JD Leads Social Engagement Growth with PDD Close Behind

•For the 618 event in 2024, total sales across all e-commerce platforms reached 742.8 billion RMB, marking a YOY decline of 7%.

•JD experienced the most significant year-on-year increase of 32%. This prominence is likely due to increased marketing investments and heightened enthusiasm for 3C products, combined with JD’s reputation for quality service.

•Pingduoduo(PDD) has emerged as a central figure in discussions around the 618 events, indicating a consumer shift toward more cost-efficient options.

3C

Apple Dominates 3C Discussions While Male Engagement Rises

•Similar to Double 11, engagement declines sharply after Apple, highlighting concentrated discussions on a few key players, with Apple leading.

•Six out of the top 10 3C brands are Chinese, showcasing strong local preference and a competitive edge over global brands.

•The spike in male audience engagement around 3C products discussions aligns with the heightened focus on JD, where many male customers from top-tier cities continue to prefer JD as their primary shopping platform for 3C products.

Beauty

Western Brands Lead Beauty Sector Conversations with Increased Competition Over Double 11

•L’Oréal Group continues to lead the sector, demonstrating robust performance in consumer engagement and marketing effectiveness.

•Only 2 Chinese brands ranked in the top 20, a decrease from 6 during the last Double 11. This change underscores the increasing market presence of Western brands, which capitalize on strong marketing strategies and high consumer trust.

•Company groups now represent 75% of the top 20 brands discussed during the 618 event, marking a 5% increase from Double 11 and indicating heightened competitiveness.

Apparel & Footwear

Outdoor & Sportswear Brands Lead While Chinese Brands Expand Influence

•Sportswear and outdoor labels continue to dominate apparel and footwear discussions.

•This year, four Chinese brands made the top 10, up from two in the last Double 11 event. Zara lost traction, while local brand Urban Revivomade a strong showing in the top 10, highlighting a notable shift toward local brands.

•Ubras and Bananain, emphasizing comfort and functionality in their product designs, have not only garnered significant social buzz but also outperformed major player Lululemon in the sector.

Household Appliance

Consumers Shifting Strongly Towards Chinese Brands Over Premium International Labels

•The consumer shift toward more cost-efficient options is especially evident in the household appliance sector. Among the top 10 most discussed brands, only the last two are foreign, while the remaining eight are Chinese brands.

•The engagement levels among the top 10 brands in the home decoration and appliance sector are relatively even, indicating a more balanced competitive landscapecompared to other sectors.

Consumer Behavior Shift

Consumer Feedback Reflects Shift Towards Pragmatism During 618 Sales

Consumer feedback around major sales events has traditionally centered on complaints about complex discount mechanisms. However, for this 618 event, the focus has noticeably shifted to low motivation and willingness to make purchases.

“There are promotions, live-streaming every day on every channel; to be honest, I’ve become almost immune to sales events.”   — Female user based in Guangzhou

Key Summary of 618 Social Discussion

•618 hits a historic low with a 7% revenue dip, while JD & PDD excel in social discussions.

•Male audiences are increasingly engaged in 3C discussions, with Apple leading the way. Tier 1 Bilibilibloggers in the technology and electronics industry are flocking to Red

•Western beauty brands dominate social discussions, but Chinese brands excel in eComrevenue, indicating fierce competition and a nuanced consumer landscape.

•Outdoor & sportswear brands lead the apparel and footwear sector, with more Chinese brands gaining attention.

•Consumers are shifting towards more cost-efficient options, especially in household appliance sectors.

•Consumption downgrade and frequent promotions leads to a lack of enthusiasm for major sales events.

Our Team of Expert

WalktheChat is a marketing agency specializing in AI-driven social media marketing for luxury and premium brands. Our clients, including Louis Vuitton, Chaumet, Marimekko, Le Creuset, DeLonghi, PDPAOLA, Missoma, and Polene, rely on us for advanced marketing intelligence and customized strategies.

The post [Social Report] Are consumers getting numb about sales events like 618? appeared first on WalkTheChat.

Spend over 5 minutes on social media anywhere in the world, and you’ll see a funny video involving a cat (a “meme”). But in China, you’ll also see brands using such videos to grab attention Gen Z’s attention.

Meanwhile, cat meme content has shared the trend, “内耗不如发疯” (roughly translated as “It’s better to go crazy than to burn out internally”), which young people now prefer to embrace a “psychopathic” mental state. This shift reflects a broader trend of authenticity and emotional expression becoming more valued among young Chinese consumers.

How it all started…

The “cat videos” trend started in China around February 2024. A Japanese blogger published a cat “meme” describing his experiences in China. The videos got over 1.6 million views and gained over 200,000 followers in a week on Bilibili. Little Red Book followed quickly.

This start a craze of cat memes that grew exponentially month over month:

Soon enough, a “cat meme ecosystem” started to grow. Creators on Bilibili published guides and instructions helping users to create their own cat memes, growing the trend further.

It wasn’t long until brands tried to leverage the “cat memes” craze.

How brands jumped on the trend

Brands took notice of the cat meme trend and tried to benefit from it. At first, it was mostly used by small brands using an informal and relatable tone to gather attention.

The pattern was the following:

• The creator mentions working for a specific brand
• The creator introduces a workplace challenge assigned by their boss
• Describes the task as difficult or impossible
• Ask the audience for help by engaging with the post and following the account

Larger brands soon started to follow the trend. Here is one created by China’s largest logistics company SF Express, that gathered over 200,000 engagements. SF Express uses cat meme in a funny video to depict the excitement of a new employee’s first day at their Fortune 500 company, showcasing office highlights and innovative features.

Brands like L’Oréal, Biotherm, and Estée Lauder are promoting affordable products, such as primers and cleansers, using cat memes. They create scenarios where couples are giving these products as gifts, making the brand and its affordable products more relatable to young users.

Nestlé launched a new ice cream flavor with a video featuring a popular cat meme, garnering 34,000 engagements.

Brands start to build up emotional connect with Gen Z

The discussion of mental state has become increasingly popular on social media. The economic downturn and rising unemployment rate since COVID-19 have significantly pressured Gen Z. This has led to more exaggerated expressions of “going crazy”, with a trend towards celebrating an “unconventional mental state.”

And on Xiaohongshu, the posts related to mental state (精神状态) continuously gained over 48 million engagements in April 2024. 

The viral game “Electronic Muyu” has captured the attention of young people. The game features a virtual version of the traditional “muyu,” a wooden percussion instrument used by monks during meditation and chanting. Each tap on the screen mimics the rhythmic knocking of the muyu, displaying a “-1 worry” message. This simple yet engaging activity has become a trend among office workers and students alike, providing a playful outlet for stress relief and anxiety management. 

Although it may seem like an absurd action, this phenomenon precisely highlights the mental state of young people today: overwhelmed by social pressure and striving to avoid trouble by all means.

More brands are striving to emotionally connect with the younger generation. IKEA exemplifies this approach by fostering a strong bond with the youth community through humor-infused branding. They strategically place iconic dolls in unexpected locations to spark social conversations and enhance the store experience. A notable example is a plush toy pig lying on a grill with eggs beside it, creating a whimsical and humorous display that resonates with young shoppers.

Additionally, IKEA’s slogan, “Choose ‘good night’ and forget night shifts and late marriage,” directly addresses the pressures young people face regarding work-life balance and societal expectations about marriage. This approach makes the audience feel supported by the brand. IKEA’s ability to combine humor with a deep understanding of young people’s challenges sets them apart in creating meaningful connections.

Speed is crucial

In the first 30 days, over 50 brands engaged with young people using cat memes on their official accounts. The first ones that followed got a lot more reaction from the market.

Nestlé first cat meme ice-cream launch video received over 34,000 engagements in April, but a second video using a similar theme garnered less than 200 engagements in May. This 30-days gap highlights the significant impact of timing.

While a well-crafted story that incorporates brand features is important, the speed at which audiences switch their attention is the make-or-break factor.

In Conclusion

Understanding and engaging with Gen Z in China requires brands to be authentic, culturally savvy, and emotionally resonant. The use of cat memes and mental health themes demonstrates how brands can effectively connect with young consumers by tapping into popular trends and creating relatable content. 

However, it’s not just about applying a trending meme template and following the hottest discussion; it’s about building deeper connections with users. By staying attuned to the evolving preferences and mental states of young consumers, and by incorporating their feedback, brands can create impactful and memorable campaigns.

The post Brands start leveraging cat “memes” in China appeared first on WalkTheChat.

1. Xiaohongshu stores are booming: 6.9x YOY in GMV for Xiaohongshu stores and a 4.2x YOY increase in GMV from live-streaming sales in 2023.
2. Foreign brands are required to localize their content more extensively, driven by a surge in national pride post-COVID
3. Engagement rates are higher on Xiaohongshu than on Instagram; in Q2 of 2024, the average comment-to-like ratio was 8%, compared to Instagram’s 2%. Brands can utilize the rich feedback from comments for understanding niche and affluent groups, offering detailed consumer feedback and enabling effective crisis management.

Learn more about the complete Little Red Book marketing guide here.

Trend #1 Zoom: Xiaohongshu stores are booming as live-streaming picks up

Xiaohongshu has been rapidly expanding its live-streaming e-commerce capabilities as part of a significant pre-IPO effort. In April 2024 compared to the same period last year：

• A 5x increase in brands starting official account live-streaming
• A 12x increase in customers placing orders during these live sessions
• A 7.4x rise in the number of brand stores achieving over 1 million RMB in sales

For the upcoming 6.18 shopping festival, the platform is offering over 0.1 billion RMB in discounts and increased traffic for Red store brands, further emphasizing its commitment to growing its e-commerce segment.

Celebrity live-streaming

The platform’s live-streaming success is largely driven by celebrity influencers who, despite having limited shows, generate impressive sales figures.

For instance, Dong Jie and Zhang Xiaohui, both prominent figures on Little Red Book, achieved average gross merchandise value (GMV) per live-stream of 43 million RMB and 78 million RMB, respectively. These influencers focus on high-value products such as fashion items and skincare sets, which resonate well with the platform’s user base.

However, these Red superstar live-streamers are celebrities, not full-time live streamers, thus their livestreams are rare. For instance, Zhang Xiaohui only did one streaming in the past 3 months, while Douyin’s top celebrity Luo Yonghao’s account had 131 shows in one month. Despite the limited number of shows, these celebrities drive high engagement and sales due to their star power.

While top Red live-streaming influencers are achieving results comparable to those on Douyin, such influencers are rare. On a normal day, fewer than 20 live-streamers on Little Red Book manage to achieve over 100,000 RMB in sales. While on Douyin this number on any given day is way over 100 influencers.

The average order value on Little Red Book is potentially 2 times as high compared to Douyin, emphasizing the platform’s focus on premium products. This makes it an attractive channel for brands looking to market higher-end items.

Brand’s official live-streaming

Brands like Fabrique have started to leverage official live-streaming, beginning in March 2024.

Launched only two months ago, Fabrique’s Xiaohongshu live-streams have already achieved significant traction. In April alone, sales from Fabrique’s official live-streaming on Little Red Book reached 16% of their Tmall sales.

While Little Red Book’s official live-streaming sales currently represent only 9% of Douyin’s overall store sales, there is strong potential for growth.

Tmall typically performs well during traditional e-commerce holidays such as 3.8, 6.18, and Double 11. However, during “off-season” months like April, total sales from social media platforms Douyin and Little Red Book can account for up to 65% of total sales (49.8% for both months). This highlights the potential of social commerce for premium fashion brands, demonstrating that social media channels can significantly boost sales outside peak shopping periods.

Trend #2 Zoom: foreign brands need to localize content for Chinese audiences

In light of the rising wave of nationwide patriotism post-COVID, foreign brands now need to localize their assets more than ever to resonate with cultural norms and nuances.

Luxury brands such as LV and Lewoe are taking a more aggressive China-localization approach in 2024.

To celebrate the Chinese New Year of 2024, LOEWE collaborated with three jade carving masters to create three limited-edition jade pendants (Jade is highly in line with Chinese preferences). Drawing color inspiration from six ancient Chinese jade carvings, LOEWE launched 6 new colors for the Flamenco Mini handbag and invited the global ambassador Yang Mi to shoot branding assets.

The success of Arc’teryx’s localization in the 2024 IWD (International Women’s Day) campaign lies in its deep understanding of its audience. The brand integrates the concept of “softness” with strength in its marketing, resonating profoundly with outdoor enthusiasts who appreciate both the delicate and powerful aspects of nature. 

This approach not only highlights the product’s functionality but also connects emotionally with viewers by reflecting on their personal experiences and values. Compared to previous content, this campaign gained huge engagement and brought social buzz to the brand.

Fendi collaborates with Yi (ethnic minority) artisans: strengthening brand ties to local culture, they also selected a temple as the offline exhibition venue and inviting Yi ethnic craftsmen for live embroidery demonstrations enhances the cultural experience.

AI could play a pivotal role in tailoring global brand assets to resonate with local Chinese cultural nuances. A case study from WalktheChat demonstrates this strategy with Le Creuset’s marketing adaptations for the Chinese New Year and the Dragon Boat Festival. By deploying AI, brands can swiftly modify their global campaigns to appeal to Chinese aesthetic and cultural preferences, enhancing engagement and market relevance.

This is another of WalktheChat’s showcases of AI localization. We helped to put Polène’s Series Eight handbags in a Chinese-style setting, incorporating culturally resonant elements such as Chinese bonsai and motifs reminiscent of dim sum and dumplings. This demonstrates how brands can deeply engage with Chinese culture, blending traditional elements with contemporary design to resonate with local consumers.

Marimekko launched a 60th-anniversary celebration campaign in Shanghai, creating an engaging campaign with the famous Shanghai landmark.

Marimekko’s Unikko Foreveer Pop-up event in Shanghai. Video created by WalktheChat. This asset got over 1 million likes worldwide

Trend #3 Zoom: Leveraging Little Red Book’s Engagement for Deep Brand Insights

Little Red Book’s community engagement significantly outshines Instagram, with an 8% average comment-to-like ratio in Q2 of 2024, compared to Instagram’s 2%.

Comments on Little Red Book offer brands a goldmine of information, especially useful for understanding niche and affluent groups. For example, an analysis of 2,000 posts from Tesla drivers taking road trips during the national holiday provided detailed feedback on their experiences.

In contrast, BYD drivers frequently discuss issues related to maintenance and battery performance. This stark difference underscores Little Red Book’s potential as a crucial resource for brands seeking actionable and detailed consumer feedback.

Little Red Book also serves as a critical platform for crisis management. Brands can effectively monitor and analyze user sentiment, identifying emerging issues swiftly and accurately.

For example, by using WalktheChat sentiment analysis tool Doris, here is the Messi HK crisis visualization to understand the root causes of negative reactions. By analyzing 50k comments, we get a much clearer picture of the anger is coming more from lack of fan engagement than economic impact on fans.

Little Red Book comments are like a gold mine of authentic users’ feedback. It allows companies to proactively address concerns, manage public relations issues, and mitigate potential damage to their reputation. By visualizing user emotions and the underlying causes of dissatisfaction, companies can strategize more effectively, ensuring swift and appropriate responses to maintain consumer trust and loyalty.

Conclusion

Little Red Book’s evolving landscape presents a unique opportunity for brands to tap into China’s dynamic market by leveraging booming live-streaming sales, embracing extensive localization to align with cultural nuances, and utilizing high engagement rates to gather rich consumer insights. By strategically incorporating these trends, brands can significantly enhance their presence, drive growth, and maintain a competitive edge in 2024 and beyond.

The post 3 Trends of Little Red Book Marketing in 2024 appeared first on WalkTheChat.

Summary Insights 

• 60% of Douyin transactions in the fashion sector potentially take place off the Douyin platform. Making an omnichannel strategy for Douyin crucial for 2024

• Douyin’s “Omnichannel Measurement” tool allows for real-time tracking of the potential transaction out of the platform, enhancing both online and offline sales.

• Brand Douyin livestreaming is growing in popularity, driving a larger share of total sales with high-value brands seeing substantial success.

• Advertising and supportive platform policies have led to increased traffic and higher conversion rates for brand Douyin livestreaming.

Fashion Marketing Campaign on Douyin may drive 60% of potential transactions out of the platform 

Douyin launched “Omnichannel Measurement” to monitor the contribution of Douyin marketing to all channel e-commerce conversions and offline business.

The Omnichannel Measurement solution from Ocean Engine( Douyin Ads platform) employs two sophisticated algorithm models: MTA (Multiple Touchpoint Attribution) and MMM (Marketing Mix Model). It enables brands to view results on daily basis, facilitating real-time adjustments to budget allocation and campaign strategies.

Among the 500 reports generated by brands, current data indicates that, on average, 39% of transactions occur outside the Douyin platform,  though this rate varies widely by industry. The clothes and accessories sector leads with the highest rate at 60%, followed by the healthcare industry at 46%.

From QuestMobile, during the Double 11 Festival, Douyin contributed 7.4% of traffic to Taobao and 5.6% to JD, more than RED, Weibo and Kuaishou.

Zara initiated a quite luxury style Douyin livestraming

Zara leads the charge among high-end retailers in embracing a ‘quiet luxury’ style of livestreaming on Douyin, breaking away from the traditional, bustling online sales chatter. Their approach is refreshingly direct and understated, showcasing collections in a manner that mirrors the exclusivity of a private fashion show.

This strategic pivot positions Zara not just as a trendsetter in fashion, but also in digital marketing, offering a refined blueprint for other premium brands to engage with audiences without diluting their brand’s cachet. Zara’s initiative is a significant stride forward, signaling a shift towards a more sophisticated, brand-centric livestream experience that could redefine the future of luxury brand engagement on social platforms.

The 1st show attracted 1.2 million views and 267 thousand interactions, 10 times more engagement than before. The average views of  Zara Brand Livesteams reached 560,000 after the update,  marking a 180% growth from the previous.

Up until 2024 Jan, Zara had:

• 181 Official live-streamings in total
• Accumulated 460 thousand followers
• The estimated annual GMV from Official live-streaming exceeded 40 million RMB

Zara’s success shows that a tailored approach, focusing on engaging content over direct sales, is essential to generate buzz and build brand presence on Douyin.

Other brands such as Ralph Lauren also hosted their Spring Summer 2024 show on Douyin. However, this show didn’t quite capture the same level of engagement as Zara’s meticulously Douyin-tailored presentation, they only got 488k views.

Ralph Lauren’s fashion show livestreaming show on Douyin didn’t spark the same excitement as Zara’s, highlighting a crucial point for luxury branding on the platform: it’s not the replication of a fashion show that draws the Douyin crowd, but the creative and platform-specific entertainment value. The key for luxury brands is to design experiences that marry their brand story with the interactive and visually rich format that Douyin users love.

Brand Douyin Livestreaming increased stably 

Brand official Douyin live streaming continued to gain momentum. The proportion of GMV attributed to brand-official Douyin livestreaming saw a continuous increase, from 25% to 33% in 2023.

High-value brands, in particular, found substantial success with this approach. More affordable luxury brands joined  Douyin’s e-commerce last year. Their brand livestream-generated GMV makes up more than 50% of their total Douyin sales, and the average value per order exceeds 1,000 RMB.

Lululemon focused on using Douyin as a new product launch platform 

Since 2024, Lululemon has adopted a strategy of featuring new and limited-edition products in their Douyin livestreams. In contrast to their Tmall store, which mainly promotes classic items, three of the top-selling products in the Douyin store are new releases for 2024 Spring Festival. 

Lululemon also enhances new product promotion by inviting professional sports influencers to their livestreams, using expert fitness advice to attract consumer attention, enrich livestream content, and increase the efficiency of new product launches.

Brand Douyin livestreaming can get extra traffic from Douyin easily by completing certain tasks. Douyin’s supportive policies for brand-led livestreaming have proven effective.

Compared 2023H1 with 2022H1, sales per thousand views in influencer-led Douyin livestreaming saw a 15% year-on-year decline, with average conversion rates dropping by 30.5%, and only a marginal 0.6% increase in the average value per order.

In contrast, official Douyin live-streaming experienced a 17.6% rise in sales per thousand views, with a significant 39.9% increase in the average value per order. This indicates that official Douyin live streaming tends to secure higher average order value.​​

Top affordable luxury brands like Lululemon can capitalize on brand Douyin livestreams to initially boost sales. Smaller or medium-sized brands may benefit from utilizing KOL livestreams to enhance brand image and sales at the beginning. 

Annually, Fabrique partners with over 70 KOL livestreams, yielding a GMV of 40 million RMB. Initially, these KOL collaborations accounted for 60% of total Douyin sales. In their second year, through ongoing refinement of their official livestreams, more frequent live-streaming, a growing follower base, and increased advertising spending, their official livestream GMV soared from 15 million to about 80 million RMB, comprising 56% of their Douyin sales.

Brand Douyin Livestreaming highly relies on ads to boost traffic

For brands venturing into Douyin’s e-commerce platform, advertising plays a key role in driving traffic during the initial stages. For instance, an outdoor sports brand reported that around 30% of its live-streaming traffic came from paid ads.

By analyzing a typical week of advertising data, it’s clear that by significantly boosting paid traffic to their brand Douyin live-streaming, the brand achieved a 262% rise in GMV. The substantial influence of paid traffic on the brand’s official Douyin livestream performance is apparent.

Meanwhile, the impact of paid traffic from Douyin on organic traffic is quite pronounced. After increasing paid traffic, organic traffic has more than doubled, significantly boosting the potential for more in-store visits and conversions during Douyin livestreamings.

While advertising-driven traffic to brand Douyin livestreams can notably increase sales in the short term, the long-term acquisition costs for new customers may rise. Brands should also prioritize converting public traffic into their own channels. To foster brand loyalty and improve repeat purchase rates, brands can utilize options like followers’ groups, Official Apps, and membership systems.

Conclusion

To succeed on Douyin, brands are leveraging official livestreaming for rapid sales growth, as seen with affordable luxury brands. While ads can boost short-term sales, converting public traffic to owned channels is key. Following Zara’s example, more brands recognize livestreaming’s power in boosting brand image. Tools like “Omnichannel Measurement” help track off-platform transactions, enabling smarter marketing budget allocation for top brands.

Douyin Live-Streaming and case studies: a brand marketing guide

Douyin Zibo (自播), AKA Douyin live-streaming hosted by the brand, is a trending marketing method in China.

In Feb 2022, 50% of the total Douyin sales of the top 500 brands came from the brand’s own official live-streaming.

During the 618 e-commerce holiday in 2022, a total of 25 brands’ official Douyin live-streaming reached over 100 million RMB in sales. The top brands include Xiaomi, Adidas, Estee Lauder, Apple, and Nike. 

Also, brands’ official live-streaming represented 57.7% of the total Douyin e-commerce live-streaming time on June 18th, 2021 (the rest was live-streaming by influencers), according to East Money.

To break down the Douyin live-stream strategy, we will cover:

• What’s brand Douyin live-streaming
• How to optimize Douyin Live-streaming 
• Should brands invest in Douyin live-streaming?
• Case study

What’s brand live-streaming?

Brand live-streaming is a live-streaming session hosted by the brand’s official account (and not by a 3rd party influencer).

Dedicated account just for live-streaming 

Many brands choose to set up different Douyin accounts specifically for live streaming. For example, Adidas has over 4 live-streaming accounts for different audience groups: the flagship store, women, kids, and distributor stores. 

The content on those live-streaming accounts is simple and short clips from live-streaming. Most editing is just to add background music and Douyin effects. 

Such content positioning is very different from Adidas’ main official account, which only shares high-budget creative content.

Hours-long

Lots of these live-streaming accounts run on insane live-streaming hours of over 15 hours per day. Usually, the live-streaming has one host, often a female, selling over 50 discounted products. 

Despite this time commitment, the viewer count (the number of viewers watching the live video at one time) is extremely low. Even for the top 500 Douyin brands, the average viewer count is often below 100. This would accumulate over 100k daily viewers in total.

Compared to the viewer amount, the sales result is impressive. For example, Under Armour’s max viewer count could be 100, with a total of 100k daily views, and the daily sales could reach over 300k RMB. Douyin users tend to make quick and impulse purchases during live streams.

Pricing is lower than Tmall

Below brands are from the top 100 best-performing Douyin stores. Comparing the average product price in Douyin and Tmall flagship stores, the pricing on Douyin is around 10-20% lower.

Higher pricing on Tmall could be a result of Tmall users’ stronger purchasing power. Usually, Tmall users have a stronger purchasing intent, while Douyin users have a stronger need for entertainment.

Adidas is one of the top 5 Douyin stores. Its price on Tmall is 17% higher than Douyin throughout the year. The difference reaches over 100 RMB from January to April.

A stronger focus on Douyin during the non-event period

The focus of Douyin marketing and live-streaming should be during the non-event period. Douyin sales tend to remain relatively stable or even drop during large Tmall events such as Double 11 and 618. The sales gap usually closes before and after the event period.

Brands can focus on driving traffic to Tmall and setting relatively competitive prices during the event periods.

According to the above stats, Douyin already reached 39% of Tmall’s net sales. But the Tmall net sale might be underestimated. Tmall officially claim to have 8,100 million RMB in GMV in 2022, and Douyin officially claimed only 730 million RMB GMV in 2021, less than 10% of Tmall’s. But it’s clear that Douyin’s e-commerce continues growing and the gap between Tmall and Douyin is closing.

How to optimize Douyin Live-streaming 

Focus on the hero product 

Just like the hero product strategy on Tmall, Douyin also emphasizes the top-selling products. Over 20% of sales are from the 3 top-selling items. Many brands even have over 50% of total sales from the top items. This is significant since many brands have over 100 products listed. For example, Erke (a Chinese sports brand) has 890 products, and Under Armour has over 300 products.

Think of live-streaming as the last step of Douyin conversion funnel 

Live streaming does not work alone, it’s the end of the conversion funnel. 

The top of the funnel is the source of the traffic. Traffic comes from display ads, content, and organic live-streaming traffic from Douyin.

According to Newrank, the source traffic from a brand’s own live-streaming when first starting live-streaming could be broken down according to categories: 

The more a brand relies on brand awareness, the more it needs to run advertising to kick-start the traffic.

Use content to generate traffic to your live-streaming account 

Quantity over quality when it comes to driving traffic to the brand’s own live-streaming. The Douyin algorithm made content performance unpredictable, thus posting more is a safer bet to generate more traffic. 

Brands with over 500k Douyin followers, tend to create a separate account just for live streaming. These accounts’ has very promotional content, very different from the usual concept video a brand would produce with a bigger budget. These are just short clips from the live streaming. Often using the same editing template, music, and special effects to make it simple to produce. Most brands post over 10 videos per day to drive traffic to live streamings.

For most brands with less than 500k followers, a brand can simply use the same account to set up Douyin live-streaming. In this case, the content still needs to be creative, and on-brand. The brand could post less frequently.

Below is the type of content Lola Rose, a 1,000-2,000 RMB jewelry brand, generates on Douyin. It’s just 2 pictures with simple background music. Easy to produce in bulk. This video got around 100 engagements on Douyin. The same video asset could also be used on the brand’s Tmall store.

Another type of content strategy is to post less frequently but rely on display ads to generate traffic. Premium brands with large budgets and restricted content requirements usually do so.

Discounts and user engagement

Engagements and purchase actions will boost the organic traffic to a live-streams.

Charlotte Tibury’s team set up 1-2 lucky draws for a 200 RMB product during every live-streaming. To participate, viewers will need to pay 0.1 RMB to join the Fan club and add a comment. These are small but effective actions that will trick the Douyin algorithm to bring even more traffic. The host will decide when to release the lucky draw result, thus encouraging viewers to stay longer to wait for the result.

Douyin has many other features to encourage users to spend time on live streamings, such as limited products, time-sensitive coupons, small giveaways, and comment-lucky draws.

Participate in Douyin events to gain traffic

Same to Tmall, Douyin also has its own event schedule for the e-commerce holidays. Participating in the official events will gain traffic to the store.

Set the price lower than Tmall

Brands can use tactics such as different hero products, gift-with-purchase, or even develop Douyin-specific SKUs to set up a lower pricing strategy for Douyin. In general, many brands would price 10-20% cheaper on Douyin than Tmall.

Gift-with-purchase

Some brands use gift-with-purchase to set different pricing while avoiding users directly comparing prices across Douyin and Tmall.

Perfect Diary promotes the lip gloss set during flagship store live-streaming and sets the price 31% lower than Tmall. Gift-with-purchase is able to justify the pricing differently and avoid a direct price comparison.

Douyin-specific product

Some brands also develop Douyin-specific SKUs to offer a cheaper pricing product in Douyin, while avoiding direct competition with Tmall.

Should brands invest in Douyin live-streaming?

Despite the impressive aggregated sales result, most brands still struggle to manage their own Douyin live streaming.

High upfront cost

The upfront investment is huge:

• Over 10 hours of daily live-streaming
• An operation team to assist with content posting, promotion, ads, and technical support through daily operation
• A great salesperson as the live-streaming host who also needs to match the brand’s style
• Supply chain system to support the surge of demand during peak periods
• Deal with excess inventory when performance is below forecast

Traffic concentrates on top brands

Another barrier to entry is the current live-streaming sales are extremely concentrated on top-tier brands. Xiaomi, Florias (Chinese cosmetics startup), and Adidas are among the best-performing brands on Douyin. These brands already have over 9 million Douyin followers and the monthly sales from brand live-streaming are over 50 million RMB.

The 2nd tier of brands with strong distribution channels and high brand awareness in all tier cities in China. These brands usually have over 1 million followers on Douyin and have 10-30 million monthly Douyin live-streaming sales. For example, brands such as Lancôme, COACH, Erke (Chinese sports brand), and Fila.

Most good-performing brands fall under the 3rd tier, with 100-500k Douyin followers and live-streaming sales of 1-2.5 million RMB per month. The majority are Chinese brands with average pricing under 300 RMB. Some premium brands in this category that stands out are Charlotte Tilbury and Amazing Song (Chinese startup bag brand), both with average live-streaming price above 500 RMB.

The brands above are all from the top 200 best-performing Douyin store brands in their category. Over 95% of these 200 brands are Chinese brands. Many sell commodity products with little brand awareness. The majority of brands still do not run their own live-streaming or generate any sales from it.

For most SME and mid-tier brands, live-streaming will bring low ROI during the first year. Instead, working with influencers who already have strong followers is a much cheaper way to gain short-term sales and build initial traffic on their own accounts.

Case studies

Under Armour

Under Armour has 24 Douyin accounts, 6 of which run daily live streamings: 3 are official accounts (the flagship account, Under Armour Women, Under Armour Kids), and the other 3 belong to distributors.

Lots of similar content

The Under Armour flagship store posts 20 videos per day. These videos are just video clips from the live-streaming events. All the content uses the same editing template, some don’t have any editing at all. These videos usually got less than 10 engagements, and the purpose of repetitive posting in large quantity is to show up on the user’s feed and drive traffic to the brand’s live-streaming event.

Under Amour’s Douyin live-streaming is on 16 hours per day. It has a 237 average viewer count (the number of viewers watching your live video at one time), and 105k total viewers per live streaming. In February, the top performance show brought 1.3 million RMB sales, and a total of 19.9 million RMB monthly GMV, according to New Rank.

The live-streaming script is similar to Tmall

The live-streaming script is very similar between Douyin and Tmall. Both hosts encourage users to join the member club, claim additional coupons and encourage impulse purchases. Douyin’s host spoke a bit faster and is more enthusiastic about sharing the product. Tmall’s host tends to engage with user comments a bit more.

The hero product is cheaper than Tmall

The 3 top-selling products in the Tmall flagship store and the Douyin flagship store are different, but the price range is similar.

Hero product also gets brand would put a lot of emphasis during the live-streaming. For example, the top-selling men’s jacket was appears 30 times during every Douyin live-streamings in January 2023.

Douyin has a slightly higher pricing hero product in the men’s jacket category, 60 RMB more expensive than the hero product on Tmall. However, if we compare the same product, the Douyin flagship store’s pricing is significantly lower than Tmall.

Brands that want to better control pricing in multiple channels, could consider develop up platform-specific SKUs. Under Amour’s hero product, the ColdGear React jacket is only sold on Douyin. This way even when users find out a similar jacket on Tmall is sold for 300 more, they won’t be too angry due to the slight design difference.

Most Douyin sales are from the official account, and Douyin sales are strong during non-Tmall-event periods Douyin sales

Unter Armour sold 19.9 million RMB during Jan 2023 via the brand Douyin live-stream according to New Ranks. This is the majority revenue source for Douyin sales. And KOL live-streaming and sales only take 29% of total Douyin sales.

In comparison to Tmall, Douyin’s sales are very strong during the non-even period, especially before the event. In October, Douyin sales even exceeds Tmall’s.

Having Tmall and Douyin sales compared side by side definitely shows the strong sales position of the Douyin channel. Overall, Douyin’s sales take 21.6% of total Douyin and Tmall sales.

Conclusion

Douyin brand live-streaming is growing very strong with a strong concentration on the top tier brands. Douyin’s product pricing strategy should be lower than Tmall, and investment could focus on non-Tmall event periods. The up-front investment is high for most brands. Brands need to focus on content creation and ads to kick-start. Premium brands with less than 100k Douyin followers could hold off on launching their own live-streaming and focus on working with KOL to build initial momentum.

The post 3 Douyin Livestreaming Trends in 2024 appeared first on WalkTheChat.

Highlights of China Jewelry Report 2023:

In H1 2023, the fashion jewelry market contracted by -22% to 4.7 billion RMB compared to 2020. Post-pandemic, luckily we are seeing a slow recovery of 1% growth compared to 2022. Chinese firms showed resilience, while international brands bore the brunt of the downturn.

Monica Vinader, Emporio Armani, Lola Rose, Agatha, and Gucci are among the fastest-growing international brands in 2023. Monica Vinader’s beads series has grown 9 times this year. 

Luxury hair accessories have grown 66% YoY, a strong trend lead by brands like Alexandres De Paris, She’s, YVMIN, Parada, Miumiu, and Chanel. 

The widening gender income gap may affect women’s purchasing power, and the decline in feminist terminology in the jewelry sector suggests the need for renewed marketing efforts to appeal to women buyers. Instead of “powerful” and “independent”, consumers’ moods are swinging towards other trends such as self-care, jewelry with healing-effect, Dopamine dressing, and New China Styles. 

Gifting trends have shifted, with fewer people buying jewelry for relationship purposes and a rise in purchases for mothers and babies, indicating a shift towards familial and sentimental motivations.

The post China Jewelry Market Report 2023: Insights, Trends & Key Players – A Focus on Recovery, Fastest-Growing Brands, Luxury Hair Accessories Surge, and Evolving Consumer Preferences appeared first on WalkTheChat.

NetEase uses AI for creating product photoshoots, packaging design, and more

NetEase, a 58 billion USD Chinese tech company, uses ChatGPT and Midjourney to reinvent its e-commerce design. The team is training the system to generate product backgrounds. Designers then edit products into these A.I.-generated backgrounds to avoid distortion of product information.

According to NetEase, creating a high-definition material with a 3D model would cost 800RMB to 1,200 RMB per picture. The same result would traditionally take 2 to 3 working days. Now with Midjourney, the material photos on the left took 2-3 hours to create.

The difference will be even more extreme when we look at model shoots with animals. Instead of spending thousands in creating the setting and animal models for pet food photo shoots, now both the cats and background could be generated via AI technology.

Chinese tech giants use AI to generate billboard ads

Fliggy, Alibaba-owned travel APP, created over 1,000 posters using AI technology. A.I. enabled the platforms to generate impressive and dreamy landscapes in line with their brand image.

These billboards delivered results beyond the offline world: the tech giants’ breakthrough use of AI in advertising created a hot discussion topic on Weibo, attracting over 150 million views.

Meituan, a publicly listed lifestyle APP, also uses AI to generate ads for its food delivery service.

Storyboard for advertising campaigns

AI is disrupting before the production of assets: it starts during the pitching phase. MatChat, a Chinese advertising director, uses Midjourney to create storyboards for brand pitching. MatChat used to create PowerPoint presentations with numerous reference photos and text descriptions to illustrate her idea. Now she’s just a few prompts away from sharing the creative images she’s imagining.

Doris – an AI-powered social listening tool

A.I. also enabled brands to better understand their customers. We developed Doris, a social listening tool sharing real-time insights on how a brand or a product is perceived by consumers.

A.I. fundamentally changes the nature of social listening in multiple ways:

• Analysis instead of just data: A.I. enables to verbalization of consumer insights in much more sophisticated ways than previous analysis tools. Where most previous tools would only provide keywords, A.I. can give a detailed explanation of the meaning behind the data
• Interpretation of trends: if previous social listening tools enabled to identify peaks of traffic, engagement, or positive/negative sentiment, Doris and such A.I. tools can explain the reason behind the trend. Why did negative sentiment suddenly explode? Is it an issue with a batch of products? Or a failed PR campaign? A.I. can answer this question with nuance.

For instance, here’s an example of the feedback given by Doris about Armani’s lipsticks:

“Several comments mention that the actual color of Armani lipstick does not match the color shown on the packaging or online, with some users expressing disappointment with the color and finding it too pale. Eight comments mention that Armani 214 is not suitable for people with dark skin or lips, and that the swatches in the article do not accurately represent the color. Twelve comments express regret for blindly purchasing Armani 214 and finding it unsuitable for their skin tone or lip color. Two comments express disappointment with the color of the Armani Power Fabric Lipstick, which appears too orange or not as expected.”

Sample of analysis from Doris A.I. about Armani lipsticks

This take is directly generated via A.I. The remarkable thing is that A.I. is able to do the work of a junior consultant, delivering insights and interpretations instead of dry numbers.

AI can also find the top influencers associated with your brand and similar influencers for additional collaboration or seeding. By using semantic analysis on the influencers’ posts and analyzing the pictures from different successful campaigns, Doris can directly point you toward your next collab.

AI influencers collaborating with brands

AI-powered influencers are a popular option for brand collaboration. They are just like human influencers. Each has its own personal values and style. Small bonus: they will never get into scandals and risk hurting your brand’s image.

The top AI influencer is Liuyexi, she is a beauty & cosmetics influencer. Most of her videos are short animation films where she uses her superpowers to fight against evil, spreading joy and kindness around her. Chinese audience resonates with Liu also because her video has a unique mix of cyberpunk and Chinese traditional style. CREATE ONE, the team behind Liu, claimed to invest 500 million RMB into Liu’s creation. After 2 years of operating this virtual IP, they have collaborated with some of the largest Chinese brands, including Chinese automotive brand Xiaopeng and top FMCG brand Master Kong.

AI characters are now becoming popular in the live-streaming world. Instead of a person hosting for 15 hours a day, an AI character can work all day and night, selling products on platforms like Taobao and Douyin.

The cost of using a digital live-streaming host ranges from 5,000 to 90,000 RMB per year, but it’s getting cheaper as the technology develops.

More companies are registering as live-streaming hosts, and this trend is expected to grow rapidly in 2023.

AI-designed green dress generating over 300k RMB in sales

An AI-generated dress, referred to as AI Little Green Dress, went viral on Little Red Book. The keyword quickly reached 33k engagements and 1.3k likes from people interested in buying the dress.

Sensing the business opportunity, several stores immediately began producing the wanted Little Green Dress. The first store launched a 10-day pre-sale link only within 2 weeks of the original post. With this first-mover advantage, the store generated over 216K RMB in revenue by selling over 900 dresses. Another store created a similar product and sold over 200 dresses making over 60k RMB in revenue.

Many customers bought the dress and created their own AI-generated picture to repost on social media, creating an additional wave of content that further pushed the sales of the dress.

The success of this seemingly ordinary AI-designed green dress getting popular, creating 300k RMB revenue, may seem too random for brands to use as a marketing case study. But the impact of AI technology in fashion and packaging design is only starting to take shape.

You can already find costume design and product packaging design services on Taobao using Midjourney, Stable Diffusion, and other AI technologies. Most of the services are priced below 50 RMB to start with. Some are even just selling the prompts to create a certain style of costume design.

Other services, such as rice packaging design, product shooting, and illustration design (with free trial) are all available on Taobao. 33 people bought the rice packaging design service so far.

This is only a glance at the near future: integrating AI and China’s world-class supply chain systems represents a paradigm shift in manufacturing, ushering in an era of unparalleled efficiency and quality.

Opening a Taobao store with the help of AI

A 36Kr news reporter created a Taobao store using ChatGPT and Midjourney. He then wrote a story about his journey of using AI tools to create the Taobao store. The post got over 1 million views on Little Red Book.

The reporter even tried to push the design into production, although the difficulty is the factory requires a minimum order of 500, and the gradient-style print is expensive to produce. Some user were concerned that the AI-produced design would be technically hard to reproduce in real life.

The store got its first order shortly after it went live, then the owner took all the products down. Now it’s just an empty store with 2.5k enthusiastic Taobao followers.

How to use A.I. completely wrong: ice cream brand launches a new product line using AI technology:

Chicecream (钟薛高), a well-known Chinese ice cream brand, launched a new low-cost product line Sa’Saa. AI technology is involved in every aspect of creating this new product: naming, flavor development, packing, and poster design.

Chicecream is a premium ice cream brand with an average product price above 15RMB. The brand even got its nickname “ice cream assassin” due to its high price. The Sa’Saa line is priced at 3.5RMB, the first time taping into the low-price market.

During the same time, Chicecream launched DanSheng, an egg-shaped ice cream line with 3 flavors. Below is the Little Red Book’s reaction to the 2 new products. Chicecream sponsored 39 Little Red Book KOL collaborations while only sponsoring 15 for DanSheng. This shows the company spends at least twice the budget on promoting SaSaa. Even though Sa’Saa got 11 times more engagements, most comments are around the surprisingly low price instead of the fact that it was created by AI.

Here’s a quintessential example of a tech-savvy brand hopping on the AI bandwagon just for kicks. The flavors they’ve launched are far from revolutionary, just your regular red bean, green bean, milk, and chocolate. The packaging design is also mediocre. I wouldn’t be surprised if the designer took the packaging directly from a stock photo library. The company seems to catwalk into the chic AI realm while making a product that looks like a joke.

Conclusion

Chinese companies are rapidly leveraging AI technology to optimize efficiency. Imagine AI-powered design factories, and personalized marketing campaigns, combined with low-cost labor. It’s only a matter of time before the social commerce industry undergoes a transformative revolution. Think twice if you are still underestimating the scope and speed of these changes. It is only a matter of time before forward-thinking brands begin to capitalize on this and gain an edge.

The post The AI Takeover in China: 9 Incredible Case Studies in E-commerce and Social Media appeared first on WalkTheChat.

I interviewed clients, other brands, agencies, and platforms to conclude with the following trend:

1. Brands tend to spend 50/50 on Tmall and social

The social vs. Tmall spending ratio varies widely among the brands we studied (from 80% social to 20% social). However, on average, brands spend the same amount on both. The average brand in our study spends 32% of its net Tmall GMV on marketing (16% on social and 17% on Tmall).

1. A higher pricing position means higher spending on social media.

Note the pricing percentile could change a lot based on the Tmall category. For example, the rain boots brand is more expensive compared to 96% of other rainboots but is only in the 41% pricing percentile for outdoor shoes. By competing in the outdoor category on Tmall, the brand gets some pricing advantage which leads to more traffic.

2. The faster the brand wants to grow, the more is needed to spend on social media. Although the correlation between growth rate and social media investment is very weak.

The low correlation is mainly due to the fact that the impact of social media spending on sales varies depending on the goal. Some social-driven sales campaigns can yield high ROI in the short run, but a branding PR campaign will yield a long-term impact on brand perception.

Generally, we recommend brands spend over 100% of Tmall sales during the first 3 to 6 months of Tmall launch.

According to some agencies, during the first 3 years, the social media spending could even be between 30% to 80% if the brand is aiming for over 10 million RMB Tmall sales and a 3-year breakeven period.

3. Larger brands usually spend less as a percentage on social media marketing.

The German sports brand is ranked No.1 in its own Tmall category, thus only spending 1% of its sales on social media marketing. Most new brands need to spend over 20% of their sales on social media marketing when monthly sales are below 1 million RMB.

Categories such as personal care have a much higher margin %, and thus usually have a higher budget to spend on social media. Brands with more functional products usually spend less compared with premium fashion brands.

Interviews

How much to spend on social media is a tricky question. We interviewed 10+ brands and 4 Tmall agencies. The answer also varies a lot depending on the brand.

Here are some answers we get.

Ivy Shen, VP of Azoya (Tmall agency)

The % spending on social media and within Tmall depends on the following factors:

• The less brand awareness the brand has in the market, the higher it needs to spend on social media marketing.
• It also depends on the ROAS (return on ad spend)
• How fast and how much brand awareness does the brand need. Brand awareness revenue

Spending as a percentage of Tmall sales can be influenced by the size of the brand:

1. The brand with 5 million RMB yearly Tmall sales: spend 100% of sales amount on total marketing. 20%-30% goes within Tmall, and 70-80% goes on social media.
2. The band with 5-12 million RMB yearly Tmall sales: total marketing spending could be between 60%-90%. 40% of the total budget goes to Tmall, and 60% of the budget goes to social media
3. The brand with over 12 million RMB yearly Tmall sales: the marketing budget can be adjusted down to 40%-70%. The amount of social media spending depends on the growth expectation. High growth expectation means more spending on social media. Inside Tmall spending could be 40-70% of the total budget, and social media spending would be 30-60%.

Jacob Cooke, co-founder & CEO of WPIC Marketing + Technologies (Tmall agency)

The spending on social media and Tmall depends on how popular is the brand in China.

For newer brands, the split between social and Tmall is 80/20; for more established brands, the split is 20/80. The total spending on marketing and social could be around 70% to 80% of the net sales. More during the launch.

Senior operation manager, Kay Tune (Tmall agency)

Most brands would spend 20% of GMV (gross merchandise value) in social media in the first 3 years…

The % is the balance between profit, GMV, and break-even period…

On the break-even timeline, I worked with 2 kind of brands: 

1. Willing to wait for 3 years
2. Operating in China business as an independent entity. This means the profit and marketing budget is charged to the local entity. The global team is only supporting during the Tmall launch or when sales pick up dramatically. If the China unit has negative EBIT (earning before interest and tax), it will be closed down. A shorter breakeven timeline means lower social media spending and lower sales volume.

Senior operation manager with 10+ years of experience from Kay Tune (a TP agency)

A Tmall Agency

For a mother & baby product that has enough budget, usually we would split the budget between Tmall and social media in a 3:1 ratio.

Since COVID, more brands are hoping for breakeven during the 1st year, which is not always realistic.

The month before any larger Tmall holidays, we suggest brands to invest 100% of GMV into social media marketing.

For fashion brands, most of social media spending is on Red; for brands with more functionality, Bilibili is the major spending channel since review videos help drive sales.

A senior account manager from a median-size Tmall agency

Fashion & lifestyle brand from Northern Europe (Product price: 2,400 RMB)

• 2022 marketing investment within Tmall: 23% of net sales 
• 2022 marketing investment outside of Tmall: 23% of net sales

% social media spending depends on our gloabl target. During the launch, we focused on building brand awareness. In total we spend 2.5 million RMB in Tmall in 2022.

We are planning to increase the spending on Tmall for 2023, since the sales target is 2.5X compared to 2022. And the overall marketing strategy is a lot more focused on performance marketing.

Brand’s marketing manager

Hong Kong premium jewelry brand (Product price: 1,900 RMB)

• 2022 year-over-year change (YoY)%: 54% increase
• Marketing investment: 15%-18% of net sales 
• 2022 marketing investment within Tmall: 5% of net sales 
• 2022 marketing investment outside of Tmall: 13% of net sales 
• Tmall vs. social spending: 30% vs. 70%

We spend 70% of our marketing budget on social media, mainly on the Little Red Book. Our conversion funnel is longer, thus building brand awareness and trust is the key. Especially for new customer acquisition, conversion is higher if the customer first heard of us from an influencer they trust.

We monitor the add-to-cart cost, so the spending split also largely depends on this.

We spend around 2% of net sales on Tmall for doing various tests. Usually, a new product would have a higher add-to-cart cost, but it will decrease as we spend in marketing, until we saturate the market and it will start to rise again.

-The founder

An iconic UK outdoor brand A (Product price: 850 RMB)

• Pricing percentile: more expensive than 41% of outdoor casual shoes 
• 2022 Average monthly net sales: 3.1 million RMB
• 2022 Tmall net sales: 43 million RMB 
• 2022 year-over-year change (YoY)%: 80% increase 
• 2022 marketing investment within Tmall: 17% of net sales 
• 2022 marketing investment outside of Tmall: 10% of net sales 

As the brand’s yearly sales reached over 30 million RMB, the marketing strategy had a complete shift from focusing on sales return to focusing on brand awareness. During the initial growth phase, the brand used to setup KOL target at 200% ROI. Now the brand is large enough to devote budget on celebrity seeding and PR campaigns. Even though the social media marketing budget is kept at 10%, the goal for this budget is nolonger short-term sales conversion, rather on-brand content and celebrity endorsement.

WalktheChat account manager for this brand

Hong Kong premium bag brand (Product price: 3,500 RMB)

• 2022 marketing investment within Tmall: 5% of net sales 
• 2022 marketing investment outside of Tmall: 20% of net sales 
• Tmall spending vs. Social media spending: 3:7

The brand newly launched its Tmall store 3 months ago. The brand took an organic approach to entering China by selling via WeChat cross-border store during the first 2 years. It builds strong momentum via a targeted influencer seeding strategy on the Little Red Book. When the brand finally launched on Tmall during the 3rd year, it already has a strong Tmall search volume and thus it was able to hit over 1 million RMB monthly sales during the first 3 months of Tmall launch.

The brand spends around 20% of sales on social media campaigns and seeding. This creates around 50 Red postings per month with a 50-70% of bookmark ratio (bookmark over like). 50 posts from various fashion influencers is a decent amount of promotion to generate sales conversion on Tmall, and the bookmark ratio is a good indicator of the purchase intention of the viewers. On average, a typical premium bag brand usually gets a 30-40% bookmark ratio. 

French baby personal care brand (product price: 90 RMB)

• Average monthly sales: 0.2 million RMB
• 2022 year-over-year change (YoY)%: 48% increase
• 2022 marketing investment within Tmall: 40% of net sales 
• 2022 marketing investment outside of Tmall: 30% of net sales

The spending on social media is usually much higher as a percentation for personal care brand, it’s an industry with higher margin.

This brand only has 700 Little Red Book mention, with such a low brand awarness, spending 70% of its net sale on marketing is nessessary during the first year of operation. Although for personal care brand, building a strong distribution network is more important than D2C marketing approach.

WalktheChat account manager for this brand

German sports equipment brand (Product price: 550 RMB)

• 2022 Tmall net sales: 111 million RMB (No. 1 in its category) 
• 2022 year-over-year change (YoY)%: 11% decrease
• 2022 marketing investment within Tmall: 3% of net sales 
• 2022 marketing investment outside of Tmall: 1% of net sales 

Although the social media marketing spending is only 1%, this is much lower compared to other brands in its category. The major reason for such low investment is:

• It has a strong competitive advantage in material and non of its competitor can replicate 
• The major celebrity spending is charged to its global unit, thus not counted here 
• The brand has been operating in China for over 10 years and has a 13% market share in its category

WalktheChat account manager for this brand

Conclusion 

The spending on social media in China varies a lot. In general, premium position products, faster growth curves, and smaller brands need to spend a larger percentage of their sales on social media marketing. But it’s not a one-size-fits-all, and the spending amount changes over time for each brand. The things brands can do are:

• Closely monitor your competitors’ spending pattern 
• Keep a clear track of social media spending ROI and compare it to Tmall ads ROI to find an optimal split
• Increase Tmall spending during the event period 
• Spend more on social if you aim for faster growth and a larger GMV goal 
• ​Spend more on Tmall if you want a shorter breakeven time and organic growth

The post How much $ should a brand spend on social media marketing? appeared first on WalkTheChat.

In this article, we will explain:

• What is WeChat Channels (Video Account) and what’s the difference with WeChat Moments?
• How promising are WeChat Channels?
• Should you create a WeChat Channel for your brand?

What is WeChat Channels?

WeChat Channels is a dedicated space to watch video content, similar to Instagram Reels, but more “down to earth”.

Up to 2021, WeChat Channels have 500 million DAU (Daily Active Users), growing at 79% year-on-year. It’s expected to reach 600 million DAU in 2022.

Compared to Douyin‘s 800 million DAU, WeChat Channels still have some way to go. However, considering WeChat has 1.2 billion Monthly Active Users, it’s still possible for it to catch up with Douyin in user volume.

Here are some main differences between WeChat Channels and WeChat Moments:

• WeChat Channels are public by default, while WeChat Moments are private, only visible to your contacts.
• You can publish videos of up to 1 hour on WeChat Channels, while on WeChat Moment, the duration is limited to 30 seconds.

How promising are WeChat Channels?

WeChat Channels are connected with WeChat’s ecosystem, fully integrated with WeChat Official Account, Mini Program, WeChat Search, and WeChat payment.

With established infrastructure, WeChat has been pushing for the commercialization of WeChat Channels.

Since November 2021, WeChat Channels has held several online shopping festivals such as the Live-stream Good Things Festival, the New Year Goods Festival, etc. Brands, live stream influencers, and celebrities started earning money on WeChat Channels.

How do merchants and influencers make money on WeChat Channels? Read further:

• WeChat Channels Livestreaming Rewards “Traffic Coupon” to Drive Traffic and Sales

In 2022, Chinese singers and rock stars held several online concerts on WeChat Channels, attracting more young people to explore the feature.

On July 18, WeChat Channels allowed in-feed ads for the first time. BMW China, Armani Beauty, and Yili Satine became the first advertisers to participate in the beta test. Words have it that WeChat will allow large-scale in-feed ads in Q4 2022.

On July 21, WeChat launched “Channel Store“, allowing merchants to open stores and sell directly in the video account scenario. WeChat’s “Video Store” model can learn from the existing experience of “Kaishou Store” and “Douyin Store”.

The Everbright Securities Research Report believes that once Video Store can close the loop of live stream eCommerce, it’s likely that the GMV (Gross Merchandising Value) of this channel will grow rapidly.

Should you create a WeChat Channel for your brand?

Here are several points for brands to consider.

WeChat Channels work better with Official Accounts and Mini Program

As a part of the WeChat ecosystem, WeChat Channels can better fulfill its functions if you already have WeChat Official Accounts and WeChat Mini Program. Without these, it doesn’t make much sense to have a WeChat Channel alone.

Most of the brands that created WeChat Channels already have these two features. Even for big brands like Dior and Lancome, the average views on their Channel accounts aren’t too optimistic without extra marketing spend – the view per video is quite flat, usually below 100.

WeChat Channels can be the next step for brands with existing awareness

If your brand entered China a while ago and has a presence on major social media channels such as WeChat Official Account, Douyin, Red (Xiaohongshu), and Weibo, you may consider creating a WeChat Channel. To save resources, you can use the same video creatives published on Douyin. Having a Channel can help you better distribute your brand’s video campaigns and live streaming in the public traffic pool of WeChat.

However, if you are a niche brand looking to enter China or at an early stage of your China expansion, it’s better to focus your marketing efforts on other channels such as Red (Xiaohongshu) or Douyin.

The post WeChat Channels: is it worth your attention? appeared first on WalkTheChat.

Looking for help to define or improve your WeChat strategy? Just fill out this 1-minute form and we will be in touch with you:

What is WeChat Livestreaming

Livestreaming is a powerful tool to engage directly with potential customers and drive sales. Sales assistants from physical stores or even CEOs can participate in the company’s live streaming to promote the brand. There are mainly two ways to host live streaming on WeChat.

WeChat Mini Program Livestreaming

Brands and businesses can add a Livestreaming module or component to WeChat mini program. For example, brands such as Perfect Diary, Forest Cabin (in Chinese: 林清轩), and Prada have held live streamings through WeChat mini program for sales or events.

Most of the viewers of mini-program live streaming are already followers or have used the brand’s mini-program. Brands can send notifications to followers and drive traffic organically to mini-program live streaming. If it’s an important event, brands can also promote live streaming through additional WeChat Advertising.

WeChat Channels Livestreaming

The Traffic Coupon we are talking about is for live streamings on WeChat Channels.

WeChat Channels is a short video feature integrated within the WeChat ecosystem. WeChat launched this feature back in 2020 in response to challenges posed by Douyin, the Chinese Tiktok. Up to early 2022, WeChat Channels have reached 450 million Daily Active Users, a 50% increase compared to early 2021. (source: CBN Data)

WeChat Channels Livestreamings are more visible to the public audience compared to mini-programs. For example, people browsing content on WeChat Channels may enter live streaming of a brand they didn’t know before. Trendy domestic brands beloved by young people, such as Pop Mart, Luckin Coffee, and Hey Tea, have made their debut on WeChat Channels Livestreaming.

What is WeChat Traffic Coupon?

According to Merchant Incentive Plan launched by WeChat, “for every new user a merchant brings to WeChat Channels, the platform will give back a user from public traffic in return.” (source: Newrank) Brands or merchants can use this “Traffic Coupon” to “purchase” public traffic. 

How to gain Traffic Coupons for WeChat Livestreaming?

In 2022 April 12th to December 31st, any live streaming for shopping purposes with the shopping cart function activated will be automatically participating in Merchant Incentive Plan.

Brands or merchants have to introduce 50 new viewers that didn’t come from WeChat Channels to gain official traffic coupons. You can drive followers from your WeChat Official Account, spread the news through WeChat Moment, WeCom, personal chats, or groups, to Channels Livestreaming.

Once completed these requirements, the platform will reward the merchant with official traffic coupons, which are valid for seven days. The more new viewers, the more coupon you’ll be rewarded.

How does Traffic Coupon work?

According to WeChat, there are two ways to leverage Traffic Coupons:

1. System Smart Recommendation: automatically push the Livestreaming to users who might be interested  
2. Custom Targeting: use this if you have a preference or established target audience. It works like in-feed bidding ads: you can target users by selecting age, city, and interests. Although, the segmentation capacity is quite essential compared to the WeChat Advertising backend. 

Does WeChat Livestreaming worth trying?

Before, WeChat Service Provider (the agency that helps brands run WeChat Ads and other services) needed to apply to WeChat Team to promote Channels Livestreaming. Still, they cannot select segmentations such as age and cities. In comparison, Traffic Coupon has a clear advantage of reaching your target audience more accurately.

According to a Traffic Coupon user Xiaheng (夏恒), each UV (User View) is approximately 0.5 CNY (~0.08 USD). During significant sales festivals, you can raise the bidding price to 2-3 CNY (~0.31 USD-0.46 USD).

Traffic Coupons can bring actual sales returns. According to the same source, a traffic coupon of 10k UV can get more than 2000 product clicks and reach 150k CNY (~23k USD) of sales. This result is quite significant, but you can generally expect to gain 1000 CNY sales by spending 1000 UV traffic coupons.

Up to April 2022, merchants can only gain traffic coupons by participating in the Incentive Plan. It’s not open for purchase yet.

Therefore, for brands with an active WeChat Channels account, live streaming is a smart way to leverage the platform’s support, gain more traffic and increase sales.

Looking for more information about WeChat? You will find these guides helpful:

• WeChat Mini Program Guide
• Official Account Guide
• WeChat Advertising Guide
• WeChat Pay Guide

The post WeChat Channels Livestreaming Rewards “Traffic Coupon” to Drive Traffic and Sales appeared first on WalkTheChat.

This article will analyze Chinese niche brand Songmont went from 0 to 10 million RMB of sales in their local market.

Brand overview

Songmont is a premium local Chinese handbag brand with an average handbag price range from 1,000 RMB – 2,500 RMB.

Starting from 2019, Songmont began to invest massively in influencer campaigns on WeChat & Red (including sales-focused campaigns on WeChat, sales-focused live-streaming campaigns on Red, branding-focused KOL & KOC campaigns on Red) in order to boost sales. In the same year, their annual revenue reached 10 million RMB. 

WeChat strategy: start small for exposure, then go big for sales

Like many other niche brands, Songmont first started working with the smaller-size WeChat KOLs in order to test the market with a limited budget. Smaller-size WeChat KOLs are more affordable, which makes them a better testing ground for an early-stage brand.

Songmont has a total of 359 mentions from WeChat official accounts, and only 18.6% of the mentions are coming from the Tier 1 KOLs. The majority of mentions come from middle-size KOLs with less than 30k article view.

Source: WalktheChat Analysis, WeChat

Once the brand improved its social presence, it started focusing on bigger WeChat KOLs to boost sales.

Songmont has launched 21 WeChat KOL campaigns since 2021, much more focused on larger influencers.

Source: WalktheChat Analysis, WeChat

Almost half of Songmont’s promotional campaigns are collaborations with Tier 1 KOLs and middle-size KOLs.

Apart from adjusting the KOL strategy for WeChat & Red, Songmont also started to leverage KOLs from popular video-content platforms including Bilibili & Douyin. These platforms offer access to a broader user base, as they rely more on customizing each user’s feeds through powerful algorithms.

Bilibili strategy: a mix of exposure and sales-driven campaigns

Bilibili started as a platform focused on animation, comics, and games. It is therefore the perfect platform to target the younger Gen Z. Fashion is still a niche category on the platform, enabling brands to stand out.

Songmont repeated their WeChat strategy: being a relative upstart on the platform, they started by targeting smaller KOLs to gain initial momentum.

 Source: WalktheChat Analysis, Bilibili

Here again, Songmont favors smaller-size KOLs with followers around 10,000 to 50,000 for branding campaigns and relatively bigger KOLs with 100,000+ followers for sales-focused campaigns (with direct link to their Tmall store).

Songmont also favors investing in spot promotion among other products/brands for branding campaigns: this is an efficient way to receive a proper mention on Bilibili without paying the price of a whole video content. 

Douyin: branding campaigns to get customers familiar with the brand

As the most trending video APP,  Douyin now has an DAU of 600+ million. However,  most users use the APP to kill time: the sales conversion for expensive products is low. Songmont, hence, favors branding campaigns on Douyin to get as many potential customers familiar with the brand as possible, focusing on branding rather than sales.

The brand’s approach for Douyin is straightforward: focus on the middle-size KOLs and Tier 1 KOLs with 100,000 to 1,000,000+ followers who have large groups of young female followers from smaller cities in China.

 Source: WalktheChat Analysis, Douyin

Songmont launched 10 KOL campaigns since December, 2020 to April, 2021, all the campaigns are collaborations with Tier 1 KOLs and middle-size KOLs.

The branding campaign between Fu Song, the founder of Songmont, and Tier 1 KOL Kiki with 10+ million followers, reached 197,000+ likes, 3,211 comments, and 1,325 reposts.

Conclusion

Songmont, as a local upstart who quickly went from 0 to 10 million RMB revenues, presents a good footprint of success in the Chinese market:

1. Working with plenty of small-size KOLs on WeChat & Red in the initial stage for exposure and sales
2. After getting initial momentum, switching investment to middle-size & Tier 1 KOLs on WeChat & Red to boost sales
3. Leverage video platforms to reach a broad audience for branding purpose
   • Bilibili: working with smaller KOLs for both branding & sales
   • Douyin: working with middle-size KOLs and Tier 1 KOLs for branding
4. Once the brand gains significant momentum, launch collaboration campaigns with Top Tmall live-streaming KOLs to take the brand to the next level. Songmont worked with influencers including Viya (2020 Sep) & Li Jiaqi (2021 Apr & 2021 June).

The post From 0 to 10M RMB – Case Study of Songmont appeared first on WalkTheChat.