Resonance’s Jerry Clode was recently interviewed in the South China Morning Post about American brands effect on luxury fashion in China. It’s a great read, full of revealing insights into Chinese culture’s unique effect on brand adoption and how brands like Michael Kors, Ralph Lauren, Calvin Klein and Tommy Hilfiger succeeded in China when their home markets were suffering.
Resonance’s Jerry Clode Interviewed on SCMP
“In China, American brands have been incredibly successful in owning category and new behaviours,” Clode told the South China MorningPost. “Starbucks has created coffee culture, Disney is the exemplar family destination, Apple still dominates premium consumer technology and Tesla has captured the imagination of China’s future-focused middle class.
“As local consumers increasingly use fashion and luxury to express their lifestyle and identity, American brands have a profound head start on other nationalities in terms of precedent and aspiration,” he said.
On June 26th, Resonance’s head of research and digital insights, Jerry Clode, will be leading a workshop at the American Chamber of Commerce.
Titled: “Brand America in China – How to Leverage Your Brand’s American Identity and Culture to Connect with Chinese Consumers”, the workshop aims to tackle key strategic issues facing US brands and organizations communicating liberal values in a country that emphasizes control and political correctness.
We’re proud to announce Resonance’s Jerry Clode and Michelle Yan have made it on the 2018 Campaign Asia Digital A List for creative excellence in the marketing and communications industry. They join 30 other digerati harnessing China’s enormous potential and the irresistible force of digital technology to make significant contributions to the marcom industry in China.
Michelle and Jerry – Digital A List Winners
Jerry is recognized for his work creating SMART@Resonance, our research offering, and developing and pioneering a new research methodology meshing traditional research with WeChat and other digital and social platforms to drive targeted results for both mass and niche brands entering or realigning their brands in China.
Michelle is recognized for her high standards and relentless push for excellence; offering new, original and tailored social media, WeChat strategies for clients, pushing boundaries and producing big results for clients across multiple industries.
Both Jerry and Michelle are a joy to work with at Resonance, and we look forward to the many great things they will no doubt achieve in the future.
I’m sure you’ve heard China’s internet is booming. I’m sure you’ve heard of the power of WeChat, and how everything is “moving so fast”. But how, why? What lies beyond the hype and big numbers? What lies beyond the “damned statistics”? Is it possible for me to get more “quotations” into this paragraph? Answers are needed, and answers we just may provide.
Wandering through Youtube on my lunch break I came across a few videos that dive into the “what” ie: what it is, but also the “how” and the “why”. I’m sure you dear reader, if you are reading this blog, are well versed in all things China, digital, social and mobile. So this article isn’t for you. It’s for the friend, or the client, or the partner who have just entered China and are trying to absorb information the size of an ocean with a sponge the size of their brains. Here’s what you can show them, two slickly produced videos from the New York Times and Wall Street Journal. Perhaps the old saying really is true: Ask Youtube and ye shall receive (unless you’re in China, get thee to thine VPN, posthaste!).
From NYT: How China is Changing your Internet.
This video is a great primer on the Chinese Internet, and WeChat’s dominance. Chinese Internet law and culture play a big part in how different digital China is to the west.
From WSJ: China’s Great Leap to Wallet-Free Living.
This video documents the coming extinction of cash. This isn’t due to global warming, but rather the rise of a fierce new predator (cue ominous drumbeat): mobile payments. Great intro in the subject, but beware of profanity from the woman from Shenzhen.
Organic virality has been over for brands on Facebook and Twitter for a while now. But brands scratching their heads about why their WeChat figures are so low might find some small comfort in knowing they are not alone. A recent study found that brands struggle to achieve views over 100,000 on the platform. Part of the blame falls on the design of subscription and service accounts, but it turns out KOLs are achieving much better numbers, so it’s also likely that brands are not giving users the content they want. Hope is not lost though, as there were a number of campaigns that went viral on WeChat over the Lunar New Year. One of which reached millions of people starting with a budget of only 3000RMB.
Starbucks may be seen as a digital leader in the US, but until recently it lagged behind the rapid pace of digital developments in China. Case in point: Starbucks was way behind the pace with its adoption of mobile payments in China. But the company is adapting rapidly, and the new website shows a raft of improvements in UX, design and content that will help position Starbucks as a digital leader.
The convenience of Mobike’s dockless bike-sharing model has proven irresistible for urbanites, but also unleashed its fair share of disorder on city streets around China. A big part of that disorder is due to the sheer quantity of bikes, but bad user behaviour has also exacerbated the problem with bikes being left blocking sidewalks, locked in people’s homes or vandalized. To combat this, Mobike is introducing a user rating system that will see the worst users charged up to 100 times the normal rate, and excellent users given incentives. The catch: the whole system will rest on user-reporting.
The two are a natural fit. Social is all about friendship and community, and both these things are often built on shared interests. Consumers in China often go to e-commerce apps to discover new products and like-minded people. Taobao now has a feed for shops to post on regularly anda live-streaming feature that has turned people into influencers. Here Jing Daily takes a look at 3 other businesses making the most of the benefits the marriage between social and e-commerce offers.
Let this be the final nail in the coffin of the opinion that China’s tech sector is full of copycats. From the beginning, that belief was spread on the back of misguided assumptions. Sure, when companies like Xiaomi launched they took a lot of inspiration from Apple. But now they have developed their own business models and responded to the unique tastes of the market in China.
KOL and influencer marketing is so popular precisely because of the communities and fans that spring up around them. But sometimes, the connection that fans feel for their favorite stars can become a little extreme. Fan clubs are becoming increasingly popular around top celebrities in China, and club members are motivated by their obsessions to do a range of things, from donating to certain charities, to hiring planes to sky-type the star’s name above LA. Fights have even broken out between fans of two stars who are part of the same band. These are the people who will turn against a brand if any missteps with their beloved stars are made.
Both Weibo and Miaopai have set up their own KOL platforms through which brands are required to cooperate with KOLs. The motivations for this are easy to see when you consider that Weibo’s KOL channel takes a fee equivalent to 100% of the KOLs fee (Miaopai is more reasonable with a fee of 20-30%). Nowadays on both platforms suspected sponsored content is taken down if it has not been through the platform’s own KOL channel first. The goal is to force all KOL content through the platform channels to generate more revenue.
Organic reach is over for brands on Facebook, and according to new research, has always been tougher for brands on WeChat. The setup of brand accounts on WeChat introduces a lot of friction in the process of getting users to see the content, and posts can get lost among the noise of daily life on the platform. Engagement with brands is not as high as engagement with KOLs – a clear indication that KOLs know more about the kind of content users want to consume than brands do. A fact that is evidenced by a lot of bland brand content on the platform. More creativity, a deeper understanding of what good content means to consumers, and clever use of KOLs can help improve the situation for brands.
Virality on Wechat is a tough game, but not impossible. A few campaigns achieved impressive numbers over the New Year holiday by playing on the key themes of family and togetherness. One plucky startup surprised itself by going viral on a budget of only 3000RMB. PALAPALA developed a superbly designed site that allowed users to create a cartoon family New Year photo using a variety of fixed elements. The aesthetic was a hit with middle-class consumers from China’s large cities, and the ability to drop as many elements as you want allowed users with a creative side to get abstract with their “family” picture.
China may be leading the world in many ways, but sadly attitudes to women and families can still be very conservative. Predictably, this leads to some incredibly trite and even offensive contributions to the marketing mix on Women’s Day. Problematic posts this year implied women should only be enjoyed for their beauty, or that women only care about buying clothes and finding a man. The brands who made these mistakes paid the price on social media.
While China’s tech companies quickly advanced from copying to innovation, there are still many products on sale in China that look suspiciously like well-known products. Rather than viewing them as simple copycats, this article from Jing Daily suggests that they can sometimes be seen as tributes to the original. “I like it, so I am allowed to create one just like it” the article suggests is a common attitude. And, in reality, this attitude offers a starting point on the road to innovation for many entrepreneurs. Another part of the picture is a set of entrepreneurs who see their lower price points as a disruption to the often obscene-seeming price points of the most expensive luxury brands. One thing the article doesn’t address: the issue of fakes being sold as originals and damaging brand image in the process.
This time of year in China the anticipation is building for the lunar new year celebration, which falls on Friday February 16 this year. The year of the dog is incoming, which might seem like a gift to most social media marketers given everyone’s love for all things cute and cuddly. Already there are lessons to learn for businesses in 2018 as Marriott faces anger for labeling Taiwan a country, and this year is also likely to see the rise of micro-influencer marketing in China.
Influencer marketing is a dizzying prospect at the best times, but can be even more so in China where the range of popular platforms across social, shopping, video and livestreaming is crazy. Up until now, a few top influencers like Gogoboi have taken most of the brand dollars. But brands are waking up and realizing that these influencers are happy to take money from anyone and everyone, in the process diluting the potential for a genuine connection. 2018 is likely to be a big year for smaller and micro influencers in China.
Here’s a great example of how people are making crazy amounts of money in the weirdest ways. Li Jiaqi is a male beauty blogger and millionaire. Every day Li broadcasts himself trying over 300 lipsticks to his numerous fans on the Taobao shopping app. His dedication has earned him the nickname “iron-lipped brother.”
The Chinese language offers an abundance of opportunities for wordplay and fun, and boy do people online really run with it. Sixth Tone takes a small snapshot of some of last years popular sayings, including the ubiquitous “Do you freestyle?” from the online series Rap of China. With the right social media savvy slang can be a part of a brand’s online conversation, but also has the potential to make a brand look like it’s trying too hard. Authenticity and alignment are key.
Just days before CES, AT&T pulled out of a deal that would have seen Huawei phones go on sale in the US, allegedly because of political pressure and worries about Chinese espionage. Consumer products CEO Richard Yu’s speech was supposed to be Huawei’s big moment so you think they’d be, well, just a little annoyed. And judging by the end of Yu’s speech where he goes off-script and speaks from the heart, you’d be right.
Xiaomi may have been the first Chinese phone maker to successfully scale selling flagship-level tech at mid-range level price points, but OnePlus were the first to truly nail the branding too. With a strategy that ships different phones inside and outside of China, OnePlus has developed a dedicated following worldwide. Which is why when they release a phone as beautiful as the Sandstone White 5T it is gone in a flash.
Many of China’s big tech companies made their start online only, but Xiaomi has realized the value of using unique retail experiences to carve out a unique identity. It is also still very difficult to reach a truly mass market in China without retail stores. Xiaomi has diversified to producing nearly every kind of gadget imaginable, including routers, air purifiers and even drones, and now boasts over 300 stores.
Retail sales in China this year are expected to match or surpass the US, but the thing which probably surprises most people in China is learning that this hasn’t already happened. The explosion of e-commerce in the past few years has been breathtaking, and there is still growth to come. Economists are over the moon. Conservationists? Not so much.
Haidilao has being doing impeccable customer service since way before everyone started talking about the switch to a service economy.Wait times at the restaurants can run up to two hours, a wait which is complemented with free drinks, snacks, games and manicures. The food itself is far from the best hotpot in China, but the real secret to Haidilao’s success is a focus on creating one of the most unique service experiences around.
Marks & Spencer’s clothing offering has been horribly bland for a very long time. In its home nation of the UK, the brand has managed to set itself apart with a supermarket range that is on the premium side, and also probably the best in the country. But in China, food was a tiny part of M&S’s business as demand for the kinds of foods M&S sells is very low here. The clothing side of the business offered little to make it significantly stand out from the abundant competition Chinese consumers have to choose from, and these facts, combined with the complexity of doing business here, probably helped spell the end for the chain.
Marriott found itself in hot water after netizens discovered an online questionnaire treated Hong Kong, Tibet, Taiwan and Macau as separate countries, and after one of the company’s social media accounts was found to have liked a Twitter post by a group that supports Tibetan independence. Marriott’s website was blocked in China, and there is speculation that a freeze on the company’s social media posts globally was put in place at the behest of the Chinese government. Marriott later apologised in a rather sycophantic manner. This in itself offended many of its non-Chinese customers who viewed the apology as capitulation. Marriott: Here’s your rock, there’s your hard place. Now play nicely.
After the scandal, a China-based economist pointed out on Twitter that state-owned airline Air China also labels Taiwan a country on its website. The important thing to remember is that it’s always more offensive when a foreign company does it, so be vigilant because the fenqing (youth with extreme nationalist tendencies) are waiting for you to make a mistake.
China’s economy may have exploded in the last 15 years, but social welfare hasn’t kept up. Social provisions are still inadequate which can make life feel fragile, even for the relatively wealthy. Financial Times research found that this year healthcare and education costs rank high among the concerns of well-off Chinese people, while interestingly food safety is still a key concern across all income groups. There is still an opportunity for companies operating in that space to emphasize safety, though as the market has matured on this in the last 5 years finding a distinct way to do it is key.
File under: Increasing trend for Chinese students to return home to find jobs. Although this article focuses on tech workers, there has been a strong trend for Chinese students to return home after study in the last few years. These returnees bring with them different tastes and habits which can make them a tastemaking consumer, as returnees can drive changes in consumption patterns. In Shanghai, coffee culture has exploded in the last 3 years, some of this was driven by young people returning from overseas and bringing new habits with them.
OK, it’s time to bury the prevalent misconception that Chinese people don’t care about privacy once and for all. It’s true that when it comes to government monitoring, there is little Chinese citizens can do to affect change, so it is accepted as a part of life. But as consumers there is more freedom. Recently the chairman of car maker Geely called out Pony Ma Huateng of Tencent for “looking at our WeChats every day.” It’s actually a moot point, as Tencent by law has to store all chats in case the government wants to look at them, but the exchange has resulted in more discussion of privacy. Ant Financial also got in trouble with consumers for automatically enrolling them in a social credit scheme without asking permission. Finally on this topic, a study by China Consumers’ Association found that the number one concern of consumers is having their personal information leaked, that’s from March 2017.
The takeaway is clear: consumer awareness of data privacy is rapidly building in China and businesses ignore it at their peril.
WeChat is releasing a brand new eye-catching ad format featuring large visuals and surprise ‘easter eggs’ in time for the Chinese New Year holidays in February. The New Year ads will be the largest WeChat has rolled out with a format of 960 by 960 pixels, offering a more compelling proposition for visuals to encourage action and engagement from WeChat users.
WeChat CNY Special Adverts
‘Liking’ will flip the advert’s image to reveal 1 of 3 kinds of easter eggs for users. The first easter egg flips to show a New Year’s greeting from a celebrity, while the second turns over to give the user a red packet or promotion. The final easter egg gives users a branded Chinese New Year sticker pack for users to send to friends over the holiday. The easter eggs are an interesting touch, the novelty of which could well increase the shareability of adverts.
Talking of shareability, WeChat is introducing a new share function for the Chinese New Year ads. Previously users only had the option to like or comment on ads, but the new share function means users can send the advert to a friend, or share on their WeChat Moments. When users share in a chat with friends, the ad shows in a card format with high priority placed on the visual. Posts to moments will look like normal shares from public accounts.
WeChat is also introducing greater flexibility with text to complement the new visual features. Ad text is broken into a title (no more than 12 characters) and a description (no more than 15 characters.) The text can be aligned at the top of the visual, the bottom of the visual, or with the title at the top and the description at the bottom of the ad.
The new sharing functions opens up a world of extended reach for brands. The big winners in this respect will be brands who design adverts for the new format that have shareability as a key consideration. Storytelling is going to be more important than ever.
The new ads will be in testing stages during the first week of February, with the official rollout beginning Thursday, February 8.
Tencent, the owners of China’s largest social media platform WeChat, are employing 200 Chinese content reviewers to flag up low quality or harmful content on the site, including pornography, plagiarism, fake news and out of date news. Made up of 10 journalists, 70 writers and 120 users, they will be expected to make 300 reports each per month. As WeChat has become a primary source of news, particularly among younger generations, finding articles that are fake or contain out of date information is of great importance. China introduced new laws last June that tightened up on cyber security, and some Chinese Apple product users could be affected by the new rules.
In 2017 Apple’s iPhone 7 Plus only made second place for sales in the Chinese marketplace, being beaten by Oppo’s R9S. Apple was the only foreign brand in the top 10 phones being sold in China last year. Although Chinese smartphone maker, OnePlus did not make the top ten, they did pass a billion dollars in sales for the first time and made a profit. This is quite an achievement when huge companies such as Motorola are running at a loss. Meanwhile, a little known Chinese phone maker, Transsion Holdings, came third in the table of sales in India, a market almost as large as its home market in China. They succeeded because they noticed that the Indian habit of eating with their fingers made it difficult to use a smartphone and very cleverly developed an oil resistant finger recognition feature.
At the recent CES there were 4500 exhibitors, just over 1500 of them were from China. The only nation that had more was the US, and that was only by a few. Technology in China is advancing at an amazing pace, partly because the government backs new innovation and has highlighted technology as part of the plan for the country. A growing number of exhibitors have been looking at blockchain technology, among other things, and they are building a reputation for high quality output. China has also identified virtual reality as a growth area, and included it in its latest five-year development plan.
A new website, www.discoverychina.org.cn, was launched this week at the forum “Global Design: Inspired by China” The focus of the forum included opportunities and inspirations for promoting Chinese culture to global design industries. The Chinese Embassy in Kuwait, together with the Association of Chinese Companies in Kuwait hosted the New Years celebrations in Kuwait, a country that embraces Chinese culture. Traditions and culture are an important part of Chinese life, and each year nine awards are presented to recognise cultural achievements. China’s 2017 Cultural Industry Oscars included awards to the China Cultural Figure of the Year, Special Contributors to Chinese Culture and Charming Towns with the Highest Cultural Value.
The popularity of smartphones means it’s easier than ever to follow our favourite celebrities on social media. One young lady has become an overnight sensation as she shows what it is like to live with no arms. She was only three when an accident resulted in both her arms being amputated, but she has gone on to lead a full life. She now live streams how she has taught herself to do many things the rest of us take for granted. Another popular account belongs to HoneyCC, who is one of the biggest stars on the video-sharing platform, Meipai, which launched in 2014. Her passion for social media began after an injury cut short her dancing career. She found a single picture could only say so much, and to really communicate you need to use a video. The explosion of social media has not gone unnoticed by the fashion world, which found that Chinese stars have a big influence on what fashions people buy. Stars have often endorsed products, but the promotion of brands through social media can be a lot subtler.
In 2016 Chinese smartphone maker Xiaomi had fallen from first to fifth place among China’s smartphone manufacturers. They turned this around in 2017, and are currently on target to become the worlds second largest smartphone vendor, behind only Samsung. China is a unique market because of its size. A company can become a global sales leader without selling outside our borders. The top five phone vendors in the country are becoming more dominant, creating a group that is making it very difficult for new businesses to enter the market. These companies work hard to constantly come up with new ideas and improve technology to suit the Chinese people, the latest one being smartphone ID cards. Such ingenuity means even some of the big boys have a very small percentage of phone sales in China, like Samsung, which has just over 2% of the market.
China has become a major player in digital technology, and there’s much more untapped growth potential. China’s e-commerce transactions are estimated to be more than those of France, Japan, Britain, and the USA combined. Our technological expertise is producing software to handle the pace of growth. This was shown at the 4th World Internet Conference, where products were on display that were innovative in the fields of information technology, cloud calculation, and artificial intelligence. Recognising the talent available in China for AI development, Google is opening an artificial intelligence research centre. The Google AI China Centre will have a small group of researchers and several hundred China based engineers, which will help to keep China at the forefront of tomorrow’s technology.
According to a report by KPMG, 77% of Chinese people say online shopping is their favourite pastime. Out of everyone surveyed, 67% of those who took part were born after 1985. People born after this year are considered by many to be digital natives, as they grew up during a period where technology was becoming far more common in everyday life. It should come as no surprise that with such a huge number of people using apps to shop online, China is now playing a leading role in their development. This trend has been recognised by several large retailers, including the Swedish fashion group H&M. They are about to open the companies only online sales channel in China, apart from its official website.
If you’ve spent any time in a coffee shop in China, you’ll know just how popular social media is becoming in our culture, so it shouldn’t be surprising that things are looking good for WeChat, with more than half of China’s mobile users connected, putting it ahead of social media giant Facebook globally. As Facebook have discovered after the US presidential election, fake news is a real problem. Chinese social media is tackling this problem head on, by creating an AI that will detect any misinformation. We can’t see Donald Trump doing the same in the US anytime soon. It isn’t just our culture that seems to be falling for social media, it seems to be equally popular with the citizens of Thailand. This week it has been revealed 40% of Thai travellers take their reviews of locations in China from social media before travelling, choosing to trust real world opinions over those in glossy brochures. It’s good to know our opinions matter.
To celebrate its fourth anniversary, Chinese smartphone vendor OnePlus unveiled the OnePlus 5T in lava red. Demand is set to be high, as there will only be a limited number of handsets available in this colour, and we all like a bit of exclusivity. With China’s homegrown smartphones proving the most popular, OnePlus are probably on to a winner. Meanwhile, China smartphone maker Xiaomi wants to win over the Indian market, and is investing heavily in Indian start-ups to help improve its image, and speed up growth outside of China. Tencent has already secured the deal to bring Player Unknown’s Battleground (PUBG) to China, but now the popular PC game is being developed for smartphones, and Tencent is working on bringing the game to our smartphones soon. So if you enjoy fighting for your survival, soon you’ll be able to battle to the death wherever you go.
China understands the importance of technology education and is spending billions to ensure children and students of all ages have access to innovative teaching. STEMedu is authorised by the Ministry of Education, and is leading the charge to introduce science and technology into the education system, including training teachers to provide a more technology-focused education. With the rapid growth of China’s tech companies, there will be no shortage of opportunities, as proven by Alibaba and Tencent quickly moving up the league of the worlds largest companies. Overtaking Google, Apple, and Amazon will attract even more global attention, and help to secure China’s position on the global economic stage. Agriculture in China is being revolutionised by technology. No longer the domain of straw hats and hand tools, or long days spent labouring, graduate programs in topics like Protected Cultivation are smashing old stereotypes, and allowing farmers to become more efficient and profitable.
Israel has opened a China Cultural Center in Tel Aviv, to showcase clay-sculpting skills, as well as hosting art performances, cultural exhibitions, and academic seminars. It is hoped the center will help to strengthen the ties between the two countries by creating a better understanding of our culture in Isreal. While we try to strengthen future relationships on an international scale, our leaders in maritime archeology are looking to gain a better understanding of the past, and using shipwrecks to weave together the history of seaborne trade. At the same time as we are gaining a better understanding of the history of seaborne trade, we are also trying to preserve our cultural history. The launch of a website just for information about lost cultural relics is designed to help gather clues about missing artifacts, while at the same time deterring criminals from trying to steal any of our remaining artifacts.