What’s this “520 day” that intrigues many in China? The term 520, an abbreviation for May 20, denotes an unofficial Valentine’s Day in China. The number “520” phonetically resembles “Wo Ai Ni” or “I Love You” in Chinese.

While February 14 remains the globally recognized Valentine’s Day, the Chinese honor their affection on several other occasions as well, including May 20 (520 Day) and the Qixi Festival. These days are regarded as Chinese versions of Valentine’s Day, with the 520-day holding special significance as it symbolizes “I Love You.”

Despite not being an official holiday, 520 Day has garnered popularity among couples and singles as an opportunity to express romantic love.

Due to the ongoing pandemic in 2020, the “520 Day” celebration witnessed changes with fewer public gatherings. Nonetheless, businesses capitalized on the festival by initiating online engagement campaigns.

For instance, luxury brand Prada, created a campaign using the hashtag #prada520# on Weibo, one of China’s top social platforms. The campaign featured brand spokesperson Cai Xukun and garnered 180 million views as of May 5.

The “520 Day” traces its roots to Taiwanese singer Fan Xiaolan’s song “Digital Love,” where “520” symbolized “I love you.” Over time, “521” was also interpreted as “I am willing,” and “I love you” in China, earning various epithets like “Marriage Day,” “Love Expression Day,” and “Love Festival.”

These two dates, May 20 & 21, serve as annual internet Valentine’s Days in China, echoing the phrases “I (5) love (2) you (0/1)” in Chinese. While they lack historical roots, they are products of commercial promotions in the 21st century.

Despite not being official holidays, the evenings of these days see restaurants and cinemas bustling and prices surging due to Valentine’s Day celebrations.

May 20 is particularly crucial as men utilize this opportunity to express their romantic love for women, often presenting gifts or ‘hongbao.’ Some couples even choose this date for their wedding ceremony.

The difference between 520 and 521 is that the former is largely a day for women, while the latter caters to men. On May 20, men express “520” (I love you) to their significant other. The subsequent day, women reply with “521” to indicate their reciprocation of love.

For marketers in China, these days present lucrative opportunities for promotions. The rising orders of roses, surging sales of chocolates, and full-house hotels underscore the business potential of the “520-day festival.”

A few notable examples of this trend include the most retweeted photo on Sina Weibo on May 20, 2014, and a post by The Economist in 2017 asking “how do economists say ‘I love you’?” The topic #Sweet 520# witnessed almost 4 million discussions and over 1 billion views as of noon on May 20, 2017.

The characteristics of 520 Valentine’s Day include:

1. Fashionable: “520” resonates with the younger generation who find creative ways to celebrate the day, even choosing this date for their wedding. It’s also a popular topic on WeChat Moments and QQ group chats.
2. Younger: Those under 30 years old, who are quick to embrace new trends and spend much of their free time on the internet, are the primary followers of 520 day.
3. Spiritual: Gifts exchanged on May 20 and 21 lean more towards the “spiritual.” It could be a coded message of love sent over the internet or mobile phone.
4. Implicit: Unlike the globally recognized Valentine’s Day, which is for established couples, the 520 Internet Valentine’s Day is preferred by men and women to subtly express their love using digital codes.

5 key trends shaping the Chinese economy, accelerated by COVID-19

Centered around the theme of the ‘Spirit of Nature’, this collaboration draws upon Burberry’s longstanding exploration of the relationship between humans and nature.

The fashion house’s affinity to the outdoors links harmoniously with Honor of King’s character Yao, who embodies the spirit of nature and is able to take the form of a deer – also an expression of the Burberry animal kingdom house code.

In keeping with the fashion house’s signature gabardine, pioneered by founder Thomas Burberry and designed to protect its wearer against the elements, Yao plays the role of a protector for her fellow gamers within Honor of Kings.

Yao’s two exclusive skins have been inspired by Burberry house codes as reinterpreted by Riccardo. Seamlessly blending the physical and digital worlds, Yao’s ‘Spirit of Nature’ new skin draws upon Burberry’s rich heritage and includes references to the iconic House check, the trench coat, and the Thomas Burberry Monogram.

Burberry launched its first luxury social retail store, empowered by WeChat

This skin draws upon the classicism of these Burberry hallmarks and reinvents them into a modern look for Yao to reflect her strong, dynamic and adventurous character.

Yao’s ‘Spirit of Nature’ deer takes a mirrored form, drawing upon Riccardo’s fascination with the concept of duality and the creativity found in two perspectives.

In Honor of King’s first collaboration with a brand on its ‘Legend’ skin offering, Burberry has co-created a ‘Spirit of the Forest and Ocean’ Legend skin for Yao using one of the runway looks from the house’s Spring/Summer 2021 collection ‘In Bloom’ – a collection inspired by thoughts of regeneration, dynamic youth and reconnecting with nature.

Yao’s look draws upon the collection’s mythical marine references and features a statement warm royal blue collarless trench coat and a crystal-embroidered vest. Mirroring the essence of the look, the ‘Spirit of the Forest and Ocean’ Legend deer pulsates blue light through its crystal body.

Building upon the existing partnership between the luxury fashion house and Tencent, this collaboration continues to reflect Burberry’s ambitions to push boundaries through innovation and creativity, enabling the Burberry community to explore the digital realm of Honor of Kings in an exciting new concept.

The exclusive Burberry skins will be available to purchase for all Honor of Kings players in mainland China. The skins will then remain part of the players’ permanent collection.

China luxury consumer behavior study 2020

Companies that value customer empathy and digital experience will also be favored by more customers in the future. The protection of customer data security and privacy is becoming important and urgent.

Here are the 10 forecasts from IDC on China’s future customers:

1. Digital first

By 2021, 70% of organizations will take the lead in turning to digital through automated operations and contactless experiences, as physical interaction has become a convenience of the past.

2. Empathy

By 2025, enterprises with excellent performance in empathy and security on a large scale will surpass 40% of those without the same ability.

3. entertainment consumption

4. consumer-generated video

By 2025, 50% of China’s fortune 500 enterprises’ investment in the consumer-generated videos will see its impact on enterprise income and customer satisfaction.

5. new environment

In 2021, Chinese customers will spend an additional 25% on working with companies whose digital transformation can quickly and easily adapt to the new business environment.

6. partners

7. organizational control

By 2023, 45% of organizations will use standardized workflow to integrate with enterprise applications to regain control over the stability of user-defined applications, thus improving customer data security and providing an excellent customer experience.

8. social responsibility

By the end of 2023, 80% of the large and medium-sized enterprises will formulate or revise the social responsibility statement, and make their customers recognize it again, so as to promote the development of social undertakings.

9. personalized experience

10. privacy value

By 2024, privacy will be redefined as “data value”, and suppliers will provide customer loyalty service programs to exchange consumer data, with 70% of consumers participating

Top 10 forecast of China digital innovation in 2021-2025

It connects the advertisers’ accounts with their WeChat Work (enterprise version of WeChat) accounts in order to better reach out to target groups and to increase customer management efficiency. This, in turn, can help improve customer services and conversion rates.

Making the connecting more efficient

The customer acquisition solution combining WeChat Advertising with WeChat Work can provide advertisers with tools for building landing pages, automatic deployment of multiple customer services and smart optimization.

These tools allow advertisers to acquire customers in a new way and significantly simplify the process of customer reach-out and acquisition. With these tools, advertisers can manage their traffic volume at a more granular level and maximize customer value.

Tools for Building Landing Pages

In order to help advertisers achieve high efficiency in reaching out and acquiring customers, new follow-widgets and pages for WeChat Work are added to the native promotion pages and landing pages.

In this way, WeChat users can quickly and easily follow the advertisers’ WeChat Work account. Advertisers can quickly achieve conversion and track their landing pages on WeChat Work based on the characteristics of the sector they are in.

Advertisers can monitor the number of their followers on their Tencent Ads back-end dashboard or WeChat Work in the process of advertising campaigns.

Automatic Deployment of Multiple Customer Service Staffs

This solution provides advertisers with the ability to automatically deploy customer service staff in order to make their services more efficient.

Advertisers can authorize WeChat Work via the Tool Box in the back-end. After authorization, they can add departments or employees within their organization to create customer service groups.

In the process of advertisement deployment, unique QR codes will be generated automatically for each customer service group. When the user scans the QR code, the system will automatically deploy a customer service staff within the group. The user can then enjoy 1-1 service after adding the operator as a friend on their WeChat.

Smart Optimization

With the new solution and oCPM bidding, it can help to optimize the “Follow WeChat Work customer service account” process, and in turn, can improve the conversion rates for customer acquisition.

Advertisers can rate the process and identify target groups that are more likely to follow, then optimize their advertisements with better conversions.

The new solution makes the process of customer acquisition significantly shorter and improves the conversion rate, allowing them to effectively lower the costs of customer acquisition.

In the meanwhile, the new process fully leverages on the connection between advertisers and users to build a direct communication channel between users and customer service operators. This can allow advertisers to offer users efficient, high-quality, and real-time services.

In addition, advertisers can achieve high-conversion and retain target users in their WeChat Work. These users can be reached and engaged again through WeChat Moments (WeChat’s social networking section) and community management (WeChat Group) in order to maximize their user value.

Currently, this solution supports an omnichannel deployment through WeChat Moments Ads, Official Account Ad, and Mini Program Ads.

Thanks to the 1.15 billion users, the highly efficient smart deployment technology, and the targeted reach ability, advertisers can retain users in their WeChat Work in a highly efficient way. They can then provide these users with more personalized professional service, increase the user value, and achieve business growth.

Helping eCommerce to Capture Long-term Value

With the increasing cost of traffic, the marketing-to-sales eCommerce business model starts to encounter its bottleneck. The difficulty to retain users, together with the long sales cycle for high premium products makes it very difficult to guide users with high-quality products and services in the long term.

Therefore, the operational advantage of being able to constantly increase user value proves to be of great value.

With the new process, users can follow the advertisers’ WeChat Work account and interact directly with customer service staff after seeing the ad, allowing higher effective and real-time services.

At the same time, advertisers can also introduce their products and content directly to users and keep them engaged. Combining with e-commerce promotions such as Double Eleven, advertisers can keep the push marketing content effective.

In addition, thanks to WeChat Work accounts’ ability to post on WeChat Moments, advertisers can timely update users on their products, professional knowledge, and maintain customer relationships in a non-intrusive way.

Targeting users with a certain level of knowledge on the products, advertisers can manage the community through groups in WeChat Work too.

In this way they can efficiently reach out to their customers afterward and provide them with more professional and customized services, therefore improving user engagement and increase their re-purchasing frequency.

Combining with the ability to connect to WeChat mini-programs, advertisers can integrate the online shopping function of the mini-programs into their WeChat Work, providing multiple service windows to customers.

A fashion brand ALFA has successfully reduced the time from acquisition to conversion and its user acquisition cost by 50% with the help of the new WeChat Advertising + WeChat Work solution.

At the same time, their operation efficiency increases significantly thanks to the integration of WeChat Moments and various promotional campaigns in WeChat community. Users in the WeChat groups are highly engaged and frequently re-purchase.

Helping the Travel Sector by Converting Target customers Online

Travel related products usually feature high price and long decision process. Its target customers have high conversion barriers and diverse needs. In order to boost conversion, advertisers from the travel sectors usually need 1-on-1 real-time communication to fulfill the customer’s different needs.

In the future, by converting offline customers online and integrating operation and management online, the travel sector can effectively benefit from this new solution.

In the new process, advertisers from the travel sector can exhibit their brands and promote their products on their native promotion page, in order to attract target customers and retain them on their WeChat Work accounts.

At the same time, with the personalized welcome display, advertisers can send useful content such as product information to their new users in a faster manner, encouraging better user engagement.

WeChat Work provides advertisers with a more convenient online communication tool, enabling real-time communication, and facilitating the delivery of personalized services.

Corporate images are clearer on the WeChat official account, effectively building trust and awareness of the brand. At the same time, advertisers can manage users based on various tags such as destination, travel time and wiliness, and provide users with more customized services.

They can also roll out different promotional information in the WeChat groups and constantly reach out and convert users, allowing a more granular service.

Yunnan Kunming Travel Agency, focusing on Leisure Family Trip, has significantly shortened leads engagement time and reduced their costs with the help of the new process and oCPM model.

Within the trial period, the cost of acquiring a new follower for WeChat Work is near the cost of their mature conversion funnels. In addition, it has profiled their users using tags and promoted limited time offers, group purchase offers in their WeChat groups in order to guide users and achieve better conversions.

With the help of WeChat group promotions, the deposit conversion rate increase by 60%.

The integration between WeChat Advertising and WeChat Work effectively could meet various advertisers’ needs, helping them shorten the acquisition path, reach out, and convert targeted audiences.

WeChat Work allows advertisers to get closer to their users and lower the conversion barrier. At the same time, WeChat Advertising helps advertisers to reach out, convert, and retain target users in multiple ways.

Audi launched its video ad campaign on WeChat Moments earlier today. What’s interesting is that the video played is an Infiniti ad.

Based on discussion from a WeChat Group of advertising professionals, Audi’s spending 30 million yuan working with Tencent Social Ads.

Tencent Ads has issued an apology and shared that the wrong ad creative launched at 9 am today was taken offline at 10:30 am. It was caused by an automobile service company’s careless mistake.

The ad generated 3,959 impressions with a total spend of 202 yuan according to Tencent. But the media coverage about this incident is growing; good news for both Audi and Infiniti.

Based on the provided figure, the CPM is roughly 51 yuan (US$7.2) and Audi’s campaign most likely targets lower-tier cities. As Beijing and Shanghai targeted video ads on WeChat Moments cost about 100-300 yuan on CPM.

And, some influencers are making fun of Audi on China’s social media, which drives more free coverage.

Shuangye, a Weibo influencer with over 1 million followers, published a post, “Audi is indeed a generous company, spending money in WeChat Moments for Infiniti China…”

Some companies are taking advantage of this incident, like Volvo:

#Audi Infiniti# has become a hot topic on Weibo with over 3.4 million views as of writing this post. But neither Audi nor Infiniti has responded yet. It’s a good opportunity for Audi to generate good awareness for its Q8 though the value from from the incident far exceeds Audi’s 200 yuan spent.

Fake fans and manipulations on China social media

Update: Infiniti responded in the evening via its Weibo account:

China’s effort to expand garbage sorting into more cities will have a far-reaching impact on consumers’ shopping behavior and their attitudes towards brands.

Since July 1, 2019, Shanghai has enacted its household-garbage sorting management regulation, which stipulates that all garbage must be sorted into four categories: recyclable waste, hazardous waste, household food waste and residual waste.

Any individual who mixed hazardous waste and household food waste with other garbage could be fine up to 200 yuan. To ensure everyone will follow this new rule, the city government “recommended” residential complexes to implement a “designated time and location for garbage throwing”, which ends up people being allowed to throw away trash ONLY at two two-hour time windows every day (eg. 6:30 – 8:30, 18:00 – 20:00).

These efforts have ushered in new buzzwords on Chinese social media, such as “trash-throwing freedom” (which means 996 workers (9 am till 9 pm, six days a week) don’t have time to throw away their trash during designated time), and a new greeting line for Shanghai people when they meet in front of the trash bins: “what kind of rubbish are you?”

Jokes aside, garbage sorting will not stop at megacities like Shanghai: China is expanding this practice to all big cities. By the end of 2020, 46 big cities, mostly with populations of more than 2 million people, will have established their “basic garbage sorting systems”. By 2025, all prefecture and above level cities should have done so.

For Chinese consumers, very soon when they make purchasing decisions, they will have to think about the eventual cost of throwing away the garbage. Some more environmentally sophisticated consumers will also consider whether the brand they’re buying from has minimized its impact on the environment through its production, operation, and distribution.

This trend has turned sustainability into a new growth opportunity for brands in China – it is no longer just a corporate social responsibility initiative, it is a concrete business consideration. Kantar’s researches have found that sustainability-aware brands will win more Chinese consumers as this trend gets stronger.

Do Chinese consumers care about sustainability?

Now 93% of Chinese consumers think FMCG manufacturers did not do enough to reduce plastic waste; 54% of Chinese consumers care about sustainability and have taken actions.

• Eco Actives care about sustainability, and have taken multiple actions to reduce waste;
• Eco Believers care about sustainability, and have taken one or two actions to reduce waste;
• Eco Considers care about sustainability, but have not taken actions.

Kantar Worldpanel data showed that nearly half of Eco Actives live in tier-1 or tier-2 cities, and they are more likely to be high-income family. This means that sustainability-aware consumers have stronger buying power. By better serving this segment, brands can not only contribute to protecting the Earth but also find long-term growth for themselves.

In fact, even without China’s garbage-sorting efforts, Chinese consumers’ attention on environmental protection has been growing organically.

Global Monitor, another survey by Kantar, has found that the proportion of Chinese consumers agreeing “I feel that I can make a difference to the world around me through the choices I make and the actions I take” jumped to 63% in 2019 from 51% in 2017.

Also, 71% of surveyed consumers are willing to “pay more money for products that are better for the environment”, 16 percentage points higher than the global average. Of all surveyed consumers, 84% said “it’s important to me that the brands I buy from are committed to making our society better” – 18 percentage points higher than the global average.

Success cases

In China, many brands have launched and implemented their sustainability strategies, and make them known by consumers. Kantar Worldpanel’s research has found that consumers can identify some brands that have taken efforts to reduce waste, such as KFC, McDonald’s and Starbucks.

Many frequently mentioned brands are fast-food retailers, instead of FMCG brands. This is partly because fast-food brands have been quite active in protecting the environment in the past year.

Act now

“Sustainability” is no longer an optional box to tick: it’s a compulsory question that all brands will be required to answer. This is also not a homework only for brand’s marketing department – it’s for every business unit and for every step in a brand’s operation. Kantar suggests brands to develop and implement their sustainability strategy from the following dimensions.

• Consumer understanding
  • Consumer’s need to buy sustainable brands
  • Trigger and barrier to recycling/reuse product/package
  • Motivation to purchase
  • Loyalty towards sustainable brands
• R&D
  • Ingredient innovation
  • Material selection
  • New technology
• Package innovation
  • Modulization design
  • Possibility to be reused/recycled/degraded
  • Communicate sustainable messages via package
• Communication language
  • Establish a brand mission on sustainability
  • Encourage consumers to live a green lifestyle
  • Educate consumers on how to use sustainable products/packages
• Supply chain
  • Upstream – zero waste production
  • Midstream – high efficiency distribution/logistics
  • Downstream – recycle waste & educate consumers
• Collaboration
  • Collaborate with tech companies to develop the product, upgrade production line, re-design service
  • Collaborate with sustainability organization/charity to better communicate brand image

Join third-party sustainability initiative or alliance, even working with competitors, such as the Loop initiative supported by Unilever, P&G, Colgate and many other FMCG brands in the United States.

Vlog trending in China

This article was originally published on Kantar.com

Although 80% of WeChat users use Official Account, 73% of users followed less than 20 official accounts (OA), of which 24% followed less than 10 and nearly 50% only 10-20, according to data from QuestMobile.

In terms of usage time, more than half of the users spend 10-30 minutes per day browsing the official accounts. In contrast, WeChat has an average daily user duration of 77 minutes.

Interpersonal relationships have a great impact on WeChat users, and 41% of users will follow OA based on recommendations from acquaintances.

In addition, the main influencing factors are interest & hobby related content, such as culture, film and television, car, reading; many large OAs are developed based on this layered matrix, very similar to a city newspaper with different types of the content group.

WeChat Official Account currently has two types: subscription account and service account. The subscription account is suitable for individuals and organizations with strong media functions, allowing daily push notifications to all followers. The service account is suitable for the organization and the service function is outstanding.

Compared with regular WeChat users, WeChat OA users are younger with higher online consumption capacity in second-tier and above cities. Most users pay attention to less than 20 official accounts, and more than half of them spend 10-30 minutes a day browsing OA.

Women are more likely to be influenced by others’ OA recommendations, with more proportion of users following over 20 official accounts. In comparison, three-quarters of men follow no more than 20 OA.

Male users prefer to pay more attention to finance-related OA and know all kinds of financial information while female users have high shopping enthusiasm, followed by the strong interest in emotions, education (more children’s education) and so on.

Related Dossier: WeChat Official Accounts

Vlog has become the new theme of user growth competition on several video platforms in China. One of the new players who recently joined the arena is iQiyi.

iQiyi, whose main content is professional copyright videos such as movies, TV dramas and variety shows, has recently launched a Vlog application called “iQiyi Suike”, which is obviously intended to share a piece of vlog market with the leaders such as Kwai, TikTok, Bilibili, Weibo, etc.

Vlog can be regarded as a kind of “video log” with popular themes of travel, food, pets and so on. Its production is relatively simple, the creator uses the camera to record what he sees and thinks in his daily life, and then through later editing, with music, text or stickers, can produce a Vlog.

Usually, it’s a little longer than the 15-second short video on TikTok, and a little shorter than the professional copyright content on iQiyi. It’s a little more delicate than the food broadcasting on Kwai.

In order to encourage users to create Vlogs, the design of iQiyi Suike App is very simple, with only three interfaces: main feed, publishing, and personal homepage. There is no search function for vloggers or content, nor any categories of bloggers or content. Users can get content by pulling down feed pages and triggering updates.

Several video platforms have started promoting vlog since the second half of 2018. Bilibili’s vlog content upload has increased by 7.6 times in April 2019, compared with April 2018, according to 36Kr.

This month, Kwai began to test the long video, limiting the video length to more than 57 seconds, less than 10 minutes. A month ago, its competitor TikTok also started internally testing videos of up to 15 minutes long. In April, TikTok opened the limit for 15 seconds longer short videos, and the original Vlog with a duration of more than 30 seconds can participate in the “Vlog Billion Incubation Plan”.

Xigua, another video platform under the same company Bytedance as TikTok, also launched their campaigns to support vlogger this month. In comparison, Weibo’s vlogger growth mainly focuses on celebrities.

From Baidu search trend shown below, we can see a surge of interest in vlog since the second half of 2018:

However, Vlog’s current penetration rate is still very low. Nearly 60% of the users surveyed, conducted by Tencent’s Penguin Intelligence, have never heard of Vlog, and 70% of users claim to have never seen Vlog. Vlog users are currently mainly high-education female, concentrated in the first- and second-tier cities. The main platforms are Weibo and TikTok.

42% of Weibo Vlog users are post-95s (those born between 1995 and 2000) in Q1 2019, followed by post-90s (22%) and post-00s (20%), according to Eefung Software. The number of views on Weibo topic #VLOG# is 4.57 billion, and the number of users in related discussions is nearly five million.

Weibo Vloggers with over 1-million followers only account for 0.4% of the total; and, those with 10,000 or fewer followers account for 96%, according to Eefung data. The top topics covered by Weibo Vloggers are food, travel, celebrity, entertainment, and humor.

Marketing: Short Videos or Vlog?

Vlog contents, compared with seconds-length short videos on platforms like TikTok, are more difficult to create. Technical hindrance is not the real obstacle to its growth; video platforms will make it easier and more convenient for vloggers. However, high-quality vlogs take both delicate planning and good storytelling skills, which is much more challenging than creating short videos. It’s far behind short videos in terms of both quantity and quality.

Vlog is rising and trending, definitely worth marketers’ attention and experiments. The nature of vlogs is “log”, which can be easily boring, while the short videos focus on just eye-catching moments. So, it can’t be any serious threat to the popular short video content for reaching the mass audience but a very good complement to overall content mix.

To get you some sense what it could potentially do for marketing, take a look at the three videos below:

Vlog for Apple iPad Pro

In addition to feeling the atmosphere of the launch conference, experiencing the magnetic features of the new iPad Pro and Apple Pencil, they also incorporate many daily elements of New York’s food and lifestyle in vlog and present the experience content of the conference from the perspective of life.

Vlog for LV Exhibition

Louis Vuitton held a large exhibition and invited some top vloggers. The look and feel of the scene were presented in different Vlog styles. Among them, LV also provides vloggers with branded products such as clothing, shoes, handbags, and ornaments, which were also recorded in the vlogs.

Hyatt Presidential Suite

A couple on Weibo, boy Sid is Chinese, girl Kat is from the United States. In this vlog, they received an invitation from Grand Hyatt Xi’an to experience the 31,000-yuan presidential suite. With the arrangement of the hotel, Kat and Sid followed the timetable and introduced the hotel’s room profile, double room spa service, and an Italian restaurant.

The most important thing about Vlogger sharing life is to resonate with free expression to attract people in the same circle. Compared with traditional TVC or celebrity endorsement ads, Vlog gives the audience a smaller sense of distance and is more realistic, in addition to its much lower production cost.

How a popular vlog celebrity in China expanded from online to offline retail

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.

The number of China internet users exceeded 801 million with a penetration rate of 57.7% according to the latest data from CNNIC. Live broadcasting, short videos, and personalized content will continue to be essential parts of digital marketing strategies in 2019.

1. User Attention Highly Distracted

On average, each user installs 44.2 mobile apps in China as of Q2 2018. Fifty-nine apps have exceeded 100 million user base. The number of WeChat Official Accounts is over 3.5 million according to data from iResearch.

2. Increased Difficulty in Competition

The Chinese population has been more diverse with multiple segmentations including Gen-Z, post-90s (people born in and after 1990 and before 2000), new middle-class, the town youth (those living in tier-3 and lower tier cities between 18 and 30 years old), etc.

80% of marketing resources are in the hands of the top 20%.

3. Rising News Feed Advertisement

China’s online advertising revenues are estimated to reach 491.4 billion yuan with a growth rate of 31%, which is about one-tenth of China’s internet economy (4.73 trillion yuan) according to iResearch.

Mobile advertising accounts for about 70% of China’s online advertising market and is estimated to increase to 77.6% in 2018 and 82.8% in 2019.

Mobile news feed ads grow further this year accounting for nearly 24% of the total, compared with search 31.7%, e-commerce ads 19.5%, and 11.4% from display ads.

China’s native ads market totals 242 billion yuan in 2018 based on iResearch’s estimate, accounting for 49.2% of the entire online ads market with strong growth of 40.9%. It’s estimated to further grow to 53.5% in 2019.

4. More Diverse Marketing Channels

The growth and development of online videos, news, live broadcasting, OTT, and online marketing have led to multiple advertisement formats. Search remains a critical channel on desktop while social and videos play an important role on mobile.

Online video ads market is now worth 45.93 billion yuan; OTT over 4 billion yuan; news ads 42.47 billion yuan; and, online live broadcast marketing 3.4 billion yuan.

Many marketers have seen and enjoyed the power of content marketing and social media marketing in 2018, either following and utilizing the trending topics or making new ones. Mobile apps in short video market worth your attention are Kuaishou, Tik Tok (Douyin), and Miaopai.

Verified organization accounts (companies, government agencies, and media) on Tik Tok exceeded 12 thousand. Short video has seen massive adoptions by marketers in China as one of the essential online marketing channels.

The e-commerce giants Taobao, Tmall, and JD.com have cooperated with at least 10 short video platforms so far. The video view of short video at Taobao and Tmall exceed 100 million, closely followed by JD.com.

5. Influencer marketing

More online celebrities may emerge and some can have a high impact on driving brand awareness and sales, especially in social and live broadcasting e-commerce. Many brands would increase their investment in key opinion leaders (KOL) in 2019, who often create very relevant and quality content.

6. Technologies

The adoption of AI has increased the efficiency of China’s marketing industry by 20% according to iResearch. Advertisers and marketers’ adoption of technologies will extend from adtech to martech. IoT could potentially enhance the user experience. And, advanced speech and facial recognition, AR, and VR will drive higher engagement and deliver better user experiences.

7. More Personalized Social Content

Top technology companies in China, such as Alibaba, Tencent, Baidu, and JD, has been tracking integrating various channels and delivering to users more personalized content. WeChat’s recent update also shows Tencent’s efforts in personalized and social content.

Read more: China mobile short-video app market 2018; Tik Tok vs. Kuaishou

An article called Why I Left Tencent to Sell Chaoshan Specialities received over 100,000 views within 6 hours since published on WeChat.

Xu Ruifeng, sitting in front of reporters, talked about the WeChat marketing and calmly said, “We expect more than 10 thousand (views)”. As a former marketing & PR senior manager at Tencent Group, Xu Ruifeng undoubtedly makes a quite successful PR for his own pioneering work. As he says, the current cumulative amount of reading is over 400 thousand.

The soaring amount of article views directly drove the in-store visits. Within two weeks after its opening, the customers cram into the store and occupy the only six tables and the number of the customers doubled at the weekend. Last weekend, the store issued 50 numbers for seats waiting.

Also read: Why Wechat Marketing Metrics Could All Be Lies

Content marketers and publishers experienced in utilizing third party recommendation engines may be interested to give Baidu Recommendations a try.

Baidu released its content recommendation engine service to its content network publishers around May this year and made it available to the public about one month ago.

According to Baidu, over 1,000 websites have used Baidu Recommendations to boost their traffic and the average increase in traffic is 15%.

It provides three display style (above): pop-up, embedded, slide in.

After selecting the display style, templates will be provided to choose from as shown in the image at the top of this post.

For inbound marketers and content marketers, Baidu Recommendation is worth testing as part of your China content marketing strategy.