Global Edition: Why China’s Young Consumers Love Brand Collaborations
Plus: Livestream shopping looks west, why F&B collaborations succeed, and our TikTok Take.
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Tracking the Trends for 2021 is produced in partnership with cross-cultural agency TONG to analyze four key insights for the coming year. Pulling expertise from Jing Group’s network of leading B2B publications, the four-part series covers consumer insights luxury players must be aware of to survive post-COVID China. In this installment from Content Commerce Insider, we dive into the rise of brand collaborations in the Chinese market.
Key Takeaways:
China’s Gen Z and millennial consumers seek novel products that stand out from the crowd, fueling a rapidly evolving culture of innovative “mega-collaborations” between brands.
The rise of direct-to-consumer (DTC) domestic brands such as Perfect Diary have fueled competition to stand out via innovative collaborations that can propel a relative newcomer to “internet-famous” (wanghong) status with the ability to iterate signature products into creative derivatives.
Brands build upon collaborations to offer experiences — both digital and physical — and content for wider reach and greater impact. Special events, pop-up shops, gaming features, and other opportunities allow consumers to boost their engagement with brands and their collaborative products.
Many successful mega-collaborations have tapped into China’s distinct heritage by leveraging current tastes for “national trend” (guochao) products, “cultural creations” (wenchuang), and consumer nostalgia.
As more young consumers express a preference for Made in China, international brands may find that collaborations with local partners can be an effective route to establish connections.
The year 2020 has seen an expanding range of brand collaborations in China emerge from some unlikely sources — from Adidas x Hey Tea to National Gallery x Ramen Talk to Pepsi x People’s Daily. Just about any and every combination of brands appears open to the trend, and these collaborations continue to push the envelope in scale and ambition.
Over the past few years, brand collaborations have taken off globally as a marketing strategy, particularly across fashion and lifestyle brands. But in China, this form of marketing has accelerated to new heights through brand partnerships that have fueled a culture of mega-collaborations with the power to surprise and delight consumers. Driven by the demands of a younger generation of Chinese consumers, the recent surge in product innovation via brand partnerships has been a consistent source of entertainment and media buzz, as well as a driver for further consumption.
China’s mega-collaborations may appear increasingly extreme or even bizarre, such as KFC China’s development of insect repellent-flavored drinks earlier this year, a partnership with the traditional Chinese brand Liushen. However, such items are widely talked about, and their freshness and limited-time appeal can tempt young consumers to at least try new (and often affordably priced) products — which also make them attractive candidates for posting on social media, further helping to expand the reach of brands among that valuable demographic.
Compared to the West, branding is still a relatively recent concept in China, and young consumers have shown an openness to the presence of brands in much of everyday life, such as on television, where sponsor logos are prominently displayed on reality shows and brands are written into the storylines of dramas. And with fairly few brands constrained by long histories and established narratives, they are free to reinvent themselves as much as necessary and align themselves with the latest trends, from milk tea to space exploration. Even older brands, like Li Ning in sportswear and the nostalgic White Rabbit candy, have sought to rejuvenate their images through collaborations in youth-oriented sectors such as gaming and beauty.
Growing individualism and a desire for differentiation among China’s Gen Z and millennial consumers draw them to mega-collaborations. Thanks to their limited-edition or limited-time nature, these products appear more unique and special than the mass-market items that are readily available to the general public at all times. The more special the mega-collaboration appears, the more discerning and sophisticated the consumer can feel.
New brands adopt a “collaboration-first” to respond to consumer desires
The rise of direct-to-consumer (DTC) domestic brands such as Perfect Diary has fueled competition to stand out via innovative collaborations that can propel a relative newcomer to “internet-famous” (wanghong) status with the ability to iterate signature products into creative derivatives.
Many of these brands have only been in existence for a few years, and use collaborative products as a key marketing tool to generate buzz, especially via social media. For example, the DTC brand Yongpu Coffee, which sells primarily via Tmall, has been involved in more than 400 collaborations since it was founded in 2014. What was initially a marketing tactic borne from its limited budget for advertising has since become an integral part of its brand identity, extending into content-focused collaborations with partners such as lifestyle platform Xiaohongshu and the hit youth film “Better Days.” Yongpu Coffee frequently pairs new flavors with these collaborations, translating into a high repurchase rate among buyers who are keen to sample the latest releases and share their reviews among their social circles.
Another of the most active brands on the mega-collaboration front is Hey Tea, which has leveraged the craze for tea-based drinks among young Chinese into collaborations such as peach tea-inspired cosmetics with Fenty Beauty and grape beverage-colored shoes with Adidas. Hey Tea’s enormous fan base and social media following mean that any collaboration will be hotly anticipated and widely shared on platforms such as the lifestyle-oriented Xiaohongshu, while also driving engagement through exclusivity as in the case of the Fenty Beauty collaboration, which was not offered for sale but was a limited giveaway in exchange for social media engagement.
Breaking through product categories into experiential collaborations
Brands build upon collaborations to offer experiences — both digital and physical — and content for wider reach and greater impact. Special events, pop-up shops, gaming features, and other opportunities allow consumers to boost their engagement with brands and their collaborative products.
In late Spring, as China emerged from its coronavirus lockdowns, Airbnb worked with Hey Tea to promote the concept of a “staycation” among would-be travelers who might be wishing for a change of scenery while still feeling understandably cautious about venturing too far from home. The brands engaged actress and musician Lin Yu-pin to create a Shanghai getaway decorated in bright colors inspired by a Hey Tea mango beverage and amply supplied with Hey Tea products. Opportunities to win weekend stays were offered via social media channels — another case of a mega-collaboration used to generate engagement and awareness for the brand partners rather than merely selling products.
Around the same time, the established Chinese liquor brand Jiangxiaobai collaborated with Mengniu, the country’s largest dairy producer, on boozy ice cream treats to mark Children’s Day, a nod to the fact that the holiday continues to be celebrated by young adults who mark the occasion by going out to dinner with friends or shopping. The brands also opened a very photographable pop-up “adult ice cream shop” in Shanghai to promote the collaboration, adding an important offline component that meshed well with the desire to engage in social activities with friends for the “big kids'' version of Children’s Day.
Mega-collaborations build on national pride and cultural heritage
Brands have tapped into China’s distinct heritage by leveraging current tastes for “national trend” (guochao) products spanning “cultural creations” (wenchuang) and consumer nostalgia in the development of collaborations. Guochao refers to brands and products that incorporate a distinctly Chinese style, whether ancient, old-school, or futuristic, and it appeals to millennial and Gen Z consumers who have come of age with a sense of national pride. Beauty and fashion brands have been most successful in exploiting consumer tastes for these products, but many other types of consumer brands have gotten involved in partnerships to create goods with a strong cultural element.
In sportswear, homegrown brands such as Li Ning, Anta, and Bosideng have emerged as leaders in brand collaboration, with diverse partnerships ranging from luxury labels to gaming IP to the Chinese counterpart to NASA. The Palace Museum (aka Forbidden City) and the Dunhuang Research Academy are at the forefront of developing new revenue streams through product collaborations with partners running the gamut from Oreo cookies to Lenovo computers to major e-commerce platforms JD.com and Pinduoduo. Meanwhile, C-beauty brands such as Florasis have drawn rave reviews for recent collaborations with traditional artisans to create visually stunning products in limited editions that can command a premium for their evident craftsmanship.
In July, Li Ning, which was established in 1989 by the Olympic gold medal-winning gymnast of the same name, partnered with QQ Dance, a Tencent Games title, to connect with young consumers using a combination of retro and futuristic elements. Li Ning appointed the game’s virtual idol Xing Tong as a brand ambassador to promote its throwback collection in a short branded film. This type of creative content helped merge Li Ning’s status as a “national trend” brand with the futuristic gameplay of QQ Dance.
Local partners can be a key to international brand success
As more consumers in the market express a preference for “Made in China,” international brands may find that collaborations with local partners can be an effective way to dissolve geographical boundaries and establish connections based on a shared vision. These partnerships may be enabled by e-commerce platforms such as Tmall and its affiliated product development and marketing departments, which can provide consumer insights as well as channels to reach target consumers, such as social media, short video, and livestreaming.
And as China continues to be a major focus of attention for global brands amid the ongoing COVID-19 pandemic, more international players are lining up to seek out domestic brand partners, especially in the luxury fashion sector, for which the Chinese market is increasingly important as a source of revenues. The Karl Lagerfeld brand recently worked with both Tsingtao Beer and KFC in China on special joint capsule collections, while Italian fashion house Moschino partnered with dairy giant Mengniu for a special teddy bear and yogurt gift box designed by Jeremy Scott.
Especially during a pandemic, an understanding of what consumers want and need is essential to brand survival. Several global names have already become established in developing creative brand collaborations in China, whether because of their deep efforts at localization (Oreo, KFC) or by working with licensing partners that can help connect them to Chinese consumers (Metropolitan Museum of Art, National Gallery).
While the trend of mega-collaborations has been growing over the past few years, and 2020 saw an increasing number of hyped-up partnerships, there are few signs of consumer fatigue. China’s Gen Z and millennial consumers now expect to be entertained and amused on a regular basis by creatively co-branded products and accompanying online and offline campaigns that they can engage with directly. In 2021, the challenge for brands is to go the extra mile to ensure that collaborations create long-tail consumer affinity and reflect brand values, rather than simply attracting short-term curiosity and buzz.
“For brands seeking out Chinese partners to collaborate with, it’s tempting to go down the route where big, loud, or weird is the gateway to capture consumer attention,” said James Campbell, co-founder of TONG. “For those entering or scaling up in China, it’s as much about entertainment as it’s about brand or product education, otherwise there’s the risk of becoming an irreverent, flash-in-the-pan moment.”
With the rising competition for consumer attention (particularly over digital channels), brands must be intentional about creating real value in their collaborations, and it is especially important for international brands to be savvy in their choice of partner, product development, and marketing in order to produce successful mega-collaborations that are capable of creating lasting impressions and deepening the relationship with consumers. Mega-collaborations are here to stay in China. Now, it’s up to brands to fully capture the opportunity.
Mentioned in today’s newsletter: Adidas, Airbnb, Ben & Jerry’s, General Mills, Hey Tea, KFC, Karl Lagerfeld, Monica Vinader, Monki, Moschino, Oreo, Pepsi, Perfect Diary, Sesame Street, TikTok, Walmart, Xiaohongshu, YouTube.
Why the West Should Transition From Influencer Hauls to Livestream Shopping
by Sadie Bargeron
E-commerce lacks the social appeal of bricks-and-mortar retail therapy, yet interactive, livestreamed shopping is coming to change that. The “shoppertainment” phenomenon known as e-commerce livestreaming was responsible for approximately $63 billion of sales in China through 2019, according to Everbright, and is the country’s number one source of revenue per hour [Kleiner Perkins' Internet trends report]. While the format has trailed in the West, store closures brought about by the coronavirus pandemic have sped up digital commerce innovation, with the United States seeing more than one out of every five retail dollars spent online in the second quarter of 2020 — the highest rate of any quarter or year on record — and, as a result, livestream shopping has finally started to gain traction.
However, YouTube clothing hauls currently hold center stage for celebrity-driven shopping content in the West. Video reviews, in which influencers style new clothes, try out beauty lines, and unbox products, can draw millions of views. According to Shorr, the average influencer who does hauls has two million views with 300+ uploads, and the United States has the most users (39%), followed by the United Kingdom (13%). Shein, the Chinese direct-to-consumer fast-fashion brand that is hugely popular with teenagers around the world, owes a good deal of its success to clothing haul videos. In short, the format works for authentic, personalised marketing, so why the need to shift to e-commerce livestreaming?
To start, livestreamed sales broadcasts can be seen as a greener alternative to clothing hauls. Increased consumer awareness of sustainability has led to some backlash against hauls for encouraging excess consumption, thanks to the seemingly infinite stream of packages supplied to influencers by PR firms. Yet those concerns have barely made a dent and hauls have become a key feature of the YouTube and TikTok cultures.
Yet livestreamed content offers the same escapist distraction that YouTube audiences have grown addicted to. And since Western consumers are already accustomed to using influencer reviews to make purchasing decisions, the fundamental core of e-commerce livestreaming has already proven lucrative. Emarketer reports that more than 55% of Gen Z internet users in the United States do half of their shopping online and are largely influenced by browsing on social media.
Gen Z and millennial consumers represent the majority of China’s livestream shoppers as well. “A lot of people around me [as a millennial] are into livestream shopping, perhaps because of the company that livestreamers provide,” said Drizzie Zuo, a Beijing-based senior analyst at Ladymax, a Chinese-language fashion trade publication. “I think it reflects that people are fundamentally lonely.” Zuo notes that consumers longing for social interaction can find comfort in sales broadcasts, just as they do in YouTube. “People don’t necessarily have anything in mind to shop. They just watch [a] livestream in the evening and end up randomly buying something.”
Still, it will take some time for YouTube audiences to transition to watching e-commerce livestreams, and it will come down to brands to make the first move. Some, like Monica Vinader and Monki, have already done so with their in-house channels, while others are turning to independent e-commerce livestreaming platforms such as Commentsold, Ntwrk, PopShopLive, and TalkShopLive. Bloomberg reported that Ntwrk, a mobile app that hosts live shows to sell collectibles, has seen sales rise 400% this year, while TalkShopLive reported a seven-fold increase in sales.
TalkShopLive’s CEO and Co-Founder Bryan Moore explains this spike in interest: “Facetime and Zoom have created a new way of conversing, and one that still feels intimate,” he told CCI. “Individuals can shop and talk alongside their favorite influencers, celebrities, and brands for a really personal experience.”
Celebrities are the motor of this livestreaming business model. TalkShopLive has featured streams by the likes of Meghan Trainor, Tara Reid, and Dolly Parton. “When we started breaking records with celebrities selling between three and nine times what they were selling through other online avenues, within a 15 minute show, the talent organically came to us,” said Moore.
China has proven that e-commerce livestreaming can make people famous too, as seen with top sellers Viya and Li Jiaqi, who have become household names. “[Famous livestreamers] can sell stuff at a very low price due to the bargain power they have over vendors, reinforcing their reputation and trust,” said Zuo of Ladymax. “They’re more like celebrities now with many loyal fans, so people support them by buying stuff through their channel.”
Kim Kardashian’s appearance on Viya’s livestream in 2019 epitomizes that force of fandom, selling 150,000 bottles of her KKW perfumes in seconds. Displaying confidence in the booming livestreaming influencer space, Tmall Global’s incubator plans to expand to 10,000 influencers worldwide over a five year period.
Leading livestreamers in China like Viya make tens of millions a year from selling products, advertising, and receiving virtual gifts on streams. Western brands and influencers will likely capitalize on the potential of e-commerce livestreaming soon enough, hopefully moving away from the less lucrative and unsustainable realm of YouTube hauls.
CollaBrands: Some Brands Do Good to Do Better, and Some Just Go to Hell
The popularity of new content-based food and beverage collaborations continues unabated. Last week we reported on Lady Gaga’s Oreos and Queen Elizabeth’s gin, and soon after, Ben & Jerry’s announced its collaboration with Colin Kaepernick, the former San Francisco 49ers quarterback who rose to international fame by protesting injustices perpetrated against African-Americans by the police.
Kaepernick first protested by sitting and then by kneeling when the national anthem played before NFL games. Claiming free agency from the 49ers at the end of 2016, Kaepernick, a star player, was allegedly blackballed by the league, ending his professional football career. Tweets by President Trump called for the NFL to suspend Kaepernick, further inflaming tensions, and he became a cause celebre. While the NFL vehemently denied any coordinated action against Kaepernick, in 2019 the league settled out of court with Kaepernick and Eric Reid, another player who kneeled during the anthem, without any public admission of guilt.
Despite the setback to his football career, Kaepernick has emerged as the most prominent public figure of the Black Lives Matter movement, and established a foundation dedicated to using social activism and education to fight oppression, with an emphasis on teaching children of color about safety issues with law enforcement through his “Know Your Rights Camp.” By licensing his name and likeness to Ben & Jerry’s for their new “Change the Whirled” ice cream flavor, Kaepernick will see royalties from sales of the product go towards financing the camps.
Unilever, which purchased Ben & Jerry’s in 200, is the fourth-largest consumer goods company in the world, owning and marketing more than 400 brands. Founded in 1978, the Vermont-based Ben & Jerry’s has always been known for its corporate mission as a “social enterprise“ and for effectively using content as a marketing tool.
Flavors with names like Cherry Garcia and Wavy Gravy appealed to baby boomers who came of age in the 1960s listening to the Grateful Dead, creating emotional connections for the Woodstock generation through the ultimate comfort food. Other offerings such as Phish Food instantly appealed to Gen X, while Netflix and Chill’d got the attention of Gen Z and millennials. Companies that understand that consumers admire brands that stand for something simply do better with consumers. During the pandemic, as the idea of “brands doing good” is embraced by more companies, this type of reinforced brand positioning is a valuable lesson for other brands seeking to increase their marketing clout.
Nike, another brand whose success is predicated on content as a marketing tool, has also famously maintained a collaborative partnership with Kaepernick. In 2018, the sportswear giant released a controversial ad to mark the 30th anniversary of its “Just Do It” campaign, featuring Kaepernick with the text, "Believe in something. Even if it means sacrificing everything." Nike also partnered with Ben & Jerry’s back in May on a collaborative Chunky Dunky sneaker that took its design cues from Ben & Jerry’s packaging. The “chunky” rendition of the SB Dunk Low, named after the Chunky Monkey ice cream flavor, features hues and textures that mimic Ben & Jerry's signature packaging, with blue skies, cow prints, tie-dye, green pastures, and even a melting Nike swoosh. Given the hypebeast, sneakerhead culture of collectors, the shoe sold out immediately.
Another significant food licensing deal based on content aimed at doing good is the newly announced Sesame Street-General Mills line of breakfast cereals, which will hit supermarket shelves in January 2021. According to a press release from General Mills, the collaboration “supports growing bodies with many essential nutrients and engages curious young minds with activities and stories.” To create meaningful yet playful learning opportunities at breakfast, the cereal will come in two varieties: a berry flavor with number-shaped pieces and a cinnamon flavor with letter-shaped pieces, and the back of each box will open like a book, featuring dual-language (English and Spanish) short stories with Elmo and friends. Story themes include “Elmo Visits the Farm,” “Elmo’s Day at School,” “On the Go with Elmo,” and others.
For more than 50 years, ”Sesame Street,” produced by the nonprofit organization Sesame Workshop, has delivered not only school-readiness lessons promoting literacy and numeracy, but also age-appropriate guidance on healthy habits, self-expression and self-regulation, empathy, friendship, and much more.
A Collaboration From Hell
Celebrity-branded hard seltzer from chef Gordon Ramsay is giving nothing to charity, but likely will do very well given Ramsay’s fame and the popularity of the beverage with Gen Z.
As Ramsay states In a press release, "Even I enjoy a hard seltzer after a long day, so I decided to toss the devil horns Into the ring and heat things up!" This "f***ing sinsational" drink, according to the product's website, will come in four different, and, of course, "unapologetically bold" flavors inspired by the menus of Ramsay’s Hell's Kitchen restaurant in Las Vegas: Berry Inferno, a peach/blueberry/raspberry blend; Knicker Twist, a mix of pineapple, passionfruit, and orange; Mean Green, with kiwi, lime, pineapple, and mint; and That's Forked, with key lime, vanilla, and graham flavors.
The seltzers, developed by Brew Pipeline and Global Brews of London, have an ABV of 5.5% and. will be sold In 12-can variety packs priced about $16 per pack.
Steven Ekstract is Managing Director of Global Licensing Advisors, a consultancy that provides companies with insight and strategic direction to succeed in the $300 billion a year licensing business. Ekstract is the founder and former Publisher of License Global magazine, the leading information source for the consumer licensing business. He can be reached at Steven@globallicensingadvisors.com.
TikTok Take
Walmart takes a leap into e-commerce livestreaming with TikTok: The American retail giant and hopeful lead investor in a planned U.S. TikTok spin-off is hosting a “Holiday Shop-Along Spectacular” today (December 18) through its account on the video platform, which will include a test run of TikTok’s new “shoppable product” feature that will allow users to buy from Walmart without leaving the app. The livestream-style video will be led by popular TikToker Michael Le with creators such as Devan Anderson, Taylor Hage, and Zahra Hasimee, showing off their fashion picks from Walmart. Read more on TechCrunch.
Reddit is buying TikTok rival Dubsmash: In a bid to get in on the short-video craze, Reddit has made a deal for one of the few remaining independent players in the space, and it’s billing it as a win for diversity: “Just as Reddit is a place for content you won’t see anywhere else on the internet, Dubsmash provides a welcoming platform for creators and users who are under-represented in social media,” noting that 25% of all Black teens in the U.S. are on Dubsmash, and with females represent 70% of users. Still, the move comes after more reports of racism on Reddit earlier this year.
Second appeal is heard in U.S. federal court against order blocking Trump administration’s TikTok ban: On December 14, three appeals court judges on the D.C. Circuit questioned lawyers for TikTok and the government. Reuters reports: “Two of the judges expressed skepticism with a central government argument about whether a prior case is applicable.” Another federal appeals court in Philadelphia will hold arguments on February 11, 2021.
The U.S. Federal Trade Commission seeks data-use information: TikTok, Facebook, Twitter, and other video streaming companies have 45 days to respond with information on their use of personal information, algorithms, and targeted advertisement. Reuters notes that the responses will likely be used to generate policy or recommend legislation.
TikTok on the bigger small screens: Samsung and TikTok have partnered to bring the Bytedance-owned app to all Samsung Smart TV models produced between 2018 and 2020 for the European market. TikTok is also now compatible with Microsoft’s Surface Duo mobile phone, with an “enhanced” app feature that adapts to the dual screen design, allowing users to watch the ‘For You’ page on one screen while browsing hashtags and searching for videos on the other.
Global News
While Alibaba’s push into Southeast Asia has been well documented, a series of failed deals, drama, and bad luck have seen the Chinese tech giant largely shut out of the Indian market, where now Walmart and Amazon vie against each other. The Information
Can Facebook turn Whatsapp into an international equivalent of WeChat for brands? Luxury brands are increasingly turning to the chat app to connect with top customers and offer personalized attention. Vogue Business
Facebook is also developing a tool to allow celebrities, influencers, and creators to livestream and receive virtual gifts from fans during broadcasts, a practice that is hugely popular in China as well. Bloomberg
In another content-boosting move, Facebook publicly launched a new app for making collaborative music videos that combines aspects of short video and social media. Techcrunch
An argument and recommendations to promote a sustainable “creator middle class” on content platforms, where currently a handful of star contributors take up the lion’s share of revenues. Harvard Business Review
Twitter is giving up on Periscope, the livestreaming app it bought back in 2015, with operations expected to cease in March 2021. The Verge
But Twitter (and others) are investing heavily into the next big thing: a wave of “audio-social” apps. Wired
Apple looks to have shelved a show being made by Apple TV based on the story of Gawker Media’s rise and fall. New York Times
FaZe Clan COO Jaci Hays talks about the role of esports in Hollywood and connections between gaming and content. The Hollywood Reporter
Gaming has already scored a major hit in the music industry, with Riot Games’ creation of its League of Legends virtual group K/DA. Genius
From celebrity partnerships to cross-category experiments, some key ingredients for successful brand collaborations in the beauty sector. Beauty Matter