Douyin live commerce platform is a service platform provided by Douyin for local lifestyle service businesses. It aims to help businesses market and sell their products and services on Douyin.

Short videos were the most popular type of content on the platform, accounting for 83% of total transaction volume. Short video uploads grew nearly 1.4 times, while text content uploads grew 2.68 times.

Douyin Live streaming was also a major growth driver, with transaction volume growing 5.7 times. The number of live streams that generated transactions increased fourfold, and the coverage rate of merchant self-broadcasting reached 59%, with self-broadcasting transaction volume growing 4.45 times.

Daily search volume grew 1.57 times, and transaction volume driven by search grew 2.6 times. The most popular live-streaming content categories were:

• Food: Hot/unique dishes, fast food, hot pot, regional dishes, and bakery and desserts
• Services: Massage and bathing, beauty and fitness, hairdressing, car services, and nail and eyelash art
• Travel: Travel agencies, hotels and guesthouses, theme parks, attractions, and zoos

TikTok also saw significant growth in the number of new service providers and group-buying influencers on its platform. The number of new service providers increased 1.79 times, the number of businesses working with service providers increased nearly two times, and service provider transaction volume grew nearly eight times.

The number of group-buying influencers increased 2.89 times, and over 580,000 influencers earned income from the platform. The total transaction volume of influencers grew more than 2 times, and influencer discovery shopping generated 946 billion yuan in revenue.

Chinese influencer platforms: Weibo, Douyin, Kuaishou, Xiaohongshu

In the video interface, users can like, share, and follow video bloggers of Pinduoduo. In the upper right corner, “Duoduo video” provides an incentive scheme for users to watch short videos.

Watching short videos can get hundreds of virtual gold coins, and 10,000 gold coins can be converted into one yuan of cash. However, in addition to the first withdrawal, the minimum amount is 10 yuan, which means that you need to watch at least hundreds of videos to withdraw, which undoubtedly increases the user stickiness and user duration of the platform.

In the interface of “Duoduo Video”, there is a button to “search for the same product”. Users can click to search for products by analyzing the elements of the video screen.

This differentiates Duoduo Video from the mainstream short video apps, which usually embed shopping carts for the corresponding product in the videos. This means the product being searched on Duoduo Video is unlikely associated with the video blogger.

In December 2019, the top short video platform TikTok made a major adjustment of its shopping cart function. Consumers could see other video bloggers’ recommended products through a video showcasing the same product.

Pinduoduo has attracted many top online influencers to join the Duoduo Video platform; yet, it’s still in an early stage of development.

Short video penetration exceeded 70% in Q3 2019 with 810 million active users. Read more here.

Top 2 short video apps compared: Tik Tok vs. Kwai 

Data-driven, social media and omnichannel are the focuses of digital marketing growth for luxury brands, while “young”, “geographic concentration” and “social” are the keywords that best describe the trend of luxury brand marketing in China.

A recent report, jointly published by Tencent Advertising and Boston Consulting Group, revealed three major pain points for luxury brand marketing in China:

• how to better reach out to customers
• how to better increase customer loyalty
• how to better use data assets to drive business growth.

Luxury marketing in China: Young, geographic concentration and social are the keywords that describe the future trend

In 2018, China’s luxury market exceeded 110 billion Euros while maintaining a growth rate of 6%, accounting for 33% of the global luxury market. It is expected to grow at a CAGR (compound annual growth rate) of 5-6% in the future and to contribute over 40% of the global luxury retail sales by 2025.

It is an indisputable fact that China has become the most important market for luxury brands. The report shows that this growth is mainly driven by three major trends of Chinese consumers:

• luxury consumers continue to be young
• Geographically, the majority of luxury consumers are from the top 50 cities
• Social media influence remains strong

The report reveals that luxury consumers are becoming younger. Consumers aged between 26-35 y-o contribute 62% of luxury sales and consumers between 18-25 y-o contribute 12%.

Geographically, the majority of luxury consumers are from the Top 50 cities: At the same time, luxury consumption has become more widespread in China and shows an apparent trend of geographic concentration.

High-end luxury consumption has gradually penetrated into second-tier cities. Luxury consumers in the first and second-tier cities account for around 70% of the total number and contribute over 70% of total sales.

Currently, domestic luxury consumers from first and second-tier cities tend to travel abroad to buy high-end luxury goods while due to a limited number of local luxury shops, luxury consumers from third & fourth-tier cities tend to make their purchase in the first & second-tier cities. Therefore, how to use digital channels to manage retained customer assets will be one of the focuses in the future.

Social media influence remains strong. Because of the ubiquity of mobile social media in China, Chinese consumers have also demonstrated strong social orientation when making luxury consumption decisions. More than 80% of Chinese consumers choose the “rational” way of researching online and purchasing offline when buying luxury goods, far above the global average.

The core channels influencing Chinese luxury consumers’ purchase decisions are shifting towards high digitalization. The social media penetration rate is now as high as 67%. Luxury brands can, through social media platforms, better reach out to their target customers, attract and influence the younger generation of core consumers with customized contents.

For luxury brands, the key to growth is to know how to better leverage social media platforms and to achieve a tight online-offline connection in order to form closer relationships with their customers.

Pain point 1: How to leverage social media and reach out to customers

According to the report, customers spend a significant amount of time on social media platforms and contents, and at the same time, KOLs’ endorsement has a very significant influence on their purchasing decisions.

Therefore, how to leverage on social media has become a critical topic that luxury brands need to think about.

Kiki Fan, General Manager of Tencent Advertising’s Key Account Sales and Operation Department, shared the new idea of leveraging on social media with Tencent’s Smart Marketing Solutions:

“…no longer focus on a single social media platform, but use a more global perspective, connect users with all touching points through four major traffic channels, and make social media the key to generating traffic.”

First, the brands must have their own traffic. Currently, an increasing number of luxury brands have set up their own WeChat official accounts, mini-programs, and other tools in the WeChat ecosystem.

Because of the unique characteristics of luxury brand marketing, proprietary channels can best present the brand image and allow them to position most precisely in order to achieve in-depth interaction with their customers, which is also the best way to retain and accumulate loyal customers.

The social media traffic is in turn generated from fission marketing as well as voucher campaigns initiated by the brands. In this way, they can acquire traffic from the social behaviors of their customers within the WeChat ecosystem.

This approach can maximize the social energy of WeChat and help achieve exponential traffic growth. In the end, this traffic can still be directed to the brand’s own channels such as their mini-programs in order to build a true marketing closed loop.

The report shows that researching online and purchasing offline is the main way Chinese consumers make their luxury purchases.

Tencent’s Smart Marketing & Smart Retail Solutions offers a series of tools to allow brands to convert their offline traffic into online traffic and integrate the two. This can help them convert their traffics in offline shops and from shopping guides into direct sales.

The advertising traffic provided by Tencent Advertising, as paid traffic, can be an amplifier for brand marketing campaigns, enabling a wider range of customer connections under diversified contexts of the Tencent platform.

A number of luxury brands, including Cartier, Bulgari, and Gucci, are experimenting with these four traffic solutions provided by Tencent to effectively expand their customer base and realize growth.

Pain point 2: How to better improve customer loyalty

According to the report, among the current online purchase channels, proprietary channels are emerging and account for over 30%. Brand-managed mini-programs and WeChat public accounts became the fastest growing channels last year.

This phenomenon is closely related to the unique characteristics of the luxury industry. For luxury brands, their customers expect the same shopping experience online as in offline boutiques. Therefore, for luxury brands, the key to realizing future growth breakthrough is to build proprietary platforms in an asset-light fashion that can interpret their brand image and help them build a tighter relationship with their customers.

Kiki Fan stated that: “Tencent Advertising provides the Brand 2.0 model for luxury brands. With mini-programs as the core, we can help brands establish and operate their proprietary sales channels on WeChat mini-programs and help them achieve closed-loop marketing throughout the chain.”

Brand 2.0 does not only allow brands to establish their proprietary sales channels in an asset-light way through mini-programs and mobile payment but also enables them to offer consumers a richer shopping experience through the social media platform of WeChat.

Online mini-programs can provide brands with long-term online boutiques as a non-stop sales channel. It can also be used as the ground for pop-up shops as the brand’s online marketing campaign.

Tiffany launched its limited edition product line in its pop-up shop mini program during the 520 period (20 May, Chinese Lovers’ Day), and achieve efficient sales conversion with the help of advertising campaign in WeChat’s social sharing channel Moments and injection of social media traffic.

At the same time, on their proprietary channels, brands can deepen the emotional connection with consumers through collaboration with IPs or KOLs, or by creating customized contents that attract consumers.

On these channels, brands can communicate with consumers effectively, and by using the Tencent Smart Advertising tools to analyze and manage collected data, service their consumers more precisely, create their own CRM and in turn increase their brand loyalty.

Pain point 3: How to achieve business growth leveraging on data assets

In the past, the communication and marketing of luxury brands relied mainly on creating emotional resonance with and conveying brand values to consumers.

In a highly competitive market environment, how to collect and retain consumer data from the four major channels and convert it into business and strategic insights in order to drive growth has become the third biggest pain point. Tencent Think Tank can effectively address this pain point and help brands explore potential growth opportunities.

Thanks to its accumulation of data insights over the years, collaboration with third-party partners, and excellent multi-dimension strategy development capabilities, Tencent can help brands match target consumers as well as potential consumers through its Data Think Tank, provide advertisers with many options of group combinations and expansion models.

With Model LAB’s more intelligent customizable model, flexible targeting, positive-negative target sample comparison functions, and machine learning training models, Tencent help advertisers precisely target group combinations, optimize marketing budget allocation, increase client base expansion capability and ultimately boost conversion throughout the entire chain, according to the report.

This is like providing luxury brands with a compass on the sea and help them effectively reduce the time spent seeking growth in China.

For luxury brands, China still has huge prospects and potentials to be explored in the future.

“Data capability is the foundation of growth for luxury brands, and is the basis on which marketing strategies should be developed.” Kiki Fan said.

She states that thanks to Tencent’s Data Think Tank’s multi-dimensional insight and strategy development capabilities, brand data assets collection and analytic capabilities, and the one-click marketing applications, luxury brands can obtain 360-degree portraits of their consumers at different stages of the consumption cycle and truly understand them.

This can allow them to identify key loss/conversion nodes in the consumer decision path, and to understand the relationship between audiences and advertising. Brands can then develop a more optimized and effective marketing strategy in order to capture the business opportunities and achieve growth brought by China’s 820 million mobile Internet users.

Chinese New Year is the most important festival in China. Shopping is an integral part of Chinese people’s celebration, and naturally, e-retailers were engaged in fierce battles to compete for attention, and hence preferences, of consumers in the days leading up to Chinese New Year (February 15 in 2018).

JD.com (partly owned by Tencent) and Tmall (B2C platform wholly owned by Alibaba) launched their promotional videos since mid-January. The “battlefield” spanned from main platform Weibo to WeChat, BBS, mobile video pages, video websites and news apps.

In this case, JD.com and Tmall both launched family themed videos on Weibo and WeChat. They also embedded information on Chinese New Year online sales events into these videos to maximize the impact.

Who has a bigger share of voice? More importantly, who has earned more positive sentiment from consumers? Kantar Media CIC did a data analysis based on user-generated contents.

Tmall ‘overbuzzes’ JD.com on Weibo

Both Tmall and JD.com generated significant volumes of buzz on WeChat from their Spring Festival sales campaigns. By cooperating with popular WeChat accounts and taking advantage of unlimited content space as well as rich formats available on WeChat, Tmall and JD.com ensured that WeChat users can be fully informed of their offers during the holiday season.

Tmall vs JD.com on WeChat buzz volume

Their voices were also well heard on news platforms, especially the news channel of Sohu.com and news aggregator app Toutiao. Combined together, the two contributed more than half of total buzz volumes Tmall and JD.com generated in all news platforms. (57.8% for Tmall and 59.4% for JD.com).

However, Weibo is the make-or-break place for the campaign war. JD.com’s share of voice was overwhelmingly defeated by Tmall, which leveraged its partnership with celebrity accounts on Weibo, such as Chinese actress Tian’ai Zhang (张天爱), Chinese actor Honglei Sun (孙红雷), as well as influencer account Hui Yi Zhuan Yong Xiao Ma Jia (回忆专用小马甲). These accounts retweeted or mentioned Tmall videos and managed to help them go viral. Weibo users posted organic comments underneath these clips. Tmall also launched several rounds of retweet lucky draw campaigns to encourage Weibo users to retweet their posts. This tactic also expanded its impression.

By contrast, JD.com just published its video on its official Weibo account and through Weibo accounts of its partner brands, creating much lower volume of buzz.

Tmall vs JD.com on Weibo buzz

Tmall launched a series of family-reunion themed short videos. Many of them told stories of younger generations returning home from big cities for the Spring Festival break and ran into “lifestyle shocks” with their parents. Many of the videos finished with a heart-warming ending, together with the Chinese New Year sales event promotion from Tmall. These impressive videos were retweeted by tens of thousands of times and viewed by more than 23 million times. Weibo users left mostly positive comments under these posts.

JD.com launched one video clip for their Chinese New Year sales campaign, telling three stories of an elderly father, a left-behind child in rural China and a daughter in a Chinese city missing their son/parents/father far away. The slogan was “Don’t let the ones love you wait too long”. However, that’s all video contents from JD.com on Weibo for the Chinese New Year campaign.

In the following days, the focus of JD.com Weibo posts moved to its partnership with other brands, mostly putting its JD.com dog logo as the central visual element for sales campaign posters. It did attract some attention among younger users, but overall their impression was very limited.

In this year’s Chinese New Year sales campaign, Tmall and JD.com both chose “home-coming” and “family reunion” as their themes. However, JD.com only scratched the surface, and then moved onto direct sales promotion, albeit using its JD.com dog logo to soften it a little bit. Tmall, on the contrary, spent much more efforts to create longer and better-scripted videos on this topic, which had moved many users. According to our analysis of Weibo comments around Tmall and JD.com campaigns, Tmall related comments were more family oriented. So apparently people were more emotionally impacted by the Tmall campaign.

Kantar Media CIC Viewpoint

In 2018 Chinese New Year e-commerce promotion campaign competition, Tmall toned down its promotional video clips to keep them away from direct and hard sales pitches. Instead of focusing on the level of discounts available during the holiday season, they emphasized the “homecoming” and “family reunion” atmosphere of these special days. This paid off well, according to our analysis of social media user responses.

In the comments underneath Tmall videos, there were lots of mentions of family, parent, reunion themed words. It is true that Spring Festival is not as special as before in terms of food/gift/shopping options only available during its time, still, Chinese people celebrate it more as a unique season of reuniting with family. This is why Tmall’s videos have triggered so many strong positive feedbacks from consumers.

JD.com also launched its video campaign based on “home-coming” theme. But it didn’t leverage the contents and quickly moved onto poster-based sales promotion campaigns partnered with brands. The buzz volume and sentiments coming out from this tactic were not as high as those of Tmall’s.

During a season as special as Chinese New Year, brands have to dig deeper to understand what this holiday truly means for consumers, and then influence them emotionally. Only through this approach, can brands become more emotionally relevant to consumers.

The Impact of Taobao Villages 2017

This article was originally published on kantar.com

Sora Aoi launched her own product “Spakeys G-Self silk bra” on Weibo with a limited number of 528 sets, each highly-priced at RMB 1,288. This product was launched for a limited time of 5 hours and 28 minutes and all were sold out.

Sora Aoi’s Popularity on Weibo

Sora Aoi is best known in China as a Japanese AV idol who has over 14.9 million fans on Weibo. Within 6 hours since she opened the Weibo account, its total number of followers reached 400 thousand, exceeding that of her Twitter account.

“Bra” is a clever choice of product for the perception of Sora Aoi’s character on China internet.

Pre-launch Campaign on Weibo

A simple post on Weibo was published on 19 May 2014 to “leak” the product idea, mentioning and asking (@) Xiaomi Tech’s founder Lei Jun for the advice of e-commerce strategy.

It was taken by China internet users as a piece of very entertaining news and got re-posted for about 23,730 times. A few reasons behind:

• E-commerce itself is a popular topic on China internet; some experts and celebrities in e-commerce industry shared news and some even provided suggestions
• Underwear designed by AV idol was news worthy and interesting
• The details were not released which got China internet users curious
• Mentioning a celebrity got the news viral; besides the wide exposure on Weibo, many main news media published articles on this news

Pre-sale Publicity on Weibo

As one idea from an e-commerce celebrity fan, Sora Aoi “recruited” 1,000 fans on Weibo to “experience” her own designed G-self underwear. This small campaign not only engaged its fans but also won her product great exposure through Weibo.

It’s a “hot” topic and many regular China internet users re-posted the news and submit their request to experience it. “1,000” quota is very limited considering she has over 14 million fans. And each was carefully selected including some grassroots celebrities and influencers to further push the exposure.

Product Launch Promotion

Spakeys G-Self Bra was not simply launched for purchase. Price tag over RMB 1,000 for underwear may face a lot of difficulties getting sold well on the Internet. But all 528 sets were sold out within planned 5 hours 28 minutes.

Time and quantity limit. The limited number of 528 sets and limited time of 5 hours and 28 minutes are telling the fans to “hurry up”, allowing online users little time to carefully consider and do comparison shopping.

Incentives and sales strategy. The product launch post carefully targets two groups of people, both of whom are very interested in the product: one who can afford and are willing to pay; one can not (or considering the bra too expensive).  For the former group, the sale promotion gave away silk scarf worth over RMB 1,000 to push the sales. For the other group, it encouraged them to share the news by giving away 180 sets to the lucky ones who re-post it.

The whole product launch consisted of several carefully crafted campaigns to promote the high-end underwear brand Spakeys via G-self series bra. It definitely got the awareness and exposure but I don’t think that’s enough for influencing high-end underwear brand. And, the question now is, how and whether or not Spakeys can capture and capitalize on this product launch.

My suspicion for the whole “Sora Aoi” bra campaigns is, it’s more of a marketing promotion than a self-owned product launch. The “Spakeys” brand’s official website spakeys.cn, after whois analysis, is owned by Xianyidai Co., Ltd. which happens to be an underwear company.

This is a deep collaboration between an influencer and a manufacturer, which is a commonly seen business model in China. Live streaming is another popular sales channel in China you could check out.