Overview of the Chinese cosmetics market

China’s cosmetics performance in the global stage 

According to Euromonitor, China’s cosmetics market occupies 12.7% of the global cosmetics market, becoming the second-largest market after the US.

Data source: Euromonitor, Top 10 cosmetics markets globally

Even after several years of market expansion, the market still seems to have a fine potential for growth in the future. According to Euromonitor, the CAGR of the Chinese cosmetics market is the highest in the world.

Data source: Euromonitor, Top 10 cosmetics market ranked by CAGR

Based on data from the National Bureau of Statistics, the yearly growing pace is remaining at about 10% since 2013 and the total retail sales reached 299.2 billion RMB in total. Hence, investing in such a large and consistent growing market can bring high revenue to the company.

Source: National Bureau of Statistics, Total cosmetics retail sales in China

Chinese domestic cosmetics brands are prospering

Cosmetics comprise a wide range of products like skincare, makeup and perfume. In the Chinese cosmetics market, skincare products are the main consumption force, and makeup products increased its market share year by year. Skincare products consistently accounted for over 50% of the Chinese cosmetics market. On top of this, makeup products have been continuously increasing since 2014.

Data source: Euromonitor, Cosmetics market distribution by category

Seven of the ten top cosmetics brands in China sare Chinese domestic cosmetics brands. The attention rate of Perfect Diary is far higher than other brands, meaning that a lot of cosmetics fans in China follow Perfect Diary.

Data source: QuestMobile New Media, Which Chinese domestic makeup brands are the most popular

Among the top 100 most popular cosmetics brands in China, 37% are Chinese domestic makeup brands.

Data source: QuestMobile New Media, Regional Distribution of top popular 100 brands

There are two cosmetics categories where Chinese domestic cosmetics brands have a strong position. These categories are essential skincare related products and eye make-up. Essential skincare products like hand cream, mask and cleanser have high daily consumption. Chinese domestic cosmetics brands could use price advantage to compete, through controlling the supply chain to lower cost. Besides, unique design helps Chinese domestic makeup brands make eyeshadow and eyebrow pencil hot products.

Data source: QuestMobile New Media Database, Origin of brands dominating China’s cosmetics market by product category

The rise of Chinese domestic makeup brands is correlated with sales promotions. According to Askci, 2 of the top 5 sales brands were Chinese domestic cosmetics brands during 618 shopping festival in 2020. Perfect Diary and Florasis ranked first and fourth respectively.

Data source: Askci, Cosmetics brands sold most during 618 shopping festival

Chinese cosmetics consumers portrait

According to data on Tmall and Taobao, consumers under 30 years old place most of cosmetics orders. Most of them are post-90 or even post-00. Students aged 18–22 made up over 25%, but their market share has decreased.

Data source: Tmall & Taobao, Chinese cosmetics consumers distribution by age

However, the share of consumers over 30 years old has an overall increase. This increase might because people aged over 30 gradually build and wake up the awareness of using skincare and makeup. Therefore, the demand for cosmetics among them goes up.

What Chinese domestic cosmetics brands consumers purchase most

According to the skincare top sales, Pechoin harvested 1,733 million RMB in sales, ranking first, followed by Chando and WIS, with 1,653 and 1,515 million RMB respectively.  

Data source: Tmall & Taobao, Top Chinese skincare brands

In the makeup market, top brands are different from top skincare brands, although some makeup brands provide cosmetics products. Perfect Diary maintained its performance and ranked first, with 2,762 million sales.

Data source: Tmall & Taobao, Top Chinese makeup brands

What makes Chinese domestic cosmetics brands different

Compared to foreign cosmetics brands, Chinese brands seem to put their eggs in more baskets. Their marketing efforts are spread through much more variety of activity and spread across many more platforms.

Creating a KOL marketing feedback cycle with short video apps, live-streams and KOLs

The rise of most Chinese domestic cosmetics brands attributes to social seeding through KOL marketing and cooperations. This feeds a feedback cycle where consumers give feedback on open platforms, where brands can then apply to their product development.

Data source: QuestMobile, Online marketing mode

Leverage traffic of multi-channel, post content in different forms

Traffic in multi-channel is other boost for the development of Chinese domestic cosmetics brands. It is common to market on Douyin, Kuaishou, Weibo, Wechat and Red, but each social platform has its own marketing strategy. On Douyin and Kuaishou, where people post short videos, brands cooperated with KOL to post makeup try-on, makeup tutorial and unbox testing. On Weibo, brands normally implement celebrity endorsement. On Wechat official account, brands post deep introduction of products. On Red, brands and KOLs post products-related tutorial.

Data source: QuestMobile, Online marketing in different forms

Launch cross-over products in big e-commerce promotion

Co-branding is more a strategy to get hold of targeted audiences who have complex behaviors. Through cooperating, brands can find a connection between consumers and brands. For example, Chando’s cooperation with Bilibili is a new try for its marketing strategy. As a place attracts most young generation, Bilibili provides a platform for Chando to increase consumers base.

Source: Chando, Chando X Bilibili

Unique marketing strategies for each Chinese domestic cosmetics brand

Perfect Diary, a textbook case for private traffic

Perfect Diary, established in 2016, is one of the young Chinese domestic brands. It targets 20-35 year old women, which is a high spending power group. In March 2017, it opened an online store on Taobao and Tmall. Half a year later, Perfect Diary opened on Red, WeChat store and hosted three Pop-up stores in Shanghai. In 2018, It established a Douyin and JD store. On January 19^th, 2019, it owned the first offline experience store in Guangzhou and expanded to 40 offline stores now.  

Behind Perfect Diary’s bold IP collaborations

IP cooperation is becoming a popular marketing method for domestic Chinese brands. Perfect Dairy cooperated with lots of IPs to launch new products. The most popular IP cooperation is with the Discovery channel.

Source: Tmall, Perfect Diary X Discovery

The history of Perfect Diary’s IP cooperation consists of three stages. In the first stage, Perfect Diary started to explore the market and launched fashion week related products. It reached celebrities, who have high credibility and cultivate the trust in the market. In the second stage which is the explosive phase, Perfect Diary cooperated with cross-over IP and KOLs to promote a single product. In this stage, it cooperated with makeup KOLs and reached to the followers, which increase the influencing power of brand. In the third stage where the brand continuously grew, it cooperated with mass and trendy IP. This cooperation helps to expand customers group, including people make-up beginners. 

Perfect Diary implements private traffic to build brand-owned traffic pool

Perfect Diary builds private traffic in two ways and uses two virtual BA (Beauty Advisor) to manage different types of consumers. Xiaowanzi (小完子) is in charge of consumers, who purchase online and joined through a lucky money card. Xiaomeizi (小美子) maintains the consumers who attracted from offline pop-stores or give aways. The source of customers is different, which requires two virtual BA to communicate customers in different tactics.  

Data source: Maoshihu, Process to reach Xiaowanzi

Florasis redefines the oriental cosmetics

Florasis’ sales performance is rising

Florasis was founded in March 2017 and opened its Tmall flagship store in August 2018. Although the sales for 2018 were only 43.19 million RMB, Florasis’ sales reached 1.1 billion RMB in 2019, rising nearly 25-fold. 

Florasis also presents an excellent in its first Double Eleven promotion. According to Mktindex, Florasis gained 220 million RMB sales and ranked fifth among the top 10 Chinese cosmetics brands that gained most sales.

Distinctly Asian makeup

As a chinoiserie cosmetics representative, the idea behind Florasis brand is ‘the Oriental makeup, using flowers to nourish the makeup look’. It includes everything from product ingredients to package design. Product ingredients highlight to use nature grasses and flower, and nourish the skin mildly. Package design and product name also filled with chinoiserie. For example, Florasis’s carved lipstick replicates the ancient Chinese carving technique and carved flowers on the lipstick, creating a precedent for the three-dimensional texture lipstick in China.

Source: Taobao, Florasis’s classical relievo

Pregnant woman friendly

Florasis gives people a safe and harm-free impression. It emphasizes that its products contain zero alcohol, zero-hormones and contains no harmful ingredients. An actor (Jiani Zhang) in Story of Yanxi Palace, which is a popular Chinese drama, recommended Florasis’ CC cushion. Zhang posted her using experience as a pregnant woman on Red, which drew most followers’ attention and discussion.

Source: Red, Jiani Zhang promoted Florasis’ product

Picking right KOL and spokesman

According to Baidu Index, the spokesman’s effect can be observed. On 3^rd March 2019, search word ‘花西子’ peaked because Justin Lee promoted Florasis’ loose powder. Another peak on 18^th May 2019 is because Florasis announce Jingyi Ju as spokesman. Jingyi and Florasis is a perfect match, because Jingyi owns high traffic and was known as the oriental beauty.

Data source: Baidu index, What increase the search of ‘Florasis’

Little Dream Garden, a black horse in the body care market

Targets ingredient-oriented consumers

Little Dream Garden is a Chinese cosmetic, focusing on developing body care products. It targets customers who care about the ingredients. Therefore, it emphasizes the ingredient and efficacy, naming product by main ingredient, such as Shea Butter body scrub and Ceramide body lotion.

Source: Taobao, Shea Butter body scrub

Posts testing video to build trust

Little Dream Garden leverages KOLs and KOCs to post product testing videos on Red, guiding users to join in the discussion. The opinion of KOL and KOC can increase trust rate and prompt consumers to buy the products.

Source: Red, Products testing video

How WIS involves celebrities on Weibo

WIS is a Chinese domestic skincare brand, created in 2011. It aims to provide scientific and effective products. It does not have any offline store so far. The brand targets consumers aged 18 -35 who have the strong social ability. For brand positioning, low-price capture lots of post-90 and post-00’s interest.

Source: Wechat, WIS products

Weibo is WIS’ social marketing asset

The popularity of WIS results from social marketing on Weibo. For example, a member of Happy family, Weijia Lee, recommended its product on Weibo, which attracted more than 240 million readers and brought around ten thousand followers for WIS. At the same time, celebrities, such as Jiu He and Na Xie, reposted the Weibo and reinforce the marketing effect.

Source: Weibo, Weijia Lee promoted WIS

What can brands learn from the success of Chinese domestic cosmetics brands

Although foreign cosmetics brands represented more than half of the cosmetic market in China, the rise of Chinese cosmetics cannot be overlooked. In fact, they can provide a learning opportunity on how to effectively appeal to Chinese consumers.

• Listen to the customers

Under short video App + Live Broadcast + KOL marketing mode, brands not only promote their products but also listen to the feedback from customers. Upgrading products according to the feedback is an important strategy to maintain brands’ sales performance.

• Pick the right brands for collaborations

Most Chinese domestic cosmetics brands implement cooperation with brands in different fields, celebrities and etc. to launch limited products. This campaign can bring the brands more consumers, strengthen brand image and increase brand volume.

• Promote in an appropriate form

Chinese cosmetics brands promote their products in different forms according to the character of a product. A testing video will gain more trust for a product that emphasizes its harmless ingredients. 

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History of Marie Dalgar

In December 2006, Marie Dalgar ((玛丽黛佳) created its first grafted mascara, which completely overturned traditional view on mascara. It achieved an amazing sales performance: Marie Dalgar claimed that they sell one mascara every 15 seconds. In May 2008, the Chinese cosmetics brand formally established Shanghai Feiyang Cosmetics Co., Ltd., the marketing center. The brand has followed the rapid development path based in Shanghai and expanding to the whole country. In the same year, it launched its official website, providing consumers with a comprehensive information platform. 

In January 2010, Marie Dalgar opened its’ international factory in Shanghai Fengxian Industrial Park, covering an area of ​​20 acres, which is the largest mascara production base in Asia. Besides, it won the “China Cosmetics Annual Best Single Product Award” at the 2010 China Cosmetics Industry Conference.

In March 2011, Marie Dalgar won the 2010 “Best Makeup Brand” and “Best Single Product” awards in China’s cosmetics industry. In the same year, the brand joined hands with the well-known fashion women’s website Kimiss, and organized makeup contest with international brands such as Armani, Bobbi Brown, and MAC.

Currently, Marie Dalgar is one of the most promising cosmetics brands in the Chinese market.

Marie Dalgar’s brand concept

As the brand claims, besides the perfect effects, makeup is also an artistic master piece. It enhances confidence and it is a factor for different life expression. Marie Dalgar represents the spirit of modern woman’s personality and the attitude of women in this era.

Focusing on young consumers

From the user portrait, Marie Dalgar’s target group is 18-24 year old college students, and 25-35 young white-collar workers in China who have just started work.  Brand has a strong focus on young consumers and builds products that are easy for them to use on different occasions. The youthful brand naturally attracts young consumers through its product innovation and engaging cross-over marketing in the ‘new retail’ environment. Having its own research and development centers and manufacturing bases allows Marie Dalgar to innovate and meet changing demands quickly.

Data Source: NetVoices, 2018 Top Cosmetic Brands in China Report, Marie Dalgar’s consumers by age

Marie Dalgar’s marketing strategies

The domestic brand embraces the “New Retail” concept, taking a unique approach to increase the consumer experience and build brand awareness. On top of this, it has been a pioneer in collaborations.

Cooperating with third parties for campaigns

Co-branding is a key marketing strategy. These collaborations are through co-branding, such as collaboration with KFC and Heineken, and through collaboration with social media platforms like Douyin.

Co-branding rather than embassadors

Every year, Marie Dalgar holds Crossover Art Project. The brand invites artists to express themselves by using its make-up products. For example, fashion photographer Paco Peregrin chose the theme ‘Facing’ in 2015. The following year, photographer Damien Dufresne opted for ‘Through your eyes’ . For its products packaging, the brand also calls on artists, like the young Chinese artist JINLE, invited to celebrate the year of the pig. Out of a limited edition run of 3,000 units, Marie Dalgar sold 1,000 units within 10 minutes. The campaign reached 62 million consumers online, with a total of 50 million engagements.

Source: Marie Dalgar, Wechat, Year of the pig campaign 

Cooperation with KFC

The young makeup brand decided to take advantage of the expanding retail ecosystem by cooperating with third parties for special campaigns. Marie Dalgar outsourced sales efforts and found other ways to use partners’ e-commerce platforms in China. In 2017 Marie Dalgar cooperated with KFC on campaigns and advertising, pulling in traffic from KFC’s huge consumer base.

Source: Chinessima, Marie Dalgar’s cooperation campaign with KFC

Marie Dalgar and KFC created the “Pink is Cool” theme cross-border lipstick gift box. “Pink” and the shared target audience became the basis of this cross-industry cooperation. Marie Dalgar used this collaborative lipstick to create a cool makeup look, and attracted the attention of makeup consumers through the sharing on the Weitao platform. KFC used stores and offline resources to create a cross-border offline theme store to promote this cooperation. The campaign helped the brand win 1.4 million visits on Tmall’s official store and make over RMB 12 million in sales. Most of visits were from selling limited edition gift sets, which included both KFC coupons and lipsticks.

Cooperation with TikTok

In April 2018, Marie Dalgar and TikTok jointly launched challenge event. Being the first collaboration of its kind in the beauty industry, the video challenge had a maximum number of participants of 75,000. The event and related advertisements reached approximately 288 million people.

Cooperation with CCTV

Marie Dalgar partnered with the CCTV documentary series “National Treasure” for a limited-edition lipstick. It helped to build a well-earned reputation among consumers for championing Chinese heritage. Collaborations don’t even need to be in the realm of high culture as long as it will reach the masses in popular spaces.

Cooperation with Heineken

Marie Dalgar teamed up with brewing giant Heineken and Tmall in 2019 to release a “forgiveness” gift box. The gift box was released on Tmall’s “Fans Day” to coincide with the European Champions’ League soccer final, which Heineken sponsors. The hook: soccer lovers could give their partners a gift box to beg “forgiveness” and apologize for ignoring them while watching the final. “Wearing a green cap” in Chinese means “to cheat on your loved one”–in this case, with soccer. Two boxes were offered in “his” and “hers” editions. One box featured green lipsticks and green tea flavors, while the other contained limited-edition Champions’ League bottles of Heineken.

Marie Dalgar uses AR to attract customers

Marie Dalgar and Ali jointly launched the “unmanned color vending machine” and the beauty unmanned store “TO GO “ combined with the platform’s big data to reach more potential consumers.  Marie Dalgar’s “TO GO” store features an augmented reality (AR) mirror to link offline consumers’ experience with their online purchase. This application of AI in beauty  boosted both offline and online sales.

Source: Chinessima, Marie Dalgar’s “TO GO” store in Shanghai

WeChat and Tmall are key platforms for brand’s retail and marketing

Marie Dalgar established the “Playing Color Academy” on WeChat. They use this mini-program to make more customers to reach offline channels. On top of this, Marie Dalgar uses WeChat database for analysis of user portraits and then send it to product development department.

Marie Dalgar actively uses Tmall and gained popularity among its users. In 2018 its rating there was even higher than such cosmetic giants as Armani, Estee Lauder and YSL. Besides, brand’s live streaming on Double Eleven was equally astonishing, with a total of nearly 100 live broadcasts for 300 hours and 1.3 million views. 

Data Source: NetVoices, 2018 Top Cosmetic Brands in China Report, Make-up brands rating among e-commerce users in China

Marie Dalgar is one of the leading cosmetic brands in China

Marie Dalgar is one of the fast-growing brands in the make-up market in China. Such foreign cosmetics brands in China as YSL, Dior and MAC are on the top of ranking.

Data Source: Kantar, Top-5 fast-growing make-up brands in China

Innovative products push Marie Dalgar’s sales in China

In its early stages, Marie Dalgar attracted attention thanks to its “grafting” mascara, especially adapted to the relatively short and sparse eyelashes of Asian people. “It lengthens eyelashes by 300% and increases their density by 700%”, according to Jumeili.

Marie Dalgar’s Innovative products:

• The world’s first grafted mascara
• The first micro-vibration electric mascara in China
• The first domestically baked eyeshadow and blush
• The first mascara with retractable brush in China
• The first vibrating mascara in China
• The first domestic mascara with adjustable thickness and variable extension brush

Pioneering projects:

• The first domestic mascara with 360° rotating brush
• The first custom-made DIY eye shadow in China

Marie Dalgar was the number one domestic makeup brand during the 2018 Double Eleven festival

On Double 11 shopping festival in 2018, Marie Dalgar’s online flagship store was on the Tmall’s Top Beauty brands list. Its mascara also was in TOP 3 hot single products. The daily turnover of offline shopping mall channel stores increased by 414% year-on-year during 11.11 festival. Marie Dalgar participated in Tmall Double Eleven many times, and won the “New Retail Outstanding Contribution Award” from Tmall. The relationship between Marie Dalgar and Tmall are complementary.

Marie Dalgar expands to the Asian market

All of these steps helped to make Marie Dalgar one of the best-selling local brands and advanced the company onto the global stage. It became the first Chinese brand to sell its products in Sephora stores outside of China.

Expansion to Singapore

At the end of 2018, the brand entered Singapore via Sephora. To Mary Dalgar’s CEO, Chen Haijun (陈海军), Southeast Asia is only a preamble before Europe and the United States. “Worldwide markets will represent 20% of the brand business within 5 years”, he said.

Because of it’s strong innovation power, and collaborations to expand it’s consumer base, Marie Dalgar is one Chinese brand that is worth learning from.

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The development of vitamins and health supplement market in China

The market size of healthcare products in China is growing

Large market size of healthcare products represents the high potential in China.

According to iimedia, the market size of healthcare products in China, maintained around a 10% YOY growth rate between 2013 and 2019. This  which is similar to the US growth rate in 1970’s. China’s healthcare market size reached ¥222.7 billion in 2019, which makes China the second largest market for healthcare products, just after the U.S.A.

Data source: iimedia, Market Size of Healthcare Products in China

The market segment of healthcare product was occupied most by dietary supplement with more than half of the market in 2019.

Data source: chyxx (中国产业信息院), Market Segment of Healthcare Products in China

The health supplements industry in China developed along with the improvement of Chinese people’s living standards and health awareness

Most Chinese considered a healthy lifestyle to include physical and mental health. A healthy lifestyle should be without physical illness and with positive mental health, good social life etc.

Many Chinese see health supplements as a part of a healthy life. Hence, health supplements, such as vitamins and fish oil, are an important choice for health-conscious Chinese consumers. In a survey conducted by iimedia, 48.6% of the participants choose health supplements as their first choice to improve their health condition.

Price distribution of health supplements ranges from RMB 50 to over RMB 300. Most consumers buy health supplements for under 150 RMB on Taobao and Tmall. Customers’ price preference means high-end products are popular among a small group.

Data source: Taosj (淘数据), Price Distribution of Health Supplements in Chinaby Sales Volume

China’s demand for vitamins is continuously growing

Vitamin market in China is expanding, as vitamin products are becoming widely used in China. An increase in market size can be expected under COVID-19 impact.

Data source: iimedia, ‘Size of Vitamin Market in China

Vitamin E is the most popular vitamin in China, followed by vitamin C

Vitamin E is the most popular vitamin in China, making up 36% of the market. Followed by vitamin C, which takes 30%. The popularity of vitamin E is is partly due to the fact that Chinese believe it can prevent cancer. Chinese’ vitamins preference is different from other countries, such as USA, where vitamin D is very popular.

Data source: chyxx (中国产业信息院), Market Share of Vitamin Market in China by Vitamin Types

Skin care is the #1 concern among Chinese vitamin consumers

Vitamins which target skin health have large market potential in China. From information by DXY (丁香医生), 40% of the survey participants regard skin problems as a bothering health problem.    

Data source: DXY (丁香医生), Top Health Problems Chinese Concern

Skin problems, as the biggest health problem plaguing Chinese people, have led to an increased demand for vitamins, as some vitamins are beneficial to skin health. Vitamin A, C and E can help skin maintain a youthful state, prevent pigmentation, freckles and wrinkles. Thus, they are popular in vitamin market in China. For example, Gold Partner (黄金搭档) sold over 90,000 monthly vitamin C chewing tablets, which is #1 vitamins product for skin problems on Tmall. Considering the apparent concern for skin health, it is also no surprise that China’s skincare market is booming.

Millennials are the target market

Chinese millennials are the target group in vitamin and health supplement market in China, as post-90s gradually become the main force of vitamin consumption. According to Baidu Index, age of people who searched “vitamin” on Baidu distributed mostly in aged 20-29 years old.

Data source: Baidu Index, Age Distribution of people Searching ’Vitamin’

In one survey about post-90s’ health products consumption, top three health-related health-related products purchased are health supplements and vitamins (38%), nutrients dense fruits (27%) and traditional Chinese medicine (25%).

Source: Analysys (易观), Top Health-related Products Purchased by Chinese post-90s

Consumer Analysis in vitamins and health supplements market in China

Core drivers of purchasing vitamin and health supplements

Function, product quality, brand and price are four main drivers of purchasing, according to an analysis, which aims to research what factors effect most when Chinese consider buying vitamin and health supplement.

Data source: iimedia, Main Drivers of Buying Vitamins and Health Supplements

Most customers’ positive perceptions are related to functions. On Weibo or Zhihu, Chinese consumers mentions the function of relieving fatigue and skin whitening ect., when talking about vitamins health supplement.

Data Source: Sample of Weibo & Zhihu Posts, netizens opinions in the Vitamin and Health Supplement Market in China

Core obstacles of purchasing vitamins and health supplements

There is a large gap between China and developed countries in per capita consumption of health supplements. In 2019, per capita expenditure spent on health supplement was only $18 on vitamins and health supplements, while in America, that was $148, eight times higher than in China. However, the market is now growing fast as COVID-19 stimulated the consumption in China.   

Data source: chyxx (中国产业信息院), Expenditure on Health Supplements by Country

Factors, such as Price, product effect and reputation, will stop potential customers from purchasing vitamins and health supplement. Most complaints of health supplements result from effect. Consumers gave negative comments when the high price does not match the value. In addition, the reputation of health supplement in China is damaged by media. Most Chinese customers are bombarded with negative information of health supplement, which to some extent embedded a negative image of vitamins and health supplements in Chinese.    

Data Source: Sample of Weibo & Zhihu Posts, Obstacles for Entering Vitamin and Health Supplement Market in China

Other obstacles, such as the size of tablets and taste, also potentially stop people from purchasing vitamin and health supplements. Although Centrum (善存)’s multivitamin products have high popularity online, Chinese customers complain the design of bottle and the size of tablets on RED (小红书).   

Source: Sample of Weibo & Xiaohongshu Posts,, Comment about Centrum (善存)

Market Competition in China’s vitamin and health supplement market

Vitamins and health supplements from Australia and U.S.A are the most popular in China.

2018’s customs data by CBNDATA, shows that Australia and U.S.A are top two import countries of the vitamin and health supplement market in China. Australia and U.S.A account for 22.3% and 20.4% of VDS imports to China respectively. Their brands quickly seized China’s health supplements market share by cross-border and social e-commerce.

Source: CBNDATA , Customs data, Top 5 Imported Countries in Vitamin and Health Supplement Market in China

Besides Chinese brands, Australian brands, such as products from Swisse and Cenovis, are the most popular on China’s online market. By-Health (汤臣倍健) ranked #1 in May 2020, followed by Swisse (#2) and Centrum (#7).

 Data Source: Taosj (淘数据), ‘Top health supplements brands on Taobao & Tmall

Most vitamin and health supplement brands leverage online and offline campaign to build brand image and promote

How brands build youthful image through cooperating with celebrities?

Many health supplements brands aim to build a youthful brand image by using young KOLs and actors as spokespersons. For example, By-health rebuilt its brand image by endorsing young celebrities, Xukun Cai (蔡徐坤) to attract young consumers and associate with younger personalities. In order to shape the young image, By-health cooperated with Transformers and released cross-over products on Tmall.

Source: Tmall, Youthful Image of By-health

Cenovis is trying to raise brand awareness and attract more young consumers through endorsing Chengyu Hua (华晨宇) who is a singer with high-traffic in mainland China.

Source: Cenovis’s endorsement with Chengyu Hua

Centrum changed brand’s perceptions into young, funny and approachable by cooperating with Joker Xue (薛之谦, a famous Chinese singer and actor). Centrum worked with Joker Xue to film videos ads on Tencent.

Source: Tencent, Centrum filmed videos ads on Tencent

Offline marketing activities to reach Chinese vitamin and health supplement consumers

Many brands use offline marketing activities, such as sport events and pop-up stores, to interact with consumers in vitamin market in China.

By-Health built a museum which can use AI and hologram technology to educate about nutrition science and provide health examinations. These activities help visitors understand health situation and sell By-Health’s products.

Source, By-Health, By-Health’s Science and Technology Museum

Swisse built a immersive urban oasis pop-stores in malls during 618 promotion, where Chinese customer can see its healthy and natural brand image vividly. In addition, Swisse cooperated with The Color Run (Color run: Five-kilometer paint race), the sport event attract most young generation in China.

Source: Swisse, Australia-themed pop-up shops (Left) & Swisse X The color run (Right)

In order to expand target population, Centrum launched a carnival to interact closely with children and sponsored a child-parent TV program.  

Source: centrum, Centrum carnival & TV Program

Covid-19 stimulation: How Covid-19 stimulated the sales of vitamins and health supplements

Chinese consumers are more interested in vitamin and health supplements as COVID-19 increased their health awareness

The health supplements industry in China developed along with the improvement of Chinese people’s living standards and health awareness. Chinese netizens showed more interest in improving their immunity during the coronavirus outbreak in January 2020. Demand for vitamins and health supplements that can enhance their immunity became strong during COVID-19.

Source: Baidu Index, Search Trend of ‘Strengthen the Immune System’

Chinese people showed strong demand for  vitamins and health supplements that can enhance their immunity. Accordingly, health supplements that could improve immunity got more sales.

More Chinese consumers have showed purchase intention for vitamin and health supplements since the epidemic increased their health awareness.

Data Source: BCG (Boston Consulting Group), ‘What Chinese will Buy Most in The Post-COVID-19’

Brands seize the opportunity to increase sales revenue during the most serious period of COVID-19

The biggest price drop of health supplements was in February, as many brands decreased online price to have more consumers during the most serious period of COVID-19. However, many consumers were focused more on personal protection and disinfection products.

Data source: CHUANCAI securities, SOOCHOW securities, Changes in Price of health supplements in China during COVID-19

Then, the sales revenue of health supplements greatly increased from March along with people’s health awareness further improved.

Data Source: Taosj (淘数据), E-commerce Sales of Vitamins and Health Supplements

For example, the health related products of BY-HEALTH (汤臣倍健) and Swisse had significantly increased their online sales.

Data source: Taosj (淘数据), Sales of By-Health & Swisse during COVID-19

What can we learn about the vitamin and health supplement market in China

• Physical and mental health are both important for Chinese people

Many Chinese people are eager to have both physical and mental health. Therefore, in addition to promoting physical health, how to help consumers relieve mental pressure is also an important sales point for all health-related brands in the Chinese market.

• People under 30 are the key customers for many brands

Many health supplements brands aim to build a youthful brand image to reach out more young consumers in China. They frequently used young KOLs and actors as spokespersons. At the same time, Baidu index analysis shows young Chinese consumers have the most interest in vitamins and health supplements.

• Skin health is a top concern of Chinese vitamin consumers

More and more Chinese people are bothered by skin imperfections. Because of Chinese beauty standards, skin whitening is an important driver for Chinese women to take vitamins. Therefore, some health supplements launched products targeting skin problems and received positive feedback.   

• COVID-19 stimulated consumption in the vitamin market in China

The COVID-19 outbreak brought great attention to physical health, Chinese people showed strong demands on vitamins and health supplements to enhance immunity.

See our full report on China’s vitamin and health supplement market

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Chinese superstitious beliefs can be divided into three categories:

Traditional and secular Chinese superstitions

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

Believing the existence of ghost and gods

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

Believing fate

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

Superstition and spirituality products in China

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

The Healing Crystals market in China

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

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

Source: Popo. Inside of Donghai crystal market

Amulets market in China

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

Foreign superstitions influence: The tarot and astrology market in China

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

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

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

Read more on how astrology is used in Chinese marketing

Fortune-telling market in China

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

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

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

Interest trends of superstition and spirituality products in China

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

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

Distribution and promotion methods

Social media

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

Source: Douyin, Tarot divination

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

Source: Kuaishou, Tarot divination

Source: Bilibili, Tarot divination    

E-commerce

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

Advertising

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

Consumers of superstitious, spiritual and occult products in China

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

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

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

Source: Bilibili, Tarot divination

Is scientific literacy really the end of Chinese superstitions?

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

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

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

Full transcript below:

Hello everyone, I’m Aurelien Rigart I’m the co-founder and Vice President of IT Consultis, I’m from France. I’ve been in China and started this adventure nine years ago. So, IT Consultis is a digital transformation company. It’s a team of 80 people in three countries, which are China, Singapore, and Vietnam. So, we’re helping Fortune 500 and fast scaling start-ups to work on their digital transformation. It can range from eCommerce, from building mini-programs, from building websites, App, integrating systems together, or overall work as a consultant on their digital transformation initiatives.

What are the main requests during and after the COVID-19 lockdown?

I mean what’s interesting is that a lot of people do believe that China is fully digitally transformed. They believe this because they see that there is a deep penetration – like the whole ecosystem, like the usage of WeChat, the Alipay, the JD and so on, but there is a big war right now on traffic ownership where basically brands are really struggling to at the same time survive and gathering the data of the users. So that’s why the concept of private traffic which has never been used in the past, suddenly came in 2019 where brands finally they did understand it – like the more money they were investing, basically they were having a negative revenue. So, they were losing money on any kind of growth that they were having. So, like you’re always looking for growth, I mean in this period of time you’re looking more to survive, but looking for growth – they didn’t understand that if basically they wanted to find other channels, they may need to go back to basically private traffic and private traffic was made easier with basically the WeChat and the mini program. Because – before we started the mini-program, you didn’t have that channel. Tomorrow you’re not going to bring everybody on the website – websites are still important but it’s hard to drive people on a website unless they are already a fan of your brand and they want to see oaky – this particular car, that particular car – so brands that are at a certain level should always have a website, but what really makes a difference is really the capability within a WeChat mini program ecosystem to have the API’s for brands to be represented and to have like the full ownership of their traffic and this has been the major, major change.

In early 2019, when we did an interview with you, you said that the keyword for 2019 would be ‘omnichannel.’ How does it look like for the first quarter of 2020?

Well I would say that – that’s interesting that you remind me of this – it is definitely Omni channel, it is definitely headless, I would say that the keyword for the end of 2019 was really private traffic, so there was like a little bit of a change between Omni channel, basically private traffic is kind of like englobing the entire ecosystem, the entire Omni channel ecosystem and what I believe is that yes – it’s going to push more and more in that direction. Brands are still going to go to TMall, brands are still going to grow on all those marketplaces and they should do it, they should as well make sure that they have good ownership and at least a specific percentage, maybe 10 – 30% of their users coming on their platforms, to make sure that they have like a deep connection, but at some point they get into a fight with the category manager of Alibaba, they just don’t drop their self to zero from one day to another – I think that’s something that we’ve seen over the past and so – Omni channel is still going to be here, private traffic is going to be important, O2O which was probably 3 or 4 years ago is still very relevant, so this is going to continue but the most important is really the digital transformation that we’ve seen that is being operated and what’s interesting is that B2B is really leading the charge right now and there’s a lot of B2B brands in some very specific industrial ecosystem that are largely investing, they’re working through distributors and the problem is that they’re entering a Chinese market where – okay there are the products that are dropped, containers here – and then of course they’re doing all the marketing, they’re doing all the branding, but then comes the black box where they’re going to have one distributor, second layer of distributor and then they have the Alibaba ecosystem and basically those two are kind of like black boxes. So, trying to make sense of what the users wants, how they can adapt their strategy, their pricing points and how there can be some loyalty program and some deeper connection with the users and with their fans and that’s something we’ve never seen in the past and that’s something where we see a lot of players are really investing into that particular area and they need to find ways to create those connections because they’re not made easy. So there’s not like a magic formula where you’re going to say – hey, all of a sudden I’m a distributor, I’m a brand here and I want to target somebody that is here that is going through five layers of ownership and I have the opportunity to reach this person. So, there is no magical solution here, there’s no magic potion to make it up. So, it’s a laborious and really step by step approach using CRM, marketing automation, content, frictionless user experience, it can be app – it can be mini programs, there is many, many ways to do it, overall I’m using and leveraging as well distributors as well is something that is important, but that’s really what we see as a huge opportunity when it comes to the digital in 2020.

In the West, we see that CRM companies like Salesforce or Zoho have been able to expand massively and be titans in their industry. What CRM players are big in China?

First of all, we need to remember that it seems that we’re going to have Salesforce coming to china supposing July 2021, so of course, if things are not moving forward politically or with the virus – we never know when things are really going to happen so I think it is safe to say that those big players are going to come to China at some point, but China has not to wait to create their own ecosystem and you get a lot of start-ups that have been backed up by both Alibaba and Tencent, one of them is Xiaoshouyi which is like a CRM that is backed up by Tencent that is working pretty well, then you’ve got a few ones that are backed up by Alibaba. So, each of them is supporting their ecosystems together and kind of like blocking the other one from their own ecosystem. So, I think it’s something that is interesting and I’m very curious to see because Salesforce has a partnership with Alibaba and so they have announced already that they’re going to launch in summer 2021. So I’m very curious about how this partnership is going to influence basically the opportunity for Tencent and the mini-program to connect with this because we’ve seen over the past that they’re tried to silo those ecosystems, so I think there’s going to be a very interesting conversation, but clearly, there’s a lot of b2b players in the market that are very strong, but as well I know a lot of brands that are using salesforce globally that are just waiting for one thing that when the sales force is coming here, then we’re going to use potentially salesforce commerce and sales force here in China to replicate what they have done globally and to make things easier in terms of maintenance, in terms of programming and so on.

So, I think 2021 is going to be an interesting year to see if companies will want to resist and continue leveraging using what they’ve been developing for years or if they will say okay – let’s follow what global is saying and we’ve seen of course in China a lot of resistance. You don’t actually have the full ownership of the strategy and the governance of the country for those brands, so I think it’s going to be very interesting.

Any questions? We will find an expert to answer them. Drop your questions in the comments, or send us an email at dx@daxueconsulting.com.

This article Daxue Talks transcript #75: China’s digital transformation and CRM players is the first one to appear on Daxue Consulting - Market Research China.

According to White paper on mental health of Urban Residents in China, among 1.1 million people in the sample, nearly 75% suffer suboptimal levels of mental health  while only 10.3% enjoy a healthy mental status. The paper also indicates that there is a relationship between the mental health and physical health. 50.1% of people who have physical health also suffer mental health problems. Specifically, people who are diagnosed with tumours, diabetes and hypertension are more likely to have anxiety and depression.

A more recent survey by Teenager newspaper reported that in 2018, more than a third of the young adult in the age group 14-35 were at risk for depression and 10% had severe depression. The rate of young adults with no mental health issues dropped by 5.3% between 2008 and 2018. The risk of mild-to-moderate depression increased 5% (compare to 2008) and the risk of severe depression was also higher than in 2008. All the evidence points out the fact that more and more people in China are facing mental health problems. Additionally, the Chinese government announced a series of documents (Health China movement健康中国行动) to urge local school and institutions to pay more attention to children and teenagers’ psychological wellbeing. It is therefore important to understand the current development of China’s mental health care market and how it is organised.

Mental health care market in China: The growth of C2C psychotherapy online platforms

According to iiMedia research, the scale of e-commerce users of therapist services in China exceeded 20 million in 2018, and it is expected to triple in 2020. Rather than offline services, Chinese tend to choose online therapist services as it is more convenient and private. There are a large number of consumers needing a therapist for emotional setbacks as well as depression. This research suggests that with the development of user education the growth of the e-commerce market for therapist services will slow down in the next few years, and the services will refine themselves with more diversified segments.

Data source: iiMedia, Chinese go online for therapy sessions

Song Guo Qing Su (SGQS松果倾诉) and Hao Xin Qing (HXQ 好心情) are the e-commerce psychotherapy platforms that are trending. Both SGQS and HXQ use a C2C business model to deliver their service. SGQS attracts many independent yet less qualified therapists to join the platform. A client can choose either to communicate via text or a call and the therapists will charge accordingly. The price is in a wide range and usually much cheaper than the professional therapist in the hospital. However, SGQS does not guarantee the quality of the therapists. The same kind services are proposed on Tao Bao (淘宝) as well.

In contrast, HXQ is relatively more professional in terms of quality of therapists. According to HXQ website, the therapists registered with HXQ are all from public hospital psychiatry, neurology and psychology department doctors. Almost 20 thousand psychiatrists, accounting for 80% of the psychiatrists nation-wide, are registered with HXQ. HXQ uses the cloud and big data technology that share the sources with the supply chain of the medical and health products. Hence, HXQ is not only a provider of psychological consulting services but also a health supplement retailer.

Image source: Sohu new report, CEO of HXQ’s presentation about online mental healthcare market in China

Supply in the the mental health care market in China

In a China Paradigms interview, Zhang Ying Fei, a psychological therapist in China points out that the Chinese mental health market is underdeveloped. Even though many people want to become a therapist and some of them do obtain a certificate, low future income and high upfront investment are obstacles. In order to get the certificate, aspiring therapists need to invest time and money for training, which normally lasts six months to one year.

Independent therapists face unstable income and high investment in training

The supply of therapists in China is short partly due to the sacrifices that therapists must make. According to Zhang, “Even if someone has the certificate they are not going to be a therapist. Who can really be a therapist; according to what I observed are those that are really determined and so they have to sacrifice many things; their time, their current job”

See our China Paradigms episode with Zhang Ying Fei

Zhang says the length of the training is not enough to train people professionally. Therefore, extra investment of time and money is needed for more professionalism. This normally takes a few years and the student needs to be financially independent to do so. The low income is another obstacle, being an independent therapist in China does not guarantee a high income. It is quite the contrary, most of the people take this profession as a part-time job because of the low income and unstable consumer leads. The pay is around 200 to 300 yuan per hour which is a relatively low return on the prior investment. Additionally, there is time needed to manage the clients.. To summarize, there are four obstacles to become an independent therapist: high investment in time and money for training; low future income; unstable consumer leads and difficulty of self-managing clients.

Opportunities and challenges in mental health care market in China

Data driven technology to improve the service

Mr Chen, the CEO of Hao Xin Qing (HXQ) says the next step of HXQ is to strengthen the online systems and attract more registered doctors to join the platform. Due to the relatively conservative Chinese society which possesses a stigma against mental disorders, in combination with expensive consulting fees, Chinese people with mental sub-health are often not willing to seek professional help.

According to 2019 white paper on Mental and Psychological, 92% of Chinese who suffer mental health problems never receive any treatment. Problem such as depression and anxiety are often ignored. Some of them even refuse to admit they have mental problems. Providing an online platform protect patients’ privacy and reduce the cost for both sides. The white paper indicates that indirect mental treatment via online platforms costs an average of 350 Yuan while the direct treatment via off-line hospital costs 1,032 Yuan. Around 50% reduction on cost via online platforms. In the future, HXQ will consider introducing the offline services for their patients if there is need for rehabilitative treatment.

Future market entrants will have to discuss the growing challenges. First, the therapist’s certificate in China is easy to obtain. This reduces the quality of the therapists and increases the complaints from the consumers. This lack of regulatory policies in the mental health market makes it difficult for people with complaints to report.  Secondly, there is no standard fee in the industry. Companies charge differently, raising concerns about the quality of the service as well as barrier of client trust. Therefore, regulations are necessary for the future to guarantee the growth of the mental health market in China.

How did COVID-19 effect the mental health of Chinese people?

Listen to our Daxue Talks episode with David Ammerschlaeger

This article The mental health market in China awakens through digital channels is the first one to appear on Daxue Consulting - Market Research China.

Matthieu David interviews Josh Gardner, CEO at Kung Fu Data. The e-commerce sector has never been more relevant and richer in China than the present and Kung Fu Data is a big reason why businesses succeed in this field. Gathering the right data combined with having the right business relationships and taking advantage of present opportunities has made Kung Fu Data a force to be reckoned with in the e-commerce business. Find out why in this new China Paradigm podcast.

• 0:15 Guest introduction and Kung Fu Data’s history
• 6:48 Current company size and workflow – pre and post COVID-19
• 17:13 The quality of the shopping experience – is it changing?
• 19:55 Calculation of conversion rates during a live stream – the new way of shopping
• 25:23 What other changes might occur as a result of the coronavirus outbreak?
• 28:50 Owning the marketing strategy – shopping platforms are integrating with social media platforms in China
• 31:51 Learning about e-commerce – how did Kung Fu Data come to be?
• 39:41 Rigging the Game – building strong professional relationships makes long term sense
• 47:46 How does Kung Fu Data gain it’s clients’ trust?
• 53:39 Valuable Intel – sacrificing a year to learn the market
• 58:57 Kung Fu Data strategies for optimizing e-commerce marketing
• 1:06:49 The smallest details matter – a Kung Fu Data approach to e-commerce today
• 1:13:48 What books about China has inspired Josh Gardner the most in his entrepreneurial journey?
• 1:23:47 What surprising success or failure has Josh Gardner witnessed in terms of business in China?

 China Paradigm website

One relevant episode

We believe, that China, with 20% of 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 110: How to score a 1.5 million RMB sales day through live-streaming twice is the first one to appear on Daxue Consulting - Market Research China.

Chinese KOLs and Western influencers earning potential

Top 5 highest paid influencers in the west

Influencers typically advertise products on Instagram, Twitter, YouTube and other platforms. Businesses pay a large amount of money to them with a lot of followers to promote their products. If the  followers appear to match the company’s target customers, it will pay more.

Here are the five highest paid Western influencers

1. Kylie Jenner: $1 million per sponsored Instagram post.
2. Ariana Grande: a little less than $1 million per sponsored Instagram post.
3. Cristiano Ronaldo: $ 975,000 per sponsored Instagram post.
4. Kim Kardashian-West: $ 910,000 per sponsored Instagram post.
5. Selena Gomez: $ 900,000 per sponsored Instagram post.

Influencer is becoming the fastest growing channel for brand marketing. Based on a Tomson study, western businesses earn $6.50 for each dollar spent on influencer with the top 13% earning more than $20, which is a significant return.

The two Chinese KOLs with the strongest sales power

Compared to the hundreds of thousand dollar instagram posts of western influencers, Chinese KOLs can make over a million RMB in sales revenue a minute during live-streams. On October 21^st 2018, Li Jiaqi averaged around 1.77 milllion RMB (around 250 thousand USD) sales revenue a minute during a six hour twelve minute live-stream. Coming in second, Weiya averaged 1.64 million RMB (around 234 thousand USD) revenue a minute on the same day.

Chinese KOLs are relatively more active on live broadcasts platforms, like Tiktok and Taobao live broadcast. Li Jiaqi（李佳琦） and Weiya（薇娅） are the most representative KOLs in China with strong sales power. Li Jiaqi is the “No.1 Lipstick sales ” who sold 15,000 lipsticks in 5 minutes; Weiya is the “the most powerful promoter” that made a record of over 267 million products in a single (2 hours) live broadcast.

On October 20th, on the eve of the Double 11 pre-sale, Li Jiaqi once surpassed Weiya on the hottest Chinese KOLs ranking list（巅峰榜）. In the end, Weiya ranked the top of the hottest ranking list with 550 million live broadcasts traffic.

Source: Baijiahao, the hottest Chinese KOL ranking list

Li Jiaqi Live Data on 21^st October 2018

Li Jiaqi started the live broadcast at 20:14 on October 20^th and finished at 01:36 on the 21^st. The name of the live broadcast room was “miss the start of 21^st, you will regret the whole year”. From start to finish, the cumulative number of viewers reached 31.78 million. Among them, Li Jiaqi sold a total of 39 types of products, sales volume of 1.527 million, sales revenue reached 660.7 million RMB.

Source: Zhigua Data, Li Jiaqi live data

Weiya Live Data on 21^st October 2018

Wei Ya started the live broadcast at 20:00 on 20^th, 14 minutes earlier than Li Jiaqi, and finished at 02:43 on the 21st. During this period, the cumulative number of viewers reached 38.11 million, a total of 242,000 new fans, a total of 57 types of products were sold, sales volume was 976,000, and sales revenue was 661.2 million RMB.

Source: Zhigua Data, Weiya live data

Their live broadcasts on the day of Double 11 in 2018 proved their incredible sales power. Wei Ya achieved more than 267 million volume sales a day. Li Jiaqi sold 15,000 orders in 5 minutes, which defeated the record created by Jack Ma, the founder of Alibaba.

Chinese KOLs like Li Jiaqi and Weiya can feed dozens of factories in China. As Wei Ya said, no matter how much money she made, she would never stop working. If she stopped her live broadcasts, many factories might be closed. Other than advertising income, they also have commission. Weiya can make 2,370,000 RMB income for one live broadcast, and Li Jiaqi can make 3,150,000 RMB for one live broadcast.

Comparison between top western influencers and Chinese KOLs

In contrast to Chinese KOLs livestreaming, western influencers them promote products by well-produced and creative videos posted on Youtube, Instagram and other social media platforms. The quality of those videos can compare with MTV in Hollywood and even comparable to the quality of film production.

Jeffree Star vs. Li Jiaqi

Jeffree Star is a male, born in 1986. His father died when he was 6 years old. His mother is a professional model and has a profound influence on his aesthetic and preferences in a subtle way. He started to wear makeup when he was 12 years old, tried women’s clothing after attending high school, and finally showed himself as a “female image”. Initially, Jeffree Star was active as a model and singer, and was favored by Lady Gaga’s mentor, Akon. Akon boasted that he would become Gaga No.2. However, it did not come true. Later, Jeffree Star was famous for his creative makeup display on YouTube.

Source: WWD, Jeffree Star cremation palette

Four of the five highest paid western influencers are celebrities. Jeffree Star can make a good comparison with the Chinese KOL, Li Jiaqi, as they both are just influencers not celebrities.

Both Chinese KOL, Li Jiaqi and Western KOL, Jeffree Star focus on makeup. KOLs in China have more restrictions than in western countries. Before Li Jiaqi, most of makeup promotors were female KOLs in China. Li Jiaqi always tries lipsticks directly on his lips to better show the real colors, which was very bold for a male KOL in China. However, this is nothing compared to what Jeffree Star has going on.

Annual Income: Li Jiaqi (140 million US ) vs. Jeffree Star (100 million US dollars)

The profit model between these two make-up enthusiasts is quite different. Li Jiaqi’s team earns 1 billion RMB advertising revenue per year. Jeffree owns his personal brand “Jeffree Star Cosmetics” and make 100 million US dollars per year. He is no longer just a KOL but also a famous brand entrepreneur. Based on the data, Li Jiaqi’s team create more revenue than Jeffree Star’s cosmetics company.

Source: Shangyexinzhi, Jeffree Star Cosmetics

Business Model: Li Jiaqi (marketing team) vs. Jeffree Star (vertical business line)

Vertical business line, vertical e-commerce brand is a profit model that many western KOLs are adopting. They start from becoming influencers, then accumulating fans, doing a lot of traffic, and finally forming an independent vertical brand. This is a very different business environment between the KOLs in United States and KOLs in China. Some Chinese KOLs are trying to adopt the same business model. However, many of them were facing quality problems and failed. Vertical business line can also make profits for KOLs in China but following the example of Li Jiaqi might be more suitable in the Chinese market. Li Jiaqi’s team plays a role of a marketer but not involved into production.

Learn more about KOL marketing in China

China Paradigms podcast on how to leverage Chinese KOLs in marketing

This article Chinese KOLs vs. Western Influencers: How does an instagram post compare to a minute of livestreaming? is the first one to appear on Daxue Consulting - Market Research China.

Steal the Spotlight

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

The story of the Kardashians started from a reality show

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

Arousing viral discussion

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

The Kardashian’s fame as officially hit China

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

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

How to mimic the Kardashian success in a Chinese way?

In China, vlog is a powerful tool

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

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

Stay Active in Social Media

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

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

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

Presence of the Kardashians in China

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

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

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

Kim collaborated with a Chinese influencer to expand her audience

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

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

What could be next – Short Video Platform

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

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

Construct favorable public image – the Chinese way

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

How the Kardashians level up their public image?

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

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

The Chinese audience is strict

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

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

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

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

Fan conversion

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

How the Kardashians achieve their success in business

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

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

Can someone mimic the success of the Kardashians in China

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

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

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

Author: Dongni He

Partner with a Kardashian-like KOL in China

Learn how to do influencer marketing in China with daxue talks

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

Matthieu David interviews Alex Duncan, Co-founder and Product Lead, and Alex Li, VP at KAWO Head of Brand and Agency Partnerships. If you are a big brand trying to establish yourself on the Chinese market you’re going to need a strong social media presence. Thus, we decided to arrange this interview to get the answers directly from experts and explore social media management platform, since KAWO offers support for foreign brands across all the major Chinese social media platforms. How hard was it to build this business? What were the challenges the team face when deciding their pricing model and what did they learn about how to handle the ever-changing algorithms of the Chinese social media platforms? Find out the answers to these questions and many more by listening to this interview.

• 0:15 Guest introduction and KAWO’s history
• 6:11 KAWO is always implementing new features based on user feedback 8:50 Present company size and user base
• 13:26 How did the coronavirus outbreak impacted KAWO’s functioning
• 15:24 The early days – how did KAWO come to be?
• 19:24 How hard is pricing the service in the SaaS industry?
• 23:25 More about pricing – how adaptable does the pricing model need to be for KAWO?
• 28:02 How does KAWO handle pricing for multiple account users?
• 32:26 Planning and Reporting – very important features for KAWO users
• 37:32 Does planning mean just pushing messages or is there more to it on KAWO?
• 39:06 How difficult is it to build a software service based on APIs of existing Chinese social media platforms?
• 43:15 How is KAWO’s API leveraged by their clients?
• 45:15 Beside timing what makes a post great by KAWO’s standards?
• 49:13 WeChat subscription accounts are the safe bet for tailored content
• 52:04 How hard is it to be viral on Wechat?
• 53:52 Post frequency on Weibo – avoiding diminishing returns
• 55:13 Catering content to your niche is the key to success on Wechat
• 55:58 What books have most inspired Alex in his entrepreneurial journey?
• 58:54 What do you read to stay up to date on China?
• 1:01:22 What unexpected failure and success have Alex witnessed in China?

 China Paradigm website

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We believe, that China, with 20% of 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 109: Building a SaaS in the Wechat, Weibo & Douyin ecosystems is the first one to appear on Daxue Consulting - Market Research China.