China Marketing Insights Monthly Newsletter [January 2022]
Welcome to 2022!
In this newsletter, we cover several trends reports. But first, as the big tech crackdown and stricter policy are being enforced we see more companies taking a proactive stand in regulating their growth & compliance. We look into the details of Xiaohongshu banning 39 brands including Dove, Nivea, Neutrogena.
We have 3 new trends report in this edition – 2022 Tmall global consumption trends report – the report highlights 6 trends to look out for in 2022 and how you can maximize your marketing activities around them.
Next, we deep dive into “2022 China’s New Consumer Brand Development Trend Report” – analyzing the new market environment insights, brand development characteristics, marketing strategies.
Finally, we have a report from our partner – “Miaozhen on 2022 Digital Marketing Trend” – usual growth categories include short videos, social media & e-commerce, but there are also rising activities around digital transformation & AI lead creativity.
In our App of the month, we look at MoMo – equivalent to tinder in many aspects – we dive into details of the app, advertising opportunities & why marketers should consider this in their media plan.
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 Tiger bring abundance of joy to you & your family.
Sincerely,
Mia C. Chen
CEO & Co-Founder of OctoPlus Media
XIAOHONGSHU BANNED 39 BRANDS
On January 5, 2022, Xiaohongshu launched the second round of the “false marketing” governance project, and 39 consumer brands, medical beauty institutions and medical beauty product brands suspected of illegal marketing were banned. The scope of this governance has been extended to offline business entities, from consumer goods brands to offline medical beauty institutions and medical beauty supplies brands.
The scope of governance this time is mainly aimed at the medical beauty industry, especially the false content around personal safety, serious adverse effects and misleading users. In addition to medical beauty institutions, consumer products brands including cosmetics, medical beauty, food, and baby products have also been investigated by Xiaohongshu and screened out violators. Searches on the Xiaohongshu site will no longer display notes from these brands or institutions.
International beauty and skincare players, including Neutrogena, Nivea and Dove are among those caught up in the crackdown.
When users search for these brands or institutions, the relevant notes will no longer be displayed. The search results page only displays “This brand is suspected of illegal marketing, relevant content will not be displayed”. Brand flagship stores on the platform still appear to be up and running, however.
In recent years, with the rapid development of social media, “planting grass” or content seeding has become one of the ways for many people to share and taste early adopters. “Growing grass” relies on word-of-mouth and mutual trust. However, some brands and businesses employ professional writers and Internet navy to make up “grass-planting notes” and “Internet celebrity evaluation”. This behaviour not only pollutes the content ecology of the Internet platform, but also affects consumers’ right to know, damages consumers’ rights and interests, and may even damage life safety and physical health. At the same time, this also seriously affected the credibility of the content on Xiaohongshu.
In order to improve this situation, Xiaohongshu has started this governance since December last year. It is believed that the activities will continue, and there is still a long way to go to improve the overall environment of the digital marketing industry.
Xiaohongshu is taking such drastic steps partly also because of new regulatory policies. Read more about our regulatory policies updates and report – December update, November update, October update, Anti-monopoly crackdown, PIPL, Advertising law.
Keep abreast of China’s marketing changes and avoid illegal advertisement, contact us to help you.
2022 TMALL GLOBAL CONSUMPTION TRENDS
According to the trend forecast report released by Tmall International and CBNData, precise skincare, emotional fragrance, snack-based health care, light sportswear and low-sensitivity parenting are the six major imported consumption trends in 2022, especially under the boom of overseas shopping, cross-border e-commerce has become the main consumption window.
Trend 1: Precise skincare
Contemporary consumers attach great importance to the health of their skin, and functional skincare products with advanced efficacy have become a trend, and the explosive growth has continued to exceed 2x in Tmall International in the past two years. In response to the demands of different skin types, consumers pay more attention to the skincare efficacy of the right medicine to solve skin problems, so consumers pay close attention to their key ingredients. Among them, ingredients such as flavonols, boseine, ceramides, fruit acids, and vitamin E are the most concerned. “Ingredient Party” is also mentally advanced, not only paying attention to product ingredients but also pursuing the professional and scientific nature of ingredient distribution. The report shows that 73% of consumers will pay attention to the ratio/formula of ingredients when purchasing skincare products, and pursue precise skincare.
Trend 2: Body care with oil
In Tmall Global, personal care products are showing an upgraded trend. For example, head care is no longer just a washing step, but also strengthens scalp care and hair essential oils; body care also has advanced product forms, such as bath oil, oil-based care products such as scrubs became popular. According to the survey, efficacy is the main decision-making factor for consumers when purchasing oil-based hair/body care products. In terms of hair care, the main functions that attract the most attention are moisturizing, preventing dryness, and repairing the damage. In body care, it also pays the most attention to moisturizing and anti-drying effects.
Trend 3: Emotional Fragrance
With the rise of the olfactory economy, China’s perfume aromatherapy market has grown rapidly, and the consumption trend of “emotional fragrance” represented by niche perfumes and home fragrances continues to rise. The younger generation seeks emotional healing through incense, and the main reason for purchasing decisions is to reflect personal style and taste. More than 40% of consumers prefer floral, fruity and oriental notes; post-95s prefer gourmet and woody notes. According to the data, 57% of consumers will choose different fragrances according to seasons, outfits, moods, etc., and seek fragrance experiences in different situations.
Trend 4: Snack-based health care
As the pursuit of a healthy lifestyle has become one of the main concerns of the people, the demand for imported health care products has increased, and the consumption scale and number of people in the health care products market on Tmall International has increased in the past two years. The concept of “snack-based” health care has prompted consumers to choose “snack-based” health care products, especially after 90/95, for reasons such as convenience in taking, good effect, portability, and no physical sensation of “taking medicine”, such as comprehensive nutrition. Meal packs, functional snacks, etc. Daily supplements and health care products with regulatory functions at specific stages have also received more attention, and different groups of people have different appeals and preferences for different pain points. For example, the party who stays up late prefers to improve immunity and care for the liver.
Trend 5: Light sportswear
With the impact of the epidemic and the development of sports culture promoted by the government, consumers have strengthened their demands for sports, their mentality has been greatly improved, and the popularity of sports has continued to heat up. 76% of consumers believe that in the post-epidemic era, they will pay more attention to and are willing to exercise. For this reason, with the upsurge of national sports, consumers have gradually strengthened the trend of taking into account the beauty and practicality of clothing, so the trend of “light sports” wearing has also risen. In the Tmall international market, “light sports style” related clothing categories have grown rapidly, such as casual loose sweaters, sweat pants, Japanese and Korean sports watches, etc., which cater to the lazy and refined lifestyle of today’s young people. According to the survey, women’s clothing consumers tend to prefer cool and familiar styles, and among the style elements, sports leisure and simplicity are the most mainstream.
Trend 6: Hypersensitive parenting
As the young groups of the post-90s and 95s join the front line of parenting, the proportion of consumers is rapidly expanding. They advocate the concept of refined and professional parenting and start “low-sensitivity parenting”. Infant milk powder is the core category of cross-border consumption, and the growth rate of hypoallergenic milk powder in the overall consumption amount of Tmall Global is obviously leading. Hypoallergenic milk powder covers the needs of different groups of people. According to the different degrees of baby allergies, from the basic “safe hypoallergenic” to the “prevention of allergies” and advanced to the high-level needs of “allergy treatment”, it brings comprehensive care to the baby. Therefore, consumption in the mother and baby market has grown rapidly.
When asked their first choice of international destination, almost one- third (32%) selected South East Asia. Europe, Australia/New Zealand, and East Asia followed. The most popular international destinations outside of Asia were selected by a higher proportion of female respondents than males, while international destinations within Asia were more popular amongst the male respondents.
Data shows that China’s cross-border consumer users have reached 300 million, the number of overseas brands on Tmall International has doubled, and the new cross-border e-commerce business continues to attract new overseas brands and new products into China. So far, more than 29,000 overseas brands from 87 countries and regions have settled in Tmall Global, covering more than 5,800 categories.
2022 NEW CONSUMER BRAND DEVELOPMENT TRENDS
According to the “2022 China’s New Consumer Brand Development Trend Report” jointly produced by Weiboyi, MMA and Mojing Market Intelligence analyzed the new market environment insights, brand development characteristics, marketing strategies. China is becoming one of the world’s largest consumer markets in terms of economy, and technological advancements such as 5G, big data, and artificial intelligence can improve product production efficiency and transportation efficiency. In addition, the growth rate of brands in the Guochao (“national trend”) market can also be seen that more and more consumers are willing to consume according to Chinese traditional culture. Moreover, the diversification of Chinese consumer demand has given the new market a lot of room for growth. Finally, coupled with the endorsement of favourable national policies, it has vigorously promoted economic development and accelerated the formation of a strong domestic market.
Common characteristics of typical new consumer brands
New consumer brands are emerging in mature categories and cutting-edge categories mainly through differentiation, segmentation and regionalization strategies. Combined with sales channels, starting from product design and development, to marketing channels and terminal contact methods, they are all centred on consumption. They not only improve consumers’ loyalty and dependence on brands but also make brand production and marketing more efficient, more accurate, and closer to consumers.
New consumer brands can accurately capture the needs of markets and target groups with low concentration, low brand effect, fast growth, and survivability, quickly fill market vacancies and category gaps, and gradually achieve scale breakthroughs through upgrades in various directions to gain capital favour. Food and beverage, clothing, beauty, mother and baby, pets and other industries are gathering industries for new consumer brands.
The marketing methods of new consumer brands are more aggressive and bold, investing a lot of online KOL word-of-mouth construction, using new social channels as an important conversion outlet, and using the volume scale to force sales conversion growth. New consumer brands make better use of digital tools to build a comprehensive intelligent growth path, and achieve a comprehensive digital reconstruction of the “people and goods market”.
KOL marketing strategy and effect analysis
Daily planting of grass is the biggest appeal of KOL marketing for new consumer brands. The average monthly investment amount is 1.6 million yuan, with an average monthly posting of 120 articles. The competition for KOL placement is becoming more and more intense, which is relative to difficult for new brands. The report shows that KOL investment costs account for an average of 3.7% of key e-commerce channel revenue, and the largest is 15% for mother and baby brands.
From a strategic point of view, first of all, new consumer brands generally put more articles on Xiaohongshu and more money on Bilibili; and in terms of account type strategy, in different marketing scenarios, KOLs emphasis is also varied. The stronger the conversion demand is in the marketing scenario, the more vertical the type of KOL is, and the more the tier level is concentrated at the waist (mid-tier KOL); the new consumer brands as a whole use sharing, good things, recommendation, and evaluation as general popular keywords for grass-growing and publishing, and then cooperate with them. The characteristics of each platform, such as Xiaohongshu, focus on collection gameplay, Bilibili emphasizes domestic products, and Douyin highlights life scenes.
From the perspective of the e-commerce effect, KOL marketing investment has an obvious effect on promoting e-commerce. The new consumer brand KOL’s launch intensity and sales basically show the same frequency in the same month. At the same time, at least 3 platforms have increased the number of posts, and the probability of incremental sales has increased. Xiaohongshu has the greatest effect on conversion promotion. From the perspective of interactive effects, Douyin has a good overall interactive effect. The main interactive effect of the film and television UP main station of Bilibili is the best, the photography KOL of Weibo is good, the Douyin is the best KOL, and the Xiaohongshu life record KOL is the platform’s TOP1 .
Case Study of KOL Marketing of Typical New Consumer Brands in China
WONDERLAB case – a large number of tests are mainly carried out in the vertical seed circle layer, and then the products are implanted by the momentum department/star, using the large V of the circle layer, and the waist vertical KOL to deeply plant grass with the same style, good things recommendation, etc., and then use the whole field KOL content detonated the focus of the public. Finally, with the help of festival nodes and e-commerce live broadcasts, the anchors with goods can promote conversion. Long-term operation is achieved by the brand social and e-commerce platform KOC posting orders to achieve long-term keyword search and retention.
Michelle Bingcheng Case – The official release of the theme song on major platforms starts the prelude to the creation of memes, and then uses the Z generation to reprocess the topic in Bilibili by playing memes, and playing the theme song interestingly to bury the point for subsequent dissemination. Douyin and Kuaishou platforms realize offline shop exploration and create a trend of low-threshold events that everyone can participate in as a stalk. Weibo undertakes topics (clock on) and evolves from richer entertainment to gameplay to reach a wide range of people. Finally, the WeChat public account is used to dismantle the topic in a multi-dimensional and in-depth manner, and the media account and marketing account are used to continue the topic’s popularity.
Marketing trends
The new generation, the new elderly, the young people in the new town, and the new middle class will be the four major new user groups, while the intelligent taste new, the first to please yourself, the rejection of anxiety, the multi-lazy house, the health picture book, the Yuanre extension (metaverse craze), and the trendy sports, empathy experience, national style and national trend, and companionship of cute things will be the top ten consumption trends in 2022.
In terms of the changing trend of products, based on the external environment of social development and technological progress, superimposed on the user base of diverse audiences and iterative needs, the four keywords for the development of new consumer brands in China in 2022 will be intelligence, scene-based, ecological and international change.
From the perspective of changes in the marketing field, the KOL marketing market is expected to reach 525.3 billion yuan in 2022, and KOL promotion and short video marketing are still the focus of new consumer brands. At the same time, Zhihu, Bilibili, and video have high development potential and may become new favourites. In addition, the acceleration of the integrated construction of public and private domains will bring long-term operational ROI brought by the seamless undertaking of all links, which will reduce costs and increase efficiency for brands. Based on accurate insights into demand pain points based on changes in people, goods, and field environments, smart marketing decisions based on data + AI will become the dominant model in the future.
Finally, the report also takes stock of the KOLs that are most favoured by new consumer brands in 2021. The list is based on three major selection criteria, focusing on beauty, food and beverage, daily chemicals, small appliances, mother and baby and clothing, and selected 180 high-quality KOLs, providing a reference for brand marketing in 2022.
Please contact us to inquire about KOL marketing and placement strategies.
2022 CHINA DIGITAL MARKETING TRENDS
According to the “2022 China Digital Marketing Trend Report” released by the Miaozhen Marketing Academy, the overall marketing expenses of enterprises are stable and bullish, with an increase of 19%. The average growth rate of digital marketing in China in 2022 will be consistent with the growth rate of overall marketing investment, which will be lower than the actual increase of 22% in 2021, but it will still maintain a high growth trend.
Although the marketing budget of emerging brand advertisers is less than that of mature advertisers, the proportion of increased marketing investment is far higher than that of mature advertisers. High-budget advertisers pay more attention to brand goals, especially in brand image building, and high-budget advertisers also pay more attention to “consumer relationship maintenance”.
Short videos, social networking, and e-commerce
From the distribution of different types of resources on the Internet, the short video, social media and e-commerce media will receive the most attention in the future, with 79%, 77%, and 57% of advertisers. However, compared with last year, the proportion of increased investment in live broadcast, search and comprehensive information also decreased to varying degrees. It can be seen from the report that KOL advertisements and short videos with the ability to convert and bring goods are in the first echelon, and the proportion of advertisers who increase the placement of KOL advertisements and short videos reaches 70% and 69%. Performance advertising and information flow still have advantages, and the proportion of advertisers who increase investment in both exceeds 50%.
Digital Transformation & AI Creative Advertising
Advertisers believe that digital transformation of marketing is very important, and AI advertising creativity has more application potential 64% and 33% of advertisers strongly agree and somewhat agree. Overall, the importance of marketing digital transformation is recognized. Regarding the level of digital application in different marketing fields, the report shows that the current application of e-commerce and user operations, KOL placement, and data management is relatively high, but only between 30% and 40%.
More sections are still under development, and there is huge room for digital marketing in China. Through the application of marketing concepts, private domain traffic, short video and live broadcast e-commerce have the highest proportions. In terms of the application of marketing technology, content classification technology is currently the most widely used, reaching 65%. In the next two years, AI advertising creativity, offline advertising programmatic placement, content intelligent distribution and recommendation applications have great potential and are worthy of attention.
Social media continues to grow
According to the report, social marketing in China is expected to grow by 18% in 2022. 76% of mature and 79% of emerging brand advertisers expect to increase their social marketing investment, while 35% of emerging brand advertisers have an increase of more than 30% in social marketing, which is more aggressive.
In 2022, KOLs and short videos will still be the focus of advertisers’ social marketing. At the same time, nearly 60% of advertisers indicated that the operation of official social accounts will be their focus, followed by community operation/private domain traffic.
Comparing the data from 2019 to the present, it can be found that the overall attention of short videos and KOLs is still on the rise. It is expected that the popularity of KOL marketing in 2022 will be more obvious than that in 2021.
Contact us to get the full report in Chinese.
APP OF THE MONTH – MOMO
Momo, a Nasdaq listed social platform based on LBS to meet new acquittances. Its platform is similar to its US counterpart, Tinder. Momo has launched two versions, Chinese and English. The English version currently only supports the IOS platform.
Momo has more than 100 million users and 60 million monthly active users. The user population is concentrated under the age of 32, of which 85% are users between the ages of 19 and 32, and the number of young groups is huge. The majority of Momo users are male, and most of the users are on Android.
Users can send free text, pictures and audio to other nearby users through Momo app, as well as local geographic location information, as well as participate in group discussions, check-in, and use live broadcast and video shooting functions.
Momo’s current status
Today, Momo has developed into a stranger social platform that integrates stranger social networking, live broadcast, video, and games.
Huge market opportunity and industry leadership
Momo is currently No. 1 in mobile social communication, No. 2 in mobile online news and No. 3 in mobile search. Momo’s daily activity and monthly activity are second only to WeChat and QQ.
Innovative social mode and active social ecology
Momo’s marketing forms are diversified, and advertisers can choose to display advertisements in the form of videos and advertising in games. In the social ecology of the Momo platform, users use Momo for 30-40 minutes on average every day. At the same time, most Momo users are from second-and third-tier cities. Advertisers can use this feature to achieve mobile marketing and precisely reach users.
Powerful technical functions
Momo has strong technical advantages such as massive big data analysis capabilities, precise positioning technology, stable mobile communication technology and storage system. Advertisers can use powerful technology to achieve precise and optimized advertising delivery.
Momo advertising resources
Open screen ad
Momo’s screen-opening advertisements can realize the first-time strong exposure of advertisements, support click-and-click interaction with users, and Momo’s screen-opening advertisements can formulate different screen-opening advertisements for different regions. Open screen advertisements are mainly displayed in the form of pictures, videos, and GIFs, which are suitable for new product launches and theme activities in the whole industry.
Charging mode: CPD (billed by day)
News Feed
In-feed ads are common places where ads appear in apps, such as nearby people, nearby updates, and friend updates. There are three types of information flow advertisements, namely landing page type, application promotion type and O2O type:
1. Landing page
The landing page type information flow advertisement is an intelligent promotion method based on user preferences and hot spots. When the goal is to achieve “order conversion” or “collection target”, it supports jumping to external links.
Landing page information flow advertisements are mainly displayed in Momo moments, nearby events, nearby people and friends’ dynamics in the form of pictures and videos.
Charge Mode: CPM or CPC
2. Application promotion
App promotion advertisements are interspersed in Momo’s information flow as part of the content and are highly integrated with the APP content. The main promotion goal is for the “registration and installed capacity” of the application, prompting users to install and download directly after clicking on the advertisement.
App promotion information flow advertisements are mainly displayed in the style of pictures and videos at the moment, nearby dynamics, nearby people and friends’ dynamics.
Charge Mode: CPM or CPC
3. Go to the store
Based on the massive localized user resources of the Momo platform, Diantong Advertising can accurately promote the business information to the surrounding customers in need, and help the local life service businessmen to efficiently acquire customers and expand business sources.
The store-to-shop advertisement is a picture displayed in the nearby dynamic and nearby people in the application, which is suitable for local O2O customers to promote new products, promotions and discounts.
Charge Mode: CPM or CPC
Momo Advertising Advantages
Multidimensional orientation
LBS + POI, accurate positioning to the nearest 5 meters, the benefits of physical stores
Flexible delivery, smart and convenient, diversified creative display and transparent monitoring data.
User advantage and consumption potential.
Contact us for more details about Momo Advertising!
-End of the Newsletter-
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