Content Commerce Highlights From China’s Spring Festival

Plus: Cash for short video creators, Aston Martin's clever collaboration, and an Apple exclusive on Bilibili.

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The Year of the Ox got off to a strong start in terms of consumer spending, with better-than-anticipated results. According to China’s Ministry of Commerce, consumers spent RMB 821 billion ($127 billion) at “key” retailers and restaurants between February 11 and February 17, a 28.7% increase from the equivalent holiday period last year, which was marked by coronavirus lockdowns that affected more than half the country’s citizens, and 4.9% more than in 2019. However, overall retail data was not released and may well have been below 2019 levels, when holiday spending surpassed the RMB 1 trillion mark. 

The “new normal” of 2021 saw a significant reduction in travel and tourism as the government sought to curtail the spread of Covid-19 beyond several localized clusters that emerged in January. With long-haul travel off the table for most in China, “at-home entertainment” and “suburbs tourism” became two of the biggest catchphrases of this year’s Spring Festival. 

But just because Chinese weren’t traveling long distances didn’t mean they were staying indoors with their wallets shut. Retail outlets saw a boom in foot traffic during the holiday week, with shopping malls in first- and second-tier cities reporting a more than 200% year-on-year increase in shoppers, who lined up to browse luxury brands such as Chanel and Louis Vuitton. Urban residents also flocked to local luxury hotels and bed-and-breakfasts for their staycations and took in all the cultural offerings that their cities had to offer, from movies to museum exhibits to offline murder-mystery role-playing games

Perhaps more surprisingly, mobile internet traffic also surged this year, increasing by more than 23% year-on-year during the seven-day holiday period, a result of widespread acceptance of “cloud living” for entertainment, shopping, and family reunions. Alibaba’s logistics platform Cainiao reported a five-fold increase in package volumes compared to the 2019 Spring Festival, as separated family members sent the gifts they would normally bring in person.  

One major trend among luxury brands for the Year of the Ox was the adoption of WeChat’s customizable virtual “red envelopes'' (aka hongbao) as a marketing tool. Gucci’s offering, which highlighted the brand’s Doraemon holiday collaboration, was especially popular, with its hashtag trending on Weibo and drawing more than 210 million views. Many other brands, including Burberry, Bulgari, Louis Vuitton, and Tiffany & Co., also used their red envelope designs to engage consumers and entice them to shop. 

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Mentioned in today’s newsletter: Airbus Helicopters, Alibaba, Apple, Aston Martin, Bilibili, Bulgari, Burberry, Bytedance, Cainiao, Chanel, Douyin, Freshippo, Gucci, JD.com, Kuaishou, Louis Vuitton, Maserati, Nayuki Tea, Netease, Nongfu Spring, Tesla, Tiffany & Co., WeChat, WeChat, Weibo, Xiaohongshu, Xigua Video.


Cash for Creators and the Battle for Short Video Dominance in China

by Avery Booker

Although far from new in China, short video is shaping up to become a bigger battleground for platforms in 2021, with implications for brands and content creators as well. Douyin, the Chinese version of TikTok, recently gave away a record RMB 1.2 billion ($185 million) as the red envelope sponsor of CCTV’s Spring Festival Gala (by far the world’s most-watched TV program), while Kuaishou is hot off the heels of a $5.3 billion Hong Kong IPO, WeChat launched a short video channel in 2020, and Bilibili reported a 74% increase in net revenues in its third-quarter 2020 financial results.

All of these platforms are cashed-up and intent on spending heavily on incentivizing high-quality content creation to keep viewers engaged and spending via integrated e-commerce functionality.

Netease is the latest to join the fray with its recent announcement of plans to invest RMB 1 billion ($155 million) to support video creators across existing Netease apps for news, social media, e-commerce, music, and education. Founded in 1997, Netease is one of the country’s oldest internet companies, but it hasn’t yet been able to capture the video zeitgeist. Now, it clearly thinks incentivizing creators could give it an edge.

But simply throwing cash at influencers and hoping the audience follows may not be enough to dethrone Douyin and Kuaishou, which together account for an estimated 60% of China’s short video market and aim to spend heavily as they fight to come out on top. In September, Douyin said it would invest $1.5 billion over the next 12 months to help double revenue for creators and diversify their income streams. Kuaishou announced a similar incentivization plan aimed at incubating 100,000 businesses and helping each of them achieve $146,000 in annual sales, while cultivating some 10,000 livestreamers and hosting a million e-commerce broadcasts over the same period. 

These platforms are employing multi-pronged strategies to win over audiences with five key pillars: sponsorships of popular events around local holidays; support for the production of higher-quality user-generated content; exclusive agreements with celebrities, influencers, and top creators; expansion into longer-form content such as movies and series; and e-commerce integration, especially through livestreaming

Kuaishou’s efforts over the past year reflected this approach. The firm gave away RMB 1 billion ($155 million) as the exclusive sponsor of last year’s CCTV Spring Festival Gala, convinced Mandopop legend Jay Chou to launch his first mainland Chinese social media account and grant rights to his music, partnered with JD.com to promote e-commerce livestreaming, and even branched into arthouse cinema with the exclusive distribution of indie director Zhang Wei’s “The Empty Nest” (空巢) last May.

Competition for top creators has grown increasingly heated. Last summer, one of Bilibili’s most popular “uploaders,” Necromancer Financial, was poached by Bytedance’s Xigua Video in a deal rumored to be worth RMB 100 million ($15 million), and the business vlogger stated that his dependence on Bilibili fans for revenue was unsustainable. Later in the year, it was Bilibili’s turn to nab talent from Xigua Video, with popular esports commentator Ao Changzhang jumping ship from Xigua to Bilibili under an exclusive five-year contract.

In 2021, the key for platforms contending for greater market share will be smart spending — not just on quality, but on niche content in areas with the most potential for growth. In the case of Netease, education could prove to be a cornerstone.

CCI recently reported on Netease’s announcement of a new knowledge-based short video platform called Netease Knowledge Highway (网易知识公路) and plans to expand video on other NetEase properties such as Netease News, Netease Cloud Music, fanfic platform Lofter, and online education subsidiary Netease Youdao. If the company can succeed in using video to merge its disparate content streams (whether knowledge-based or not) and attract creators through exclusive deals, it may stand a chance of making inroads against Douyin and Kuaishou.

That said, building market share won’t be easy (or cheap), and luring top creators away from rivals is likely to be an uphill battle for the far less edgy and relatively long-in-the-tooth Netease.

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Brand Film Pick: Aston Martin Leads Game for Peace’s Dream Team

The Spring Festival was a peak period for gaming campaigns in China, as big names sought to capture player attention during the week-long holiday when more people stayed at home than usual. Premium brands have also sought to tap the enormous base of players in China with increasing creativity.

Ahead of the Lunar New Year, Game for Peace, Tencent’s Chinese mobile version of PlayersUnknown Battlegrounds, created a “super-alpha team” comprised of Aston Martin, Airbus Helicopters, and BonBon Girls 303, a group formed last year via Tencent Video’s idol competition show “Produce Camp 2020” (创造营2020, aka “Chuang 2020”). The collaboration includes limited-edition in-game Aston Martin and Airbus Helicopters skins, along with a flashy music video featuring the seven members of BonBon Girls 303 completing a mission with the help of fast cars and even faster aircraft, with plenty of dancing and shooting along the way.

Game for Peace has previously worked with high-end automakers such as Maserati and Tesla to enhance players’ gaming experiences with limited-edition skins, but the latest three-way mega collaboration — with Aston Martin at the center — shows a more sophisticated understanding of how various forms of content (gaming, music, and video) can be layered to communicate a brand’s message in a way that’s deeply entertaining and relevant to young consumers. 

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News From China

Video streamer Bilibili has been the subject of controversy in recent weeks, with several domestic brands pulling out of the platform following an outcry over its broadcast of a misogynistic anime series from Japan, which it has since cancelled. 

  • But the platform still holds strong appeal for international brands. One of Bilibili’s most popular creators, the 22-year-old vlogger He Tongxue (何同学, “classmate He”) recently scored a coup with his interview of Apple CEO Tim Cook. The 18-minute video has been watched more than 7.2 million times on Bilibili since its release on February 17, while the related Weibo hashtag has drawn more than 250 million views.

  • Conducted entirely in English (with Chinese subtitles), the interview covers a range of topics from personal habits to tech innovation, with Cook sharing how certain iPhone features such as Night Mode and Junction View (in Maps) were inspired by feedback from Chinese users.  

Lifestyle-oriented platform Xiaohongshu is best known for its fashion and beauty content, but food has been a growing area of interest among its young and largely female user base.

  • In addition to its recent Spring Festival film, “Cook a Meal for Loved Ones” (为爱的人, 做顿饭), the platform has rolled out a series of initiatives to appeal to foodies. Xiaohongshu enlisted a group of celebrities to amplify the message of its film and promote home cooking, and hosted a livestream event with prominent male bloggers cooking a simple meal of stir-fried eggs.

  • Brand such as Nayuki Tea, Nongfu Spring, and Freshippo also participated in the campaign that linked food and love to resonate with consumers. 

E-commerce livestreamer Li Jiaqi made the 2021 Time100 Next list of people to watch around the world.

  • Explaining the selection, Time noted his charismatic ability to sell while offering reviews that viewers can trust, along with his work to support charity and the government’s poverty alleviation initiatives.

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News in English 

  • Starting next year, Ant Group and other internet lending platforms will be required to partner with commercial lenders to jointly fund at least 30% of every loan they make. Wall Street Journal

  • Weibo is reportedly set to join the ranks of U.S.-listed tech firms seeking secondary IPOs in Hong Kong. Bloomberg

  • Western influencers who speak Mandarin are amassing fans on Chinese platforms along with attention from brands. SCMP

  • Burberry won a preliminary injunction from a Chinese court against a local firm using the name Baneberry and a logo nearly identical to the British brand’s equestrian knight. National Law Review

  • With two holidays essentially overlapping, YSL made the rare move to opt-out of Spring Festival marketing in favor of the February 14 Valentine’s Day. Dao Insights

  • Subtle feminism and attention to women’s bodies are among the lessons Chinese lingerie brands have to offer their Western counterparts. Business of Fashion

  • Colgate-Palmolive continues to file for trademarks in China for Darlie (“Black Person Toothpaste” in Chinese, previously known as “Darkie” in English), despite previously announcing that it would consider a rebrand. National Law Review

  • The Moutai name, associated with one of China’s best-known liquor brands, is powerful enough to boost the fortunes of unrelated firms. Reuters

  • The combination of ancient history and AR helped a regional satellite network stand out amid the crowded field of Spring Festival gala shows on TV. Radii

  • Following outcry over sexist references to women, the Sexy Tea chain apologized for inappropriate slogans including one that referred to women as “bargains.” Global Times

  • A look at Wang Yibo’s rise from boy-band member to one of China’s most marketable celebrities. Radii

We’ve Got China Covered