10 Chinese Market Trends Since COVID-19
A lot has changed in the past three months!
Some industries are still recovering. Others have reached new heights. There doesn’t seem to be any areas that haven’t been affected.
Let’s take a look back at some of the trends that we’ve covered in the China Marketing Weekly newsletter recently.
The outbound travel market is on pause
China looks to domestic tourism as the border stays closed for international tourists.
China’s borders may not be completely shut down, but even people with resident permits are not allowed to enter. At the same time, the number of international flights was reduced significantly to one route per airline and one flight per week. As international airlines prepare to slowly restore their flights to certain countries, China has extended their restriction indefinitely (May 31st was the previous deadline) and warned international airlines against pre-selling tickets for flights that haven’t been approved yet.
In mid-May, representatives of countries such as the UK, France and Serbia were seen in a live broadcast on Flying Pig, one of China’s most popular travel platforms. The goal was to encourage more tourists to visit their countries. However, if the regulations stay as they are, people won’t have much choice. The Chinese government is also focused on restoring tourism in the country, and is not expected (Chinese) to rush into opening up the country to international visitors.
Does the Qingming festival show us what travel trends will be like in 2020?
Early in April, the country observed the annual Qingming festival (Tomb Sweeping day), which usually marks the first of the springtime trips. However, this year, the country recorded a 61.4% decrease with only 43 million travellers nationwide deciding it would be a good time to travel.
The China Tourism Research Institute released a report (Chinese) summing up the trends that stand out the most during this time:
- Most travellers avoided hotels and public transport: choosing short-distance car trips with no overnight stays.
- The contactless (and humanless) services in the hotels were the ones most appreciated by the guests.
- Most tourist attractions were visited in small private groups (although Chinese tourists are known for travelling in bigger groups).
- Travel agencies turn to live-streaming to promote local products and travel spots online and encourage people to travel.
- The price of domestic flights keeps declining, and the overall prognosis for international travel doesn’t look very good.
Online education invigorated
The online education industry is booming and creates more opportunities for individual educators, schools and platforms alike.
Online programs that were actually supported by the Ministry of Education were released as the country tries to move as many aspects of life online as possible and keep life going despite the pandemic.
Bilibili, a video platform that could be compared to Youtube, rolled out “Bilibili never stops learning” program in cooperation with China’s top educational institutions such as Tsinghua and Peking Universities, and Shanghai Gezhi Middle School. It covers general education subjects (for all grades), current affairs (covering trending topics), and more.
At the same time, Tsinghua University is also cooperating with short-video app Kuaishou (Chinese) to help students “start classes as scheduled although the semester has been delayed”.
As the start of the spring semester continued to be delayed all over China, students took to social media to express their disappointment (Chinese). Not only were they forced to take online classes, they also had to make up for lost time on weekends and during the summer holiday.
Study abroad shooken up
Chinese students forced to rethink their "study abroad" plans. With the situation changing so quickly, it’s tough for students to know what to do. BOSSA, the association of education agents in China, revealed that about half of all students planning to study abroad are directly blocked from being able to apply for a visa. But 71% of students say they will not change their plans.
As for Chinese students that are already abroad, 86% said they would feel safer in China now than in their host country. Their biggest concern is the virus itself, and the next biggest concern is the impact it is having on their studies. As international travel becomes increasingly difficult, many students are concerned about being able to return to China or their country of residence.
China’s Gaokao college entrance exam has also been delayed by one month (Chinese), giving students an extra month to prepare.
Students are concerned and confused by the rapidly changing situation. During times like this, it’s important for schools to communicate clearly to their students and future students. They should make sure that students know the current policies and are able to reach admissions staff digitally.
Businesses are digitizing
Canton Fair goes online. The current situation with COVID-19 has forced organisers to move China's most famous import and export trade fair (since 1957) online. The organisers promise “around-the-clock services for online product promotion, matchmaking and business negotiations” on their official website. What does it mean in practice? For instance, each exhibitor will get their own live-streaming room with the opportunity to broadcast content around-the-clock for ten days.
Moving the fair online is only one example of businesses adapting to the new situation. However, given the pandemic and restriction of movement, it will give businesses all over the world the opportunity to reach their desired customers even though they cannot show up in Guangdong themselves. Trade fairs organised offline are common within the industry, however, they do have their limitations. Moving these events online increases the number of people who can participate.
COVID-19 survival lessons from businesses in China. Executives of companies operating in China shared their advice with McKinsey:
- Providing protective gear and additional health-benefits to employees were crucial to maintaining morale.
- Maintaining digital communication with both clients and employees keeps the management up-to-date with the current situation and enables them to act quickly.
- Moving as much of the operation online as possible, doubling the digital initiatives and adjusting the message; as well as, providing contactless services after the reopening offline, which helped keep customers feel taken care of and safe.
Both big international companies and smaller businesses in China believe that the crisis brought employees and management closer together. Chinese businesses that stocked up for Chinese New Year (the peak season) faced bankruptcy and mass lay-offs. At the same time, many businesses were forced to “borrow” employees from each other to survive.
Business video meeting apps break the record with 62 million downloads in 7 days (Chinese). Even Douyin, which is notorious for breaking download records, cannot compete in this race. Videoconferencing has been the fastest-growing category in app stores around the world.
The coronavirus has brought crisis to so many aspects of our lives; however, industries related to remote work or online education are actually booming. Zoom's downloads topped the global rankings in February and March, but companies behind the Chinese apps are also working hard. Tencent’s international app, VooV Meeting, was launched in over 100 countries and regions including Malaysia, Singapore, India, Thailand, Japan, Hong Kong, and Macau. The app is free to use and each meeting can hold up to 300 attendees at one time.
We tested both Zoom and VooV Meeting for cross-border calls between China and Europe. Despite Zoom cutting meetings after 40 minutes on the free plan, it’s still providing much better call quality when compared to VooV; furthermore, there’s no VPN required (a huge improvement compared to last year). On top of all this, Zoom allows attendees to join the call via a link while Tencent requires users to set up an account with their phone number. So, unless beautifying filters are a deal-breaker at your office, we’d still suggest sticking to Zoom.
Chinese buyers are snapping up International real estate again. Wealthy investors see this as an opportunity to buy properties at relatively low prices.
From a marketer’s point-of-view, we expect that Chinese buyers will compare real estate options in multiple countries. Countries with better future economic outlooks should attract more investment-minded buyers. Meanwhile, buyers that are simply looking for a place for them or their children to live will also consider factors like COVID-19 risks, education and perceptions of safety.
Domestic mobile video games explode.
China’s video game market grew to 73 billion Yuan in Q1 2020, 25% higher than the previous quarter. Most of the revenue is from mobile games. During this time, the pandemic caused some bottlenecks for certain types of games. Games from outside of China need to be approved within other jurisdictions first (such as Japan’s CRRO), but that was put on pause. Plus, logistics bottlenecks made it hard to send physical games. Tencent’s revenue for mobile games rose 64% to 35 billion Yuan, with most of the increase coming from Honor of Kings and Game for Peace.
Indoor exercise apps rise, outdoor exercise apps falter.
With people unable to go outdoors, some of them were getting noticeably chubbier.... So many started exercising indoors instead. One of the leaders in this space is Keep. Keep was at a growth plateau in 2019, but the pandemic gave it room to shine. It’s ranking on the Apple App Store went from less than 200 to top 50, with up to 6 million users per day. This was much better than exercise apps that didn’t have a focus on indoor exercise.
The above pieces are excerpts from recent weekly newsletters. In each newsletter, our team of Chinese and foreign marketing experts share their point-of-view on Chinese consumer trends, technology and marketing. To subscribe, fill in the form below.