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.

One month after she appeared publicly, she was on Weibo’s hot topic ranking board more than 32 times. That popularity is something that not many celebrities or KOLs are able to achieve in their entire career. Yet LinaBell made it just in one month.

Who is she? What makes her a huge superstar among Chinese people, especially girls? What commercial plans are hiding behind her?

New Member of the Duffy Family from Disney: LinaBell

LinaBell is a fox! She’s a new member of the Duffy Family from Disney, introduced in September. Here is her cute background story. So Duffy was playing around in a forest and he got lost. When he was about to panic, LinaBell showed up with her iconic magnifier, and guided Duffy out of the forest.

Her character is set to be brave, outgoing and she’s a fox with endless curiosity to explore the world. She loves adventures.

Currently, you can only find LinaBell in Shanghai Disneyland. She will be introduced in Hongkong and Tokyo Disney in the near future.

What Makes LinaBell a Huge Celebrity?

Her Popularity

On the first launching day of LinaBell’s products, people had to wait in line for seven hours so as to get one. And to take a picture with LinaBell, people often line up for three hours.

LinaBell’s products are ALWAYS out of stock, including her dolls in different sizes and her blankets. People’s crazy desire to get her products are often taken advantage of by “Huang Niu” or scalpers. A keychain of LinaBell doll which is 119 RMB, is sold at nearly 2,299 RMB on collectible resale platform Dewu.

On November 24, Shanghai Disney published the announcement that the Christmas collections of Duffy Family would be launched on November 29, along with LinaBell’s dolls! That’s a big news for LinaBell’s fans and the scalpers. Immediately, scalpers were hiring people in WeChat groups, looking for people to rush to Shanghai Disney on the launch day. 

Some people go the opposite way to produce fake LinaBell merchandise. There are people on social media platforms to help LinaBell’s lovers to identify the authenticity of their dolls.

Cute Look of LinaBell

LinaBell is cute. She is a fox with a soft pink color and fluffy clothes. Her big and seemly-warm tail also makes girls scream every time she turns her back to the audience and shakes it. But obviously, what makes LinaBell’s popularity last long and continue to increase is her character.

LinaBell’s Brave Character

Unlike many other Disney characters, the setting of LinaBell’s personality is different. She has many dimensions. Sometimes she is being cute, shy, and sometimes she’s being angry to show her dislike.

When visitors say something that she doesn’t like, she would pretend to pull out her sword. When she sees handsome boys, she becomes shy and wants to hug them. She’s also very sporty, showing fans how she lifts dumbbell to strengthen her body. When fans are complaining that her products are often out of stock, she pretends to write letters to the manufacturer and call related people. She even starts to thread the sewing machine and pluck out her own fur to shape a small LinaBell.

She’s alive for fans.

Disney’s Commercial Plan behind LinaBell

Creating Idols without Film and Television Works

Think about classic Disney characters such as Mickey Mouse, Donald Duck or Simba, they all have movies to complete their personalities. Yet, the Duffy Family doesn’t. They were created and rely on people who play inside the costumes to make them alive.

Duffy’s story is a good example for LinaBell. He first showed up in an American Disneyland in 2004, and he wasn’t even had a name back then, and was called “Disney Bear”. After he was introduced to the Tokyo Disney, the local team proposed a new name for him: Duffy, and put him in sailor suits. Together with fabricated stories behind the bear, Duffy quickly gained huge popularity and it continues nowadays.

Disney realized that a character doesn’t necessarily need to appear in movies, a character just needs a personality.

Following Duffy, we see more and more family members being created. So now, the Duffy Family has seven members, or “idols”. Those characters help Disney make great revenues by selling their peripheral products. It is estimated that the amount of StellaLou, the purple rabbit in the Duffy Family, sold by Shanghai Disney in three years is equal to 119 Mount Qomolangma if you pile them up. This rabbit even has its own color named by its fans, which is called the StellaLou Purple.

An Effective Weapon against the Beijing Universal Studios

The opening of the Beijing Universal Studios in September 2021 definitely drags away lots of traffic from Shanghai Disneyland. What might also become threatening for Disney is that, the Megatron in the Universal Studios is so talkative when taking photos with visitors, and thus, he has attracted many people to go to the park and interact with him. He is popular as well.

StellaLou is still popular and yet, people were not as crazy as before. Disney needs a new character to give visitors more reasons to come and spend money on its products. According to The Paper, the revenue of Disney’s tickets only takes up 30% of its total revenue, and the park largely depends on second consumption, which is by selling its IPs’ products. 

A nice try, Disney!

Our Thoughts

Though without film works, an IP has a lower threshold for fans to get to know them. What it requires for them to become popular is mostly their looks. However, without background television works, fans might not have as deep engagement with those IPs as they have for Mickey or Donald Duck.

(But with LinaBell in Disney, I am planning to buy an annual card of the Shanghai Disneyland and to visit her frequently!)

The post Who Is LinaBell And Why Is She A Big Hit Among Chinese Girls? appeared first on China Marketing Insights.

Never’s image is featured on one of the eyeshadow palettes in the Discovery Collection. The shades in the palette are created by Austin and inspired by Never’s personality. Profits from the palette will be donated to an animal protection fund in Beijing. The product is going fast – during the live streamed launch Austin already sold out 180k palettes. 

Read more: 美人计｜连李佳琦的狗都开始联名带货了

Key Takeaways From Questmobile Report on Young Consumers in Lower Tier Cities

As of November 2019 there are over 200 million post-90s consumers located in 3rd-tier and lower cities in China. This is 10.1% growth YOY. In Chinese these consumers are referred to as 小镇青年 (Xiaozhen Qingnian) or “small town youth”. Here are some key takeaways from the report: 

• Their average monthly screen time is 127.9 hours, slightly higher than young people in 1st and 2nd tier cities (127.3 hours).
• Students and white-collar workers make up 60% of Xiaozhen Qingnian. Their income is lower than 6,000 RMB. The average amount per month is around 4,000 RMB.
• Yet since living costs in lower tier cities are much lower, they have more disposable income. 
• Xiaozhen Qingnian’s favorite topics to search online are: food, travel, fashion, ecommerce shopping, auto, and wealth management. 
• Xiaozhen Qingnian spend on average 7.1 hours/month on ecommerce platforms. 
• The top 3 e-commerce platforms they use are Taobao, Pinduoduo, and Xianyu. 
• The group places more value on recommendations from friends and acquaintances, and often group buy together. 
• They are sensitive to price and are willing to spend more time browsing other platforms to compare prices. They love searching for coupons and discount information as well. But when it comes down to it they care even more about quality and brand name.  
• They show great interest in second-hand products. 
• When it comes to planning travel, Xiaozhen Qingnian’s interest in vacation rentals like Airbnb has increased significantly since 2018. 

Read more: QuestMobile2019小镇青年洞察报告：2亿青年每月128小时都在干嘛？

Art & Aroma Essential Oil Skincare

Art & Aroma (Chinese name 芳研社) is a small Chinese essential oils skincare brand founded in 2014 by two friends, a chemist and a biologist. While still small at only 10 SKUs, the brand has been featured by one of China’s top business writers Wu Xiaobo Channel (吴晓波频道) and has a very loyal customer base, with a repurchase rate of 80%. Here are some of the things they have done to grow such a loyal customer base: 

Emphasis on Private Traffic: 
Art & Aroma focuses heavily on private traffic. They operate 4 personal WeChat accounts with a total of 4,000 connections across all accounts. All of their private traffic users are customers of their Tmall store. After each and every person purchases a product, the team will actively encourage the person to add the company’s WeChat. After adding the accounts, the users are segmented into different categories and WeChat groups, such as skincare, hair care, new products launching and discounts.

These four accounts regularly post content on Moments with 25% of content about skincare, 25% about event and live streaming notifications, and the rest is about the daily lives of the three founders and other lifestyle content. They also actively participate in customers’ lives by liking and commenting on customers’ Moments posts.

Passion for Proving Product Quality Helps Gain Visibility:
Once team members shaved part of their hair just to test whether their shampoo product could increase hair growth rate. The story was later featured by the popular WeChat Commerce platform Youzan(有赞). On that night Youzan posted the article, Art & Aroma did over 200k RMB in sales, and sold out 3,000 hair care sets within 4 hours.

Giving Consumers Ownership:
Similar to a domestic beauty brand Chioture(稚优泉), Art & Aroma invites its customers to participate in the decision making process. This includes choosing scents, ingredients, packaging styles and product names. Co-founder Qing Fen(清芬) said involving customers in this process makes customers happy while simultaneously promoting new products. 

Offline Aromatherapy Certification Courses:
In the past the brand has held offline aromatherapy certification courses. This is a great way to interact with customers in real life and for the co-founders to demonstrate their professional expertise and inspire trust. Right now a growing number of Chinese beauty and skincare consumers are known as 成份党 or consumers that pay great attention to the ingredients. Classes like this would appeal to that consumer base. 

Livestreaming:
Art & Aroma’s livestreaming is very different from most brands. One of the co-founders Xiao Ke(小珂) live streams three times a week. Unlike other brands, she doesn’t actively try to sell products. She typically sits in her kitchen or dining room drinking a cup of tea and chatting with viewers. Usually, she shares a book, a movie or her hand-made crafts. Sometimes she shares her thoughts on essential oils and skincare. 

Read more: 仅靠4000好友做到复购率80%，被吴晓波频道看中的“她”如何打造强信任关系？

China Marketing Podcast Ep. 64: An Overview of China’s Burgeoning Fragrance Market 

Today’s conversation is with Dao Nguyen, founder of ESSENZIA, a boutique marketing creative strategy agency helping fragrance and cosmetics brands reach young Chinese consumers. We dive deep into China’s rapidly growing fragrance market which has changed dramatically over the past 5 years.

Dao gave an overview of the market, answering questions such as:

• Who are the main consumers?
• What types of fragrances tend to appeal to a Chinese audience?
• Which brands are doing well in the China market and why?
• Are there any mistakes brands tend to make?

Later in the episode we also discussed China’s beauty industry and I ask Dao to share her thoughts on the rise of China’s domestic beauty brands.

Listen on Spotify, iTunes, or XimalayaFM

Women In China Marketing

This is a new online directory dedicated to women who specialize in helping brands market to Chinese consumers.

It was created by the wonderful Olivia Plotnick after a report on China marketing trends for 2020 in which only 1 of the 22 report contributors was a woman.

Check it out here
And if you’d like to add someone to the list, feel free to submit a profile!

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