September 9, 2022

China Marketing Insights Monthly Newsletter [February 2021]

Hello,

Niu (Ox) year has arrived!

While the China government was very cautious and discouraged travelling during the long festival holiday. And it worked, railway journeys was down 70%, air & bus travel was also considerably down. On the other end, box office receipts smashed previous one-day record on Friday – first day of year of OX at 1.7 Billian Yuan. Yet, many believe the travel advisory is short-lived – Macau is expecting 10 Million tourist in 2021; many international DMOs are also expecting rebound soon as more get vaccinated across the globe. We are seeing this first hand with several destination ramping up their marketing activities.

In this newsletter, we cover several new marketing ideas, media update & insights report. First is updates from annual WeChat conference & its 2021 roadmap – read all the highlights. In Insights report, we have latest 2021 China Marketing Trends from Miaozhen.

We have collated several new marketing ideas – Community Offline Ads, Global Liquor Pub, Blind Box Marketing. And finally, we wrap up this newsletter with App of the month – Meitu the beauty app & how marketers are using the app for both traditional advertising & more innovative partnerships.

Once again, from all of us here at Octoplus Media, wishing you all a very prosperous Chinese New Year – 新年快乐, Gong Xi Fa Cai ! May the year of Ox bring abundance of joy to you & your family.

Sincerely,

Mia C. Chen

CEO & Co-Founder of OctoPlus Media

2021 WECHAT ROADMAP

Tencent held its annual WeChat flagship conference in Guangzhou, the app’s birthplace. The founder of WeChat, Allen Zhang shared some performance data and mapped out future plans.

He said that currently, some 1.09 billion users open the WeChat app on a daily basis. Among the 780 million people using the Moments functionality－a virtual space to share one’s daily updates－some 100 million items now appear as video content. 360 million of them read articles from Official Account and 400 million of them use Mini Program on a daily basis.

Key Insights from the conference:

Mini program to boost business growth
WeChat Pay Scoring Model Offering New Opportunities
Making WeChat search a user habit

Mini program to boost business growth – 400M+ DAU & 100%+ Increased Annual GMV

Mini programs were first pioneered by Tencent in 2017. Unlike traditional apps, they reside within WeChat and can be accessed on-demand to perform a variety of functions like food ordering, ride-hailing, ticket purchasing, and more. The COVID-19 pandemic accelerated Mini Program to be a part of our daily life. The number of active mini-program and mini-programs with transactions increased by 75% and 68% respectively last year.

WeChat Mini Programs, which allows users instant access to enterprise services while creating tremendous value to merchants and service providers, has maintained strong momentum in its fourth year of operations. With brands leveraging the services to facilitate consumer interaction amid the COVID-19, Mini Programs’ average daily active users exceeded 400 million. Total sales (GMV) more than doubled over last year, while the number of Mini Programs used per user and the average transaction value increased by 25% and 67% year-on-year respectively. Today, the services are used in a variety of sectors with transportation, department stores, apparel, and sporting goods leading the growth. In the future, Mini Programs will cross-promote user traffic more seamlessly with Weixin Channels to provide greater value to businesses and consumers.

WeChat Pay Scoring Model Offering New Opportunities, TRUST is the keyword for WeChat pay in 2020

The number of users on WeChat Pay Score has exceeded 240 million, saving users over 200 billion RMB in deposits, and more than 10 million users have used the shipment-before-payment service when ordering express delivery.

WeChat Pay Scoring Model offers new opportunities, including No-deposit Rental, No-deposit Hotel, Enjoy First & Pay Later and Smart Retail. Currently, WeChat Pay Scoring Model has covered more than 1,995 brands in five major categories, including shared rentals, shopping & entertainment, transportation, lifestyle services, and accommodation booking. WeChat Pay continues to grow its international reach with the strong growth of Chinese outbound tourism, with cross-border payment services now offered in over 60 markets.

Make WeChat search a user habit

WeChat improved its search functions in 2020 to help users navigate easily through its massive ecosystem and will continue to improve the user experience this year, integrating more content, services, and brand-related functions. Services and content of mini programs will also be shown directly in search results.

COMMUNITY OFFLINE ADS

The most popular marketing method in China recently is none other than “Community Marketing”. It is “offline community + media”. A new “brand amplification” has been created to extend brands and products from online sales to offline traffic and market them in the community.

Key Benefits of Community Marketing:

This method of advertising reaches directly to consumer groups, the target group is concentrated, and the credibility is high. It is more favorable to word-of-mouth promotion.
Minimal investment with quick response, and high return in investment to justify expenses.
It can be used as a generic targeting method, or it can be targeted at specific targets to organize special groups for key promotions.

The community of households is the gathering place of consumers, which also forms the main offline traffic. Through high-frequency exposure in a closed, low-interference space, brands and products can be precisely reached by the target audience, thus increasing sales. There is a stable consumer base in the community, which also makes the community an indispensable channel touch point for the brand. Internet sales channels or advertising marketing channels can be APP, mini-program, and websites. However, offline communities are offline places that focus on families, gather offline users together, form specific community traffic, support the brand’s sustainable and complete brand image and concept, and promote the brand and products to the community. Community is no longer a geographical concept of community, the real value of community marketing lies in the reconstruction of “User, Products, Community”, and after the reconstruction, it forms a powerful trigger of potential.

The right of Community Marketing

Marketing Research on pre-marketing

Market research has to be carried out by brands, which includes detailed information such as size of the community, culture, consumption level, population income, age distribution, and shopping habits, etc.

Selection of marketing methods

Marketing methods can be divided into online and offline. The combination of online and offline should be reasonable, which can lead offline consumers to online business, provide more comprehensive services to consumers and win their trust. With the help of social apps, direct communication with customers and consumers can be realized, enhancing better understanding of the brand and product by consumers.

Creativity is key

Many brands now carry out community marketing, but the undifferentiated marketing model may give consumers a sense of fatigue and lack of freshness. Brands should selectively promote, and physical display and promotion are often ways that consumers are willing to accept. Consumers’ daily necessities and decorations with practical value can be used as content carriers so that consumers will accept these promotional materials because of their use-value, which greatly increase the chances of contacting advertising information.

Attract traffic correctly and increase fan base

There are many types of fans. Some fans participates for gifts in the event, and some fans come for products. If the brand is operated and maintained equally, it is a waste of cost, and the consumption conversion is also very low. The brand can set the theme of the event to attract customers who have needs, and the gifts are of course also the products they sell. But no matter what the format is, it must be creative and to not hold the same event repeatedly within the same community, else the interest level of the event diminishes due to a lack of new ideas.

Chinese enterprise marketing is in a period of innovation and change. To adapt to the new round of marketing innovation in China, the traditional “community marketing” must also make a series of changes, rethinking and defining “community marketing” in many ways. “, to meet the changing needs of enterprises and consumers. OctoPlus Media has a large number of community groups and a unique community management system. The brand can be successfully promoted to the major target communities with one click, and the “offline community + media platform” can be effectively connected to create a full range of momentum and trigger points.

TMALL OPENS ONLINE GLOBAL LIQUOR PUB FOR SAMPLE SIZE TRIAL AT 1RMB

Tmall Global officially launched the “Taste First, Buy Later” service on January 28. Consumers can pre-order a sample of wine for 1 RMB and make a decision to purchase after tasting. The purpose of this service is to make it easier for consumers to purchase imported wine. Martell Brandy, Granville 12 years whiskey and so on can be tasted before purchase.

Tmall Global opened an online Liquor Pub for consumers to shop and drink during this year’s Lunar New Year shopping festival. Consumers are able to sample and then purchase at the Liquor Pub to experience the drinking experience in different ambience. Different from the general shelf-lined shopping experience, the Liquor Pub provides consumers with sections such as the Imported Wine Score Index, the Wine Selection List by Scenes, and Meal Wine list.

In fact, the launch of online Liquor Pub to upgrade the purchase experience is due to the continuous growth of online imported wine consumption and the acceleration of the popularity of foreign wines among various consumer groups in China. In the past year, due to the cross-border e-commerce retail import policy favoring foreign wine categories and the global pandemic, foreign wines in duty-free shops that have been bought abroad in the past and niche foreign wine brands that have not yet entered China have accelerated their expansion in China.

According to Tmall Global data, the sales of imported wines in 2020 is projected to increase by more than 500% Y-O-Y. Young consumers are the new force of imported wine consumption, with nearly half of 18-29 year olds buying imported wines, while only 29% purchase locally. More than half of those who bought imported liquor came from 3^rd & 4^th tier cities and below.

BLIND BOX MARKETING

Blind boxes are where different items are placed by merchants in a Box and the user draws the item by luck. Customers are not aware of the item until they purchase a blind box. Lucky boxes and themed bags in shopping malls, such as New Year’s and Christmas bags launched by beauty brands each year, are all blind boxes.

Blind box marketing refers to the use of randomized and probabilistic sales methods to arouse curiosity or even gambling psychology that causes addiction, thus creating irrational consumption, especially when it involves “limited edition” products. Blind box marketing helps businesses in achieving multiple goals, including stimulating transaction conversion, improving re-purchase rate, increasing unit price, inventory clearance, and so on.

Blind box marketing can be divided into two categories:

Packaging products into blind boxes for sale

The concept of blind box is used to package original products, such as trial products launched by beauty brands — L ‘Oreal small beauty boxes launched by the cosmetic group, contained 6-8 brands of trial products.

“Buy 1 get 1 free” option to receive a blind box

Using blind boxes as an incentive to attract customers. For example, Li Ning launched a lucky bag containing random products valued at 800 RMB for purchases of 999 RMB.

Why is it so popular?

Curious psychology
Gambling psychology
Herding effect
Difficulty in making choices
Low barriers to entry

Key to Blind Box Success

Prize selection

Generally, the prizes of blind box activities are composed of two parts: lower-value prizes, such as power banks and Bluetooth headsets, and high-value prizes, which are also gimmicked prizes that attract users to participate in activities, such as mobile phones and gift packages worth thousands of RMB.

Marketing Poster

The blind box poster is usually composed of four parts: main title + subtitle + prizes + scan code for call to action.

Marketing path

It is mainly divided into two categories: one is to attract traffic to WeChat official account, and the other is to attract traffic to the enterprise official WeChat account.

User conversion

There are three main methods:

Enterprise WeChat official account / WeChat personal account – The objective is to attract users into the customer service account through event welcome messages, graphics & messages, assistance reminders, etc. Users will be converted through one-to-one communication, such as sending of exclusive benefits, preferential activities, etc.
Communities – The entrance to the community is similar to above. Upon entering the community, users are converted via group purchases, seckill – ultra low priced products almost sold out immediately, lucky draw, live streaming, etc.
Multiple messages sent in groups: Upon following the official account, the account automatically pushes multiple messages to the user within a certain time frame.

2021 CHINA DIGITAL MARKETING TRENDS

A China Digital Marketing Trends 2021 report is was recently released by the Miaozhen Academy of Marketing Science (MAMS), the Global Digital Marketing Summit (GDMS), and Media 360. The report was a forecast on China’s marketing trends and investments in 2021 with the objective of helping advertisers and industry partners in planning their digital marketing strategies.

Key insights from the report:

Overall marketing trend

According to the report, 47% of advertisers believe marketing spends in China will increase in 2021 with a 12% expected growth which also showed optimism from new advertisers.

Combining branding and performance campaigns is the trend in 2021 . Top brands focus on long term branding goals such as building of brand image and recognition. While majority of top and mid-level management agree that “Branding remains important in the digital age” but equally important is customer relationship management.

However, the biggest challenge in 2021 is selecting a media platform to increase marketing communication ROI followed by measuring and verifying effectiveness. While new advertisers pointed to a shortage of marketing talent.

Trends of major marketing investment categories

Mobile remains the platform most advertisers will invest in, with 67% of advertisers indicating towards increasing spend on mobile marketing. Three platforms have the highest potential for growth – Connected TV, Display and Out of Home advertising.

78% of advertisers indicated an increase in their digital spend as the pandemic did not affect investments and is expected to grow by 20% in 2021.

In terms of digital platform, usage of short-form videos, KOL, newsfeed, and performance-based ads are popular formats and they are the current focus on social marketing investment. Interest of advertisers in short-form videos has steadily increased each year, while interest in KOL marketing has been constant.

Trends of future outlook and marketing technologies

The report shows that 56% and 47% of advertisers respectively indicated that they were already using data middle to end and content tagging, the highest usage out of all technologies. 60% of senior level management are aware of the importance of building a data mid-end.

With the high expected usage of new technologies in the next two years, offline programmatic ad buying, smart content distribution and recommendations, and AI ad creatives are worth paying attention to.

APP OF THE MONTH - MEITU XIUXIU

Founded in October 2008, Meitu is China’s leading image processing and social platform, driven by artificial intelligence. Meitu’s mission is to “make the world better with Meitu’s products” has created a series of hardware and software products around “Beauty” such as Meitu Xiuxiu, Beauty Camera, Meipai, Meitu phone camera and Meitu magic mirror, changing the way users create and share beauty.

Meitu Xiuxiu is currently one of the most popular image processing software in the world and a new social platform positioned to “Create My Lifestyle”. Meitu Xiuxiu marked its 10 year journey recently from the launch of the online version in 2008 to the mobile app in 2011, It has also witnessed and led the mainstream aesthetic trend in the past decade, and has maintained a leading edge in photographic image applications. In May 2018, Meitu Xiuxiu upgraded from a picture processing tool to a social platform with the position of “Creating My Lifestyle”.

Key statistics:

Meitu company’s total MAU reached 295 million by 2020 Q2, an increase of 4.6% from December 2019.
MAU of Meitu Xiuxiu grew 4.2% to 121 million.
Meitu XiuXiu average daily usage time reached 15.4 minutes, up by 13.2% from the second half of 2019.

Common forms of advertising