Keeping Up With China's Marketing Evolution
The average consumer in Shanghai is bombarded with 3-4 times more advertising than consumers in most Western countries. With so much noise, it can be difficult for even the most established brands to be noticed.
If the competition and clutter hasn't made it hard enough already, keeping up with constantly evolving marketing channels and understanding how to best utilise them also adds to the pickle.
WeChat is a good example. Many brands know that it is a powerful marketing tool, but many only use a small portion of its capabilities. WPP's China CEO Bessie Lee recently summed up some of the challenges foreign brands face. She noted that "when more and more Chinese brands are using WeChat as a distribution platform to sell products, most multinational companies are just using the messaging app as a content-marketing tool.“
In addition to the limited awareness of the marketing opportunities, some foreign brands rigidly stick to marketing mandates and mindsets from their home markets. These directives rarely work and often aren't even relevant in China's unique marketing environment.
Some of the most rewarding things about working in China's market are the exciting, world-leading innovations constantly launching. There are the well known channels, such as WeChat taking social media to a whole new level and China's o2o leadership. Yet there are also many new marketing channels that are currently underutilised and not optimised to target markets' needs.
One of the most exciting new marketing platforms we've seen at China Skinny is Tmall Live - Alibaba's innovative take on the popular TV shopping, which is likely to help it wrestle back some social commerce from their WeChat foe. We recently worked with Comvita and their Chinese distributor to deliver an engaging Tmall Live campaign to build brand awareness, engagement and education around the usage and benefits of their products. Here's more info about it.
Next week marks the long-anticipated October Golden Week holiday, which will see the China Skinny HQ closed for the break. There will be no newsletter next Wednesday, but we'll be back on 12 October. For our China-based readers, have a great break - we hope you are doing something nice and find somewhere that isn't too crowded! Here are this week's news and highlights for China:
Chinese Consumers
Big Data Lens on China's Economy (Mostly) Affirms Official Stats: Official stats aren't looking as ropy as some people thought, with big data confirming much of the Government's data: manufacturing is weak, real estate is better, auto sales and online consumption are robust, but malls and tourism are suffering and employment is slipping as old industries shed workers. Some areas of consumption are where the big data is more negative than official stats.Yichang Government Encourages Civil Servants, Party Members to Have Second Children: Yichang in Hubei is urging residents tied to the Party to lead the way in having a second child. The city also promised longer maternity leave, following similar policies from Shanghai, Shenzhen and Zhejiang. A report from the Chinese Academy of Social Sciences last year said China's fertility rate was hovering around the global warning line of 1.3 babies per woman.
Digital China
China’s Innovative Marketing Channels Case Study: Comvita Tmall Live: Alibaba's latest marketing platform is its most innovative yet, as global Manuka honey leader Comvita found out.
Tencent Tests new WeChat Feature Allowing In-App Access to Mobile Services: WeChat is testing a feature that lets users directly access mobile services and applications in-app, with many similarities to its current Service Account features.
China Has Finally Seen Explosive Growth in Short Original Videos: Miaopai, a leading video clip-capturing and sharing app in China, claims to have seen daily views surpass 1.7 billion; growing from 510 million in late 2015. Its rise has been fuelled by Weibo which saw video views grow 9.7 times in the 12 months ending Q3 2015.
Chinese Teen Ties Mother to Chair, Starves Her Dead in Fury for Being Sent to Brutal Internet Addiction Boot Camp: A 16-year-old Chinese girl starved her mother to death after being sent to China's increasingly common, yet poorly regulated, military-style "boot camps" to cure Internet addictions.
Food & Beverage
China to Invest $450 Billion Modernizing Agriculture by 2020: The Ministry of Agriculture plans to spend 3 trillion yuan ($450 billion) over the next five years to reduce poverty via agriculture investments. It is believed the investment will assist in protecting national food security, support the sector doing business overseas and develop China's seed industry.
Chinese Consumers Want Natural, Organic Foods: 70% of Chinese say they follow a diet that limits or prohibits consumption of at least some foods or ingredients, with 82% willing to pay more for foods without undesirable ingredients according to Nielsen. 79% are paying closer attention to ingredients in food and beverages, with 35% preferring low fat, 35% low carbohydrate and 35% low sodium. 23% are sugar conscious. 67% wish there were more all natural foods on shelves, 55% more organic and 52% more GM free foods.
26 Restaurants see Michelin Stars: 26 Shanghai restaurants have become the first Mainland China venues to be awarded by the prestigious guide. 19 are Chinese restaurants, with the others serving Italian or French cuisine as well as innovative, vegetarian or barbecued foods. T'ang Court, which serves Cantonese food at The Langham hotel in the Xintiandi area, is the only restaurant awarded three stars.
Chinese Demand for Foreign Baby Formula Surges on Trust Deficit: Chinese consumer demand for foreign-branded infant milk formula is continuing to grow, despite the government’s claim that the domestic industry has emerged from a scandal seven years ago that killed at least six babies. 61.9% of consumers most regularly purchased foreign-branded formula, up from 58.9% 6-months earlier, according to an FT survey. The proportion rose to 73.4% for higher-income respondents, with 14.9% only buying imported formula. A new batch of regulations impacting domestic and foreign producers will come into effect on 1 October.
China Removes 13-Year-Old Ban on Some US Beef Products: China has ended a complete ban on US beef imports, allowing "American bone-in beef and boneless beef for cattle under 30 months" into China. Access to Canadian bone-in beef products has also been restored. Beef prices in China are now four times higher than in 2000.
Chinese Tourists
Countries Want Chinese Tourists - Just Not All In The Same Place: 78% of all Chinese arrivals in Australia stayed in the main destinations, whereas 50% of Chinese visitors to the US stay in California. Countries such as Japan and New Zealand are implementing initiatives to encourage wider travel in their countries.
Fashion
China Churning Out Wearables: China shipped 9.54 million wearable devices between April to June this year, 81.4% up on last year. Unlike basic wearable products in overseas markets where fitness tracking is their main function, equivalent devices in China are of much richer product forms and offer more functionality.
Entertainment
Wanda Group Partners with Sony Pictures, Giving China’s Richest Man a Leg Up in Hollywood: Wanda will invest an undisclosed amount in Sony Pictures, giving it creative control over upcoming films, by allowing it to "highlight the China element in the films in which it invests." The deal grants Sony better access to a vast Chinese market hungry for action-packed blockbusters such as its "Spider-Man" movies. The deal follows Wanda's $3.5 billion acquisition of Legendary Entertainment earlier this year.
Investments & Property
Citi Says China Housing Boom to Continue in 2017: A strong contributor to Chinese consumer confidence - the housing market, will remain ‘robust’ in 2017 given government support and higher prices according to Citigroup. CLSA and S&P are less bullish in their predictions. Average house prices rose in 64 out of 70 mainland cities surveyed by the government last month.That's the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing, research and digital advice and implementation.
