Six Key Trends Shaping China’s Content and Commerce in 2021
Plus: Luxury mahjong without cultural appropriation, Douyin’s 2020 trend report, and Burberry’s Spring Festival awakening.
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Coming off the heels of a tumultuous 2020, the new year has so far shown few signs of letting up, with political upheaval in the United States and an ongoing coronavirus pandemic that shows no indication of ending anytime soon. With that in mind, here are six key trends that CCI expects to shape China’s content and commerce in the year ahead.
1. Covid Ups and Downs Will Continue to Shake Up Consumption
The emergence of the novel coronavirus known as SARS-CoV-2 a year ago in China altered the daily lives of hundreds of millions, literally overnight, leading to long-term shifts in what consumers buy and how they do it. The acceleration of online retail, e-commerce livestreaming, community group-buying, revenge spending, prioritizing of health and fitness, and shifts between the homebody lifestyle and cravings for new experiences were among the leading trends that came out of China’s coronavirus experience.
And now, as the country is facing a reemergence of the virus in a number of regions, another year’s Spring Festival holiday season may be canceled for many, sharply curtailing spending and travel-related consumption. Whether China can roll out an effective vaccine in time to stave off widespread shutdowns of the type seen in early 2020 seems unlikely at this point, and millions are likely to return to “cloud living” to weather the difficult days ahead.
2. A New Era of Regulation Is Coming for Content Commerce
The rapid rise of e-commerce livestreaming in 2020 was a boon for brands and sellers, but has been met by the launch of regulatory responses intended to curb fraudulent practices and develop a more professionalized industry. From the central-level administrations to local authorities, a slew of rules, guidelines, and draft regulations were issued in 2020, with more comprehensive and unified efforts likely to take shape over the coming year.
Likewise, Beijing is aiming to rein in the monopolistic excesses of the big players in the market, with draft anti-monopoly guidelines for the “platform economy” issued in November and awaiting finalization. In the meantime, authorities have launched separate antitrust investigations against Alibaba and Vipshop, levied fines against firms over pricing and acquisitions, and sent clear signals that “all internet platforms will be treated equally by regulators regardless of their size.”
This could presage a fundamental rethinking of how China’s major tech firms operate after years of being largely free to do business as they please. Beijing has been quick to rein in high-flying conglomerates in the past, essentially crippling them or taking them over, but today’s internet leaders are so intertwined with the consumer economy (and its necessary but tenuous recovery) that an overly-heavy hand could backfire.
3. Luxury Invests in Storytelling to Connect With Chinese Consumers
China was the one bright spot for premium brands in an otherwise dismal year, with luxury consumption in the Chinese market projected to have risen by a staggering 48%, largely as a result of global travel restrictions that kept the country’s big-spending tourist-shoppers at home for most of the year. With hardly any Chinese consumers coming to them (at boutiques in Paris, Milan, or New York), luxury brands were forced to meet Chinese consumers where they are. With growth in Chinese luxury consumption coming largely from Gen Z and millennials, that means emphasizing online connections and creating physical retail experiences that can stand out from the crowd via compelling content. Expect to see more branded films, collaborations with Chinese artists, musicians, celebrities, and cultural institutions, and sponsorships of TV and video streaming programs from the luxury sector.
4. Content Commerce Firms Go Private or Go Home
While U.S.-listed Chinese e-commerce firms and content platforms saw extraordinary stock market gains over the course of 2020, the combination of Beijing’s promotion of “homecomings” for Chinese companies plus increased regulatory scrutiny and the threat of U.S. delistings in the means that more companies are taking the initiative to go private (such as luxury e-tailer Secoo), seek out secondary listings in Hong Kong (Bilibili), or skip the U.S. capital markets altogether and go straight to IPOs in Hong Kong and/or Shanghai (Kuaishou).
5. Brand Collaborations Get More Creative
Over the course of 2020, brand collaborations in China went from a nice-to-have to a must-have marketing strategy, with dozens (if not hundreds) of domestic and international brands rushing into partnerships aimed at driving sales during a difficult, pandemic-hit year. The boom of activity on the collaboration front has fueled competition to stand out with increasing creativity, with a greater emphasis on partnerships that leverage popular IP, art, and culture to develop entertaining products and experiences that appeal to young Chinese consumers.
6. Gaming’s Influence Transforms Content and Commerce
From the gamification of e-commerce to luxury brand sponsorships of major esports tournaments, gaming has gone legitimately mainstream and offers seemingly limitless marketing opportunities for brands.
China represents the world’s largest gaming market with more than 540 million players in the first half of 2020, and the industry generated $10.3 billion in revenues in the third quarter of the year, largely from mobile games. Premium brands such as Louis Vuitton, Burberry, Tesla, and MAC Cosmetics have taken the lead on investing resources into gaming partnerships, and this trend will accelerate in 2021.
As Darang Candra, director of Southeast Asia for gaming research firm Niko Partners, recently told CCI:
Both gaming and luxury fashion intersect in serving the lifestyle needs of the middle- and upper-class segments of the population. Both can serve as a status symbol of sorts and provide happiness to the users. Furthermore, gaming, especially console and PC gaming, mostly target the well-off segment of the population which are also more likely to buy luxury fashion products.
- by Sky Canaves
Mentioned in today’s newsletter: Bilibili, Brunello Cuccinelli, Burberry, Bytedance, Dior, Hermès, iQiyi, Louis Vuitton, MAC Cosmetics, Pinduoduo, Pokémon, Porsche, Prada, Rimowa, Tencent Video, Tesla, Tiffany & Co.
Luxury Mahjong Without Cultural Appropriation
by Avery Booker
Recently, controversy broke out in the United States after The Mahjong Line, a Dallas-based company started by three white women, launched with game sets that eschewed the traditional Chinese tiles for images such as bags of flour, bubbles, and kites. Marketing copy on the company’s website noted that the “artwork of the traditional tiles, while beautiful, was all the same” and that the “venerable game needed a respectful refresh,” leading to a swift backlash and accusations of cultural appropriation.
The Mahjong Line quickly put out an apology and updated its website with a statement saying while the company’s intent “is to inspire and engage with a new generation of American mahjong players, we recognize our failure to pay proper homage to the game's Chinese heritage.” Despite the apology and online criticism, the company’s “Americanized” mahjong sets remain up for sale.
The case of The Mahjong Line and the avalanche of bad press caused by its failure to clearly acknowledge the history and heritage of mahjong shows how, without the right context and intention, attempts at cultural adaptations can turn into appropriation. As sociologist Nancy Wang Yuen told CNN, it’s one thing to take inspiration from another culture, but “if there's an air of superiority over the original content, then that becomes appropriation."
On the other end of the cultural spectrum is another updated mahjong set, this time a collaboration between American artist Daniel Arsham and the hit iQiyi streetwear-oriented show “Fourtry” (previously on CCI). Last month, Arsham — best known for his architectural and sculptural designs — created a series of artworks in partnership with iQiyi that included an art installation at Fourtry Space, the show’s experiential retail store in Chengdu. A seasoned collaborator, Arsham has previously partnered on projects with Dior, Pokémon, and Porsche, among others.
The installation followed the style of Arsham’s “Fictional Archeology” series, which conceptualizes how familiar objects will look 1,000 years in the future, and also included a China limited edition of "Eroded Mahjong" and related products, including a monogram rug and a mahjong keychain.
The Arsham x Fourtry collaboration attracted positive press in China, with China Daily noting that the partnership with an international artist of Arsham’s caliber “not only brought the world’s most pioneering and cutting-edge visual art to ‘Fourtry’ season 2, but also reflected the commercial value of [Fourtry]’s own brand.”
But more importantly, by showing respect for its source material — i.e., mahjong and traditional Chinese culture — while merging it with contemporary art, the collaboration sidestepped any criticism of cultural appropriation. In doing so, it joined previous examples of top-of-the-line luxury mahjong collections that speak to Chinese audiences such as those produced by Prada ($3,900), Brunello Cuccinelli ($9,867), Tiffany & Co. ($15,000), and Hermès ($40,400).
Read the full story on Content Commerce Insider
Four Key Takeaways From Douyin’s 2020 Trend Report
The offline world may have come to a standstill in 2020, but online activity intensified and flourished in new directions as lockdowns extended into months. And Douyin, China’s version of short-video platform TikTok, offers living proof.
According to the 2020 report released on January 5 by parent company ByteDance, Douyin’s daily active user base now exceeds 600 million and its average daily video search volume reaches upwards of 400 million.
These swelling figures reflect Douyin’s effective marketing strategies and ability to broaden its appeal across demographics and geographies. Throughout 2020, the platform continued aggressive promotions and fine-tuned its capabilities in livestreaming, social networking, e-commerce, and search.
Recently, CCI sister publication Jing Culture & Commerce highlighted four key takeaways from the report that offer insights into the ways audiences used the platform in the past year and the role it will play in 2021:
Conversations shaped by the pandemic
Douyin might be a platform known for humorous, light-hearted content — as embodied by its slogan “Record Beautiful Life” — but in 2020 it was also a place of solace and community for socially distanced audiences experiencing hardship.
In 2020, Douyin users uploaded 2.2 million videos using the keyword “doubt” (怀疑), 7.61 million videos on “giving up” (放弃), and 14.91 million videos that opined “too difficult” (太难了). It wasn’t all negative: Douyin also saw 69.13 million comments related to “persistence” (坚持), 130 million that implored “believe” (相信), and 1.8 billion that offered encouragement (加油).
Read the full story on Jing Culture & Commerce
Brand Film Pick: Burberry’s Spring Festival Awakening
In a redemption of sorts from a Lunar New Year collection that was met with jeers for its cheap-looking tote bags, Burberry has released a brand film for the Chinese Lunar New Year starring celebrity ambassador Zhou Dongyu and actor Song Weilong, and helmed by Derek Tsang, who directed Zhou in her award-winning turn in 2019’s youth drama “Better Days” (少年的你).
“A New Awakening” (心春由你) celebrates the concept of spring as a time of renewal and emergence, focusing heavily on the wonders of the natural world. The Burberry brand placement is subtle and quietly integrated into the outdoorsy environment of the film, echoing a recent short film campaign that featured three Burberry-clad Chinese indie drummers playing in forest settings.
The six-minute film was teased by a shorter trailer and released in movie theaters in Beijing, Shanghai, Hangzhou, Chengdu, and Shenzhen from January 14 to 17, with online distribution exclusively via Tencent Video. The quality of the production, its stars, and uplifting message have drawn an overwhelming positive response on social media, with the campaign’s Weibo hashtag drawing 170 million views so far and the trailer racking up 4.4 million views.
News From China: The Virtual and Interactive Future of Chinese Video Platforms
The future of Chinese entertainment is looking increasingly like gaming, populated by virtual characters and with strong interaction from audiences. In December, youth-oriented video platform Bilibili presented the 11th edition of Bilibili Macro Link (BML) concert with a lineup consisting entirely of virtual stars. A total of 30 Chinese and Japanese performers appeared as holograms, and the event drew big-name sponsorships from the likes of Alibaba’s Tmall and Wahaha, China’s biggest beverage producer.
On January 16, Bilibili followed up with the release of “Vox Ultima” (创世之音). a musical fantasy livestream starring a dozen popular virtual idols from China and Japan. Produced in partnership with a subsidiary of Shanghai Media Group, the two-hour production went beyond the typical gala-style stage show to emphasize storytelling through the tale of a demon-slaying warrior who creates a new world with the help of twelve goddesses (portrayed by the virtual idols), each representing a concept such as “light,” time travel,” and “space.”
Video platform iQiyi presented its eighth annual “Shout Out for Love Gala 2021” (为爱尖叫晚会) on January 15 as a heavily interactive affair that utilized multiple livestreams and invited viewers to weigh in on the order of performances, the performers, encores, and the awarding of prizes by voting on the iQiyi app. The innovative format was likened to a “blind box” of entertainment for its ability to keep viewers on their toes as they anticipated the next surprising performance.
With China’s big gala show season coming up for the Spring Festival, we can expect to see more creative efforts to keep audiences engaged with offerings from major networks and video platforms, especially since it looks like more citizens will be stuck at home again for the holiday this year.
News in English
Copycat, competitor, inspiration, or something else? How Silicon Valley’s views on China shift and develop. Macro Polo
It’s official: The Chinese economy grew by 2.3% in 2020, a sharp contrast from the sharp contractions seen in many other developed nations as a result of the coronavirus pandemic. New York Times
And digital ad revenue in China rose 23% in 2020 as brands increased spending on short video, e-commerce, and social media. The Drum
China’s latest spate of Covid-19 lockdowns is dampening the luxury industry’s hopes for a prosperous Lunar New Year holiday season. WWD
Pinduoduo is out as the main sponsor of CCTV’s Spring Festival gala following allegations of harsh working conditions, and Douyin is in to grab viewer attention by giving away millions in virtual “red envelopes” during the broadcast. Dao Insights
Vipshop is facing an antitrust investigation as Chinese regulators widen their crackdown on e-commerce business practices. Caixin
PayPal became the first foreign company to have full ownership of a Chinese payments platform after it completed an acquisition of GoPay, which it had previously had a 70% stake in. Technode
Gaming characters have the potential to be the next big thing in influencer marketing. China Marketing Insights
A look at young Chinese tastes and trends for 2021, from entertainment to fashion to food and beverage. Radii
Premium outerwear brand Canada Goose has released a 13-piece capsule collection designed by Angel Chen. WWD
In a reversal of sorts, the Chinese hit drama “Nothing But Thirty” is set to get a South Korean remake. Jayne Stars
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Jing Culture & Commerce: What Should Museums Consider in a Digital Transformation?