3 Experts’ Takes on 2019’s CNY Campaign Trends

To say that Chinese New Year festivities have “gone global” isn’t an exaggeration.

2019 marks the democratization of CNY celebrations, and a lot of brands not only activated their marketing campaigns early this year by combining them with Christmas promotions as a two-month-long global celebration, but they also plastered CNY billboards and promotional campaigns all over airports and travel retail stores around the world.

But more attempts at marketing this traditional holiday could also mean more misfires. Brands like Burberry and Bvlgari are now being taken to task by Chinese netizens who are highly critical of their CNY campaigns — a stark difference from brands that used the holiday to do well financially while elevating their brand images within this important group of consumers. Noticing these opportunities and challenges, Jing Daily chatted with three industry experts to find out what this year’s biggest trends are and why betting on a zodiac animal for success no longer works (and could even be a dangerous move).

The way people celebrate CNY is changing

Chinese New Year celebrations used to be about watching the annual Spring Festival Gala on TV (a Super Bowl-like event in China), eating dumplings, and setting off fireworks when the clock struck midnight. Chenyin Pan, the director of the digital marketing agency Fireworks in China — and a native Chinese — argued that the post-’90s and ’80s generation does not celebrate Chinese New Year the way earlier generations did. An extravagant, family-style celebration is not a must anymore, and many prefer a small gathering, a “staycation,” or a trip elsewhere. Brands that focus on the old traditions may have a hard time resonating with consumers — just look at Burberry’s awkward family portrait CNY campaign.

“Fewer people who work in first- or second-tier cities choose to travel back to their hometown in the countryside to celebrate,” said Pan. “And brands have to realize the way people celebrate the New Year is changing, thus changing the message they are communicating with consumers.”

Travel retail is prospering

Travel seemed to be an essential theme during this year’s CNY. According to online travel agency Ctrip, Chinese tourists visited nearly 1,296 cities in China and abroad during the 2019 holiday. The number of destination countries grew from 82 in 2018 to 97 this year, an 18 percent increase. International travelers spent approximately RMB 7,000 ($1,034) per trip during CNY, which was twice the amount of domestic travelers.

This growing demand from outbound Chinese travelers is motivating global brands’ regional offices to work as a team and consider how to best present CNY abroad, what channels to pitch to Chinese travelers with, and what kind of campaign will best benefit global sales. Tanguy Laurent, the U.S. managing partner of Creative Capital, has seen brands make these types of changes. “This massive wave brings change to the traditional approach of seasonal marketing with pre-campaigns and cross-market activations,” said Laurent. “Marketing teams should partner with local Chinese teams to generate traffic to their U.S. touchpoints.”

Less literal interpretations of the zodiac

It seems that brands are realizing that they can’t solely rely on cute zodiac animal products to succeed during CNY, so many have opted for a more conceptual message instead. For example, the athletic gear brand Lululemon did a campaign a month ahead of CNY this year to target outbound travelers with a special edition of yoga wear featuring prints of mountains and rivers. Whether they are traveling or not, the campaign allowed consumers to free their minds from their busy city lives and find some zen via this natural imagery.

“Most Western brands are at their first few attempts to [connect with] Chinese consumers, so they fall into the folklore of Chinese icons and portraits of pigs,” said Laurent about this common pitfall. But when discussing CNY success stories, he instead pointed to Hennessy’s creative campaign, which — instead of featuring a pig — offered a WeChat fortune-telling game as something refreshingly different. Jennifer Zhang, associate editor of fashion forecasting company WGSN, pointed to Gucci’s campaign as another good example of not trying to take the zodiac theme too literally. The time-honored brand chose to blend Western and local cultures with a range of products, tapping into the popularity of Disney in China as well as traditional Chinese imagery via playful cartoon motifs.

Brands also chose to launch collaborations with artists for the holiday, giving them even more room to interpret Chinese culture in fun ways (if it’s not done correctly, brands get the lion’s share of the blame). This year, we saw the French fashion brand Chloe collaborate with Indian artist Rithika Merchant for a series of CNY-related products decorated in the artist’s elegant, hand-painted style. Meanwhile, Hennessy partnered with Chinese artist Zhang Guangyu on a limited edition drink package that featured a beautiful grouping of Chinese motifs.

Both Jennifer Zhang and Laurent argued the need for local approval checks before brands launch new campaigns or products in China, and not just for CNY holiday campaigns. “Look into what’s trending culturally, the country’s history, and test your campaign and product with Chinese shoppers,” said Zhang. “Tap into your Chinese team’s knowledge.”

Source link

Chinese Whispers: Daigou Arrested in Paris for Money Laundering

In “Chinese Whispers,” we share the biggest news stories about the luxury industry in China that haven’t yet made it into the English language.

In this week’s edition, we discuss:

  • Chinese daigou arrested for money laundering,
  • Prada’s Lunar New Year campaign stirs criticism, and
  • The closure of Topshop’s Shanghai and Hong Kong offices.

1. Parisian police arrested six daigou agents from China, accusing them of money laundering – Sina Fashion

At least six Chinese daigou agents were recently arrested by French authorities for a series of wrongdoings including money laundering, drug trafficking, and tax evasion that allegedly earned them up to $5.6 million (RMB 38 million) of illegal income, according to Chinese media outlet Sina Fashion.

French police alleged that the criminal group used the daigou practice — purchasing luxury goods in the local currency and reselling them at a higher price in China — as a way to launder money. The group was found in possession of a great number of luxury goods from Louis Vuitton, Chanel and Gucci as well as five fake passports.

As the luxury goods market in China grows, customer demand for clothing alteration services also rises. Photo: Shutterstock

As the luxury goods market in China grows, customer demand for clothing alteration services also rises. Photo: Shutterstock

2. High-end clothing alteration company in China raised RMB 50 million in financing  –  Gelonghui

As the luxury goods market in China grows, customer demand for clothing alteration services also rises. Last week, etailor (易改衣), a Chinese company that specializes in clothing tailoring services of luxury goods, completed a Series A funding round totaling $7.38 million (RMB 50 million) from investors such as Vipshop, Dingxin Capital, and others.

British fashion brand Topshop closed its Shanghai and Hong Kong offices. Photo: Shutterstock

British fashion brand Topshop closed its Shanghai and Hong Kong offices. Photo: Shutterstock

3. British fashion brand Topshop closed its Shanghai and Hong Kong offices – Winsang

Arcadia Group, the parent company of Topshop, announced the closure of both the Shanghai and Hong Kong offices of the British fast fashion brand. Winsang, the Chinese business publication, wrote that the move signaled Topshop has accelerated its exit from the Chinese market, following the shutdown of their Tmall store last year.

Source link

How Much Money Do Influencers Earn in China vs. Elsewhere?

It is a well-known fact that every other teenager in China wants to become an “influencer,” “KOL” or “WangHong” (网红): a social media personality with a large following and glamorous lifestyle.

But how much do influencers make in China? And how does that compare to the revenues of Western influencers?

Revenues of influencers outside China

Instagram influencers

The average rate of a sponsored Instagram posts by influencers with over 1 million followers on Instagram is $1,405, according to a 2017 survey of 2,885 influencers by marketing company Influence.

Estimates given by the Influencer Marketing Hub calculator are slightly higher. According to the tool, the fashion influencer Danielle Bersntein (@weworewhat) would bill between $4,000 to $6,700 for a post to her 2 million followers. Johannes Huebl could charge similar amounts with “only” 987,159 followers, on account of his high 2.34 percent engagement rate.

Overall by cross-checking sources, we can assume an Instagram influencer with a following of 1 million followers will charge somewhere between $1,000 to $5,000 for a post, depending on the level of engagement.

Assuming these influencers generate between 40 to 100 brand collaborations per year (that’s between 1 to 2+ collaborations per week, a very high turnover) they would end up with $40,000 to $500,000 yearly revenue.

YouTube influencers

YouTube is perceived by marketers as an even stronger marketing channel: YouTube “cost per follower” is about double what it is on Instagram, and an influencer with 1 million followers would easily collect $5,000 to $10,000 for a paid endorsement.

Influencers are however more scrutinized on YouTube than they are on Instagram, and tend to publish sponsored content less frequently. A typical YouTube influencer with 1M followers could collaborate at most with around 10-20 brands every year, generating $50,000 to $200,000 in revenues.

Unlike Instagram, brand collaboration is however not the only sources of revenue for YouTube influencers. The platform also shares part of its programmatic advertising revenue with content publishers.

According to the Influencer Marketing Hub, YouTube influencers can make $3-$5 per 1,000 video views. YouTube beauty influencer Chrisppy Makeup (1.6 million followers) published around 40 videos last year, with around 80,000 average views. She would have made around $9,600-$16,000 from YouTube ads. A nice boost, but not a large sum of money by any means.

At the end of the day, a YouTube influencer with 1 to 2 million followers can expect to generate around $60,000 to $200,000 per year from his or her channel (and likely closer to the lower end of this scale).

Affiliate networks

Another growing channel of monetization for influencers is affiliate links: redirecting users to an e-commerce page with a specific tracking link and getting a percentage of the sale.

The platform RewardStyle has been booming in this space. It claims more than $3 billion in sales generated by its 25,000 influencers across its eight years of existence.

RewardStyle even offers a “LIKEtoKNOW.it” App which enables users to follow influencers and to easily access the e-commerce page of products featured in their posts.

How much money does that mean for influencers? Given that the platform pays around 10 percent commission on average, it comes down to only about $2,000 per influencer and per year on average (given that this revenue is however concentrated over fewer influencers and around the last years of operation of the business, we can assume that quite a few influencers make significant revenue from the platform – the platform claims that the number of influencers making more than $100,000 per year nearly doubled between 2016 and 2017).

Revenues of influencers in China

Collaboration with brands

China’s influencer ecosystem is much more involved with brand promotions. There are two main reasons for this difference between mainland China and the rest of the world:

  • CPC/CPM (cost per click/cost per impression) advertising is less developed in mainland China. In the U.S, advertisers will see a very good return on investment from Google and Facebook advertising. There is no direct equivalent in China, and much of this budget is redirected to influencer campaigns
  • Followers of Chinese influencers are much more tolerant toward advertising. Whereas sponsored posts tend to create a backlash in the West (accusing influencers of “selling out”), Chinese followers tend to embrace and encourage collaboration between influencers and brand they love or are interested in discovering.

When it comes to cost, WeChat influencers tend to be on the higher end of the price scale. A typical WeChat campaign will cost between RMB 0.5 and RMB 1.5 per view.

For instance, WeChat influencer “After Party,” with 550,000 followers and about 32,000 average views charges RMB 40,000 for one post. WeChat KOL “blogger手账” with 70,000 average views charges RMB 33,000 for one post.

Overall the cost of one WeChat influencer campaign averages around RMB 1 per view.

Douyin turns out to be one of the next more expensive social networks to run KOL campaigns on, while Weibo sits on the other end of the spectrum, 55 times cheaper than WeChat! (which doesn’t mean that the Weibo campaigns will be 55 times more efficient than WeChat campaigns: the value of a WeChat impression can be so high that WeChat will lead to higher return on investment with similar budgets).

Chinese influencers also tend to be much more likely to be run by large teams, which enables more frequent partnerships with brands. Chinese influencer Gogoboi charges around $50,000 per promotion message and can run up to 15 brand collaboration each month. That’s $9 million of yearly revenue solely from WeChat advertising for an account estimated to gather around 8 million followers.

Gogoboi’s Weibo account, with nearly 10 million followers, likely brings in an additional $15,000 per post, with around 10 collaborations per month, netting another  $1.8 million per year of revenue from Weibo advertising.

E-commerce direct sales

China enabled a whole ecosystem of e-commerce run by influencers which are nearly non-existing in the West.

While some superstar influencers such as Becky Li decided to launch their own brand, many influencers such as Gogoboi chose to leverage platforms such as LOOK. LOOK enables influencers to create their own WeChat Mini-program Store without having to worry about the logistics of shipping the products and dealing with customer service (which is all handled by the LOOK platform).

Unlike RewardStyle, influencers do more than sharing a link: they operate their own store where they decide assortment, special campaigns and sometimes pricing.

Xiaoxiaobaomama, a popular childcare KOL, runs a popular WeChat mini-program store generating more than RMB 80 million of sales per month. Assuming a 30 percent commission on all product sales, it is about $43 million of revenues every year.

Programmatic advertising

The last method of promotion for Chinese influencers is the display of banners within their account. Authors can choose to display automated ads into their posts, and WeChat will share with them roughly 8-10 percent of the advertising revenue.

WeChat Official Account PupuLab普普实验室 has an average article view of 20,000. Assuming a 1 percent view to click rate, and RMB 0.5 CPC, one article would only bring RMB 100 ads revenue. This amount is insignificant compared to the RMB 70,000 charged for brand collaborations.

Overall, programmatic advertising is a negligible source of revenue for Chinese influencers.

So, who is better off?

Overall, it is unquestionable that Chinese influencers tend to yield much better returns than their Western counterparts.

The main drivers of this difference are:

  • Less competition from advertising platforms
  • Better integration between influencer posts and e-commerce
  • Chinese customers are more open to seeing native advertising in influencer posts
  • Larger teams operating influencer accounts
  • Chinese influencers tend to diversify revenue streams (WeChat ads, Weibo ads, Douyin, e-commerce, etc.)

While many Western influencers struggle to make a living, Chinese influencers are quickly sought after and can easily monetize their following. Larger accounts also tend to be more profitable, with opportunities to generate dozens of million USD of revenue both from advertising and e-commerce.

Which influencers are ideal for brands?

In China and abroad, brands tend to focus on influencers which are too large to bring an actual return.

Thinking of promoting your brand in the West? You might think of Kim Kardashian as one of the top Western influencers. But the picture is more nuanced: you might be better off collaborating with Mr Dombaza, a San Francisco musician with only 28,000 followers but an Instagram engagement rate about 10 times higher than Kim Kardashian!

A similar pattern exists in China. A campaign with Gogoboi is a risky bet as it might not cover your $50,000 investment (except if taking into account the long-term PR benefits). However, working with influencers with 50,000 to 500,00 followers will very often lead to returns between 3x to 8x your marketing expense.


China benefits from a striving ecosystem of influencers, much more developed than its Western equivalent.

The strong appetite of followers for brand recommendations are advantageous for KOLs and for brands: both benefit from strong demand for quality branded content.

As brands start leveraging this ecosystem, they should focus on mid-size KOL with enough influence to drive sales, but not so big that their cost per engagement would start to decrease (the sweet-spot is around 200,000 followers).


This story originally appeared on WalktheChat, our content partner site. 

Source link

Erno Laszlo Aims to be a Billion-Dollar Brand in China

“Tofu” cream. “Protein” lotion. “Ice white” facial masks. These are the nicknames that loyal Chinese fans of the skincare company Erno Laszlo have made up for the brand’s products PHelityl Night Cream ($126), Hydraphel Skin Supplement ($60), and Hydra-therapy Skin Vitality Mask ($88), respectively.

And when consumers get creative with pet-names for brands and products in China, it means that those items have become wildly popular.

Erno Laszlo’s CEO Charles Denton is fully aware of the potential his brand has in the Chinese market. After entering the country’s marketplace over five years ago by setting up several counters in department stores and shops on Alibaba’s B2C marketplace Tmall, Denton decided that this year was the time to hatch a much more ambitious plan for the brand: grow Erno Laszlo into a $1 billion brand within five years.

“Our goal [in China] is over the next five years to have 30-40 department stores [up from five] and 10-20 boutiques, which we call ‘Laszlo spaces,’” Denton told Jing Daily in a recent interview in New York, adding that “we will be launching our stand-alone stores with the first one in Shenzhen this spring/summer.”

Erno Laszlo has gathered a small number of Chinese loyal fans in recent years because of its high-quality products. Courtesy photo

Erno Laszlo has accumulated a small number of loyal Chinese fans in recent years because of its high-quality products. Courtesy photo

The timing of Erno Laszlo’s China expansion couldn’t be more intriguing. Ever since the National Day Holiday last October, the Chinese government officially started cracking down on cross-border daigou agents (individuals who purchase high-priced products abroad on behalf of buyers and ship or carry them back to China without paying customs taxes), and this January, the country passed its first-ever E-commerce Law in an attempt to further regulate this illegal buying behavior and drive consumers to spend at home.

For premium brands like Erno Laszlo that saw a significant part of its China business come from daigou agents, the development was disastrous. Denton admitted that the brand did “expect to see some slowing of our growth in markets like Hong Kong and South Korea due to fewer people buying the products for reselling in China.”

But recent luxury success stories in China from brands like LVMH, The Estée Lauder Companies, and Kering Group seem to point the way for high-end goods makers to avoid disaster after the government’s daigou crackdown. That path involves brands having a sophisticated presence in the market that’s completely available to serve Chinese customers on the ground. Without a doubt, Erno Laszlo’s expansion is looking to fill this gap.

As a matter of fact, the 93-year-old brand already had a decent presence in the market. It opened online flagship stores on Tmall’s domestic and cross-border platforms four years ago, with the combined revenues from Tmall accounting for roughly 60 percent of Erno Laszlo’s business in China, according to the brand.

This year, aside from opening four to six more counters in Chinese department stores, Denton said Erno Laszlo would also focus on tidying up and driving the brand directly on Taobao, which should hopefully offset any declines. “Overall we don’t expect any real impact on our rate of growth,” he said confidently.

How Erno Laszlo communicates with Chinese consumers via marketing campaigns is going to be another important aspect that determines how well it can do in this market. According to Kristy Watson, the chief marketing officer of Erno Laszlo, being authentic, truthful, and transparent with customers is always their brand’s rule of thumb, no matter how vastly different China’s digital landscape is from the U.S.’s.

And the same approach applies to their influencer marketing. “We think of KOLs the way we think of our consumers,” said Watson. “Our objective is to build authentic relationships with those KOLs who have a real passion and liking for our brand.”

In the West, Erno Laszlo is fortunate to have had a legendary line-up of devotees, including Hollywood goddesses Audrey Hepburn, Marilyn Monroe, and Grace Kelly, which, to some extent, makes the brand an easy sell. In China, Erno Laszlo is still a niche brand, but it has accumulated a small number of loyal fans in recent years because of its high-quality products. Denton said that this loyal group of Erno Laszlo advocates would need to be the company’s champions for it could grow in the future.

Source link

Anonymous Chinese Employees on Why Western Brands Fumble When Marketing in China

From a creepy Burberry Chinese New Year ad campaign that featured a cast of devious-looking Chinese family members maniacally staring at their grandmother to a spooky and downright melancholy Prada campaign that made Chinese New Year feel more like a funeral than a celebration, big brand marketing failures surprisingly happen all the time in China.

Despite constant lip service from Western luxury brands about the importance of diversity, these culturally insensitive campaigns continue to get made and approved. It makes one wonder why these brands, who clearly have Chinese employees, work with Chinese marketing specialists, and hire Chinese KOLs, can’t install the necessary checks to help prevent these crippling missteps.

Despite constant lip service from Western luxury brands about the importance of diversity, these culturally insensitive campaigns continue to get made and approved. Photo: Weibo

Despite constant lip service from Western luxury brands about the importance of diversity, these culturally insensitive campaigns continue to get made and approved. Photo: Weibo

To understand the problem better, Jing Daily spoke with five Chinese employees who work in some of the world’s most prominent luxury groups, including LVMH, Aeffe, and Kering. Because of the sensitive nature of these topics, their quotes are given under pseudonyms, but their insights are real and reflect the fashion industry’s skewed priorities when marketing their products in China.   

The first issue that plagues many brands in China is the primary medium for their brand messages: social media. Many CEOs compare China’s quickly-evolving social media world with their own social media universe of Instagram or Facebook. But that doesn’t begin to relate to the very different and complex role social media plays in Chinese society.

“They do listen to the Chinese team on the usage of digital apps and platforms, but when it comes to influencer engagement or content collaboration, they make [up] their own mind,” said Annie Chang, a digital marketing employee for a Parisian luxury group about her Western employers. To not properly understand China’s digital culture invariably leads to a disconnect with new Chinese consumers, making a brand’s message all the more likely to be misinterpreted.

Another problem within large luxury companies is the limited role that their Chinese teams play in final marketing decisions. In the fashion world, most strategic decisions are made by a small circle of CEOs and directors, and many Chinese employees feel that errors are made engaging with a Chinese audience because they are left out of important Chinese marketing decisions.

“On the creative or product development level, the Chinese team doesn’t have any say,” said Jenny Cheung, an area manager who works with the Shanghai team of an Italian brand. Ultimately, it’s the brand’s time-honored dictum that rules her team, she said, and any cultural nuances that could affect that image are quickly rejected.

But what’s even more concerning than first two issues is the way local teams on the ground in China often feel marginalized, even though their insight could be the difference between marketing success and failure within their home country.

Balancing a global brand’s image with a culture’s local taste is a delicate game, one that requires expert opinions. Yet time and time again, companies ignore the advice of the experts they’ve hired — and often with disastrous results. Angela Wang, who works on a China marketing team for an American premium brand, explained how the New York headquarters insisted on using a white American celebrity as a brand ambassador for a Chinese campaign, overriding the Chinese team’s strong veto on the decision. “She is very little known in China, nor in Asia,” said Angela. “We all thought it was a marketing budget waste.” Alternative ideas were suggested, she added, but they went unheard.

The danger of these marketing pitfalls doesn’t mean a brand has to play it safe with their marketing either — in fact, the opposite is true. A daring move, when executed well in China, can draw immense praise and distinguish a Western brand from the rest of the crowd. A recent example is Maybelline’s wildly popular Chinese New Year Mahjong products, which drew inspiration from the popular Qing Dynasty game.

Today, more and more luxury fashion brands are paying close attention to the Chinese market, but in order to succeed there, they have to go beyond cultural clichés and really connect with contemporary Chinese people. It’s not just about putting Chinese models in the catalogs and making profiles on all the trendy Chinese apps. For real change to happen, brands must empower their Chinese hires to speak their mind and serve as goalies for any potential culturally insensitive blunders. At the very least, there’s a much greater chance that someone would point out another exoticized ad and say, “This might not work. Let’s do better.”

Source link

Travel Shopping Slips, But Italy Still Draws in Chinese Tourists

Italy is blessed with so many iconic travel musts — Venice, Florence, the Amalfi Coast, and the Sistine Chapel in Rome — it’s no wonder that it continues to attract record numbers of Chinese tourists. And this Lunar New Year holiday was not a disappointment for the nation. Despite some hiccups to start the travel period, including accusations of racism aimed at Chinese tourists, there has been an overall positive response from Chinese travelers.

Italy isn’t the most convenient getaway from Mainland China when you only have a week or less to travel. Perhaps given this, it dropped out of the top 10 most popular destinations for the holiday this year, as more Chinese travelers chose short-haul destinations, according to Hotelbeds. The booking platform noted that Italy was the 12th most popular destination this year, just behind Spain. However, China’s largest online travel agency, Ctrip.com International, listed Italy as the 10th most popular destination for the holiday this year. And surprisingly it’s the seventh most popular destination for young travelers in 2019, according to online travel agency and user-generated travel content site Mafengwo.

Rome welcomed the influx of tourists with traditional Lunar New Year decorations at Fiumicino International Airport, as well as at businesses and museums throughout the Eternal City. Shops, museums, and even taxis expanded their acceptance of Alipay and WeChat Pay in an effort to increase travel spending during the holiday. And some of the more popular shops, such as La Rinascente, even offered holiday discounts for tourists using the popular mobile payment platforms. The high-end department store has also added Mandarin-language services, including a WeChat account, to assist the growing number of independent Chinese travelers.

A Chinese tour guide told Chinese state media Xinhua that as Chinese tourists have flocked to Italy over the years, they’re now searching for more personalized experiences beyond shopping. She told the media outlet that the visitors are interested in culture, history, and nature, as well as discovering Italian cuisine and wine. She added that younger travelers tend to plan out their trips well in advance. “Traditional multi-site shopping and sightseeing packages no longer meet their needs,” she said. One reason for the decline in shopping tours is that travelers have greater access to information; including prices of products they may be interested in purchasing. This leads to better planning before arrival and reduces the reliance on tour guides who may make a commission on sales.

According to tour guides, who specialize in shopping trips along Rome’s Via Condotti, Chinese tourists are heavily targeted as potential buyers, but they have seen the same visitors become more restrained in their spending. The guides also note that Chinese tourists are searching for the best-quality products they can find. Another guide added, “Chinese shopping in Italy is more like looking for icing on the cake.”

Additionally, Chinese tourists are beginning to branch out of the more touristy destinations of Rome, Venice, and Milan. Island tours of Sardinia and Sicily have become more popular recently. And as travel shoppers decline, Italy is seeking new ways to lure more Chinese tourists. Rome has set a goal of turning China into a top five tourism source market by 2022, Carlo Cafarotti, Rome’s accessor for tourism, told Xinhua. Currently, one in every 20 tourists to the city is Chinese.

Part of the plan to further increase Chinese arrivals hinges on campaigns that include a wider acceptance of mobile payments like Alipay and WeChat Pay, Mandarin-language promotional videos, as well as Mandarin-language tours of Rome’s famous museums. As more Chinese tourists seek experiences over shopping, museums in the Italian capital are likely to reap the benefits of improved services. With a greater focus on promoting cultural activities in Rome and beyond, Italy may return to the most popular destinations list soon. Here’s to La Dolce Vita.

Source link

Where Are WeChat Mini-Programs Headed in 2019?

It has been more than two years since Tencent Holdings introduced its “mini-program” feature, essentially a lightweight app that operates within the WeChat ecosystem. Despite a rocky start, WeChat mini-programs completely took off in 2018, with thousands of brands and retailers jumping on the bandwagon to explore business opportunities.

A new survey co-authored by Chinese research agency Kueclub (酷鹅研究院) and Tencent Research & Development offers insights into how Chinese consumers use WeChat mini-programs and what their behavior can mean to brands and retailers.

Published at the beginning of this year, they surveyed 8,000 WeChat mini-program users to understand their daily habits and preferences. Nearly 70 percent of users are optimistic about the future development of mini-programs, and over 40 percent think mini-programs can replace stand-alone apps someday.

Here are five key takeaways from the survey:

Non Mini-program users vs. Mini-program users

Non Mini-program users vs. Mini-program users

1. As of the end of 2018, WeChat mini-programs had more than 600 million users, of which 34 percent are frequent users. Though people are used to popping in and out of mini-programs, the report suggested WeChat should focus on ways to encourage users to stay within a specific mini-program as long as possible. 

Mini-program is the No.4 top used function within WeChat.

Mini-program is the No.4 top used function within WeChat.

2. Difficulty in searching within WeChat mini-programs (which is especially inconvenient for older users) and a lack of functionality were two main reasons for users to abandon a mini-program.

“Don’t want to download a stand-alone app” is the top reason for users opt to use mini-program.

3. 30 percent of respondents indicated they shopped via WeChat mini-programs in 2018. The convenience of getting all things done within the app as well as group coupons and discounts were two major factors that influenced shopping decisions.

4. In the future, WeChat mini-programs that focus on functionality and entertainment will become more popular, the survey noted.

5. A better way to direct mini-program traffic to a stand-alone app download is through identifying a user’s genuine interest rather than offering financial benefits, the survey concluded. In 2018, only 30 percent of mini-program users are willing to download an app after trying out the mini-program. Many companies offer a bonus or additional functions to convince users to download their app, but the retention rate is low.

Source link

3 Chinese Mobile Payment Trends Businesses Should Know

It’s no surprise that Chinese tourists now prefer to shop abroad using mobile payment platforms like Alipay and WeChat Pay, and both services have seen their acceptance expand significantly around the world, just within the last few years. Now, sales reports during major travel holidays are reinforcing that growth, making mobile pay options a must for businesses that want to grow sales among Chinese travelers.

Considering the huge increase in spending via mobile payment platforms during the National Day holiday travel period this past October, it wasn’t a question of whether this month’s Chinese New Year holiday would see an increase in digital transactions but more a question of how much it would increase and who would drive that growth. Interestingly enough, three mobile pay companies — Alipay, WeChat Pay, U.S. mobile payment partner Citcon — have just released data on who’s been spending on these popular payment platforms during Chinese New Year holiday week. Here are Jing Daily’s three key takeaways:

1. Smaller Cities’ Residents Are Paying with Mobile

Luxury brands and sales platforms have always assumed that mobile payments come from sophisticated buyers in big cities like Beijing and Shanghai, but new data is proving that’s not necessarily the case. Both Alipay and WeChat Pay saw significant increases in use from residents in third- and fourth-tier cities who outspent their counterparts in major cities like Beijing, Shanghai, and Guangzhou. WeChat Pay confirmed that users from smaller cities now accounted for 40 percent of spending. In short: spending comes from everywhere in China.

2. Older Traveler Spending via Mobile Is Booming

Although the massive Millennial and Gen-Z generations of consumers in China keep executives awake at night, it’s starting to become clear that businesses looking for travel dollars on mobile platforms simply cannot ignore Generation X — and we now have numbers to prove that. Alipay users born between 1960 and 1969 increased by a whopping 230 percent from last year, and their spending abroad through the app increased 250 percent. Meanwhile, the number of Alipay users born between 1970 and 1979 increased by 190 percent from last year, with spending overseas jumping by 232 percent. Maybe Gen Xers have gained better jobs as they’ve aged or they’ve become enamored with payment technology, but either way, they’ve clearly now committed to spending more abroad via apps.

3. Mobile Pay in the West – It’s Working

Experts have predicted the rise of Chinese mobile payments and extolled the benefits of Western businesses adopting such platforms, with businesses that have adopted it proclaiming success. Now, it looks as if the tipping point has finally come. WeChat noted that France was now among the top 10 foreign countries with the greatest WeChat Pay spending volume — the first time the country made the list of mostly China-neighboring countries. It’s also an indication that many more retailers and businesses have finally adopted the platform. And in the U.S., UnionPay QR Code Payments processed through Citcon saw an impressive 800 percent year-on-year increase in luxury and fashion retail sales in 2018, and Citcon saw total mobile payment volume in the U.S. increase 10-fold from last year — a huge jump. Meanwhile, the average purchase size in the U.S. rose to $150 from about $120 last year, according to Citcon.

Source link

New Year, New You? Selfridges’ WeChat Quiz Wins Chinese New Year

The Chinese Lunar New Year has become an increasingly important time for department stores around the world to court Chinese luxury shoppers. Some simply stick to the basics — decorating with red lanterns; holding dragon dances — while others go beyond the traditional, particularly if they plan to attract a younger audience, and that requires a digital approach. Selfridges & Co., based in London, has done just that — creating a winning digital campaign, with a lifestyle-driven focus that resonated with the younger Chinese audiences.

Total visits on the WeChat mini-program tripled from the previous one. Photo: Selfridges/WeChat

Total visits on the WeChat mini-program tripled from the previous one. Photo: Selfridges/WeChat

How it worked: Launched weeks ahead of the Chinese New Year, Selfridges published a month-long WeChat mini-program, which asked users to take a personality test and offered a New Year outlook based on the users’ answers. It also matches the user with an artist that reflects their personality, as well as product recommendations, and a location in England to snap that perfect selfie.

The challenge: This wasn’t Selfridges’ first mini-program, but it did pose some challenges for the company. The mini-program was in development for nearly three months from idea to completion, and the most challenging aspect of the New Year mini-program development was deciding on the design and functionality of the personality quiz. Simon Forster, managing director of the department store told Jing Daily, they finalized the program because they believed the quiz function was a fun way to directly engage with users, while allowing them to express their own personality.

The results: Overall, Selfridges has seen significant improvement from this mini-program compared to the last one that went live last autumn. Total visits on the mini-program tripled from the previous one. All KPIs was reached in 10 days — the total page views within the mini-program were nearing 200,000, and on average, users spent 1.4 minutes within it, and it had been shared more than 3,000 times so far.

The WeChat mini-program is a small part of Selfridges’ digital asset, though being digital-savvy is a big part of identity to the department store. In a survey of over 5,000 Chinese luxury shoppers’ customer experience by OC&C Strategy Consultants, Selfridges’ e-commerce site ranked seventh after Farfetch and just ahead of Lane Crawford. Selfridges is also one of the early adopters of WeChat Pay and Alipay in its stores, and it offers direct shipping options to China.

The digital investment in China has been paying off. In the company’s earnings release in October 2018, Selfridges’ sales increased 11.5 percent year-on-year, reaching £1.75 billion ($2.27 billion) for the year ending February 2018.

Source link

Lunar New Year Spending Sends Mixed Signals on Chinese Economy to Luxury Brands

China’s Lunar New Year spending growth slowed to its lowest level since 2005, while overall consumption on retail and restaurants during the holiday surpassed $148.96 billion (RMB 1.01 trillion) for the first time, sending mixed signals on the state of the Chinese economy.

Chinese spending during the seven-day national holiday that officially ended on February 10 was up 8.5 percent year-on-year according to figures released by the Ministry of Commerce and National Statistics Bureau. The single-digit growth, however, was a sharp drop from a 10.2 percent increase in 2018, signaling the economy is losing some steam.

“The data represents a continuation of consumption slowdown in China starting from the second half of 2018,” wrote Shenwan Hongyuan, a Shanghai-based investment management company, in a recent research note. “[Based on the readings], we expected the country’s retail sales in January and February this year will grow around 8 percent.”

Investment bank Nomura Holdings maintained its negative forecast, saying, “[The data] does not bode well for overall retail sales growth.” They predicted the country’s full-year retail sales growth to slow to 8.5 percent year-on-year in 2019, from 9 percent in 2018.

In recent weeks, a slew of luxury groups and brands including Hermès, LVMH, Burberry, Tapestry and Estée Lauder Companies posted positive sales growth in their Q4 and/or full-year 2018 earnings, citing spending by Chinese nationals as the main driver.

While there is no guarantee that the weak consumption growth rate during the Chinese Lunar New Year holiday will translate into an overall slowdown of luxury goods consumption by Chinese shoppers this year, it should set off an alert with luxury brands who rely on this demographic to spur growth.

One bright spot, as mentioned by Shenwan Hongyuan, is that Chinese citizens have become more willing to pay more for quality, based on the consumption patterns shoppers revealed during the holiday. The country’s second-largest e-commerce site JD.com noted some high-priced watches, jewelry & accessories, and fashion apparel & shoes were in hot demand during the holiday.

Shenwan Hongyuan also noted Chinese consumers were still spending a lot at shopping and outlet malls, which are home to many luxury brands in China. In Shanghai, for example, shopping and outlet malls reported more than 20 percent growth in sales from the previous year, from February 4 to 10, the investment firm said.

Elsewhere, Chinese internet giant Tencent released a report to illustrate who was actually spending in China during Lunar New Year. Those born between 1980 and 1989 were the top spenders in the period, accounting for 40 percent of total spending, the report said. The post-’90s group followed closely, as did the post-’00s group.

Source link