China Consumer Strategy Report 2024

China Consumer Strategy Report 2024

Editor’s notes

Why is Wong Kar-wai's new TV show, "Blossoms," so popular? What exactly is Kemusan? And why has the guochao trend continued to impact consumer sentiment? These are the types of questions trend watchers might pose regarding Chinese consumers. However, our focus here is not to dissect the latest buzzwords in marketing, branding, and PR. Instead, we aim to explore the foundational elements and the fertile ground that has nurtured these trends.

Often, China market watchers find themselves swamped by fleeting signals and trends in a market that changes with bewildering speed—where 15 minutes of fame can shrink to merely 15 seconds. If too focused on the surface, I argue, the habit can exacerbate misunderstandings and perpetuate the notion of Chinese consumers as 'the other.'

To fully understand China, I always urge those who are interested to immerse themselves where these trends emerge, to understand the "soil" from which new developments sprout, and then see from the consumer lens of what makes them happy, sad, excited or emotional.

In an age where China prioritizes on domestic economy, the insights and strategies of brands must align with local contexts and preferences, because of :

1.Rising patriotism and nationalism, which means consumers will likely to be more influenced by homegrown trends

2.Increasingly competition from domestic brands that have largely stepped up in branding and marketing, as they move faster in adapting to consumer needs.

3.Intentional decoupling from the rest of the world and continued anti-espionage crackdown on officials and civilians, which could increasingly turn foreign culture and influencers into a sensitive area.

This is why I launched ApertureChina, a research and strategy consultancy that is focused on Chinese consumers. (to learn more about what we do, please turn to page 21)

Here, I want to present nine aspects that could offer you a good understanding of how China came to be what it is today: four areas where China distinguish itself from the other markets, and the five key trends that will continue to shape the communications space here.

“To fully understand China, I urge individuals to first grasp the ‘soil’ from which new developments sprout, and then view through the consumer's lens to comprehend what makes them happy, sad, excited, or emotional. ”

Founder of ApertureChina

Yaling Jiang

How Chinese social media has transitioned from a trend enabler to a trend setter

“Chinese social platforms (like Douyin) not only reflect fashion and beauty trends, but also actively shape and accelerate them.”

9 focal areas in Chinese consumer market in 2024

Mia Zhang Head of China Inbound Product Operation and Marketing, Ocean Engine

How can consumer data assist your decision-making on China market

“New platforms keep emerging. If you only track a few platforms in a static way, you are bound to make errors because your worldview is fundamentally flawed.”

Why brands must form China-specific PR and reputation management strategies

“For brands entering China, reputation management and PR is a delicate dance between having specific China-centric messaging for the markets and staying true to its core brand equity.”

page 3-4

How does one view brand localisation from the Chinese consumer perspective

“New brands need to understand that they're starting from scratch in China in terms of customer education.”

Rubbie Chong Design Partner at ApertureChina

page 9-10

How China’s sports ecosystem is changing, and what that means for brands

“China is witnessing a shift in training system, consequently, more athletes are showcasing dynamic personal brands that can enhance their marketability at home and abroad.”

David Zhang

China consultant, AISTS

- International Academy of Sport Science and Technology

page 15-16

Robert Wu CEO of BigOne Lab

page 5-6

Why are pop-ups and exhibitions the best way to connect with Chinese consumers post-Covid

“In the post-Covid era, an event is a great way for a brand to remind consumers that it’s still here, it’s still relevant, and conversely that the consumer is important to them.”

Tom Griffiths Managing Director at Stink Studios

page 11-12

How should brands approach e-commerce content in China

“The customer funnel is becoming shallower and wider, thanks to the increased number of shopping platforms. Therefore, it’s key for a brand to have an omnichannel presence.”

Jacob Cooke Co-founder and

CEO

of WPIC Marketing + Technologies

Ivy Yang

Founder of Wavelet Strategy

page 7-8

How podcasts become the best brand-building medium for luxury

“The established brands, with a long-view approach to brand-building, are very willing to invest time in nurturing lasting bonds with their listeners.”

Adriana Zou

Director of Sales and Partnerships at JustPod

page 13-14

Why does community marketing work in China

“Chinese consumers are known to be diligent researchers…Employing consumer-centric community marketing strategies can effectively engage them across various stages of their purchasing process.”

Kadri Karolin Kõuts

Marketer & Strategist at Projekt 86

page 17-18 page

How Chinese social media has transitioned from a trend enabler to a trend setter

The rate of internet users accessing the internet via mobile phones in China surpassed that of traditional PCs for the first time in 2014, according to state-run China Internet Network Information Center. Since then, the position of mobile phones as the primary internet access device has been solidified. According to the 50th CINIC report published in January 2024, the number of mobile internet users in China has reached 1.047 billion, accounting for 99.6% of the total internet users, with the short video user base amounting to 962 million.

China has entered a short-video era – short videos now dictate consumers' attention, public discourse, and brands’ influence.

Additionally, the influence of platforms like Douyin extends beyond entertainment, shaping trends in sectors such as fashion and beauty. This is illustrated by the trendsetting role of Douyin and selected beauty brands in popularizing "Millard" (美拉德), a term borrowed from food science to describe a browning effect, now a widely recognized trend in the fashion and beauty industry. Let’s hear it from the mastermind behind the shift.

Head of China Inbound Product Operation and Marketing, Ocean Engine

Mia Zhang

Mia Zhang is the Head of China Inbound Product Operations and Marketing at Ocean Engine, a comprehensive commercial digital marketing platform under Douyin Group [part of TikTok owner ByteDance].

At Ocean Engine, her team assists global advertisers in expanding their presence in China through end-to-end support, including media strategy, planning, product testing, and creative execution. She previously worked at JWT, where she offered integrated marketing strategies for global clients.

1What’s the biggest misconception about marketing and advertising on Douyin?

I think the most common misperception regarding marketing and advertising on Douyin is that young, impressionable teens make up the majority of the platform audience. Douyin has more than 600 million daily active users – half of China's population – with the diversity spread across age, interests, and consumer behaviors.

Engaging with the diverse demographics of Douyin requires brands and marketers knowing the distinct cultural and social trends that appeal to Chinese consumers, utilizing a variety of influencers, gearing up creativity and crafting content that appeals to a wide range of people.

Another misconception is that all it takes to succeed on Douyin is to follow global trends. While global trends certainly play a part in the effectiveness of a marketing campaign, do remember the local culture and adapting to the tipping points are super important.

Regarding trend setting, can you talk about how it’s done and the future of social media trend setting in China?

What you described reflects how fascinating Douyin is reshaping trendsetting in the realms of fashion and beauty. We can break down into a few factors.

First of all, I think Douyin plays a splendid Trend Incubator & Inspire Master role by offering a new space for ideas, new styles, and trends to be resonated organically.

Secondly, trends usually start as user or influencer-shared experimental notions or specialized interest. The 'Millard' trend is a good example to describe a beauty trend emerging from Brand - Douyin collaboration. Beauty brands often engage with celebrities or influencers on Douyin to showcase their products or styles creatively and in a multi-variety way, effectively promoting and normalizing it. If we look at another creative trend "五金女孩 Ironware Girls", it beautifully "seared" shining and metal fashion trend, got "caramelized" in a perfect way with over 47,000 contents published in 3 weeks and over 2.2 billion impression on Douyin.

When the Millard trend starts gaining traction on Douyin, its virality can inspire widespread adoption. Guess what will happen next? Tons of users and influencers will emulate or adapt to the trend, and further popularize, AKA "trend-jacking". Vary content with similar trends contributed by users and Douyin's interactive nature facilitates the trend to evolve rapidly.

Thirdly, the trend grows from niche to mainstream, it often transcends from the original platform. Media coverage can catapult a trend from a social media phenomenon to a mainstream fashion or beauty movement.

In summary, Douyin not only reflects fashion and beauty trends, but actively shapes and accelerates them. This dynamic is likely to evolve as technology advances, creating a more integrated and responsive trendsetter in China.

What are some of the fastest-growing sectors of Douyin commerce for Gen-Z VS the general mass consumers?

The top 3 sectors, like beauty & fashion, pets and consumer electronics, are what Chinese Gen-Zs like the most if compared to the general public. This is quite precise as Gen-Zs' demographic.

Gen-Zs first start as a "self-lover" that embraces beauty and fashion to express their confidence and uniqueness, keeping up with the latest beauty trends, experimenting with new looks and makeup techniques. For them, fashion & cosmetics are not just about enhancing appearance but self-expression and empowerment. They will also share their experiences and tips on Douyin, to find confidence and joy in self-care and fashion.

Next, a "pet-lover", prioritizes the companion bond with their pets. Mainly, they can find solace and deep emotional support during hard times. As one of the integral family members, pet-lovers often advocate for the emotional benefits of pet ownership in their community.

Lastly, a "savvy-techie" that likes the latest technologies and consumer electronic products, enjoys experimenting with the latest gadgets like smart phones, VR tools and home automation systems.

What was the biggest change about Chinese Gen-Z consumers in 2023 (or one thing that surprises you from data), how do you think this may evolve in 2024?

Gen-Zs experience dividends from high-growth urbanization, education and resources. They live up to the internet and social media, which continuously broaden their knowledge literacy. They even possess a stronger sense of autonomy and cultural confidence.

The biggest change in Chinese Gen-Zs consumers that I noticed in 2023 was about "free spirit, sustainability and ethical consumption". Gen-Zs consumers in China started to show greater concern for themselves either physically or emotionally, environmental issues, sustainability practices, and ethical implications for their purchases.

In 2024, we can anticipate an even stronger swift towards Gen-Zs' unique traits, as they become the predominant spenders in the China market. Brands that align with their values may gain more popularity, particularly those emphasizing freedom, authenticity, cultural confidence, ethical practices and sustainability. This shift will further lead to demand for transparent production processes and the origin of raw materials, eco-friendliness as well as the niche appeal of brands or products. 2 3 4

How can consumer data assist your decision-making on China market

Consumer data plays a crucial role in informing decision-making for businesses everywhere. In China, the public's engagement with brands and products is predominantly shaped by an intricate ecosystem of social media and e-commerce platforms. That is to say, that the importance of data in decision-making is even more crucial, when the market is so vast, with differences among regions and demographics.

There are more than 10 mainstream platforms in China with various demographics: WeChat (now with short-video focused Video Accounts), TikTok’s sister app Douyin, Xiaohongshu, Weibo, Bilibili, Kuaishou, Dewu, Xianyu, Pinduoduo, Tmall, Taobao, JD.com. Many of you may already wisely select the platforms that make sense for your core target audience, using them to understand consumer preferences and trends, optimize marketing strategies, and forecast market demands.

However, Robert here brings out an interesting point that your China consumer data pool is a window into their world, and tracking the same platforms could mean that your worldview could be flawed. Ever wonder why luxury should track second-hand trading platforms, and why Consumer Packaged Goods (CPG) should keep an eye on O2O platforms in China? Read on.

CEO of BigOne Lab

Robert Wu

Robert Wu is CEO of BigOne Lab and Co-editor at Baiguan. At BigOne Lab, Robert leads the team to help clients discover how alternative data can add valuable insights to their research and investment process. At

Why is data so important when watching consumer trends?

How can brands make data-driven decisions with data? You’ve worked with over 100 investment funds, how are your solutions for brands different from those for investment funds?

The consumer market is so vast and so diverse, especially in China's market. The good thing about data is that it can help you see the big picture (which trends are emerging relative to others) while also enabling you to dive into the details anytime. So that 1) you don't miss any important trends and 2) you can get down to the right level of detail in order to understand the drivers behind them.

Another good thing about data is that it's based on objective facts, and unaffected by subjective bases. So while qualitative understanding is always important, it's always crucial to have an objective side to your strategy. Investment firms tend to focus more on the bigger picture (sector-level, brand-level, company-level), while corporates care more about details, which often include product and even product attribute-level data. Investment firms have a more strict stance toward accuracy (the margin of error is usually within 5%) while corporations have a looser attitude toward it. Helping both kinds of clients at the same time helps us to be both comprehensive, accurate, and detail-oriented at the same time.

2 3

Young people are known to try different apps, especially those that align with their interests. Do you think it’s necessary to track all of them, why?

Absolutely. Online space is very fragmented, and different pockets of the population have different app usage behaviors. Moreover, new platforms keep emerging. If you only track a few platforms in a static way, you are bound to make errors because your worldview is fundamentally flawed.

For instance, for luxury products and collectibles, it's necessary to track prices on second-hand product platforms such as Dewu (Poizon) and Xianyu/Goofish. Second-hand markets are consumers' real-time reading of the value of a brand or of a specific product. The higher the prices of second-hand products, the more valuable consumers perceive the brand to be. This not only a good reflection of facts, but itself can also self-reinforce as a momentum for further growth: when consumers understand what they purchase is not only a good product, but can also be a good investment, they will be more willing to purchase.

For CPG products, if you do not have a picture of how your sector is doing on so-called O2O platforms such as Meituan and Jingdong Daojia but only rely on traditional supermarket data, you will miss a huge growth vector.

What are some of the emerging trends to be watched in 2024 in consumer data in China?

1) Consumption in lower-tier cities is surging. As a result of "reverse migration", more people are going back home from first-tier cities like Shanghai, often back to center cities in hometown provinces such as Hefei, Changsha, Wuhan, Chengdu, etc. BigOne Lab's real estate, job posting, and offline catering data are all showing spikes in those areas.

2) Offline consumption, on the back of good growth in 2023, will have an even stronger comeback in 2024. At the same time, innovative mobile payment data will be rolled out into the market (which BigOne Lab is also developing), helping brands to understand the competitive landscape, market drivers as well as user profiles in the offline space.

3) More companies will harness the power of GPT and AIGC to massively harvest social media data to inform product design as well as marketing strategies.

Why brands must form China-specific reputation management and PR strategies

For brands entering China, reputation management is a delicate dance between having specific China-centric messaging for the markets and staying true to its core brand equity. Additionally, brands must respect unwritten local rules that public relations (PR) in China work differently.

It pains me to say this as an ex-full-time journalist because the local PR practice with Chinese media does not support journalism indepence at all, however, it is conducive for the brands to maintain centralized power over its messages. As a former international PR at Alibaba, Ivy recently noted in her newsletter: “Chinese media favor topic suggestions from known PR contacts over cold emails and some outlets operate on a pay-to-play model, or at least expect a transportation stipend.” She added that it is common PR practice in China to review articles and sign off before publication. Aside from a few respected publications such as Caixin that are akin themselves to Western journalism standards, most Chinese publications oblige to these practices.

At the same time, both Ivy and I are witnessing an interesting PR trend, that entrepreneurs of large consumer companies like Gree Electric’s Dong Mingzhu are coming forward not just for media interviews, but also to join reality shows, constantly appearing on her company’s short videos, is it necessary for foreign brands to copy? What are the pros and cons?

Founder of Wavelet Strategy

Ivy Yang is the founder of Wavelet Strategy, a New York-based communications and reputation management company. She writes a Financial Times Chinese column 话语 权时代 Discourse Power, and newsletter Calling the Shots: Bridging the U.S.-China

Ivy Yang

How is reputation management and PR different in China than the West? What are the common pitfalls?

Reputation management and PR in China differ significantly from practices in the West. One key difference is the central role of digital platforms in China, such as Weixin, Weibo, Douyin, and Bilibili, and how all of these platforms integrate to reach audiences. The speed at which information spreads on these platforms requires foreign brands to be exceptionally proactive and responsive.

Common pitfalls include underestimating the importance of cultural sensitivity, leading to communications that may be perceived as inauthentic or disrespectful. Additionally,

2Over the last few years, we are seeing a lot of entrepreneurs joining reality TV shows and collaborating with young vloggers. Do you think executives at foreign brands should learn from them in interacting with millennials and Gen-Zs, why/why not?

The trend of Chinese entrepreneurs and executives stepping into the public eye, as seen with figures like Dong Mingzhu and Shen Zhirong, and even the rise of Christie's auctioneers as role models, highlights China's evolving landscape of influence. Personal IP is more important than ever. These individuals have successfully leveraged reality TV and social media to build personal brands and channels to broadcast to the broader public. The "realness" resonates with younger audiences, particularly millennials and Gen-Zs, because it shows that behind the "big boss" persona, there is a natural person behind the titles.

Brand executives should learn from these examples. Engaging with these younger demographics authentically can enhance brand perception and loyalty. This approach demonstrates an understanding of and respect for these critical audiences' cultural context and communication preferences. However, these engagements must be genuine and well-aligned with the brand's values and image to avoid the pitfall of appearing overly curated.

3What are some of the emerging trends to be watched in 2024 in public relations in China?

Looking ahead to 2024, several emerging trends in public relations in China are worth noting:

Focus on CSR and Sustainability: There's a growing emphasis on corporate social responsibility and sustainability, and companies in China are eager to communicate their ESG initiatives as many of them are going into international markets (出海大潮).

E-commerce Integration: With the blurring lines between e-commerce and social media, PR campaigns will increasingly integrate with e-commerce platforms, leveraging KOLs (Key Opinion Leaders) and KOCs (Key Opinion Consumers) to drive brand awareness and direct sales.

Localized Content Creation: There will be a greater focus on creating localized content that speaks directly to the Chinese audience's preferences and cultural nuances, moving beyond mere translation to true localization.

In conclusion, understanding the unique landscape of cross-cultural reputation management and PR is crucial for brands entering or growing in China.

How does one view brand localisation from the Chinese consumer perspective?

Branding serves as the initial gateway for consumers to engage with a brand, offering a first impression before they even experience product quality. This aspect is particularly vital for Chinese consumers who are unfamiliar with a brand. It works in tandem with public relations and marketing efforts to introduce the brand to local customers and foster openness to trying the products.

The concept of "Glocalisation," a term coined by Sociologist Roland Robertson in the Harvard Business Review in 1980, has become a buzzword in branding and marketing in recent years. Initially defined as "the simultaneity—the co-presence—of both universalizing and particularizing tendencies," this concept is at the heart of our approach to localization branding at ApertureChina. By incorporating a brand's DNA with a local perspective and distinguishing it from local competitors, we aim to help our clients navigate the intricacies of the Chinese market effectively.

It's imperative for global brands to recognize the escalating influence of domestic brands, driven by key factors like the guochao a revival and celebration of local cultural identity and brands, the appeal of cost-effectiveness amidst economic shifts, and a remarkable agility in adopting and setting new trends. These dynamics are reshaping competitive landscapes across a myriad of sectors, from food and beverage to fashion and beauty.

Performance results from Tmall’s annual Double 11 event, namely world’s largest e-commerce shipping festival, underscore these market shifts. Since 2019, when the platform began to release such data, domestic brands have accounted for over 60% of the brands that surpassed sales of one hundred million yuan (US$13.9 million), which is considered a milestone. Last Double 11 in 2023, 243 of 402 brands that passed the mark were domestic brands.

This section of the report sheds light on the critical aspects of the approach of conducting branding localisation through the perspective of your target audience in China. Having worked with both international brands and local brands, Rubbie Chong's perspectives provide a comprehensive overview of the complexities and necessities of brand localization in a market as intricate and rapidly changing as China's.

How do you approach localizing foreign brands for the Chinese market?

What are some of the key considerations you have to take into account?

It's crucial to shift the perspective to that of Chinese consumers when looking at a brand, rather than just replicating its elements in the home market. For example, I have previously worked with two international beverage brands before their entry into China, one from Italy and the other from California. It's important to focus on incorporating design elements that resonate locally, so Chinese consumers can immediately recognize the brands' origins and DNA.

These two brands had relatively subdued branding in their home markets. One of them often engaged in artist and brand collaborations. However, in China, new brands need to understand that they're starting from scratch in terms of customer education.

In brand localization, it’s essential to analyze the brand's DNA, story, and tone to see if it resonates with Chinese consumers.

2 3

Can you provide examples of lifestyle and food and beverage brands you've worked with? What were some of the challenges and successes you encountered with these projects?

I have worked with brands from electronics to medical equipment to lifestyle. I always believe that branding must be able to assist businesses in being flexible in the market; it is also key for us to be proactive in spotting trends that make sense for the businesses.

The most recent example that comes to mind is me leading the branding of a Shanghai-based bakery Fuxing Flour Mill, which required constant changes, as food and beverage brands in China are among the most agile in adapting to consumer trends.

The bakery was initially positioned as a Japanese-style retro bakery. But during the development phase, it was found that the Japanese style might not suit current customer preferences. Gradually, the taste was adjusted more towards French, and the overall decoration and brand tone also needed corresponding adjustments. So, later on, the direction was slowly found following the brand's opening, and the design direction was constantly adjusted with the brand's growth.

What

are some emerging trends you see in the design and branding industry in 2024? How do you see these trends affecting the future of your work?

Regarding design trends, the rise of AI tools has greatly changed the efficiency of work. For example, designers can quickly collaborate with ChatGPT to come up with ideation text or quickly generate product demos with DALL-E to present design concepts to clients. However, I believe that GPT currently cannot replace designers, especially those focusing on the Chinese market.

This is because communication and refinement with clients still require in-depth human input. More importantly, tools like GPT lack information and insights about the Chinese market. In China, consumer influence is largely through individual social media platforms like Xiaohongshu's posts and WeChat and Douyin's videos, as well as offline trends, which GPT cannot access. Thus, there’s a greater need for experienced designers who are familiar with the Chinese market.

Why are pop-ups and exhibitions the best way to connect with Chinese consumers post-Covid

The Covid period in China from 2020 to 2023 was a bad time for any event planning and bad news for brand engagement. In 2022, the number of offline exhibitions nationwide dropped 53.2% to 2,572 events, according to the China Convention and Exhibition Economy Research Association. The pop-up store market, as analyzed by the domestic Xinsijie Industry Research Center, showcased a vibrant scene with a market size reaching 401.53 billion yuan in 2021 but was also subdued under the stringent zero-Covid policy. As the shadows of the pandemic started to fade in Q2 2023, exhibitions and pop-ups, along with other brand-led activities finally began to see a revival.

In the realm of luxury fashion, a sector often at the forefront of marketing innovation, brands have been keen to forge direct connections with consumers through pop-up stores and exhibitions, particularly in the latter half of last year until now. The Bulgari Serpenti 75 Years of Infinite Tales exhibition (March 24 to April 17), Gucci Cosmos in Shanghai (April 28 to June 25), Louis Vuitton resort pop-up store in Xiamen (June 5-12), and "Nóng Hó, Shanghai" pop-up (Oct. 12 to Nov. 12), Swarovski’s Masters of Light (Sep. 20 to Oct. 9), Prada exhibition PRADASPHERE II in Shanghai (Dec. 7, 2023 - Jan. 21, 2024) are all great examples.

While sharing an affinity toward co-creation for campaign content, how are Chinese Gen-Z consumers different? What other brand-led activities are taking place in China? Tom Griffiths, who spearheads such projects daily, is here to share his insights.

Why are we seeing so many exhibitions and pop-ups by luxury brands in H2 last year? What are some of the more effective ones you’ve seen?

I think the sudden boom in exhibitions last year (and flowing into this year too) can be attributed to a few different factors.

Partly I think we’re still seeing a lingering reaction to Covid lockdowns. Brands want to reconnect with customers in personal (in-person) meaningful ways. Going above and beyond products and new collections, to something deeper and story-led. An event is a great way for a brand to remind consumers that it’s still here, it’s still relevant, and conversely that the consumer is important to them.

Additionally, brands are leaning into exhibitions and events as a way of supporting co-creation. Great online content often comes from an offline event. When Gucci ran their Cosmos exhibition, elements within the set up were perfectly designed to share on social media. The overall set up had a great balance of “wow” moments and brand history, creating a huge amount of earned online media - something that’s not always the easiest to do within China’s KOL-driven social space.

2 3

In what ways are pop-up stores and exhibitions contributing to the overall retail and marketing strategies of businesses targeting the Gen-Z demographic in China, and what measurable impacts are they achieving?

Along with the brand-led exhibitions, we’re also seeing some other interesting offline events in the market, aimed more closely as sales. Dior held a repeat of their AW23 show in Shenzhen in July, along with a week-long VIP trunk show. Kenzo, Bottega Veneta and Chanel all did similar later in the year.

Dior’s VIP shopping experience, held in the same venue as their repeat show, was a combination of sales and brand experiences (perfect for social-media moments). We at Stink Studios helped to create a large projection room for them during this event, projecting footage of the original Paris show on three large gauze screens, highlighting the collection’s innovative use of textures and silhouettes.

One of the strongest trends, globally, in campaign content creation for Gen-Z is the concept of co-creation. That is providing consumers with tools, and/or ideas to create their own content with the brand. Born out of “Social Media Influencer” being the most desired job for this generation, Gen-Z are a group that want to be creative themselves. Going beyond simply sharing, Gen-Z want to create, remix and build upon existing brand experiences. This trait is vital to keep in mind when producing any brand experience and separates the great offline events from the rest.

What are

the emerging trends to be watched in 2024, in designing and curating pop-up experiences that specifically target Chinese Gen Z consumers?

Gen-Z globally are much more brand-savvy than previous generations. It’s common parlance among many young consumers to describe something as “off-brand”, where this was once only a term for those of us in the marketing industry.

Chinese consumers are no different, in fact they are best thought of as a group of branding experts. There’s a high expectation here among consumers to get the idea and the execution right, particularly when it comes to international brands.

When something feels off-brand, particularly when that’s being translated from another culture, consumers here will make that known and with social media they have the reach and the ability to make it known widely. Though of course conversely, when an event gives a strong and positive brand experience, Gen-Z are less cynical than previous generations, they’re much more likely to participate if given the opportunity to be creative themselves. It can be a real pleasure designing interactive campaigns for Chinese Gen-Z as there’s often a high chance of a good uptake (if designed correctly).

How podcasts become the best brand-building medium for luxury Adriana Zou

Director of Sales and Partnerships at JustPod

Adriana Zou is the Director of Sales and Partnerships at JustPod, a leading podcast and digital audio company in China. She has led the team to provide podcasting services to renowned global brands such as Louis

As mentioned, last October, Louis Vuitton unveiled “its latest pop-up in Shanghai named “Nóng Hó, Shanghai" (Hello, Shanghai) near Suzhou Creek, Shanghai’s oldest waterway. The one-month pop-up coincides with the release of the Maison’s updated version of the city guide and the debut of a Chinese podcast Louis Vuitton [Extended].

Podcasts have emerged as a favored channel for brands looking to engage with China’s affluent and well-educated demographic, mirroring their increasing appeal among marketers worldwide.

Aside from JustPod’s clients, which includes venture capital firm GGV Capital, Italian fashion brand Giada, and American apparel producer Nike, U.S. outdoor brand Patagonia, domestic underwear brand Neiwai and domestic athleisure brand An ko Rau have all ventured into the arena.

For a market driven by rapid responses in e-commerce, where sales figures often overshadow branding, it's uncommon to target a relatively niche audience. China’s most popular podcast platform Xiaoyuzhou 小宇宙 2022, versus the mainstream social platform Weibo that boasts an MAU of 700M this year. However, embracing such a focused approach may well carve out a valuable, distinct space for brands, proving its worth as a meaningful investment in cultivating deeper consumer relationships over time.

What kind of brands are suited to do marketing and branding via podcast? What kind of ROI are they looking for?

Brands genuinely dedicated to creating branded podcasts aren't fixated on conversion rates. The programs we do almost never feature any product placements. However, the established brands, with a long-view approach to brand-building, are very willing to invest time in nurturing lasting bonds with their listeners.

The profile of our clients has evolved with the economic cycle. In 2019 and 2020, emerging consumer brands like instant coffee brand Saturnbird seemed more open to experimenting with podcasts, possibly because there was a more favorable investment sentiment then.

Over the past two years, we've collaborated more with well-established consumer brands, such as Giada, Nike, and Louis Vuitton that have enough financial resources to support good brand storytelling. Also, for these big companies, it takes longer to validate internally before accepting a new medium.

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What kind of audience will they reach with this medium?

Based on our 2022 Chinese podcast report, we found that the typical demographic of Chinese podcast listeners are aged between 22 and 35, who predominantly live in first-tier and new first-tier cities, 90% of them have bachelor’s degree and 40% have master’s. They typically draw mid to high-tier salaries.

These individuals represent the ideal target demographic for both up-and-coming and established consumer brands. Moreover, they have an inclination towards content with depth and substance.

Has there been an update on the audience demographic since your 2022 podcast report? What are some of the emerging trends to be watched in 2024 in the Chinese podcast world?

The scale of podcast listeners in China is rapidly expanding. Based on our observations and data from audio platforms, the demographic profile of listeners has not changed significantly, with young people from first and second-tier cities still being the main audience, while the number of university students and listeners over 35 years old is gradually increasing.

Emerging trends in the podcast space:

1. More and more major brands are launching their own branded podcasts. As podcasts gain acceptance among more listeners, they are also increasingly accepted by decision-makers within companies. Branded podcasts are gradually becoming a "must-win" arena for brands seeking brand building opportunities. The success of branded podcasts from Nike, GIADA, and LV in 2023 has set a benchmark for branded podcasts and is expected to attract more brands to invest in podcasts.

2. The commercialization opportunities for original programs have significantly increased, and the commercialization system is becoming more mature. High-quality podcasts have become a new choice for brand advertising, and podcast channel advertising will become an increasingly important option for brands considering media placement.

3. The Matthew Effect in original programs becomes more significant. The increasing number of individual and branded podcasts will intensify competition in the podcast market. Top-tier programs, supported by audience acclaim and commercialization, will thrive, while new programs, especially personal ones, will find it increasingly challenging to survive.

How China’s sports ecosystem is changing, and what that means for brands

Sports have become increasingly significant in today's Chinese marketing landscape for two key reasons: one driven by governmental initiatives and the other rooted in grassroots movements.

In 2021, against the backdrop of the 'Clear and Bright' campaign led by the Cyberspace Administration of China, the fan economy faced stringent crackdowns. This period saw the cancellation and subsequent sentencing of ex-Louis Vuitton ambassador Kris Wu, prompting brands to meticulously vet their current and prospective ambassadors. Amidst this upheaval, athletes emerged as favored endorsers within the Chinese market. Their discipline, healthy lifestyle, and positive public image positioned them as potentially more reliable figures for brand partnerships, presenting a lower risk in contrast to the unpredictable reputations of entertainment celebrities.

Simultaneously, the COVID-19 pandemic stirred a longing for community among Chinese consumers, leading them to engage more deeply in sports activities. From skiing and glamping to cycling and climbing, each year sees the rise of a new national favorite. Looking forward, the State Council has set an ambitious goal within the National Fitness Plan (2021-2025): to expand China's sports market to five trillion yuan by 2025, highlighting the growing importance of sports as a significant sector in the country's economic and social fabric. Where is this going, and what are some of the overlooked trends and opportunities?

*Disclaimer: Views expressed in this report only represent David Zhang's own, not those of AISTS.

China consultant, AISTS

- International Academy of Sport Science and Technology

David Zhang

David Zhang specializes in sports partnership activation in the era of digital transformation and aims to connect Chinese brands and consumers to the world. He manages global partnerships between top sports properties and Chinese and global technology brands with on-site partnership activation experience at Olympic Games, FIFA World Cup, UEFA EURO, among others.

A slew of brands started using athletes as the face of the brand after China started cracking down on the entertainment industry and fan economy around 2021, where is this marketing trend going next year?

This trend is gaining more momentum in 2024 as two most-watched quadrennial sporting events, the Olympic Games Paris 2024 and the UEFA EURO football tournament in Germany, are approaching. To put this into context, the last Olympic Games in Tokyo generated around 48 billion views in China alone. Faced with these golden marketing opportunities, brands are already actively engaging with Chinese and global athletes for partnership opportunities.

Sponsoring athletes and activating may require more planning than brands are used to in other countries. The commercial rights of Chinese athletes are sometimes partially managed by the sports bureaus or the national team so that additional effort would be required to strengthen your partnership.

Also, immediate return on investment is rare in sports marketing. Chinese brands need to recognize the value of building a brand in the long term rather than simply look for quick wins of traffic and conversions.

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Can you talk about how this generation of athletes are changing, and how that may affect their role in the marketing world?

China is witnessing a shift from the traditional Soviet-style sports training system. For Gen-Zs, Sports boarding schools, known as 'tixiao', are no longer the singular path to becoming Olympic Champions.

An increasing number of parents are now investing in private training for their children and more young athletes are training and competing overseas regularly. Consequently, more athletes are showcasing dynamic personal brands; they are active on social media, sharing their personal lives, the shows they watch, and video games they play, opinions on current events. This more comprehensive personal brand and international exposure enhances their marketability and extends their influence beyond China.

Notably, lifestyle and luxury brands are increasingly recognizing the value of partnering with Chinese Gen-Zs athletes. US-born Eileen Gu stands as a testament to this trend. She enjoys the sponsorship of global luxury brands such as Louis Vuitton and Tiffany & Co., as well as being a brand ambassador for Swiss luxury watchmaker IWC Schaffhausen. Su Yiming, another Beijing 2022 gold medalist in snowboarding inked a deal with Cartier while the first-ever Chinese F1 driver Zhou Guanyu is Dior’s brand ambassador. These brands are investing in the growing influence of Chinese Gen-Zs athletes to drive brand preference and loyalty among China's sizable young consumer market.

What are some of the neglected opportunities in China’s sports world, and what are some of the emerging trends to be watched in 2024?

A few trends to watch in 2024:

Rising interest in outdoor sports: In China, there's a growing engagement in urban outdoor sports, a trend embraced by the public and looking to receive a boost through government support. Newly introduced Olympic sports such as sport climbing, flag football, breakdancing, and squash, etc. are poised to benefit from increased funding.

Sustainability in Sports: Sustainability is a pillar of the Olympic Agenda and key initiatives of various sports organizations. With the anticipation of more sporting events to be hosted in China in 2024 and beyond, this opens the door for eco-friendly sports practices.

Sports Travel: China’s sports travel business peaked in 2018 during Russia's World Cup as some 60,000 Chinese nationals applied for Fan ID, the largest after Russia, even when China did not compete that year. Looking at 2024, Chinese fans are gearing up to cheer on their teams overseas for the first time in 4 years. Paris and Germany would be amazing travel destinations to look forward to.

Influencer/Content creator in sports: Sending Influencers to create content at sports events helps brands drive more authentic engagement and provide more direct and authentic measurement if executed well. In 2024, more brands and sports IPs will team up with Chinese influencers and MCNs.

Co-founder and CEO of WPIC Marketing + Technologies

How should brands approach e-commerce content in China Jacob Cooke

Jacob is the driving force behind WPIC’s world-class data tools, e-commerce services, and artificial intelligence technology. Under his leadership, the firm has built out an expansive solution set covering data analytics, e-commerce activations and store management, brand strategy, creative campaigns, merchandising, warehousing, 3PL integrations, and more. He has lived in Beijing since 2003.

Since 2016, China's internet population dividend has gradually disappeared, with the cost of acquiring new users via e-commerce continuously increasing. Livestreaming and short videos have become the content formats that occupy the most of people's online time during and post-pandemic, respectively. Against this backdrop, e-commerce platforms have entered the fray, learning from Douyin's interest-based commerce and Kuaishou's trust-based commerce. Guiding existing users through content and social interaction has become a new breakthrough in e-commerce development.

A 2023 report by iiMedia Research indicates that the Chinese short video market has entered a phase of stable growth, with projections that by 2025, the market size of China's short video industry will reach over one trillion yuan. Meanwhile, domestic brokerage Tianfeng Securities predicts that by 2025, the livestreaming e-commerce market's GMV will approach seven trillion yuan, with a CAGR of 37% from 2020 to 2025.

The continuous development of digital technology, cloud computing, big data, 5G, AI, and other technologies in China also provide the possibility for e-commerce to keep moving and iterating. Let us then turn our attention to Jacob, who spearheads his ventures spread across China, Japan, South Korea, and Southeast Asia amid these structural shifts.

1With stories about top livestreamers facing public scrutiny and the emergence of new stars in the quiet luxury style. How do you anticipate the livestreaming sector changing in 2024?

For over two years, China’s live-streaming sector has become more and more fragmented. Originally, live-streaming was star driven with a handful of celebrities on Tmall drawing most of the viewership and interest from brands. Over time, the poor economics for brands of working with celebrity live streamers, as well as the crackdown on Viya and others, led to rise in popularity of smaller-scale live streamers with more favorable rates. The emergence of Douyin has further de-centralized the live-streaming sector, since now it is easy for a brand to work with small live streamers who have niche followings within their target demographic.

To take an example, in the mother-baby space, a brand can engage various mother-baby influencers who livestream on Douyin, whose live-streams will appear in the feeds of users consuming baby-related content. That makes it much easier for brands to reach their target buyers via live-streaming.

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How has the role of e-commerce content evolved in recent years, particularly with platforms like Taobao/Tmall emphasizing short videos and Tencent's increased focus on WeChat Channels? What impact has this evolution had on conversion rates for brands?

In terms of content, the most significant change in China’s e-commerce landscape has been the rise of Douyin.

In contrast to the traditional model of search-based journeys, Douyin’s social commerce approach is preference-based. It leverages algorithms to present individual products and styles through intuitive short videos and live-streaming formats. This approach tags and tracks consumer engagement, nudging them towards quick, emotionally-driven purchasing decisions. Douyin stimulates consumption demand by smartly recommending short videos and influencer-led live streams that mirror the consumer’s media tastes and purchasing preferences.

On Douyin, content has become the central hub connecting consumers and products, and more and more consumers spend money on products while consuming content. The continuous progress of social commerce technology has contributed to the magnification of content value and the value chain that promotes brand potential via product interactions and sales.

Douyin still presents high conversion rates, but it is becoming more competitive. Branded content on Douyin typically originates from the brands themselves or the KOLs they engage to promote specific products. The platform generally charges brands 3-4% of their GMV as a technical service fee. In addition, KOLs collaborating with brands on streaming content usually earn a 30-70% commission on the brand’s GMV. From this, Douyin extracts a 30-40% fee from the KOL’s revenue.

To remain profitable while utilizing Douyin, brands must effectively manage their revenue share with KOLs and continuously enhance their capabilities in creating compelling branded content on the platform.

WeChat is positioned to emulate the Douyin social commerce model given the popularity of WeChat’s video feed and the penetration of WeChat as a communication tool, but until Taobao/Tmall becomes a social/content destination in its own right, video content in Alibaba’s ecosystem will primarily be integrated into the search-based journey. This enhances the experience of Taobao/Tmall, but doesn’t necessarily create new inbound traffic.

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As we look ahead to 2024, what emerging trends should we keep an eye on in China's e-commerce sector, especially those that are closely linked to Gen-Z consumers? How might these trends shape the marketing strategies of brands targeting this demographic?

The most significant trend that we’ve identified at WPIC is that the customer funnel is becoming shallower and wider. If we go back maybe five years, the funnel is long and narrow. Almost all online purchases were made on Tmall and JD via search-based journeys. Customers would conduct product and brand research outside of those platforms, but in-platform ad spend on Tmall and JD was ultimately key, since customers would eventually return to those platforms to make purchases. Now, the number of shopping platforms has increased—PDD, Douyin, Kuaishou, and Little Red Book—and many of those platforms are geared towards more spontaneous purchases, especially Douyin. So a consumer can be exposed to a product/brand in one of many different ecosystems, and instantly make the purchase in that ecosystem. Or not—they might shop for different prices across different platforms. For a brand, the key is to have an omnichannel presence.

Why does community marketing work in China

After more than a decade of evolution, China's online communities have transitioned from the web forums to become mobile-centric ecosystems that connect people, information, and everything in between. When it comes to offline communities, Lululemon’s China entry that has been empowered by its vibrant Sweatlife events set the foundation for consumer brands to model after.

If Lululemon is considered the godmother of sports communities, then the latter assumes the role of a pioneering force for community marketing in China. During the pandemic, sports communities have emerged as vital spaces for fostering connections; for individuals to fulfill their yearning for connection, and for brands to connect with users while store opening hours were affected by China’s zero-Covid policy. From On Running to Patagonia, these communities with their distinctive target audience have transformed individual activities such as running, cycling, and fitness into collective sports, where people can meet like-minded others and immerse themselves in the brand culture.

In recent times, the online-to-offline model, transitioning from WeChat groups to physical events, has been effectively adopted across various consumer sectors and through collaborations. To delve into the mechanics and success factors behind this strategy, let's hear from the founder of the pioneering agency dedicated to community-focused marketing.

Marketer & Strategist at Projekt 86

Kadri Karolin Kõuts

Kadri is currently working with European SMEs and organizations on their China entry and scale-up strategies. Her extensive background in marketing, brand strategy and copywriting combined with bilingual capabilities make her a trusted specialist on China’s complex business environment. Originally from Estonia, she has graduated from The University of Hong Kong with a dual degree in Journalism and Fine Arts.

What is community marketing, essentially?

Why is it important in China?

Community marketing is a brand growth strategy that focuses on connecting and engaging with people to build long-term relationships.

In China, there’s already a cultural emphasis on relationships - guanxi 关系. In other words, trust among Chinese stakeholders is often built through personal relationships rather than formal contracts or agreements. That is essentially what community marketing is about: value-based two-way engagement and interaction.

Chinese consumers are also HIGHLY active on social media, which creates a perfect opportunity for brands to bring their consumers together in a non-intrusive and meaningful way. A great example of this is private traffic, in which businesses maintain direct communication channels on superapps like WeChat and Alibaba's ecosystem rather than relying solely on third-party platforms or channels.

In my experience, Chinese consumers tend to be a bit more skeptical of brands and products on the market. They are known to be diligent researchers, encountering multiple touchpoints along their customer journey. Therefore, employing consumer-centric community marketing strategies, both online and offline, can effectively engage them (and build trust!) across various stages of their purchasing process.

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How is it different from other forms of marketing, and what kind of brands need it the most?

Traditional marketing focuses on one-way communication with the sole purpose of promoting products or services.

Community marketing, on the other hand, is about two-way engagement, interaction, and providing value to community members.

D2C businesses that operate in niche markets, prioritize ethical practices, are startups or small businesses, or offer subscription-based services can really benefit from community marketing.

What are the dos and don’ts in community and community management? Can you give some examples?

Staying on-brand with your communication tactics is a must, of course. It’s also important to engage regularly - stay curious about what people have to say and respond to both positive and negative feedback swiftly.

The biggest don’t for me is being overly promotional. And letting your group chats slowly and painfully die out. *tumbleweed emoji*

What are some trends to be watched among Chinese Gen-Zs and millennials in online and offline community marketing in 2024?

There’s a lot more happening in the active lifestyle, wellness and outdoor space. Tier-2 and Tier-3 cities are starting to take note, too. We’ll be seeing more offline experiences such as pop-up events, workshops and amateur races when it comes to cycling, running and trekking. I’m hoping to see more recreational clubs popping up as they provide so many opportunities for connection. Sustainability is also becoming more of a priority, which is really wonderful to see!

ApertureChina

ApertureChina is a research and strategy consultancy that is focused on Chinese consumers, founded by Yaling Jiang in late 2023. As of 2024, the consultancy has expanded to design with the latest joining of design partner Rubbie Chong.

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Yaling Jiang Founder of ApertureChina