Mois : juillet 2020

Across countries, one of the effects of the Covid-19 crisis was to reinforce protectionism and nationalist sentiment. That was the case in China too, probably even more than anywhere else, but in a slightly different way, as the government played a significant role.

 

To help local brands through these trying times, the Chinese government has taken measures in various fields. One of these measures was the new features of China Brand Day (中国品牌日), rolled out online on May 10^th 2020. China Brand Day was designed to encourage domestic brands’ “brand building” in all sectors, with a view to accelerate the transition from ‘Made in China’ to ‘Created in China’, from ‘China speed’ to ‘China Quality’, and from ‘Chinese product’ to ‘Chinese Brand’.

 

How did it translate into concrete actions?

• Massive promotion of Chinese brands’ stories on mainstream media. Over 1,300 national brands participated in the China Brand Day Online Expo this year.
• The launch of Chinese National Brand Expos in several provinces, where brands from sectors ranging from manufacturing and services to culture or technology, gathered to demonstrate their history and innovation power, and present new products and services.
• The international forum of China Brand Development, where discussions were held about future policies aimed at further accelerating the development of Chinese brands and changing their image.

 

This year, CCTV participated in the Reinvigorating China Through National Brands project (品牌强国工程) via a variety of promotion events.

• Over 30 national brands went on Yang Shi Ping (a 5g video app, developed by CCTV) to promote the new products of domestic brands such as Lenovo, Hisense, Wanda or Ping An insurance.

 

• Austin Li (Li Jia Qi) teamed up with famous CCTV host, Zhu Guang Quan, for a livestreaming on the night of Chinese Brand Day (May 10^th). They hosted an online sales event for a variety of quality national products and promoted domestic brands. One example of very positive outcome was Mercury home textile’s sales result of 3.3 million yuan following the livestreaming session.

 

These government initiatives definitely play a significant role in influencing Chinese consumers purchase behaviors.

 

The National brand preference trend is present across sectors such as technology (Xiaomi, Huawei), home appliances (Gree, Haier), food & beverages (Yan Qi Sen Lin, Mengniu) or Sport & Outdoor (Li-ning, Anta).

 

It is also accelerating in the beauty sector, especially in the mass and masstige segments.

 

As a result, a great number of C-beauty brands have been soaring and this trend will definitely continue in 2020 & 2021. Consumer patriotism, an aesthetic shift, and a hyper-digitized retail reality — all of which grew during the COVID-19 pandemic — have made conditions favorable for C-beauty brands over the long term.

 

Tmall has launched its spring thunder initiative, starting with the goal of helping 1,000 emerging beauty brands achieve over RMB10 million ($1.41 million) each in annual sales in the coming year.

 

In the last June 18 Shopping Festival, 4 out of top 10 best-selling beauty brands were C-beauty brands, including Perfect Diary, HomeFacial Pro, Winona and Huaxizi (source: Tmall sales data).

 

On China Brand Day, Li Jiaqi, one of the Top KOLs, has named 23 quality C-beauty brands in his livestreaming. Bouncy Red Ginseng Essence Beauty Cream, newly launched by Marie Dalgar, was the only base makeup product in the selection. The ‘bun’-like design of its applicator generated hot discussion on social media.

 

 

Consumers’ interest in C-beauty brands specializing in Chinese herbal ingredients was triggered due to the heavier usage of Chinese herbal formulas during the pandemic. For example, Inoherb recently launched its new premium line “Inoherb Tang”, which brings back the power of an ancient formula through modern technology. The main claim is that the amount of Chinese herb ingredients in the products reaches 60%.

 

 

This is a new challenge for accessible foreign Beauty brands that will have to adapt, and find a way to display a deeper commitment to, and understanding of, Chinese culture.

In the past 10 years, the combination of State policies towards high-tech investment, buoyant startup scene and unique consumer appetite for new technologies has lead China to become a world leader in daily use of digital solutions. The Covid19 crisis further accelerated digitalization in a number of in sectors and it may be indicative of what will happen in Western countries in a next stage too.

 

More specifically, boosted by the lockdown and the need to find new ways of doing business with consumers, a number of sectors turned to livestreaming e-commerce, a new form of retail which was already well developed in the beauty and personal care field and really took-off in other sectors thanks to the specific benefits offered in such a crisis situation.

 

Healthcare is a sector that was obviously under enormous pressure during the pandemic. While online consultations and digital scheduling of appointments were already becoming commonplace in China, the coronavirus outbreak has seen a sharp rise in the use of digital platforms and an explosion of online doctor consultations. JD Health, one of the leading providers of such services, has seen its online daily consultations jump from 10,000 in January to 150,000 in March. Baidu Health, another leading healthcare platform, now has over 100,000 doctors from across China offering online consultations around the clock. The platform was made accessible free of charge to those with pneumonia symptoms during the pandemic and had handled over 55 million enquiries by the end of April. While the virus started to spread across the world after the China wave, several Chinese platforms started offering free online coronavirus consultations in English to people abroad. A good way to develop their client base to prepare a global expansion while also sending a message about China’s willingness to contribute to fighting the consequences of the pandemic abroad.

 

Also during the coronavirus crisis, the city of Shanghai launched 11 internet hospitals affiliated to offline public hospitals. An interesting sign that the handling of patients is on its way to becoming a combination of online and offline approaches.

 

In the field of retail fashion, live-streaming was a way to make up for the closure of stores during the pandemic. Labelhood is a platform for emerging fashion designers in China which has a boutique in Beijing and another one in the Shanghai French concession. While these brick and mortar locations remained closed during several weeks founder Tasha Liu launched a WeChat store so that people could shop through the app, and started offering life-streaming in order to show potential clients new arrivals from designers’ collections. In addition, WeChat video calls were offered as a way to develop a bespoke one-on-one approach with customers, one that is very suitable to the tailored, personal dimension of designer brands’ business. The Covid 19 crisis has been an accelerator in embracing digital, one that has pushed retailers and brands to adopt a new way to talk to customers, created a new type of personalized connection… without the unique “offline” benefit of being able to touch fabrics though. It also provided boutiques with access to consumers well beyond the city, spreading business opportunities across new geographies and population segments, enlarging their client base at a the very time it was threatened to shrink dramatically.

 

 

Live-streaming also helped farmers* across the country survive the pandemic by completely transforming their business model. Last February the nationwide lockdown left growers of flowers, fruits and vegetables with no logistics and therefore no access for their products to stores and markets. A number of these producers, who had traditionally had no contact with end clients, started using live-streaming to reach consumers. With just a mobile phone they could broadcast directly from their farm, tour their facilities, show-off products and answer questions from potential buyers. On the other side of the country, in urban areas, consumers stuck at home were eager to shop online. Live-streaming, combined with the shipping services of e-commerce giants JD.com and Alibaba, helped the two ends meet and completely redesign the market. Consumers could receive at their doors products that were no longer available in stores, and farmers benefited from a new stream of revenue. On Taobao Rural Livestreaming, one of the main platforms for that type of broadcasting, about 2000 rural participants now generate a monthly income of over RMB 10,000 i.e eight times the rural average. By connecting producers directly to consumers, live-streaming has changed the way business is done, created a new bond between producers and consumers, and has been a catalyst for local development.

 

 

pineapple-livestreaming

 

 

Beyond these examples of how digital is changing business in a broad range of sectors, the development of 5G will soon generate new opportunities and changes as it will promote even more interactive content and seamless e-commerce features via a dramatic increase in internet speeds. As China is already more advanced in this field than most Western countries, global brands will have to quickly grasp the new interactive features of the China market to stay relevant in the years to come.

 

*this section is based on an article published by MIT Technology Review on May 6, 2020 “Live-streaming helped China’s farmers survive the pademic. It’s here to stay”.

 

 

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