China Marketing Weekly: Can Starbucks Remain China's #1 Coffee Brand?
This week, we analyze Starbucks’s marketing strategy in China - a hot topic since Luckin Coffee stirred the market. Everyone seems to be asking the same question: will Luckin Coffee take them down?
Also, learn about Taobao’s failed plan to ambitiously digitize shopping in the Chinese countryside, how Oreo stepped up its product localization in China, and how WeChat censors user images. Speaking of censorship, top American universities and scholars seem to self-censor too.
On The Blog
Starbucks signed a deal with Alibaba recently to catch up with marketing trends in China. In recent months, Luckin Coffee has challenged their place on the market, or so media outlets say. What is Starbucks true standing in China? Read our recent blog post to learn more about their marketing in China.
“Who said Oreo can only be sweet?” The company just announced on Weibo they are launching new flavours in China: hot chicken wings and wasabi. Foreign companies try hard to sell sweets in China but the consumers prefer dried or smoked treats. However, China-exclusive products turn consumers' heads; recently, Snickers launched a chilli flavour, and Pizza Hut premiered durian pizza. - Read more (English)
Oreo got a lot of social media attention, but while people seem excited about a chicken wings flavour, more ask: why wasabi? It’s not popular in China, and isn’t a spiciness Chinese consumers look for.
360 Search introduces a new e-commerce platform. The idea of the “360 Fenqi” (360分期) is allowing users to purchase products on installment plans. This allows the platform to become competition to Xiaomi - 360’s products are following the concept of the smart home and can be fully integrated with one another. Simultaneously, this allows 360 Fenqi to compete against Alibaba’s Huabei and Baidu’s Baitiao. - Read more (Chinese)
As 360 owns a search engine (No.2 in China, after Baidu) driving traffic to their new platform will be easy.
Taobao fails to revolutionize China’s countryside. In 2014, Alibaba announced a plan to invest 100 bn. RMB (over 1 bn. USD) to erect 1k county-level operation centres and 100k village-level Taobao distribution centers to improve the flow of products between cities and the underdeveloped countryside. Four years later, the fallout isn’t as pristine as suggested: Taobao found new village-based consumers, but ruined local stores and failed to promote countryside products to urban areas. As many e-commerce companies are looking to seize the rural market, they should definitely learn from Alibaba. - Read More (Chinese)
Chinese Video Platforms
iQiyi no longer displays the number of views on their videos. Instead, they will show the “popularity metric”. The company explained that the number of views was often untruthful as broadcasters had a habit of buying fake views (similar to buying fake followers) allowing their videos to gain more attention from real viewers. iQiyi claims the popularity metric is more truthful and mirrors both increases and decreases in popularity. - Read more (Chinese)
In my opinion, it’s a good concept. Fake-boosting views is a real problem, but on the other hand, the data transparency problem appears after the real numbers are hidden from viewers.
A few weeks ago we reported Douyin launched a platform matching KOLs and businesses. First reviews came through: apparently it’s a mess. Shortly after launch, the rules are unclear and change almost daily and some KOLs are also blocked from the platform. We recommend against it for now.
Local governments work with Alibaba to digitalize their services. A new mini-program will be built-into the Alipay app allowing its users to manage over 716 services without excessive paperwork nor leaving their homes. It’s been launched in Fujian and Haikou, with Jiangxi and Wuhan to follow. It’s a step in the government’s plan to create one digital platform for all the services. - Read more (Chinese)
WeChat image censorship has different rules for domestic and international accounts. Some content that is visible for users in, say, Canada may not be displayed to Chinese users, doesn’t matter if it’s on a public moment nor sent in a PM. Read the very complex report here (in English).
University of New Hampshire becomes the first state school in the US to accept Gaokao. It surely makes the enrollment for Chinese students much easier as they can skip the typical tests required for studying abroad. But let’s not forget many students decide to study abroad to SKIP Gaokao entirely and save nerves. - Read more (English)
Universities all over the world submit to self-censorship regime to avoid offending China. The University of Salamanca was just told to cancel its Taiwan Cultural Days planned for October. Events, conferences, and even book publications are being cancelled at top American universities. “It has gotten to the point where I don’t engage with anything overly political relating to the Chinese state,” said a graduate student at a top American university. - Read more (English)
Baidu launches a new algorithm to evaluate website’s SEO. Many Chinese pages are intruding and trashy. So, Baidu wants to make sure they only display high-quality sites. Main rules are as follows:
Page title must be closely related to the content.
Title cannot be packed with keywords. Keyword cannot be repeated more than 2-3 times.
Special symbols cannot be used in the headlines - symbols other than regular punctuation marks: commas, dashes, dots.
No contact info is allowed in the headlines.
The text watermarked on the pictures is limited to three lines, font size not bigger than 14.
The content must be of high quality and well-organised so it’s easy to find required information on the page. No unnecessary interruptions in the middle of the text (like contact info).
Baidu has long stayed behind Google with SEO evaluation. These new regulations are an attempt to catch up, but also to promote its product for content indexation and protection, Bear Paw. - Read more (Chinese)
Tweet Of The Week