NBA's Fine Balance of Keeping Loyal Fans Happy and Reaching New Consumers
What caught our eye in the build-up to this Chinese New Year is not the nearly-3 billion trips to be made via China's transport system, not the thousands of ways to make pigs cuter including carving one into a watermelon, but the NBA's pick for its Chinese New Year ambassador: 20 year old boy band member Cai Xukun from the group Nine Percent.
In a land where there has been much public debate and negative state media over the influence of 'sissy boy' role models, the decision caused the expected uproar online. On popular sports platform Hupu, known for its masculine user base, 82% - 39,363 voters - checked the option "I'd rather die" in a poll about Cai's NBA mission.
On the surface the choice seems like an outrageous misalignment with the esteemed NBA brand. The NBA has some of the most athletically-impressive beings of the sporting world - poles apart from the effeminate 65kg pop idol. Yet the expensive decision is likely to bear fruit.
For a start, although the NBA already has an epic following in China including the largest social media fanbase of any sports league with 150 million followers, that only accounts for a small portion of China's population. Like any business, they will be wanting to grow that base.
In choosing a target market, they will look to the Gen-Zs (those born in the mid-90s to early 2000s) as having a high propensity to support and spend on the game. Gen-Zs are an open-minded generation in a society that has never been so enthusiastic about sport, causing them to explore and embrace sports more than the generations before them. They're also big spenders. Although most haven't yet banked a single pay cheque, they account for 15% of household expenditure, versus just 4% in the USA and UK. As the only child/grandchild of six doting adults, and having never lived through tough times, they are free spending with seemingly few worries in the world.
You've probably guessed that many of Cai's fans are Gen-Zs, and particularly females - another lucrative yet untapped sector by the NBA. Last year's NBA All-Star Celebrity Game featured Chinese-Canadian singer Kris Wu, which reportedly increased female viewers by 30%.There are plenty of examples where endorsements of effeminate pop-idols have bolstered sales for brands in China, albeit most are more closely-aligned to each other's core values than the NBA and Cai. Yet the NBA's China fans are so deeply rooted in the game, they are unlikely to stop supporting the game en masse due to a Chinese New Year endorser who doesn’t fit the league’s image. Most brands in China would struggle to pull that off.
There have never been more options for consumers to spend their money. Sport - like everything - has to find ways to boost the entertainment factor to stay relevant. Whilst there would be better ways to entertain their loyal fan base, they are likely to entertain a segment who may have never considered the NBA before. Although many of the NBA's execs are unlikely to get down to Cai Xukun's music, they are putting their own opinions aside to attract a new and wider pool of fans. Hats off to the league for embracing China's countercultures - those who dare to rebel from entrenched traditional values - something brands are increasingly having to do to reach the younger, freer-thinking generations.
On that note, we'll leave you to celebrate the coming of the Pig. Happy Chinese New Year, wishing you a prosperous and productive Zhūnián. We'll be back after the break - enjoy this week's Skinny.
Here are this week's news and highlights for China:
Chinese Consumers
China's Gen Z Teenagers Spend More and Worry Less Than You Do: China's Gen-Z spend over $7,000/year on luxury products, are pumped up about the future and not worried about their career prospects or international politics, notwithstanding a trade war at their doorsteps. Although the vast majority are not yet drawing a salary, they account for 15% of household spending in China. That's the highest share globally, versus 5% in Germany and 4% in the US and UK, according to a survey by OC&C including almost 2,000 youngsters from China.
China Will This Year Surpass the US in Total Retail Sales for the First Time: Forecast: China is expected to see its total retail sales grow by 7.5% this year to $5.6 trillion, compared to 3.3% growth in the U.S. retail market to reach $5.5 trillion. In 2019, China will account for nearly 56% of all online retail sales globally; a figure expected to exceed 63% by 2022 according to eMarketer. Alibaba's share of China's ecommerce sales is forecast to fall to just 53% this year, down from nearly 70% in 2016.
Being a Woman in China Means Working a Sixth of Your Life Unpaid: Chinese women spend 2.1 hours a day on housework on average, roughly three times that of men, according to a survey by the National Bureau of Statistics. Men in the US do twice as much as their Chinese counterparts by comparison. When other chores are counted, such as taking care of children, grocery shopping or picking kids up from school, Chinese women are engaged 3.8 hours a day on such “unpaid work,” versus 1.53 hours for men. Men also have about half an hour more “disposable time” to do exercise, watch television, read magazines or meet up with friends.
Cross-Border Ecommerce Platform NetEase Kaola Extends Offline Presence: NetEase Kaola plans to open 15 new brick-and-mortar stores during 2019 in a bid to keep up with China's new retail boom, having just opened its first store in Hangzhou. The store stocks over 3,000 cosmetics, maternal care, and child products, luxury products, electronics, and sportswear SKUs based on big data analysis of consumer preferences and behaviour. The new stores will feature interactive screens, which allow for browsing products and viewing popular items, and testing areas for cosmetics. The company hopes the feature will decrease customers’ decision-making times.
Sport
NBA China Ad Featuring Male Singer Reignites Masculinity Debate: Cai Xukun, a singer with the group Nine Percent, has been called effeminate and not masculine enough by netizens arguing that his appearance and personality aren’t fit to be associated with a professional sports league. According to NBA China, Cai is the first Chinese star to ever be featured in an NBA promotional video celebrating the Lunar New Year holiday.
Digital China
China's Baidu Pledges to Improve Search Service After Complaint: "Baidu no longer plans on being a good search engine. It only wants to be a marketing platform, and hopes to turn users searching for content into traffic for itself," according to journalist Fang Kecheng, with roughly 10% of results referring to poor quality articles on its Baijiahao platform.
China’s Pinduoduo Reports Theft Worth Millions of Yuan: Hackers took advantage of a loophole in online group discounter Pinduoduo’s platform to steal tens of millions of yuan worth of vouchers earlier this month. Rumours soon circulated on social media that Pinduoduo could have lost ¥20 billion ($2.95 billion) from the scheme, but the company estimated its 'official' loss at ¥10 million ($1.48 million).
Food & Beverage
China’s Lethal Milk Scandal Reverberates a Decade Later: “I won’t even consider giving domestic brands a chance, even 10 years later,” says a young mother, feeding into China’s $27 billion infant-formula industry that was reshaped to the near-exclusion of homegrown companies among the market leaders. With only a quarter of Chinese mums breast-feeding, China’s infant-formula market will expand 21% to about $32 billion in 2023, according to Euromonitor. Both Danone and Nestle are focusing on parents in lower-tier cities as they become the new battleground for brands.
Chinese Tourists
New Trends in Spring Festival Travel Rush: 7 million Chinese tourists will travel to over 500 tourist destinations in more than 90 countries and regions during the upcoming week-long Spring Festival holiday according to Ctrip. Chinese international tourism continues to bubble along, with 140 million outbound trips made last year, a healthy 13.5% more than in 2017.
Inside Alibaba's New Hotel in China that Looks Like a Spaceship and is Staffed by Robot Bartenders: Alibaba's new 290-room FlyZoo hotel incorporates facial recognition technology for guests to check in, use the elevators and unlock the doors to their rooms. Robots roam the hotel restaurant delivering food and mix drinks at the bar. "When they experience the robot and the voice butlers, they say 'Wow!'. When they enter into the lobby they say 'Wow!'," says Andy Wang, CEO of Alibaba Future Hotel Management. "It's such a different lobby. It's empty - but maybe it's the kind of empty of the future."
More Chinese Tourists Favour Scandinavia: The number of Chinese tourists who booked trips to Scandinavian countries through Ctrip in 2018 soared by 82% according to Ctrip. This year also marks the China-Finland Year of Winter Sports, well timed with the build-up to the 2022 Beijing Winter Olympics.
Gambling Hub Macau Shrugs Off China Downturn with Tourist Surge: Macau's 620,000 people hosted 35.8 million people last year - 10% more than in 2017. The semi-autonomous region rakes in five times the gaming revenue of Las Vegas. Although the anti-corruption campaign saw Macau's casinos take a hit in 2014 things are now back on track, with gaming revenue increasing for 28-straight months.
Beauty
How to Create Effective Chinese New Year Beauty Collections: Red and gold are the colours for Chinese New Year; black and white are not. There’s a fine balance between generic seasonal clutter and standing out among the sea of red and gold: brands should aim for the right balance between their own identity, a playful and modern style, Chinese culture codes and animal reinterpretation - this year Chinese consumers have been resonating with playful and cute pig-inspired designs.
Would you Share Make-Up With a Stranger?: A new shared makeup booth in Wuhan allows users to scan a QR code to pay a small fee, and enter a room with a chair and dressing table and an array of cosmetics including high-end Western brands. Consumer reviews are generally positive, although hygiene was a concern for some.
Entertainment
Mainland Pressure — China's Underground Club Culture: China's underground nightlife is an ecosystem that’s under pressure yet thriving, rebellious yet traditional, heavily regulated but free. China’s club scene, much like the rest of the country, abounds with beautiful contradictions and varying wildly from city to city.
That’s the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing strategy, research and digital advice and implementation.
