared to Hong Kong.    

The post Is Hainan the next Hong Kong? appeared first on China Marketing Insights.

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

Why Is Keeping A Diary So Expensive?

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

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

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

Group Buying Washi Tapes

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

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

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

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

Influencers Getting in On the Trend

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

Shou Zhang Communities

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

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

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

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

According to a 2020 cosmetic medicine report (2020医美行业白皮书), despite the COVID pandemic, Chinese medical cosmetology market grew 30% YOY, and it is expected to overtake the American market in 2021, becoming the top cosmetic medicine country in the world. In 2020 the Chinese medical cosmetology market reached 197 billion RMB, making up 17% of the world market.

Why Are People Becoming Obsessed With Cosmetic Medicine?

There are many reasons for the growing popularity of medical cosmetology in China, and the two most significant ones are: social media and women’s desire to feel more beautiful to make themselves happy. 

Whenever you open Douyin, Kuaishou or Xiaohongshu, you see so many beautiful girls. They have milky skin, big eyes, double eyelids, pointed noses and skinny bodies. They often appear to be in high class restaurants and hotels, with many luxury products surrounding them.

On Xiaohongshu, some of them are generous to show their medical cosmetology experiences and even share the name of the hospital or agency where they had the surgery. 

This, in some way, misleads people to think that once they are as pretty as those girls/boys, they can have the same quality of life. A girl named Chuchu (楚楚) said in this Tencent article that once you’ve seen so many beautiful girls on social media, you would rather look as pretty as them even you all look the same, rather than looking ugly and stand out among so many people.

Xiaohongshu is a very popular platform to discuss these procedures. In fact, there are over 780K posts about cosmetic procedures.There are also many people who will post their photos on Xiaohongshu and ask other users if they think they should get surgery. While some responses say no, many will often say yes. 

According to Tencent, 80% of women are willing to pay for cosmetic medicine/surgeries, and 95% of them would have a second experience once they had one before. Common types of procedures include having double eyelids, shaping a pointed and high-bridged nose. And in fact, changing lip color is a common one. The color of my lips used to be very dark and had the procedure two months ago to change the color, and now I look okay instead of sick without putting any makeup on.

How Can People Afford These Procedures? 

A small cosmetic surgery for example, having double eyelid or inserting prosthesis into the nose costs between 1k-8k RMB, while for bigger surgeries such as breast implant or liposuction cause 10k-60k RMB. 

The majority of consumers undergoing these procedures are university students and young professionals that don’t have independent economic support so many of them are paying for them with credit cards or loans from payment providers such as Alipay and then paying it off slowly.  

Lower Tier Cities Welcome Medical Cosmetology 

China’s medical cosmetology market started growing in 2008 and since 2014, the market has been booming. Since 2018, the industry’s growth rate in first and second tier cities slowed down and more and more agencies are moving to lower tier cities.

The Xiachen market, or lower tier city market, is a key breakthrough hole for the cosmetic medicine industry. Compared with first and second tier cities, lower tier cities have less competition, require lower budgets, and thus, they are easy for those agencies to make profits.

Grey Area of the Industry

Among so many medical cosmetology agencies, in 2020 in China over 88% of them did not have legal licenses and only 28% of medical cosmetology doctors are certified. In addition to this, consumers are also concerned about fake products and machines.

However, with promotions from all sorts of agencies and users’ recommendations and sharing experiences on social media, my prediction is, there will be more and more people joining the trend, and the age of consumers trying out these procedures will continue to become younger.

Read more:

2020年，全村女孩都去割了双眼皮

我的医美贷款还不上了

The post Appearance Anxiety Driving Chinese Consumers to Take Loans to Pay for Cosmetic Procedures appeared first on China Marketing Insights.

There is a saying “Chinese girls treat Xiaohongshu as Baidu”. Baidu is the biggest search engine in China, therefore this saying encapsulates a key behavior of consumers using Xiaohongshu. On Xiaohongshu, people not only scroll through their feed to discover new content, they often actively search for content on the app, typing in brand and product names or keywords such as “moisturizing lotion”. 

This means that it is important for brands to consider SEO and hot keywords when creating content for Xiaohongshu. Here are a couple tips for optimizing your content: 

Finding Trending Topics 

The easiest way to make your content be seen is to take advantage of trending keywords. But how can you spot the trends? You can go to the search page and see what are the grey words that appear in the search bar. Those are topics that other users are searching for. Then look below that at the recommended section, those are topics other users are searching for as well.

After capturing these key phrases, include them in your post title and content. In this case, the system will automatically recommend your content to more people, so the post gets more exposure.

Note: The recommended topics with the blue symbols next to them are paid campaigns. If you don’t mind piggybacking on top of another brand’s campaign, you can create content using their brand campaign keyword and benefit from the traffic they are driving to their campaign.

Find Related Keywords & Long Tail Keywords 

If you want to write about something that’s not included either in the searching column nor in the recommended content section, for example, if you want to write something about skin brightening products. Here is what you can do:

Put “ skin brightening” (美白) in the search bar and you will see below that in addition to skin brightening, additional related long tail keywords will pop up. For example, whitening serum, whitening body lotion, whitening face masks etc.

Depending on how popular your original search term is, it is much more effective to use these long tail keywords so that your content doesn’t get drowned out and you can reach a more targeted audience. 

Find Popular Keywords That Describe Your Brand or Product

If your brand or product is not well known in China, it is much more effective to focus on incorporating popular keywords into your posts instead of including the name of your product or brand everywhere. 

For example, if you want to tell users that in Bangkok, a vintage store called PAPAYA is very good for taking pictures, you better not put “PAPAYA” in the title. Because when users are searching where to take pictures in Bangkok, they won’t search for PAPAYA. So in this case, you’d better make the title more general, something like “the best vintage store to take pictures at in Bangkok”. You just need to think what keywords users will put in the searching bar if they are looking for your content.

Get Readers to Use Keywords in the Comments Section

Another way to increase your posts’ exposure is the comment zone as comments also count towards a brand’s SEO. So you may want to think about how to end your post and guide users to put those key words in the comment zone. Or if you answer users’ questions in the comments, be sure to use keywords in your response.

Read more: 都2020了，我们再来聊聊小红书上的关键词设置｜方法论

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All of a sudden, this joke went viral and Starbucks reacted very quickly with it. The brand posted on Weibo inviting people to join its Qifen Zu. All they needed to do was post on their WeChat moments saying “I want to join Qifen Zu”, take a screenshot of it and post it on Weibo, and tag Starbucks. If they were selected by Starbucks, they would be given coupons and other bonuses.

Many Offline Businesses in China Leverage Qifen Zu 

While Starbucks’ Qifen Zu is organic, and unpaid, many businesses in China actually pay for people to make their stores and restaurants look busy.

For example, pubs. They hire people to run to the floor first when the music comes on and dance crazily. These people, the “Qifen Zu” are there to create the atmosphere that everyone is joining and don’t be shy and hesitant. Most of them are post-00s, because they are young and energetic, and they’d love to have a drink as well. 

Bubble tea stores also love using this tactic to create the image that people are desperate to buy their drinks. A store called Chazhilan (茶芝兰) in Shanghai hired more than 30 people to pretend to be its consumers and line up in front of the store on its first opening day. Every 15 minutes, there were two people called to line up to make sure that there were always people waiting in line.

The real estate industry uses Qifen Zu as well. On the day when a company launches new apartments, it will hire a bunch of people who are dressed nicely to visit the property and pretend to be interested in the apartments. It is faking the image that everyone wants to buy an apartment here, and giving people a sense of scarcity and urgency.

Online Qifen Zu 

This tactic is also often used online, the most common Qifen Zu that we see every day is the comment section of a Xiaohongshu advertisement or Taobao or Tmall listing. Many brands hire people to pretend to be customers and leave nice comments to guide real customers’ purchasing decisions. There are even companies that run this Qifen business. If the owner of the store wants a positive comment, it requires 100 RMB. 

Not only for brands, Qifen Zu also applies for celebrities or KOLs. They hire fake fans sometimes, to increase their popularity.

Conclusion:

While some may feel that this tactic is fake or misleading, in China it is a very common practice often used to jumpstart the popularity of an offline store or to grow an account or drive traffic to a product online. But brands need to pay attention to its limits. Don’t overuse this tactic.

Read more: 四周都是“气氛组”，只有你是傻白甜

The post New Viral Phrase You Need to Know: Qifen Zu (气氛组) appeared first on China Marketing Insights.

For the first time ever, this year’s Double 11 is divided into two phases. The first presale period started on October 21. Consumers could see what products were available and put down a deposit to lock in the sale price then make the final purchase during the first sales period on November 1-3. The second presale phase started from November 4 with final sales taking place on November 11.  

During the first sales period, domestic beauty brand Perfect Diary became the first cosmetics brand to break 100M RMB sales on Tmall. Two hours after the sales began, it broke 200M RMB.

Perfect Diary Parent Company Going Global with IPO & Acquisition

This achievement for Perfect Diary comes at an excellent time as its parent company Yatsen Global (逸仙电商) just filed on October 30 with the SEC to raise up to $100 million in a US initial public offering. The Guangzhou, China-based Yatsen was founded in 2016 and booked $658 million in sales for the 12 months ended September 30, 2020 between its three brands: Perfect Diary, Little Ondine, and Abby’s Choice. 

The same day it filed for an IPO, Yatsen also announced the acquisition of high-end French skincare brand Galénic, the first non-Chinese brand in Yatsen’s portfolio. 

If you’ve been following our content, this acquisition comes as no surprise. When I attended the launching event for Perfect Diary’s sister brand Abby’s Choice (完子心选) in June, Chen Yuwen (陈宇文), co-founder of Yatsen Global said they aimed to become “the L’Oreal of China” with ambitions for global expansion. 

While Perfect Diary accounts for 80% of Yatsen’s revenue, Little Ondine and Abby’s Choice are growing at a rapid pace. Having only just launched in June, Abby’s Choice surpassed 10 million RMB in sales within the first 33 minutes of the November 1st 11.11 sales period, and over 20 million RMB by the end of the first day.

Yatsen’s Success Relies on a Massive Marketing Budget 

Perfect Diary has been spending big recently. In fact, Yatsen’s marketing expenditures are more than 60% of its total revenue. To improve its brand image, Perfect Diary appointed top Chinese actress and former Chanel ambassador Zhou Xun (周迅) and the popular Australian singer Troye Sivan as its ambassadors. Hiring two celebrities of this caliber is extremely expensive, especially when Perfect Diary’s products tend to have a lower price point, for example the price of its lipstick is around 99 RMB, much lower than the other international brands these celebrities work with at 300-400 RMB. 

But they seem to know what they’re doing. Perfect Diary is a marketing powerhouse, known for its innovative marketing strategies, ability to build online communities, and willingness to experiment with new platforms and content types.

Yatsen is an expert at understanding how to engage with China’s digitally native Gen Z consumers, leveraging an army of KOLs across nearly every Chinese social platform imaginable to spread information about its brands. According to this article by WeChat Account Global Netrepreneur, Perfect Diary alone has worked with over 15,000 KOLs. Among those, over 800 have over 1 million followers, but the majority of KOLs it works with are mid-tier and micro KOLs.

On the other hand, Yatsen allocates minimal budget for product development. In 2019, it spent 23.1M RMB on R&D and by September in 2020, it spent 49.9M RMB on R&D. Though the number rises, the budget spent on development only takes up 1.25% of Yatsen’s total revenue.

If we look at other international brands, Estee Lauder (from June 30, 2019 to June 30, 2020) spent 1.6% of its revenue on R&D while L’Oreal spent 3% to 4% (2004-2017).

Yet even with the smaller R&D budget, Yatsen is constantly launching new products. Perfect Diary has over 200 data analysts who analyze consumer behavior and preferences and use their findings to advise product development teams. Perfect Diary is fast to act on its findings and can create a new product from start to finish in less than 6 months. In comparison, many of its international competitors take anywhere from 7 to 18 months. In 2019 plus the first 3 quarters of 2020, Yatsen Global’s brands launched 1,500 new SKUs.

Transforming Perfect Diary’s Brand Image

What Perfect Diary is working on at the moment is to upgrade the brand image. It used to be mentioned as “the cheap version of xyz international brand” on Xiaohongshu and other social media platforms, and we know that Perfect Diary is a brand born from the Internet, so getting rid of the “wanghong” or “internet famous” title and upgrading the brand image are Perfect Diary’s next moves.

Appointing Zhou Xun and Troye is one of the big steps. Other than this, Perfect Diary is speeding up opening offline stores. At the beginning of 2019, it opened the first store in Guangzhou, and as of September 2020, it had 200 offline stores. On average the brand opens 10 stores a month, and currently covers nearly 90 cities in China.

Read more: Fictional influencer “Xiao Wanzi” is Perfect Diary’s Secret to Success

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