AsureQuality’s China Marketing Insight Series #6

Welcome to AsureQuality’s China Marketing Insight Series

This is the sixth in our series of insights and learnings around the China marketing calendar.(external link)

Winning at livestreaming

Oriental Select, New Oriental Education’s livestream Channel, has attracted over five million followers on Douyin with their unique offering of free English teaching sessions while livestreaming.(external link) According to data from live-streaming tracking platform Huitun,(external link) Oriental Select’s daily sales topped USD $6.7 million on 14 June 2022, up from the daily sales which had been stuck at USD $149,000 for the six months since launching in December 2021.

The company was one of China's largest private education companies,(external link) but as a result of the ‘double reduction’ policy announced in August 2021,(external link) the private education sector in China suffered and New Oriental had to lay off 60,000 employees. In one video that went viral on Chinese social media, a New Oriental host (and former teacher) promoted a deal for steaks as he wrote “steak" and "seasoning" in English on a white board, demonstrating how to use these English words in context before encouraging viewers to place orders.

This new livestream format with a combination of education + e-commerce + promotion(external link) is appreciated by many netizens(external link) who enjoy the entertainment and the learnings gained from this new winning format. Dong Yuhui’s(external link) bilingual livestreams are popular with over 900 million viewers being attracted by his enthusiasm, fluency in English, witty jokes, personal stories and talent for singing.

Despite recent changes, livestreaming remains strong

In the past five years, livestreaming e-commerce in China has developed into one of the top retail industries(external link) and is worth over US $180 billion.(external link) Successful livestreamers have previously been endorsed by the China government and become famous for their charisma, skill at product selection and special offers for consumers. Recently though, there has been a major upheaval and shift in power since some of China’s top livestreamers have come under scrutiny by government censors and are no longer active.

The 'Lipstick King’,(external link) Austin Li, with over 64 million flowers on Taobao, has not streamed or posted on social media since 3 June 2022, when his livestream session was suddenly cut off. And in 2021, Taobao’s popular livestreamers, Viya and Cherie(external link) were fined  USD $210.2 million and USD $10.2 million respectively in 2021 for tax evasion and have not streamed since.

Despite the disappearance of some big livestreamers, the livestreaming industry continues as strong as ever, given another charge by the recent lockdowns. At the same time, there’s been a power reshuffle within the industry,(external link) as smaller players gain more attention. Many brands are also now committed to building their own livestreaming channels.

While these may be good changes for sellers to lessen their dependence the top Livestreamers, it’s not considered a good thing for consumers as they can’t access the same discounts they previously could.

The quietest 618 shopping festival ever

The 618 Shopping Festival is the second-largest e-commerce shopping festival in China, second only to Single's Day and possibly the second-largest shopping festival in the world. However, this year's 618(external link) was reportedly restrained. Three months of COVID lockdowns in Shanghai and Beijing(external link) have led to economic uncertainty with nearly 80% of China’s logistics firms have reported falling profits in the first five months of 2022.

While companies were expecting to make up for sales lost during the lockdown periods, the market reaction was cool. Ecommerce platforms tried to boost sales by offering good discounts and simplifying rules, but consumers remained cautious. JD.com, the second largest ecommerce platform in China, said their 618 sales were only 10.3% higher than last year, PNG (50 KB) marking the slowest growth of the past five years.(external link) Alibaba Group and Pinduoduo did not release their 618 sales data but according to consultancy firm Syntun’s sales across major e-commerce platforms, including Alibaba's Tmall marketplace, JD.com and Pinduodu were estimated at USD $86.75 billion(external link) compared to last year’s sales of USD $86.14 billion. With significant sales growth in previous years, this year's growth fell flat.

“For both platforms and companies, the time for pursuing high growth is gone,(external link) especially amid weak consumer demand”, an e-commerce platform professional said. “It may be more realistic and more important for companies to offer better services and maintain the loyalty of their existing consumers.”

Relaxation of quarantine policies for travellers

On 28 June 2022, China slashed its quarantine policy by half for international travellers. Since beginning of this pandemic, China has some of the world's strictest entry requirements, mandating most inbound travellers to spend at least 14 days at a government quarantine facility, followed by seven days of isolation at home. According to National Health Commission’s announcement, incoming visitors will now only spend seven days at a quarantine facility and three days at home.(external link)

This has not been considered a sign of dropping the "zero-Covid" policy",(external link) but as being more scientific and targeted(external link) and is still a relief for international businesses who eager to visit partners and review market status.

Chinese NoLo market estimated to boom to USD $11.1 billion in 2025

The NoLo market (No and Low alcoholic beverages) is showing big potential(external link) in the China market especially among Chinese young consumers. Data from TMIC (Tmall Innovation Center) shows that NoLo products generated sales of USD $3.88 billion in 2021, being 42% higher than the year before. This market is estimated to grow to USD $11.1 billion(external link) in the year of 2025.

Although the NoLo market in China is smaller than some parts of the world, it is growing rapidly due to increasing popularity among the Post-00 Generation, female drinkers, and High-income and High-Knowledge consumer groups.

Meet our marketing expert Mia Yang!

With an international business management education background, Mia has worked as a marketing specialist for Kiwi brands for over four years. She is dedicated to helping Aotearoa’s producers share their products with the world. Mia is passionate about supporting AQ Assured customers and loves coming up with innovative ideas to help their brands stand out in the domestic and international marketplace.

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If you’ve missed previous issues of our China Marketing Insight Series, you can find them here.(external link)

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