To understand China marketing in 2020, you must first get a good handle on these five terms that have become part of Chinese marketing slang throughout 2019. These are not flash in the pan, but enduring trends that reflect changing consumer tastes and habits. Chinese consumers.
Many of you who are heavily involved with China are probably familiar with some or all of these trends, for the rest of you – take notes!
In the past, brands looking to target Chinese consumers have often focused on cosmopolitan consumers in China's major cities and sometimes secondary cities. However, in recent years, consumption growth in these cities has slowed as the market has become oversaturated. These adult shoppers are overwhelmed with choice, and it's expensive for brands to cut through the noise.
"Xiachen" literally means to sink or submerge andis now a popular termThis means that brands' marketing efforts adjust to downgrade or relegate to lower-tier markets.
Consumers in China's less developed urban centers and rural areas arefeed the next wave of consumption growth in the country. Arecent survey of over 6,700 Chinese buyersfound that consumers of the 3rdthirdTier and below cities plan to spend more than consumers in 1ste 2ndAnimal Cities during Alibaba 11.11 Shopping Festival 2019.
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Some key characteristics of consumers in these cities:
- Lower cost of living (especially housing) means these consumers have more disposable income
- Lower towns generally have less stressful work schedules, but also fewer entertainment options, prompting them to spend more time online, whether it's shopping, playing video games, watching short videos and live streams, or talking to strangers on social media platforms. social media
- Your content and product preferences are not the same as consumers in 1ste 2ndAnimal Cities. They are drawn to content that is relatable. They have different tastes and the images and messages used in other markets are often far removed from their lives.
- As rising incomes lead to lifestyle improvements, these consumers are increasingly looking for higher quality products at affordable prices.
Although the popularity of the platforms might lead us to believe that consumers in lower cities are strongly influenced by discounts, thesearch aboveactually found discounts to be a bigger factor in product selection by 1ste 2ndLevel consumers, while those at 3thirdTier and below cities focused more on cost efficiency.
While the preferences and behaviors of these consumer groups may be more difficult for western companies to understand, brands that want to succeed in China over the long term must stop avoiding this market and start dedicating significant resources to entering it.
Private traffic (private domain traffic)
As online traffic has become more expensive in China, the termPrivate transport has become a big buzzwordem 2019.
OThe term refers to Internet userswho you can contact directly or who visits your channels without having to pay to reach them.
Similar to Facebook and Instagram, most Chinese social media and eCommerce platforms are severely limiting organic reach, forcing brands and influencers to pay to reach their own followers and brands are looking for alternatives.
The western equivalent of private traffic would be a blog or a mailing list, which are their own channels. However, in China, people rarely visit websites or use email, so influencers and brands are still looking for ways to get private “owned” traffic on social media sites.
Now the super appWeChat is the biggest private traffic channel in China.brands likepopular domestic cosmetics brand Perfect Diaryuse personal WeChat accounts and WeChat groups to build consumer communities. Although it is a laborious process, it reduces the distance between the brand and the consumer and helps build customer loyalty. In 2020, we will likely see more brands empowering these communities using custom chatbots.
Brands are also creating their own online communities in widgets, which are lightweight applications within WeChat. For example, luxury beauty brand YSL has theYSL beauty club, a UGC (User Generated Content) mini-program where consumers can share their selfies featuring YSL products in exchange for reward points that can be redeemed for discounts.
Another way for brands to leverage private traffic is through influencer-run groups. Rather than paying an influencer to only post to their public facing accounts, they post branded content to their private groups, which typically contain thousands of their most loyal fans.
KOCs (Key Opinion Customers)
In many parts of Asia, influencers are called KOLs, or Key Opinion Leaders. This year, a sub-segment of KOL marketing gained traction and it was KOCs, or Key Opinion Customers/Consumers.
KOCs are essentially long-tail micro-influencers. They are normal, everyday consumers who love to share their experiences on social media. In general, they are knowledgeable about certain topics. Unlike KOLs, they may only have an audience of a few hundred to a few thousand followers, and therefore generally have a much closer relationship with their followers than a KOL. Unlike KOL campaigns, KOC campaigns are generally unpaid - KOCs are given free products in hopes of sharing content.
Ema recent interview, Ray Veras, co-founder of Chinese marketing platform KOC Pingjia Daren, gave several reasons why KOC marketing gained traction in 2019:
- Chinese consumers are becoming more sophisticated, they have many ways to avoid traditional advertising. Their attention span also decreases, which means it becomes harder to keep their attention once you get it.
- Unlike a few years ago, today's consumers are very aware that KOLs are promoting products because they are getting paid to do so. They want more content that is not commercially influenced.
- The Chinese social media landscape is becoming increasingly fragmented. Consumers can turn to multiple platforms for information, which creates complexity for brands that don't know which platforms to operate on or how best to use each platform as they have their own rules and best practices.
- In recent years, the performance of KOLs in China has declined, but the cost has risen, making it prohibitive for many brands. There were also many instances where KOL's performance was inflated.
To be effective, KOC marketing needs to be done at scale, with the goal of building brand equity and gradually increasing sales over the medium to long term. Over the past two years, we've seen a number of Chinese brands use KOC marketing with great success, and it will continue to be a popular marketing method in 2020.
While e-commerce live streaming has been around in China for several years, 2019 has really taken off, as evidenced by live streaming on Alibaba's Taobao live streaming platform during this year's Singles' Day shopping festivalgenerated sales of $2.85 billion– about 7.5 percent of daily sales.
All over the Chinese Internet, marketers dubbed 2019 as the "first year of the e-commerce live broadcast era", which means that e-commerce live broadcast not only entered the mainstream last year, but that industry leaders assume it will. here.
OGrowth of e-commerce live streamingthis is mainly due to its strong appeal to consumers in low-end cities in China. As mentioned above, the low-end or “Xiachen” markets are seen as the next big opportunity and domestic and international brands are eager to experiment with new methods of engaging with this audience.
Alibaba's Taobao live streaming platform is an early adopter and leader in the e-commerce live streaming space and has built a solid foundation of powerful live streaming hosts in recent years.
Two of the biggest hosts, Viya and Austin Li, achieved celebrity status in China last year. Often ranked as the top-selling streamer on Taobao, Viya rose to fame in the West after collaborating with Kim Kardashian during Singles' Day 2019. Li has become a household name across China after garnering a huge audience across multiple streaming platforms. Chinese social media outside the Alibaba ecosystem. to become the first and only Taobao live streamer to enjoy such fame and popularity.
While Alibaba is the clear leader in this trend, nearly all of China's top social media apps including Douyin, Kuaishou, WeChat and soon Pinduoduo and Xiaohongshu (RED)integrated e-commerce live streaming into their platforms.
I expect the hype around e-commerce live streaming to remain high in the first half of 2020 and then cool down in the second half as the industry matures.
In recent years in China, there has been a growing interest among young consumers for local brands and products that embody traditional Chinese style and culture, a trend known as guochao.
China's young adults, especially those in their 20s and 25s, grew up in a different environment than previous generations. You've witnessed China's rise to become a global economic powerhouse. While older generations grew up in an era where foreign branded products were always seen as higher quality than domestic brands, younger consumers don't necessarily think the same way, especially when it comes to cosmetics, skin care, food and beverages and products such as fast fashion.
How is this age demographicto become one of China's largest spending groups, National brands have been quick to seize this opportunity - more established and previously considered obsolete brands such as Li-Ning and Pechoin are rebranding to appeal to younger audiences, brands that were popular in the early 2000s such as White Rabbit It isWanglaojiare inspired by nostalgia and new brands like Perfect Diary, Hey Tea andZhongxuegaocome out of nowhere and generate incredible sales with their guerrilla marketing strategies.
Guochao is not just about the rise of local brands, but also about the resurgence of traditional style and cultural elements. beijing historyThe Forbidden City has become very popularamong Chinese youth due to its numerous product design collaborations with national and international brands and influencers.
Meanwhile, local skincare or snack brands are outperforming international brands by including ingredients traditionally believed in Oriental medicine to provide health and beauty benefits.
In this environment, international brands thrive that are willing to adapt to consumer demand for local elements. The past year has seen aNumber of IP collaborationsbetween national and international brands, such as the global cosmetics brand MAC. and the popular Chinese mobile game Honor of Kings.
However, simply collaborating with a native brand or adding Chinese graphics does not equate to success. International brands need to be very careful when working closely with Chinese teams to ensure that the collaboration is appropriate and that they don't interpret Chinese culture in a clichéd or offensive way.
Due to China's isolated Internet environment, the strength of native e-commerce and social platforms, and rapidly changing consumer preferences and behaviors, Chinese marketers have developed their own unique practices.
Learning to connect with Chinese consumers is a complex undertaking, and a basic understanding of these five key terms is a first step.