What marketing trends will shape China in 2019?
For The Drum magazine's February issue, we ask marketers in China which trends, innovations and strategies are set to play out in the country this year.
The Drum's February issue focuses on the marketing innovations to be found in China
Nicky Wang, managing director, WE Red Bridge
Firstly, services will become more personalized, backed up by data. With the availability of one-to-one level data available from social platforms like WeChat and payment platforms like AliPay and WeChat Pay, social CRM data will increasingly be used to drive deeper offline engagement.
Secondly, cross-border e-commerce will inform long-term entry into the Chinese retail space. Given the significantly lower level of investment needed to run an e-commerce store on a third-party platform, more brands will trial cross-border e-commerce to test the market and gather consumer intelligence before establishing a long-term retail strategy.
Thirdly, demand for both purpose and function across polarized consumer needs is increasing. On one end we see Generation Z emerging as powerful global consumers. They are becoming very similar to young consumers in other parts of the world and are increasingly demanding that brands deliver a higher purpose over just functionality.
On the other end, the vast majority of the consumer base is aging. This is the audience segment that’s actually growing the fastest in China and they are far more pragmatic towards purchases. We are looking forward to seeing more function-driven innovation for the older consumer base in years to come.
Chua Kong Ho, technology editor, South China Morning Post
Social commerce is one of the key trends in China that may have a lasting impact for brands seeking hard-to-reach millennials. Much of this goes through key opinion leaders (KOL) – or ‘wang hong’ in China – via live streaming. This provides live, direct and instant engagement with the host, along with mobile payment and buying suggestions from your social circle – all consolidated within the same social platform. It creates a much more accessible, interactive and convenient consumer experience that combines promotion and conversion. This trend has reached critical mass in China over the past 12-18 months.
With a huge population of youths placing a premium on convenience and accessibility, social commerce is a trend that will endure to the next decade and is certain to evolve and possibly develop into a worldwide trend. Western businesses will soon begin to learn from trends that started in China. Marketers worldwide targeting next-generation consumers have realized that your brand has to be discoverable on their terms – if you don’t localize and adapt, you won’t survive.
Matt Harty, senior vice-president Asia Pacific, The Trade Desk
The roll-out of 5G will catalyze the media environment in China. Content and services will become cheaper, faster and more accessible, making it even more important for marketers to adapt their digital strategies in China.
Against this backdrop, we expect programmatic advertising to develop rapidly in 2019. With 802 million Chinese internet users and a fast-growing middle class, the stage is set for brands to engage with Chinese consumers in a more personalized way. Consumers in China are more stratified than their western counterparts.
As we saw in 2018, connected TV in China is crucial to reaching consumers at scale and with emotional impact. Western companies need to move fast to capitalize on this development. We recently signed partnerships with Tencent Social Ads, Baidu Exchange Services and Alibaba’s video streaming service, Youku to help global marketers reach Chinese consumers through display, mobile, video and native advertising campaigns.
We think western brands won’t want to just observe the changes underway in China during 2019, they will want to participate. With 5G roll-out and connected TV achieving real scale, it will be an exciting year in China.
Tom Elsden, senior client manager, Mailman
Brands will demand digital return-on-investment, instead of just brand awareness. This will require marketers to innovate with new digital products and platforms to drive revenue streams. Platforms like Red have provided an opportunity to combine content, communication and commerce that very few brands have jumped on so far.
Susana Tsui, group chief executive officer, Dentsu Aegis Network China
Simplicity is the defining trend. Consumers demand great usability and purpose. The best innovations will be those that can break down barriers and deliver functions that combine convenience and usefulness in everyday life. Tencent’s mini-programs within WeChat typify this – at the end of 2018 it had 200 million daily users and a million apps covering everything from e-commerce to coupons to membership programs and event management. Great functionality that shows tech is everyday, for everyone, in every way.
Lee Folland, head of research, Reuter Communications
Reuter Communications’ luxury consumer research has identified a few big trends – the rise of the ‘woke’ consumer, the luxury of family life and a craving for niche.
Chinese consumers are not only increasingly focused on their own health and wellness, but also eco-friendliness and companies’ green credentials. And it’s not just luxury brands. Businesses in every sector need to seriously up their game in terms of sustainability and how they communicate this aspect of their brand to the knowledgeable consumer in China.
Another aspect is that family life is the new luxury for the affluent Chinese. Our research into wealthy family travelers found child-friendliness to be a top choice when choosing a hotel or resort. Furthermore, consumer expectations of the quality of family activities and facilities are sky-high – a simple kids club will no longer cut it.
Chinese luxury consumers are craving niche brands, limited editions and exclusives. This consumer has already traveled the world and shopped for what they like, so now they are looking for brands and experiences their peers aren’t aware of and that differ from the choices of their own parents. Many new retailers focus solely on niche brands, be it beauty, wines or sneakers. Social commerce platforms such as Red (Xiaohongshu), where internet KOLs (‘wang hong’, the Chinese term for influencers) review and sell various products, are increasingly a fruitful playground for niche brands.
In 2019, consumers will opt for more domestic brands and increasingly shop locally in China (be it for foreign or domestic brands). Demand for product customization will continue to grow, reflecting consumers’ desire to differentiate themselves from their peers. In the luxury space, brands will continue to embrace e-commerce and social commerce.
Finally, the digital space will continue to evolve at breakneck speed, leading to innovation in how brands can engage with the consumer.
Sarah Yam, co-founder, Red Digital
The innovation in search functions inside WeChat mini-programs is one of the biggest coming trends. Zhang Xiaolong, founder of WeChat, has said that in 2019 Tencent is going to make mini-programs more prominent in WeChat by matching users with service providers and by innovating and enhancing the WeChat search function.
With a background in product development, he sees WeChat as a tool to enhance users’ experiences by accessing mini-programs whenever, wherever and whatever they want, rather than constantly pushing new information to users.
In 2019, we will see a shift from ‘push marketing’ to ‘pull marketing’ in WeChat with marketers promoting products and services more intelligently with a data-driven marketing mindset.
The Drum's February issue focuses on the opportunities and challenges to be found in China. From its ever-more sophisticated ad environment, to its highly developed e-commerce scene and its fast-paced tech sector, the world's most populous country holds temptations and obstacles for the marketing industry. You can grab your copy here.