Labor Day Shoppers Flock to the Cloud
Plus: Virtual bottle service, Didi's music video, and a burgeoning second-hand sales boom.
China’s five-day Labor Day holiday, which began on May 1, has been the first major national celebration since the government began easing most coronavirus-related restrictions, and has been seen as a major test for the potential recovery of consumption in retail, travel, and tourism-related sectors.
Even as more than 50 million trips were made during the first two days of the holiday, the final tally is expected to be less than half of last year’s, with many more Chinese opting to stay home than in previous years. As a result, digital campaigns continue to hold crucial importance for brands seeking to reach consumers.
The high-end e-commerce platform Secoo (NASDAQ: SECO) has jumped on the “cloud” fashion show trend through its partnership with China Fashion Week to present the Autumn/Winter 2020 collections under the theme of “Rebuild. Innovate. 2020.” Launched in 1997, China Fashion Week, which is held twice a year in Beijing, is the country’s oldest and most established fashion week. The spring edition was originally scheduled for late March, but was postponed in early February.
Secoo’s weeklong virtual event runs from May 1-7, with more than 230 local and international designers presenting an assortment of livestreamed runway shows, creative presentations, and sales sessions which will include “see now, buy now” functionality. Some of the content will be shared on other platforms such as Weibo, WeChat, and Youtube.
Secoo has embraced livestreaming to help cope with the fallout of the coronavirus epidemic, opening its channel to retail partners while offering tech and operations support. In March, Secoo partnered with the Shanghai-based trade show Onetimeshow to livestream the event, which featured more than 100 labels. For China Fashion Week, designers were able to stage shows in Beijing, but without audiences present.
The platform saw rapid growth in 2019, reporting a 71.3% increase in gross merchandise volume, a 75.6% increase in orders, and a 32% increase in registered users from the previous year, according to its recently released annual report. Revenues were up 27.5% to RMB 6.87 billion ($987 million), while net income rose 3.9% to RMB 161.7 million ($23.2 million).
Shanghai launched an expansive “5.5” shopping festival to coincide with the holiday. Though aimed primarily at boosting local firms, international brands were also featured prominently in keeping with Shanghai’s status as a cosmopolitan city.
The event had a major online component, with an emphasis on e-commerce livestreaming. A total of 55 Shanghai Radio hosts participated in a series of nightly five-hour-long shows, broadcast via Douyin from April 30 to May 5, that focused on sharing brand stories.
Local officials also engaged in livestreaming to promote good, with one from Shanghai’s Minhang District gaining a measure of notoriety after commenting on how much younger his wife looked after using a facial product that he was hawking.
The video streaming platform Bilibili released a short video to promote the shopping festival starring a number of its popular creators and influencers. Overseas brands such as Vero Moda and Corona were highlighted alongside trendy local labels including C-beauty brand Perfect Diary and tea chain Lele Cha.
Coming next week: the CCI Guide to Streaming Platforms in China, highlighting key players in China’s booming streaming video market, platform strengths and weaknesses, and best practices for 2020.
Interested in getting your copy? Drop us a line ahead of time or keep an eye out for our dedicated newsletter next week!
Mentioned in today’s newsletter: Budweiser, Carlsberg, Corona, Didi Chuxing, Heytea, JD.com, Lele Cha, Nayuki Tea, Perfect Diary, Pernod Ricard, Rémy Martin, Secoo, Vero Moda.
Drink to That: Beverage Brands From Tea to Wine Turn to Livestreaming
When it comes to livestreaming in China, it seems that just about any brand can benefit from using the format — whether to forge and maintain connections with customers or to emphasize sales. Brands that were dependent upon consumption outside of the home for much of their revenues have found new ways of getting people to engage with them at home.
JD.com, China’s second-largest e-commerce platform, launched a program to connect alcohol brands with online entertainment through a partnership with Taihe Music Group, launching a series of live “cloud clubbing” shows featuring musicians and DJs, and with one-click purchasing enabled.
Budweiser, Rémy Martin, Carlsberg and Pernod Ricard participated and saw promising results on the days of the shows they sponsored.
The platform has also worked with wineries to join the party while promoting education to Chinese consumers. But it’s not just alcohol brands that have looked to get in on the action:
The venture-backed chain Heytea used livestreaming to promote the opening of a new concept store in Guangzhou, inviting consumers to “drink and stroll” in the cloud and offering coupons along with new drinks and accessories such as mugs, keychains, and tote bags.
Competitor Naixue Tea (aka Nayuki Tea) has invested in some of the big names in e-commerce livestreaming with top seller Viya on Taobao Live and entrepreneur Luo Yonghao on Douyin, who sold a combined RMB 13 million ($1.84 million) worth of vouchers. Read more in Chinese from Media 360.
Presented by ASAP+: How Global Luxury Can Reach Homebound Chinese Shoppers
Now almost four months into the Covid-19 pandemic, industries across global markets face the reality that the “new normal” remains uncertain. For the fashion sector, halted orders and supply chain disruptions have resulted in job losses, bankruptcies, and the closure of factories, brands, and high street chains.
With the threat of a second outbreak looming overhead, consumers are prioritizing their health and wellbeing, with industry estimates circulating that personal luxury will take a 20-25% hit this year. Moreover, with limited room for consumer travel — whether to a local store or on a weekend shopping trip — brands must find new ways to reach homebound shoppers.
“Reaching global Chinese shoppers presents an ongoing challenge for global brands. Under the current COVID-19 climate, brands need to adapt to reach the shoppers at home who would otherwise be overseas,” says Alpha Xu, founder of China digital marketing agency ASAP+.
Read more on Jing Daily
Brand Film Pick: Didi’s Labor Day Tribute to Essential Workers
Ride-sharing companies are not known to be particularly worker-friendly, and many have faced public backlash at some point over their practices. The Chinese market leader Didi Chuxing has sought to use content to rehabilitate its image, using comedy shows, reality TV, and popular dramas, even going so far as to establish a media company late last year.
To mark China’s Labor Day holiday on May 1, Didi produced a music video paying tribute to the essential workers who have been on the job throughout the coronavirus epidemic in the country. Tapping into the huge success of the current season of the idol competition show “Youth With You” (青春有你), Didi worked with Fu Ruqiao, a leading contestant on the show, to use a song she recently debuted that became widely popular.
The video shows clips of actual workers over the course of a day in Beijing, from a breakfast cook before sunrise to a man making deliveries by bicycle late at night. Each person’s name, profession and length of service is highlighted, including a Didi driver who has been operating taxis for 22 years. The shots of face masks, temperature checks, and sanitation measures highlight China’s “new normal” in the post-coronavirus recovery period, as the song’s lyrics make reference to the virtues of kindness and persistence.
The film’s closing text and images promote the latest iteration of Didi’s “One Square Meter of Warmth” campaign, encouraging retail merchants to offer space for outdoor workers to take a break and enjoy free drinks, snacks, and mobile device charging. Late last year Didi launched a program of similar “warming stations” for drivers in Northeast China.
Viewer feedback shows that the campaign has helped Didi’s image somewhat, although critics have noted that the tone of the video is overly romanticized, and that the company continues to exploit its drivers.
News in English
Livestreaming via Douyin is still in its infancy, and brands on the platform may be better off relying on well-known influencers and celebrities to sell products instead of using their own channels. WalktheChat
The audience for livestreaming in China reached 560 million in March, representing 62% of all internet users, according to a report from the China Internet Network Information Center. That’s up 41% from the end of 2018. Xinhua
Tesla tapped top livestreamer Viya to host an hour-long broadcast on Taobao to show off its vehicles’ features, with four million viewers tuning in — the latest in a series of novel ventures by automakers to connect with the Chinese market. Bloomberg
A look at Weibo’s social e-commerce initiatives, which offer brands improved channels for sales and may help the Twitter-like platform to offset declines in traditional advertising revenues. Business of Fashion
While global brands are relying on Chinese consumption to offset lost revenues in other markets, shoppers there say they are being more cautious in their spending for the foreseeable future. WSJ
Priorities are also shifting for consumers, and that will affect different sectors in varying ways. SCMP
Less shopping, more selling: Young Chinese are giving secondhand sales platforms such as Alibaba’s Idle Fish a major boost at they seek to bring in cash by offloading their extra stuff. Reuters
Even as coronavirus-related restrictions eased somewhat in March, mobile internet traffic saw significant increases, rising nearly 40% year-on-year. KrAsia
American beauty brands should look to the digital strategies deployed in China to maintain ties with consumers during the coronavirus crisis. Vogue Business
We’ve Got China Covered
China Film Insider: Maoyan Entertainment Explores New Ways of Doing Film Promotion
Jing Daily: How Valentino Marketed China’s Latest It Bag
Jing Travel: Revenue Strategies: Five Takeaways from CultureConnect Webinar
Thank you for reading! Ahead of our next newsletter on Thursday, we’d appreciate you following CCI on Linkedin and helping spread the word!