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Chinese or English? That is the Question

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An article in the Sydney Morning Herald last week highlighted some common misnomers about localisation and translation for China: After researching in China, an Australian vitamin brand found that their Mandarin-speaking Chief Science Officer would be most compelling speaking English in the brand’s promotional videos for the Mainland market.

For some, it may be a strange concept that communicating to the Chinese target market in Chinese can hurt sales.  But it comes down to authenticity.  If you are trying to promote yourself as an Australian brand, or from another English-speaking country, you appear to be the real thing if your communications are in English.

Similarly with packaging.  If a brand’s labels are translated in Chinese, many consumers are less likely to associate the product with the positive attributes around that country of origin and will question how the Chinese supply chain has been involved.  The less similar it looks to the same products in the supermarket of an item’s home country, the less Chinese consumers will trust it.

Notwithstanding, there are countless touch points where translating into Chinese is advantageous.  Even though over 300 million claim to have English skills, it is rudimentary for many.  And even fluent English speakers will instinctively turn to Chinese and be more comfortable in their native tongue. Chinese language is often preferred in the details, such as searching for facts on a website, or reading a visitor guide on holiday.

Whilst some videos look more authentic with spoken English and Chinese subtitles, there are many examples where videos in Chinese or with a Chinese speaker translating on the fly are hugely successful, such as Tmall’s streaming video service.

Getting the mix of English and Chinese language right, and in the correct places is just the start – localisation should be much more than just translating messaging word for word.  Chinese consumers often have completely different buying behaviour and motivations which is best reflected in positioning and communications.  And those motivations regularly differ from region to region. Go to Page 2 to see this week’s China news and highlights.

The post Chinese or English? That is the Question appeared first on China Skinny.


How Brightly Coloured Bicycles Represent Chinese Consumer Trends

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This time last year bike lanes in China’s big cities were the realm of migrant workers, with the occasional expat or hipster local on a single speed pedalling among the peasant peloton.  For many Chinese, bicycles were for poor people and a cold or sweaty reminder of when few could afford a car and cities had no subways.  In Beijing, just 12.5% of residents cycled in 2015, versus 38.5% in 2000.

Thanks to investments of more than $200 million, technology advancements and widespread adoption of mobile add-ons such as payments, China’s bike-sharing schemes have changed the face of city streets. Bike lanes in cities like Shanghai and Beijing are unrecognisable from 12 months ago.

At least eight bike-sharing start-ups have come to the fore.  Launching just eight months ago, Mobike already has four million monthly active users of its 100,000 bikes across five cities. Urban middle class Chinese in suits and Hello Kitty knits now ride among those migrant workers and foreigners, in streets that resemble a Copenhagen with Chinese characteristics.

The overnight adoption of cycling is a testament of just how open Chinese consumers are to new things, particularly when they conveniently fill a need or want, and are assisted by some sort of mobile tech.

Talk of the orange, yellow and other jelly bean-coloured bike sharing schemes seems like a fitting prelude to talk about what else is changing in China and trends for 2017, particularly in the marketing and sales space. Of all the years that China Skinny has been crystal ball gazing, 2017 is looking like the most exciting yet. Here are our top-8 predictions.

We’ll leave you with that to ponder as this will be our last Skinny for 2016. The China Skinny office will be open for the rest of the year so please get in touch if there is anything we can do to help grow your brand and sales in China. For our readers who are celebrating, we wish you the Merriest of Christmases, and a Happy New Year to all! Go to Page 2 to see this week’s China news and highlights.

The post How Brightly Coloured Bicycles Represent Chinese Consumer Trends appeared first on China Skinny.

Personalisation for Chinese Consumers, and the Essential Steps to Achieve it

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When you are just one out of a heaving mass of 1.4 billion, feeling special or unique is a treasured experience not often received. As China’s cities swell and lives become increasingly homogenised brands are finding ways to make their consumers feel that unique touch. Tailored communications, product add-ons and loyalty programmes are amongst the touchpoints which brands are personalising to engage the increasingly selective Chinese consumer.

Most successful personalisation initiatives are happening online where consumer behavioural data allows brands to cater to the unique tastes and habits of customers in real time.

Nevertheless, it is physical locations that lend themselves to the greatest gain from personalising the experience for consumers. With the rapid rise and subsequent disruption of ecommerce, physical retailers have been forced to soul search to understand their points of difference to compete with evermore savvy online channels. The most obvious area where bricks & mortar cannot be matched is the tactile experience that comes from authentic touching, feeling, smelling and physical social interaction that online alternatives are still a long way from matching, even with much-touted technologies such as virtual and augmented realities

Yet to maximise that experience, personalisation needs to be a component to ensure increasingly diverging preferences and needs are being met in bricks and mortar. The only tangible way to personalise en scale in the physical world is to incorporate that smartphone in every potential customer’s pocket or handbag. This allows brands to identify individuals, understand what they like and ensure their experience best meets that.

Providing such an experience effectively is no easy task, but even the basic foundation work is still not being done by most brands in China. For example, just 14% of fashion brands in China offer in-store product availability online, while 5% allow users to pick up online purchases in the store and none allow in-store returns of online purchases. Only 19% of fashion brands and 15% of watch and jewellery brands offer international locations on WeChat store locators. These services not only improve the customer experience, but also provide a great data source for consumer behaviour and lay a foundation to implement personalised services.

What makes China such a fertile ground for such initiatives is the infrastructure already in place to support them, in addition to a consumer who embraces it. This is represented by the two brands that topped China’s Brand Relevance Index – Alipay and WeChat who bridge the online and offline worlds better than anyone. Integrating the digital will only become a more important factor in the consumer world – building preference, advocacy and creating greater opportunities for meaningful personalisation for everything from supermarket shopping to driving a car. Agencies such as China Skinny can assist you to ensure you are making the most of the opportunity and are ahead of the curve.

One area that lends itself to more offline and online integration and personalisation is tourism. For our New Zealand readers in the tourism industry attending the Kiwi Link event in Foshan next week, China Skinny’s Mark Tanner looks forward to discussing this further. Please come and say ni hao if you’re there! Go to Page 2 to see this week’s China news and highlights.

The post Personalisation for Chinese Consumers, and the Essential Steps to Achieve it appeared first on China Skinny.

China’s Potent Marketing Channel: Online Video

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Glance across any Chinese park, restaurant or subway and it becomes quite clear that online video is one of the most popular channels in China. It is also one of the most dynamic. This is reflected by user numbers which has seen former market leader Youku-Tudou’s 325 million active monthly mobile users fall far behind market leaders Tencent Video and iQiyi with 457 million and 442 million respectively.

One of the interesting trends in online video is the paid subscribers. Whilst Chinese consumers have traditionally been used to getting much for free online (either by well-funded startups trying to acquire users or through pirated means), the masses are becoming increasingly prepared to pay for video content. A recent survey by China Netcasting Services Association found nearly 43% of online video users were paid subscribers to some form of video service – over a fifth more than last year. The main reasons are to get exclusive content and to skip advertisements. This represents the overall trend of a much-freer spending Chinese consumer who is prepared to pay a premium for things that will make their lives better.

For brands hoping to reach Chinese consumers, developing video content can be one of the richest and most engaging channels.  There are a number of other possibilities for online video too – particularly for those who are prepared to spend. Advertising has long been an option, but it is about to get a lot more interesting on Tencent Video following the company’s announcement to bring together the wealth of data from its seven main business units.  This will allow much deeper insights and targeted marketing – not just on Tencent Video, but WeChat and Tencent’s other apps.

As powerful as video advertising can be, KOLs can provide a more persuasive and seemingly authentic way to spread and amplify a message if done well. Although brands can drop significant budgets on KOLs, the return can be questionable on many campaigns as they don’t utilise KOLs’ channels as well as they could. Video blogging and related live streaming can be some of the most powerful channels where online influencers can bring your brand, products and services to life.

Some 470 million internet users in China follow these online influencers – 20.6% more than last year. 65.7% sought out videos with humorous and fun content from them. Videos through online ‘celebs’ can also help brands get to otherwise difficult-to-reach consumers, with 54.1% (257 million) of those followers living in third- or fourth-tier cities. Although those big name vloggers are mainly Chinese, there are a handful of Mandarin-speaking foreigners who are gathering quite a following.

A look at the formats for popular vlogs provides an insight into the overall psyche of Chinese consumers. Whereas vlogs in the West can be quite long, they are usually less than 2 minutes in China; representative of local consumers’ love of instant gratification and shorter attention spans for content. Many of these rules apply for other video formats that can be valuable in China’s market place, such as internal and B2B comms where video can be used to train staff, agents and retailers in an engaging format. Agencies such as China Skinny can ensure you maximise the online video opportunity.

On a slightly different topic, China Skinny is working with Westpac and the Australian Chamber of Commerce in Shanghai on the 2018 Westpac Australia-China Business Sentiment Survey. We’d encourage all of our readers who are Australian businesses working in, or with, China to participate in the Survey. The survey aims to provide a valuable insight into the health of the Australia-China economic relationship and provide you with a useful benchmarking tool to inform your business strategy. The collective view of Australian businesses will also help identifying areas that can be built upon and improved to assist Australian businesses in China. Click/tap here to participate in the 15-20 minute survey. We appreciate you taking the time to complete it! Go to Page 2 to see this week’s China news and highlights.

The post China’s Potent Marketing Channel: Online Video appeared first on China Skinny.

2017’s Top-10 WeChat Moments Ads as Voted By Consumers

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Advertising on WeChat Moments can get your brand into Chinese consumers’ most personal of feeds, yet it is not cheap, with the CPM (cost per thousand impressions) north of $20 in bigger cities, with a 20% premium on short video ads.

With costs like that, brands really want to make sure their ads resonate with Chinese consumers to ensure they’re not spending a whole lot of money on campaigns that return very little. In developing ads, it is important to understand one’s target market’s motivations and emotional buttons to push (China Skinny can assist), and to marry that up with learnings from the most popular ads.

Last month, WeChat launched a poll asking users to vote for their ‘Your Favorite WeChat Moments Ad’ in 2017 – incentivising participants with random red envelopes. Below are the top ads as chosen by more than 600,000 WeChat users casting 1,378,948 votes.

Ads are listed in alphabetical order by Chinese name – click on the ad image to see the full video version:



Adidas WeChat Moments adAdidas Originals
#Original is never finished

Launched on 15 August, using a short video with local and foreign celebrities including HK singer Eason Chan, Chinese visual artist Chen Man, and American model and TV personality Kendall Jenner. The ad linked to a longer video with the celebs explaining how they pushed themselves to keep original. Viewers were invited to follow the account at the conclusion of the video.



Tourism Australia WeChat Moments adTourism Australia
Launched on 8 June, Tourism Australia was one of two winners who used a static image with accompanying text that translated to ‘Let’s explore the coastline in Australia’. Clicking on the ad took the user to a stunning a 30s video with a voiceover from Australian actor Chris Hemsworth, AKA Thor. Viewers were invited to follow the account.



BNW WeChat Moments adBMW China
Launched on 29 August, the short video promoting the 2018 BMW X1 combined fun visuals of the car with strobe shots of beautiful scenery and outdoor activities. Clicking on the ad, viewers are shown a longer video and car features, with a link provided at the conclusion of the ad where viewers can link to the BMW website to make an appointment to test drive the X1.



Dior Beauty WeChat Moments adDior Beauty
Launched on 13 October, a short video used alluring pink hues and eye catching shots of lips with designs and letters drawn from the new Dior Addict lip tattoo, long-wear coloured tint. Viewers could click on a link in the ad to purchase the lipstick.



D&G WeChat Moments adDolce & Gabbana
Launched 28th Feb, an image showed the Millennial ‘models’ for Spring & Summary fashion photography with the ad linking to a WeChat post that explaining story behind each of the photos from famous Italian street photographer Franco Pagetti.



Jimmy Choo WeChat Moments ad
Jimmy Choo
Launched on 28 April, the ad was an image for a pair of fancy wedding shoes, leading to a WeChat post with embedded video introducing their customized wedding shoes for both bride and groom.



JD-Transformers WeChat Moments adJD
#Mission Red

Launched on 23 June, a high-action short video utilized Transformers to announce the Brand Day for Hasbro’s Transformer toys on JD. Clicking on the ad, viewers were taken to a longer ad with embedded links to purchase toys with exclusive discounts.



Trip-Advisor Australia WeChat Moments adTrip Advisor
Australia took out another of the top spots with this ad launching on 27 June. A short video showed that Trip Advisor takes you to view a different Australia with animal, coastal and undersea shots. Viewers who clicked on the ad were taken to a detailed video showing how the featured KOLs experience Australia differently. When the video concluded, viewers are encouraged to download the Trip Advisor app and visit Tourism Australia’s 360-degree visual map.



Tencent Charity WeChat Moments ad
Tencent Charity
#Love is everywhere

Launched on 7 September, a short video showed what makes the passengers travelling on metros look up, encouraging people to care about the world and discover the beautiful things around you. Clicking on the ad takes viewers to a longer video which educates viewers about the work Tencent charity is doing such as wildlife protection, poverty reduction and education. Following the ad, readers can find out how they can participate in upcoming charity events.



Montblanc WeChat Moments ad
Montblanc
#Be ahead

Launched on the auspicious day of 8 August, a short video introduced Montblanc’s Summit smart watch marking the exclusive WeChat launch. Clicking on the would provide viewers a link to order the watch, with the first 10 customers also receiving a special gift from the Montblanc.



Key themes and learnings from the top WeChat Moments ads:
  • Video resonates with WeChat users. Although it costs 20% more, it is much likely to be noticed and engaged. 7/10 of the top ads were short video, and nine of the ads linked to a longer video.
  • Recognisable brands are most likely to resonate on WeChat Moments feeds – other brands will need a stunningly creative campaign for breakthrough
  • The top brands all had beautiful imagery/video, which is a fortunate characteristic of the popular beauty, fashion and tourism categories
  • Call to action was varied: purchase, book/reserve, download the app or just follow the WeChat account.
 

WeChat Moment ads and other Tencent advertising is likely to continue to become ever more relevant for brands as the platform evolves. In Q3 last year, advertising revenue grew 63%. There’s still plenty of room for growth when you consider Facebook makes 97% of its revenue from advertising versus just 17% at Tencent.

Late last year Tencent announced they would bring together their seven internal units such as WeChat, QQ, gaming and finance to offer smarter, more targeted advertising using better coordinated user data and profiling. This will only grow Moments advertising effectiveness for brands.

 

The post 2017’s Top-10 WeChat Moments Ads as Voted By Consumers appeared first on China Skinny.

China’s Cross Border Commerce Discrepancies

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In April 2016, pundits were predicting the demise of China’s cross border ecommerce channel after hefty new taxes were suddenly introduced on all online cross border trade. Fortunately, some slick lobbying from Alibaba and JD saw the new tax rates ‘postponed’ the following month and good old cross border was soon back on track.

Shaking off the scare of ’16, eMarketer estimated China’s online consumers spent $100.2 billion on buying products cross border last year. This is more than ten times China’s General Administration of Customs’ value, which announced last month that cross border imports growth rocketed 116.4% in 2017 to ¥59.6 billion ($9.4 billion).

A 2017 Tmall Global Annual Consumers Report published last week (in Chinese) by Tmall Global and CBNData, forecasted the 2017 figure at around $68 billion. Enormous data disparities are not unusual in China, which is why China Skinny typically cross-references a number of sources. From what we’ve seen, the cross border figure is around the $60-75 billion mark. Custom’s low numbers are likely to indicate that many products could be slipping through customs unnoticed, values may be fudged by exporters, or there is some dubious bookkeeping at the borders.

Getting back to Tmall Global’s report, an interesting insight was consumers born in the 1990s are the biggest spenders on cross border products. Last year they accounted for nearly 50% of Tmall Global users and 40% of total sales. The three biggest motivations driving them to buy imported products are trying new things, aspiring to own luxury items and anxiety over aging.

Beauty products, food & supplements and mother and baby products were the top selling categories on Tmall Global, helped by the 60% of households – and almost 70% in high tier cities – who purchased FMCG products online last year.

The top countries selling products on Tmall Global were Japan (baby & beauty products), USA (health, baby, bags), Australia (health, baby, milk powder), Germany (milk powder, dietary & nutrition, cups & kettles) and Korea (beauty).  One positive development is that shoppers are becoming more adventurous, with the purchases from outside the top-3 countries breaking 50% for the first time. In 2017 there were 16,400 products from 68 countries on Tmall Global alone.

Yet behind the pomp and pageantry from ecommerce platforms, not everything smells quite so sweet. Cross border is heralded as providing certainty of authentic products direct from a trusted overseas source, but 40% of cosmetics products purchased from cross border platforms on Singles’ Day were fake according to a consumer association report. The issue is clearly real given Alibaba’s recent announcement to push into Blockchain for the channel.

On the subject of ecommerce, for our Shanghai-based readers China Skinny’s Mark Tanner will be joining an esteemed line-up of speakers at the Clavis Insight 2018 APAC eCommerce Accelerator Summit on March 28. The event is for brands currently selling online in China and looking to up their game, it is a complementary full-day event with limited spaces remaining. More information here. Go to Page 2 to see this week’s China news and highlights.

The post China’s Cross Border Commerce Discrepancies appeared first on China Skinny.

Baidu’s Domination in China

China’s Heaving Population Just Officially Got Bigger

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Many people, including some of the big media houses, still refer to China’s population as 1.3 billion. This was true five years ago, but since 2012, the number of people living in China has been closer to 1.4 billion.

China’s latest census results were released last month, showing the population is edging even nearer to the 1.4 billion figure at 1,373,490,000. Between 2011 and 2016 that number grew 0.5% or 34 million, the slowest growth in recent history, but still similar to the population of Canada.

The census highlighted the concerning trend of China’s declining working-age folks.  Those aged 15-59 dropped by 15 million, from 70.1% to 67.3% of the population at 925 million.  Whereas the number of Chinese over-60 grew by almost 45 million people from 13.3% to 16.2% in just five years.  Under-15 year-olds increased by 4.5 million from 2011 to 227 million. Whilst China’s aging population and the One-Child Policy haven’t helped birth rates, the portion of youth remains virtually unchanged at 16.5%.

China’s urban population rose 6.2% over the past five years to 767.5 million – 55.9% of the population, although migration growth is slowing.

Nevertheless, whether China has 1.3 or 1.4 billion people, the total population is not overly relevant for most brands selling into China. The percentage of the populace with the means, and the will, to buy most imported products is currently only a fraction of that.  That fraction is growing however, and fast.

Although China is already the largest market for luxury goods, cars, tourism, international education, foreign property and countless other categories, what we are seeing today is just the tip of the iceberg.  The number of Chinese urban households with earnings of at least $25,200 annually is expected to soar from 4% in 2010 to 54% by 2030 according to McKinsey. In addition to rising incomes, the willingness to spend on consumables is also increasing.  Brands that are already building a presence and channels, and an understanding of China, are best placed to tap into that opportunity.

For our Shanghai-based readers, China Skinny’s Mark Tanner will be explaining who those relevant consumers are and how to best reach them next Tuesday May 10 in association with the Canadian Chamber of Commerce.  Click here for more information.  Go to Page 2 to see this week’s China news and highlights.

The post China’s Heaving Population Just Officially Got Bigger appeared first on China Skinny.


The Interesting Undertones of Chinese Regulation

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Keeping up with the dynamic Chinese consumer is essential for anyone selling in China, but it’s also a good idea to stay abreast of ever-changing regulations.  We obviously need to comply with the laws, but also understanding the regulations’ nuances provides interesting insights into how Beijing wants to shape things, which affects almost every component of selling in China.

Many exporters are familiar with last month’s introduction of cross border and daigou regulations which provided further evidence of Beijing’s support for local products. In addition, there has been a string of recent introductions of new laws that foreign brands should be aware of. There’s the possible ¥1 million ($154K) fine for using superlatives in communications, such as the “highest”, “best” or “national level,” reminding brands to be humble when operating in China.

New food and beverage safety laws were launched last October in hope of addressing one of China’s most pertinent challenges – the lack of trust in food.  The evolving rules will impact many exporters, covering everything from pre-imports to selling online.

In March this year we were again reminded how conservative China’s law makers remain, when they banned homosexuality, drinking and vengeance on television.  Last month, new legislation prohibited reality TV from featuring celebrities’ kids, halting production of shows such as the uber-popular Daddy Where Are We Going, which has been used by international destinations New Zealand, Fiji and Western Australia to promote their attractions. Even the big budget Tang Dynasty drama was pulled and edited after it was considered that A-lister Fan Bingbing showed too much cleavage.

Trade shows haven’t been immune either, with female models in tight dresses and miniskirts banned from last year’s Shanghai Auto Show.

Whereas online has traditionally been less regulated than traditional channels, this is changing.  New rules are constantly introduced by digital channels such as Tmall, WeChat and Youku which reflect direction from Beijing; the most recent ban on eating banana’s sexily on streaming video.

New online search engine regulations were also swiftly introduced this week, following the outcry from the death of a 21-year old student who had found ineffective treatment after clicking on a paid medical advertisement on Baidu. The tragedy may also further impact Chinese consumers’ search behaviour, which is already different from the West due to limited trust in Baidu results.  #BringBackGoogle.

No product or service selling in China is immune to Beijing policy, so best to keep on top of it.  Go to Page 2 to see this week’s China news and highlights.

The post The Interesting Undertones of Chinese Regulation appeared first on China Skinny.

Chinese or English? That is the Question

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An article in the Sydney Morning Herald last week highlighted some common misnomers about localisation and translation for China: After researching in China, an Australian vitamin brand found that their Mandarin-speaking Chief Science Officer would be most compelling speaking English in the brand’s promotional videos for the Mainland market.

For some, it may be a strange concept that communicating to the Chinese target market in Chinese can hurt sales.  But it comes down to authenticity.  If you are trying to promote yourself as an Australian brand, or from another English-speaking country, you appear to be the real thing if your communications are in English.

Similarly with packaging.  If a brand’s labels are translated in Chinese, many consumers are less likely to associate the product with the positive attributes around that country of origin and will question how the Chinese supply chain has been involved.  The less similar it looks to the same products in the supermarket of an item’s home country, the less Chinese consumers will trust it.

Notwithstanding, there are countless touch points where translating into Chinese is advantageous.  Even though over 300 million claim to have English skills, it is rudimentary for many.  And even fluent English speakers will instinctively turn to Chinese and be more comfortable in their native tongue. Chinese language is often preferred in the details, such as searching for facts on a website, or reading a visitor guide on holiday.

Whilst some videos look more authentic with spoken English and Chinese subtitles, there are many examples where videos in Chinese or with a Chinese speaker translating on the fly are hugely successful, such as Tmall’s streaming video service.

Getting the mix of English and Chinese language right, and in the correct places is just the start – localisation should be much more than just translating messaging word for word.  Chinese consumers often have completely different buying behaviour and motivations which is best reflected in positioning and communications.  And those motivations regularly differ from region to region. Go to Page 2 to see this week’s China news and highlights.

The post Chinese or English? That is the Question appeared first on China Skinny.

How Brightly Coloured Bicycles Represent Chinese Consumer Trends

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This time last year bike lanes in China’s big cities were the realm of migrant workers, with the occasional expat or hipster local on a single speed pedalling among the peasant peloton.  For many Chinese, bicycles were for poor people and a cold or sweaty reminder of when few could afford a car and cities had no subways.  In Beijing, just 12.5% of residents cycled in 2015, versus 38.5% in 2000.

Thanks to investments of more than $200 million, technology advancements and widespread adoption of mobile add-ons such as payments, China’s bike-sharing schemes have changed the face of city streets. Bike lanes in cities like Shanghai and Beijing are unrecognisable from 12 months ago.

At least eight bike-sharing start-ups have come to the fore.  Launching just eight months ago, Mobike already has four million monthly active users of its 100,000 bikes across five cities. Urban middle class Chinese in suits and Hello Kitty knits now ride among those migrant workers and foreigners, in streets that resemble a Copenhagen with Chinese characteristics.

The overnight adoption of cycling is a testament of just how open Chinese consumers are to new things, particularly when they conveniently fill a need or want, and are assisted by some sort of mobile tech.

Talk of the orange, yellow and other jelly bean-coloured bike sharing schemes seems like a fitting prelude to talk about what else is changing in China and trends for 2017, particularly in the marketing and sales space. Of all the years that China Skinny has been crystal ball gazing, 2017 is looking like the most exciting yet. Here are our top-8 predictions.

We’ll leave you with that to ponder as this will be our last Skinny for 2016. The China Skinny office will be open for the rest of the year so please get in touch if there is anything we can do to help grow your brand and sales in China. For our readers who are celebrating, we wish you the Merriest of Christmases, and a Happy New Year to all! Go to Page 2 to see this week’s China news and highlights.

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Alibaba Jumps into the Future of Physical Advertising

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A quick quiz to start this week’s Skinny: What is the most valuable marketing company in the world? Most people probably couldn’t care less, but there are a few folk in the industry who would say WPP. Whilst the company hasn’t had a great year, it remains the largest marketing company in the world measured by billings and revenue. The London-based conglomerate has a market cap of $18.9 billion, putting them ahead of the other well-known marketing companies such as Omnicom at $15.3 billion, Publicis at $12.6 billion and Interpublic at $8.3 billion.

Before using your guess on the familiar marketing giants, you may want to consider the lesser-known companies, like Focus Media. Last week Alibaba acquired a 10.32% stake in the company for $2.23 billion, which as of yesterday had a market cap of ¥162 billion ($23.8 billion). Focus Media is the company behind many of the digital advertising screens in streets, subways and elevators across 300 Chinese cities.

With the acquisition, Alibaba plans to collaborate with Focus to merge offline media and digital marketing, slated as an upgrade to “New Marketing” which will support the growth of New Retail across all sectors. Focus has ambitious plans to soon control 5 million terminals covering 500 Chinese cities and reaching 500 million consumers.

Powering the evolution of Focus’s screens will be Alibaba’s vast banks of consumer data from the more than 550 million online shoppers on its platforms, 520 million AliPay users, and potentially the hundreds of millions watching Youku videos, navigating with AutoNavi maps, taking Didi taxis, browsing on UCWeb, ordering food on Ele.me, cycling on Ofo, using Weibo along with the more than 100 other businesses Alibaba owns a share in. When Alibaba figures out how to truly integrate and harness its massive data, there will be few stones unturned in consumer knowledge that can help direct what gets displayed on advertising screens or whatever they evolve to. Throw that in with their facial recognition technologies and you’ll have Minority Report-type advertising folks!

Alibaba’s investment into Focus Media will support its irrepressible expansion into physical retail and further strengthen its presence across the whole customer journey. What does it mean for companies such as the WPPs and Omnicoms of the world? The continued structural shift in marketing and advertising will force them to evolve beyond their traditional services.

One thing we have found at the Skinny is that while big data is valuable in planning, marketing and product development, it is a complement, rather than a replacement, to human creativity for determining how to best push consumers’ emotional buttons. It is likely to be a while before any machine can do that. Based on the early stage talks involving Alibaba and Tencent to buy a stake in WPP China, the big tech companies may be thinking so too. Go to Page 2 to see this week’s China news and highlights.

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Baidu’s Domination in China

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It is indisputable that Baidu is the dominant search engine in China. Although there are other search engines such as 360 and Sogou, their market share remains small compared to Baidu’s.

Check out China’s search engine landscape and Baidu’s reign in this infographic.

Baidu's Dominance

 

Contact China Skinny to find out more about marketing your website through SEM/SEO strategies in Baidu, or find out more about our services here.

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China’s Heaving Population Just Officially Got Bigger

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0

Many people, including some of the big media houses, still refer to China’s population as 1.3 billion. This was true five years ago, but since 2012, the number of people living in China has been closer to 1.4 billion.

China’s latest census results were released last month, showing the population is edging even nearer to the 1.4 billion figure at 1,373,490,000. Between 2011 and 2016 that number grew 0.5% or 34 million, the slowest growth in recent history, but still similar to the population of Canada.

The census highlighted the concerning trend of China’s declining working-age folks.  Those aged 15-59 dropped by 15 million, from 70.1% to 67.3% of the population at 925 million.  Whereas the number of Chinese over-60 grew by almost 45 million people from 13.3% to 16.2% in just five years.  Under-15 year-olds increased by 4.5 million from 2011 to 227 million. Whilst China’s aging population and the One-Child Policy haven’t helped birth rates, the portion of youth remains virtually unchanged at 16.5%.

China’s urban population rose 6.2% over the past five years to 767.5 million – 55.9% of the population, although migration growth is slowing.

Nevertheless, whether China has 1.3 or 1.4 billion people, the total population is not overly relevant for most brands selling into China. The percentage of the populace with the means, and the will, to buy most imported products is currently only a fraction of that.  That fraction is growing however, and fast.

Although China is already the largest market for luxury goods, cars, tourism, international education, foreign property and countless other categories, what we are seeing today is just the tip of the iceberg.  The number of Chinese urban households with earnings of at least $25,200 annually is expected to soar from 4% in 2010 to 54% by 2030 according to McKinsey. In addition to rising incomes, the willingness to spend on consumables is also increasing.  Brands that are already building a presence and channels, and an understanding of China, are best placed to tap into that opportunity.

For our Shanghai-based readers, China Skinny’s Mark Tanner will be explaining who those relevant consumers are and how to best reach them next Tuesday May 10 in association with the Canadian Chamber of Commerce.  Click here for more information.  Go to Page 2 to see this week’s China news and highlights.

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The Interesting Undertones of Chinese Regulation

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Keeping up with the dynamic Chinese consumer is essential for anyone selling in China, but it’s also a good idea to stay abreast of ever-changing regulations.  We obviously need to comply with the laws, but also understanding the regulations’ nuances provides interesting insights into how Beijing wants to shape things, which affects almost every component of selling in China.

Many exporters are familiar with last month’s introduction of cross border and daigou regulations which provided further evidence of Beijing’s support for local products. In addition, there has been a string of recent introductions of new laws that foreign brands should be aware of. There’s the possible ¥1 million ($154K) fine for using superlatives in communications, such as the “highest”, “best” or “national level,” reminding brands to be humble when operating in China.

New food and beverage safety laws were launched last October in hope of addressing one of China’s most pertinent challenges – the lack of trust in food.  The evolving rules will impact many exporters, covering everything from pre-imports to selling online.

In March this year we were again reminded how conservative China’s law makers remain, when they banned homosexuality, drinking and vengeance on television.  Last month, new legislation prohibited reality TV from featuring celebrities’ kids, halting production of shows such as the uber-popular Daddy Where Are We Going, which has been used by international destinations New Zealand, Fiji and Western Australia to promote their attractions. Even the big budget Tang Dynasty drama was pulled and edited after it was considered that A-lister Fan Bingbing showed too much cleavage.

Trade shows haven’t been immune either, with female models in tight dresses and miniskirts banned from last year’s Shanghai Auto Show.

Whereas online has traditionally been less regulated than traditional channels, this is changing.  New rules are constantly introduced by digital channels such as Tmall, WeChat and Youku which reflect direction from Beijing; the most recent ban on eating banana’s sexily on streaming video.

New online search engine regulations were also swiftly introduced this week, following the outcry from the death of a 21-year old student who had found ineffective treatment after clicking on a paid medical advertisement on Baidu. The tragedy may also further impact Chinese consumers’ search behaviour, which is already different from the West due to limited trust in Baidu results.  #BringBackGoogle.

No product or service selling in China is immune to Beijing policy, so best to keep on top of it.  Go to Page 2 to see this week’s China news and highlights.

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Chinese or English? That is the Question

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An article in the Sydney Morning Herald last week highlighted some common misnomers about localisation and translation for China: After researching in China, an Australian vitamin brand found that their Mandarin-speaking Chief Science Officer would be most compelling speaking English in the brand’s promotional videos for the Mainland market.

For some, it may be a strange concept that communicating to the Chinese target market in Chinese can hurt sales.  But it comes down to authenticity.  If you are trying to promote yourself as an Australian brand, or from another English-speaking country, you appear to be the real thing if your communications are in English.

Similarly with packaging.  If a brand’s labels are translated in Chinese, many consumers are less likely to associate the product with the positive attributes around that country of origin and will question how the Chinese supply chain has been involved.  The less similar it looks to the same products in the supermarket of an item’s home country, the less Chinese consumers will trust it.

Notwithstanding, there are countless touch points where translating into Chinese is advantageous.  Even though over 300 million claim to have English skills, it is rudimentary for many.  And even fluent English speakers will instinctively turn to Chinese and be more comfortable in their native tongue. Chinese language is often preferred in the details, such as searching for facts on a website, or reading a visitor guide on holiday.

Whilst some videos look more authentic with spoken English and Chinese subtitles, there are many examples where videos in Chinese or with a Chinese speaker translating on the fly are hugely successful, such as Tmall’s streaming video service.

Getting the mix of English and Chinese language right, and in the correct places is just the start – localisation should be much more than just translating messaging word for word.  Chinese consumers often have completely different buying behaviour and motivations which is best reflected in positioning and communications.  And those motivations regularly differ from region to region. Go to Page 2 to see this week’s China news and highlights.

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How Brightly Coloured Bicycles Represent Chinese Consumer Trends

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This time last year bike lanes in China’s big cities were the realm of migrant workers, with the occasional expat or hipster local on a single speed pedalling among the peasant peloton.  For many Chinese, bicycles were for poor people and a cold or sweaty reminder of when few could afford a car and cities had no subways.  In Beijing, just 12.5% of residents cycled in 2015, versus 38.5% in 2000.

Thanks to investments of more than $200 million, technology advancements and widespread adoption of mobile add-ons such as payments, China’s bike-sharing schemes have changed the face of city streets. Bike lanes in cities like Shanghai and Beijing are unrecognisable from 12 months ago.

At least eight bike-sharing start-ups have come to the fore.  Launching just eight months ago, Mobike already has four million monthly active users of its 100,000 bikes across five cities. Urban middle class Chinese in suits and Hello Kitty knits now ride among those migrant workers and foreigners, in streets that resemble a Copenhagen with Chinese characteristics.

The overnight adoption of cycling is a testament of just how open Chinese consumers are to new things, particularly when they conveniently fill a need or want, and are assisted by some sort of mobile tech.

Talk of the orange, yellow and other jelly bean-coloured bike sharing schemes seems like a fitting prelude to talk about what else is changing in China and trends for 2017, particularly in the marketing and sales space. Of all the years that China Skinny has been crystal ball gazing, 2017 is looking like the most exciting yet. Here are our top-8 predictions.

We’ll leave you with that to ponder as this will be our last Skinny for 2016. The China Skinny office will be open for the rest of the year so please get in touch if there is anything we can do to help grow your brand and sales in China. For our readers who are celebrating, we wish you the Merriest of Christmases, and a Happy New Year to all! Go to Page 2 to see this week’s China news and highlights.

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Outrageous Advertising Claims in China

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Fancy a tonic favoured by Chinese emperors that cures painful joints, frail kidneys, and weakness and anemia in women? Or how about a milk beverage that will enlarge your breasts from an A-cup to a D? Perhaps a coconut drink that whitens your skin and will make you more buxom?

Believe it or not, these are all advertising claims in China, and not by small fly-by-night operations. The cure-all tonic was a top-seller from Hongmao Pharmaceutical, who outspent P&G in 2016 to become China’s largest advertiser. The breast-enlarging milk drink was the product of China’s largest beverage group Wahaha, and the magical coconut juice comes from the producers of China’s most popular coconut milk.

Reports of such advertising and other headline-grabbing news such as hordes of Chinese tourists lured to Sydney University believing it was a setting in Harry Potter movies may have some believe that Chinese consumers are a gullible posse. Don’t be misled. Whilst some consumers in lower tier cities are making discretionary purchases for the first time and lack some confidence, most middle-affluent class Chinese are incredibly sophisticated. While we’re seeing a rise in impulsive purchases, Chinese consumers typically don’t take things at face value and do significantly more research before purchasing products and services than their Western peers.

Much of this research comes down to an inherent lack of trust. This is confirmed in virtually every project China Skinny works on, in which Chinese consumers’ purchase journey involve an extensive series of touch points across online and offline channels before a purchase is made.

Most readers will be aware of the fake vaccines, fake condoms and even fake zoo animals. Yet Chinese consumers can’t even rely on cross border ecommerce, which is held up as the beacon of trust – supposedly straight from the source from a more dependable origin. In reality this isn’t true; 40% of cosmetics sold through cross border on Singles’ Day ’17 were fake for example.

Although China updated its advertising laws in 2015 to be much more punitive, many false promises continue to slip though. China has the most fragmented bricks & mortar retail landscape of any major economy, and an online sector containing tens of millions of stores that even Alibaba and Tencent struggle to control in light of their advanced data mining and AI. The regular scams have been one of the drivers behind China’s $9 billion key opinion leader (KOL) industry, who are often more trusted than brands even though close to 70% of KOLs have fake fans and engagement. Regardless, over 60% of Chinese consumers are receptive to online influencers compared with 49% in the US and 38% in Japan.

Although China’s marketing landscape is littered with fakes, foreign brands shouldn’t take Chinese consumers to be fools – they are anything but. It is good to be aware of the misleading claims out there, but don’t dare to try it yourself. It will be found out and shared on social media en masse. Chinese consumers are unforgiving to those who disrespect their intelligence, particularly foreign brands. China Skinny can assist to ensure you can still succeed by keeping everything above board.

On another note, we’re hiring! If you’re a native English speaker based in Shanghai who is curious, intelligent and personable and happy working across diverse and fascinating projects, go ahead and apply. More information here. Go to Page 2 to see this week’s China news and highlights.

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The TV Ads that Connect in China

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Spending on TV advertisements in China is declining as an overall share of advertising. By the end of 2019, Alibaba’s ad revenue is forecast to be 63% greater than total ad spending on TV. Nevertheless, TV advertising has its place in China and brands are getting smarter about using it to reach Chinese consumers with tactics such as product placements … even those that have humorous, but blatant promotion. The infographic below highlights some of the most effective strategies brands are using TV advertisements in China nowadays.

China Brand Placement TV Ads infographic

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How Brands Are Incorporating Gaming Into China Marketing Strategies

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There’s nothing quite like staying indoors for a couple of weeks to hone in on your gaming addiction. The coronavirus outbreak and resulting time people are spending inside their homes has seen a sharp increase in Chinese playing games. At the peak of the outbreak, Chinese were spending 6.11 billion hours a day online – over seven hours for each of China’s 840 million online consumers.

Of the online activities, mobile gaming attributed to the largest growth in daily users, with 20% of growth in users of the top apps coming from mobile games, and 38% of mini programs. Chinese spent an average of 159 minutes a day playing games over the Spring Festival period in 2020, versus just 113 minutes in Spring Festival in 2019.

Gaming has long been a popular activity for Chinese, with close to 600 million players before the outbreak. Yet the addictiveness of gaming is likely to see much of the increased popularity over the outbreak maintained when things turn back to normal. As a result, gaming will become an even more relevant channel to build your brand preference and ultimately sales.

Who are China’s gamers?

A quick look into China’s 600 million gamers shows a population representing a strong cross section of its lucrative millennial demographic. Females account for almost half of China’s players. If we take a look at NewZoo’s studies into three of Chinese biggest games: Dota 2 and Honor of Kings, we can see an average age of close to 30, with female participation of mid-40%.

Chinese gamer demographics

Brand Affiliation with Gaming in China

There’s no shortage of case studies with brands partnering with games. We’ve selected a couple of games to illustrate what brands are doing – Honor of Kings and Game for Peace.

Honor of Kings China Honor of Kings

Launched: November 2015

Daily users during 2020 Spring Festival: 95 million

Average daily use time during Spring Festival: 194 minutes; 75.1% rise y.o.y

Honor of Kings has worked with beauty, accessories, food & beverage and luxury brands. With over 50% of players under 25, and 90% are under 35, the game provides an engaged and emotional channel for connecting to these millennials in the most crowded targeted demographic in China.

Mac collaboration with Honor of Kings

While many game collaborations in China target males, MAC cleverly reached the 44% of the games players who are female, and an increasing population of Chinese males wearing lipstick. Early last year, Mac launched five lipsticks themed on five Honor of Kings heroes, priced at ¥170 each ($25). The promotion also used five members from the band Rocket Girls 101  (of reality TV fame) to personify the heroes and expand the reach through their Weibo followings as high as 24 million.

MAC made a clever play on the Honor of Kings phrase “Hold still, we can win,” swapping it out for “Kiss still, we can win.” ‘Kiss’ and ‘Hold’ share the same pronunciation of Wen in Chinese.

The Diao Chan and Lu Na lipsticks sold out within seconds. Visitors to MAC’s official website grew by 3,000% with the topic “MAX X Honor of Kings” attracting over 35 million views and 40,000 discussions on Weibo.

Honor of Kings Lipstick Honor of Kings MAC Lipstick Lu Na Honor of Kings Lu Na Honor of Kings lipstick

MAC X Honor of Kings Honor of Kings X MAC Honor of Kings Partnership Honor of Kings Collaboration

Honor of Kings Diao Chan lipstick Honor of Kings Diao Chan MAC lipstick

A month after MAC’s successful collaboration was followed a month later Jewellery brand Chow Sang Sang partnered with Honor of Kings for branded products, and Netease’s Onmyoji game. The brand’s collaboration including naming jewellery pieces after the game and collaborating with famous Japanese animation One Piece and Naruto to bring them to life. A year later, all of the products are still available, with sales of some pieces over 1,000.

Honor of Kings X Chow Sang Sang Honor of Kings and Chow Sang Sang Honor of Kings, Chow Sang Sang Partnership Honor of Kings Partnership Chow Sang Sang

Baidu Searches Honor of King Chow Sang SangAs noted in the Baidu search index below, searches soared when the Honor of Kings promotions were launched.

Even before MAC and Chow Sang Sang were on the Honor of Kings wagon, Parker Pens had partnered with the game to launch four branded pens characterised by four heroes: Libai (Honor), Di Renjie (Justice), Zhuge Liang (Wisdom) and Zhuang Zhou (Dream). The collaboration allowed the brand to reach young Chinese customer luxury consumers who account for a much larger portion of luxury sales than in western markets.

Parker Pens X Honor of Kings Parker Pens partners Honor of Kings Parker Pens collaboration Honor of Kings Parker Pens and Honor of Kings Parker Pens, Honor of Kings Parker Pens special Honor of Kings edition Parker Pens special Honor of Kings

Honor of Kings X MicoFMCG brand Meco launched five new products with branded packaging based on five heroes from the Honor of Kings. The five characters are part of an official group called “infinite kings” who have countless fans and even a fan club. Fans who buy the products can scan the QR code on the packaging to be rewarded with in-game items such as new costumes, virtual money, and so on.

 

 

 

Game for Peace Game for Peace

Launched: November 2018

Daily users during 2020 Spring Festival: 80 million

Average daily use time during Spring Festival: 124 minutes; 24.6% rise y.o.y

Game for Peace has mainly workedwith films, TV shows and food & beverage, with luxury car brand Maserati also capitalising on Game of Peace top app ranking.

Maserati partnership with Game of Peace ChinaMaserati X Game of Peace collaboration China

Maserati timed its collaboration with Game for Peace beautifully from the 24 Jan-20 Feb 2020, capturing the spike in gaming over this year’s Spring Festival. The partnership saw players able to skin their cars with a Maserati in the game.

The hashtag for the Game of Peace X Maserati took off on Douyin – another app which surged over the break. The hashtag saw 11,000 videos uploaded and received 86 million views.

Game of Peace has successfully partnered with popular culture including the Men in Black: International movie, Angry Birds, and Chinese variety TV program Who’s the Murderer.

Men in Black movie Game for Peace collaboration Men in Black movie Chinese game collaboration

Game of Peace and Angry Birds CollaborationAngry Birds Collaboration with Chinese game

Chinese game partnership with Angry BirdsGame of Peace x Angry BirdsGame of Peace and Angry Birds Partnership

Game of Peace X Who's the Murder Collaboration

FMCG brands Wang Lo Kat and Master Kong have also had placements within the game.

Wang Lo Kat X Game of Peace

Master Kong X Game of Peace collaborationMaster Kong placement in Game of Peace Chinese game

Takeaways for Brands

Although Beijing regulations trying to stall gaming popularity caused a couple of slow years in the industry, the coronavirus has seen the popularity of gaming soar. There has never been a more valuable time to reach the often-hard-connect with young demographics through the channel.

Clever collaborations with games can provide exposure and awareness when consumers are doing something they love. Gaming companies provide endless opportunities such as in-game placement and branded products. While these initiatives alone can be successful, a cross-channel promotion including key opinion leaders can amplify the benefits.

China Skinny can provide best practice advice on gaming promotions in as part of our overall marketing strategy, branding, product development advice and research. Contact us to find out more.

The post How Brands Are Incorporating Gaming Into China Marketing Strategies appeared first on China Skinny.

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