Singles' Day 2019: The Big Things to Watch are Short Video and Livestreaming
On those long, lonely evenings, what could be better than snuggling up to your smartphone and streaming video content? Out with friends at a hip restaurant - no better place to watch another set of streams. Waiting for the elevator or even in traffic on your electric bike, it would be a missed opportunity if you weren't watching more on your screen.
Short videos and livestreams have ballooned over the past couple of years in China. No other online activity has grown as fast or takes up more of users' time in China. 648 million Chinese watched short videos last year - 78.2% of the online population. Users spent a total of nearly 600 million hours per day watching them on mobile in April 2019. The top-rated platform Douyin saw an average of 72 minutes for each of its 320 million daily users. This has created ecommerce KOLs overnight, such as the student who sold ¥1.5 million ($213K) worth of an anti-acne product within 24 hours screening a short video of PowerPoint slides praising its benefits.
The other digital mega-trend that is sweeping Chinese screens is livestream ecommerce. Livestreaming hit China with a vengeance in 2016, died down a little, evolved with some wacky iterations such as the real-time quiz fad, then came back bigger than ever last year, and has continued to soar since. In 2018, Taobao alone sold over $15 billion worth of goods through its 4,000 livestream hosts, up over 400% from a year earlier.
Top livestreamer's annual sales now surpass that of large brands on ecommerce. In the last month, livestreamer Viya sold ¥353 million ($49.7 million) of goods in a single day, and Jiaqi Li sold ¥100 million ($14.2 million) of products sold within 6 minutes, with as many as 31 million concurrent users watching his five-hour livestream as he encouraged shoppers with his famous catchphrase "OMG! All ladies, buy it, buy it, buy it!" A little over a week later, Beijing urged livestream platforms to tighten content controls following his 'mindless endorsements' without trialling products or fact-checking claims.
Although short videos and livestreaming are very relevant for brands targeting younger Chinese consumers, they have really come into their own with this Monday's 11th 11.11 (Singles' Day) Festival. Arguably the most noticeable difference with this year's shopping festival is the use of influencers on Douyin and livestreaming to stand out from the other 200,000 brands hoping to sell their wares.
Alibaba is using hashtag promotions on Douyin luring customers to buy more goods with coupons of up to ¥100 ($14). Similarly, Alibaba is hosting over 2,000 key opinion leaders on its platforms via livestreaming, allowing brands to showcase products and boost engagement with consumers. Alibaba has a lot riding on the streaming videos - and Taylor Swift - as it hopes to stave off online festival fatigue and show that Singles' Day growth is defying China's slowdown, in its first Singles' Day without the big personality of Jack Ma at the helm.
Even after the buzz of Singles' Day falls away for another year, brands who aren't already, should be looking to short video and livestreaming as powerful channels to both sell products and build their brand awareness and trial. Whilst ROI can be tight, if skilfully executed, they can be used to convert curious audiences into loyal customers and advocates. Talk to China Skinny about how best to do that. If you're participating in 11.11, all the best on Monday!
Here are this week's news and highlights for China:
Digital China
2019 11.11 Global Shopping Festival Officially Underway: Singles' Day deals began in earnest on 21 October. One million products from over 200,000 brands will participate in the 11th 11.11, 22,000 of which will be from overseas markets. It is hoped lower tier cities will participate more in this year's festival. 226 million new mobile monthly active users had joined Taobao over the past two years as of June 2019. 70% of new users this year have come from lower-tier areas. Alibaba is setting up 40,000 recycling stations, in addition to 35,000 from its express-courier partners to deal with the mountains of cardboard boxes created from deliveries.
How Chinese Consumers Shop for 11.11: 1:30 video showing how Chinese consumers will save products in their shopping cart prior to November 11, set an alarm and then click to buy at midnight. Games within Alibaba apps to win coupons and livestreaming also make it fun, while "killing time and saving money". A survey of 2,000 Chinese consumers found 30% expect their purchases to be foreign brands, although 78% overall say they will avoid buying American brands.
7 Examples of Successful Douyin Marketing Campaigns: Douyin had 320 million daily active users as of July 2019, who spent an average of 72 minutes a day on the app. 43% of users live in tier 1 & 2 cities and less than 20% are aged over 30. A student made the news last month for selling ¥1.5 million ($213K) of an anti-acne product within 24 hours simply using a powerpoint slideshow showing the benefits of the product, although the lack of success from the many sellers who tried to replicate the technique highlight the randomness of success on Douyin.
Influencers, KOLs, Idols, and the Future of China Ecommerce: 35 minute podcast: A comprehensive introduction to KOLs and related areas such as MCNs (Multi Channel Networks): one-stop-shops working with KOLs and platforms and organising programming, advertising and brand endorsements, and even incubate KOLs. Douyin, Weibo and Kuaishou have official agreements with MCNs as 'official MCN Partners.' There are more than 5,000 MCNs in China with 60% claiming to have raised funding and 6% making more than ¥100 million ($14 million) a year. Also the wacky world of Chinese idols and their fan groups - the fan economy.
6 Tactics from Taobao’s Top Ecommerce Live Streamer Viya: Earlier this month, Viya sold ¥353 million ($49.7 million) of goods in a single day. How has she become such a successful livestreamer on Taobao? In part due to 1. Intense product filtering process to increase trust; 2. Creating an immediate problem or need the consumer didn’t know existed - for example, instead of focusing on the long-term pros and cons of floss vs. toothpicks, she tells viewers that their children might imitate them with toothpicks and poke an eye or damage their gums; 3. Selling specific products to specific audience segments; 4. Developing loyalty and ownership over a specific audience; 5. Careful wording to avoid after-sales issues; and 6. Inviting celebrities with hosting experience.
Alipay Launches International E-wallet, Giving Foreigners Access to Electronic Payment Platform in First for China: Great news for visitors to China who are a little hamstrung without the ability to use a mobile wallet. Alipay has unveiled a 90-day ‘tour pass’ programme for short-term visitors to pay for online purchases through its platform. China received 30.5 million international tourists in 2018 who spent $73.1 billion from lodging to shopping and food.
Chinese Consumers
Xi: China to Adopt 5 Measures to Promote Higher-Level Opening-Up: In President Xi's speech at the opening ceremony of the CIIE expo in Shanghai yesterday, he said that China will adopt five measures to promote higher-level opening-up: 1. Continue to expand market opening-up; 2. Continue to optimize the framework of opening-up; 3. Continue to improve business environment; 4. Continue to deepen multilateral and bilateral cooperation; and 5. Continue to jointly build the Belt and Road.
Adidas: We Over-Invested in Digital Advertising: Adidas admits that a focus on efficiency rather than effectiveness led it to over-focus on ROI and over-invest in performance and digital at the expense of brand building. The company says its attribution modelling was based on last-click and it didn’t do any brand tracking. It also focused on efficiency over effectiveness, leading it to look at specific KPIs and how to reduce their cost rather than what was in the best interests of its brands. Some good lessons for the many brands who focus on tactical digital metrics as KPIs and don't factor in the overall halo effect of branding.
CIA Turned Our Celebrities into ‘Sissy Pants’, says Chinese Academy of Social Sciences: Fingers have been pointed at the CIA for "brainwashing" Asian men, beginning in 1962 by weakening the male temperament of Japanese society." This has spread across east Asia including South Korea and now China. Beijing’s experts compare China’s entertainment industry, which "advocates feminine male artists", to Hollywood, where "male stars are not like this, most of them are tough guys." [paywall] For more on China's 'Sissy Boys', click here.Halloween in China: Just a Bit of Fun, or Too Scary for the Authorities?: Last week's Halloween saw many Chinese happy to enjoy parties and school activities, while others objected to importing Western traditions. Many theme parks and bars had been decorated since early October. Yet some local governments banned festive costumes and make-up from subways, or branded them a threat to social stability.
China Trade Upgrade a Win Despite Modest Gains: An upgraded free trade deal with China may not contain all that New Zealand politicians and officials had hoped for - but that progress has been made in the current global environment is a win for the Government. The original agreement was signed in 2008 and was the first FTA China had with a developed nation.
Food & Beverage
China Finds Solace in Wine From Australia Amid Economic Slowdown: The value of wine exports to China jumped 18% to a record $858 million ($1.25 billion AUD) for the year that ended in September. The average value of each litre of Australian wine sent to China surged 40% to $5.82 ($8.42 AUD).
Chinese Tourists
US Travel Industry Steps Up Efforts to Win Back Chinese Tourism Business Lost to Trade War: States and cities are making a big effort to attract affluent Chinese visitors and their spending power back to US shores. In 2018, Chinese tourists travelling to the US spent $30 billion more than American tourists visiting China did. The number of visitors from China dropped nearly 4% in the first half of this year after a nearly 6% in 2018. Beijing has issued two warnings to would-be visitors to the US, one concerned gun violence, while the other was about harassment by US law enforcement officials. The rejection rate for Chinese tourist visa applications to the US hit 17% in 2018, from a low of 8.5% five years earlier. Meanwhile, protests and political tensions are keeping Chinese tourists away from traditional hotspots Hong Kong and Taiwan, with neither making the top-10 for Golden Week according to Ctrip.
Healthy
China Is Striving for the World’s Best, Cheapest Healthcare: China has doubled the amount it's pouring into public hospitals in the last five years to $38 billion. It wants to see a healthcare industry valued at $2.3 trillion by 2030, more than twice its size now. In new drugs, pharmaceuticals from Pfizer to Roche have agreed to cuts of as much as 70%. China is already catching-up to the US on some important health metrics, and hopes to surpass their doctor patient ratio and is fast closing in on life expectancy. Xi has also stressed the role of traditional Chinese medicine for "Healthy China", emphasising equal importance should be placed on traditional Chinese and Western medicines and efforts be made to enable them to supplement each other and prosper together.
Entertainment
What Trade War? Hollywood Movies Invade China: The number of foreign films imported into China rose to 124 last year compared to 108 in 2017. Not all of these are American films but Hollywood’s share of the foreign film box office is also rising. As of 27 October, the US box office was down almost 6% this year at $9.06 billion, while China’s box office revenue, excluding fees from online ticket services, was up 5.5% at $7.3 billion.
“We Need a Generational Effort”: Music Lawyer Eric Zhao Crusades Against Piracy: A fascinating, in-depth look into China's "hourglass-shaped" music industry, viewed from prolific attorney and beatmaker. The Louis Vuitton-ification of Chinese rap, and the problems with a copyright industry dominated by big tech.
That’s the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing strategy, research and digital advice and implementation.
