Matthieu David interviews Lucas Englehardt, founder & CEO at xixilab. Hard work pays off. At least this was the case for Lucas’s first business which was food delivery. Using flyer marketing he’s managed to grow it into a sizable business and then eventually sell it to a German company for a great deal. Now Lucas Englehardt is focusing on the dental care market and has been successful in building xixilab into a profitable business in China, in a country that has a powerful public healthcare system. But what products does xixilab sell and what marketing strategies does it employ to generate revenue? Let’s find out in this new China Paradigm podcast.

• 0:15 Guest introduction
• 3:13 Story Time: Why xixilab?
• 7:21 Customizing and Remixing – how xixilab develop their product
• 11:03 How to maintain product quality while going through the approval process
• 13:00 Supply and Demand – how xixilab keeps its prices low
• 16:19 The state of the market – how privatized is teeth care in China
• 18:16 How does xixilab market directly to their consumers?
• 19:25 Teeth whitening and teeth straightening – which one is xixilab’s focus product?
• 22:34 More about xixilab’s company size and business
• 23:29 How did Lucas Englehardt raise money for his business?
• 25:24 China Accelerator – why would a seasoned entrepreneur benefit from it?
• 28:10 Social Media Marketing – China vs The West
• 29:54 About food delivery marketing – Lucas Englehardt’s second business
• 36:04 Making It Work – the vision behind Lucas Englehardt’s food delivery business
• 39:26 The state of the food delivery business in China right now
• 43:39 Two Different Approaches – Lucas Englehardt’s xixilab business vs his former food delivery business
• 47:39 What book has inspired Lucas Englehardt the most in his entrepreneurial journey?
• 49:50 What books about China would Lucas Englehardt recommend?
• 51:30 What productivity tool does Lucas Englehardt like best in China?
• 55:09 What failure and success has Lucas Englehardt witnessed in China?

 China Paradigm website

One relevant episode

We believe, that China, with 20% of the world population and as the second world economy, is impacting every single business, small to big. That is why it is a new paradigm. How does China impact your business is the ultimate question we will answer through those podcasts.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

This article China Paradigm 104: Running an oral care business in China after selling a 400-person food delivery company is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below:

Hello everyone, this is China paradigm where we Daxue Consulting interview season entrepreneurs in China.

Matthieu David: Hello everyone, I’m Matthieu David the founder of Daxue consulting and it’s China paradigm podcast and today I am with Carlotta Godio. You have been in China for 12 years but you have been linked with China for a much longer time because you studied the Chinese Language if my researches are good – in your own country in Italy. You are the co-founder of FLATMIND video production with your husband. So, for more than 12 years in video production in China. You have worked for famous companies like CISCO, Converse, BMW, McDonalds, in China. Video content marketing in China is big, everyone has created his own video with a phone. Everyone has published videos. That was not the case 20 or 30 years ago. 20 or 30 years ago there were only very few people who had published videos. Now, everyone has done that. Let’s discuss a few numbers about the video industry in China. I am pretty sure that growth is similar worldwide.

In China, people on average consume 3 to 4 hours of video daily, media and video content, digital media and, video. Very often when you are on a digital asset, you usually, at some point, consume video. What is very impressive is that among all the tools which are social e-commerce, social CRM, corporate Weibo, promotion with KOL’s, the item which has grown the most between 2017 and 2018 are short videos and live streaming. When I look at those numbers and when I look at Chinese digital video production, I was asking myself, do you really benefit from the rise of short videos? Do you really benefit from the rise of live streaming? Because those videos are of average quality or maybe uncertain quality, not that much edited. So, video marketing in China is everywhere now but maybe non-edited or very amateur videos. So, that’s a very interesting market. It’s moving, it’s moving fast, it’s changing, there’s a need for videos, and there is a lot of videos online now. Thanks for being with us today!

Carlotta Godio: Thank you for having me!

Matthieu David: You’re welcome! My first question is; could you describe a little bit about the size of your video production studio in China in terms of the number of clients, the number of production and what you do?

Carlotta Godio: So, we are a video production studio in China, as you said. We are in China since  2008 and we started with two people and a very basic set of video equipment, like laptops and handy cameras. Since that remote time where, as you said, Chinese digital video production was still something pretty new – not too many companies – we have been growing slowly but constantly and now we are a total of 15 people. We have our headquarter in Italy. Shanghai is the branch that is now formed by 8 people. So, we are still not a very big video production studio in China compared to typical Chinese digital video production where you have 50 or 70 employees. We decided to remain a boutique agency that can follow the client very closely and carefully to be able to give the best result on the Chinese digital video production they are requiring. We work on video, 360 degrees. We focus only on videos. Clients ask us for photos, for design, but we don’t do that. We decided to focus on video marketing in China, but still focusing on the video we have a big, big range of industries we work with any kind of videos as you said. Nowadays, video promotion in China can be used for so many reasons, for so many goals in a company. External communication, internal communication and so on. So, during these years we have been working with very popular corporate companies and brands like cisco, like. We have a couple of big names in the chemical and pharmaceutical fields like Bayer and Solvay and Dissona, and then we work on fashion. We have been shooting the social media campaign on the latest Prada fashion show that was done in Shanghai, for example, so you can easily realize how big our range of clients is. This is what we decided. not to focus only on fashion, not to focus only on industrial videos. We like to change and to be the most creative we can, so that’s us.

Matthieu David: I see, I understand what you offer to your clients. What I’d like to understand better is how you interact with them. What I see that you have a wide range of sectors you are working with, so as you say chemicals, fashion, etc. It’s difficult to find more different than chemicals and fashion. Very different industries. I believe that the pattern you have between the different clients is the way you interact with them, the way you try to understand them. Can you describe a typical process you follow for a video promotion in China? From the day they contact you with an idea or even an IFQ, something precise or unprecise. What are the different steps you go along with them? Is there a script you write with them? Is there a first version of the video and then second versions? What’s a typical way of working with you?

Carlotta Godio: So, the process starts of course with the very first meeting, when we learn to know each other and where the client usually already comes with an idea himself, but not always actually and that also our job as a video production studio in China. We sometimes have meetings where the client may have some budget left and doesn’t know for sure what they want for a video. It can happen that they are not really sure about what kind of video marketing in China they want and what the scope of the video is. So, the first phase is the relationship, when we start with the client. It is the most important for us because first of all, we need to understand very clearly what is in our client’s minds in terms of Chinese digital video production. If they don’t know exactly, we usually provide them a very detailed creative questionnaire, with a lot of questions like what’s your audience? Where do you want to promote your video? Where are you planning to stream your video later and what’s exactly the message you want to give with this video? Is the video going to be B2B or B2C, and many other questions? For example, what do you think is the highlight that you can provide to your clients and that your competitors don’t have? and so on.  So, there are many questions. Then, the second step will be for us to start studying our client and second also the competitors that are in the market to understand a little bit of the direction of the communication style and the Chinese digital video production that we are going to do. So, this is actually something that will require always, every time, quite some time for us, because as you said; if you work always in the same field, you study the competitors once and then you will know everything about that field, but because we are changing a lot, we always need to update ourselves on that particular field.

Then the pre-production is fundamental for our video agency in China. We spend and we try to spend the longest period of time on the pre-production. It’s very, very important that everybody is aligned on the message we have to deliver, especially because you have many people working together on the same Chinese digital video production, so everybody needs to be very well briefed on what’s going on. We go further with writing the first storyline – it is still not a storybook that is going to be the next step and it will be even more detailed. First of all, we give the storyline because most of the time if the client doesn’t have an idea in mind we will be able to provide a few options. So, we write down a little bit of the storytelling that we are going to develop to check if the client will like it. Then, there will be another meeting, I mean we will have a few meeting before. It’s quite funny because especially with very Chinese companies, most of the time, they are providing us the timeline and they want us to go on with the pre-production in like 3 days. Then, they give us one month for editing and for the post-production. It’s always difficult. We struggle a lot in trying to let them understand that it’s actually the opposite that we usually need to have. You will have the storyboard with images and text and text describing what will be in the video. So, of course, you have the images but they are just pictures or they are hand drawings. It’s not something that moves already. So, you will also have the text describing what’s going on and if the voice over is required then, we also start at this point to write down the voice over. It can also be sometimes that the client provides the voice over and then we will construct the Video content marketing in China according to the voice-over, of course.

So, we will have a few meetings before we will be ready to start with the video shooting to do video marketing in China for instance. When the shooting will really happen – everything is already very well prepared –, you need to think about production. Sometimes outfits are required, some models, etc. So, you will have them to study some of their voiceovers. They will need to speak and so, usually during the shooting day, not so many problems will come out and it’s the finest time of each project for our video production studio in China. Everything goes very smoothly, we have fun and there is a lot of energy with the crew, with the client and models or actors. So, it’s something very fascinating and, then, after the shooting, there is the post-production phase. As I mentioned before, that will start with the editing of what we call: “the first cut”. That is, of course, very rough editing of the video, allowing us to select what in our opinion is the best shot for video marketing in China and we share it with the client to see if they like our selection.

So, still, you have another time of interacting and communicating with the client, we, of course, cannot give them the video finished because it’s really difficult to understand the images that are already in mind, I mean, in the clients’ mind. That’s why we spend so much time in that and it happens that we need to go on with 2, 3, 4, or even 10 rounds of modifications to get the perfect Chinese digital video production. This happens sometimes mostly because in the big Chinese company structures, there are a lot of different levels of people and everyone wants to say his own opinion and they do not collect all the feedback at the same time. So, you need to be very patient because every time you do a modification on a video – it is not like Photoshop where it is done in 3 seconds –, you need a lot of computer renders and quite a long time. This is especially the case if we are talking about 2D and 3D animations that I didn’t mention before. It is also a very core business in our video production studio in China. We work a lot with the motion graphic part and for this part, it’s even more difficult to imagine or to make people imagine what will be the final product. So, in this case, we also provide an animatic, that shows the timing. So, it’s not a storyboard,  it is already a kind of animation but not the final one. Thus, you can also have a check on the timing and the images that we will move later.

Matthieu David: I see. You have already spotted some differences between video production in China and video production in the West. One of the differences between China and the West –at least with the Chinese clients – is that they feel that the creative part, the part of thinking about what to do should be short and that the part which is to actually produce the video should be long. That’s one of the differences you assessed. The other difference you mentioned is that the number of checks, the number of validations in a state-owned enterprise or big Chinese company is going to be much longer than with the interaction you have with international companies where they would gather and get the feedback internally. Would you have other differences you are assessing between China and the West? I’m thinking not only in terms of client relationships but also in the use of video marketing in China compared to Europe for instance? My understanding is that for instance, YouTube cannot be compared to Youku. Youku cannot be compared to YouTube exactly. WeChat cannot be compared with Facebook, because the videos on WeChat is much smaller, you have a smaller screen for the moments and so on, it’s different. So, I believe the use of videos is slightly or even usually really different between China and the West. What’s your feedback between Chinese clients and international clients?

Carlotta Godio: So, another big difference – before I go a bit deeper in this topic – that I noticed for so many years, is that for example in China they will select you like a video vendor only if you have already done the most similar video production in China compared to what they are requiring. For example, we have been working for Stella Luna – it is a high-quality leather shoe design company – and, after a few months, another brand that is called Dissona – a leather bags company – saw the video and they wanted exactly the same video style, so they didn’t even consider to call other video production studio in China

or asking for a pitch or something. In the Western world, or at least for what I know in Europe and mostly for Italy, it’s exactly the opposite. That means especially if you work with fashion brands, they don’t want to have the vendor who knows about you and also about your competitors.

Matthieu David: Okay, let me understand it better. Is it before they think of confidentiality and they would like to stick with one Chinese digital video production company or is it because they believe that they have to differentiate themselves and it needs to be very creative? The question is: international brands, foreign brands or foreign companies, how do they select a video production studio in China then? Because there are many other companies which have not worked with Stella Luna and other brands and you can find many others! So, how wold they select a Chinese digital video production company not only based on the fact that it has not worked with competitors? Is it on the creative brief? Is it on the relationship purely? What are the criteria? I understand for Chinese it is because you have the most relevant experience.

Carlotta Godio: Yes, I think, video production in China is still very new to corporate entities and then they feel more secure with this option. They tell you what they want and they know you can provide the same quality. For, Italians it can be that they don’t trust you because you could tell their competitors about some numbers or some – let’s say – secrets. Also, it can be a little bit about their creative side of the business, that they feel maybe you will work with their competitors brand and you will do something very similar and they want of course to be unique in their video creation, video content. So, it can be both I guess.

Matthieu David: I see, that’s what’s happening with big agencies. They cannot work with competitors, so it’s pretty common in the West indeed. About the use – yeah go ahead.

Carlotta Godio: Yeah, going back to your previous question, I think the big difference can be both the quantity and the quality of the video productions in China compared to Europe, let’s say – you can see a lot of videos also on Taobao for example. You know, the big range will be the Taobao video promotion in China where you have maybe, I don’t know, the cousin or the brother of the shop owner or the factory owner, taking a video of their sister modeling with the shirts or trousers or whatever they are selling. They do video marketing in China by mobile phone and they will upload it immediately without even knowing about post-production for example. So, you have a really huge quantity of videos going online.

Matthieu David: For people who may not live in China, Taobao is an online marketplace, but what people may not know – amazon is not built this way – is that it’s not only about pictures! You don’t only see pictures when you buy a product on Taobao, but you very often see a video which is showing you the product from different faces and how to use it and how the solidity is, how resistant it is if they think that you buy the product because of its resistant. So, very often, you will see video content marketing in China for products on Taobao.

Carlotta Godio: Yes, and this doesn’t happen for example in Europe where even if you are working on a very low budget video, still, the quality is going to be a little bit more professional. So this is the main difference I guess and looking back at all our working years and experience we got, we went through the very beginning of our video production studio in China, where many brands didn’t use videos, they didn’t even consider it. They, of course,  we are using photos for the biggest part of their campaigns or promotional campaign but no video content marketing in China. Then, the video started to be more known, more used and more needed. It was a very good time for us because …

Matthieu David: You’re talking about China or …?

Carlotta Godio: Yeah sorry, sorry because actually, I am much more in the Chinese market, I don’t really follow the Italian one. So, I am more related to what is happening in the video marketing in China.

Matthieu David: So, what are the clients asking for when it comes to video promotion in China? for which use? We understand that Taobao is not the right segment because it’s usually poor-quality videos. What does it do with the videos? They can put on TV but it’s maybe for very, very big campaigns, and a bit rarer. It could be for a corporate video to display at the entrance of the corporate offices. Or is it for special uses like Youku, WeChat, which are very China-specific, or live streaming or sells on different platforms?

Carlotta Godio: Well, recently, since you have these big needs of content for any kind of social media, when we plan a shooting we always try and help the client not to focus only on the one format video, but we try to create much more content to be used. You will have for example the vertical format for the Instagram stories. Of course, the first and most common is the 16×9 format that you can use wherever you want, like Facebook or Youku. Both Chinese or Western social media can be fine for this format, but we like to collect as I was mentioning, the 1×1 format, that is the Instagram and then the vertical one, that is for Instagram stories. So, the same video will be edited in a few different formats to adjust to each single social media. That’s also what Chinese digital video production is about.

Matthieu David: I see, that’s interesting.

Carlotta Godio: And then we also try to collect like behind the scene or backstage videos for our clients. This is still some content that people want to see, want to watch, want to be part of the process. So, some pictures of course and maybe some GIFs. We try to sell a package that is not only one video for one social media, and another difference is of course that nowadays, video is a must for any brand and any company. In fact, all these channels have a huge appetite for content, then you need to find the way – even if you don’t have a big budget –, you still must find a way to make some video promotion in China. So, our production goes from the very handy-cam to the very big production where you have like 10 -15 people from the crew and you have something like ¥10,000 cameras or even $10,000 cameras. So that’s the range. The cost of video production in China can vary greatly according to the expectations. For example, if some clients are requiring some case studies or market research in China, we go to the interviews and record them with their clients. For instance where the client will tell about what is good about the product and why they like it. So yes, you need to create the most possible to be able to place it all around and create the best video content marketing in China possible.

Matthieu David: Very interesting. I feel that this ability to plan, this ability to leverage content, video into short videos, gif, as you say backstage videos, is actually something which indeed requires planning, requires professional thinking and I feel that it is certainly something that your clients may be impressed by, or very attracted by when you talk about this.

On your website, there are many things you are mentioning and I like to go through a couple of things because I don’t know if it is mainstream for Chinese digital video production or just beginning of a new segment. You talk about 3D animation, you talk about videography – meaning with a drone I believe – you’re talking about documentaries and video art. Those 4 segments for me were a bit new to the video production in China. Especially documentaries, because we are not in a country where documentaries can be so easily shot, so easily broadcasted. We are still in a country where there’s censorship. Documentaries on the other hand – and that’s something I saw with SK2 – are actually done by companies in China. And fewer media, less Chinese digital video productions, or maybe state-owned could be, but it is a brand and state-owned enterprise. Would you mind sharing a bit more about what you do in terms of documentaries, IR videography, video art and, 2D or 3D animations which seems a bit new to me?

Carlotta Godio: Sure. So, talking about documentaries and video production in China, we never had such kind of experience. It happens sometimes that we came through their security, telling us to stop the shooting. I don’t know if you were talking about this. What we usually do, because in terms of asking permission to shoot, it will take many months and also most of the time you won’t have the permission. So, what we do is to use a kind of spy equipment that is going to be very small and used by a crew of max 2 or 3 people, so you don’t show too much, because nowadays a lot of privates, they already use photo cameras that are already quite professional. So people around won’t see the difference between a private person shooting for their own interest and the other that goes more in-depth to shoot documentaries.

Matthieu David: Is it often asked, to run a documentary to your video production studio in China? Is it asked by companies in China? Is it asked by state agencies? Is it asked by foreign players? Is it a segment which is sizeable?

Carlotta Godio: Actually we are not so specialized in that field and so it doesn’t happen so much that they ask us to shoot documentaries but I have to say that it is always for me the most fascinating field because you can mix shooting and traveling. For example, we have been doing a video recently for Pepsi and we had to travel. It was, of course, a lot of fun and it was amazing, but the content was not sensitive and so, I mean it’s not a deal in terms of problems happening on-field or something like this. And, yes, that’s mostly it.

Matthieu David: I’m asking you the question because I feel that in the West, companies are trying to explain when was the business started, more and more how they are engaging in environmentally friendly actions, how they are inclusive and for these, they build short documentaries about how they benefit the society, etc.  So, my question was: is it a request you’ve had in China? Do you see something happening with documentaries in the same ways as we see in the West?

Carlotta Godio: Oh yes, for example with McDonald’s we have been shooting a documentary where we were showing the life of left-behind children centers that McDonald sponsors. So, we have been spending two days with these kids at school and showing how they spend their normal daily life from morning to evening and this is an example of what you were mentioning before for the creation of video content marketing in China.

Matthieu David: Exactly. I see. Talking about videography with drones. For the first time, yesterday, I saw a drone in Shanghai. At the corner of the street.

Carlotta Godio: Come on! There are a lot of them yes!

Matthieu David: In the street?

Carlotta Godio: Well yes. Also, in the sky.

Matthieu David: But it is regulated, not on the  5^th floor or 10^th floor right?

Carlotta Godio: It’s regulated because the software you use to fly is very, very precise and can stop your drone on flying higher if you are for example close to the airport area. For the airport area, it is not 10 or 100 meters, but it is actually kilometers. So, it’s quite safe, I guess.

Matthieu David: I see, so you’re using drones even in the street in China to shoot video promotion in China. Actually, it’s pretty open, pretty unregulated and you can get pretty creative, right?

Carlotta Godio: It’s much, much more open than in Italy for example. There, you need to have a patent. Here you need to register yourself as the owner of the drone in China, that is the plate number. In case something bad happens. I don’t know, for instance, if you break a car, they will know who was the one owning the drone. Other than that, it’s quite free.

Matthieu David: Interesting, it’s really a surprise from China and I think we see that with every interview we do. China is seen from the West as a place where there are a lot of regulations, where there’s censorship, where it’s difficult to do things, to be creative, and actually what you’re telling us is that you can pretty well use a drone in the city to shoot a movie while I’m pretty sure you cannot do it in Paris or in New York, I’m pretty sure you will be asked to put it down or you need to ask the authorities for permits to do that. What is the trend you see in the new formats? We talked about documentaries that are potentially a new format, we talked about IR videography, we talked about 3D but are VR, virtual reality or AR, already something happening or is it still something which is for the future? What do you see as new trends happening now and trends which are going to happen – especially with the advancement of 5G? So, what do you see as currently the new formats used and the coming formats?

Carlotta Godio: Actually, we don’t deal with VR, but I know it’s a big trend at the moment in China. Of course everything changes, everything evolves and each brand always tries to impress with video marketing in China. So, there was a time, a few years ago, where we made a lot of video mappings for example. It is the kind of, like maybe you know, the projection on building facades.

Matthieu David: Oh, you did that?

Carlotta Godio: Yes, our video production studio in China can do that also. For example, we did it for an Oppo’s video promotion in China

during their presentation of a new phone. After video mapping now, the brands are struggling to surprise the audience so yes, VR is going to be used also because of the experience you can give through VR production. So, for sure it’s going very well but as I mentioned already, we don’t do it so I cannot go in detail on this topic.

Matthieu David: What are the next changes you see in the industry of video marketing in China? 5G may impact it because it may make the use of videos even easier, faster to download, to stream. Do you see new trends coming out – in products and mapping actually you mentioned on your website, I didn’t understand…

Carlotta Godio: Well in China, if you use Chinese platforms if you use WeChat, if you use Youku actually speed is already nuts, also a big problem in my opinion and also I guess what is going to happen in the future is that every single video will be shorter and shorter because people are not patient enough. You know you want to see a lot of videos; you don’t want to spend 10 minutes or even 5 minutes on a video.

Matthieu David: What’s the best format? What’s the best time for Chinese digital video productions

then, from your experience? Is it 20 seconds, is it more?

Carlotta Godio: Of course, it depends. It depends on the message, it depends on the social platform you want sticking to. For example, we do a lot of events video as well, or company introduction videos. Company introduction videos cannot be 20 seconds, because you don’t have the time to even start talking about the company and that would not be a good video content marketing in China. We always suggest sticking into the two minutes which is the maximum amount of time somebody can give you his or her attention. Imagine, you open a website of a company you’re interested in the product they are selling. How much time would you give to that video? Or, for example, you are visiting an exhibition and you have hundreds or thousands of booths with huge LED screens projecting the introduction videos of their companies. So, you walk around and maybe you stop for half a minute, you need to watch all of the videos but still, it gives you an impression that will stay. Something that we also struggle with is that most of the time when it comes to video promotion in China, the clients always try to stick the most of the content they can add in the same video. So, they ask for five, six, or sometimes even eight-minutes video thinking that it’s going to be the best for them. This is not correct because it’s not the time that you dedicate to a video. The video needs to leave you with a positive impression, like wow! Beautiful or wow! Very hi-tech company or wow! Very lifestyle product whatever. Then, if you really are interested in that product or in that brand, you will search online and you will read much more precise information for example on the website or anywhere on the web. That’s what we need to explain as a video production studio in China.

Matthieu David: Do you do some tests? Are you asked to do some tests on the video to see how people react? It’s my research background – the consulting – which is coming back here, but are you asked by your clients after the first versions to do some tests with the target audience?

Carlotta Godio: Yes, we do it. Actually, we do it quite early with the storyboard.

Matthieu David: Already.

Carlotta Godio: Yes, because. of course, after the shooting, if you realize that something is not clear or something didn’t work well, it’s already late in terms of finance and time management to go back and change. So, usually, we do it a bit earlier to be sure that during the shooting everything is already decided and that it will work.

Matthieu David: I see, I see. Last questions we have at the end of every interview about China and yourself in China. What kind of resources do you read or watch? Actually, maybe you watch as well some content about China to stay up to date.

Carlotta Godio: So, I read Jing Daily is my favorite and its mostly because it is related to fashion, design, and brands. Also, it is not really focused on China. I also like a lot AdWeek which is a website and it will come with the newsletter also related to media, advertising and technology and everything related to videos.

Matthieu David: Very short videos.

Carlotta Godio: Yes. It’s a video channel for art, culture, and fashion, beauty and so on. It’s very general but they have a very high level and nice creative videos. Then the boring one is Shanghai Business Review. For this one, I have the newsletter, but yeah, I check it sometimes.

Matthieu David: What books would you suggest for someone to read about China?

Carlotta Godio: Oh, about China? I suggest a book that is not business-related if you don’t mind. It’s called “Leaving Mother Lake” and was written by Erche Namu. So, this is part of my background because as you mentioned before, I studied Chinese culture at the university and I wrote my thesis on this minority that is a matrilineal society living in the south of Tibet. This book is the story of a girl that is originally from this place and who became a famous singer and so she tells about her world that is very different, very particular and then all the story of how she first went to sing and to study in the bigger cities of China.

Matthieu David: No, no I thought it was the end, but thank you very much for choosing a novel, most of the people we ask for books select business books but actually, I strongly believe you learn more about the country through novels than through business books.

Carlotta Godio: I really like the culture, what I love about the book is the cultural side, not even of the big cities but like the remote areas. It’s a bit of a different book.

Matthieu David: Something that would not necessarily be discussed in business and you won’t see them in business books or even in newspapers.

Two questions about China – two more questions. Peter Drucker the thinker of business and strategy for businesses said: “In order to understand innovation, in order to foresee innovation, what’s going to happen in the future, you need to see the failures, current failures or current success that you were not expecting.” I’ll give you an example, I was not expecting that Google would leave the Chinese marker or Uber would leave China or amazon would fail. On the opposite, I would not expect that people would spend so much time on Douyin, TikTok, sharing videos which for me seem a bit meaningless and a waste of time. And I think that shows the innovation for the future. What have you witnessed in terms of success in China? It could be an industry, a company, or whatever, that you were very surprised about their a failure or a success.

Carlotta Godio: You mean related to…

Matthieu David: Your observation, what have you observed in China which has been successful and you were very surprised how successful it could have been. Of course, for instance, people are surprised by WeChat payment, how digital payment can be big in China. That was a very big surprise!

Carlotta Godio: Okay, I got it. I’m amazed about how good taste is being developed between younger Chinese communities. Before I remember, many years ago, nobody had any logic or any taste in dressing. They were mixing a lot of different styles, colors, but not in a nice way. I was always surprised because, in the end, you could check the label, they were very big brands and expensive clothes but putting together, they didn’t give you the idea of elegance or trendiness. Now, I think they are the best in the world because they keep this freedom of not following. For example, in Italy, you have a lot of very small cities where people always follow the same trend, the same fashion. Here they mix Chinese, they mix Korean, they mix Japanese, they mix European styles and they are very beautiful and elegant and each one is very personal. So, I love it.

Matthieu David: Yeah, I feel the same. Generally speaking about design, a lot of people were saying that China was not a country for design or a country for creativity, that it was a country for production. The fact is, I see much more creativity here compared to Paris. It can be in a coffee shop, the streets, the retail…

Carlotta Godio: Art galleries.

Matthieu David: Art galleries! everything actually is as creative or even more creative and sophisticated as a city like Paris which is said to be very creative.

Carlotta Godio: Absolutely! The same if I compare Shanghai with Italy now, I feel the same.

Matthieu David: True. Thank you very much for your time. We learned a lot about video production in China!

Carlotta Godio: Thank you. I hope I was not too boring.

Matthieu David: A very interesting talk about the format videos, because I think there are a couple of things you said which is leveraging one video into different formats which is a different use of video like documentaries used by companies. It’s certainly showing as a road for a new type of media and I think it is going to grow bigger and bigger, especially when we think about 5G in China and how connected the world is going to be. Thank you very much again, I hope you enjoyed, I hope everyone enjoyed as well to listen to us and to learn more about video content marketing in China.

Carlotta Godio: You’re welcome!

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

This article Podcast transcript #89: How do companies produce marketing video content in China? is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below

Hello everyone, this is China Paradigm where we, Daxue Consulting, interview seasoned entrepreneurs in China.

Matthieu David: Hello everyone, I’m Matthieu David the founder of Daxue Consulting and its China paradigm podcast. Today, I am with another podcaster and the editor in chief of TechNode – John Artman. You’ve been in China for 12 years now and you have been with TechNode for more than three years – correct me if I’m wrong about the timing but that’s what I got from your LinkedIn. You are also managing two podcasts on the tech industry in China, maybe three if you have hidden one, but the two that I know are China Tech Talk and China Tech Investor. I’m a listener of them, I think they’re a great resource to understand the Tech scene in China and I’d like to talk about those two activities you have, being editor in chief of TechNode a tech media in China for westerners, and covering China tech through TechNode, but also through Chinese podcasts. Thanks for being with us today, and my first question is going to be a question you ask every person – what’s your China story?

John Artman: Yeah, so it’s a bit of a long one. So, I moved to China in 2008, previously I had visited here twice, so once in 2004 and once in 2006 with my university. I started studying Chinese in 2003. I went to a small public university in North Carolina called Appalachian State and we had a small Chinese department, but I was very lucky to have a great Chinese teacher who was visiting from Sojo University. She gave me my Chinese name and really inspired me to keep studying. So, anyway I graduated in 2006 with a degree in psychology and philosophy and a minor in Chinese language and then I worked for about 9 to 10 months at a mental health facility for children, which was very, very stressful and then – 

Matthieu David: In China?

John Artman: No, no in the US, near my university. And then didn’t know what I wanted to do, I guess I was trying to figure something else out. A bunch of my friends has moved to Nashville, Tennessee. They were artists, musicians and, writers so I was planning on moving there as well, but before I actually moved I had Christmas with my father’s side of the family, and my uncle used to live in Beijing, and he was like: “John, you could go and mess around with your friends whenever you want, or you could go to China, you already have the language skills. You can go to China and you can figure, and you can ride the wave”. I thought that it was a really good idea. So, he put me in touch with an English teaching school, like a private training center for adults. I was able to get a job there, came to China in 2008. I had a one-year contract to teach English and that was basically going to be it. Come here, teach English for a year and then probably come back and do something else.

It ended up that I met my now wife. We dated for a while, we have two kids now and I ended up working at China Radio International for about five and a half years, started off doing research and guest booking, then I worked in pre-recorded weekend shows lifestyle kind of silly stuff mostly, but then the last couple of years that I was there, I was very fortunate to help design and host a program called Round Table, and if you listen to China Radio International – Easy FM is the name of the station – in Beijing, it’s 91.5, that show is actually still going, more than 4 years after I’ve left. It’s a very popular format, but basically, it was a one-hour show where we discussed Chinese social issues, and so we used mostly Weibo as well as public forums for inspiration, news and things like that. Funny enough, TechNode and its discussions on Chinese tech company, both for that show as well for some technology reporting that I was doing, was actually a pretty big resource for understanding what was happening.

So, I was there for about five and a half years, reached the bamboo ceiling as it was – it’s a state-run media so there’s not much room for a foreigner to grow. Also, this was a few years after the present leadership gained power, so everything was becoming a bit more politically correct. And so, I worked in localization for a year and a half, mostly servicing Huawei and their translation services center. I helped to build a team of English native writers and editors to help Huawei – a Chinese tech company – with their technical documentation and then I saw that TechNode –this was maybe early 2016 – was looking for a managing editor. I had been out of tech and media for 2 years at that point and I was really kind of missing it. Being part of a public discussion, having impacts, helping people understand certain issues were really important for me and so I applied. My now-boss and CEO Lu Gang and I had conversations over the next few months, trying to feel each other out, get a sense of what we wanted and what the organization needed. So, I joined in November 2016. When I joined there was me and there were two other reporters, and now fast forward to almost the end of 2019, we’re 15 writers and editors, we launched a membership program called TechNode Squared, in May earlier this year. We’ve got about 250 members that want to understand the Tech scene in China right now and we’re just building up momentum and pushing forward. Really focusing on unbiased factual reporting about Chinese tech companies and Western tech companies in China and then also offering analysis and insights into what’s happening on the ground.

Matthieu David: How do you organize the editorial line of TechNode, as an editor in chief? I feel for tech media in China for westerners there’s a lot of hot news, breaking news, so I think it’s all the more difficult actually to have an editorial line. So, how do you combine those two aspects of getting a lot of breaking news, some companies need to raise money, some changes in technology and so on, on the other hand, to have an editorial line?

John Artman: Yeah so, I mean, I think that first of all, we have a very strong team of editors. So, we have a news editor, we have our senior editor who does a lot of different things and then we have our commentary editor. We have specific people in management and editing roles to make sure that things are getting done in kind of the way that we want them to. At the end of the day, reporters are responsible for not only covering news but then also making sure that they’re working on their feature stories. Then you know, we have three different newsletters right now as well, so we are all quite busy I would say, but at the end of the day, it’s really all about passion. We’re a team of I would say 60% local, 40% international and we’re all just very passionate about what we do. I think that TechNode is a very unique tech media in China for westerners. Where it is a media company,  it’s more than a media company and we get a lot of opportunities to talk with executives and people on the ground to really figure out what’s going on, and I think that’s really what it’s about, it’s about figuring out what’s going on and then writing a story to explain that to our readers.

Matthieu David: How do you pick the topics? When I listen to your tech industry podcasts in China – another part we’re going to talk about – I feel there are topics coming from time to time, more recurrent than others like the mention of ByteDance for instance, as a third player compared to Tencent and Alibaba. It seems that it is a topic you went into deeper than other topics. So how do you pick a topic? How do you assess that this is going to be the topic which is going to become important, the topic you want to go in-depth? How do you do that in an environment where you have so much news which can actually be weak signals and change actually the environment and also the noise, and that’s a difficulty?

John Artman: So yeah, that’s a very good question. I think that at the end of the day it’s really just about us – because a large part of our job is talking with people on the ground, talking with people who work with these Chinese tech companies or Western tech companies in China, talking with people who run their successful business in China on these companies platforms, analysts, investors. So, I think, it’s really just kind of about sounding things out. So, getting a sense of what’s going on and then kind of making some guesses about what we think is important. Also, we get a lot of signals as well from our readers as well as from our members, so we get direct feedback from both groups, but then also we have a very clear page view metrics, so a lot of it is like: “okay, so this story got a lot of page views, so this is something that we should follow up on”. I think that one good example of that actually is our coverage of automated vehicles and electric vehicles. We started reporting on that specific sector of the Chinese tech companies earlier this year, or should I say taking that sector seriously earlier this year. We just saw a lot of great feedback, people wanted more. There was a lot of demand for more interest, for more content about this industry and so, we went the whole hog. So, now we have two reporters. One reporter who covers it full time, one reporter who covers it part-time and then we have a whole newsletter dedicated to that industry. So, I think, as a product manager for a tech media in China for westerners, I’m looking at the following: who are our users? what do they need? Then trying to create products to fill that needs, but our product is of course content and different kinds of content. 

Matthieu David: Okay yeah. I know you have a link with TechCrunch and I know it certainly has been a source of inspiration, certainly also a comparison. How do you compare them with their work? How do you compare with managing a tech blog, a tech media now, a big one in the US, an influential one as well in China? How do you compare them? How different it is and how similar it is?

John Artman: Yeah so, I missed part of the introduction to that question but just to clarify, TechNode and TechCrunch are two separate companies. TechNode is the exclusive China partner of TechCrunch. We’ve been friends with them since 2011. We helped them to bring the first TechCrunch to disrupt if I remember correctly in 2012 to Beijing. Actually, I was working at CRI then and I went and that was very exciting. And we’ve been helping them to do TechCrunch events in China ever since then and we also manage TechCrunch.cn which is Chinese translations of their English content. 

So, what’s the difference? I think one of the biggest differences is that we’re a lot less bloggy than they are. You have to remember that both TechCrunch and TechNode have been through a lot of changes over the years. TechCrunch got started with Michael Arrington back in the early 2000s and he was just an investor, a guy in Silicon Valley, as you know there’s a lot of bullshit – excuse me my bad words – but there’s a lot of nonsense going on in Silicon Valley. No one’s writing about it. I am going to write about it and Arrington was never shied away from controversy. So, doing something like TechCrunch was a good way for him to amplify his own voice as well as agitate for change. Journalism is activism to a certain degree, but then you know, TechCrunch was eventually bought by AOL, now its owned by Verizon and so I think that really kind of what we’re seeing is different generations of writers. So, even TechCrunch started off as very bloggy, very personal, a lot of personal opinions and now you have a lot of young and intelligent writers, so they still insert some of their opinions but at the end of the day, it is in general much more professional than it used to be. For TechNode we had very similar beginnings as well. Lu Gang started writing actually. It was called Moby Node at the time; he was in the UK getting his Ph.D. in telecommunications engineering and he started writing just a personal blog about kind of whatever. A little bit of tech and then came back to China and saw that there were not really tech media in China for westerners. So, he started doing that as well, following the Michael Arrington TechCrunch model.

Now when I came on board, I had been out of media for a little while and part of my onboarding process was kind of taking the measurement of the landscape and you look at the kind of where we are now with media and where we were then when both TechCrunch and TechNode got started. I mean – when TechNode and TechCrunch got started, like the New York Times, Bloomberg, Reuters, they didn’t do a good job of having that content on the web. At the end of the day, people getting content from the internet wasn’t quite mainstream.

I think that looking at now, everyone’s online, everyone’s getting their news from everywhere, so I was kind of looking at that and say ok, number one, what’s our unique advantage? And how can we stay niche? I think that at the time only doing tech in China, it felt like it was going to be a bit of a challenge, that there wasn’t going to be that much interest, that it was too niche, but at the same time, when I was working in the radio, TechNode was an amazing resource. So, I wanted TechNode to stay as a great resource for people inside of China and outside of China who really wanted to understand the country and, of course, understand the tech scene in China. So, these days we are a type of content that’s competing with all other types of content and it’s not just we’re competing with other blogs or other websites who cover tech in China, but we’re also competing with Bloomberg and Reuters in the information. And so, ever since I’ve joined, my main focus has been on making sure that we are unique, that we are offering something that you really can’t find anywhere else, and if the content is similar well the formats going to be different, or the level of professionalism is going to be higher. So, that’s really kind of where our commitment to neutrality comes in.

It’s always very disappointing to see tech media in China for westerners that I respect publishing exaggerated stories about tech in China or maybe too simple stories is another way to put it. So, what we really strive to do is to stay neutral. We’re a Chinese company, I’m an American like I said – our team is 40% international, 60% local but at the end of the day we’re all committed to China in some way shape or form. I would say in terms of foreign staff, the shortest that any of our foreign staff has been here maybe like 4 or 5 years and all of our foreign staff, they’ve lived in China before they joined TechNode. So, we’re all very interested in telling the China story so that people can understand the tech scene in China, but we’re interested in telling it in a balanced way because we recognize that it’s a very complex country. The politics, the economics, the technology landscape is extremely complicated and so, rather than taking a side or aiming for what we call clickbait, we want to be neutral and just give you the facts and help you understand what’s actually happening for Western tech companies in China and Chinese tech companies. And so, we’ve kind of evolved from the bloggy style into something that’s much more professional.

Matthieu David: 50 people work in the company and this requires financing it. So, what’s your business model now? Recently, you started to adopt a subscription business model, but what are the different streams of revenue you have now?

John Artman: Yeah, so TechNode is a lot more than just our English media. So, we started off as English media but now we do events. For example, I was just in Shenzhen last week for the TechCrunch event down there. We do one of every single year. We also do the Asia Hardware Battle, which is, I think, pretty self-explanatory. We gather hardware start-ups from around the Asia region, all the way to the Middle East, in fact, so the Middle East all the way to Japan in terms of geography and then we find experts and judges to choose the best ones. So, we do the TechCrunch Asia hardware battle. We do something called China Bond, which is like an awards ceremony, kind of recognizing the best start-ups and the best innovations of the year. And then we also have our services teams. We have two teams focused on financial advisory, so one team based in Singapore, which does cross border financial advisory like helping Indian and southeast Asian start-ups get in touch with Chinese investors and then we have a domestic financial advisory service as well, that focuses on something very similar, matchmaking basically within the China market. So, all of this is to say that the English content isn’t very well monetized. We’re very much supported by the rest of the company and our membership as well as our annual Emerge event series is part of that monetization process and so ever since I’ve joined. I mean I’m pretty entrepreneurial so one of my main goals is to make TechNode English sustainable. Maybe not profitable but at least breaking even. 

Our membership and our Emerge events series are a large part of that and so right now, you go to our website and you sign up for our membership, it’s a $100 a year if you want to understand the tech scene in China. I think we give you three newsletters; we give you access to our community as well as access to some of the reports that we produce as well. That’s great value for money and it’s not always going to be a $100 per year. Then, with our Emerge events, we charge a relatively high-ticket price compared to a lot of tech events in China organized by other tech media in China for westerners for instance. We are pretty expensive, I mean not like super expensive but definitely higher than most people are used to paying, and that’s for a reason because, for a lot of companies, events are a marketing tool, it’s a way to raise awareness and kind of create an offline community. For us, it’s definitely about the offline community but the content is the producer and so we charge for that. So for example – in May we did panels on AI ethics in China, we did look at China to southeast Asia, blockchain regulation, corporate innovation and we had some pretty big names – from Walmart to WePay the thing is again, for the content offline you know, we take it very, very seriously and we just did a side stage at TechCrunch in Shenzhen. We did cloud gaming, mass customization so and we had some really great speakers there as well. We give time for the speakers to go in-depth, so a lot of times you’ll see panels or fireside chats, maybe 15 to 20 minutes and we aim for about 45 minutes for each panel. So, really kind of going in-depth and making sure that we’re covering the entire topic rather than just a small slice of it.

Matthieu David: You have not mentioned advertising which is the usual model of monetizing content. Is it because you don’t monetize through advertising or because it is too small, and you don’t worry about it?

John Artman: Yeah, so, on the one hand, compared to TechCrunch for example, our traffic is much lower than theirs. We’re very, very niche but at the same time, we have some really amazing SEO. We get some pretty decent engagement on social media, so our traffic is pretty good I think for our size. That being said, that is one of the big things that we’re going to be focusing on going into 2020 is increasing traffic.

So, on the one hand, it is a traffic problem, I mean like we don’t have millions and millions of people visiting us every month but at the same time it’s also my own kind of philosophy as well, I want the customer to be the end-user, so the reader is the customer, not a sponsor, or an ad network. Now, we do sponsored-content on our Tech media in China for westerners. That’s something that we’ve offered for quite a while. In that, we do projects with companies on a regular basis but it’s not something that we really enjoy doing or like really are very active in pursuing. My boss might not like me saying that but at the end of the day, I don’t like advertising. I have always been philosophically opposed to it. I think again that the people paying for a service or a product should be the ones actually using it and that’s why we launched our membership because this way we have a direct link to our readers and to our fans. $100 is not a lot of money if you want to understand the tech scene in China but it is a barrier, it’s a psychological barrier. So, people who choose to cross that barrier, they’re doing it because they want to invest, they want to invest in the production of news and information that’s relevant to them. We do have an ad network on our website that is a Carbon ad. So, it’s a very small network, they only have a selected group of advertisers that are on there and you’re not going to see random advertisements for your Kim Kardashian or alien babies and things like that on our website. Instead, you’ll see advertisements for things that are relevant to you, so for example, discounts on Adobe Creative Suite, discounts on Slack memberships and things like that. We’re very happy with Carbon. Carbon has been really, really good for us because again, it’s very relevant, highly targeted ads for our specific leadership.

Matthieu David: The other format you have is a China podcast. You don’t monetize the podcast if I understand because I’m not listening to any sponsor of the podcast when I listen to you. Could you share about why you started a China podcast and again, what’s the difference? I know you had actually an episode on that. What’s the difference between the West and China on podcasting, or podcasting from China to the West? You had an episode where you were mentioning that podcast is very different in China than to the West because China goes through platforms like Ximalaya and all those which wants to monetize and sell the courses whereas in the West it’s free. Would you mind sharing a bit of the reason why you started a China podcast and the differences you see with podcasting between the West and China?

John Artman: So, yeah, I’ve been podcasting for a long time. I did radio as I mentioned before and working at a radio station, I think there’s a lot of creativity left on the table. So, Charlie Custer, a long time China watcher – I think he might still have his website  Chinageeks.com – and I started a podcast called China Punks and it was just us kind of going through the news in China and giving our own young and let’s say “curmudgeon” kind of opinions on stuff. We never really promoted it and never really got huge, but it was a lot of fun to do. So, when I joined TechNode, I knew that I wanted to do a podcast, I knew that I wanted to do something in audio, because audio and conversations are just fun and I think that, for me at least, I learn through writing, I learn through talking. When you think in your head, you have the kind of swirling around, but it doesn’t really kind of come out until you’re actually trying to communicate them and having people ask you questions and getting feedback, I think, is extremely important for the creative process.

So, yeah when I joined TechNode I knew that I wanted to do a podcast on Chinese tech companies and Western tech companies in China but the talent that we had internally at the time was not quite appropriate for what I wanted to do. I was just kind of on the lookout for an appropriate co-host and I noticed that Matthew Brennon was very active on WeChat. He clearly was an influencer of sorts and also really knew his stuff, and so I reached out to him and I was like: “hey, I’m John, just joined TechNode, do you want to do a podcast?”, and funny enough, we didn’t actually meet face to face probably until about six months or even longer than that of doing the podcast. I originally pitched him to do a podcast only about WeChat, and so, every week we would do a podcast about what’s happening with WeChat, and funnily enough, he was like “no I don’t really want to do that, I don’t want to only focus on WeChat”. So, it evolved really and now we discuss many topics to help people understand the tech scene in China. So, we do some WeChat every once in a while, but we’re actually very broad when it comes to the topics that we cover. So, for example, recently we looked at the social credit system before that was private traffic, we’ve done asymmetry’s between US and China in AI, we’ve covered blockchain quite extensively although not recently and basically anything that we find to be interesting. And then, Elliot Zaagman who also is a contributor invited his friend James Hull with whom he is just having some really great conversations. So, Elliot is a writer and he also does some consulting in China and then James is a professional investor, he used to work for a state-run investment company and now he works for himself managing money for other clients. So, Elliot at one point pitched me: “hey, let’s do a podcast, James and I are having these great conversations, I want to make this a recording” and so we did and actually just the other day, it was their one-year anniversary. So, they’ve been going for about one year. Matt and I, it’s about 2.5 years now, I think.

Your other question was: “what’s the difference between podcasting in the West and in China?”. Well, the biggest difference is that podcasting in China isn’t really podcasting. Or at least the way that we think about it. So, podcasting in the West is very similar to talk radio, where you have one person talking for a long time. Dan Carlin is a great example, hardcore history or common sense, it’s just one guy talking for hours at a time. Or you have podcasts like this one, or the one that Matt and I do, which are one on one interviews or a three-person conversation about a topic, whereas podcasting in China is just audio content. So, you take a lot of the content that’s kind of popular in other formats. It’s only audio, so it could be storytelling, it could be in some case discussions but in most cases, it’s actually educational. People will pay money to basically take an audio course or to gain access to an audiobook, or something like that. It’s much less to do with talk radio, I mean again, there are some shows that are quite popular that are very similar to talk radio, but the bulk of the content that you find on platforms like Lizhi and Ximalaya are in fact more educational or can be storybooks or things like that. A lot of the audio content produced by Chinese people, you’re not going to find on the open web, so you’re not going to find it on Spotify, you’re not going to find it on Apple Podcasts, because you can’t monetize on Apple Podcasts or Spotify.

I mean you can have an advertiser, but advertising in the podcast space is quite difficult and for advertisers, the metrics are still very grey because there’s really no good platform that can give you a 100% saying: “okay; this is how many people actually listened this is how much they actually listened, this is how many people were actually exposed to your message”. In general, that kind of stuff is very difficult on the open podcasting, whereas in China, users will pay directly for the content, whether it’s a 100 RMB for a course, whether it’s like 1 RMB per audio file or something like that and so, it’s actually a lot easier to monetize and to make a business of Ximalaya and Lizhi.

That being said, we interviewed someone who is an early-stage VC based in Shenzhen a couple of months ago and he does three podcasts and all three of those are on Apple Podcast and Spotify, all in Chinese, which is interesting. I don’t think he’s making that much money from it, but then there is another podcast, a friend of mine runs a podcast called BBPark, it’s all in Chinese, it’s all for Chinese listeners, it’s available on the open web but they monetize in kind of KOL method where they actually engage in e-commerce. They have meetups that they’re able to monetize on, and they have a few other things that they do as well to monetize, but they’re very unique because they’ve been podcasting since 2011-2012 I think, so really kind of first-mover advantage, been around for a long time and it’s very, very talks radio-ish I would say. A lot of younger people who kind of grew up listening to the radio, they enjoy listening to it and its young people who host it, so they have a lot of really interesting personality, they’re able to connect directly with their listeners and create that community, but as I said, it’s very unique what they’re doing, whereas in most cases if you want to monetize it has to be on Ximalaya and Lizhi.

Matthieu David: That’s the thing actually, in China I feel that – I don’t know if you feel the same –  the words are similar since we use the word blog in China and in the West we use the word podcast in the West and in China, but actually the real product today is very different. Let’s say blog for instance. I had a very hard time explaining to a Chinese CEO of a big firm that we are getting a lot of attraction on our own blog at Daxue Consulting. He was thinking of a microblog like Weibo or twitter, right? He was not thinking about the long content or the long piece of article, where we were going in-depth, it was not in his mindset, and the ICP regulation, to get to the compulsory ICP you need to have your own website. It certainly slows down or even kills this other guide for a very long article on your own platform and you go on platforms, you don’t have your own website in China. That’s the same I believe for podcasts.

I’d like to talk about Chinese media censorship. Basically, there is Chinese media censorship when you publish content. You are publishing for the West, so, in some way, you are a bit outside of the radar, because you’re publishing in English, but on the other hand, you are in China. Is it a concern for you? Is it a concern to comply with Chinese media censorship regulations?

John Artman: Well, it’s funny because actually, I just learned a new metaphor for something like this. A Chinese tech investor did an interview about the blockchain and I think the interviewee Matthew Graham made a really interesting metaphor. Basically, the anaconda in the chandelier where there’s an anaconda in the chandelier and it’s not really doing much but you’re in a room full of other people and you don’t want to be the loudest person, right? You don’t want to be the one to draw a lot of attention to yourself, because you never know when the anaconda might strike, choosing you because you’re so obvious. So, I guess that’s a really interesting way of thinking about it. I mean, in general, we don’t touch on sensitive issues, in part because sensitive issues are actually outside of our editorial purview. We focus on technology in China, we focus on telling people what’s happening with Chinese companies and certainly, we do ruffle the feathers of the companies themselves, there have been many conversations with companies of various types, about our coverage of them, because that’s journalism.

We tell the truth as we see it or as best as we can about what’s happening inside these companies, why they’re making certain decisions and what their prospects are and so on and so forth. So, we definitely get a lot of pushback from the companies themselves, but I think to your point, we are trying to baste, we are in English, so we are I think to a certain degree under the radar, but at the same time we don’t touch on sensitive issues. I have worked at state media for five years and I think my sixth sense is pretty well developed when it comes to this kind of stuff. We basically stay away from all that stuff, and at the end of the day, it’s not to our detriment either, because again we just want to understand what’s happening, why it’s happening, so we just want to tell people the way it is, and I do think there are sometimes, like especially with my weekly column, that I write when I do have a bit more freedom to go in-depth and have my opinion, there are sometimes, I think, where it does get a bit close to some line, but at the end of the day, it’s still factual.

I’m not here to smear China, I’m not here to create fear mongering or anything like that. At the end of the day, it’s how can we best explain China to westerners through an appropriate Tech media in China for westerners, and I think that there is actually a middle ground to all of this. A lot of people in the West, they want to see China as a boogieman, as an enemy, but I don’t think that China is, and I think that if you want to understand the world, you have to take a dispassionate point of view and that’s certainly what we try to do. So, the short answer to your question is that we cover Chinese Tech companies as well as Western Tech companies in China. Tech is pretty neutral in general and then when it does come to potentially sensitive issues, we try our best to avoid those.

Matthieu David: I’d like to know a bit more about numbers, about how many – metrics about TechNode and your podcast, would you mind sharing a little bit of the audience you have? Who is reading to you? Who is listening to you? Which countries? How many people, if you can share some?

John Artman: Yeah so in 2018 we had about 4 million visitors to our website, 2019 is going to be more than that. When it comes to our podcast, we get about 7000–8000 downloads per episode for the talk. China tech investors are much more niche and so we get a little bit less than that, but in terms of audience, the largest group of people that consume our content is from the United States. So, consistently we see the largest group is from the US, and then the second largest group is from mainland China actually. Looking at kind of our analytics back end we can see that most of the people coming from China are actually English speakers, so maybe they’re European, maybe they’re from the UK, or from some other English speaking country and so when I say mainland China, I don’t mean Chinese readers. Most of them are going to be English speakers. And then I would say, so number 1 in the US, number 2 in mainland China, 3 and 4 are Singapore and Hong Kong. That kind of switch positions and then number 5 in India. We’re very international in terms of our audience but at the same time, the largest by far, I mean our website, for example, around 30% of our traffic comes from the United States, and that’s the largest of any other demographic. So definitely we can see there’s a huge amount of interest in Chinese tech companies from specifically the United States, but then at the same time, there’s also a pretty decent number from elsewhere around the world.

Matthieu David: We’re coming to the last 10 – 15 minutes and I’d like to have your view on some topics which are coming over and over in China about tech. The first one is, why are there so many failures with Western Tech companies in China? It could be a one-hour talk but I’d like your opinion and some ideas, Microsoft has been successful, but it seems to be a bit of an exception when you look deeper. Uber failed, Google for some reason failed in some way, even if they do export advertising, they’re selling ads for the Chinese companies, but they don’t operate anymore in China. So, one can see a lot of players failing in China for various reasons. Some are more political and licenses, others are purely business issues like Uber. So, what’s your take on it?

John Artman: Well, I think that first of all the Chinese market is extremely difficult. I think that even you talk to domestic entrepreneurs and most of the Chinese market is extremely difficult. It’s highly competitive and you have to move fast, extremely fast. If you’ve thought about it for more than a day, you’re probably moving too slowly. Also, for Western Tech companies in China, there is a lot of issues around localization. So, there’s the localization of the product and there’s the localization of the team. So, for example, I think Groupon is actually a really interesting example for Western Tech companies in China. So, I’m not sure if you remember, Groupon came in around 2010-2011 and all of the management in China was done by Americans. So, they flew Americans in and then tried to figure it out and it’s one of those things where the working culture is so different in China than it is in the West. China kind of lacks professional culture, and I don’t mean that in a pejorative sense. I don’t mean that there’s something wrong with it necessarily, but Chinese people don’t think of their jobs in kind of a professional way right, whereas I think that, at least in America, parents kind of trained their children to think this way.

My early bosses really kind of trained me to be this way, being conscientious, scheduling everything, making sure that everything is delivered on time, that quality issues are raised before delivery and things like that. Whereas in China, there’s a very different relationship between managers and employees. The manager is expected to be very hands-on, to kind of tell the employee exactly what to do and to give very extremely specific feedback. And so, I think as a Western manager it has been a bit difficult for me. If you’re a Western Tech companies in China trying to come into the market and you don’t find managers who know how to manage Chinese people, you’re never going to get off the ground. So, yeah, it’s the market, its company culture, and then yeah, localization of the product as well. Localization of the product, localization of the marketing and advertising in China, I think that if you look at the consumption landscape of China, people like games, they love discounts and they love their celebrities. So, these days, of course, it’s moving a lot more to online celebrities, but also it used to be traditional celebrities. I think that there’s a whole suite of different things, but then also it’s also government policy where it has been. I think they’re trying to make it easier actually, in the past couple of years where it’s easier to get a wholly foreign-owned enterprise license, but at the same time you have to know the right people, you have to know the right people to get the license, you have to know the right people to help you open markets, so finding the right managers, finding the right partners, finding the right team on the ground I think is what makes it so difficult for Western Tech companies in China.

Matthieu David: You already answered partly the question I want to ask next, which is: what are the common misconceptions about tech in China? From an observer’s point of view, when you talk to people from overseas and foreign tech.  Actually, in the West and in China, what do you feel are the main misconceptions about what’s happening in China in the tech industry? Do you find some – I’m sure there are many –, of them being podcasting, same way but it’s different, the way it’s practiced, blogging is the same but actually a very different way of doing it. Generally speaking, have you found some parts where there is a misconception on how to analyze the tech scene in China?

John Artman: Yeah, I mean I think that probably the biggest one is related to a podcast episode that we did recently on the social credit system. I think one of the biggest misconceptions is that the government wants to be involved in everyone’s life. 

I think that, historically, if we look back to the founding of the people’s republic of china and kind of the evolution of the communist system here, the government used to want to be very involved. The success of the state-led capitalist system that we see now has been in fact a part of that story. It’s been the story of the government slowly kind of receding from everyone’s personal life. It used to be that the people that you worked with are the people that you married, the people that you lived with and everything was very, very controlled on a business unit basis.

These days it doesn’t happen anymore, and so if we take a look at the social credit system, for example, number one – that system was more designed for a private company or companies, the state-owned and non-state owned. And then, over the last few years, there has been some more exploration of applying it to individuals, but a lot of it is still applying it to individuals in the context of business malpractice, of not repaying your debts. Not replying or complying with court orders and things related to business malpractice. So, if your company kills people because you created a low-quality product, then, well, your social credit score is going to be affected. So, no, the government doesn’t want to be involved in your life, I think that we are going to see probably more tracking of behavior, more analysis of behavior, but I think it’s going to be very similar to tech companies where at the end of the day the government is much more interested in aggregate behavior.

So, how are we enforcing those traffic laws? Are people following commercial laws? How are we enforcing those commercial laws and so it has much less to do with today this person bought oatmeal? Why does the government care about that? They really don’t. It’s much more about broader social management questions as well as broader economic management questions. I think for a westerner, for an American, who is raised to be very individualistic and to treasure freedom of speech and freedom of behavior, whatever that means, it’s very difficult to wrap your head around and ultimately accept. I’m not sure I’m comfortable with it. I can kind of explain it a little bit as I did before, but it still feels weird. Just because it feels weird to me doesn’t mean that it’s necessarily bad. I think that any technology is open to abuse, but at the same time what china is trying to do with a lot of their technological governance systems is really trying to solve age-old problems. There’s a phrase in Chinese that says: “the mountain is high, and the emperor is far away”. China has historically had amazing amounts of problems enforcing central government policies and even on a provincial level, and so this is just one way to leverage technology to actually implement real enforcement mechanisms and to actually create more trust in society as well as trust between individuals, trust between customer and a company. Then, also trust in the government that the government is actually going to be enforcing laws and regulations. 

Matthieu David: True, social credit I think is the example of misconception from the West in China and portraying something very new, and it’s not that new actually. My last question is concerning your industry and yourself, towards your peers. How do you stay up to date about China? How do you stay up to date about the news? You mentioned Weibo as a source of inspiration for a round table, I think. Now, what are the best sources you would recommend using, of course, TechNode and your podcast, but beyond that, what would you suggest using to be up to date on China?

John Artman: Well, I would say in the English language there are two main resources; one is Sinocism by Bill Bishop. So, Bill Bishop has been a China watcher for many, many years. He used to live in Beijing, so he does a daily newsletter. Well basically he aggregates and curates news stories about China and that’s one of the main ones that I read. Then there’s another one called SupChina. SupChina is much more focused on culture, whereas Bill Bishop is much more focused on politics and business I would say. SupChina is very focused on culture, but both are very, very good resources for keeping up to date. You spend 15-20 minutes reading these newsletters every morning and you’ll pretty much know what the big trends are, what are the big discussions going on and things like that. In Chinese, I would say there are a few resources when it comes to understanding the tech scene in China.

One is – I kind of hate saying it because it’s also our competitors in the tech media in China for Westerners industry– cn.technode.com. That’s obviously a resource, but then apart from that there’s 36Kr, so 36Kr.com – so that’s a technology media. PingWest is also one, their website is really kind of my main sources when it comes to tech news in Chinese. Hushio is a good one for kind of longer-form essays and it’s usually not just tech but it’s also business, and then, of course, there’s Tencent and others, and kind of like the news aggregators where they have huge teams, but they don’t actually do much original reporting. So, I would say those are my main sources of information about China.

Matthieu David: Thanks. Thanks very much for your time John. It was very, very interesting, and I hope you enjoyed it and hope everyone enjoyed it. Thanks for listening and thanks for participating.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

This article Podcast transcript #88: How do media cover trends and news around Chinese tech companies? is the first one to appear on Daxue Consulting - Market Research China.

By 2018, the impact of AI on advertising in China is impressive. The size of the mobile advertising market in China had exceeded 400 billion, with a growth rate of nearly 50%. With the landing of AI in the Chinese advertising market, the realization efficiency of mobile advertising is effectively improved, leading to further growth of the advertising market.

Changes in China’s advertising industry – AI and Big data as new focuses

With the continuous development of the marketing industry, the traditional advertising model is no longer adapt to this environment. Under the premise of fragmented user time, problems such as unsatisfactory advertising ROI, and unclear target users are constantly magnified. At the same time, the viral delivery mode and single content form will inevitably cause users to have fatigue, which will reduce the interest in advertising. Additionally, the efficiency of media resources and traffic management urgently needs to be improved. To improve the effect of customer collection, and transformation, AI advertising in China combines technology with marketing to provide more creative content based on substantial user characteristics. AI advertising in China is at the frontlines in AI adoption and innovation. The application of AI in China’s advertising industry can bring richer user labels, more advanced crowd expansion technology and optimized click transformation of the target population. This effectively improves the advertising experience for both the advertisers and the target market by reducing unwanted ads and unwanted targeted audience members.

Several marketing pain points of China’s traditional advertising industry are: the balance between the amount of ads and the user experience; user engagement; user retention; product differentiation in the Internet media.

Therefore, advertisers are focusing on the role of data and technology to effectively solve the pain points in digital marketing. Currently, the majority of advertising spend is digital, and AI advertising in China thrives on massive data sets available in China.

The place of AI in the Chinese advertising market is throughout the whole process

According to a survey about AI in China’s advertising industry by ibaogao, 60% of advertisers have used AI for content creation. Besides, the proportion of ‘user insight’ and ‘effect analysis’ both equal to  46.7%. Meanwhile, other application landings that the main attempted have been “strategy development” and “remarketing.”

Thus, three stages of advertising with applications of AI in China’s Advertising Industry can be highlighted: the ad creation stage, the ad serving stage, and the ad detection stage. These three advertising phases also correspond to three dimensions content management, traffic management, and data management, respectively.

AI in Ad creation

The stage of ad creation includes hot topic matching, creative mass production, creative screening tests, and material integration and adaptation. With the application of AI in Ad creation, advertisers can realize the standardized production of primary creative ideas and quickly enter the release process: realize the automatic output of AI for standardized copywriting, design elements, graphics,  text, etc.

An AI-powered system can create ads for advertisers. The function has appeared on some social media platforms. Based on the links you promoted, those platforms apply intelligent automation features to suggest which ads you should run.

AI-powered systems exists in some third-party tools that use smart algorithms to write ad copy for advertisers. These systems use two AI techniques: Natural Language Processing (NLP) and Natural Language Generation (NLG), to write ad copy in seconds.

Alimama is a Chinese data-powered marketing technology platform of Alibaba group. Based on the core business data and super media matrix of Ali Group, it empowers brands to provide products and marketing platforms with AI in Ad creation. In 2018, Alimama launched an AI copywriting product at Cannes international creative festival. It combined Taobao and Tmall’s massive amount of content with a natural language algorithm. Alimama has achieved three core competence-simulating human-written proposals, real-time online sample learning, and high writing quality. The production capacity of this AI product has reached an impressive 20,000 pieces per second.

AI in Ad serving

Ad serving is the process of advertisements disseminated to the audience. AI can help provide accurate communication and improve return on investment. AI in ad serving has three functions, namely scene identification, user identification and understanding, and advertiser identification.

Firstly, AI in Ad serving provides scene marketing power. This can be achieved by access more diverse data and modules, then providing richer user portraits for AI, to improve the accuracy of delivery and reduce budget waste.

Additionally, anti-cheating technology can identify the false traffic, thereby improving the transparency and authenticity of the delivery.

There are many combinations of AI in Ad serving forms. Among them, search ads and video ads are the most popular forms,  42.9% of advertisers choose them as the form of advertising.

Nowadays, video is the most popular ad carrier in China. Two mainstream video delivery methods include Big IP and DSP (Demand Side Platform). Big IP is now the core of brand advertising in the video field, such as TV series advertising. Big IP creates a lot of traffic, but the cost of sponsorship is extremely high. The other method is DSP, also known as the precision crowd. It sends ads directly to the audience who want to see them. DSP has a relatively high-cost performance for the accuracy of the crowd. However, it only has the dimension of the user label, so it cannot accurately locate the placement of ads.

Context marketing in China uses AI to achieve effective advertising

Context marketing refers to the marketing behavior of consumers’ psychological state or demand in a specific, realistic scene, so as to effectively achieve the goal of companies. A new form with AI advertising in China is called ASMP (AI Scene Marketing Platform) system launched by Video++. The system uses AI technology to structure the accumulated video content. It can complete brand exposure, product introduction, and one-click purchase functions in videos. In specific video scenarios, users’ emotional resonance will be stimulated to maximize the effective improvement of conversion rate and expand the income of advertisers.

Compared to traditional online video advertisements, AI scene advertisements can add about 40% of advertising space resources and an average increase of click rate of 2.5 times. It is estimated that the future AI scene advertisements can bring 31% value enhancement to the online video advertising industry.

Buying services while watching videos are provided by Chinese short video platforms. The charging mode includes charging commissions for e-commerce platforms, clicks, and collection of payments for the implementation of the project. AI advertising in China first took effect on short video platforms and live e-commerce broadcasts. However, applications and business models in the long video platform, OTT and other fields have yet to mature.

Brands can set different advertising forms to be embedded in video content according to their own communication needs. Applying AI to provide high-quality solutions for video content marketing and truly complete the seamless connection between brand and content.

The ASMP system links the user’s emotion with content relevance. It enables the audience to have emotional resonance after seeing the advertisement, which makes the advertisement more meaningful and effective. This is the best-case scenario for advertisers.                                                                            

AI in Ad detection

The main task of Ad detection is to test the advertising effects.AI in Ad detection can help to manage data and traffic. Three aspects of AI advertising in China can be applied: online public opinion detection and analysis, automatic analysis of we-media data, and filtering of malicious and false traffic.

For example, in the process of advertising review on websites. Poorly targeted advertisements often appear in search engines along with malicious behaviors that collect user information, leak user privacy and threaten user security. AI in Ad detection can not only realize efficient information screening at the entrance but also automatic verification and process all links of advertising promotion by aiming at the illegal words and the constantly changing argumentation words.

At present, Baidu has used Baidu brain to build a machine recognition model by extracting text and image information from the page. Through the treatment of variant words simulation, trademark knowledge base, and risk word mining, it severely cracked down on non-industry medical promotions and other violations.

How to partner with leading advertisement AI companies in China

AI in the Chinese advertising market: Consolidate developing advantages through ‘AI+’

The core of advertising effectiveness is user understanding. Therefore, data becomes a basic competitive barrier in AI+ Ad marketing, as it is the foundation of AI advertising in China to help gain consumers insight and analysis. In terms of companies engaged inAI in the Chinese advertising market, B2C content or service platforms have a natural advantage in user data. On the other hand, B2B’s AI companies and advertising companies need to enhance customer data access capabilities and rely on accumulated data to optimize delivery capabilities.

The impact of AI on advertising in China. With whom to collaborate?

Because of the impact of AI on advertising in China, Chinese mainstream Internet companies and advertising companies have long been deployed in AI+ marketing. They have used AI technology to enrich media assets and optimize delivery effects in the original development advantages. On the other hand, it is open to customers and empowers its capabilities directly to clients in the platform ecosystem.

Most SMEs adopt the ‘production + sales’ model, and the demand for marketing is relatively simple and flexible, such as in e-commerce operations, SEO, social media promotion, H5 production, offline event planning. In addition, with the impact of AI on advertising in China, many startups are keen to create new consumer experiences that will use new technologies such as AR, VR, and face recognition.

Large B2B companies in the Chinese advertising market generally have higher advertising and marketing budgets, and their demand is concentrated on promotional videos, offline meetings, and offline advertising. Such companies generally choose stable, high-quality suppliers, and production companies to collaborate.

Large B2C companies using AI in Chinese advertising are high-quality customers competing for advertising agencies and traditional media. The advertising budget is sufficient, and the creative, production and distribution channels are biased towards the high-end. With the rise of Internet media, a significant portion of the budget for such companies has moved online, while the need for user portraits, data, strategies, and real-time monitoring has increased. Their partners are generally 4A, local interactive marketing companies, media distribution tools developed by major technology companies and advertising technology companies, big data-based AI strategy providers, etc.

The following are the leading AI companies in the Chinese advertising market.

Author: Rita Fan

We have a whole wealth of AI research to share. You can see it all in our AI in China White Paper.

See our report on AI in China:

This article AI in China’s Advertising industry: How is AI changing the future of advertising |Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

This year’s Easter was on April 21st, 2019, and while it is not traditionally a holiday celebrated in China, it seems that Chinese netizens have taken an interest in the holiday as well. Easter is a Christian holiday, making it mostly celebrated in the Americas and Europe. The date is determined by the Sunday after the Spring Equinox and always falls between March 22 to April 25.

This Easter searches for “Easter” or “复活节” fuhuojie skyrocketed on various Chinese platforms, such as Baidu and WeChat. Official Chinese news site Xinhuanet published articles regarding festivals and celebrations of Easter in the United States, while Weibo, the Chinese counterpart for twitter seemed to also have taken an interest in events that have occurred in the West surrounding this holiday. Generally, while Chinese netizens have taken interest in Easter, they are unsure as to what the holiday really is, this expressing curiosity and a desire to be more educated on the topic. Daxue Consulting conducted an analysis of the Chinese media-scape of this Easter discussion.

Easter: A high search interest amongst Chinese platforms

Our analysis using Baidu Index showed that searches for the keyword “Easter” among Chinese netizens reached over 89 thousand searches on the day of Easter, April 21st. The previous week also demonstrated a high search interest, reaching over 76 thousand searches. On average, the search for “Easter” on Easter weekend increased 16-fold from the previous month of March, from an average of 5 thousand searches in March to 80 thousand on Easter weekend. We also see that interest has increased since last Easter, with 7 thousand more Baidu searches this year than last the previous.

On WeChat, the most widely used social media app in China, the search index result was much higher, reaching 31 million searches on the day of Easter. The search for written content on WeChat regarding Easter was mainly educational and informative. Headlines include, “Where did Easter Holiday Come from? (The process of Jesus’s Resurrection)”, “Easter, a Holiday filled with Colorful Eggs,” “The Life of Easter, Death, and Resurrection.” These articles mainly describe the origins of the holiday, how people should celebrate it, and what are some common rituals surrounding the holiday, such as Easter egg hunting.  

Chinese Netizens want to understand more about Easter

Not only are the Chinese searching about Easter, Results from Zhihu, show overwhelmingly that the Chinese are unsure as to what the Western holiday is, and wish to learn more about its origins. In addition to the questions, The answers and articles are often quite detailed, offering insightful and detailed explanations for the history and religious context. For instance, one article on the question-and-answer site specifically targets Chinese students studying abroad. It offers the students a background of Easter holiday, explaining that “it is considered by Christians to a symbol of life and hope.” One article on the question-and-answer site even shows instructions on how to make colorful bunnies out of paper art.  

Colorful eggs and bunnies … what do they mean?

Chinese netizens are particularly interested in the stories behind the colorful eggs and associated with Easter. The exact date and vacation days of Easter are the most popular related searches in the Baidu Word Index. However, the next most common searches related to Easter are those relating to “Easter eggs” or “Colorful eggs.” “彩蛋” caidan is the Chinese term for “Easter egg,” which literally translates to color “彩” and egg “蛋”. Chinese livestreaming site Douyu is was also a popular keyword associated with Easter, which could have a number of implications such as: Chinese netizens searching livestreams of Easter festival/celebrations from other countries, or popular Chinese live streamers celebrating the holiday. While it seems that more searches for Easter eggs occurred this year, there are many questions on Zhihu asking about both eggs and bunnies, and many articles answering the questions on that context.

Weibo: The Viral Violent Easter bunny

A video of a violent Easter bunny beating up a man in the streets became very popular on Weibo. The incident took place in the state of Florida in the United States, and the video was posted on multiple Weibo accounts. The man dressed as the Easter Bunny, named Antonie McDonald, saw a fight occur between a man and women when he came out of a bar in Orlando, Florida. He then claimed to “intervene” or “break up” the fight and proceeded to beat the man that was involved in the fight he saw.  The most widely seen video was the one posted to the official news Weibo account “头条新闻” or “Headline News.” As of April 26, the post has received 2350 likes, 598 comments, and 791 shares. There were a number of Weibo hashtags for posts related to this incident, including #Easterbunny, #bunnybeatupviolentman, #Easterbunnyfleeingfromfamine.

International Easter coverage on official Chinese news media

A search for “Easter” among Chinese netizens on the most popular official state media site, Xinhuanet, reveals 55new posted articles in 2019 related to the holiday. Coverage of Easter posts varies, from educational articles of how to celebrate Easter to also a number of international press coverage of Easter festivities from other countries. This year, Xinhuanet reported on events such as the New York Easter Parade and Bonnet Festival, the Sydney Royal Easter Show, and the 2019 White House Easter Egg Roll. With a number of posts on the White House Easter Egg Roll, it seems that the news site was especially interested in the White House Easter Roll. The posts were a main consisted of a photo reel of the event, most notably, Trump standing at the White House in the presence of an Easter Bunny.

The overall trend of interest towards Easter in Chinese Media

In general, Chinese citizens are unsure of what exactly is the meaning of Easter, and what the festivities are surrounding this Western holiday. However, our analysis demonstrates a high search for “easter” among Chinese netizens, as well as a desire to understand the religious origins, its history, and its rituals. Recent events during the holiday, such as the viral video of the violent Easter bunny and the White House Easter Egg Roll seemed to have garnered a lot of attention in Chinese media, thus increasing conversation of Easter among Chinese media this year. Overall, while a desire to understand the holiday, Easter eggs, and Easter bunnies seem to be experiencing an upward trend, general awareness of Easter among the Chinese public is still low. This is largely due to its Western religious origins, as China was not a traditionally religious country, nor does it have a large Christian population today.

Author: Julia Qi

Make the new economic China Paradigm positive leverage for your business

Do not hesitate to reach out to our project managers at dx@daxueconsulting.com to get all answers to your questions

This article What do Chinese Netizens say about Easter?|Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

Given that Paris is one of the favourite destinations of Chinese tourists and that visiting the Notre Dame Cathedral is among the top three favourite activities of Chinese tourists in France, it is understandable that the Notre Dame’s fire shocked Chinese Internet users. Daxue Consulting conducted a study to understand how Chinese media and Chinese netizens reacted to this tragic event.

The most discussed topic on Chinese social networks

Notre Dame de Paris’ incident quickly became the most talked about topic on Chinese social networks, reaching more than 830 million views and hundreds of thousands of comments and pictures posted in a matter of hours.

On April 16, the first morning after the fire of Notre Dame for the Chinese people, the number of searches on the keyword “Notre Dame de Paris fire” increased to over 1,800,000 on Baidu, according to the Chinese SEO tool Baidu Index.

A majority of Chinese people are saddened by the scale of the Notre Dame de Paris’ disaster

This Monday, million of Chinese expressed their shock at the fire and posted their own pictures of Notre Dame with the hashtag “Notre Dame de Paris and me” #NotreDamedeParisandme. The hashtag had been viewed more than 120 million times, and around 20,000 comments expressing sorrow were posted.

On Weibo, the Chinese social media with more than 340 million users, Chinese netizens have also expressed their grief and dismay about the Notre Dame tragedy. Most of them evoke cultural reasons: more than 800 years of history, an architectural treasure, works of literature and cinema, etc. 

Many Chinese Internet users then referred to the novel by the French writer Victor Hugo, The Hunchback of Notre Dame (Notre Dame de Paris in French). The novel, well known and loved in China, is even considered “a must-read masterpiece for middle school students.” The characters of Quasimodo and Esmeralda have given the Chinese people a better understanding of French culture at a time when many films and operas have been made based on the story in China.

On Chinese e-commerce platforms, there is even a craze for works related to Notre Dame Cathedral. For example, on three different versions of Victor Hugo’s novel, The Hunchback of Notre-Dame, translated into Chinese on Tmall/Taobao shops we can see that in one night, the number of sales exploded from a few dozen the day before the fire to almost 2000 sales in just a few hours (see chart below).

For this younger generation, which has often traveled overseas, the loss of such a monument ”is not only the loss of France but also the humanity” as KOL Yingguo Baojie wrote a few hours after the incident, with more than 30,000 interactions:

A minority of Chinese Internet users remain doubtful about the sense of urgency in Paris

Questioning the effectiveness of emergency measures and origin of the Notre Dame fire

Since the cause of the Notre Dame fire was accidental and stemmed from work that had been undertaken by France, some Chinese Internet users concluded on Wechat, the Chinese giant which amounted 1.0825 billion monthly active users last year, that this was maybe a lack of professionalism and rigor from France.

Some Chinese netizens are so disappointed to see the Notre Dame cathedral destroyed that they question the preventive measures put in place by the French government around the Notre Dame and the responsiveness of the Parisian fire brigade. According to some Chinese tourists on the scene, it took time for the firefighters to respond and deploy their full power:

Notre Dame fire is being compared to the burning of Yuanming garden in 1860

A series of comments comparing the fire in Notre Dame to the one in Beijing’s Old Summer Palace were posted on Chinese social networks these recent days.

Yuanming Garden (圆明园), also known as the Old Summer Palace, is a historic site in Beijing which was known for its extensive collection of gardens, building architecture and numerous art and historical treasures. However, in 1860, during the second opium war, it was extensively looted and destroyed by English and French troops. English troops continued burning the gardens for three days until the complete destruction of the palace. Many exquisite artworks were stolen at the time, including porcelain, jade, silk, gold… 

This painful part of China’s history was, therefore, at the center of online discussions after the incident happened in Paris. On Zhihu, a Chinese question-and-answer social network, the top question was ‘‘How do you view the Paris Notre Dame fire’s aftermath? Many netizens are comparing it to Yuanming Garden’’. And here’s one of the top answers:

Some netizens explain that they can understand the pain felt by the French, but that the Beijing incident was much more serious. In this debate, a minority of Chinese users even went so far as to say they will never give money to rebuild the Notre Dame cathedral, as France plans to ask, but they would prefer to ask French people to give money to rebuild Yuanming Garden.

On Baidu, we also find that the peak of searches on the keyword ‘Notre Dame de Paris’ and on ‘Yuan Ming Garden’ match, showing the interest of the Chinese in this debate.

According to some of them, what happened in France is a matter of karma. This means that it is because of the intentions of the French troops who looted and burned Yuan Ming garden in 1860 that the cathedral is now burning. These rather extreme remarks rejoicing in Notre Dame’s fate have fuelled an endless debate on Chinese social networks.

Despite everything, a large majority of the Chinese netizens are indignant about this debate and feel a great deal of sympathy for the French, knowing how emblematic the cathedral is. 

How do Chinese media report on the Notre Dame de Paris’ fire?

Highlighting the strong China-France friendship

If we look at several articles in China’s national media, one element stands out: the long-standing relationship between France and China.

‘’Given our country’s longstanding commitment to the preservation of world cultural heritage, given our countrymen’s special enthusiasm for French culture, as well as the historical China-France friendship, it would be great if we could see Chinese participation in the upcoming restoration projects.’’

China Daily Global edition, ‘’Grief over Notre Dame shows cultural heritage global treasures’’, 04.1

All the media also took up the Chinese President’s announcement expressing his condolences to the French, showing the proximity between the two peoples.

Growing awareness: the Notre Dame’s fire as a warning for China’s heritage

The destruction of an architectural treasure has also made the Chinese realize how important it is to preserve their heritage. The Chinese newspaper People’s Daily, therefore, published an article on the fire prevention measures applied to the Forbidden City. The aim was to make sure that they are effective, especially since this ancient architecture is mainly built of wood.

‘‘Fire protection measures for the Forbidden City’’ was on top search on Monday.

Many Chinese media have thus relaunched the debate on the protection of Chinese architecture, reminding everyone how fragile history is.

Hou Weidong, a researcher from the Chinese Academy of Cultural Heritage told the online Chinese media Shine that “Exchange of ideas, technology, and experience on protecting cultural relics between countries and regions should be strengthened to further protect the cultural heritage of all humankind”.

Although opinions differ somewhat on Chinese social networks, the dramatic incident that took place at Notre Dame de Paris is a reminder of how much the Chinese are attached to French and European culture. Many of them even said they were willing to give money to rebuild part of the cathedral within the next five years.

Author: Steffi Noël

Monitoring social media trends is an excellent way to understand Chinese consumers and to gain strategic insights. If you want to learn more about the Chinese social media landscape or to run a survey in China, please contact our team directly at dx@daxueconsulting.com.

This article Fire at Notre Dame cathedral in Paris: What do Chinese netizens say about the fire in Notre Dame? | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

Peppa Pig is a popular cartoon series from the UK, which has been screening in China since late 2015. Recently, a 5-minute video titled “What is Peppa” (啥是佩奇，Sha Shi Peiqi?, Peiqi is the Chinese translation for Peppa) caused a huge response among Chinese netizens. This video has received an enormous number of views and the hashtag “WhatIsPeppa” on Sina Weibo has got over 1.6 billion views, in which over 1 million Chinese netizens have participated in the discussion.

Actually, “What is Peppa” is a promo video for the upcoming movie “Peppa Pig celebrates Chinese New Year”. The movie is co-produced by Alibaba and Canadian media company Entertainment One. It will hit Chinese screens on Feb. 5, 2019, the first day of the Chinese Lunar New Year.

Screenshots: movie promo video posted by Weibo “Peppa Pig celebrates Chinese New Year” official account on Jan 17th, 2019 has received over 74M views so far (left); the video posted on the same day on WeChat through video sharing platform Migu (咪咕视频) has received over 64M views so far.

In this video, a grandson tells his grandpa he wants ‘Peiqi’ (Peppa) for the New Years. The grandpa utilizes all resources he has available in his rural villiage to figure out what ‘Peiqi’ means, creating a hilarious narrative on the differences between rural and urban China. In the end, he surprises his grandson with a hand-made Peppa modified from a wind blower.

This video evoked deep emotion in many Chinese; most of the scenes were shot in a village showing the daily life of grandparents who remain in their rural homes, to which many Chinese people can relate. The grandpa, who can be described as old-fashioned and stubborn, reminds many Chinese audiences their own grandparents living in rural areas. This character is also lonely and expresses a desire to see his family more often.

The Lunar New Year, also called Spring Festival, is the most important traditional holiday in Chinese culture. It signifies happy family reunions, no matter how far the family members are living nowadays, people overcome distance and difficulties to return to their hometowns. We can feel the grandpa’s heartbreak when he thought his family won’t visit him during the Spring Festival. This episode also makes all the spectators worry as it touches a very sensitive topic. In the last scene when the grandpa finally meets his family and takes out the special gift he made for the grandson, many Chinese netizens claim to almost burst into tears.

As China is getting more and more urbanized and the pace of life increasing, Chinese people are even more appreciative of their traditional festivals. When a massive amount of Chinese people from rural parts of the country are leaving their homes and elderly behind to pursue a better life, they are faced mixed feelings such as homesick, loneliness and sometimes even guilt.

Screenshot of “Peppa Pig celebrates Chinese New Year” movie trailer

This promo movie mixed the sentimental element with many humorous details, by following the grandpa’s journey of finding out what Peppa is, the story successfully caught Chinese audiences’ hearts. Premiering just before the “Year of the Pig” in China, Alibaba Pictures and Canadian media group Entertainment One want to draw young families to the theater as a way of celebrating the national holiday. From the responses on Chinese social media we have seen, the strategy is going to work.

Peppa Pig celebrates Chinese New Year” movie poster

Peppa Pig is not only loved by Chinese children and their parents since 2017 this little pink piggy has caused many buzz topics in China. There have been fan videos online of Peppa talking different Chinese dialects as well as various fan-made Peppa Pig chat stickers and emojis. The most sensational issue about Peppa is that the wildly popular children’s character was banned from Douyin, a video sharing platform in China, which deleted more than 30,000 clips. The hashtag #PeppaPig was also banned. The reason why is that Peppa was jokingly cast as a shehuiren (社会人 “society people”, a slang term for lowlifes and gangsters).

Localization tips in the Chinese market

For international brands, it is extremely important to understand the Chinese culture to be able to engage with them. Like Connie Chan, a partner at venture firm Andreessen Horowitz, said in the Twitter thread: “This Peppa trailer reflects a deep, deep understanding of Chinese culture: family duty, generational love, rural cities, community, Chinese New Year.” She announced. “Touching the heartstrings through a deep cultural connection is the most powerful kind of localization and marketing!”

Screenshot https://twitter.com/conniechan

Author: Chencen Zhu

Daxue Consulting helps you get the best of the Chinese market

Do not hesitate to reach out our project managers at dx@daxueconsulting.com to get all answers to your questions.

This article How Peppa Pig went from banned to viral right before the year of a pig | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

All eyes in China are now on ofo, a Beijing-based bicycle sharing company founded in 2014. The dockless system uses its smartphone app to unlock and locate nearby bicycles. In 2017, it had deployed over 10 million bicycles in 250 cities and 20 countries. As a pioneer of the bicycle sharing system in China, ofo has received a lot of honor; its business model was praised as one of the “Four Great New Inventions in Modern China” by Chinese state media. This time, ofo is again in the spotlight, but for a totally different reason. Chinese people are spectating ofo’s struggle for survival. Besides expressing anger, disappointment and sympathy, many Chinese consumers are further questioning issues like the citizen quality, city management and moreover, the responsibilities of the authorities.

What do Chinese netizens say about ofo?

A WeChat account posted the video [No Place to Place] and obtained over 100K views and caused a heated discussion in the comment session:

Comments on the video [No Place to Place]

• Shared bicycles died from low-quality citizens. (1858 likes)
• Reply by author: It also failed in developed countries. (over 4K likes)
• I don’t really understand why so many bicycles ended up in the dump. People’s hearts are so vicious, so much sabotage. (1874 likes)
• Reply by author: People’s quality is one thing, putting a massive number of bicycles into the market without supervision and operation caused all these sabotages. The situation is now much better in Hangzhou, although there are so many shared-e-bikes, they all park in assigned areas. (almost 3K likes)
• …… ofo destroyed the urban appearance as well as the whole bicycle sharing industry. I once reported an illegal occupation, no response for almost one month. The company has never thought of the maintenance and the liquidation…… (almost 2K likes)

Ofo’s deposit crisis

Screenshot: associated terms of Xiaohuangche (aka. ofo) on Baidu Index

Only a couple of years ago, Chinese consumers discussed ofo with joy and excitement, because the system was novel and offered convenience for them. These bright yellow bicycles were everywhere in the city and provided a perfect “last mile solution”. Chinese consumers have given ofo a cute and friendly name: Xiaohuangche (小黄车, little yellow bike), the easily rememberable nickname once had become a general designation for a shared bicycle in China. But now, according to Baidu, currently, the associated terms of Xiaohuangche are phrases like deposit refund, bankrupt and how to get the remaining sum back.

#WhatsYourPlaceInOfosDepositRefundLine

There is even a topic on Weibo, Chinese biggest micro-blogging platform, which could be translated to: #WhatsYourPlaceInOfosDepositRefundLine. This hashtag got over 2 million views and Chinese netizens are posting the screenshots of their ofo deposit refund status. From a post on Jan.7, 2019, we can see there are already over 14 million ofo users are lining up to get their deposit back, which normally amounts to 199 RMB (30 USD).

Chinese netizens are mocking up the situation by saying: this might be the longest line I have ever been waiting in, and many of them don’t think they could ever get the money back. There are even people who charge and deposit and then apply for a refund, just to be a part of it.

Screenshot: ofo’s deposit refund status

Screenshots: search frequency of ofo on WeChat Index

Screenshots: search frequency of ofo on Baidu Index

Both on WeChat Index and Baidu Index, the search frequencies reached the peaks in the week of Dec. 17, 2018. On that day, due to the rumor of users getting their deposit back by going to the office directly, hundreds of ofo users were waiting outside of the company’s Beijing headquarters to ask for immediate deposit returns. On Dec. 19, Dai Wei, the founder of ofo, announced a full staff letter, admitting “the company has been carrying immense cash-flow pressure for the whole year”, but he hopes that “every ofo staff will agree and keep the faith: no running-away, but fighting bravely for survival and taking the responsibility for every cent they own their customers as well as other creditors.”

Chinese netizens were mocking Dai and his company by calling this letter a “chicken soup for the soul”, since it neither provided any solution for the company’s crisis nor answers for their users and creditors.

Chinese netizens’ reaction on WeChat and Zhihu

On WeChat, the top comments of posts analyzing the ofo crisis are mostly complaints about the user experience, e.g. hard to find a bicycle on the street in a good condition; the amount of deposit and prepay are too high. There are also many Chinese netizens blaming ofo for being irresponsible. Like one netizen on WeChat commented: “Start talking about passion when they supposed to take responsibility, that’s the pattern of many companies.”

Yet we can still see many voices of support, saying they have been an ofo fan from the very beginning and won’t ask for a deposit refund. One comment said:” ofo, I will support you! The shared bicycle is a good product and it has provided me so much convenience. I believe every innovation requires a process of development. Learn from the experience and fight through a hard time!”

Screenshot: WeChat top comments regarding ofo

Screenshot: WeChat top comments regarding ofo

Screenshot: Zhihu top answers regarding ofo

On Zhihu (Chinese largest question-answer platform), someone asked the question: how ofo managed to end up like this by having a so good hand at the beginning? The top two answers with thousands of likes both compared ofo with Mobike, another one of the largest Chinese bicycle sharing company. Both answers are blaming ofo for destroying the whole bicycle-sharing industry. Top comments compared ofo with Mobike and told lots of user experiences with both brands; almost everyone agreed that Mobike is better.

Chinese consumers are price-sensitive, yet good user experience is still the key to success

Ofo was a pioneer in China’s bike-sharing market, attracting US$2.2 billion of funding from big-league domestic and overseas investors, including DST Global, Coatue Management, Matrix Partners China and Alibaba Group Holding. With all the financial support they had, instead of focusing on providing high-quality product and service, ofo chose to seize the Chinese bicycle sharing the market with the advantage of price and the number of bicycles on street. Chinese consumers are price-sensitive, yet without the basic quality of service, there is no way for a business to last in China. From the reactions of Chinese netizens, we can see that Chinese consumers have matured a lot and became more rational regarding issues like this. Alone with low price or a novel business model will maybe attract consumers at the beginning, but a high quality of product/service and good user experience are still the key to success.

Recently, there has been a lot of discussion on Chinese social media about Luckin Coffee, the emerging coffee chain opened about 2000 outlets across China in just one year and plans to expand to 4500 by the end of 2019, which would take it ahead of Starbucks to become China’s biggest coffee chain. One post on WeChat compared Luckin Coffee with ofo, and raised the question: will Luckin Coffee become the next ofo? Both companies achieved huge success within a very short time through the new business model and outstanding promotion strategy. But what happens after that? From the impasse ofo is facing now, what have we learned to avoid becoming the next ofo is indeed a good question.

Ofo bicycle parking in front of Luckin Coffee, Source: Daxue Consulting

Author: Chencen Zhu

The Chinese market is quite unique and specific one, so there is no one recipe of a strategy for startups to enter the Chinese market or for an existing company to solve a problem. Based on Daxue Consulting’s experience, there are always unique cases and corresponding unique solutions. Daxue Consulting’s team leverages various methodologies to provide your company with pragmatic, agile and close-to-market research approach. One of them is ethnographic research analysis in China which offers practical advantages regarding the thorough understanding of the context and cultural background shaping Chinese consumers.

This article No Place to Place: Chinese netizen’s react to ofo’s downfall | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

Besides many small modifications, there are two eye-catching new features:

1.     From [Like] to [Haokan] (好看, worth reading)

This might be the most impactful change to brands and companies who share content on WeChat. Until now, WeChat users can only repost the content they like from WeChat Official Accounts to [Moments] or directly send it to friends. Clicking on [LIKE] won’t help the content spread to a wider range. With the [Haokan] button, the posts will automatically be shared on [Top Stories] (看一看 Kanyikan) within the WeChat app. There, WeChat users can see all the posts, of which their friends have clicked on the [Haokan] button.

How does this affect content promotion?

From Daxue Consulting’s observations, the promotional effect of sharing content on [Moments] has been on the decline. Many people believe this new feature is good for content creators on WeChat since articles get another channel to be exposed. For international brands who seek publicity among Chinese consumers through WeChat, this new feature might help them reach a broader audience. Yet no one can know for sure, how Chinese netizens are going to react. It is possible that they won’t click on the [Haokan] button, once they realize their friends on WeChat could see what they have read and liked. Until now, the [Like] feature has been private for WeChat users, they can “like” the content without letting anyone else know. After the update, some KOLs on WeChat claimed to lose a huge amount of views without any obvious reason. The new feature might have led to this; some readers tend not to click on the [Haokan] button since they don’t want their friends to see what they have read., this might especially be the case for content with dark humor or intimate topics.

Screenshots: by clicking on the [Top Stories] (看一看kanyikan), WeChat users can see all the content on which their friends have clicked on the [Haokan] button

2.    The [Time Capsule] feature

The new [Time Capsule] feature is similar to the “Stories” function from Instagram and Snapchat. WeChat users can upload an existing video clip or shoot a video directly through this new feature and post it on [Time Capsule]. They can also add location, emojis and text into this video clip to make it more personalized and fun. The videos will only show on users’ individual pages or in a chat window for 24 hours. Compare to the videos users post on [Moments], Time Capsule video can be 15 sec. long (5 sec. longer) and your friends won’t see them unless they go to your personal site directly.

What does this mean for foreign companies?

With emerging video creating and sharing social platforms like Douyin (抖音, launched in Sept. 2016), short videos are becoming popular among young Chinese netizens. Consequently, WeChat had been losing appeal not only to content consumers but also content creators and advertisers. With the new short-video function, WeChat tries to attract the young generation and compete with other social platforms. The new [Time Capsule] feature might not affect foreign brands on WeChat directly, yet it utilized to create more intimacy between users and make WeChat more fun for young consumers, as a result, increase the use frequency of the App.

How are Chinese netizens reacting to the latest version of WeChat?

Screenshot: #WeChat huge update becomes a hot topic on Weibo

On Chinese biggest micro-blogging platform Weibo, #微信大改版 (#WeChat huge update) has become a hot topic, which has 640 million of views and 60K related discussions. Chinese netizens seem to have very different attitudes towards this update, some of them claiming with regretting updated their WeChat, while others are excited to try out the new functions. For those who don’t like the new version, many of them dislike the new UI and the new [Top Stories] feature, which they think steals privacy from the users. On the other hand, some Chinese netizens like the new interface and look forward to using the new functions like [strong reminder]. The purpose of strong reminder is to ensure you don’t miss messages that are important to you. After setting someone as ‘strong reminder’, the message sent by this friend will be displayed in full screen within 2 hours.

First collected feedback from Chinese users

Since the update has been launched for only two weeks on Apple and a couple of days on Android, the amount of data regarding usage and user experience is very limited. Nevertheless, Daxue Consulting decided to reach to a panel of 35 actual users – heavy consumers of digital content – through an online mini-survey. The answers are good indicators of the overall reception of this update.

1. Almost 1/3 of the users reached haven’t noticed the new update yet. From those who do know, the majority  already upgraded their WeChat (either has done by themselves or by their smartphones automatically).
2. 5 participants have not upgraded yet. From these 5 participants, 3 decided not to upgrade on purpose, since they have read the comments online that the new version is less good than the previous one.
3. About the change from [Like] button to [Haokan], Chinese WeChat users seem to have very different opinions: Over half of the participants said they would like to share good content to their WeChat friends and/or are interested to see what their friends have recommended.
4. However, almost 1/3 of the participants told us that they definitely won’t use the [Haokan] button because of the privacy issue. The rest participants haven’t noticed the feature yet.
5. Towards the new [Time Capsule] feature, Chinese WeChat users’ attitudes are milder. About 2/3 of the participants find this feature interesting and think they might use it in the future. Some participants don’t think it will be in great demand. The rest participants don’t quite understand this feature yet.

Daxue suggestions for international brands on WeChat

From Daxue Consulting’s observation, the new features of WeChat tend to increase the content conversion by creating a new channel of sharing. Not only will the liked articles be exposed on [Top Stories] in addition [Moments], but also, high-quality content will be shared from top stories again, creating a healthy circulation for articles WeChat users deem worth reading. Content creators see this update as an opportunity to gain publicity, since, in the last couple of years, WeChat has faced some difficulties within the content-ecology. Many content creators have realized a solidification of content transmission, this latest update is definitely a chance to energize the circulation of high-quality content on WeChat.

In our opinion, for WeChat Official Accounts with a high profile, this update might not be as effective as it is for small to middle sized accounts. As a matter of fact, in the last two weeks, several content creators with a middle-sized audience (10K views for an article in average) have already experienced a huge increase of the numbers of views. However, this might also be caused by the curiosity of the users trying out a new function, whether the positive effect will last, needs more time for observation. Good and interactive content is still the key to approach Chinese consumers on WeChat.

Author: Chencen Zhu

Daxue Consulting provides a tailor-made market survey in China

Daxue Consulting is able to run a high-quality market survey of any sector in the Chinese market. If you are thinking of entering the Chinese market or are already a market player but need fresh research do not hesitate to contact our project managers at dx@daxueconsulting.com.

This article What international brands should know about WeChat’s latest update | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

Two weeks ago, several official news accounts and KOLs on different social media platforms in China, including Weibo, WeChat, Tencent Video (腾讯视频，a Chinese video streaming website with over 500 million mobile monthly active users and 63 million subscribers) and Bilibili (a Chinese video sharing website) posted a video named Chopsticks. This chopsticks video got huge attention these days, which was produced by CCTV for public service in 2014. Why did this video from 4 years ago suddenly just go viral among the Chinese netizens?

Screenshots: “Chopsticks” on CCTV News WeChat account got 100,000+ views, Weibo KOL names 艾达出生在美国 got 114,000 views and 意匠id got 1.7 million views, on TencentVideo this video got 790,000 views

What is the Chopsticks video about and why did it go viral on the Chinese social media?

This 5-minute-long video was made of 8 small stories happening across the whole of China:

A baby’s first taste of food with chopsticks (Inspiration);

A mother teaching her toddler daughter how to use chopsticks (Inheritance);

A child learning table manners (Courtesy);

As Chinese say: “Do not move your chopsticks before your elders do so.”

A mother cooking for her son who came to visit after three-years of working away from home (Caring);

An elderly man putting bowls and chopsticks to offer sacrifice and pray to his late parents (Longing);

A family inviting a lonely neighbor home to celebrate Chinese New Year together (Good-neighbors);

As Chinese say: “One more guest is just one more pair of chopsticks.”

Husband bringing home a pair of children’s chopsticks to his pregnant wife after a long-day work (Interdependence);

Having dinner with the whole family and sharing food (Gratefulness).

This video uses chopsticks as a medium of emotional bond and cultural inheritance. No matter which part of China is one is from, which dialect one speaks, or what food they eat, by using chopsticks, people share the same culture and history. Most Chinese netizens describe the chopsticks video as touching, they also feel a sense of pride having such graceful cutlery with a long history.

What is the Dolce & Gabbana controversy?

On Nov. 18th the Italian Brand Dolce & Gabbana (D&G) released three posts on Chinese social media platform Sina Weibo as well as other international social platforms like Facebook and Instagram to promote its upcoming runway show in Shanghai (planned on November 21), with hashtags #DGLovesChina# and #DGTheGreatShow#. D&G introduced their first episode of promotion video on Chinese biggest microblogging platform Weibo with the sentence: “First up today is how to use this stick shaped cutlery to eat your GREAT traditional Pizza Margherita.”

Screenshots from Dolce & Gabbana’s official Weibo account on Nov. 18th, 2018

Unfortunately, it didn’t end there. On November 21st Weibo users posted screenshots of a conversation between D&G designer/co-founder Stefano Gabbana and an Instagram user, showing designer’s offensive comments about China and its people. Although the firm claimed that Gabbana’s Instagram accounts had been hacked, it triggered massive anger among Chinese netizens. As a result, the numbers of Chinese celebrities boycotted the D&G runway show because of its issue. The brand confirmed the cancellation of Shanghai Great Show on its official Weibo account just hours before its scheduled time. Many social media users in China labeled this video as stereotypical, insensitive and disrespectful, and some even interpreted it as racist. D&G deleted the posts within less than 24 hours after its release.

Tips from local experts on the successful development of a foreign brand in China

E-reputation is crucial in China to build a well-known brand

According to McKinsey & Company: “Since 2015, the primary driver of increases in luxury spending in China has shifted from consumers making their first purchases of luxury goods to incremental spending from existing luxury consumers. This transition means that luxury-goods players need to invest more in building loyalty among existing customers.” E-reputation and word-of-mouth are extremely impactful for a brand to develop in China. The power of social media should not be underestimated. No brand should take a risk to lose their reputation on Chinese social media.

“It takes many good deeds to build a good reputation, and only one bad one to lose it,” Benjamin Franklin.

Understanding the local Chinese culture by foreign brands to avoid sensitive topics

“Western brands seeking to enter and expand in China should be aware of Chinese cultural sensibilities,” said Angelica Cheung – Editor in Chief of Vogue China – reported by WWD. “Instead of dictating everything from head office, they would gain a lot from listening to the opinions and insights of their Chinese teams.”

As Chinese merging middle class holding stronger purchasing power, they also expect foreign brands to respect them and their culture. For international brands who are not familiar with Chinese culture, it is extremely important to get acquainted with the local sentiment and be careful about the cultural expression.

In-time and proper crisis management

Things spread with an uncontrollable speed in the modern digital age, thus crisis needs to be responded quickly and concisely. The backlash of an issue on social media is strong and can easily cause a series of chain reactions. To be able to avoid the irreparable damage to the brand image, international brands need to put great value on strategies of crisis management in China. 

Author: Chencen Zhu

Daxue Consulting’s Expertise: Business Turnaround in China

Daxue Consulting has developed a set of close-to-market methodologies that identify new market opportunities in China, which fit the ambitions and available resources of its clients. Daxue Consulting also works with growing companies, assisting them with various challenges from market shift anticipation to internal re-organization and deciding new ambitious objectives.

This article D&G issue in China: Why the video about chopsticks suddenly went viral on Chinese social media | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.