China Marketing Blog

China Marketing Weekly: New E-Commerce Law Affects Daigou Business And Overseas Brands

Wiktoria Marszałek — Fri, 12/28/2018 - 18:25

 

Hello!

This week, we discuss how brands can be affected by new law, what Chinese consumers value more: quality or lower price?, and if China is ready for plus-size fashion.

Also, for those who are still in the Christmas mood: Weibo released a Santa-looking emoticon that is not really Santa... Say what? ;-)

Dig in!

 

E-Commerce

New e-commerce law affects lucrative Daigou business and overseas brands. Have you ever queued at the airport behind a Chinese girl and wondered about her twenty huge duty-free bags? Or, maybe you’ve spotted someone filming their pharmacy trip? You probably encountered a “daigou” who sells foreign-purchased goods on Chinese e-commerce platforms or to Wechat friends. It’s a common way for the Chinese to get foreign products such as luxury brands, supplements, and baby formula- products otherwise overpriced or unavailable in Mainland. But on January 1, 2019 this will likely change as a new law targets daigou’s who don’t have registered companies and avoid taxes. - Read more (English)

How does it affect foreign brands? They may expect a major drop in sales made by Chinese customers. Some luxury brands in Europe already reported lower sales around Chinese holidays in 2018 compared to last year. How about driving the Mainland customers to official brand stores on e-commerce platforms? It’s a common struggle and woe for Chinese consumers to have to pay more than their overseas friends for the same products, or they cannot access many products foreign brands offer elsewhere. Maybe it’s time to change strategy? Tip: rolling out a limited product for Chinese markets can work miracles if promoted properly.

- Wiki

 

Chinese consumers chase quality, not cheap price - or so Taobao’s new strategy suggests. The e-commerce platform upgraded their “Daily Special Price” to “Daily Special Value.” Their manager said that chasing cheap price and low quality is outdated and they aim to promote 100,000 merchants of “special value” over the next three years.

It’s a shake-up as everyone expected Taobao’s “Daily Special Price” feature to challenge the position of Pinduoduo. Instead, Taobao decided to leave third and fourth-tier cities to the group buying platform, and instead chose to be associated with trustworthy and good-quality merchants. - Read more (Chinese)
- Sissi

 

Alibaba opens their 100th Hema Supermarket. It’s a combination of offline and online retail - a model that the giant has been heavily promoting in China over the past year. They just signed a deal with Yiguo, an e-commerce platform selling fresh food nationally, that will further expand their reach and delivery capabilities.

Although 90% of fresh food e-commerce stores are at a loss in China, Alibaba is pushing its retail forward. First, they understand the need for convenient shopping is growing fast - hence the popularity of delivery services in Chinese cities. Second, recent years have proven chain stores are crushing small businesses in China and have a much higher chance of success. - Read more (Chinese)
- Lillian

 

Social Media

Weibo releases a new emoticon that looks like Santa but is not him! It’s Lei Bao, from the 90’s comedy movie Hail the Judge, that netizens started using on social media before Christmas. Weibo immediately reacted releasing a new emoticon and related hashtags which attracted over 370 million views. After all, “it is said that Santa is a man with a white beard and a red hat,” isn’t he? ;-) - Read more (English)

- Olivia
 

Nanjing is now officially a “celebrity city” - at least on Douyin. In 2018 alone, there have been over 2.6 million short videos related to Nanjing, with a total of 19.6 billion views. Therefore, Douyin and the city’s government alongside 50 companies in different industries based in Nanjing reached an agreement aiming to create “a virtual showcase” of the city on the platform. Short videos are now one of the best ways to reach out to consumers in China who spend most of their free time in virtual reality. - Read more (Chinese)
- Sesia

 

Chinese Consumers

Is China ready for plus-size fashion? Beauty standards in China are very homogeneous (as we covered in this blog post), and shopping choices are often very limited for anyone “different”. People wearing sizes other than Western S or M struggle finding clothes or shoes bigger than size 44 - they just don’t exist in China! Trust me, it’s a regular topic among expats - we all end up shopping at H&M because they actually offer XL clothes. Strangely, it's culturally more acceptable for foreigners to be plus sized as many Chinese are like "I'd date a fat foreigner but not a fat Chinese person."

The issue is many brands, especially foreign ones, don’t feel comfortable taking risks as body shaming is commonly seen in Mainland. However, the niche is slowly filling in - and plus-size influencers are a great way to reach the target audience. The coming change is marked by Naomi Watanabe being a headliner for this year’s Double Eleven gala. - Read more (English)
- Wiki

 

58% of China’s plastic surgery customers are under 28 years old with Hyaluronic acid, photorejuvenation and creating double eyelids being the most popular treatments. The data comes from a report (in Chinese) released by Gengmei APP (更美APP; literally: “more beautiful”), a Q&A app focused around beauty and aesthetic medicine industries. The platform has built a community interested in plastic surgery and cosmetics, consisting of users’ reviews of services and products, and professional advice from surgeons and cosmeticians.

As platforms such as Baidu, WeChat or Weibo put great restriction on plastic surgery advertising, the app relies on organic marketing and paid promotion via variety shows such as Lipstick King (口红王子).

- Nara

 

Over 40 percent of college students are accompanied by social media influencers in their daily life, according to Chinese Academy of Social Sciences. Students born after 1994 are mostly focused on video games and beauty industries. Female students follow mostly beauty influencers while males are more into gamers. - Read more (English)
- Shirley

 

Search Engines

Google will not launch their censored search engine in China after all. It seems the company has given up their dream to enter China after avalanche of criticism received over the last few months and data usage concerns. - Read more (English)

For those of you who feel disappointed, we will just say Google would not be able to launch the same product as in other countries anyway. So, how about learning more about search engines that actually work in China instead?
- Wiki

 

Baidu sets up “mini-program alliance” with 12 other platforms covering industries such as travelling, car and house rental, video, transport, etc. Among the most popular companies are Ctrip, Kuaishou and iQiyi. It means that the platforms’ apps will support each other’s mini-programs and share users’ data, providing a smoother experience. At the same time, the aim is also to build a cross-brand affiliate advertising alliance. - Read more (Chinese)
- Kevin

 

Other News

Tightening control over economy and society instead of deepening reforms. Chinese economists favouring China’s opening up are disappointed after Xi Jinping’s 1.5-hour speech focusing on his Party’s dominance and leadership over everything else. It was also stated that China will not put the interest of other countries over its own. - Read more (English)
- Wiki

 

Share

Comments

Add new comment