How E-commerce Platforms Plan to Win Consumers in China's Mid-Year Shopping Spree
Plus: Kuaishou tries to go upmarket, street vendors rush to livestreaming, and skincare goes art-house.
The 618 Shopping Festival that’s currently underway started out in 2004 as a one-day sales event to mark JD.com’s anniversary, but over the years it has been adopted by other e-commerce firms and expanded into several weeks worth of elaborate marketing and promotions.
This year, the competition is especially keen to tap into pent-up consumer demand in the post-coronavirus period, and rival platforms are stepping up their entertainment-oriented campaigns to bring them on par with the efforts taken to promote the November 11 Singles’ Day sales event, which is the world’s biggest online shopping spree.
Tmall is partnering with Jiangsu Satellite TV to air the third annual edition of the “618 Super Night” gala show on June 16, featuring celebrities such as Cecilia Han and Liu Mintao along with popular bands R1SE, Rocket Girls 101, and New Pants.
Pinduoduo and Hunan Satellite TV will compete at the same time with their “Super Surprise Night” show, while Suning and Dragon TV are co-producing the “618 Super Show” on June 17, which will air on Dragon TV, Tencent Video and other platforms.
Tmall and JD.com are competing on who can bring the most celebrities and corporate bosses to livestream for 618. According to recent reports, each plans to enlist at least 300 celebrities and 600 CEOs, company founders, and other key executives to help sell goods during this period.
News anchors are another force in e-commerce livestreaming. On June 6, JD Live aired a three-hour livestream with four top anchors from state broadcaster CCTV and a popular Beijing TV host, who sold RMB 139 million ($19.7 million) worth of goods to kick off the shopping season in Beijing.
Social e-commerce platform Pinduoduo is generally taking a smaller-scale approach with celebrity livestreaming, but its June 6 show with actress Zhou Tao drew 16 million viewers over the course of four hours and sold RMB 140 million ($19.8 million) in products, An iPhone 11 with the subsidized price of RMB 4,299 ($609) was the top seller, with viewers snapping up 14,000 units.
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Mentioned in today’s newsletter: Armani, Brandy Melville, Gucci, Hermès, JD.com, Kuaishou, Louis Vuitton, Pinduoduo, Prada, KFC, Pizza Hut, Chanel, Rolex, Secoo, SK-II, Suning, Tencent Video, Tmall, Zynn.
On Wednesday, June 10, CCI’s sister publication Jing Daily will offer a webinar with Parsons School of Design on “Acceleration With Technology for Fashion.” A discussion of Shanghai Fashion Week will offer insights on the acceleration of retail and fashion technology in light of Covid-19 and how brands and retailers can best navigate the future. Learn more and register here.
A New Look for Luxury on Kuaishou in Livestreaming Partnership With Secoo
The short video platform Kuaishou has made some big moves lately, announcing a new strategic partnership with JD.com to enable users to buy products from the e-commerce retailer without leaving its app, and nabbing superstar singer Jay Chou to license his music and videos and open his first Chinese social media account on the platform.
While Kuaishou is emerging as a major player on both the content and commerce fronts, the presence of luxury brands on the platform has been fairly limited to date, with most of the big international names opting to open accounts only on rival Douyin, which has tended to have a more sophisticated audience.
But on June 7, Kuaishou partnered with the high-end e-commerce platform Secoo to host its first large-scale luxury goods promotion as part of its 616 Quality Shopping Festival. Kuaishou livestreamer Xiao Yiyi hosted a five-hour broadcast featuring products from Hermès, Rolex, Gucci and dozens of other brands, selling a total of RMB 105 million ($14.85 million) worth of items.
In a move that luxury brands may not endorse, Kuaishou relied heavily on subsidizing significant discounts to move goods. For example, a Birkin bag that retails for RMB 380,000 ($53,740) was reportedly offered for just RMB 99,999 ($14,141). Discounted handbags from Louis Vuitton and Prada and an Armani watch were the three top sellers.
A day earlier, Kuaishou kicked off the 616 Quality Shopping Festival with a livestreamed sales broadcast starring popular TV host Hua Shao (Haman Hu), who sold half-price iPhone 11 models and Gucci handbags at 40% off, along with chances to win iPads, bars of gold, and cash prizes. That broadcast, which also included appearances by celebrity guests, drew 10 million viewers and generated RMB 174 million ($24.6 million) in sales.
Taking It to the Streets, With Support From Government, Tech Platforms, and Brands
Once reviled by authorities, street vendors were suddenly welcomed back to Chinese cities with open arms following supportive comments from Premier Li Keqiang earlier this month that described them as part of the “lifeblood of China” and an important source of employment and economic revitalization in the wake of the coronavirus.
At least 27 cities have sought to boost the presence of street vendors in order to minimize unemployment and encourage consumption.
China’s big tech firms have joined in the effort. Alibaba will offer RMB 70 billion ($9.9 billion) in interest-free credit for purchases to 30 million vendors, while JD.com will extend up to RMB 100,000 in interest-free credit to small-scale store owners. Tencent unveiled a support plan for small business owners that use WeChat Pay with subsidies and other solutions subsidies, and Pinduoduo also plans to subsidize goods for street vendors.
Brands are reportedly taking the opportunity to get on the streets as well, taking advantage of warmer weather and the pent-up demand for more outdoor time. KFC and Pizza Hut (both owned by Yum China) have brought out food trucks, Tencent staged a recruitment event, and Didi Travel engaged in promotional activities such as giving out discount vouchers. Following Premier Li’s words of encouragement, auto brand Wuling (part of a joint venture between General Motors, SAIC, and Wuling Automobile) released a vehicle that can function as a mobile street stall.
Street vendors are trending on short-video platforms as well. On Douyin, the number of livestream broadcasts from street vendors saw a threefold increase between February and May, and related short videos were viewed 1.3 billion times.
But official policies are still subject to sudden shifts, with a recent commentary in the Beijing Daily stating that the so-called “street stall economy” is not welcome in the capital, and editorial in other publications noting problems with food hygiene and product quality. There could still be opportunities for brands to participate in upgrading the status of the sector.
Brand Film Pick: HomeFacialPro’s Romantic Streak
For the recent 520 (May 20) Chinese Valentine’s Day, Chinese skincare brand HomeFacialPro (HFP) developed a multimedia campaign focused on the eyes and their capacity to express love that also highlighted HFP’s new eye creams in an innovative manner.
HFP collaborated with influencer Jiang Sida, who has previously developed content for brands such as Chanel and SK-II through his Gangsida studio. Jiang’s work often combines art, philosophy, and romanticism, and at the core of his HFP campaign is a collection of video recordings of the eyes of couples and their subtle reactions to each other's voices. An online art exhibition put the pairs of eyes at the center of collage-style images incorporating lush floral motifs, and Jiang wrote a poem for the brand on the subject.
The various elements come together in the four-minute film, “Eye,” which also stars Jiang and uses limited animation techniques to create a fanciful atmosphere as his voice narrates the poem.
Like other beauty brands, HFP also works with celebrities to promote its products, with its most recent campaigns featuring current brand favorite Wang Yibo. But the brand’s willingness to develop a more sophisticated campaign using art and poetry helped it stand out from the crowd in the competitive 520 marketing landscape.
News in English
Though Kuaishou’s Zynn app has found recent success in the U.S. market by paying users to sign up and refer friends, the platform has faced numerous earlier struggles to gain a foothold in overseas markets. Pandaily
China’s digitally savvy beauty brands are thriving despite the broader downturn for the cosmetics industry as a result of the coronavirus. Bloomberg
Baidu’s Xiaodu smart speaker offers brands opportunities to connect with consumers in their homes through relevant content and interactive features such as virtual brand assistants. The Drum
“Oh my God! Trademark it!”: Top e-commerce livestreaming host Li Jiaqi, who has become a brand unto himself, is seeking IP protection for his signature catchphrases. Sixth Tone
How China’s e-commerce giants are helping thousands of domestic manufacturers to launch their own brands under the “consumer-to-manufacturer” (C2M) model. MIT Technology Review
Not playing by the rules: Teen fashion brand Brandy Melville has developed a following in China despite opting out of the usual marketing strategies such as partnering with a major e-commerce platform and appointing celebrity ambassadors. Business of Fashion
China’s digital entertainment market is expected to be worth RMB 113.3 billion ($16 billion) for the first quarter of 2020, up 10.4% from the end of 2019. China Internet Watch
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