Life Goes On (in the Cloud): How Brands are Evolving
Plus: China's streaming surge, an Alexander Wang smartphone, and Report Corner.
Despite reports that China reported no new local coronavirus infections on Wednesday of this week, potentially representing a turning point in the global fight against the pandemic, certain brand strategies developed in response to coronavirus quarantines are here to stay — for the near-term at least.
Life, in many ways, is now being lived in the cloud — whether that means working from home or virtually hanging out with friends via messaging apps — and brands in China have become accustomed to this new normal at breakneck speed. Rather than cancelling high-profile events, companies have moved them to the cloud, giving brands the seamless ability to debut and sell new products in real-time to millions of housebound consumers.
These new models of blended content and commerce will not be limited to China. Look for the same brands experimenting with cloud commerce to apply their experiences in China to traditional markets in the West as the spread of the coronavirus keeps potential customers indoors.
Companies mentioned: Alexander Wang, Bilibili, Converse, Diane Von Furstenberg, Emporio Armani, Huawei, iQiyi, Miss Sixty, Net-a-Porter, Oppo, Tencent Video, Tmall, Vivo, Xiaomi
Trending on Tmall: Gearing Up for Shanghai Fashion Week
Tmall has released its schedule for the “cloud” version of Shanghai Fashion Week that it will host for the Autumn/Winter 2020 collections, with more than 150 domestic and international designers participating in the first major roster of runway shows to be online-only.
The live version of Shanghai Fashion Week was originally postponed in light of coronavirus restrictions before Tmall stepped in to put its considerable resources behind a livestreamed event, which will run from March 24-30 and include global names such as Diane Von Furstenberg, Miss Sixty, Converse, and Net-a-Porter.
Tmall’s Shanghai Fashion Week will operate on a “See Now, Buy Now” e-commerce model, allowing viewers to purchase items from the shows and pre-order new styles in real-time via mobile phone.
The new format will allow the runway shows to reach all 800 million active monthly active users across Alibaba’s e-commerce platforms. In addition to livestreaming from the catwalks, Tmall will offer livestreaming sales slots, short video, DingTalk and enhanced virtual store experiences.
Brands will have the opportunity to personalize their Tmall flagship stores with augmented reality apps and multimedia content and collaborate with other brands (especially in the beauty sector) with support from the platform.
It’s part of a broader push to “supercharge” the presence of luxury brands on the platform, often through engaging content offerings. “This year, we expect to see more luxury brands strategize around their Tmall flagships as a hub for brand-building and consumer engagement,” said Mike Hu, head of Tmall Fashion, Luxury and FMCG.
Video Streaming Results Wrap
Several of China’s major video platforms recently announced their 2019 annual results, offering insights into the sector’s development and prospects. Though video streaming continued to be an unprofitable business last year, all platforms have seen a recent surge in viewership as a result of the coronavirus lockdowns that started in late January, and are expected to be at least partially sustained throughout the year.
Tencent Video reported a slowdown in the growth of both revenue and subscribers, which were attributed to delays in broadcasting key content. Subscriptions rose to 106 million from 89 million at the end of 2018, an increase of 19.1%. Tencent sounded a confident tone regarding expansion into short-form video, noting that the company also overcame a “late start” in long-form video to become a market leader.
IQiyi maintained a slim lead over Tencent in its subscribers, which at 107 million represented a 22.3% increase over 2019’s figure, but that still represents a significant ramping down from the heady pace seen in the previous year, when subscribers grew by 72%. The platforms revenues are getting closer to keeping up with its heavy spending on content — revenues were up 7% year-on-year in the fourth quarter, while content costs fell by 13% in the same period, with a substantially smaller loss for the period (RMB 2.5 billion vs. 3.5 billion in Q3 2018). Controlling spending while boosting subscriber drives through brand partnerships and enhanced offerings for potential advertisers are key areas for 2020.
Although a much smaller player, Bilibili has been most successful in creating a sense of community around its platform, which originated in the ACG (anime, comics and games) subculture but has gained broader appeal among the Gen Z and millennial audiences. Bilibili reported RMB $288.4 million in fourth-quarter revenues, representing a 74% year-on-year increase, an average of 130.3 million active monthly users (up 41%) and 8.8 million average monthly paid members, double the number from Q4 2019. Quarterly net losses more than doubled, however, from RMB 190.8 million ($27.07 million) to RMB 387.2 million ($55.6 million), as Bilibili increased its investment in marketing and high-quality content such as its New Year’s Eve concert and an exclusive streaming agreement for the League of Legends World Championship in China. For the full year, adjusted net losses were RMB 1.08 billion ($155.3 million), up from RMB 377.4 million in 2018.
*Alibaba does not report subscriber data or separate financial results for its video subsidiary Youku, another major video streaming service.
Smartphone Makers Aim for the High-End
Faced with price wars in the domestic market, Chinese smartphone makers are under pressure to target the upper end of the market with feature-packed phones, promoting them through content and collaborations that can raise their profiles at home as they prepare for global expansion.
Oppo’s new flagship 5G Find X2 series starts at RMB 5,499 ($784), making it the company’s most expensive release and signalling an intent to compete with Huawei, which currently dominates the burgeoning market for high-end smartphones in China. Following in Xiaomi’s footsteps, Oppo launched the Find X2 on March 6 via livestreaming, since nationwide restrictions on travel and group events remained in place.
Oppo also partnered with Bilibili to market the launch to young consumers through an animated press conference for the Find X2, which culminated in the release of an animated suspense film on Bilibili titled “Find Me” (处处找) starring the video platform’s “Little TV” mascot as a character, along with several popular creators who filmed unboxing videos for the Find X2. Viewers who watched the content and posted comments during the livestream were entered into a giveaway for a new phone, encouraging further interaction.
Vivo has collaborated with Alexander Wang on a co-branded limited edition X30 smartphone featuring a fully mirrored case design and special user interface, starting at RMB 3598 ($510). The American designer had previously partnered with Vivo on a series of phone accessories and holiday gift bag released for the Lunar New Year in January. Vivo also emphasized this fashion-forward approach as the title sponsor of iQiyi’s streetwear trend reality show “Fourtry” (潮流合伙人 - previously on CCI).
Brand Film Pick: Armani Taps Into “Mulan” Mania in Campaign with Star Liu Yifei
Last June, Emporio Armani announced “Mulan” star Liu Yifei as its ambassador for the greater China and Asia Pacific region, one of several luxury fashion endorsements that the actress has acquired over the past year (others include Adidas, Chaumet and Tissot). While Liu has long been a favorite on the red carpet and in fashion magazines, she was until recently more associated with beauty brands such as Dior Prestige, Garnier, and Pantene.
Emporio Armani launched its partnership with Liu last summer with a fast-paced short video shot by photographer Lachlan Bailey in Milan for its Autumn/Winter 2019 collection. The brand’s latest series of short videos promotes both its eyewear and clothing lines. In one clip, Liu is styled as an urban professional against highrises at night. Another sees her in evening wear against the same backdrop of glass and neon, offering an aspirational view of contemporary life for Emporio Armani’s target demographic.
Liu’s recent deals have not been without controversy, however, as she has been fairly outspoken in her support for the Chinese government’s stance towards Hong Kong’s democracy movement, with resulting calls from outside China to boycott brands associated with her, along with the “Mulan” film. But as the Hong Kong protests have receded from the spotlight, anticipation for the indefinitely delayed “Mulan” remains, and luxury and fashion brands associated with Liu can continue to leverage that to connect with consumers.
Report Corner
Most consumers are significantly increasing their focus on leisure spending, according to Publicis Groupe, and paying more attention to activities outside the home, among other recent trends.
Media 360 compiles research from iResearch, GroupM and other sources to analyze Chinese media consumption and usage habits during the coronavirus outbreak, with entertainment and lifestyle media seeing some of the biggest gains over the long term.
China spent 20% more time online while under coronavirus-related restrictions, and its experiences can offer guidance to how marketers globally can respond and communicate with consumers, according to this report by Gartner.
News in English
How did Douyin establish itself as the short video app of choice for upwardly mobile, urban consumers and the brands that love them? A report on global counterpart TikTok’s content moderation practices — censoring users deemed too ugly or poor — may offer some clues. The Intercept
Workplace dramas on TV and video streaming offer significant opportunities for luxury brands, and the latest crop have drawn high ratings but less enthusiastic word-of-mouth. GroupM
Chinese users spent an average of 5 hours a day on their mobile phones last month, a 30% year-on-year increase. Douyin, in particular, saw a huge jump in activity, with the average time per user at 7.5 hours a week. Mobile Marketer
E-commerce platform Pinduoduo has joined the productivity fray, introducing a new workplace collaboration tool called Knock. KrAsia
Wuhan’s famed cherry blossom season is in the “cloud” this year, thanks to efforts by a range of digital platforms including Alibaba, Bilibili, and Pinduoduo to offer virtual tours of the local attraction. KrAsia
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