Happy Year of the Rabbit
from RedFern Digital!

As we enter the Year of the Rabbit, many are left wondering how to digest the year that came before.

Typical to the Tiger, the previous lunar year ended with action and energy, particularly over the last few weeks as China opened its borders to the world. While the Year of the Tiger is often seen as a period of great change and action, the Year of the Rabbit promises to be one of peace and prosperity.

In the Jade emperor’s race to determine the zodiac numbering, the Rabbit finished 4th out of all animals, a placing that was assisted by intelligence and care, but hindered by over-confidence. The Rabbit, one of the first animals to set-off to the party, arrived early at the river and assuming it was guaranteed first place, decided to take a nap. However, the nap allowed three other animals to pass by, showing the Rabbit’s hubris as it fell further and further behind.

Although the Rabbit was not first, it still obtained a high positioning at the finish line due to two factors, the ability to come up with creative solutions and to give and receive empathy. As a poor swimmer, the Rabbit decided to cross the river by raft, allowing it to overcome the most difficult portion of the race. With regards to empathy, its fellow competitor the Dragon blew a gust of wind pushing it across the finish line ahead of itself.

So what does this tell us?

We should be more thoughtful in our decisions, more cautious at different turning points and more modest when facing challenges.

We should show more empathy to those around us, and be thankful for the support that we receive.

We should train our minds, grow our intellect and relish in the tranquillity and stability that the year will bring.

Whilst the Year of the Tiger was about being brash and taking action, this year will be one of flourishing prosperity for those that embrace thoughtful, logical decision-making.

Here at RedFern Digital, we would like to take this opportunity to wish all colleagues, clients, partners and friends a prosperous and peaceful Year of the Rabbit!

Best Regards,
Ryan Molloy, CEO of RedFern Digital

Double 11 this year was once again a quiet one, with no live celebrations or galas organized by Alibaba or JD.com. For the first time, neither platform released their gross merchandise volume results. Instead, the platforms placed more focus on environmental protection, creating social value, retaining customers, and enhancing the shopping experience.

Although no specific total sales data was provided, Alibaba did state that their final sales figures were in line with last year’s, where the total transaction value reached 540.3 billion RMB, while JD stated they surpassed the industry growth rate, reaching a new record that exceeded the total sales value of 349.1 billion RMB reached in 2021. Douyin also revealed that during the first day of their own Double 11 promotions, the platform saw a 629.9% YOY growth in GMV. Between Oct 31 and Nov 11, Douyin also saw an 86% YOY increase in the number of merchants, with daily sales growing by 156% YOY.

Syntun, a third-party big data solutions provider in China, monitored and released their own assessment of Double 11 sales this year. According to Syntun, from 20:00 on October 31^st to 24:00 on November 11^th, the total GMV achieved across the major e-commerce platforms in China (only including traditional e-commerce platforms and livestreaming e-commerce platforms) reached 1115.4 billion RMB. Collectively, the traditional e-commerce platforms reached a GMV of 934 billion RMB, with Tmall ranked first, followed by JD.com. Among livestreaming E-commerce platforms, the GMV achieved was 181 billion RMB, with Douyin ranked first, followed by Diantao (Taobao Live).

When looking beyond the total sales figures and towards the number of brands and products participating, this year’s Double 11 was more diversified. More than 290,000 brands of various sizes from 90 countries and across 7,000 product categories joined in on Alibaba’s Double 11 festival, selling more than 21 million different products.

According to Alibaba, during the first hour of pre-sales, the platform saw 102 brands receive a turnover of more than 100 million RMB. Over half of these brands were Chinese, indicating the rising sentiment towards local products. However, foreign brands on Tmall Global also saw massive growth, with over 1,009 brands doubling their GMV year-on-year.

Looking at specific stand-out categories on Tmall, the categories showing the highest growth rates included sports and outdoors, pets, trendy toys, and jewelry. In fact, over the past year, more than 400 sub-categories within these four categories have emerged. With that said, categories such as beauty, skincare, and consumer electronics remained strong.

JD.com also had a diversifying portfolio of products, with nearly 20 million new items available during Double 11, and the total transaction volume increasing by 157% YOY. Within the first 28 hours of the Double 11 festival, tens of thousands of SMEs saw over 100% growth in transaction volume. These sales are being driven by the younger generations, with 63% of the total new consumers on JD.com under the age of 35. Although specific sub-category breakdowns were not released by JD.com, consumer enthusiasm can still be seen through the 114% YOY growth in user visits per second.

Moreover, JD.com also identified several consumer trends this year, some of which include:

– The increased investment in products with long-term returns, such as ones for health, fitness, and education.

– A rise in attention on the emotional value provided by the brand and product, e.g., whether the products can provide a sense of comfort and pleasure.

– The desire to try out new products and explore novelty.

– Rising consciousness of environmentalism, with increasing keyword searches of “energy-saving”, “green”, and “low-carbon”.

As Double 11 Shopping Festival has matured and is no longer seeing exponential growth each year, platforms are shifting focus to developing better customer experiences and building up customer loyalty through membership programs. Brands are also following suit, creating membership or reward programs to generate revenue not just during Double 11, but also all year round.

Despite a quieter festival and ongoing uncertainty regarding the economy, Double 11 this year still led to a number of impressive achievements in sales. Moreover, new consumer trends for the upcoming year were revealed, such as the demand for new product development and an increasing desire for quality and long-term value.

Announcing RedFern Digital’s release of ISSUE 7 of our magazine:

In this month’s issue of our magazine, Ryan Molloy, CEO of RedFern Digital, will provide his insights and suggestions for brands as we enter the final quarter of 2022. We will take a deep dive into Little Red Book (Xiaohongshu), discussing shifts in the platform and how it remains a crucial touchpoint for consumers, before turning our attention to the booming pet care market. Over the past few years, people in China have increasingly looked towards pets for companionship, which has led to a rise in demand for pet food, both in quality and variety. In the article on this topic, we’ll take a closer look at the pet food industry and what it means for brands.

Last but certainly not least, we’d like to give special thanks to our partner, Hamish King, COO at Cisema, for his in-depth article on registering cosmetics products for general trade in China, where he provides his top 5 tips on what brands need to watch out for during the product registration process.

This newest issue of The RED Edition continues to explore a range of different topics and provide contemporary insights that will help enhance your knowledge about the China market. Don’t miss out and download now!

– Ryan Molloy, CEO of RedFern Digital, Issue 7 of The RED Edition

This issue will cover the following topics:

1. Message from the CEO
2. Insights & Trends for Little Red Book in 2022
3. More Pets in Chinese Homes: The Growing Pet Food Industry
4. Top 5 Tips for Registering Your Cosmetics for General Trade in China 

Excerpt from “Message from the CEO“

Welcome to the 7th issue of The Red Edition. In this issue, we take a deep dive into Little Red Book (LRB), have a look at the booming pet care market, and hear from our partners at Cisema on all things related to cosmetic registrations.

In many of our previous issues, we have talked about the importance of Little Red Book for brand and performance marketing, and although the platform has become more competitive when it comes to brands working with Key Opinion Leaders and more expensive in terms of media spend, LRB remains crucial for brand strategy. The shift in consumer demographics to include more male users, the relatively young follower base, and the strong purchasing power means that LRB will continue to hold promise for a wider target audience and an increasing number of categories.

These shifts are important for brands that are trying to focus on a particular persona. The 25 to 40-year-old female consumer is no longer the only relevant consumer type to target, and brands are spending more time investing in reaching different personas to build their sales, adjusting from an identity perspective to capture the attention of different generations. For brands to do this, they need to utilize test and learn strategies across different platforms. As we can see from the pet food category in China, a whole range of Chinese consumers are turning to pets for companionship and emotional fulfillment, from the more senior households to single millennial and Gen Z consumers. Each of these personas interact online in different ways, with the former turning to more professional pet care outlets, word-of-mouth and large public domains, and the latter being very influenced in their decision-making by social media platforms and Key Opinion Leaders.

To be continued in the magazine…

Click DOWNLOAD HERE to receive
ISSUE 7 of The RED Edition.

Please see below for past issues of The RED Edition:

To download Issue 6 of The RED Edition (published 23rd August 2022),
CLICK HERE.

To download Special Issue 2021 of The RED Edition (published 16th December 2021),
CLICK HERE.

To download Issue 5 of The RED Edition (published 29th September 2021),
CLICK HERE.

To download Issue 4 of The RED Edition (published 14th July 2021),
CLICK HERE.

To download Issue 3 of The RED Edition (published 19th January 2021),
CLICK HERE.

To download Issue 2 of The RED Edition (published 26th August 2020),
CLICK HERE.

To download Issue 1 of The RED Edition (published 8th June 2020),
CLICK HERE.

Baidu is a Chinese technology company that is best known for its search engine, although it also offers a range of other online services including cloud storage, encyclopedia, image/video management, online forum, etc.

Unlike in other countries, Google is not accessible in China, thereby allowing Baidu’s search engine to become the dominant one in the country, with about 70-80% of the market share. Similar to Google, Baidu allows for Search Engine Optimization (SEO) and Search Engine Marketing (SEM).

Why conduct Baidu Advertising?

As mentioned, Baidu is the largest search engine in China, handling over 3 billion search requests every day. The market dominance of Baidu in China, alongside its massive search volume, demonstrates the huge potential audience that the platform can reach. Especially for B2B or service-based companies and brands that are hoping to expand in China, having a highly visible website remains crucial as it is a touchpoint for potential clients or customers to find out more information about the company.

Baidu SEM (Search Engine Marketing)

Baidu SEM or PPC (pay-per-click) is a form of online marketing that involves paid advertisements that boost exposure during search results. To conduct Baidu SEM, companies will bid on specific keywords that are relevant to the business, then when those keywords are searched, the company’s landing page or website will be listed as one of the top options on the results page. Each time the promoted webpage is clicked, the company will pay a CPC (cost-per-click) fee, which can vary depending on the specific keywords selected. The costs are completely dependent on industry, competitiveness and search volume of keywords, and target audience (e.g., gender, age, location, and interests).

Baidu SEO (Search Engine Optimization)

Baidu SEO is the process of improving the organic search rankings of websites on the Baidu search engine. Conducting SEO will allow company websites to appear higher, and therefore be more visible, on the search results page. SEO can be approached from a technical perspective in terms of the website structure and design, an on-page perspective in terms of the content on the website, and an off-page perspective in terms of the backlinks to the website.

To improve search engine results of their websites, companies should ensure that the technical structure of the website allows for easy indexing by search engines. This includes having a fast website load speed, no errors when the website is being loaded, and having a website design that is easily crawled, understood, and categorized by Baidu.

On-page SEO focuses on the content on the website, which should be frequently updated and should include repeated mentions of the relevant keywords. Separate pages should be used for different topics, with enough content on each page to make it easy to index by the search engine.

Moreover, companies also need to consider off-page SEO, which can be improved by obtaining as many backlinks as possible. Backlinks are the inclusion of the website link on other websites, linking back to the company website. Having this linkage will make the website appear more trusted and authentic to search engines, which will provide a boost to search results.

Baidu SEO is more of a long-term marketing strategy that takes time to set up and improve upon, while also providing more consistent long-term results. On the other hand, Baidu SEM provides immediate results that will end as soon as the advertisements are no longer being paid for. For more information on how to best utilize Baidu advertising and marketing for your company, contact us at RedFern Digital.

Announcing RedFern Digital’s release of ISSUE 6 of our magazine:

A lot has happened since our last release of The RED Edition at the end of 2021. Ryan Molloy, CEO of RedFern Digital, will start off this issue by discussing the trends and changes that brands need to be aware of as we pass the midpoint of 2022. He will discuss the continued relevance of Key Opinion Leaders and Key Opinion Consumers in China, even as costs rise and additional challenges must be faced. Moreover, Ryan will be discussing the increasing importance of Douyin for driving sales, along with rising trends in China such as the “she” economy.

Next, we will explore the most relevant trends in the Food & Beverage category in China, covering specific changes in consumer behavior and the categories experiencing surges in growth. Our third article will discuss the Food & Beverage category from a packaging and branding perspective, offering tips and suggestions on packaging elements for brands to consider, along with characteristics that can help products stand out from the crowd.

We would like to give special thanks to Andrew Cameron from The Silk Initiative for the interview that makes up our final article in this issue of The RED Edition. The interview covers key insights & strategies for Food & Beverage brands, discusses trending categories, changes in consumer behavior and brand approaches, the key differences between the F&B category in China and abroad, and invaluable advice for brands looking to enter the China market.

This issue of The RED Edition will have new and contemporary insights to offer, no matter your current level of understanding of the China market. Don’t miss out and download now!

– Ryan Molloy, CEO

This issue will cover the following topics:

1. 1. Message from the CEO: How has the Digital Landscape in China Changed in 2022?
   2. The Top Trends & Categories in the Food & Beverage Market in China
   3. Create a Lasting First Impression: Packaging & Design for Food & Beverage Brands in China
   4. Partner Insight: Key Insights & Strategy for Food & Beverage Brands in China

Excerpt from “Message from the CEO: How has the Digital Landscape in China Changed in 2022?“

Welcome to the 6th issue of The RED Edition. A lot has happened since our last issue back at the end of 2021 and after a rather quiet 618. Most brands are now knee-deep in media plans as the pre-heat for Double 11 draws nearer, including planning with Key Opinion Consumers (KOCs) and Key Opinion Leaders (KOLs). With the cost of customer acquisition remaining relatively high, it is important that brands push themselves to find more innovative ways to drive sales and reach new consumers.

Advertising costs are remaining stable but struggling to be as effective, and KOC and KOL marketing in particular continues to dominate investment in the Chinese market. After years of growth, consolidation of the media market has led to some troubling outcomes. The main one being that the vast majority of KOLs are signed by MCN (Multi-Channel Network) agencies rather than being independent, which has led to price inflation and an increase of fake data purchases. In order to circumnavigate this issue, brands need to choose partners that meticulously cherry-pick KOLs who not only have brand fit, good content, and a solid follower base, but also have strong follower loyalty and are independent of MCN agencies. An innovative way to reduce the financial burden of KOL and KOC marketing is to offer gift-only incentives to KOLs, but it must be noted that this takes time, resilience, and effort, and may depend on the value of the products.

In 2022, many brands turned to Douyin for help in propping up their market share. In fact, some of our brands have forecasted that this year they will have 40-50% of their annual sales coming solely through this channel. This change was also seen during the past 6.18 Shopping Festival, where GMV from traditional E-commerce platforms only grew 0.7% compared to the previous year, while GMV from livestreaming E-commerce platforms grew by over 124.1%, with Douyin earning the top spot.

However, brands need to tread carefully. Although Douyin has become an important channel for first time customer acquisition, repeat purchase rates through this channel tend to be below 4%. The majority of consumers, if they decide to purchase again, will look to one of the major e-commerce platforms such as Tmall.

To be continued in the magazine…

Click DOWNLOAD HERE to receive
ISSUE 6 of The RED Edition.

Please see below for past issues of The RED Edition:

To download Special Issue 2021 of The RED Edition (published 16th December 2021),
CLICK HERE.

To download Issue 5 of The RED Edition (published 29th September 2021),
CLICK HERE.

To download Issue 4 of The RED Edition (published 14th July 2021),
CLICK HERE.

To download Issue 3 of The RED Edition (published 19th January 2021),
CLICK HERE.

To download Issue 2 of The RED Edition (published 26th August 2020),
CLICK HERE.

To download Issue 1 of The RED Edition (published 8th June 2020),
CLICK HERE.

Livestreaming skyrocketed into popularity during the start of the COVID-19 pandemic, when offline sales channels were shut-down, and consumers began to shift online. Through livestreams, Chinese consumers were able to experience as close to a ‘salesperson’ shopping experience as possible. The livestreamer introduces and demonstrates the products to viewers in real-time, and viewers are able to ask questions that are answered live. Since then, although livestreaming as a channel has become more and more saturated, it remains a viable and popular method of boosting awareness and sales. In fact, the e-commerce livestreaming industry is expected to reach 2.8 trillion RMB (about 438 billion USD) in GMV in 2022, and 4.9 trillion RMB (732.8 billion USD) in 2023.

Brands have the option of either working with livestreamers who already have a following or setting up their own internally hosted livestreams. It must be noted that products sold during KOL livestreams are usually heavily discounted, which means that the ROI for brands is unlikely to be very high even if large number of products are purchased. Moreover, as these livestreamers often suggest a number of different products during each livestream, brands can also find themselves lost in the crowd.

Therefore, many brands have turned to building up their own livestreaming channels, running frequent livestreams with internal livestream hosts. Through internally managed livestreams, brands also have much closer control over the livestream content, and are able to directly interact with the viewers, building up brand loyalty in a way that would not be possible through KOL livestreamers. However, building up an initial viewership can be difficult for internal livestreams, especially if the brand is still relatively unknown in the China market, which makes this a process that will require time and investment.

The Top Livestreaming Platform Contenders in 2022

Douyin is a short-video and livestreaming social platform and is TikTok’s equivalent in China. The platform quickly rose to prominence over the past few years, with an algorithm driven feed that constantly provides users with videos and livestreams according to their interests. Moreover, Douyin has continued to shift into the e-commerce space with its allowing of brands to directly open up Douyin Stores on the platform, creating a closed loop between product discovery and purchase. Many brands will hold daily internally managed and hosted livestreams that last for over 10 hours. Douyin has been so successful in its livestreaming ventures that it became the top livestreaming platform during the 6.18 Nationwide Mid-Year E-commerce Festival in China in 2022.

Similar to Douyin, Kuaishou is also a short video and livestreaming focused social platform. The platform is mostly known for its mass-market products, although this is an image that it is slowly and with some difficulty trying to shed. With that said, there have been prominent brands that have also held livestreams on the platform. One example is Coach, which livestreamed on the platform with the aim of expanding their audience in the lower-tier cities that are experiencing rapid growth in income and consumption.

Taobao Live is the last of the most popular live-streaming platforms and is linked to Taobao, China’s largest e-commerce retail platform in 2021. Taobao Live has a number of massively popular livestreamers who promote a wide range of products and services. Although Taobao Live had previously held the largest market share in e-commerce livestreaming, competition from Douyin and Kuaishou has been fierce. As a result, Taobao Live was pushed into the third spot during the 6.18 Mid-Year Festival, with Douyin and Kuaishou taking the first and second spot, respectively.

——

As can be seen, livestreaming is likely a feature of E-commerce in China that is here to stay for the long-term. Therefore, despite the saturated market and fierce competition, brands will need to understand the livestreaming industry in order to succeed in China.

For more information on how to best utilize livestreaming in China for your brand, contact RedFern Digital now!

As we enter the second half of the year, China has managed to maintain a positive growth in GDP, albeit only 0.4%, in spite of the resurgences of COVID-19 in the country and resulting lockdowns.

The growth in retail sales exceeded expectations with a 3.1% growth in June, showing a more robust bounce back than the predictions of no-growth had expected. E-commerce in China also continued its expansion, with the online sales of physical goods reaching a 14% YOY growth in May, and 8.3% YOY growth in June. It is clear that even with the potential for Covid restrictions the economy is holding strong.

When it comes to foreign trade of goods, China experienced rapid recovery in May and June after COVID-19 restrictions began to loosen. The growth in foreign trade jumped from just 0.1% in April, to 9.5% in May and 14.3% in June, reaching an overall YOY growth of 9.4% in the first half of 2022, at RMB 19.8 trillion (or USD 2.94 trillion). During this time period, exports increased by 13.2% to RMB 11.14 trillion and imports increased by 4.8% to RMB 8.66 trillion. Looking at China’s three largest trading partners, the Association of Southeast Asian Nations, the European Union, and the United States, during the first half of the year, trade with these partners grew by 10.6%, 7.5%, and 11.7%, respectively.

Worries of inflation have increased around the globe, however, China has managed to maintain control of its inflation, at 2.5%, which is much lower than the US and many other Western countries are facing.

In fact, China is forecasted to become the largest economy in the world by 2028, which is five years earlier than had been predicted. Most importantly, the country’s consumer market is likely to contribute more than a quarter of consumption growth around the world up until 2030, which makes the Chinese consumer market the fastest growing globally.

Part of the reason for this growth will be because of the younger generations who grew up as ‘digital citizens’ – the Gen Z and Millennials. These consumers are increasing their purchasing power as they graduate and climb up the career ladder, gaining ever higher disposable income.

Despite continued intermittent restrictions in China and the challenges that come with returning business to normal after months of disruption from COVID-19 restrictions, the long-term prospects of the Chinese market are looking positive. Companies need to look to the China market to build a foothold for their brand in what will soon be the world’s largest economy. For more information on how to benefit from China’s market potential, contact RedFern Digital now.

With the 6.18 Mid-Year E-commerce Festival ending about a month ago, we’re taking a look back at the results and what they mean for the Chinese e-commerce market. The Mid-Year Shopping Festival, known as 6.18, is the largest e-commerce shopping festival in China and is a crucial time for brands of all sizes and across all e-commerce platforms. Since its founding, the 6.18 Festival has grown from a day-long event to a month-long event with pre-sales starting in May.

As a result of the COVID-19 pandemic, its recent re-emergence in China, and the economic downturn, consumption demand among consumers has dropped and many merchants described the shopping festival this year as being ‘quiet’. However, despite the situation, there were still several success stories and new records set.

According to Syntun, a digital retail data service provider, the GMV across all major e-commerce platforms (only including traditional e-commerce and livestreaming e-commerce platforms) reached 695.9 billion RMB. Within that number, 582.6 billion RMB was from traditional e-commerce platforms, which only saw a growth in GMV of 0.7% compared to the previous year. Tmall remained the highest earning platform during the festival.

Among the livestreaming e-commerce platforms, the total GMV earned during 6.18 this year reached 144.5 billion RMB, which was an impressive YOY growth of over 124.1%. Among these livestreaming e-commerce platforms, Douyin and Kuaishou grabbed the number one and two spot, respectively, leaving Taobao Live in third place.

As can be seen, rivals to Alibaba are beginning to emerge in the E-commerce sphere, with the frontrunners being the livestreaming e-commerce platforms Kuaishou and Douyin.

A number of livestreaming campaigns were held by the major players, including:

• An online talent show that Douyin organized, which included the participation of over 100 livestreamers and resulted in 1.59 billion views.
• Taobao and Tmall both organizing popstars and celebrities to livestream for 6.18, resulting in 940 million views and 2.31 billion views, respectively, along with millions of comments.

Trends to emerge

During the 6.18 festival, several trends emerged, indicating both the types of products that consumers are looking for and a shift in where and how consumers make their purchases.

Livestreaming E-commerce

Livestreaming E-commerce platforms have seen a surge in GMV this year, seeing a GMV growth of 124.1% compared to the 0.7% YOY growth of traditional e-commerce platforms.

Healthy Living

Ever since COVID-19, Chinese customers have become more health conscious, increasing their purchases of health and nutrition foods. These include food products that include key words such as ‘low-fat’, ‘low-sugar’, or ‘low-calories’, nutritional health products, and sports equipment to maintain fitness.

High-End lifestyle

During 6.18, there was a larger growth in the purchase of premium products compared to mass-market ones, due to the growing desire for a high-end lifestyle. These products include high-end teas, boutique coffees and organic milk powder.

As can be seen, although this year’s 6.18 Festival was more ‘quiet’ than previous years, significant trends emerged, and the shopping festival still proved to be a success for brands across categories.

For more information about promoting your brand during shopping festivals, contact us now by messaging us on WeChat or clicking “Read more” at the bottom of the page. 

Kuaishou is a highly popular short video platform in China through which users can record and share content. The platform was one of the first to integrate live-streaming functions and currently has over 1 billion monthly active users. The average time spent on the platform by daily active users in 2021Q2 was 106.9 minutes, which was a YOY growth of 25.2%.

In late February, the platform announced that starting on March 1st, 2022, Kuaishou will be blocking external links to E-commerce platforms Taobao and JD.com. This block will prevent Taobao links from being displayed on the app entirely, while JD links will no longer be shown during live-streaming sessions but can still be seen during short videos or on information pages. Through implementing this block, Kuaishou is indicating that it wants to build up its own e-commerce ecosystem by leveraging its already massive userbase in order to compete with Alibaba and JD.

Brands looking to sell through E-commerce channels in China will need to take into account this ever-changing landscape, carefully considering platform connectivity when planning out a digital strategy and determining the best options for driving traffic to sales channels.

For more information on Kuaishou and platform connectivity, contact us now by messaging us on WeChat or clicking “Read more” at the bottom of the page. 

Tmall Global has opened up a new model for Cross-Border E-commerce, focused on providing SMEs with an easy and low-investment method of testing out the China market.

Prior to the announcement of the new Cross-Border E-commerce (CBEC) model, Tmall Global (TMG) only allowed brands to enter the platform’s sales channels through opening their own TMG Flagship Store or working with TMG through their Direct Import Model. However, in an effort to provide smaller brands (SMEs) with a more convenient and low-investment method of entering the China market, TMG launched TMG Mini-stores, which work through the bonded warehouse model.

Tmall Global Mini-stores can be thought of as a simplified and lighter version of a flagship store, except with the core advantages:

• Low costs and investments
• No operational management is needed by the brand
• No minimum requirements in terms of GMV and presence abroad, which means completely new brands are also welcome
• Strong incubation component included

The main cost savers of this model compared to a TMG Flagship Store is its lack of need for a Tmall Partner to help run the store operations, along with its reduced total deposit required. The one-time deposit for TMG Flagship Stores can range from RMB50,000-RMB300,000, whereas the maximum deposit for TMG Mini-stores is RMB30,000. While the Mini-store GMV remains under RMB500,000, the brand will only be charged a monthly deposit payment of RMB1,000 until a cap of RMB30,000 is reached, which will take 30 months under these conditions. If the GMV of the Mini-store exceeds RMB500,000, then the deposit will be set at RMB30,000, including previous deposit payments. All deposit payments will be refunded at the end of the cooperation.

With that said, there is a mandatory 30% of the GMV from the store that must be spent on marketing costs for the first 3 months of the Mini-store’s operation. Afterward, it is up to the brand whether to continue with this marketing cost, although it is highly recommended.

Moreover, the TMG Mini-stores also include an incubation component, wherein TMG will act as the one-stop solution to managing the brand Mini-store’s marketing, promotions, store operations, and sales. TMG will use big data and AI collected through its selection of platforms to target the right customers for the brand’s products and will take care of customer service management. Once the brand has increased its GMV enough, Alibaba will begin to place the brand into marketing promotions, such as Single’s Day.

From the brand’s side, the major steps involved will be onboarding and providing the products to be stored in the bonded warehouse, after which the TMG team will look after the Mini-store. Onboarding will require information such as brand and trademark registration from the country of origin, China custom registration, and ongoing provision of marketing materials (translated to Chinese). If needed, service providers can assist with these onboarding steps.

Although brands from all categories are welcome, in order to enter through the TMG Mini-store model, the brand cannot already have a TMG Flagship store. Moreover, brands can only select 3 SPUs each. As an example, one clothing design that offers different sizing options will be counted as one SPU. Wholesalers are also welcome through this model, although each individual brand must have its own Mini-store.

The Tmall Global Mini-store model is a great opportunity and channel through which newly established brands who are looking to enter China can test out their sales in the market. However, prior to entry, brands are advised to conduct competitor and market analysis to determine their potential for success. Although Alibaba provides assistance with incubating the brand, brand owners still need to understand the heavy competition that exists within the CBEC market in China, and that as soon as the brand enters, they will be competing against everyone else who is already there.

If you would like more information on Tmall Global Mini-stores or want to know whether this is the best option for your brand, contact us now by clicking “say hello”.

RedFern Digital is announcing the release of our end-of-year special issue of:

As 2021 comes to a close, in this issue, we take a closer look at the Double 11 festival in November. Although new records were broken in terms of total sales, Alibaba and JD.com both saw lower YOY growth compared to last year. Despite this, the festival revealed several new trends to pay attention to for next year, such as an increasing push towards health and sustainability, by both large tech companies and consumers themselves.

In preparing for the next large shopping period of the year, Chinese New Year, we also discuss successful CNY campaigns that occurred in 2021 and provide suggestions on how brands can hold their own campaigns that will resonate with Chinese consumers.

Finally, we conduct an in-depth exploration of the nutritional and health supplements market in China, providing a general overview in terms of sales, top products, top brands, and top categories, as well as hearing from two of our partners about the market from both a brand and a regulatory compliance perspective. We would like to give special thanks to Benji Lamb from Vitabiotics and Raymond Ng from Accestra Consulting for their invaluable interview contributions.

– Ryan Molloy, CEO

Special Issue 2021 of The Red Edition can be accessed by clicking DOWNLOAD HERE. 

This issue will cover the following topics:

1. 1. Message from the CEO
   2. Deep Dive into Double 11, 2021: Trends, Consumption Habits, and Changes for the Future
   3. Inspirations for Chinese New Year 2022: Learning from Successful CNY Campaigns
   4. Looking into the Health Foods Landscape in China
   5. Partner Insight: An Inside Look at the Health Supplements & Vitamins Category in China
   6. Partner Insight: An Inside Look at Health Foods & Supplements Regulatory Compliance in China

Excerpt from “Deep Dive into Double 11, 2021: Trends, Consumption Habits, and Changes for the Future“

A focus of the event this year was on sustainability and diversity, which shows a growing trend among Chinese consumers, and presents an opportunity for brands that are able to demonstrate these characteristics through their products and brand story. As an example, within the first minute of November 11, Tesla was able to sell more electric car charging stations than during the entirety of the festival last year.

Both Tmall and JD have ramped up their efforts to become more environmentally friendly.

Tmall issued RMB100 million worth of ‘green vouchers’ for the festival, with the aim of encouraging more sustainable purchases, and boosted the visibility of over 500,000 eco-friendly and low-impact products across categories. According to Alibaba, green products were purchased by more than 2.5 million consumers during Singles’ Day.

Tmall also pushed their “Goods for Good” program, wherein Alibaba donated RMB1 each time a consumer shared on social media what they purchased through this program, with proceeds going to support senior citizens living alone, low-income workers, and ‘left-behind children’ in remote areas of the country. Between October 20th and November 4th, the program raised more than RMB60 million.

In terms of recycling or reducing the use of packaging material, Alibaba’s logistics arm Cainiao provided recycling services at over 60,000 package pickup stations, while JD promised to use 25cm less adhesive tape and 210 grams less paper for each package delivered on Singles’ Day.

JD stated that compared to last year, they reduced their carbon emissions by 26,000 tons during this Singles’ Day shopping festival, while Alibaba stated they reduced their carbon emissions by 18,000 tons.

When it comes to inclusivity, a new option for ‘senior mode’ was added to the Taobao shopping app that would make the user interface more friendly to senior citizens. Features of the ‘senior mode’ include voice-assistance, simplified navigations, and large font sizes and icons.

To be continued in the magazine…

Excerpt from “Looking into the Health Foods Landscape in China“

The Consumer Health market (Health Foods – 保健食品) in China is one that is heavily regulated by the Chinese government administration. Regardless, it has expanded over recent years, experiencing explosive growth particularly during the years of 2006 – 2016. The market value amounted to RMB289,981 million (US$45,510 million) in 2020 and can still be considered a promising market as it is expected to continue to grow annually by 8.5% between 2021-2025.

In October 2021, the sales revenue for the overseas food and supplement market was greater than RMB1.1 billion.

The most popular product forms are tablet, capsule, powder, granule, and liquid. It is worth noting that the chewable or gummies form is making an upward projection in terms of preference.

Some newer brands in the health foods category that are popularizing the chewable and gummies forms are the American vitamin brand, Olly, and Australian brand, Unichi. Unichi has differentiated their product format shape into “bear gummies”. These brands are innovating in product formats, moving away from traditional capsules, which greatly attracts the younger generations and as a result, has allowed them to achieve fast development in the China market.

During this year’s Double-11 shopping festival, total sales volume of Imported Health Supplements category (海外膳食营养补充食品) reached RMB2 billion.

To be continued in the magazine…

Click DOWNLOAD HERE to receive
Special Issue 2021 of The Red Edition.

Please see below for past issues of The Red Edition:

To download Issue 5 of The Red Edition (published 29th September 2021),
CLICK HERE.

To download Issue 4 of The Red Edition (published 14th July 2021),
CLICK HERE.

To download Issue 3 of The Red Edition (published 19th January 2021),
CLICK HERE.

To download Issue 2 of The Red Edition (published 26th August 2020),
CLICK HERE.

To download Issue 1 of The Red Edition (published 8th June 2020),
CLICK HERE.

The media marketing space in the China market is one that boasts many complexities and intricacies. Since China has a range of platforms that are unique to the country, brands should be aware of what these platforms are, how consumers use them, and what marketing tools are available on each one.

During the next session of our monthly webinar series, we will explore the different media marketing tools and strategies that brands can utilize, and how brands can determine which are the best options.

Date: 7 Dec 2021
Time: 3.30pm – 4.30pm China Standard Time
Speaker: Sandra Weiss, Digital Executive at RedFern Digital

“Click Here” to register now!

After registering, you will receive a confirmation email within 15 minutes. If you do not receive one, please contact [email protected].

As some of you may know, last Thursday was November 11^th and the culmination of Double 11 (Singles’ Day), a nationwide shopping festival in China. The festival has expanded from just a single day in past years to almost a whole month of promotions, with pre-sales beginning at 8pm on October 20^th, and sales starting on November 1^st.

Since it began, the Double 11 Festival has managed to break its own record each year in terms of GMV achieved, and this year was no exception: Alibaba Group saw a GMV of RMB540.3 billion and JD.com saw a transactional volume totaling RMB 349.1 billion.

To put this year’s Double 11 Shopping Festival into perspective, we’ve provided some numbers below:

• Tmall offered discounts on over 14 million products to over 900 million Chinese consumers.
• Starting from October 20^th until the end of the festival, Taobao Live featured over 700 KOLs, celebrities, and brand representatives in livestreams.
• Li Jiaqi, one of the top livestreamers in China, had 439 products listed on October 20 and reached a cumulative transaction value of RMB11.5 billion. The estimated sales volume of his livestream room was 37.71 million and the maximum sales value of a single product was RMB389 million.
• Viya, another top livestreamer in China, also began streaming on October 20, and during her over 14 cumulative hours of streaming during the festival, reached a total sales value of RMB8.533 billion. She had 499 products listed, an estimated cumulative sales volume of 26.89 million, and the maximum sales value of a single product was RMB490 million.
• On JD.com, the transaction volume of 31 brands surpassed RMB1 billion.

A large focus of the event this year was on sustainability and diversity, which shows a growing trend among Chinese consumers, and presents an opportunity for brands that are able to demonstrate these characteristics through their brand story. As an example, within the first minute of November 11, Tesla was able to sell more electric car charging stations than during the entirety of the festival last year.

Moreover, when it comes to customer demographics, JD.com stated that during their Double 11 Promotions this year, customers aged between 18-35 years old accounted for over 70% of pre-sales, while customers from lower-tier cities made up 77% of all users.

The Double 11 National Shopping Festival continues to expand in terms of customer base, sales numbers, participating brands, and discounted products, while also reflecting the growing trends in China. Brands need to be aware of the shift in consumer attention towards more environmentally friendly products and understand the rising consumption power among the younger generations and among consumers living in lower-tier cities.

If you have questions on branding and marketing in China, contact us now by clicking “say hello”!

Chinese consumers make up one of the largest markets in the world, and everyone wants to know who they are and how to reach them. As a brand, finding your target audience in China and understanding their specific characteristics in order to tailor your product and marketing is essential. Before you can ensure that your brand meets the demands of your target consumers, you need to know who they are.

Join the next webinar in our monthly series where we will discuss:

• The Chinese consumer purchasing journey
• Major Chinese Consumer Groups
• The growing purchasing power of Gen-Z
• How to reach Chinese Consumers
• The importance of customization and personalization

And more…

We’ll be deep-diving into what makes Chinese consumers so unique, and how brands can understand who they should sell to and how.

Date: 16 Nov 2021
Time: 3.30pm – 4.30pm CST
Speaker: Ryan Molloy, CEO of RedFern Digital

“Click Here” to register now!

After registering, you will receive a confirmation email within 15 minutes. If you do not receive one, please contact [email protected].

ABOUT THE SPEAKER

When preparing for the China market, brands need to have an in-depth understanding of the following: competitors, consumers, platforms, regulations, product and positioning.

As a part of our monthly webinar series, in this month’s webinar, we will discuss:

• Preparing for China market entry
• Finding market opportunity
• Branding and localization
• Building up brand awareness
• Brand readiness for entry

Date: 26 Oct 2021
Time: 3.30pm – 4.30pm CST
Speaker: Ryan Molloy, CEO of RedFern Digital

“Click Here” to register now!

After registering, you will receive a confirmation email within 15 minutes. If you do not receive one, please contact [email protected].

ABOUT THE SPEAKER

RedFern Digital is a China specific, full-service agency that helps brands navigate the digital ecosystem, increase their brand awareness and convert that awareness into sales.

Our deep understanding and experience in the China market allows us to support brands at every step of their journey, from validating the opportunity, branding & localization, design and creative asset development, to sales launch and media activation to drive ongoing conversion.

Announcing RedFern Digital’s release of ISSUE 5 of our magazine:

With the Double 11 Shopping Festival just over a month away, brands are ramping up their preparations. In this issue, we cover insights into preparing for the festival from both a Marketing & Promotions and an Operations & Logistics perspective. We’ll also be discussing changes in consumer attitudes towards the Snacking category, and offering a data-focused deep dive into the Men’s Skincare category.  Other topics that are explored include the integration of online and offline channels, the development of New Retail, suggestions on marketing in China, tips for navigating the E-commerce landscape, and more.

Whether you are just dipping your toes into understanding the China market or already have years of experience with the country’s unique digital and E-commerce landscape, this issue will have new insights to offer you. Don’t miss out and download now!

We would like to give a special thanks to Jake Xu from Shakeup Cosmetics, Josh Gardner from Kung Fu Data, and Snacking category specialist, Poca Chen, for their interview contributions.

“For brands and agencies alike, the next month unravels into chaos as the final elements of Double 11 are locked in. Some brands will be trying to increase their exposure as much as they can prior to the event, while others will be chasing to lock-in last minute deals with live-streamers. For some brands, this won’t be their first Double 11 and they will be looking forward to reaping the benefits of a well-planned out festival. For others, energy and patience will have become the main focus for their brand as they persevere to stand out among the thousands of other brands in their category.”
– Ryan Molloy, CEO

ISSUE 5 of The Red Edition can be accessed by clicking DOWNLOAD HERE. 

This issue will cover the following topics:

1. 1. Message from the CEO
   2. Marketing and Promotions: Preparing for Double 11
   3. Operations and Logistics: Preparing for Double 11
   4. Shifting Consumer Attitudes Towards Snacks
   5. The Integration of Online and Offline Channels
   6. Men’s Skincare: Data Overview of the Market
   7. Partner Insight: Shakeup Cosmetics, An Inside Look at the Men’s Skincare and Cosmetics Industry in China
   8. Partner Insight: Kung Fu Data, Insights into the E-commerce Landscape in China 2021
   9. Partner Insight: Poca Chen, Interview on Developments in the Snacking Sector in China

Excerpt from “Marketing and Promotions: Preparing for Double 11”

The big question that most brands have as Q3 draws to a close is ensuring that all plans have been finalized and locked in for Double 11. The festival has now become a month-long opportunity for brands to gain more traction through their Ecommerce stores. There are three major components to the festival that brands need to take into consideration, the pre- warm-up, the warm-up and the day itself. The pre-warm-up involves trying to build brand awareness, increase the sales within your store and negotiating with the platforms for resources that can be provided to support traffic. Often brands will use social media campaigns to create noise and hype as well as livestreaming to ramp up sales. This takes place from early September until the first day of presales.

Presales start on the 20th of October and the first day usually brings strong sales and headlines from the larger live streamers. During this period, consumers will pay deposits for products that they will later check out if they still feel the same way towards the end of the pre-sale period. It is categorized by two periods and most traffic is encountered on the first and last days. Brands usually spend most of their time driving as much traffics as possible through in-app display marketing as well as livestreaming to increase sales. Social media, although still useful in this period, loses its effect as KOLs cannot provide attractive enough VIP discounts since most products are already relatively discounted… To be continued in the magazine…

Excerpt from “The Integration of Online and Offline Channels”

Over the past couple of years, China’s digitization has created a unique environment where online and offline channels are becoming increasingly integrated, forming new hybrid models of shopping and purchase. Although China’s level of digitization was already high, pre-COVID-19, the virus has caused an acceleration in both the acceptance and implementation of these new technologies.

When the term “O2O” is used in a marketing context, it usually refers to “Online-to-Offline”. However, China’s innovation when it comes to O2O commerce has caused an integration of digital and offline channels, creating unique experiences that combine offline participation with online or digital components. This has created a new omni-channel shopping experience that has altered how brands and customers engage with each other… To be continued in the magazine…

Click DOWNLOAD HERE to receive
ISSUE 5 of The Red Edition.

Please see below for past issues of The Red Edition:

To download Issue 4 of The Red Edition (published 14th July 2021),
CLICK HERE.

To download Issue 3 of The Red Edition (published 19th January 2021),
CLICK HERE.

To download Issue 2 of The Red Edition (published 26th August 2020),
CLICK HERE.

To download Issue 1 of The Red Edition (published 8th June 2020),
CLICK HERE.

Entering the China market is challenging for brands of all sizes. The purpose of this webinar is to provide an honest and practical overview of the steps to China market entry and to go over the checklist that brands need to be aware of.

The session will cover topics that range from the digital landscape and different modes of China market entry, to reaching your target Consumer and converting to sales, as well as case study examples of best practices in the market.

Date: 28 Sep 2021
Time: 3.30pm – 4.30pm CST
Speaker: Ryan Molloy, CEO of RedFern Digital

“Click Here” to register now!

ABOUT THE SPEAKER

Ryan Molloy has lived in China for over 17 years and has worked in the China marketing industry for nearly 10 of them. As CEO of RedFern Digital, he has worked with some of the biggest brands coming into market, covering branding, strategy, social media marketing, e-commerce and more.

RedFern Digital is proud to be partnering with AustCham Shanghai for the Australia-China FMCG Showcase, alongside Australia China Business Council, Investment NSW, 31Jiu | 叁壹酒, Coles, Baldwin Boyle Group, and supported by Australian Trade and Investment Commission (Austrade) as part of the Shine with Australia campaign.

The showcase will be a great opportunity for Australian FMCG brands to reach key Chinese distributors and receive business matching services before the noise of the 2021 China International Import Expo (CIIE). All brands involved will be included in Austcham Shanghai’s digital brochure, which will be distributed to invitees of the Showcase.

Brands that are interested can scan the QR code below through WeChat, Click Here, or email [email protected] directly. Don’t miss out on this opportunity!

Announcing RedFern Digital’s release of the fourth issue of our magazine:

As we pass the halfway mark of 2021, in this fourth issue, we’ll be exploring a number of topics related to the expansion of E-commerce in China, how this year has shaped new trends in different categories, and what steps brands can take to continue succeeding in the market.

A wide variety of topics are covered, including looking at the different shopping festivals in China (such as the recent 6.18 Mid-Year Shopping Festival), the prevalence of video content, the growing competition between Chinese E-commerce platforms, specific deep-dives into shifts within the Seafood, Alcohol and Cosmetics categories, and more. Don’t miss out on the insights and suggestions provided in the articles!

We would also like to give a special thanks to our partners from Drinks99, Knudsen&CRC, Alibaba Group and Integra Group for their article contributions.

“Ecommerce was once was an avenue that justified offline sales in the middle kingdom but now offline has found itself in reverse. At RedFern Digital, we have found ourselves carrying out more offline sampling than ever before, as offline has become the most affordable avenue to capture consumer attention, attract first time trial and then later convert into repeat online purchases. What is clear is that there is no one channel or platform that can help a brand unlock their China success, but a combination of them all.”
– Ryan Molloy, CEO

The fourth issue of The Red Edition can be accessed by clicking DOWNLOAD HERE. 

This issue will cover the following topics:

1. 1. Message from the CEO
   2. The Future of China in Video
   3. Shopping Online Through China: Festivals Throughout the Year and the Recent 6.18 Mid Year Festival
   4. Ranking War in the China E-commerce Market
   5. GACC Degree 248 & 249: What do they mean for Overseas Food Exporters to China?
   6. Diving into the Seafood Opportunity in China
   7. Partner Insight: Interview with Drinks99 – Insights on the Alcohol Sector in China
   8. Partner Insight: Interview with Knudsen&CRC – Animal Testing No Longer Mandatory after New Cosmetics Laws in China
   9. Partner Insight: Alibaba Group – Britain’s small businesses are built for exporting
   10. Partner Insight: Integra Group – China Steps Up Protections for Copyright Works

Excerpt from “Shopping Online Through China:
Festivals Throughout the Year and the Recent 6.18 Mid Year Festival”

When it comes to China, a major driver of online shopping is the wide range of festivals that take place throughout the year. They provide an opportunity for brands to develop campaigns or offer promotions and discounts to customers.

A common misconception among brands is that the only shopping festivals they should take note of or participate in are the two largest ones, the 6.18 Mid-Year Shopping Festival and the 11.11 (Double 11) Single’s Day Shopping Festival. Although these two are the largest and have the widest audience, brands should also consider smaller festivals that are still relevant to their brand, category and target consumer.

Excerpt from “Ranking War in the China E-commerce Market”

The COVID-19 pandemic had a huge impact on the offline economy, but it has also promoted the development of the online retail industry. Consumption, brand marketing and sales channels have all digitized, and the penetration rate of the e-commerce industry has continued to increase. New formats of e-commerce have developed such as livestreaming e-commerce and social commerce, providing access to e-commerce across an increasing range of people. Younger consumers are coming of age and are gradually becoming the main consumers and e-commerce users. Thus, consumption needs and consumer characteristics of the new generation of customers have changed, causing the continued expansion of the boundaries of and participation in domestic business.

The major e-commerce giants are constantly competing with each other and pushing the boundaries.

During the pandemic, WeChat Mini Programs became crucial in connecting the online and offline worlds, especially in sectors such as government, medicine, online education, fresh, retail, etc. These industries have seen surges in popularity online. Due to online shopping, online food ordering, cloud entertainment and other digital activities, such as online events, live broadcasts, and community group buying. This has helped merchants open up online sales channels and further pushed social platforms into e-commerce.

Click DOWNLOAD HERE to receive
Issue 4 of The Red Edition.

Please see below for past issues of The Red Edition:

To download Issue 3 of The Red Edition (published 19th January 2021),
CLICK HERE.

To download Issue 2 of The Red Edition (published 26th August 2020),
CLICK HERE.

To download Issue 1 of The Red Edition (published 8th June 2020),
CLICK HERE.

In China, it never feels like the new year has begun until the Spring Festival is fully celebrated. As such, Chinese New Year (CNY) is a vital time period for brands to increase their awareness to potential customers. That being said, the line between cultural appropriation and appreciation is thin, making it a challenge that brands need to navigate carefully in order to seize the opportunity and emotionally connect with their Chinese customers.

As a result of COVID-19, many people celebrated CNY in the cities that they work in, rather than returning to their hometowns. Therefore, this created a ‘new’ CNY culture that has led platforms and brands to come up with innovative new marketing strategies and campaigns. We’ve compiled a few examples below:

Tmall’s “Cool China” CNY Shopping Festival

During this year’s Spring Festival, Tmall met the emotional needs of young consumers on the platform by creating a “New Year’s Vibe” through cross-over collaborations with mainstream local brands, including Chali and LYFEN. These brands helped to develop cross-over bundles and gift boxes that used modernized CNY-themed designs for their Tmall customers.

In addition, Tmall also released a series of region-themed posters that turned traditional local products into trendy CNY goods, which were in line with the aesthetic preferences of young consumers. These posters offered in-depth insights into regional differences, accurately targeting audiences from all over the country.

Oreo’s CNY Product Launch

Right before Chinese New Year, Oreo launched a new flavour combination of citrus and lychee, which they called “New Year’s Little Red Cookie”. The launch reflected the traditional CNY themes, while still offering a more modern take. For this product launch, 16 new designs were created and imprinted into the cookies, making it more fun for the consumers. The brand also developed creative videos that helped to combine traditional CNY culture with eating Oreos, further building up the brand image.

Adidas: The Year of the Ox

For this year’s Chinese New Year, Adidas collaborated with a number of celebrities to launch a campaign connecting online and offline activities. The launch involved releasing limited edition coins that users were able to redeem both online and offline. A TV advertisement was filmed for the campaign, featuring celebrities such as Jackson Yee, Eason Chan, Liu Yi Fei, Zhang Jun Ning and Wang Sheng Di, and, with the use of special effects, showed them traversing the city during Chinese New Year.

If you have questions on branding and marketing in China, contact us now by clicking “say hello”

RedFern Digital is proud to announce the release of the third issue of our magazine:

In this issue, we discuss the trends seen in the latter half of 2020 and explore what these trends might mean for the China market.  We cover a wide range of topics, including a deep dive into the Double 11 shopping event that occurred last year, a look at how B2B businesses operate in China, and a spotlight on specific categories such as baby accessories and health supplements. Have a read of our magazine to gain insights and tips on digital marketing and e-commerce in China as we head into 2021.

“With the ability for quick cross-border entry into market, many brands will be turning to China as a new market for opportunity and growth in 2021. Although growth and market opportunity through cross-border e-commerce (CBEC) is apparent, many foreign brands need to understand that there are two trends that may not act in their favor; an increasingly competitive domestic market and an increasingly sophisticated and diverse consumer.”
– Ryan Molloy, CEO

The third issue of The Red Edition can be accessed by clicking DOWNLOAD HERE. An alternative link is available if you are accessing it from inside mainland China, DOWNLOAD HERE.

This issue will cover the following topics:

1. 1. Message from the CEO
   2. Business-to-Business Marketing Growth and Conversion in the Digital Era
   3. Staying Healthy in China: The Rise of the Health Supplements Industry
   4. Post-COVID-19 Double 11, What has changed?
   5. Pushing Sales During Double 11, New Mechanisms and Livestreaming
   6. Looking at the Trend of China’s Economic Development through Double 11, 2020
   7. The Changing Landscape of the Chinese Baby Accessories Market
   8. Partner Insight: China Skinny – Chinese Consumers in 2021
   9. Partner Insight: Alibaba – The Export Opportunity
   10. Partner Insight: Integra – RCEP Brief
   11. China International Import Expo 2020

Excerpt from “Business-to-Business Marketing Growth and Conversion in the Digital Era”

In the past year, marketers, especially in the B2B industries, have felt the urgency to shift their focus to the digital landscape. On the one hand, offline marketing, which has worked throughout the past years, is limited in terms of scale; on the other hand, successful cases of companies embracing new marketing approaches in their digital transformation are a guide for other brands in the industry in their paths forward.

When we talk about B2B marketing, there are several questions that must be considered no matter the industry:

• How can we effectively acquire new leads and grow the customer base when traffic costs are increasing each year?
• How do we prioritize the high value leads for the sales team to follow up on in order to increase the conversion rate?
• How can we reach the end consumer and receive feedback data in order to help us increase the effectiveness of our marketing, for both the brand and the channel partners?

Excerpt from “Looking at the Trend of China’s Economic Development through Double 11, 2020″

The 12th Double 11 Festival held by Tmall came to an end with a final turnover of 498.2 billion RMB. However, unlike in previous years, this figure is not just from November 11th itself, but is the cumulative total of sales from November 1st to November 11th. At the same time, JD’s cumulative turnover during Double 11 exceeded 271.5 billion RMB. Since the past two years, Double 11 has expanded beyond an exclusive game played between Tmall, JD and Suning. New E-commerce platforms such as Pinduoduo, Douyin, and Kuaishou have also joined the battlefield.

As a result of the COVID-19 pandemic, global consumption has continued to weaken, and many European and American companies hoped to focus their attention on the Chinese market. This hope is not groundless. On the one hand, in the past 10 years, the sales volume of Double 11 has maintained a double-digit growth rate. On the other hand, online shopping has remained strong even during the pandemic.

Tmall’s Double 11 will most likely be able to last another 12 years, continuing to create new transaction records. The reason for this is not only the discounts and promotions offered during the shopping festival. Other factors include the emergence of new consumer demands, the increase in national income and the evolution of China’s E-commerce industry, all of which have boosted the growth of Double 11.

Click DOWNLOAD HERE to receive
Issue 3 of The Red Edition. An alternative link is available if you are accessing it inside mainland China, DOWNLOAD HERE.

Please see below for past issues of The Red Edition:

To download Issue 2 of The Red Edition (published 26th August 2020),
CLICK HERE.

To download Issue 1 of The Red Edition (published 8th June 2020),
CLICK HERE.

When compared to B2C marketing, B2B marketing has several differences.

B2B businesses usually target specific groups of professionals or job roles, whereas B2C marketing has a broader audience. Below are tips for both entering and marketing in China as a B2B business.

Entering China as a B2B Business

1. The different methods of entry into China.
For B2B businesses that wish to enter the China market, there are a number of methods for getting established, each with its own advantages and disadvantages. Some of these options include establishing a Wholly Foreign Owned Enterprise (WFOE), partnering with a Chinese entity and forming a Joint Venture, or forming a Representative Office.

2. Chinese regulations and government policies.
Since regulations and policies for foreign business operating and marketing in China are frequently changing, companies need to be vigilant and stay up-to-date with these changes because they could significantly impact how the company functions.

3. Intellectual Property Rights in China.
China has a ‘first-to-file’ patent and trademark system, as such, understanding this system and the other intellectual property rights relevant to specific B2B industries is important to long-term operations in the country.

B2B Marketing in China

4. China’s market is not homogenous or uniform across the entire country.
Foreign B2B companies operating in China need to understand that there are social and economic differences depending on the region and city-tier, which could affect how they market to or communicate with potential clients.

5. Keep up to date with marketing trends.
With continued digital transformations in China, Chinese companies and people tend to be more digital than their foreign counterparts. Therefore, online marketing is essential for B2B companies, and oftentimes communication or the exchange of contact information is digital, e.g. connecting on WeChat instead of exchanging business cards. Other important trends that could affect B2B companies, depending on their industry, include the rise of E-commerce and the popularity of livestreaming.

6. Branding is not just for B2C businesses.
Branding and localization are just as essential for B2B businesses as for B2C businesses because it assists with company recognition and validation. B2B companies need to establish themselves as trustworthy in their industry, part of which involves creating a strong, consistent brand image across multiple touchpoints, tailored to Chinese etiquette or expectations. For B2B marketing, important aspects of branding include internal resources (culture, vision, mission of the company) and testimonials, as it is not only the product or service that the customer cares about, but also what it means to work with a specific B2B company instead of its competitors.

7. Target B2B clients across a number of different touchpoints.

B2B clients should be targeted across a number of different touchpoints, including offline (or, since COVID-19, online) conferences, exhibitions and tradeshows or through digital channels such as social media, email, website, LinkedIn or programmatic advertising. Since it usually takes a longer time and a more thorough understanding of the company for B2B customers to make a decision, marketing efforts require careful effort at each touchpoint, e.g. how the B2B business first gets in contact with the right person, how to engage them through content marketing later on and how to educate the potential customer on the products/services.

8. B2B clients expect a B2C-like experience.
As digital platforms become more widely used, many B2B clients are expecting B2C-like customer experiences or support, along with personalized services. B2B companies need to keep in mind that although their clients are participating in B2B processes at the office, during breaks or after they return home, these clients become B2C customers. Therefore, their consumption habits will have a large influence on their B2B actions as well.

9. Maintain a consistent presence online.

As China is becoming more digitized, in order to establish themselves in their industry, B2B businesses should maintain a consistent presence online, both in terms of brand image and frequency of new content. Building up an online presence is essential for brand communication and lead generation, especially because Chinese clients tend to research companies extensively before they reach out. Brands should set up a Chinese-facing website, establish official accounts on social media platforms, and more optionally, use programmatic advertising or create press releases. Depending on the clientele, these channels should also have Chinese versions as well, especially for validation of the company’s expertise in the China market. Content marketing online is very important for most B2B businesses as it is a method of demonstrating the business’s expertise in their particular industry and how the business is able to meet the potential clients’ needs.

10. Don’t underestimate the importance of WeChat.

WeChat has about 1.2 billion monthly average users and is the largest platform in China, therefore, B2B companies need to know how to utilize this platform effectively. Exchange of contact information and client communication are oftentimes held through WeChat instead of through other methods, such as email. Having a readily available WeChat QR code for the company is important during offline events to allow potential clients to scan and look up the company. WeChat is also effective as a tool for customer relations management (CRM), for offering customer service and as a simple method through which potential clients can reach out to the company.

If you have questions on branding and marketing in China, contact us now!

RedFern Digital is proud to announce the release of the second issue of our magazine:

In this issue, we will touch on a number of different industries, providing insights and suggestions on how brands can operate within these sectors. From our head of design and our head of E-commerce, we’ll also provide tips on brand localization and a look into the 618 shopping festival in the Post-COVID-19 Era.

“I would like to thank our partners Alibaba, CBBC and ChemLinked for their wonderful contributions to this issue of The Red Edition. I hope that through this issue, readers can discover new insights and key takeaways that will help them on their China Market Journey. “
– Ryan Molloy, CEO

The second issue of The Red Edition can be accessed by clicking DOWNLOAD HERE. An alternative link is available if you are accessing it inside mainland China, DOWNLOAD HERE.

This issue will cover the following topics:

1. 1. Message from the CEO
   2. Rise of Digital Marketing in China by Overseas Higher Education Institutes
   3. Message from the Creative Director – Localization of the foreign brand’s Visual Identity, achieved in three parts
   4. Campaign Spotlight – Kuaishou: Fighting Back
   5. Drunk on potential in the China Imported Alcohol Industry
   6. Sparkling water is fizzing through China
   7. Message from the Head of E-commerce – The 618 Shopping Festival in the Post-COVID-19 era
   8. Achieving success in the Mother & Baby category
   9. Partner Insight: CBBC – Insights on the Baby Food Category in China
   10. Partner Insight: ChemLinked – 2020 H1 China Food Market Review: Categories with Brilliant Performance
   11. Partner Insight: Alibaba Group – Consumption trends analysis as Chinese consumers emerge from COVID-19

Excerpt from “Rise of Digital Marketing in China by Overseas Higher Education Institutes”

In the past couple of years, China has been leading the world in terms of the number of Chinese students studying abroad. According to China’s Ministry of Education, there were around 662,100 students studying abroad in 2018. However, the COVID-19 pandemic has had a huge impact on the Chinese international education sector.

One consequence of the health crisis was its effect on the mobility of Chinese students studying abroad or planning to study abroad for both the previous academic year and also the upcoming one. According to a survey conducted by the Beijing Overseas Study Service Association (BOSSA) in February 2020, 43 investigated educational agencies in China indicated that many enrolled students are being blocked entry to and exit from the countries where they had planned to study in…

Excerpt from “Drunk on potential in the China Imported Alcohol Industry”

The alcohol industry in China has been growing rapidly over the past two decades, despite slowing growth rates in the past couple of years. When compared to 1990, there has been a 70% increase in alcohol consumption in China. The estimated total revenue generated by the Chinese alcohol industry in 2019 was 246 billion USD.

With a wider selection of products and with the convenience of E-commerce, Chinese consumers have turned their attention more and more to premium or imported brands that produce alcoholic beverages ranging from beers to spirits. In fact, E-commerce has allowed foreign alcohol brands to reach consumers across the entire nation, selling products in locations where the brand may not have offline stores.

The Chinese population born after the 1980s have become increasingly important for the alcohol market. This category of consumers tends to be well-educated, more globally minded, and less price-sensitive, therefore, they are likely to purchase more premium products, such as craft beers or imported wines, for a more unique and customizable experience…

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When first entering the China market, digitalmarketing is key to driving sales for foreign brands.

To effectively market in the country, brands should focus on understanding the differences between China and their country of origin. Brands’ marketing efforts should be tailored to differentiating themselves from their competitors and to targeting potential customers within the China market.

Below are 15 steps that brands can follow in their China marketing efforts:

1. Understand the differences in China’s digital landscape and internet behavior.
China has a very different digital landscape when compared to foreign countries, especially because China has its own set of popular social and e-commerce platforms. Gaining a better understanding of the differences in the digital landscape and internet behavior in China will help brands with their marketing approach.

2. Research your brand’s specific industry or category in China.
Depending on the industry or category, brands should approach marketing in China through very different methods. For example, B2B and B2C companies should emphasize different marketing channels in order to reach their potential clients/consumers.

3. Look on social media for consumer insights on products within your industry/category.
By looking online at what consumers are saying about their industry or products, brands can gain a better understanding of the social media landscape, both in terms of the industry and the consumers of that industry.

4. Research what your competitors are doing in the market, e.g. platforms, campaigns, products, etc.
Brands should learn from their competitors when marketing in China, researching which campaigns or marketing methods were successful and which were not. Brands can then use what they learned to develop their own successful campaigns while avoiding mistakes that competitors might have already made.

5. Determine your brand/product’s unique selling points (USPs).
With the large amount of competition in the China market, brands need to determine and emphasize the unique selling points that make them stand out from the crowd.

6. Define your purpose for creating content and develop content pillars.
Before creating content, brands should determine who their content is directed towards, what interests their desired readers have, and what the purpose of creating the content is. Content pillars should be developed to appeal to the desired readers.

7. Develop marketing material for the China market, e.g. key visuals, designs, slogans, etc.
Brands should localize and develop marketing material specifically for the Chinese market, but should be careful not to go overboard with localization as to render the brand unrecognizable.

8. Know your target consumers and understand their characteristics and behavior.
Understanding the characteristics, interests and behaviors of the target consumers is extremely useful when brands are trying to appeal to them.

9. Choose the platforms that you will be conducting paid media on.
Depending on the brand category and product type, brands should choose platforms that are most trafficked by their target consumers to conduct paid media on. Using paid media, brands can create touchpoints across different media channels, deepening brand presence and awareness in the China market.

10. Collaborate with KOLs to promote your brand.
KOLs are an extremely important factor in the purchase decision making journey of Chinese consumers. Therefore, working with KOLs to market and promote the brand can help to drive sales.

11. Conduct product seeding with KOCs.
Product seeding with KOCs will increase brand awareness online. Product seeding is more of a long-term investment for building up the brand reputation and trustworthiness among potential consumers.

12. Create a multi-platform marketing plan.
The marketing plan should form a cohesive story for the brand, should include goals and KPIs for each step, and should include the marketing format (e.g. text, image, video, livestream), content plan, campaign ideas, paid media tools, and upcoming festivals to promote during.

13. Reassess and readjust at the end of each month or after each campaign.
Brands should constantly be reassessing and making adjustments to their marketing efforts in order to ensure that their efforts have been and will continue to be successful.

14. Work on building up a community of customers and building up customer loyalty with the aim of encouraging repeat purchases.
By fostering a community of loyal customers, brands will be able to increase repeat purchases and form their own private traffic that the brands have direct control over.

15. Remain up-to-date with the latest trends in social media or in your category.
With the fast-developing pace of the digital landscape in China, brands should stay up-to-date onthe latest trends so that their campaigns and promotions remain relevant to their industry and to their potential customers.

By following these 15 steps, brands will be able to better focus their marketing efforts and increase their chances of successfully marketing in China.

If you have questions on branding and marketing in China, contact us now!

With the increasing relevance of livestreaming in the China digital landscape over the past couple of years, especially in the realm of e-commerce, more regulations have become necessary to restrict fraudulent activity and misinformation.

Introduction to Livestreaming in the First Half of 2020

During the COVID-19 outbreak in China, livestreaming was a market savior for many brands and stores that were forced to shut down their offline channels due to the lockdown. As consumers were also isolated in their home and spent more time online, the time period became an opportunity for brands to focus on their online sales channels, a big part of which included livestreaming.

In terms of percentages, Taobao Live saw a 719% month-on-month increase in new merchants in February, while the number of livestreaming sessions on Pinduoduo increased by over 500% from February to March of this year.

The importance of livestreaming in China was also demonstrated during the 6.18 festival, which was the first nationwide shopping holiday this year since the COVID-19 outbreak. During the 18 days of the event, JD hosted over 300,000 livestreaming sessions, with livestream hosts ranging from KOLs to CEOs. In addition, more than a dozen livestreams were hosted through Alibaba on June 16^th, which, combined, saw a total of more than 100 million RMB in sales.

New rules and regulations

 As can be seen, livestreaming is extremely prominent in e-commerce and has helped to drive sales for a vast number of different brands and industries. However, with the increased use of livestreaming, there has also been an increase in concern for the misuse of this new e-commerce format, especially due to the fact that livestreams are not a permanent form of content. Examples of these concerns include vulgar or illegal content, fraudulent activity and misrepresentation of products or services sold through livestreaming, which could include false promotions and poor quality of products.

In order to tackle these concerns, several departments in China, including the State Administration for Market Regulation, have begun to work on developing standards for and increasing supervision on livestreaming activity. National standards for e-commerce through livestreaming are being developed by the China General Chamber of Commerce and provincially, by authorities in the Zhejiang province, headquarters of Alibaba. These standards are expected to be officially released and implemented in July, and will cover livestreaming platforms, hosts, networks and all entities involved in the e-commerce livestreaming industry.

Moreover, the China Advertising Association (CAA), a non-profit organization that represents the Chinese advertising industry and promotes good practices, released its “Code of Conduct for Online Live Marketing”, which took effect on July 1^st. The report stipulates the rights, obligations and responsibilities of businesses, brands, or other participants of e-commerce activity through livestreams. A summary of the main points outlined are provided below:

• Livestreaming hosts must have their real names authenticated on the platform before any livestreaming activity can be conducted. During the front-end livestreams, hosts may still use screen names, as long as they are in line with the requirements of the laws and regulations.
• During the livestream, all information provided to the viewers must be complete and accurate. Livestream hosts cannot misrepresent, exaggerate, or spread false information on the products or services they promote, and cannot mislead the viewers.
• Illegal or vulgar content cannot be spread through livestreams.
• Any marketing data from the livestream that is provided by the host, e.g. to the livestreaming platform or to the merchants, must be accurate. This includes livestream viewership numbers and sales numbers.
• Livestreaming platforms must provide marketing data as requested by the relevant authorities and must operate under their supervision.
• If breaches of the code of conduct are found, the CAA will report these instances to the relevant authorities for additional investigation.

In terms of recognizing and regulating the profession of the livestreaming host, several steps have also been made.

• Earlier this year, the Ministry of Human Resources and Social Security in China released a report that recognized 10 new professions, one of which was livestreaming salesperson, listed under internet marketing specialist.
• Authorities in the Zhejiang province, headquarters of Alibaba, released the “Specifications for Training and Evaluating E-commerce Livestreaming Talent” on June 26^th. In this report, the first standards in China are provided for livestreaming hosts and include areas such as skill level, professional knowledge, training, talent evaluation and certification. These regulations set three skill levels, junior, intermediate and advanced, which are determined through independent assessments.

Finally, led by the Cyberspace Administration of China, crackdowns on illegal livestreaming activities have already begun, with a large number of livestreaming platforms already being warned or terminated due to their spread of vulgar or illegal content.

With new regulations and scrutiny on livestreaming activity in China,
e-commerce through livestreaming is likely to become even more popular due to the additional trust that viewers will have for the information on the products and services that are sold through.

Social commerce has arisen over the past couple of years as an integration of social media and e-commerce. One of the most popular platforms known for social commerce is Xiaohongshu. or Little Red Book (RED).

Xiaohongshu Background Information

RED started off as a platform for sharing product reviews and recommendations among young Chinese consumers, after which the platform began to implement e-commerce features that allowed individual merchants or brands to open up stores and sell products. However, despite the e-commerce options and the ability to purchase directly on RED, the platform is still mainly used to research products and find reviews, before the buyers head over to other e-commerce platforms to purchase the product, e.g. Tmall or JD.

Considered one of the biggest online lifestyle communities in China, last year, the platform reached over 85 million monthly active users on average and had a total of over 250 million users. RED’s userbase is predominantly female, with the majority still under 30 years old, which makes the platform popular for categories that include travel, beauty, fashion, luxury goods, and FMCG. Although beauty is the largest category on RED, travel is currently the fast growing.

RED has its own userbase, however, compared to larger e-commerce platforms, the user numbers on RED are still relatively small. Thus, the platform is more well-known for grassroot promotions or product seeding. The reviewers on the platform are Key Opinion Consumers (KOCs), a type of influencer that is more small-scale than Key Opinion Leaders (KOLs) and that focuses on product testing and reviews. KOCs are generally considered more trustworthy and authentic due to their image of being ‘just another consumer’, making them a powerful influencing factor on the purchase decision making journey of consumers.  Therefore, RED is a powerful tool for building brand awareness, especially if the target audience matches with RED’s already established userbase. Many brands invest in building up a presence on RED to increase their credibility and reputation among consumers, even if the brands do not have a store on the platform.

Reduction in Commission Rate

In early July, RED sent a notice to sellers, informing them of a reduction in the base commission rate that the platform would be charging. Before the reduction, RED’s commission rate was between 15-20%, depending on the merchant and the category of goods, which makes the drop in commission rate a significant change.

A summary of the points addressed in the notice is provided below:

• As a result of the COVID-19 outbreak and the slow recovery of the Chinese market during the latter half of the year, RED announced that it is willing to work with the merchants on the platform to build an ecosystem.
• Starting from July 1^st, 2020, RED will be reducing the base commission rate to 5%.
• The reduction in the base commission rate is applicable to merchants that have signed a store service agreement with RED and whose agreement is still in effect. Exception to this include instances in which the merchant and RED have other agreements stipulated.
• For sales that are directed from RED’s product recommendation features, the commission rate charged by the platform is reduced to 3%.

With the reduction in commission rates, more brands and merchants will be encouraged to focus their e-commerce efforts on RED, e.g. by increasing investments, opening up a store, collaborating with KOLs, conducting product seeding, or by utilizing the advertising tools that the platform has available. These changes will likely have a large impact on smaller brands that have less sales volume and would require a lower commission rate in order to consider opening a store on the platform.

Since RED’s main source of revenue currently comes from advertisements, dropping the commission rates could be an attempt at increasing the merchants on the platform, and therefore the revenue from sales commissions.

The lowered rates will also make RED more competitive for brands when compared to larger e-commerce platforms such as Tmall, which has a commission rate of 0.5 – 5%, and JD, which has a commission rate of 2 – 8%. The exact commission rates for both Tmall and JD are dependent on the category. Moreover, RED prohibits diversions to other platforms such as Douyin, Kuaishou, Weibo and Taobao, which further limits the loss in traffic to competitors.

The increased attention on RED from brands and sellers will also impact their customers, since after opening stores on the platform, brands will begin to drive customer traffic to RED. Therefore, RED will become more accepted among users as a platform for not only reviewing and recommending products, but also for purchasing products. This shift in perception of RED will likely increase future e-commerce activity on the platform and could be an attempt to create a closed-loop system where users can go to RED both for product research and product purchase.

RedFern Digital is proud to announce the first issue of our magazine:

The Red Edition will provide insights, discussions and tips on all aspects of China’s changing digital landscape, from popular trends, to shifts in e-commerce, to localization and design.

The first issue of The Red Edition can be accessed by clicking
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The issue covers the following topics:

1. 1. Message from the CEO
   2. Headline Story – Livestreaming in China 2020
   3. Message from the Creative Director – When we look at Design
   4. Campaign Spotlight – Rising Waves’: Getting out of the circle
   5. Quarterly Trends – Plant-based “meat”
   6. Partner Insights – The need for FMCG/F&B Group Mini Programs
   7. Colleague’s Corner – Looking at WeChat Mini Programs
   8. Message from the Head of E-commerce – Discussing the State of E-commerce

Excerpt from the Headline Story

In the past few years, livestreaming has exploded onto the online scene in China, taking over and combining entertainment and e-commerce. During the COVID-19 outbreak period, offline stores were forced to close due to quarantine, which caused many businesses to start pursuing online sales channels instead.

The advantage of livestreaming as an e-commerce tool is that it provides an interactive and engaging method to allow the livestream host to display products, provide information, answer consumer questions, and ultimately encourage the viewers to purchase the product or service.

The full article on Livestreaming in China 2020 will go into more detail on why live-streaming is so popular, what the different types of livestreaming are, and specific livestreams that have been conducted along with their results.

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Issue 1 of The Red Edition.