This week, we talk more about Chinese e-commerce giants - JD.com and Taobao - who are recruiting new partners to strengthen themselves against the competition. And as you know, when two dogs fight for the bone- a third runs away with it… and so Pinduoduo’s users already exceeded JD.com!
Also, who do you think is more subject to fraud-- men or women? Scroll down to find out and also what the newest fraud trends are in China in 2019.
Newsletter reader Gili mentioned that she wasn’t sure if their mobile app would be a good fit with Chinese users. We helped her run some usability tests where we gave users a few tasks to complete and had them answer a few questions. The blog post explains how we did the tests. Plus, it gives some tips that might be relevant for other mobile apps. - Read more (English)
Next questions please. :-)
Chinese Goths unites as a Goth girl is banned from taking subway in Southern China. Reportedly, her make-up was too terrifying for the female security guard (you are not allowed on subway in China if you don’t go through the security check). Right after the girl posted about it on Weibo, netizens started sending their own goth selfies tagged “Send Guangzhou Metro a Photo.” - Read more (English)
Angelababy not worthy of representing China internationally. The Chinese actress was featured among 14 “global talents” celebrated by Vogue, but Chinese netizens strongly disagreed. As she’s known for being the “Kim Kardashian of China” - so without any outstanding talents - and for the latest tax evasion scandal, the voices argued the magazine should have chosen someone “more professional”. - Read more (English)
First unmanned milk tea store opens in Shanghai. It’s the result of collaboration between Alibaba’s lifestyle app - Koubei (口碑) and Happy Lemon (快乐柠檬). After the order is placed in-app, the robot proceeds to prepare the milk tea which takes merely 90 sec. It also accurately identifies the customer's dining preferences (based on the data collected in the Alibaba ecosystem) and recommends personalized dishes accordingly often increasing the price of the order. - Read more (Chinese)
Xiaohongshu gets spotlight as fake reviews allegations arise. For the platform which was originally based on product recommendations, it’s definitely not good news. It started as a heart-to-heart community of users who shared products worth buying, but as popularity grew and advertisement opportunities arose- authenticity started spiraling down. On March 15, during China’s annual consumer rights day TV show, it was reported that reviews posted on the platform are not real users’ experience, but articles written by professional (and paid) writers. Although the platform claims to have a non-stop supervision team who have removed over 1.5 million fake accounts and 1.2 million fake reviews since the beginning of 2019, they somehow missed it. - Read more (Chinese)
Another side to the story is: we’ve already accepted the fact that recommendation platforms have become more like advertising platforms nowadays. Xiaohongshu does not really stand out among similar platforms when it comes to sponsored content, so it was most likely a set-up. But consumers’ trust once lost is difficult to rebuild.
Tencent allegedly makes WeChat and QQ users change their nicknames and profile pictures if they’re the same on Duoshan, newly emerged competitor by ByteDance (the company behind Douyin). Tencent didn’t confirm the information, but stressed that this kind of behaviour leads to data leakage and their major goal is to protect users’ privacy. In the same time Tencent filed a lawsuit against Douyin for unfair competition.
The battle between the two companies is certainly heating up. So far, Tencent blocked the ability to share Douyin’s videos in their apps, and Douyin blocked keywords related to Tencent-owned games. - Read more (Chinese)
Chinese giants do not handle competition very well, and it’s usually a struggle for users. Popular accounts who managed to accumulate followers on one platform have issues moving them elsewhere. For example, the only way to share a WeChat official account with Douyin users is typing “Vx: [WeChat account name]” in their bio and hoping someone is patient enough to search for them manually.
In China, you can pay to get praised! The “kua kua” phenomenon arose from some university groups as a kind of opposition to overwhelming hatred on the Chinese Internet. These are basically groups on social media that will praise you no matter what. You can share your thoughts, a picture, anything- and others will always find a reason to make you feel better about yourself. But as it started in a rather innocent way, now, you usually have to pay to get into the groups and get praised, and only for limited times! So, how much would you pay to hear for 5 minutes of how fantastic you are? - Read more (English)
Men are twice as vulnerable to fraudulent activities as women. According to the report by Tencent, men fall for emotional and financial fraud much easier, such as making (shady) friends, investing in wealth management, etc. Women, on the other had, are more vulnerable to everyday scams such as “free delivery” or “super offers” etc. Guangdong ranks first as the city with the most fraudulent accounts reported.
Fraud trends of 2019 are: 1) scammers using short video platforms that allows building follower bases much faster, and then implement fraud. 2) As account setup and verification regulations on social platforms have become stricter, scammers “rent” account from other users. 3) Fraud groups began to move abroad, especially to Southeast Asia. - Read more (Chinese)
Zhihu, Chinese Quora, rolls out a premium paid membership. The platform has previously introduced paid plans, and some of them will now be automatically upgraded to the new rank (盐选会员). The new type of account added some more community features and also makes it easier to browse topics based on keywords. As of January 2019, Zhihu had 220 million users, most of which are 18 to 35 years old. - Read more (Chinese)
One bonus here: users who purchase the membership are also getting a membership for JD.com PLUS programme. The e-commerce platform is clearly trying to build up its team to compete with Taobao. As Taobao’s 88 membership allows users to enjoy many privileges across Alibaba’s platforms and partners, including Youku, Eleme.me, Douyin, it’s been getting tough to compete with. I’m curious who else JD.com will try to get on their side
Pinduoduo’s users surpassed JD.com and challenged Taobao in just three years since it was established. The number of active buyers skyrocketed from 67.7 million in the first quarter of 2017 to 418.5 million in the fourth quarter of 2018. The annual per capita consumption increased from 67.7 CNY to 1,127 CNY. In the fourth quarter of 2018, the revenue was 5.653 billion CNY, a year-on-year increase of 379%. - Read more (in Chinese)
So, how did they manage to squeeze the momentum on such a harsh and competitive arena? 1) Mostly marketing to rural areas, and third- and fourth-tier cities promoting cost-effective deals; 2) Using the power of peer-to-peer recommendation and group buying on WeChat.
According to Baidu Trends, 41% of users are over 40 years old, with a high proportion of female users.
Will the next Game of Thrones be Chinese? One avenue where Chinese culture has broken through to International audiences is sci-fi. The Wandering Earth, which is adapted from a Liu Cixin novel has already earned $700 million. It wasn’t a huge release internationally, but will soon have a Netflix release. Liu Cixin’s most well-known novel, The Three Body Problem, is planned to be an Amazon show with the astounding budget of $1 billion. Liu’s work is rooted in Chinese history, but he shares a grand global vision for humanity. - Read more (English)