Chinese superstitious beliefs can be divided into three categories:

Traditional and secular Chinese superstitions

Originating from feudal society, these superstitious beliefs evolved into customs and religions but vary by region. The traditional secular superstition is mainly to believe that certain activities, ceremonies, numbers, natural phenomena, and dates will bring good luck, and taboo certain numbers and phenomena. For example, Chinese choose auspicious wedding dates according to the lunar calendar, because they believe that selected date can bring joy and harmony to marriage.

Believing the existence of ghost and gods

People believed that there are gods, demons and ghosts in the world, who have the ability to control the natural phenomena and the birth, aging and death of human beings. For example, on July 15^th of lunar the , people in south worship river gods in hopes of fair weather and a good crop yield in the coming year. In modern China, these ceremonies based on superstitious beliefs are becoming less common.

Believing fate

Many superstitious Chinese believe in fate or destiny, and that their live path is arranged from birth. Hence, when they feel they are at a cross-road in life, some people may go to fortune-tellers for help to relive anxiety about their future.

Superstition and spirituality products in China

Due to such a long history of superstition, spirituality products in China have rich opportunities to develop. From crystals to amulets, from fortune-telling to tarot and horoscopes, the spirituality and occult industry is a big business today, but it still remains under researched in the domains of marketing.

The Healing Crystals market in China

Healing crystals are thought to promote physical, emotional and spiritual healing. Different colors and types of crystals have different functions. For example, pink crystals can bring more love and kindness in your life, while purple crystals help you get a better performance in study.

The Donghai Crystal Market, located in Lianyungang, Jiangsu province, China produces 70% of the national reserve of the precious material, is known as the “Land of Crystals”, producing 80% of Chinese crystal products. Donghai Market receives 1,000 foreign tourists and local visitors daily, 5,000 daily visitors during the peak and a total of 300,000 visitors a year. The annual turnover is between 469 million RMB and 480 million RMB. With the rapid development of the “Internet Plus”, Donghai Market also caught the express train of internet development, forming an “online + offline” omni-channel sales system. So far, there are more than 30,000 crystal online stores in 27 domestic and foreign e-commerce sales platforms. The cumulative sales volume of crystal exceeded 160 million on Double 12 Day. The price range of crystals on Taobao is from 60 RMB to 5,000 RMB.

Source: Popo. Inside of Donghai crystal market

Amulets market in China

Amulets originate from Southeast Asia, including Buddha amulets, ghost amulets and Guman Thong. People worship amulets with sacrifice in hopes of achieving aspirations such as getting promotion and getting rich. There are 3,000 online shops on Tabao with average sales of 300-500 items per month. The price varied from a hundred to more than ten thousand. In term of people’s comments on Zhihu, amulets made by Luang Por and ajahn are popular in the market.

Foreign superstitions influence: The tarot and astrology market in China

Tarot was introduced to Chinain the late Qing dynasty from Europe but is now prevalent in the 21^st century. Tarot cards it is a tool for analyzing, predicting and advising people.

Astrology which is also from Europe has become enormously popular among young people in China. Astrology is the idea that stars can shape personalities and destiny. It is a name given to a group of stars in the sky that make up a certain pattern, and everyone has their own astrology based on their birth date, time, and location.

Both Tarot and astrology possess a potential in China’s spirituality and occult market. In 2005, the China Tarot Association (CTA) was established with 270,000 members, and the overall downloads of astrology and Tarot reached 80,000 times in App stores. According to the survey launched by China Youth Daily, 70.3% of the respondents say that there are many people like astrology around them and 20% of them follow the guidance of astrology and tarot cards to arrange their relationships and career paths. The most popular tarot shops on Taobao has more than 3,000 orders in a month, and each order costs around 100 RMB to 200 RMB.

Read more on how astrology is used in Chinese marketing

Fortune-telling market in China

Chinese fortune-telling has thousands of years’ history; known as ‘suanming’ in Chinese,it is a practice of predicting information about a person’s life. Among many kinds of Chinese superstitions, fortune-tellers have the most active believers. 362 million have visited physiognomist, which is a fortune-teller who analyzes fate or personality based on facial characteristics, in the past 12 months. In comparison, Nearly 145 million people in China believe in Fengshui, 141 million believe in the God of wealth

More than 91% of Chinese do not have scientific literacy  are more likely to believe fortune-telling. However, fortune-telling, as an ancient and mysterious business, has becomes popular in venture capitalism in China. The “Internet plus” fortune-telling business seems to have entered a stage of vigorous development, and AI fortune-telling is the product. Opening up WeChat’s mini programs, there are many AI fortune-telling programs come out. Users only need to upload their face photos and the intelligence software will decode photos and generate an analysis report.

Until December 2019, according to data from Tianyancha, more than 50 projects of AI fortune-telling have been financed. A certain Guangdong culture company makes an annual net profit of 500 million RMB by fortune-telling.

Interest trends of superstition and spirituality products in China

From Baidu index’s result, fortune-telling‘s search trend transcends the other 4 categories with absolute advantage. Thanks to the long history of traditional superstition, fortune-telling is more popular and credible in China. Guman Thong is on the second place, because the effect of Guman Thong is exaggerated on Internet, covered with a veil of mystery. There are many stories of raising Guman Thong on forum that saying how it helps them achieve their desires, and what punishments you will get if you do not treat them well which further strengthening awe towards Guman Thong and making people believe Guman Thong indeed has superpower.

Source: Baidu index, search trends of Chinese superstitious and spirituality products

Distribution and promotion methods

Social media

These sellers are active on all kinds of social media such as Douyin, Bilibili, Kuaishou and Weibo, and mainly focus on short video platforms. At the first stage, sellers need to cultivate their social media account by filming divination videos to attract followers. Once audience feel like videos are efficacious, they will contact video bloggers for paid one-to-one consultation, and bloggers will sell spirituality products to audience.

Source: Douyin, Tarot divination

Source: Weibo, July’s astrology predictions on the Chinese internet

Source: Kuaishou, Tarot divination

Source: Bilibili, Tarot divination    

E-commerce

Consumers also will search key words like “Fortune-telling” and “Tarot” in Taobao to seek one-to-one consultation. Usually, consumers pay online via e-commerce platforms, and add sellers’ WeChat for deep consultation.

Advertising

The most common advertising method for superstitious service is through Baidu and Tianya forums related to Chinese superstition. Fortune tellers or superstitious product distributors will leave their WeChat ID on the Chinese web for people to add.

Consumers of superstitious, spiritual and occult products in China

According to the Baidu index, 60% of Baidu searches of spirituality products are from 20-29 year olds, meaning they are a significant part of market online. People from 30-39 years old also occupied a large proportion around 30-40%. Two factors are at play to explain this data, first is that people of this age group are computer savvy and are simply more likely to turn to Baidu than local temples. Secondly is these two age groups are in the most anxious stages during the whole lifetime. They are at an age where they make a lot of important life decisions, like marriage, having children, and career path. Once they encounter problems, asking for help online is their top of mind. The data also shows that 70% of them are female

Data source: Baidu index, age distribution of e-commerce spirituality products’ consumers

Based on these two insights, divination questions on social media are mainly targeting females aged from 20-39. For example, on Bilibili and Douyin, you definitely will find that most of videos are around marriage, romantic relationships and careers, targeting females. For example, “your next relationship” and “will you end up together”. These are exactly what females from these two age groups confront.

Source: Bilibili, Tarot divination

Is scientific literacy really the end of Chinese superstitions?

The rise of scientific literacy is somewhat of a threat to many traditional Chinese superstitions. However, the modern society does make room for the evolution of the spiritual and occult market in China. Especially, due to their busy work schedules and family pressures,  many people feel helpless and search for answers. For some, spiritual products are what support them to keep going.

Hence, scientific literacy is not the end of the Chinese superstitions market. In fact, they seem to go hand-in-hand,  Al fortune-telling projects is one piece of evidence, along with the popularity of Tarot card short videos. Although some prefer Chinese fortune-telling due to its long history in China, younger generations around 20-39 show a high interest in foreign superstitions. Younger generations show a higher acceptance of new things and they are active in social media, meaning they are likely to be imbued with new values and thoughts.

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This article Traditional and modern Chinese superstitions: Ghosts, gods, fate, and wedding dates is the first one to appear on Daxue Consulting - Market Research China.

The number of students going abroad is mounting every year as increasing numbers of Chinese students are looking for an experience overseas. Between 2008 and 2016, the number of students studying abroad had increased from 179,800 to 544,500 showing overwhelming growth. In 2017 alone, 608,400 students left China for overseas study. This fast growth has been developing since 2010 and has been growing year on year. Today, China is the largest source of international students and is expected to grow. Yu Minhong, the founder and CEO of the New Oriental Education and Technology Group as well as a member of the Chinese People’s Political Consultative Conference’s National Committee, estimates that the number of students studying abroad will peak at 700,000 to 800,000 each year. However, the coronavirus outbreak has caused Chinese students to re-evaluate their study abroad plans, gradually initiating a shift in destination preferences and post-grad decisions.

Why is China’s study abroad rate increasing?

The price of student exchanges has also become increasingly more affordable as the booming economy has allowed more parents and students to meet these heavy costs. This has allowed more Chinese students the opportunity to go overseas in order to increase their chances of employment after graduation. This is especially important as 2010 brought a higher percentage of unemployed graduate students causing students to look for ways to differentiate themselves in the job market. Many students, however, despite the abroad experience often return home with the compound annual growth rate (CAGR) being 14.9% for returnees and 11.7% for students going abroad. This is as many students intend to go back after studying or find the job market overseas too difficult with them often having lower revenues. The government also offers incentives to returnees in China with them having better opportunities in larger cities which they would not have been able to access without foreign education.

Chinese students studying abroad: Destination preferences

Due to China’s massive population, it sends more students abroad than any other country and this number is still rising. This is seen with growth in the number of returning Chinese students overtaking the number of students studying abroad in 2016. The United States (US), however, has been the preferred destination for many Chinese students with it remaining the top destination year on year.  The quality of a US education is reputable and many Chinese students study in the US may hope to stay and live there after graduation in order to enjoy the lifestyle of a developed country. Further, many Chinese international students prefer to study in English speaking countries with the US, Australia and the UK making up approximately 60% of outbound students. China is also the largest source of international students in many countries with Chinese students accounting for 30% of students in America, Canada, Australia and New Zealand.

However, what may have been a popular destination could be fading due to the pandemic and various political clashes (such as trade war).

According to a report on the economic impacts of the pandemic published in April by the US-China Economic and Security Review Commission, a host of issues can reduce Chinese demand for higher education in the US in the following academic year. These include delays or cancellations of US entrance exams in China, travel restrictions, and the perpetuating uncertainty of when US college classes will be in-person. The economic impacts could be severe as nearly a third of all tuition payments to US public universities stem from international students. Also, cancelled university recruitment events in China and inability to work with local recruitment agencies could further contribute to the decrease in enrolment (learn more on how the coronavirus has impacted Chinese students’ study abroad decisions).

Prior to the coronavirus outbreak, there has already been a decline in enrolments from Chinese students in US schools, most of which are part of the larger picture of rising Sino-US political tensions. For instance, visa refusals have been a common problem facing Chinese students. As such, the development and job opportunities back home prove to be attractive reasons for the drop in Chinese students seeking to settle overseas after graduation, which was 85.4% in 2013 but 79.4% in 2016.

Other countries are also increasing their awareness in China as they gain market share slowly and Chinese students are ready to assess new destinations. It is clear, however, that English speaking countries have an added advantage to attract Chinese students who want to better their English speaking skills. Some regions have become more popular with East Asia and the Pacific taking a significant portion of Chinese students with the convenience of location. This is with Japan as the 4^th most popular country and South Korea as the 6^th most popular country in 2016.  This is also with Chinese students accounting for 57.3% of international students in Japan and 49.3% of students in South Korea. Many students also studied in Hong Kong due to its proximity.

Why do Chinese students study overseas?

Chinese students abroad: Social, personal and professional benefits

When surveyed it was found that 82.5% of companies and employers give returnee employees privileged treatment. A CCG survey found that almost half of the Chinese students surveyed who studied abroad believed that they were more competitive than their peers who studied at domestic universities. This is proven true with 20% of companies promoting returnees faster and 17.5% preferring returnees for core positions and 50% of state-owned enterprises claiming that they welcome returnees into core positions. These figures alone show the importance employers place on abroad studies with these high percentages indicative of the professional benefits provided to those with an overseas degree.

Another benefit this provides for Chinese citizens the influence abroad education has on Hukou. Hukou is strict and complicated household registration system which also doubles as a domestic passport that regulates the Chinese population both socially and geographically. It determines factors such as where a person can live and work, where their children can go to school particularly so if they belong to a rural area and the social welfare benefits they can receive. Returnees from abroad studies get a more flexible Hukou transfer policy which helps them settle down in tier 1 cities and gives them more opportunities in terms of experience and salary. Further, preferential policies are also provided by the government to get returnees to start a business by providing grants and incentives such as free or discounted offices or tax-free cars. This is in order to attract Chinese talents back to China.

Besides the social and professional benefits provided by organizations and the government, there are personal benefits for Chinese students who go on exchange. This is evident as 64% of Chinese international students pursue abroad education in order to enrich their personal experience. This includes improvement of their English skills, the knowledge they gain of a different culture, overseas life experience and an international network. These benefits can be gained by any student studying overseas but English based exchanges are particularly beneficial for Chinese students who have been studying English throughout a school. This is as it gives students a chance to gain practical experience in a different environment that makes them more employable in the long run. Other than Chinese and Spanish, English is one of the most widespread languages in the world. It has gained increasing importance with English being an official language in at least quarter of the world, with 400 million people speaking English as their first language and 1 in 5 people being able to speak or understand some English. The role of English in China cannot be understated especially as it is integral for professionals to compete within the business environment. This is illustrated with parents understanding this importance as they start English education early in order for their children to start off more competitively, thereby spiking the demand for English teachers in China.

Another major benefit is also the waiving of the Gaokao entrance exam. Gaokao is the test undertaken by high school students in order to study at university and it is known worldwide for being an extremely difficult and stressful exam. The test has been said to determine the course of a student’s life and is the only way to enter university. The supply of university spots is also known for not meeting demand- making the pressure on high school students enormous. Those who previously did not anticipate abroad studies and those determined to study overseas do not need to pass Gaokao which takes a significant amount of stress off of students.

Chinese studying overseas: Criteria for students picking universities

As studying abroad is very important for students and parents a lot of thought goes into picking the university and country they will be studying at. A big determining factor to consider is the country itself. This requires evaluating the country itself by its size, population, economy and development degree. Chinese people prefer countries which are bigger and have a larger population, higher economic power and the development degree which makes the US the most popular country to go to. Some students are also concerned about the culture of the country itself.

Further, the school awareness in China that is the school’s brand reputation is very important. This is evident with 61% of students in a survey conducted by WSE choosing school reputation as the top consideration of school selection, with the success rate following at 48%, school location at 40% and expected income level after graduation being at 39%. This is as about 80% of international Chinese students go back to China after graduation which makes the school’s awareness and reputation important when considering job prospects in the future.

Moreover, the ranking itself is very important with many different versions of school rankings applying in China to help students and parents make decisions. This includes the QS World University Rankings and the Academic Ranking of World Universities and ranking in the top 100 is very beneficial to students wishing to return to China.

Additionally, the curriculum offered by the school itself is vital. This is with weight in decision making relating to the design of the curriculum, the composition of it, the availability of course choice, the quality and exclusivity of each course and even the internship opportunities that the school supports.

Lastly, whilst all of the above is extremely important, the cost is often a major determining factor. This includes the cost of tuition, living expenses and scholarships available. As such, many students go to Hong Kong for further study due to the lower expense and some European countries provide free public education for the same reason. This is evident with 45% of students being concerned about the cost of studying abroad, compared to only 27% of parents. Cost is especially important as 89% of students traveling abroad self-finance their study so they are very receptive to scholarships or less expensive locations.

International education: How do Chinese people look for information to choose the right university?

Chinese study abroad agencies and specialized education companies are important in helping students to pick countries and universities to study abroad at. They offer a broad range of services to students and help foreign universities and programs get more visibility among students. Due to the services offered, student’s families are willing to a pay a large amount of money for these services which include counseling services on programs, assistance in preparation, application and admission processes, test preparation, English classes as well as international study tours. The Beijing overseas service association also can help abroad institutions to select good partners among agencies to promote institutions in China.

Further, as stated, online information is very important with Chinese students spending a significant amount of time looking at the best destination, university ranking and application process. As such, a good online presence is essential for an overseas university- especially if it is not a top ranking one. Particularly, 31% of students depend on social media when researching for their study destination. They also look to the alumni network for recommendations and feedback as students trust advice from those who have attended the school itself. As such, it is important for universities to have good ambassadors as Chinese students want to hear about the university in a more personal and informal way.

Trends in types of study undertaken by Chinese students

The types of study undertaken by Chinese students themselves vary with the type of study they undertake. This is with Master and Bachelor degrees at the forefront of reasons for going overseas for study, with other avenues collectively making up the remaining 31%. There is, however, a preference for longer study programs over shorter ones. This is with slower growth for shorter study options in comparison to the faster growth experienced by Bachelor and Masters degrees. This is as shorter exchanges are not as popular with Chinese students who prefer to spend the duration of their program overseas with four or two years being favored over a few months.

There are also trends evident in the degrees undertaken by Chinese students. This is with both engineering and business management as the most popular degrees chosen by students. However, in 2016 subjects shifted as more students paid attention to their own preferences over parental preferences and what is expected of them. This was evident as the Center for China & Globalization reported a decline in 2016 with students studying engineering, computer science and IT, math and statistics and social sciences, whilst the number of students who chose to study business management, foreign language and literature and education increased. Further, it was mentioned that subjects relating to business management, trade and corporate management and finance have increased as development in China has created more demand for professionals in these fields.

Market difficulty in China for student exchanges in lesser-known countries

Consulting agencies specializing in overseas programs still promote the US and other popular speaking countries such as the UK, Canada and Australia. As such, standing out from those countries can be quite challenging for smaller countries. This is as knowledge of the country studied at and a school’s ranking is very important for students. This is due to the implications it has for the employability of students, especially those wishing to return to China. Further, social recognition and prestige also play a role beyond professional necessity which can also be a determining factor for parents and students, especially from tier 1 cities.

Study abroad: The Belt and Road Initiative and its effect on Chinese international students

According to Forbes, the Belt and Road Initiative will affect 60% of the world’s population with the participation of 76 countries from Asia, Africa and Europe. The trade and infrastructure undertaking is thought to be one of the most ambitious undertakings in human history and is viewed as ‘a sort of 21st-century silk road’. Along with connecting through trade, Beijing currently offers 10,000 places each year for students who come from countries within the Belt and Road Initiative with China attracting more than 200,000 students from 64 of 68 Belt and Road countries in 2016. Further, since 2013 when the launch of the Belt and Road initiative took place, Chinese students have also flocked to Belt and Road countries with 24 educational agreements being signed between some of these countries since April 2017. This initiative opens up substantial and wide opportunities to educational bodies of countries within the initiative, with the Chinese government wanting to strengthen both educational and trade bonds between countries.

Opportunities for brands wanting to enter the Chinese market

Chinese students prefer English speaking countries in order to improve their English as it is a must-have skill in the work environment with 60% of Chinese students currently going abroad to the US, Australia and the UK. As a result, this increasing need for English helps leverage English speaking countries for exchanges as a whole – not just the top destinations sought by students. This is seen as Chinese students are now exploring new countries for overseas studies. There is, however, due to the Road and Belt Initiative, an opportunity for growth for many more educational organizations and countries to attract Chinese students using the initiative as leverage to strengthen the appeal for Chinese students. This is especially where educational organizations are not within the top 100 or are as well known to Chinese students. This awareness in China is particularly important as going abroad is meant to enhance employability and employment opportunities which cannot be achieved without businesses being aware of the educational organization. Further, an emphasis on the social and personal benefits students are looking for, along with strengthening programs in the more popular university courses, will help make organizations stand out to students. Most importantly, recognition by the Chinese Ministry of Education of the degree and the university itself is necessary for recognition and desirability among the Chinese.

Moreover, there are opportunities for educational organizations that are located in less expensive countries or areas should highlight their desirability and more expensive schools should offer scholarships in order to appeal to students who are self-financing their abroad study. However, it is also important to note that the urban middle classes are also estimated to increase; a McKinsey survey in 2015 found that there were 10 million affluent households with more than 300,000 RMB, and it is estimated to be 18 million by 2020. These households were mostly found in tier 1 to 3 cities but tier 4 to 5 cities were found to be steadily increasing their income. This growth in disposable income and wealth among cities is likely to have a positive effect is on expanding the number of students studying abroad and providing opportunities for more countries than in the past. Although there have been recent declines in Chinese students studying in the US as well as more returnees upon graduation, studying abroad is still a reflection of social mobility and status. The UK sits behind the US as a top destination, with pursuing a master’s degree as an attractive choice with its one-year program considering costs and study requirements. In the coming years, we may see a larger shift in the preference of university destinations among Chinese students in light of the recent events.

See how COVID-19 has impacted Chinese students’ aspirations to study and work abroad.

Author: Jessica Farrell 

Daxue Consulting has conducted a series of surveys on Competitive Benchmarking in China and developed a specific framework to analyze the key insights related to your competition in China.

Competitive analysis is defined as identifying your competitors and evaluating their strategies to determine their strengths and weaknesses about those of your product or service. Daxue provides you with the tools needed to win in a market full of players.

This article Education elsewhere: China seeks out exchanges in other countries is the first one to appear on Daxue Consulting - Market Research China.

Steal the Spotlight

Their reality show ‘Keeping up with the Kardashians’ has already reached the 18^th season. It has built a powerful platform for the Kardashians to stay relevant in the public and communicate with the audiences.

The story of the Kardashians started from a reality show

Basically, the reality show ‘Keeping up with the Kardashians’ made the Kardashians. Kim Kardashian, the most well-known sister, deserves the credit. Before the reality show, she ran into a PR mess when an intimate video of her and an ex-boyfriend spread across the internet like wildfire. Kim Kardashians saw her Despite the rapid success in the western world, the Kardashian’s fame was slow to catch on in China until recently.

Arousing viral discussion

The traffic economy is an economy based on digital platforms. Content creators and consumers realize the effective flow of information and generate economic benefits within the platform. In the digital era, traffic is not only driven by offline presence or advertising, but also in-time blooming information exchange online.

The Kardashian’s fame as officially hit China

Trending topics in the China are fast-changing. But the Kardashian are good at maintaining their presence by creating new dramas and the ‘magic’ of the Kardashians in China also worked. In the latest season of ‘Keeping up with the Kardashians’, the scene of the fight between the sisters went viral on Weibo. The topic climbed to the 2^nd of the Hot Search List in Weibo on March 28, with 200 million views and 27,000 discussions. Back to the last season, the dramatic break up between Khloe Kardashian and Tristan Thompson also raised a hot discussion, generating 130 million views and 12,000 discussions on Weibo.

Source: Weibo, Hot topics in terms of ‘Keeping up with the Kardashians’

How to mimic the Kardashian success in a Chinese way?

In China, vlog is a powerful tool

In fact, it is unrealistic and cost-inefficient for individuals or even brands to create a reality show to approach the public. To reach the Chinese market, Vlogs is a good alternative. Vlog is a video-blog, a casual, conversational video posted on social media, many Chinese KOLs use vlogs to reach their audience. According Bilibili, the most popular video platform for vlog in China, vlog has still seen a growing trend. One successful example of applying vlog to marketing could be the OPPO R17 campaign ‘Discover the beauty of the night’. The brand invited some famous vloggers to create short vlog with OPPO R17 about cities such as Tokyo, New York and Hong Kong and capture the beauty of night. The Weibo topic relating to that has already reached 620 million views.

Source: Biliob Index, the popular index of ‘vlog’

Stay Active in Social Media

Taking a picture and uploading it online may seem easy and mindless, but each of the Kardashian sisters gained a lot of reward that comes from a single post. With a mix of brand deals and sponsored ads, the Kardashians make money by just name dropping products and brands in their social media posts. It is estimated that Kim Kardashian makes about $500,000 per Instagram post, Kourtney and Khloe about $250,000 and the Jenners about $400,000 each, although some sources say Kylie Jenner earns up to $1 million per post.

From the reality show to social media, the Kardashians always find the best way to communicate with their audiences. The population targeted by a brand’s communication on social networks determines the content to publish. Moreover, interactive content and videos are particularly appreciated in the Chinese market. The Kardashians understand what their audience enjoys, and tailor their posts in such a way to maintain that connection. They share their lives as mothers and celebrities.

Additionally, they give their fans sneak previews of the new release of their brands. Through Instagram and Snapchat, followers are effectively given a ‘behind-the-scenes’ look at life in the spotlight. The constantly updated in social media. It feels like ‘Keeping Up with the Kardashians’ but in an unscripted, unedited, and intimate format. The result turns out well. Take Kylie Jenner for example, she is constantly active on her Instagram stories has more than 400 million daily active users. Moreover, they used social media to interact with the audiences. Kim Kardashian regularly engages with her followers and gives them insight into her world, like asking her followers for fashion advice in a tweet.

Presence of the Kardashians in China

Kim was the first one in her family spotted the value of the Chinese market and leveraged the social media trends in China. She joined several trending Chinese platforms and which at the end turned out impactful.  On October 27, Kim Kardashian opened her official account on Xiaohongshu (小红书, also known as Little Red Book or RED). Now she has more than 220,000 followers. On the social commerce platform, Kim balances the sales content with personal content her Chinese audiencescrave. The most engaging content of her Xiaohongshu account is about her family and her regular fashion. In Xiaohongshu, she interacted with her followers in the Chinese way. In her latest post about the launch of KKW fragrance, she said ‘Happy new year’ in Chinese.

Source: Xiaohongshu, the most engaging posts in Kim’s official account

However, Kim Kardashian’s traffic on Xiaohongshu is nothing compared to her Instagram following. So how can she start to gain momentum in China?

Kim collaborated with a Chinese influencer to expand her audience

To amplify the brand effect and present the product advantages in a more efficient way, Kim Kardashian leveraged the impactful e-commerce channel. In the Double 11 event of 2019, Kim joined the livestream collaborating with Viya (薇娅), a livestreaming expert in Taobao/Tmall. Even though the influence of Kim Kardashian is strong globally, her livestreaming index in Tmall didn’t tell the same story. The views of Viya’s livestream reached 10 million while the views of Kim’s livestream are less than 15,000. Nevertheless, the livestream worked in terms of boosting sales. At the end, 6,000 fragrances were sold within 30 seconds. Before the livestream, the total sales of the KKW fragrance were only 52. This livestream also raises a hot discussion in Weibo. To conclude, the collaboration enabled Kim Kardashian to win both sales and attention in the Chinese market.

Source: Taobao, Double 11 livestream of Kim Kardashian and Viya

What could be next – Short Video Platform

In order to be digitally active, accessing the vitality of the social media platform and keeping up with the trends in China is crucial. In the Chinese market, the structure of social media is changing fast. From 2017 to 2018, the usage of short video platforms soared by 6.2%. The trend remains upwards till now: the short video market in China soars on traffic growth especially that the Coronavirus crisis boosting the at-home economy. It is changing the monopolized BAT (Baidu, Alibaba, Tencent) structure in the market. There is no doubt that the short video platforming is leading the new social media trends in China.

Data Source: QuestMobile TRUTH, the proportion of usage duration of App, by platform

Construct favorable public image – the Chinese way

The Kardashians in China are controversial figures since it started with the PR mess of Kim Kardashian. However, Chinese customers respect her as fashion and beauty figures in general and the Kardashians brand gained endorsement among them.

How the Kardashians level up their public image?

In the US, the Kardashians have made philanthropic moves which impress the local audience. On one episode of ‘Keeping up with the Kardashians’, focused on Khloe Kardashian and Kim Kardashian’s mission to raise awareness about the issue of homelessness. The Kardashians influence did work. Kim Kardashian stated that the episode inspired over $1 million worth of donations to the Alexandria House, a shelter for women and single mothers in LA. They also leveraged their presence on other famous platform to do goods. Both Kylie and Kim completed the donation to specific issues on ‘The Ellen DeGeneres Show’. If philanthropy can turn someone’s image around in the US, what works in China?

Source: The Ellen DeGeneres Show, Kylie Jenner and Kim Kardashian donated

The Chinese audience is strict

Because of the unique and fragmented characters of the Chinese web, information and trends in China evolve at far higher speeds than anywhere else in the world either positively or negatively. Consequently, maintaining a favorable public image is crucial for your voice in this market. It applies for both celebrities and brands. In 2020, Chinese celebrities have tremendous pressure to maintain a clean, positive image. The tolerance of Chinese netizens is low. In the Chinese digital world, you might be admired by the public on minute, then suddenly be criticized by everyone the next.

The leading Chinese KOL Zhang Dayi (张大奕) was involved in a scandal. It went viral among the Chinese netzines. The topic #Zhang Dayi is a mistress# (#张大奕小三#) raised 780,000 discussion and gained 450 million views. Some of the netizens posted proposals to block Zhang Dayi. The company Ruhan, highly linked to Zhang Dayi, has been at stake due to the scandal. The stock price plummeted, with a maximum drop of 10% and the market value has evaporated by approximately $22 million (approximately RMB 150 million). The man involved in the mistress scandal is Jiang Fan, president of Taobao, Tmall, Alimama Business Group, was removed from the partners of Alibaba.

Thus, a proper brand position and a favorable brand image would be compulsory in order to enter the Chinese market.

Source: Baidu Index, Chinese Netizen search frequency of Zhang Dayi

Fan conversion

As famous figures or signs, their public image can be further exploited and converted properly into business. The Kardashians have become fashion and cultural icons and have infused their brand into everything they do. Each sister has taken their success and translated it into the means of businesses, lifestyle apps, brand deals and etc.

How the Kardashians achieve their success in business

Some of the Kardashian sisters have already found their own brands ranging from cosmetics to clothing. Their marketing strategies are highly consistent: using its own social media platform to promote products and inviting the big-name celebrity to post on social media. Among all the sisters, Kylie Jenner is most successful one in business: her brand ‘Kylie cosmetics’ is already worth $1.2 billion.

As fashion icon, the Kardashians also jump out of the industry to talk to their audiences. Take Kim Kardashian for example, she launched a video game ‘Kim Kardashian: Hollywood’ which is available on IOS and Android for free. It reached 1 million download and 5 million revenue by April 2020.

Can someone mimic the success of the Kardashians in China

While Kardashians’s following clearly shows some differences between western and Chinese consumers, it also highlights the power of influencer marketing in both cultures. Chinese consumers highly reward those who reach out using their culture and language. Kim Kardashian first used Weibo in English and got little traction, then she hopped on Xiaohongshu and used some Chinese, and got more traction. Then she did a livestream just for Chinese on 11.11 2019, and her fame in China hit a new high.

The global success of the Kardashians is not an accident. In the era of digitalization, colossal attention and traffic keep the money-spinning franchise running. However, attention and traffic would not maintain forever. It is crucial to find the right touchpoint to stay active online. The Kardashians successfully spot the growing social media trends in China and replicated their online impact to the Chinese market. Empirical evidences prove that favorable public image matters in China.

Negative image can destroy a public figure for a long-term period. Company in the Chinese market should be careful of building its image and stay consistent in the future. Famous figures like the Kardashians made a great amount of money by just posting pictures in the social media. The Chinese market also provides great opportunity of leverage the famous figures, which help companies exposed in the public and achieve success quickly. All in all, the Kardashians marketing tactics over the years are worthy of praise and provides useful guidelines even for marketing players in China.

Author: Dongni He

Partner with a Kardashian-like KOL in China

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This article Apply the Kardashians marketing tactics in China is the first one to appear on Daxue Consulting - Market Research China.

Rap music penetrates China under a western influence

The first rap singers in China spoke English because many believed that the Chinese language and its tones don’t fit the genre. One of the first Chinese DJs to rap at the time, DJ V-Nutz (Gary Wang), explained in 2007: “I would say that we don’t have a Chinese style yet. If you really want me to say, what is Chinese style, I would say it’s young. Local kids really enjoy western things right now. Then maybe after 10 or 15 years, maybe they can have their own style.” At that time, certain aspects of the hip-hop culture were making their ways onto Chinese billboards and charts, but not on the airwaves.

Source: VICE, Gary wang partying at ‘The Shelter’ a hip-hop club in a Beijing bomb shelter

The beginning of rap music in China

In 2003, the multinational Beijing hip-hop group Yin Ts’ang was the first mainland Chinese hip-hop group to release an album to critical acclaim. The group was made up of global nomads: two Americans, a Chinese Canadian, and a Beijinger. The diversity of the group – which is considered one of the pioneers of Chinese rap music – reflects Western influence in the beginning of China’s rap music.

Source: The New York Times, The rap group Yin Ts’ang

Yin Ts’ang’s first hit was ‘In Beijing’ (Zai Beijing), from the group’s 2003 debut album, ‘Serve the People.’ The title melts a traditional melody played on the violin against a hip-hop beat. The song, whose Chinese lyrics explore the hidden corners and great deals of the Chinese capital, took the underground music scene by storm, eventually finding its way into karaoke rooms, the internet, and even the playlist of a radio station in Beijing.

The group defends its lyrics in Chinese, which awaken the Chinese urban youth. “Before that, kids listened to hip-hop in English, but maybe less than 1 percent could actually begin to understand”, said Zhong Cheng, a member of the Yin Ts’ang.

Rap music hits Sichuan

2006 saw the rise of another famous rap group from Chengdu called Big Zoo, with several mixtapes and freestyle releases. The group won several domestic awards before fading away in 2011. With its verses in Sichuan dialect, the group is commonly regarded as the one who led the development of the rap of Chengdu, and more importantly, the birth of a new urban subculture in Southwest China.

In the late 2000s, hip-hop venues are flourishing in China, and 2009 saw hip-hop being broadcasted for the first time by the China Central Television for the annual Chinese Lunar New Year Gala.

If the 2010s distinguishes China’s rap as a new genre of music, making Chinese rap at that time is still a profitless and often subversive activity. Thus, it is only in 2017 that Chinese hip-hop scene will burst with a dedicated TV program.

The reality TV show ‘The Rap of China’ has catalyzed the rise of hip-hop in China since 2017, exploring the new potential market to achieve monetization

The underground and metallic decor of ‘The Rap of China’

“Do you have freestyle?” the sentence of Kris Wu, one of the judges of the TV show ‘The Rap of China’ (Zhongguo you xiha, or Zhongguo xin shuochang) went viral on Chinese social networks. The show consists of detecting new talents in Chinese rap, many of them previously underground, via a freestyle contest. Before the start of the 2019 season, the hashtag #TheRapOfChina reached 8.7 billion tags on Weibo across more than 44.23 million users discussing the show.

Through this TV show, iQYI (the Chinese video platform behind the show) explores the potential market of Chinese rap deeper by realizing the monetization of the rap industry. On top of Mainland China and Taiwan, the show is widely distributed to other Asian territories, bringing Chinese hip-hop culture to a broader audience. The show is such a hit among the young generation that it plays a big role in the trends of lifestyle and entertainment consumption in young people.

Since 2017, ten years after Gary Wang’s prediction about the future of the Chinese rappers, the buzzword ‘rap’ peaks according to the Chinese show’s episodes. Surprisingly, Chinese youth use the word ‘rap’ much more than its Chinese counterparts ‘嘻哈’ (xiha, meaning hip-hop) or 说唱 (shuochang meaning rap). The word ‘freestyle has no equivalent in Chinese, and many of the show’s participants mix Chinese and English in their verses.

Source: Baidu Index, the buzzword ‘rap’ peaks according to the Chinese show’s episodes

The Rap of China’s audience brings together Chinese Generation Z

Watching the program, the characteristics of Chinese rap immediately hit the viewer. The show is aimed at young Chinese urban culture, with an industrial and underground design, as illustrated in the image above. Chains, cans of paint, toolboxes, and other construction materials are part of the show’s decor, reflecting the rapid urbanization of China experienced by Chinese youth. The dark atmosphere immerses the viewer in the ambience of underground hip-hop clubs, often located in shelters and basements of major Chinese cities.

The audience brings together the Chinese generation post 95s and 00s. According to Baidu Index, around 70% of the Chinese people who search for ‘rap’ on the Chinese internet are under 30 years old. More surprisingly, females account for 55.8% of the total searches.

Source: Baidu index, daxue consulting analysis, age and gender distribution of rap fans in China

As for geographical distribution, rap consumers are mainly balanced between first- and second-tier cities, Beijing being the number one and Chongqing the 8^th. The keen interest for rap among people from Chengdu city and the Sichuan province near Chongqing city is linked to the emergence of a new kind of rap, called ‘trap’ that shakes western China.

Data source: Baidu index, daxue consulting analysis Geographical distribution of rap fans in China

‘The Rap of China’ highlights Chinese-youth market potential

But what strikes the viewer at the very first glance is the ability of the show to be overcrowded with advertisement messages. The 2019’s season host the financial application 有钱花 (you qian hua, have money to spend) as the main sponsor of the show. The logo of the application appears everywhere, at the top of the show’s logo, at the bottom right corner, and in the decor of the show. The show even features promotional rap clips that highlight the brands’ products. Thus, marketing promotion is at the heart of the competition since participants must compete in promotional clips.

Brands sponsoring the most-watched show among Chinese youth reflect the market potential for brands targeting young Chinese. Thus, outside of the main sponsor, spirits brands such as Absolut Vodka and 江 小白 (Jiangxiaobai), a Baijiu brand from southwest China, are highlighted. A brand of shampoo, Clear by Unilever, appears regularly. Pepsi is also very visible during the show, as is War Horse 我马 (Wo Ma), a Thai Chinese energy drink brand. The American chewing gum brand, Extra, in Chinese 益 达 (Yi Da) and a brand of sanitary pads, are presented through rap clips during the show.

The brands sponsoring the 2019 season of ‘The Rap of China’ reflect the lifestyle of the new Chinese generation.

Rap as a route to gen-z marketing

With all these brands popping up during the show, one can wonder about Chinese young generation’s market potential. Gen Z, or the post-95 generation, includes nearly 170 million people in China. Even though many are not part of the workforce, it doesn’t keep them from spending money. Thus, 70% of them receive at least 3,000 yuan (USD420) in pocket money, while 21% are getting more than 10,000 yuan per month.

Moreover, according to Mckinsey’s China consumer report 2020, “young, free-spending consumers in lower-tier cities are today’s growth engine.” This critical set of consumers is unaffected by slowing growth and rising cost of living that affects top-tier cities in China.

In China, the target consumer does not just start at twenty-somethings with full-time jobs in the office. Many in their late-teens already have cash on hand even if they don’t have a fixed income. And advertisers on ‘The Rap of China’ know this.

Exploring Western China’s largest cities of rappers

As ‘The Rap of China’ displays, hip-hop music incorporates street fashion and internet culture, which is embraced, learned, and made by the young Chinese generation. The demographics analysis of the keyword ‘rap’ on Baidu display East provinces as the epicenter of the trend. However, in the west, we also see Sichuan province being hit by the phenomenon. A new hip-hop revolution called trap occurs in Chongqing and Chengdu, the two largest cities of the west. Trap music is a subgenre of hip-hop, characterized by the significant use of tuned kick drums and bass, and an often-dark ambience and lyrical content.

Meet Chengdu’s hottest rappers: Xie di, Higher brothers, Ty.

In Chengdu, Sichuan province, hip-hop is even hotter than its infamously spicy cuisine. Here lies the Higher Brothers, China’s hottest hip-hop export. This band of four friends is the first to make it internationally with their DIY lyrics, recording, and production. Their ‘Made in China’ clip on YouTube is the most viewed among Chinese hip-hop videos, almost hitting 20 million views.

Source: 88rising’s YouTube channel, Higher Brothers’ clip ‘Made in China’

Like Big Zoo’s former rap, they melt Sichuan dialect, Mandarin and English in their lyrics. But they never do it on purpose, mainly focusing on the meaning of the words in each of these languages, and how it sounds. If no one knows why trap takes off in Chengdu, the Sichuanese dialect could be the reason. This twangy local dialect is said to lend more naturally to the musical style than Mandarin, China’s official language.

The legendary Chengdu City Rap House is the heart of Chengdu’s rap. It’s one of the most influential hip-hop labels in China, best-known for nurturing the success of the Higher Brothers. The collective gathers other super-famous rappers from Chengdu, like Ty. and Boss Shady (Xie Di).

Chengdu’s rappers are up against strict censorship

The latter has known a burst of popularity in 2014 by bringing Chengdu’s rap to a Chinese talent TV show called ‘The Voice of China.’ In 2018, the rapper released a dialect-heavy track called ‘Fuck Off Foreigners’ (Gua laowai). The song’s harsh lyrics towards foreigners got him banned from performing in China for an entire year. But Shady is not letting censorship get him down, announcing its partnership with Ty. to build a new record label.

Ty., Chengdu’s most successful solo rapper domestically, also experienced the throes of censorship through his breakout track ‘Hooked on drugs’ (Hai yao shang le yin), in 2014. The rapper appears then in ‘The Rap of China’ with a more commercial-friendly rap featuring other artists, including Boss Shady. A longtime friend of the Higher Brothers, he is also featured in some of their newly released tracks.

Source: VICE, YouTube, Ty. (left) and Boss Shady (right)

But a new unpleasant rivalry is coming from another neighboring western city, whose rappers have built their popularity on the back of the success of ‘The Rap of China.’

Chongqing, the Atlanta of China

This city is Chongqing, China’s third-largest city, and home to 31 million people. The commonly nicknamed ‘fog city’ or ‘bridge city’ is often compared to Atlanta, Georgia the birthplace of trap music in the United States.

Here lies the GOSH music label, gathering the most influential rappers of Chongqing, with well-known names across China, such as GAI, Bridge, and Wudu Montana. These three rappers all appear in the wildly popular reality show ‘The Rap of China’, with GAI winning the first season, in 2017.

However, GAI’s first burst of popularity came in 2015, along with the release of ‘Gangster,’ a controversial track in which the rapper claims to be a gangster. The track has soon been banned on the multiple Chinese video websites, people questioning the fact that this song could instigate criminal activities.

How a matcha-shop-owner-gone-rapper popularized Chongqing’s rap music

Popularizing rap using Chongqing dialect with similar dialects, GOSH label is maximizing its influence over the southwest region. The first rapper to sing about the fog city is Wudu Montana (Wudu literally meaning ‘fog city’ in Chinese), a matcha tea shop owner. Just like the Yin Ts’ang crew, his first hits told about his daily life growing up in the vast city, and its development since the 90’s. It is this street culture that he tries to transmit in his sounds. According to him, “Chongqing has changed a lot, things that were once small are now big.”

Source: VICE, YouTube, Wudu Montana (left) and Gai (right) on stage

Another rapper, whose name also resonates with the city and its many bridges, has recently become the Chongqing’s new rising star. Bridge is perhaps Chongqing’s rapper whose look is the most explosive. Dreadlocks and large bubble glasses are the hallmarks of this energetic rapper. According to him, trap allows people to express things with beats, just like the Chinese poets did in the old days.

Bridge during his participation for the season 2 of ‘The Rap of China’

Chongqing’s rap is more aggressive than Chengdu’s. This is reflected in what those rapper call ‘attitude.’ If people tend to compare Chengdu and Chongqing’s rap, we see that these rappers have their own shining characteristics, whether they come from Chongqing or Sichuan.           

Chinese rap is going outside of China

That being said about ‘The Rap of China,’ Chengdu, and Chongqing’s rap, we are obviously currently witnessing the rise of the Chinese rap music. But what about globally?  Is there any opportunity for Chinese rap to catch foreign audiences, while foreign streaming music and video platforms are blocked in China?

88rising, a multimedia company and music label for Asian rap in the US

A New-York based company launch in 2015 made its top priority to raise the profile of Asian hip-hop in the United States. Its name is 88rising (the 8 is the luckiest number in the Chinese culture), an Asian-focused record label and media company. The company, which only features 3 to 4 Asian artists at a time, focus on exporting Eastern culture to the West, one viral hit at a time. Among the featured artists, the Higher Brothers’ crew represents the Chinese branch.

Since the Higher Brothers signed in 2016 under 88rising’s banner, the Chengdu’s rap group completed two US tours in front of sold-out crowds. The first move of 88rising to translate the Higher Brothers hype in the United States came with the viral YouTube video ‘Rappers React to Higher Brothers’, where famous US rap artists reacted very positively to their ‘Made in China’ hit. Since then, the crew released its long-awaited new album, ‘Five Stars’ still under the 88rising label.

Source: Higher Brother’s Facebook page announcing their participation at 88rising’s music festival in Los Angeles, 2019

Much of the power of 88rising is due to the fact that it operates more like a PR agency than a record label. Miyashiro, 88rising’s CEO, estimates that only 30% of the company is dedicated to full-time music. In comparison, the other 70% is split between video production, business development, and fostering direct relationships with streaming music and video platforms, their digital playground.

But in China, relationship with Spotify’s teams are not enough, with most foreign streaming platforms blocked and replaced by local equivalent. This explains why 88rising decided to break the Chinese walls by employing a dozen full-time staff in Shanghai.

In 2019, Higher Brothers won the award for hip-hop artist NetEase’s label of the years, 88rising taking the award for Chinese music streaming of the year at the same event.

Could censorship be the glass ceiling of the rise of China’s rap music?

Ironically, one month after receiving these awards, several 88rising tracks were pulled from NetEase, ostensibly for lyrical content failing outside the requirements of Chinese censors. Even the wildly popular reality show ‘The Rap of China’ fall under the state broadcast administration regulations, which prohibited depictions of the hip-hop culture, including tattoos and obscene lyrics. Making rap about drugs, sex, violence, and politics is out of the question.

The beginnings of hip-hop – including trap music – in China were primarily influenced by western culture. Western lyrics often include violence and anti-system verses, a path that Chinese rappers tried at their expense.

Even with censorship, however, the success of rap in China among the young Chinese generation is real. By moving west towards Chengdu, Chinese rap has only proven its uniqueness: it is incisive, technical, and requires great dexterity to mix Chinese dialects, Mandarin, and English. It focuses on the style and character of the rapper, verses from Chinese rappers appearing in the process of building a full-fledged character, with coolness and attitude at its center.

Author: Maxime Bennehard

Also read, what Chinese say about the black lives matter movement

Listen to 100 China entrepreneur stories on China Paradigms, the China business podcast

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This article Feeling the beats of the Chinese rap culture is the first one to appear on Daxue Consulting - Market Research China.

While discovering how Chinese view to this issue, we should consider the factors that influence the information dispersed in the country. The Chinese government has a firm stance against protests in general, and this certainly influences the way school lessons and the media covers protests. Hence, as the series of events develops, the Chinese media tends to convey protests in a negative light by focusing on the violence.

To understand how Chinese people react to Black Lives Matter protests in the United States, Daxue Consulting conducted social listening on different Chinese social media.

The most discussed topic on Chinese social networks

On May 28, 2020, three days after Floyd’s death, the subject quickly went viral with an increase in the number of searches for the keyword 黑人 heiren (black person) on Baidu, the Chinese search engine. Baidu searches for ‘Black Lives Matter’ took longer to appear, peaking on June 6, 2020. This peak occurred thanks to a Black Lives Matter demonstration in South Korea. This close-to-China event has shed more light on the subject, fueling Chinese reaction to the Black Lives Matter protests.

Chinese netizens search for Black Lives Matter and related keywords – Source: Baidu Index

As shown in Baidu’s demand map, which indicates the search trends of Chinese netizens, the keyword ‘black person’ is closely linked to 歧视 黑人 qishi heiren (discrimination against black people), 美国黑人 meiguo heiren (African American), and 种族歧视 zhongzu qishi (racial discrimination).

Chinese netizens search for Black Lives Matter and related keywords – Source: Baidu Index

On Zhihu, a Chinese question-answer website similar to Quora, the topic reached more than 140 million views on June 5th. Under this topic, the questions reflect the Chinese netizens’ misunderstandings over the events happening in the United States.

Source: Zhihu. Chinese people react to the Black Lives Matter protests in the United States

What do Chinese netizens say about the Black Lives Matter protests?

Majority of Chinese netizens question why the protest movement has more impact on the American society than the COVID-19

When it comes to qualifying demonstrations of support in the United States, we observe that ‘riots’ (暴乱 baoluan) is much more used than ‘march’ (游行 youxing), the main form of peaceful protest. It shows that the riots strike more Chinese people’s mind than the peaceful demonstrations.

Among the questions of the Chinese netizens, many tackle racism in the United States, trying to understand why this social problem has become so crucial after the tragic event of May 25, 2020.

It’s true that if racial discrimination is a hot topic in western societies, it’s a relatively new subject for China, which opened up to the world relatively late. Therefore, it is hardly conceivable for Chinese people that COVID-19, which has killed more than 100,000 people in the United States, has less impact on American society than the death of a black American following a violent arrest.

Source: Zhihu “Chinese people react to the Black Lives Matter protests in the United States”

The top answer to the question highlights the uniqueness of American racism, in contrast to a globalized Coronavirus. The netizen also says that the United States blames the Coronavirus on China, making the American government less accountable for it. Thus, the American government’s responsibility for racism in its country has more substantial repercussions on the American society than its crisis management of the Coronavirus.

Source: Zhihu. Chinese people react to the Black Lives Matter protests in the United States

Another bases its answer on figures, displaying clear racial discrimination from the police. A comment under this response sums up: “Their frustration has been accumulating for too long.”

Source: Zhihu

Diversity and racial discrimination are a relatively new concept for Chinese society

To further understand why the death of George Floyd tipped an entire country into protests to support black people’s rights, some questions like the one below explore the causes of racial discrimination in the United States.

Source: Zhihu Chinese people’s thoughts on racial discrimination in the United States

These questions about racism in the United States show that this is not a mainstream topic in China. Even if the country attracts more African and international students, it has only been since the few recent years. Although China has around 1 million foreign residents, it makes less than 1/1400 of the total population. And when it comes to Chinese demographics, Han Chinese make up more than 90% of the Chinese population. Thus, reflecting that diversity is a relatively new concept in China, a netizens questions  even if racial discrimination exists in China.

Source: Zhihu

This ignorance of racial discriminations from the United States and more broadly from western societies may explain the absence of large-scale demonstrations of support from the Chinese, whether on the street, or even on social networks.

Therefore, support reactions are limited to specific groups, which are closer to the black American culture.

Chinese Hip-Hop musicians show their support to Black Lives Matter protests

In another article, we spotlight the rise of rap music in China, strongly influenced by American rappers – the majority of whom are black. A symbol of the influence of African American rappers on Chinese rappers, a rising Chinese Indonesian rapper, Rich Brian changed his stage name from ‘Rich Chigga’ (the contraction of ‘Chinese’ and the n-word) after admitting the original name was a naïve mistake.

Label 88rising – whose artists include Asian artists like Higher Brothers and Rich Brian – has posted its support of the protests, calling for awareness for equality everywhere. In its last statement, the company says that it “wouldn’t exist without the contributions of Black art and culture.” The company claims it is leveraging concrete actions to support the Black community on an ongoing basis.

Source: Instagram. Chinese hip-hop musicians show their support for Black Lives Matter protests

Higher Brothers, China’s hottest rap export, posted a black image on Instagram. It features the text: “We will use our channels to invite conversation and support national and local organizations for change. All of us need to strive to be the change we want to see.”

Rapper Vava – one of the best-known hip-hop artists in China – also posted a black square, along with the #blacklivesmatter.

Source: Instagram. Chinese hip-hop musicians show their support for Black Lives Matter protests

However, during the height of the Hong-Kong protest last year, these same rappers were posting as part of a social media campaign to support the crackdown in Hong Kong and drum up nationalism in China.

And it seems that the scenes of protests in the US are precisely the occasion for Chinese to draw conclusions on those that have been ongoing in Hong Kong for over a year.

Riots in the United States recall bitter memories of those in Hong Kong

A series of comments comparing the management of the Hong Kong riots and those taking place in the United States has swept the Chinese web. The impotence of the Chinese during the Hong Kong protests compared to the deployment of the National Guard in the United States has greatly fueled debates on social media.

According to Chinese netizens, the issue of racial discrimination in the United States and the management of the rioters by the American government demonstrate the limits of the American democracy and model. An article on WeChat claims that the Hongkongers are more considered to belong to the Chinese people than are black Americans in their own country.

Source: WeChat. Chinese people react to the Black Lives Matter protests in the United States

A comment under this article calls into question the idea of ​​democracy and freedom that the United States has so much defended, notably through its recent support for the Hong Kong youth.

Source: WeChat. Chinese people react to George Floyd’s death and protests

Most Weibo users criticizes the United States’protests

On Weibo, a Chinese social media platform with more than 340 million users, the debate is lively. Netizens’ posts seek to show the violence of the police during the demonstrations in the United States, by sharing shocking videos and pictures. Comments under a picture showing a man in a wheelchair reportedly seriously injured by the police vehemently criticize the United States.

Source: WeChat. Chinese people react to George Floyd’s death and protests

Since the most viral posts are often the most shocking, an impressive quantity of diverted and modified images has fueled extreme views on the events in the United States.

As already illustrated above, this is the perfect opportunity for Internet users to mock American democracy. Below, images shared on Weibo illustrate the squeaky sarcasm of Chinese netizens.

Source: Weibo. Chinese people react to George Floyd’s death and protests

Going further toward the criticism of the United States and the ongoing political cold war between the two countries, some photoshopped images show American demonstrators waving pro-China signs and the Chinese flag. However, these pictures are far from reality, as illustrated below.

Source: Weibo, photoshopped pictures of the demonstrations circulating on Weibo

However, some Chinese netizens follow American host views about the riots

Although the focus quickly shifted to political considerations by comparing the riots with those of the year spent in Hong Kong, on Zhihu, Internet users are still trying to understand the exact reasons behind the sometimes-violent demonstrations.

Thus, a video of Daily Show’s host, Trevor Noah, was massively shared. The host is very popular in China because of his views against Donald Trump. In his video, he shares his thoughts about American society and explains why riots are necessarily taking place throughout the country.

Source: Zhihu, Chinese people discuss Trevor Noah’s viewpoints towards the protests on Zhihu

The answer below shows that the Chineze netizens understand his point of view in its attempt to justify the riots.

Source: Zhihu

Some netizens turn political, “The riots will speed up America’s disruption”

Finally, the question “How the American riots will end” has been seen over 1.3 million times on Zhihu. On social media, the Chinese believe that the Black Lives Matter protests will profoundly impact the United States’ stance on the international stage.

Source: Zhihu Chinese netizens question how the ‘riots’ will end

According to comments on WeChat, the riots are unlikely to shake the American foundation but to further destabilize the leading world power. And China could benefit from that.

Source: Zhihu

On social networks like Weibo, the Black Lives Matter movement is an opportunity to denounce a very subjective Americanism of liberties. Chinese netizens point out Trump’s hypocrisy for encouraging other nations to protest while suppressing his own people when they protest.

On Zhihu, Chinese netizens try to understand the deep causes of African American racial discrimination. Chinese people’s thoughts on racial discrimination show that this not a mainstream topic in Chinese society. Thus only a few raise their voice to support the movement, for example Chinese hip-hop artists.

However, the fact that they rely on Trevor Noah’s point of view – he is seen as politically friendly – shows that although they try to understand the heart of the subject, Chinese reactions to the Black Lives Matter protest are somewhat tinged with nationalism and political activism.

Interested in learning what Chinese netizens say about international events?

We also used social media listening to see how Chinese netizens reacted to the Notre Dame fire and how Chinese netizens reacted to the Yellow Vest riots in France.

How is China suppressing the spread of COVID-19?

Listen to 100 China entrepreneur stories on China Paradigms, the China business podcast

Listen to China Paradigm on Apple Podcast

This article How Chinese netizens react to the Black Lives Matter protests in the US is the first one to appear on Daxue Consulting - Market Research China.

Data Source: JJL Overseas education, Country Distributions of Chinese Students Studying Abroad

Data Source: MOE, Number of Chinese Students Studying Abroad from 2009 to 2018

How COVID-19 impacted Chinese students studying abroad, and why it is important

When discussing studying abroad, the focus is often on the benefits of the individual students. However, the exchange of students in foreign countries is beneficial to society in many ways, especially in fostering and attracting talents. Hence, the negative impact of COVID-19 on Chinese students’ willingness to study and work abroad will inadvertently impact foreign industries if it manifests as a smaller talent pool for key industries.

In the ’90s, self-funded studying abroad became popular, triggering the boom of Chinese students abroad. Until 2011, most Chinese students who chose to study overseas stayed overseas after graduation. At that time, China’s economy was not as robust as now, so living in flourishing countries seemed to be more attractive for ambitious young professionals. Those overseas Chinese worked hard and make great contributions to overseas countries’ development, working in booming industries like tech in Silicon Valley.

Starting in 2008, when the global financial crisis broke, more Chinese students went back to China to contribute to the country’s development. The current overarching trend is that the amount of Chinese students abroad is growing faster than the amount of Chinese workers abroad.

National Bureau of Statistics’ report indicates that more Chinese went back to China, and the trend was rising since 2008. In 2017, the rate that Chinese students returned to China was 79%, over 74% compared to 1987. In 2018, nearly three-quarters of Silicon Valley tech employees were foreign citizens.

[Data Source: Chyxx “The Rate That Chinese Students Returned to China”]

Data Source: National Bureau of Statistics of China, Number of Overseas Students that go Back to China After Graduation

The trend of Chinese overseas students leaving the country after graduating is also reflected in the US visa statistics. In the year 2000, the ratio of student to temporary work visas for Chinese citizens in the US was around 1:2. Come 2015, the year when Chinese studying in the US peaked, there were 12 student visas for every temporary work visa issued to Chinese, a 1:12 ratio. In 2019, this number has dropped to 1:3 due purely to the shrinkage of student visa issuances.

Data source: US Department of State, US temporary work and study visas issued to Chinese nationals 2000-2019

Trends of the the overseas Chinese students after COVID-19

According to our mini-survey, there is evidence that COVID-19 has impacted the willingness of Chinese students to study and work abroad. However, most of students do still insist on their former plans. 22.6% participants changed their plans to study overseas, causing some impact on study-abroad market in China.

Data Source: Daxue consulting COVID-19 student impact survey: Chinese students abroad’s plans

Data Source: Daxue consulting COVID-19 student impact survey: Reasons Why Students Give up Studying Abroad/Working Abroad

Few Chinese students give up studying abroad

Although facing so many difficulties, only 2.6% of participants decide to abandon study abroad. Many students share that they cannot control the trend of the virus, but can keep positive to face difficulties. Maybe they will choose to extend the enrollment time of their programs but not give up studying abroad. Additionally, more Chinese students may study abroad in the future since numerous people didn’t get jobs this year.

More people lose interest in working overseas

Working overseas after graduation used to be popular, but now the situation is different. Daxue’s mini-survey shows that before the virus, 91.6% had at least a little interest in working abroad. However, after the outbreak of the Coronavirus, 20.3% expresses no interest in working abroad, increasing over 11.18% than before. One reason is that the virus causes a decrease in job opportunities. Some comments also show that many Chinese students feel disappointed in western countries’ poor handling of Coronavirus. Thus, more students realize that they prefer to work in China.

Data Source: Daxue consulting COVID-19 student impact survey: Participants’ Interests in Working Abroad before and after COVID-19

COVID-19 caused various worries for Chinese students studying abroad

The sudden virus disturbed people’s ordinary lives, especially students. Caught in the middle of this are students in foreign countries away from family, hence Chinese students studying abroad also met many difficulties.

Chinese students currently studying abroad were mostly concerned with finding a way home, and their healthcare.

Due to the outbreak of the Coronavirus around the world, almost all countries shut schools, forcing all students to take classes online. With flights grounded and schools closed, many graduates worry about whether they can go back home before their visas expire. Students staying abroad are also afraid that they cannot get guaranteed medical service if they get sick abroad.

Meanwhile, there is increased in discrimination against Asians in many western countries. Chinese students around the world are facing discrimination, in the form of slurs, attacks and avoidance, all while many Chinese abroad felt disappointed by how few westerners took the virus seriously. Meanwhile, the potential economic recession causes difficulties in seeking jobs. Various companies stop hiring and even laying off many employees. On May 18^th, The Mercury News reported that the Bay area laid off over 100,000 employees over eight weeks.

Data Source: Daxue consulting COVID-19 student impact survey: Worries of Chinese students abroad during COVID-19

Students who returned back to China also faced challenges

Some students returned to China, but they still met frustration. The pandemic influenced both their physical health and mental health. Students are hard to communicate with professors and classmates effectively because they are in different time zones. 77.65% of the mini-survey participants complain of a decrease in class quality. They also face degree certification issues when looking for jobs in China as they didn’t stay abroad to complete education. There is a requirement of students to study overseas for at least six months to get degree certification. Fortunately, now, MOE commits that their certification will not be influenced considering this unusual situation. Those students also are concerned that they cannot find ideal jobs as the current employment environment is poor in China.  44.7% of respondents say that they have lost an internship or job opportunity abroad during the pandemic.

 Data Source: Daxue consulting COVID-19 student impact survey: Worries of Chinese students who came back to China during COVID-19

Incoming Chinese students studying abroad were concerned about whether they can start their program on time

The Coronavirus outbreak also influences incoming Chinese students studying abroad. Firstly, applicants cannot take tests like TOEFL, IELTS, and GRE in China, resulting in their incapability in applying for programs. Thanks to many universities’ policies, many of them got these tests waived. What worries them now is whether they can get visas and start their programs on campus on time. Notably, Chinese students studying in the U.S. are concerned about whether they can have eligibility to look for internships there. Only after staying in the U.S. for at least nine months are they are eligible for curricular practical training, meaning they can have part time jobs and internships. The limitation may make international students lose opportunities if they are starting programs with online courses.

Regarding international students’ predicament, many schools issued policies to help. Many schools allow students to defer to have more time to apply for visas. For example, Case Western Reserve University offers two options for incoming students who are unable to arrive at school on time. One is that students can defer to Spring 2021. The other option is to take online courses that contain a 25% discount on tuition in Fall 2020. Then, students can attend classes on campus in Spring 2021.

Data Source: Daxue consulting COVID-19 student impact survey: Worries of COVID-19 of incoming Chinese overseas students

Chinese students who plan to study abroad in the future also hesitated to apply

Plenty of Chinese students apply for overseas schools every year. However, this year, they meet many dilemmas. They are supposed to take their required tests now, but test centers cancelled tests. Some students planned to do summer research in overseas schools, but are currently unable to get visas and fly to those countries. Also, many Chinese students who got offers this year decide to defer their enrollment. They would like to attend schools next year. Providing that schools keep the class sizes to ensure program quality, the admission size next year may shrink. Of the students who were hoping to study abroad in the future, nearly half are receiving less support from family and peers in studying abroad, and nearly a quarter say they are now less interested in studying abroad.

Data Source: Daxue consulting COVID-19 student impact survey: Worries of Chinese Students Who Plan to Study Abroad in the Future

Most students are still positive about their overseas plans

The sudden COVID-19 outbreak changed people’s lives, and many students are reconsidering their plans. However, life still goes on despite uncertainty. Though external factors like cancelled tests, grounded flights, and worried parents may seem discouraging in the short term, a majority of Chinese students maintain their plans to study abroad.  Despite that COVID-19 impacted Chinese students abroad in many ways, the long term trend is that less Chinese stay abroad after graduation, this may contribute to that trend.

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This article How COVID-19 impacts Chinese students abroad: Survey of 400 students is the first one to appear on Daxue Consulting - Market Research China.

China is the world’s largest outbound travel market in both the number of tourists and spending. Drivers of China’s rising outbound travel market include rising incomes, relaxed travel visas, increased global awareness, easier access to travel information online, and more international airlines. Outbound travel is, of course, the driver of Chinese duty-free consumption. This report explains how duty-free shops, both in China and overseas, can reach Chinese travelers.

[Data Source: chyxx.com, Chinese Duty-Free Consumption report by daxue consulting, growing number of Chinese outbound trips]

Popular destinations of Chinese outbound tourism

South-East Asian and East Asian countries are the first choice for Chinese outbound tourists. Top destinations are Thailand, Japan and Vietnam. The choice of these destinations is due to the geographical proximity to China and the ease of obtaining a visa.

[Data Source: Analysys& National Tourism Administration in different countries, Chinese Duty-Free Consumption report by daxue consulting, top outbound destinations for Chinese tourists]

Key trends of Chinese outbound tourism

The rapid growth of outbound tourists continues to drive Chinese duty-free consumption, but the per capita single-consumption amount has not changed significantly. Besides, due to the opening of new airline routes and the general increase in consumption capacity, non-first-tier cities have become major growth engines. In terms of age distribution of tourists, the growth is concentrated on those born between 1950 -1970, and 1990 -2010. More and more Chinese travelers are interested in both shopping and new experiences. Restaurants, museums and special performances are key projects for outbound travel.

Outbound tourism expenses

Due to the rising purchasing power of the middle classes, Chinese consumers’ spending on outbound tourism has been the world’s No.1 for 7 years and the number is still increasing. Regardless of tourism destinations, Chinese often spend a large part of total travel expense on cultural activities, accommodation, and shopping.

[Data Source: UNWTO, Chinese Duty-Free Consumption report by daxue consulting, China’s growing expenses on outbound tourism]

When asked about favorite shopping destinations during travel, more than 60% of Chinese outbound tourists prefer duty-free shops, as have assured quality at a cheaper price. Retailers around the world focus on Chinese customers because of their strong purchasing power. For example, in South Korea, Chinese duty-free consumption accounted for 83.4 billion RMB on duty free goods in 2018. This accounts for 73.4% of the total sales of duty-free stores in the nation.

[Data Source: McKinsey & Company, Nielsen, Chinese Duty-Free Consumption report by daxue consulting, duty-free stores are the most preferable channel for Chinese tourists]

Global duty-free sales

Due to an increasing number of travelers and rising spend per person, Asia Pacific region drives most the global growth of duty-free sales. In emerging countries such as India and China, Chinese middle-class consumers have the spending capacity to promote the growth of the duty-free industry in the global market.

[Data Source: Tax Free World Association, Generation research, Chinese Duty-Free Consumption report by daxue consulting, growth of duty-free sales in APAC]

Global duty-free sales in different channels

Due to the high volume of passengers, good maintenance and having a wide variety of brands and products, airport shops account for the largest amount of global sales. Downtown shops and border shops had realized significant increase in sales with the continuous expansion of shops in urban areas.

[Data Source: Statista, Chinese Duty-Free Consumption report by daxue consulting, airports take a lead as duty-free channel]

Inbound duty-free market in China

Due to policy support in recent years, China’s inbound duty-free shopping is now competing with South Korea’s dominant position. Offshore duty-free shops grew quickly during the last few years with the relaxation of restrictions and the increased number of product categories.

COVID-19 hits the Chinese tourism industry

The damage to the Chinese tourism industry because of outbreak is equivalent to a loss of 1 trillion RMB GDP. Many travel enterprises estimated the ongoing shutdown costs the industry about ¥17.8 billion every day.

[Data Source: Tai Media APP, Sina Finance, Chinese Duty-Free Consumption report by daxue consulting, decreasing domestic trips due to COVID-19]

Only 2% Chinese tourism related companies felt that they had not been significantly affected after the COVID-19 outbreak. Coronavirus impact on tourism in China especially visible among travel agents, hotels, and retailers (related to tourism). 

Chinese tourists contribute to the tourism industry in many countries. For instance, in 2018, Chinese tourists represent more than 70% total tourism in Hong Kong and Macao, similarly, more than 25% total tourism in Thailand, Japan, Vietnam and Korea. The impact on the economies of these countries will likely rebound in the second half of 2020.

[Data Source: Press reports; McKinsey Global Institute; Pengpai News, Chinese Duty-Free Consumption report by daxue consulting]

Coronavirus impact on tourism in China opened the opportunities for new online approach in this sphere. During the COVID-19 outbreak, many scenic areas and museums used live-stream to increase exposure and attract tourists, which attracted a lot of traffic. Even after the outbreak, the live-stream still can be watched by elderly and people with disabilities, and can be used as a preview before travel.

Short-term and long-term coronavirus impact on tourism in China

[Data Source: TravelDaily, Chinese Duty-Free Consumption report by daxue consulting]

Key Characteristics of Chinese Outbound Tourists

Chinese outbound tourists demographics

Those born in the 90s and 80s make the majority of overseas tourists. They are, on average, highly influenced by social media and they usually plan carefully to find value-for-money trip sand shopping. These Chinese tourists pay attention to both quality and price, they like customized activities and products offered by local stores.

[Data Source: Analysys & National Tourism Administration in different countries. China Tourism Academy, Chinese Duty-Free Consumption report by daxue consulting, majority of Chinese outbound tourists are young people]

Most Chinese outbound tourists come from tier-1 and tier-2 cities (provincial capital cities), over half are female. Most are also upper middle-income citizens who are willing to spend money while traveling to seek high-quality experiences.

[Data Source: Analysys & National Tourism Administration in different countries. China Tourism Academy, Chinese Duty-Free Consumption report by daxue consulting]

Chinese Duty-free consumption: The most popular duty-free goods

Skin care and beauty products are the most popular goods in duty-free shops. Women are the most important consumers, since the top selling products are women’s products. In addition, Chinese tourists tend to buy famous wine and wrist watches. Many Chinese tourists research duty-free products before purchase by reviewing online recommendations. Even after they arrive at their destinations, Chinese travelers will continue to research about duty-free goods. Brands can reach Chinese tourists by launching their own Chinese websites and apps. This allows consumers to shop anytime, anywhere, at their convenience.

Buying purpose of Chinese Duty-free consumption

When visiting duty-free stores, Chinese tourists of ten purchase duty-free goods for themselves or as gifts. A small percentage of Chinese duty-free consumption accounts for buying duty-free goods on behalf of others, such as Daigou, which is someone who buys goods from foreign markets and sells them back to consumers in mainland China. Many duty-free consumption behaviors among Chinese tourists are planned spending rather than impulse spending, they make plans based on the info from guides and comments on Chinese social media and travel websites.

[Data Source: PTRA, m1nd-set, Chinese Duty-Free Consumption report by daxue consulting]

Payment methods of Chinese overseas tourists

The payment methods of Chinese tourists vary by age and travel destinations. The post-70s and 80s Chinese tourists tend to use bank card payment during trips. For post-90s Chinese tourists, mobile payments make up a big proportion of their payment methods. Cash payment is used by all the generations of Chinese overseas travelers. They use bank cards more frequently in developed regions where credit cards are used more commonly, such as the USA. At destinations where tourists can easily connect to mainland China’s banking system, such as Hong Kong, Chinese tourists prefer mobile payment since it is convenient and a better way to keep track of spending.

[Data Source: Nielsen, Chinese Duty-Free Consumption report by daxue consulting]

How Can Brands Reach Chinese Outbound Tourists

Offer content that adapts to Chinese consumers

China outbound tourists generally choose to read travel recommendations before trips, and the most convenient way is to use popular media platforms that specialize in tourism and shopping, such as Weibo, WeChat public accounts, Mafengwo, etc. Those platforms normally provide accurate content by precisely targeting groups to permeate. Naturally, major brands choose to cooperate with these platforms to get them mention their products in articles in order to gain a high degree of attention.

Interact with consumers by delivering targeting brand campaigns

As competition intensifies among brands, companies nowadays innovate and differentiate themselves by delivering customer-centric campaigns in China, and experiences that give their target audience a compelling reason to become customers. As for duty-free brands, participating in similar duty-free shopping festivals can better interact with consumers and increase brand recognition in this field. For Chinese consumers, this kind of offline events make them have easy access to some foreign luxury brands that are not easily available in mainland China.

Provide more duty-free exclusives

Since Chinese outbound travelers purchase ahead of the Chinese New Year period and other holidays, travel retail exclusives are key purchase drivers at those time period. Also, “uniqueness of products or services” is one of the most impactful factors among duty-free shoppers. Duty-free stores offer some famous Chinese brands with lower price, compare with domestic stores, like Moutai. Because of the export tax rebate policy (exported goods pay less tax), Moutai in duty-free shops is much cheaper than the same product in domestic shops, which attracted many Chinese overseas tourists who like Baijiu (白酒).

[Data Source: daxue consulting, Special selection Moutai in duty-free market]

Cooperate with mobile e-commerce to reach traveling consumers

By cooperating with a mobile e-commerce platform like GlobuyX, duty-free brands can settle in mobile e-commerce to expand their promotion channels and connect with Chinese consumers. Globuy launched a WeChat mini-program that allows duty-free brands to exposure advertisements, duty-free goods discovery and pre-orders, WeChat menu links and exclusive benefits. Through this kind of cooperation, brands can reinforce their awareness and branding, achieve the purpose of communicating brand events and products with consumers and increase footprint and exposure online and offline in China.

[Data Source: GlobuyX mini-program, Chinese Duty-Free Consumption report by daxue consulting]

KOL Marketing to reach Chinese duty-free consumers

With the strong development of KOLs in China, consumers will now hold a wait-and-see attitude and buy products after KOLs. Therefore, some high-end duty-free brands choose to cooperate with KOL to increase their sales. According to Weibo data, the number of discussions on the Sanya Duty-Free’s Night in reached 30,000 times, and the number of likes exceeded 5,000. During Sanya’s Duty-Free Night, they successfully attracted a large number of fans by holding meet-and-greets with fans for major KOLs, including cosmetics, fashion, etc. When KOLs interacted with fans (take pictures, signature, etc.), they also recommended products to them.

How Duty-Free Shops Can Attract More Chinese Outbound Tourists

Global competitive landscape of travel retailers

The global duty-free and travel retail market is highly fragmented, and the market is dominated by non-Chinese brands.

Chinese Duty-free consumption: Business overview of Dufry

DufryAG, from Switzerland, is the world’s largest duty-free retailer with over 2,300 shops in 65 countries. The combination of organic growth and M&A enabled continuous high growth of Dufry.

[Data Source: The Global Travel Retailer 2019, Chinese Duty-Free Consumption report by daxue consulting]

Dufry’s digitalization strategy

Dufry aims to be present at every stage of the whole Chinese customer journey. By using digital and technology innovation, it is enabled to improve consumers’ shopping experience and provide personal tailored services. Travel loyalty program combining shopping and travel benefits.
 

After one year of membership, average purchase frequency increased 80% and the average spending increased 131%, comparing to the data collected one year before the membership. Dufry has virtual lipstick testing technology in the store, customers can change the color with a tap of the screen.  The strategy engages customers during in-store shopping experiences.

Dufry’s pre-order service for Chinese consumers

Dufry’s “reserve & collect” website allows consumers to pre-order duty-free goods online, then pick up and pay for Hong Kong’s offline stores. The website had 5,570 visits in November 2019. The service adopted Chinese consumers’ demands for convenience and preferential price.

Chinese Duty-free consumption: Overview of the China duty-free Group (CDFG)(中国免税集团)

As a state-owned duty-free company, China duty-free Group (CDFG) has realized high-speed development in recent years with powerful support from the Chinese government. The company has started to step into the global market, although it focuses on China’s domestic market.

[Data Source: chyxx.com, Chinese Duty-Free Consumption report by daxue consulting]

CDFG’s new travel retail strategy

Utilize digital technology to enhance connection with consumers. For example, in 2018, CDFG built a membership big data platform that helped the company have better understanding on their customers. Then, personalized service can be offered to ensure better shopping experience.

[Data Source: tfwa.com, Chinese Duty-Free Consumption report by daxue consulting]

CDFG’s strategic cooperation with Alibaba

In November 2018, CDFG officially built strategic partnership with Alibaba Group to expand the retail market in China. The cooperation focuses on areas including e-commerce, big data and logistics, aiming at establishing a new tourism ecosystem. The partnership allowed CDFG to use Alibaba’s digital tools and e-commerce platforms to optimize offline duty-free shopping and improve its logistic efficiency. According to the agreement, consumers can use Alipay in CDFG’s offline duty-free stores. As one of the merchants on ‘Fliggy buy’ (the global shopping channel on Fliggy, platform owned by Alibaba), CDFG can provide its products and content to attract Chinese consumers.
Powerful support from Alibaba group ensure CDFG better performance on digitalization and have access to more consumers’ information.

CDFG’s social media strategy

In addition to KOL collaborations, CDFG also leveraged live-stream promotions. The live-stream focused on skincare and cosmetics demonstrations. Also, it picked some popular brands to introduce price, size, discount, etc. by interviewing salespeople. Many Chinese consumers favor this kind of videos that share in-store experience. Audience members who share the video can have a chance by lucky draw to receive Guerlain’s perfume for free. This attracted much attention from Chinese customers and received 3.67 million views on social media.  

The upgraded strategies of duty-free retailers

As in the case with many offer industries, digitalization offers great opportunity to the duty-free and travel retail industry. For duty-free retailers, digital technologies are tools that can build a travel retail ecosystem. By working closely with brands, airports, airlines, etc., data can be integrated to obtain a complete view of the customer journey and buying behaviors. Therefore, duty-free shops and travel retailers are enabled to provide superior customer experience and establish loyalty programs. By integrating online and offline channels, travel retailers are able to further increase personalized communication with customers at home, during their whole journey, and when they are at the airport.

Chinese traveling shoppers usually learn about duty-free products from shopping related content and other people’s comments on Chinese social media platforms. Understanding and adapting to the needs of Chinese tourists is critical. Chinese consumers have different shopping habits from other countries’ tourists. Duty-free retailers should have content and promotion activities that precisely target different types of Chinese consumers.

Key Takeaways

China’s travelers are increasingly sophisticated. The Chinese millennials (born in the 80s and 90s) are sophisticated, price sensitive, and usually search on social media and travel websites before tourism and purchase. They seek high value, unique and exclusive products during their trips.

Experience is as important as price. Chinese overseas travelers value unique experiences. Innovative store design, engaging customer service, targeting emotional connections and flexible payment methods can bring better shopping experience to Chinese duty-free consumers.

Reach consumers ahead of time and optimize convenience. Most Chinese tourists plan their duty-free purchases ahead of time. Brands and duty-free shops promote products by allowing pre-orders, remote fulfillment and mobile payments. This helps Chinese consumers move purchases from being impulse to planned, and reduce ‘inconvenience’ as a barrier of shopping.

Attracting Chinese consumers by exclusive deals. Many Chinese tourists want to buy products they cannot find in China. Duty-free stores can drive demand by having a greater array of limited-edition products, value packs, and duty-free exclusives.

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Why Dove is the chocolate champion of China

Mars was one of the first chocolate companies to enter China in the 1980’s. Despite Nestle entering the market six years earlier, Mars still had a head start on producing Chocolate in China, setting up factory as early as 1993. Mars first sponsored the 1990 Asian Games in Beijing promoting M&M’s. However, M&M’s were perceived as children’s treats and not fit for adults. So Mars next launched its Dove Chocolate bar in China, a huge success which became the number one chocolate bar in China. In its early years, Mars had a variety of products which could be positioned in cities according to consumer’s familiarity with Chocolate, meaning cheaper products in lower-tier cities with a wider variety in cities like Shanghai. Dove now uses romantic ads to position itself as the ambassador of love, which is convenient in a culture that expresses love through gift giving.

[Source: Alibaba, Chinese Dove Chocolate gift boxes]

Chocolate consumption in China is much smaller than the rest of the world

The retail sale of chocolate in China does not perform as well as that of the western countries. According to Statista, the chocolate consumption volume in China only ranked ninth globally. Which is surprisingly low given the huge population in China. This is attributed to the fact that the per capita chocolate consumption in China is minimal, with only 0.1 kilograms being consumed per capita in 2017, which is an extremely tiny scale compared with Japan with a number of 1.2 kilos. A majority of Chinese have not made a habit of consuming chocolate. However it is becoming a trend in tier-1 cities, and the rest of the country is soon to follow. At the same time, despite having low chocolate consumption overall, due to the high population, China is the world’s second-largest sugar and chocolate market after the US.    

[Source: Euromonitor “Chocolate consumption in China is minimal given its huge population”]

Chocolate market in China has developed steadily and is in its mature stage

The retail selling price (RSP) represents the market value of chocolate products. It’s shown that sales of chocolate confectionery grew steadily up to 2014, and the market has plateaued out during the five years through 2018. The average unit price of chocolate confectionery increases by 5% in 2019. However, demand and prices are negatively correlated. Thus, the market volume continues to drop in 2019, while market value sees 4% current value growth in 2019. It’s projected that the chocolate market in China will see a 1% current value CAGR at constant 2019 prices.  

Changes in consumer behaviors are influential factors

The Chinese market is dynamic as changes in consumer behaviors are constantly evolving. Increased health-awareness and indulgence among younger consumers are proving influential in China’s chocolate market. At the same time, consumers are worried about excessive sugar intake and weight gain. That’s why we have seen many candy and chocolate companies introduce sugar-free or low calories products and increasingly more customers are turning to dark chocolate.

Moreover, younger consumers are fascinated by experience while making purchase decisions. It is said that these days, young consumers are more willing to pay for experience than products. This is exemplified by emerging brands such as Heytea (喜茶) and Hema (盒马鲜生) that gained popularity among the youth, for they create pleasurable indulgence experience in stores at affordable prices. In order to meet the demand of consumers, a synergistic effect of product innovation and experiential marketing is of importance for the chocolate market in China.       

The leading chocolate brands in China are all foreign 

In China, most of the leading chocolate brands in the market come from foreign countries. This is due to the limited cocoa output, the main raw material for chocolate manufacturing, as well as the popularity of Western and international food in China. Moreover, Chinese consumers generally perceive imported chocolate as premium ones. They are mostly American, as we can see, there are Mars and Hershey’s. There are also Swedish brands like Nestle and Lindt. There are no famous Chinese chocolate brands, but the little one is in partnership with big famous brands.  

[Source: Statista “Chocolate market in China is dominated by foreign brands”]

Mars Group dominates China’s chocolate market, possessing brands M&M, Dove, and Snickers. This privately-owned firm expands its market all over China, Dove, in particular, has a strong market presence as it consistently lines the impulse section of Chinese convenience stores. However, Mars’ market share is shrinking due to the competition with some imported brands such as Ferrero Rocher which targets young consumers in first-tier cities and grows very fast.

Mars Group retains the lead in China’s chocolate market

Mars Group entered China in the 1970s and began selling their sweets through distribution channels in 1983. Its brands, Dove, M&M’s and Snickers are worth 1 billion US dollars each just in China and have high brand awareness among the Chinese consumers. As the largest sponsor of the 11^th Asian Games, M&M had the advantage to act as one of the most popular candy brands in China. Thanks to their thorough market research and strategy, positioning and advertisement, these chocolate brands gradually interiorize, as DOVE is the symbol of love and happiness, Snickers advertises itself as the best snack for instant energy. Different flavors, mature distribution channels, and meticulous marketing segmentation, Mars has absolutely established its status in the market, with a 34% value share.

Mars’ brands Dove, M&M’s and Snickers worth 1 billion US dollar each just in China and have high brand awareness among the Chinese consumers.

Mars and Alibaba’s partnership

Furthermore, in 2016 Mars Group has made a partnership with Alibaba Group. Thanks to this partnership, Mars will benefit from its website Taobao used by 500 million people every month in 2018 and its platform Tmall, the second-largest e-commerce business in the world. The marketing services, media properties, mobile reach, big data and consumer insights of Alibaba will also considerably help Mars group to reach Chinese consumers and to be more efficient in China’s market chocolate.

For the prices, they are affordable so people can buy it easily. It’s not a premium chocolate brand as you can see its products in every store for a cheap price.

Ferrero Rocher moving from premium to affordable

In 1994, Ferrero Rocher started to sell its first products in China. It has implanted a subsidiary in 2007 and was well established at this time. Ferrero Rocher positioned itself as a premium chocolate brand in China. Due to its premium status, it is a popular choice to gift to friends and family, especially during the lunar new year. Additionally, 15% of Ferrero Rocher’s China sales can be attributed to weddings. For the price, with a box of 16 chocolates, it’s approximately 48RMB, which is down from the 60-90RMB price it held a few years ago. Ferrero Rocher is entering the mainstream chocolate market in China, which could be for the better.  

Nestlé, early China entrant

Nestlé’s first sales point was in Shanghai in 1908. Today, China has become the second largest market for Nestle thanks to constant adaptation and major innovation. It has around 53,000 employees just in China and has 34 factories. Nestle has made several partnerships with famous Chinese brands such as Totole, Yinly, and Hsu Fu Chi. More than 90% of its products sales in China are also produced there.

E-commerce has strongly increased during the last years in China. One of the major difficulties of companies is to be enough innovative to follow the new trends. Consequently, Nestlé has opened a special department which consists of developing e-commerce in China. We can say that Nestle has shown its adaptability face to evolution.

Hershey’s, a global leader with less market share in China

Hershey’s really started to implant itself in China when it bought 80% of Shanghai Golden Monkey in December 2013. Unfortunately, once acquired, the company sales started to decline and Hershey’s had to sell the Golden Monkey. Meanwhile, Hershey’s was not doing well either. In 2017, its sales fell by 17.3%. According to Mintel, Hershey’s lost its market share in 2016 because of the lack of innovation. They didn’t know how to adapt themselves with the e-commerce prospering. Hershey’s had 8.5% chocolate market share before 2016 and then dropped to 8.2%.

How Chinese consume chocolate

Women aged 15 to 39, in particular, working women, are the main target customer for chocolate as the demand for convenience food from this consumer group increases. Besides, children aged 5 to 14 years are also the major consumers of chocolate products, for children’s increasing pocket money supports higher demand for chocolate. This is proved by the finding that chocolate with toys was the fastest-growing category in China’s chocolate market in 2019 due to its specific targeting of children. If children become chocolate consumers, they are more likely to continue consuming it into adulthood, which is promising for the chocolate market in China.

Special sweet for special occasions

Chocolate is used for gifts or events but not consumed daily like in the west. In China, like in the west for Valentine’s Day, chocolate is perceived as a gift of love. During this period in China, 5 of the 10 top items sold online are chocolates, according to Alibaba. Chinese people are not into original or individual gifts. They prefer to choose quality and well-known brands that can be trusted. For example, last year, Dove partnered with leading technology company Xiaomi to co-create a Valentine’s Day campaign. The campaign leveraged Xiaomi’s AI technology while enhancing Dove’s position as the ‘ambassador of love’ in China’s chocolate market. The gifting ritual is not exclusive among lovers. Although Chinese consumers have not made a habit of consuming chocolate daily, they often give chocolate as gifts. No wonder boxed assortments are popular among Chinese consumers.

Prospects of the chocolate market in China: Demand for differentiation marketing strategy

As the market is getting saturated, the future of chocolate market in China demands brands to have a differentiated strategy to create distinctive ‘consumption moments’. For instance, Mars-owned chocolate brand Snickers markets the brand as the best snack to defeat hunger. Mondelez’s Milka brand entered the chocolate with toys category and co-branded with Oreo to produce chocolate with Oreo crumbs. Godiva benefited from the trend towards premiumization and set up stores in China to highlight the indulgent experience.

With all these brands striving for innovation and creativity in product and marketing, chocolate brands aiming to gain a competitive advantage in China have to understand their customers and constantly adapt to market dynamics. This can be achieved through the creation of new products and marketing strategy.          

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E-commerce and westernized lifestyles: The wine market in China is changing at a quick pace

Profile of wine consumers in China

Wine drinking habits in China are changing. In the old days, wine has played the role of a social indicator; it was considered expensive prestigious. Hence, the perception of wine has aroused the curiosity of its consumers through its hedonistic, self-expressive motivations. Traditionally a masculine drink and consumed in the north of the country, wine has succeeded in establishing itself and seducing a new clientele: women and young adults. On the other hand, the increase of the middle class has favored this growth with the increase in purchasing power. The consumer is willing to pay for a quality mid-range bottle without spending a fortune.

China will drive world wine consumption

The wine and spirits market in China is flourishing. High-end spirits, such as Moutai, Chivas, and Martell, are common guests on Chinese tables. However, Baijiu, the local spirit of China still dominates the Chinese spirits market. Despite significant progress over the past decade, regular wine consumption in China remains relatively low compared to countries such as France, Italy, Spain and even the United States. According to some studies, the market for daily alcohol consumption will increase in the coming years and it will become a much more common consumer product than it is currently in China.

According to the latest figures, there is no doubt about its consumption. The Chinese drink 1.46 billion liters of wine every year or almost one liter per capita, according to a study by Vinexpo, an organizer of international trade fairs. China ranks 5th in the world, behind the Americans, French, Italians and Germans. The Middle Kingdom imported nearly 690 million liters of foreign wines in 2018 against 750 in 2017. Their market share would reach 50% in volume today, i.e. one bottle out of two. According to forecasts, China will become the world’s second largest consumer by 2021 and will be the world’s most dynamic market with an estimated 18.5% increase in consumption. By 2030, wine drinking habits in China are projected to 10 liters on average per person against 7 in 2017.

[Source: Euromonitor, evolution of the wine and spirits market]

What are the consumer preferences of Chinese consumers?

Among the most popular wines are: fruity, flavored white and sparkling. Red wine is at the top of the best-selling due to cultural traditions and the health benefits associated with it. But according to experts, the Chinese thirst for white wines could increase in the coming years as the western lifestyle becomes more widespread. Drinking alcohol in China has moved into the mainstream culture, beyond just an activity at family gatherings and dinners .

In addition, drinking during the day and, especially drinking during official working hours, is uncommon in China.). It is to be mentioned that the after-work drinks with colleagues are becoming popular and familiar amongst Chinese urbanites, especially among young professional people. Among the selection criteria, Chinese distributors give priority to the origin over the label and the color of the beverage, which favors Bordeaux and Champagne in particular. Price comes second, followed by taste and designation of origin . The organic segment is becoming more and more prominent as a result of the growing environmental concerns.

E-commerce: a non-negligible distribution channel

The Middle Kingdom expresses a keen interest in viticulture, which obliges companies to adapt. As brands continue to appeal to Chinese consumers, specialist stores have become increasingly popular as famous international brands make their way through these retail venues into the Chinese marketplace. Indeed, new consumption habits have emerged thanks to digital technology. Simultaneously, many specialized shops have recently opened outside the main cities; the development of purchases on the Internet takes on a new dimension.

[Source: Vinexpo’s official website, breakdown of wine sales by volume, imported vs Chinese wines]

Online sales and the creation of platforms available on smartphones have accelerated this phenomenon. According to studies, the online wine market on platforms dominated by Tall (Alibaba) represent the second most used distribution channel behind hypermarkets. In China, 40% of the alcohol is sold online (d.ii). 50% of imported wines are resold in restaurants against 25% in specialist stores and 25% in retailers. Converserly, Chinese wines are sold mainly to retailers (50%), 45% to restaurants and 5% to specialized shops

The wine market in China shows promise

Chinese wine production

After having invested in French vineyards for a long time, European companies have a chance to invest in Chinese wine-growing. Due to the favorable farming climate in certain regions in northeastern China and the size of the agricultural areas, wine production in China is attractive because of its potential for growth. Investors such as LVHM (Moet and Chandon) and Domaines Barons Rothschild Lafite have invested heavily in China. Both firms are developing their own Chinese vineyards and tweaking flavours to best serve the Chinese market.

[Source: Bloomberg ‘Domaine de Barons de Rothschild in Shandong, China]

International events exported in China

China has become a strategic location for industry professional in their strategy to penetrate the Chinese market. After a great success at the Vinexpo exhibition in Shanghai in October 2019 dedicated to wine and spirits market, the economic capital is preparing to host Vinexpo again in October 2020, which attracted more than 5,000 visitors last year. Vinexpo and the e-commerce giant Alibaba joined forces to bring together market and online sales players to consolidate the market.  

Will the wine market in China put trading partners in the shade?

Nonetheless, China’s entry into viticultural production worries the largest producing-countries which depend on its market. The Middle Kingdom has the second largest vineyard in the world, capable of meeting both domestic and foreign demand. With the acquisition of the foreign know-how, China has succeeded in producing very-good-quality wines that the consumer could favor China’s cheaper quality wines to the detriment of European producers.

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This article China’s conquest of wine: Evolving wine drinking habits in China is the first one to appear on Daxue Consulting - Market Research China.

The hashtag about Kobe Bryant’s death (#科比去世#) on Sina Weibo had accumulated about 6.5 billion views by February 3^rd. The fatal coronavirus, which started in Wuhan has ravaged China since, had dominated the Chinese social media for the past week. However, Kobe Bryant’s death on Chinese social media still reached to the top of trending searches and temporarily buried discussion about the coronavirus.

[Source: Weibo ‘Kobe Bryant’s death’]

Kobe Bryant was the primary ambassador of the NBA in China

Some reviewers think Chinese reactions to Kobe Bryant’s death is even stronger and wider than in his home, the United States. Kobe Bryant has had a good reputation in China for a decade. In fact, Bryant’s jersey was the biggest-selling in China, eclipsing even Yao Ming‘s.

Kobe Bryant established the Kobe Bryant China Fund, which donated supplies and raised money for education to poor children with the support of the Chinese government. In the United States, the fund sponsored Chinese cultural programs, such as Mandarin-language lessons.

What are Chinese reactions to Kobe Bryant’s death on Weibo?

Bryant was also generous with his Chinese fans. Two days before his death, he posted a Lunar New Year greeting video on his Weibo, wishing a happy new year (“Xin Chun Kuai Le”) to his “dear friends in China” and thank you for their support, which has had 146,250 replies by February 3^rd. Most of the replies could not accept the fact of Bryant’s death.

[Source: Weibo ‘Kobe Bryant’s Lunar Year greeting video’]

Chinese reactions to Kobe Bryant’s death is continuing. Many young Kobe Bryant’s fans in China see Bryant’s death as the end of youth. Bryant is the permanent memory of youth of the post-80s and post-90s generation. For basketball fans who missed the era of Michael Jordan, Kobe Bryant was their Michael Jordan and their legend. Bryant is a distinct icon of the NBA. Kobe Bryant’s fans in China said that, even if there would be a second Kobe Bryant, they could never chase after youth.

Sean, who ranked the #8 rapper in China tweeted on Weibo, said: “‘The way to make art more accomplished is to make it disappear under the attention of everyone.’ I believe that your death is an act of God. Your life has brought us a lot of persistence and strength. It is time for you to take a good break in heaven. I will continue to chase my dreams like you once. R. I. P, my legend.” Sean’s Weibo is a representation of Chinese reactions to Kobe Bryant’s death and speaks the hearts of Kobe Bryant’s fans in China.

[Source: Weibo ‘Goodbye, my legend’]

What deserves to be mentioned is that even the Chinese state media, the Communist Party Mouthpiece People’s Daily honored Bryant: “His fearless spirit, both on the court and in real life, is worth cherishing. (不惧风雨的奋斗精神，不论是篮球还是生活，都值得铭记)”

[Source: Weibo ‘Kobe Bryant’s spirit is worth remembering’]

Chinese reactions to Kobe Bryant’s death spiked search engines

[Source: Baidu Index ‘search index of Kobe Bryant’]

Concerning the data of Baidu Index, it shows that Kobe Bryant related searching rose dramatically from January 27^th, straight after the death of Bryant, and the search index is still higher now than before the helicopter crash. Kobe Bryant’s death on Chinese social media is still being discussed. Chinese reactions to Kobe Bryant’s death are not only belonged to his fans in China but also people want to know him more and people who regret not knowing him earlier.

Chinese reactions to Kobe Bryant’s death on WeChat

[Source: Wechat Index ‘search index of Kobe Bryant’]

Data from WeChat Index, which is derived from the communication and information-sharing software WeChat in China, shows the similar search frequency trend of Kobe Bryant as the Baidu index. The news of Bryant’s death was explored in WeChat ‘moments’. Many Kobe Bryant’s fans in China posted friend moment on WeChat to mourn Bryant. Some fans even changed their avatars to a photo of Bryant and Bryant’s daughter, Gigi, like what Bryant’s wife, Vanessa did. The relevance of Kobe Bryant’s death on Chinese social media shows the true impact he had on Chinese society. There was also a trend of girls who are not interested in basketball also mourning Bryant for their boyfriends.

A Chinese question-answer forum (Zhihu): shows us what Chinese netizens think of Kobe Bryant and his death

[Source: Zhihu ‘what do you think of Kobe Bryant’]

On Zhihu, there are 27,097 followers and 2.6 million views of the discussions about what people really think about Kobe Bryant.

(This answer has about 30,000 upvotes)

(This answer has about 27,000 upvoters)

[Source: Zhihu ‘what do you think of Kobe Bryant’]

Kobe Bryant will be missed in China

The answers are unified. Chinese reactions to Kobe Bryant’s death on Zhihu are shocked and sad. Chinese NBA fans grew up with Bryant in the spotlight and thought would grow old with him as well. They believe Bryant would be forever young, and he would challenge God in heaven. They confirmed his honor, but what they cherished more was his spirit, diligence, enthusiasm and willpower.

Kobe Bryant’s death on was deafening. Bryant boosted popularity and reputation for the NBA in China. Kobe Bryant’s fans in China described him as a “real man” and a “real fighter”. They adore him, learn from him, and they will always miss him.

“The superstar went down, goodbye Kobe Bryant, goodbye our youth.”

R.I.P.

Learn more about the popularity of professional athletes in China through the licensed sports merchandise market report

This article Chinese reactions to Kobe Bryant’s death show influence has no boundaries is the first one to appear on Daxue Consulting - Market Research China.