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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Consumer profile of the Stay-at-home Economy in China

The expression of Zhai people (宅人群) refers to men and women who depend on the internet to meet their daily needs without leaving their homes. They are usually keen on online videos, games and social media. Apart from recreation, Internet also enables them to buy food and clothes, learn remotely, and read. During COVID- 19, most Chinese people adopted the Zhai lifestyle. Thus, the Stay-at-home economy in China has expanded.

“Zhai people” aka “宅男 and 宅女” (Zhai men and zhai women) is originally a Japanese word “Otaku” meaning “geeks”, now it is widely used to describe people who don’t like outdoor activities. They normally spend less than 3 hours outside and around 8 hours on the internet every day.

Among the Zhai people, 55.5% are men and the rest 44.5% are women. 76.8% of Zhai people are younger than 35 years old, but COVID-19 pushed the Zhai lifestyle to older generations too. Regarding geographical distribution, Zhai lifestyle are not unique to tier-1 cities. In fact, 60% of Zhai people under 30 years old live in tier-1.5 and tier-2 cities.

Internet accessibility and Mobile payment are the foundation of the Stay-at-home Economy in China

China’s fast-growing internet enables people to enjoy many services without leaving their homes. According to the most recent report from China Internet Network Information Center, 65% of Chinese population are mobile internet users. According to Mckinsey, total time spent online per user per day amounts to 358 minutes, with social apps (44%), content apps (20%) and other apps (36%).

Another important driver of the Stay-at-home Economy in China is the wide use of mobile payment. 92% of people in China’s largest cities use WeChat Pay or Alipay as their main means of payment.

COVID-19 mandated Stay-at-home, which pushed Chinese activities further online

Time spent online has steadily increased for several years in China, COVID-19 enhanced this trend. During the epidemic, Chinese reliance on the internet increased and they were exposed to more diverse platforms.

1. Mobile gaming: Multiplayer online battle arena sector is the most popular with the game Honor of Kings reached more than 100 million daily active users.
2. Social media platforms: On Weibo, some topics about COVID-19 reached over 1 million reads per minute.
3. Online Shopping: In February 2020, Taobao app had 720 million users in China, increased by 33 million users compared with December 2019.
4. Online fitness classes: KEEP fitness app registered a 185% increase in followers on the live-streaming platform Douyin.
5. Remote work and study platforms: The Tencent Meeting app was downloaded 430,000 times a day, up from 370 before the outbreak.

Social media and news apps are more embedded into Stay-at-home Economy in China

On average, every Chinese social media user has 9.3 social media accounts. 98% of Chinese netizens visited social media platforms in January 2020. All of the active social media users have access via mobile. They averagely spend more than 2 hours per day on social media and 45% of them used social media platforms for work.

COVID-19 drive the demand for news apps as well as social media

Both the time spent and the number of active users of daily news apps increased since December 2019. Along with the development of COVID-19, users’ demand for news apps peaked in February when China entered the height of the epidemic. Then, it had another growth in April when China’s market started to recover from the epidemic. Qianfan Analysis reported a 12.4% increase in the monthly average time spent on news apps per use, from 17 to 19 hours.

[Data source: Qianfan Analysys ( 易观千帆), Questmobile, monthly active users of China’s top news apps during COVID-19]

Outside of news apps, WeChat, Weibo, and short video apps became the main channels for Chinese to obtain relevant information about COVID-19. Information channels on social media are more likely to gain traffic in the future. 48% said they will continue to spend more time in information acquisition after the outbreak. A popular science KOL PaperClip went viral explaining the COVID-19, attracting over 2 million views on Weibo alone.

The 4 types of entertainment rising in the Stay-at-home Economy in China

The mobile games market still has growing potential

The revenue of mobile games had already been steadily increasing, and COVID-19 lead to an influx of new gamers. Additionally, many long-time players spent more time gaming during the epidemic. According to Quest Mobile, the Chinese New Year (CNY) holiday had a 41% year-on-year increase in terms of average time spent on gaming. In the same comparison period, the revenue of mobile games in China increased 30% from $530 million to $668 million.

Most of the top games have some social or multiplayer aspect. Mini games are also popular since they are less time consuming and suitable for stress release. The 5 top mobile games people played during the epidemic include:

1. Honor of King: the number of daily active users exceeded 50 million during the 2020 Chinese New Year. On the first day of the new year, the number reached the peak of 54 million.
2. Online chess and card games: People in northern China prefer card games and southerners like chess.
3. Werewolf: Werewolf (狼人杀) is a popular board game in China. Its active users increased by 20% every day during the 2020 CNY.
4. Sandbox games: The number of daily active users of sandbox grew by 6 million since the 2019 CNY, to reach 76 million during the 2020 CNY.
5. Mini games: OPPO mini games became the third most popular game series according to active users during the 2020 CNY.

Short videos enjoyed explosive growth and commit to user stickiness after COVID-19

Short videos have been one of the most important forms of entertainment in China during the past a few years. Now, short video apps provide quick news and info about COVID-19. The number of monthly active users of online video platforms had a large increase during COVID-19. According to iResearch, short videos claimed 68.4% of the spare time of Chinese people, only second to TV series (69.8%). Some movies released on online video platforms rather than in cinema and they had a large number of views. Cinema is no longer the only option for releasing films, online video platforms are challenging its leading position.

[Data source: quest mobile, the monthly active users of China’s online video platforms]

The industry concentration of short videos in China is high. The top short video platforms reached many new users over 40 years old because they could quickly get updates about COVID-19. Douyin (13%), Kuaishou (17%) and Xigua (19%) all witnessed double-digit growth from December 2019 to March 2020.

The number of paid users of online video platforms increased significantly during COVID-19. And those platforms are determined to keep the trend going. COVID-19 halted the shooting of many TV series, movies and shows, which decreased high-quality content. People will have higher demand for higher quality and diverse media. Video platforms are working hard to buy more high-quality video content to increase user stickiness.

Music and concert industry responded to COVID-19 in ways that ensured its growth

During the epidemic, music platforms offered songs and whole albums related to fighting against COVID-19, resulting in increased online traffic. It’s possible those new users will be paid users in the near future. According to Tencent music group, Kuwo 酷我音乐, a big online music platform in China achieved 3.5 billion total exposure during the epidemic. 462 musicians and singers also published epidemic-related songs in Q1 2020.

Offline concerts were all canceled or postponed during COVID-19, while online concerts offered extraordinary audio-visual experience to fans and received large traffic. Online concerts effectively help online music platforms reach more new users, it can be expected that online concerts will be one of the main ways for music platforms to gain traffic. For example, Tencent music group held on 11^th April 2020 an online concert “I am A-Lin”, and attracted 20 million views of its Weibo topic. 4 days later, it held another online concert “To see you whenever I want” became the No.1 Weibo hot topic.

COVID-19 promoted online reading in a somewhat permanent way

More than 50% Chinese readers chose to read novels almost every day. The average daily online reading time increased by 20% during the epidemic compared to last year. Most new readers are those who did not have much free time to read before. Now they have formed the habit of reading online and boosted the growth of the market.

86.2% of people say they will continue to read after the epidemic, hence the online reading market will likely grow in the near future.

E-commerce and delivery further developed the Stay-at-home Economy in China

E-commerce is further enhanced by KOL live-streaming

The matured e-commerce system provides more convenient conditions for Chinese consumers. But its growth rate has declined, as the scale of users has gradually reached the ceiling of netizens and the cost of acquiring traffic is getting higher and higher. However, Chinese people’s purchasing decisions are heavily affected by KOLs and live-stream and some top short video platforms (Kuaishou and Douyin) already entered the e-commerce market by live-stream + KOLs. They achieved very high sales. Hence, “live-stream e-commerce” will become the next outlet in China’s e-commerce industry.

During the epidemic, live-stream and KOLs played even more important roles in online marketing. The top short video platforms made full use of their huge traffic to work with top KOLs in live-stream marketing, they have achieved extraordinary results. Live-stream marketing is becoming the most efficient online marketing tool in China. For example, Kuaishou live-stream achieved over 620 million RMB turnover on 18^th of April alone.

Grocery delivery stands out with the help of contactless delivery service

Although January is a traditional low season for e-commerce platforms, the COVID-19 impact on Chinese consumption is evident in the grocery e-commerce market. In the long run, the main problems for fresh food e-commerce are high transportation and storage costs. Fresh food is not easy to preserve and it’s price is usually high. Therefore, it’s essential for fresh food e-commerce companies to optimize storage to lower costs.

Diverse and safe express delivery methods can increase consumers’ desire to shop online and hedge part of the consumption crisis brought by the epidemic. JD.COM has used an unmanned delivery robot for contactless delivery in Wuhan, which promoted the application of AI tech in daily life. Similarly, China’s largest delivery service provider CaiNiao (菜鸟available everywhere in China) started to use the “contactless pickup” service to reduce personnel contact since 28th January. Thus, consumers’ demand for contactless delivery cabinets is expected to continue even after COVID-19.

Online food delivery is essential in the Stay-at-home Economy in China

In the first two months of 2020, the catering industry’s revenue decreased by 43.1% year-on-year. More than 90% of the Chinese restaurants had to close. Luckily, contactless delivery, which was already quite developed in China over the years reduced infection. Two online food ordering platforms Meituan and Ele.me adapted their delivery services to reduce infection risks. This includes taking the temperature of all the people involved in the delivery process.

Seeing the success of contactless delivery, the catering industry all turned to O2O food delivery. According to the survey of iiMedia, 78% of the restaurants mainly sold online to ensure the continuity of their operations during COVID-19. Among them, 70% said they will remain online.

Read our full report on the Stay-At-Home Economy in China!

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Chinese economy is bouncing back

China’s GDP contracted by 6.8% in the first three months of 2020. It is the biggest drop in nearly three decades, as the country’s factory output ground to a halt. National Bureau of Statistics of China showed that industrial output was down 8.4% from the year before.

[Data Source: Tradingeconomics.com, ‘China’s GDP growth forecast’]

In the beginning of April, State Council claimed 99% of manufacturing firms had begun working again. Besides, 84% of small and medium businesses had reopened. The economy’s performance in the second quarter will be crucial for the government to get the economy back on track. A quick rebound can happen because of the “countercyclical policies”, or pro-growth measures taken by Beijing. Chinese experts expect economic indicators to significantly improve in the second quarter, with growth returning to potential by the end of 2020 or early 2021.

Recession-proof markets in China during the epidemic

Some markets have proven that they are recession-proof during the epidemic in China. For example, people need health services even more so than usual in these hard times. In a crisis period people also visit discount stores to buy goods in bulk and at discounted rates to save money. Since people had to use nearby supermarkets during the epidemic in China, convenience stores saw good growth dynamics.

Such goods as food, hygiene products, household and baby products were always essential and did not experienced recession. The Chinese began to be more attentive to their own health, so the sale of facemasks and sanitizers also increased. Given the current situation, most companies are making their workforce remote. They are using Chinese video conferencing solutions such as  WeChat work and DingTalk. Additionally, in a recession period, people fear losing jobs, and they get insurance to be safe.

A unique characteristic about consumption following COVID-19 in China, is that digital and online tools and services came out as a recession-proof market in China. Due to being indoors, consumers spent much more time on entertainment like gaming, short videos, and streaming movies.

Higher demand for healthcare services in China

The growing healthcare sector is in many aspects a byproduct of China’s recent economic rise. Now several hundred million people have higher living standards and can afford healthcare services. This increases the demand for healthcare services. Although the medical industry is growing fast in China, the demand for further healthcare services is growing even faster.

Industry experts estimated the Chinese healthcare market will grow to 90 billion yuan by 2020. The Prospective Industry Research Institute predicts that the sales revenue of China’s pharmaceutical industry will exceed 3 trillion yuan. The industry scale will exceed 5.3 trillion yuan in 2025.

[Data Source: Sohu, ‘China’s healthcare industry market revenue’]

Healthcare is a recession-proof market in China. After the coronavirus outbreak in China has led to an increase in the demand for medical equipment. From January to March 2020, there were 87,265 new businesses with medical devices. Besides, the performance of some medical device companies increased in January, and the medical device industry sector is trending well.

[Data Source: iimedia research, ‘Share price trend of pharmaceutical device industry’]

Most experts agree that the coronavirus outbreak will lead to profound changes in China’s healthcare sector. These changes could include massive investment in disease prevention infrastructure and a re-visiting of pharmaceutical companies’ pipeline strategies. Other improvements could focus on greater emphasis on the role of community healthcare centers.

The outbreak will also most likely lead to digital technology playing a greater role in China’s healthcare. Healthcare industry will turn to digital technologies and solutions to engage markets using AI-based diagnostics and tools.

[Data Source: qianzhan, ‘China’s VR medicine market size forecast’]

Retail industry: convenience and discount stores

Convenience stores win during the epidemic

In 2019, the number of convenience stores in China is about 135,000, an increase of 10.3% from the previous year. The number of stores will be close to 150,000 in 2020. With the improvement of digitalization and supply chain, convenience stores will give consumers a more convenient and safe shopping experience.

[Data Source: chyxx, ‘Number of convenience stores in China’]

Convenience stores proved to be a recession-proof market in China. They had more advantages during the epidemic. People have reduced their outings and the scope of activities. Community convenience stores are a typical less-personal retail format. They have gradually become a centralized point of sale and their commercial value also started to stand out. Many convenience stores even started stocking fresh fruits and vegetables to better cater to Chinese demand during COVID-19.

Walmart and Costco – discount stores in China stay on track

Executives of Walmart in China claimed that sales at the company’s 430 stores had not faltered, even during the quarantine. Customers turned to the retailer to buy food and necessities. Walmart also invested in a grocery delivery venture in China that has continued to make home deliveries during the outbreak.

Report published by Costco showed that Costco’s sales accelerating in February 2020, increasing 11.7% year over year. Customers started shopping at the discount stores when the outbreak hit. Demand was so strong that Costco placed a limit on how much customers could purchase of certain items. This helped to increase second-quarter sales and it will influence third-quarter results. For the three months ended February, Costco reported worldwide revenue growth to $39.7 billion.

[Data Source: Costco Wholesale Corporation, ‘Costco revenue worldwide for the quarter ending February’]

Food products: healthy food and convenience food face huge demand in China

In the basic life needs food undoubtedly occupies the first place. That is why it is a recession-proof market in China. During the isolation period in China, people could not eat out, so they bought the ingredients for cooking at home. Downloads of the recipe apps more than doubled in February to 2.2 million at China’s app store. In February 2020, cooking and food-related content attracted more than 580 million views on Chinese video-streaming platform Bilibili.

In order to avoid contact with people, consumers choose to use food delivery in China and have the habit of hoarding food products. Healthy food and vegetables saw the growth in sales.

[Data Source: JD Data, ‘YOY growth rate of food sales during Spring Festival 2020’]

Convenience foods and quick-frozen foods have become the first choice for customers. According to ECdataway, sales of quick-frozen foods have skyrocketed from January to February. Instant noodle sales increased by 57% year-on-year, dumplings sales increased by 78%, instant hot pot increased by 144%, and meat products increased by 264%. 

[Data Source: ECdataway, ‘YOY growth rate of convenience food sales January-February 2020’]

Survey by the “Food Safety” magazine showed 5% of food companies faced  the risk of immediate bankruptcy. 8% of companies can persist for 1 month. 3% of companies can persist for 9-12 months. Roughly 41% of companies can persist for one year. 

Baby products as essential market

As babies are a part of a natural life circle, baby products are a necessity for people. The business of baby products rarely crumbles and proved to be a recession-proof market in China. As a just-needed product, diapers had greater demand than other supplies during the epidemic. The data shows that the most stocked items for pregnant women and mothers in January-February 2020 were diapers. The proportion of pregnant women who chose to hoard diapers was 29%. The proportion of mothers who chose to hoard diapers was 64%.During the epidemic, the most used channels to buy baby products in China were large supermarkets.

Sales of cleaning household products are growing

Chinese government’s recommendation to clean touched surfaces and objects frequently increased the demand for household cleaning products. According to statistics, sales of household cleaning products on Tmall surged 210% compared with the same period last year.

Alibaba released a report which stated that the sales of household cleaning products on Alibaba website increased by 316%. Moreover, consumer demand urged the promotion and application of multifunctional washing products. As household products had big demand during the pandemic, it is a recession-proof market in China.

Hygiene industry – hand sanitizer and facemasks

High demand for hand sanitizers in China

Affected by the coronavirus epidemic, the demand for hand sanitizers surged. After the outbreak, the sales of hand sanitizers increased sharply by 231%. Hand sanitizer sales on Taobao has soared to 31 million, about 11 times more from the previous year. From January 20 to February 13, 2020, JD Supermarket provided around 6 million bottles of hand sanitizer for consumers nationwide.

[Data Source: qianzhan, ‘Demand for sanitizers January-February 2020’]

Affected by the coronavirus outbreak, the growth rate of sanitizer output value will increase. The initial estimated growth rate can reach 13.7%. The annual disinfectant output value will exceed 11.5 billion yuan.

With the need for epidemic prevention and control, the demand for 75% medical alcohol has greatly increased. In 2020 it will exceed 80,000 tons.  China Chamber of Commerce estimates that the annual output of hand disinfectant will exceed 50,000 tons in 2020.

Facemasks industry is growing

Masks have become the most important goods during the coronavirus outbreak in China in 2020. In recent years, the output value of China’s face mask industry has maintained a stable trend, and the growth rate of output value has remained above 10%.  Affected by the coronavirus outbreak in 2020, the growth rate of medical masks will increase significantly, reaching 28%. The market scale of the Chinese mask industry in 2020 will have a substantial increase and reach 71 billion yuan

    [Data Source: iimedia research, ‘China’s face mask market size’]

Industry insiders pointed out that in the future, professional masks will continue to occupy the market, and the market share of low-end full-gauze masks will continue to decrease.

Distance learning and remote work tools as recession-proof markets in China

Distance learning attracts more users in China

After the government announcing to postpone the starting day of school, online learning APPs achieved dramatic growth. Statistics show that the scale of China’s online education market exceeded 300 billion yuan in 2019. It will reach nearly 500 billion yuan in 2022. The epidemic brought to online education an outstanding traffic performance. During the epidemic, the daily active users of Xueersi (学而思) online education platform exceeded 10 million.

According to the data of the “Statistical Report on the Development of China’s Internet” China’s E-education users reached 232 million in 2019. It increased on 31 million from the end of 2018, accounting for 27% of the total Internet users.  As many schools still have an online teaching, China’s online education users can reach 305 million in 2020.

[Data Source: chyxx, ‘Chinese online education market size’]

Remote work tools are getting more popular during the epidemic

During the coronavirus outbreak, the demand for online office software has risen sharply. According to the government reports, nearly 70% of the employees believe that the company needs to provide tools for employees to work online.

In 2017, the scale of China’s remote office market was about 19 billion yuan, and it reached about 23 billion yuan in 2018. In 2020 it will grow to 47 billion because of the big demand.

[Data Source: Sohu, ‘China’s remote office market size’]

The popular remote office in this epidemic were DingTalk and WeChat Work. Later Zoom, Xiaoyu Yilian and ByteDance’s Feishu subsequently joined the competition. According to statistics, there are currently about 4,500 cloud office companies in China. At present, DingTalk and Enterprise WeChat already have a certain lead in terms of user size.

After the outbreak, the probability of using these remote office tools will only increase. This epidemic has caused more people to start to understand and understand remote office software. 

Insurance market in China can resist recession risks

The outbreak will increase China’s insurance awareness and may help the long-term development of China’s insurance industry. As the world’s second largest life insurance market, China’s growth potential remains strong. During the epidemic, the willingness of enterprises to avoid man-made and natural disasters increased.

The impact of the epidemic on the insurance company’s claims is under control. Bank of China and Insurance Regulatory Commission have strict supervision on the solvency adequacy of insurance companies. Currently, the insurance industry has enough solvency to better resist risks and is one of the recession-proof markets in China. 

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Full transcript below:

Oliver Verot: I’m Oliver Verot, the founder of Gentleman Marketing Agency (GMA). We are a digital marketing agency focused on performance and based in Shanghai.

Interviewer: What is the new system known as affiliate marketing for Douyin?

Oliver Verot: Douyin has a lot of influencers and they have a project to develop the biggest affiliate platform for e-commerce. So how it works? It gives opportunity to each of influencers, macro and micro influencers to speak about something and put a link. When the brand is selling something or if a company is selling a product, they will basically give the money automatically to the influencers. So they have an access to a large number of KOLs and they start to promote it and even give the opportunity to each people published video on Douyin to start to monetize and make money. I think it would be a big game changer in the e-commerce in China because I believe that if you have all these influencers that basically are paid for the effort, it will be totally changed. Today how it works with the influencers, you need to pay them and they’ll speak about it, but it’s kind of hard for company to track where the sales come from and what it is. So it’s very complicated for influencers to work based on affiliation and commissions because they are not sure that they would get the money with the traffic that they get. But Douyin programs this and makes it happen, they already launched this with some Taobao stores and external links, it’s possible it works. And they are planning to open Douyin stores and link directly existing influencers with an automatic system. So I believe that it’s really the future and interesting for brands because brands can develop on Douyin and after people can jointly speak about the products whatever they want and make money automatically. For all these influencers that we stopped to negotiate with brand directly and other third parties kind of things, they can directly see if they like the product and speak about it and make money on that.

Interviewer: Technically speaking, how does Douyin integrate the connection with Taobao, TMall, JD or WeChat?

Oliver Verot: How technically it work today, every time you are interested about something in the video, you can click on the link and you have an external page, you click it and after it’s linked automatically. So it’s connected automatically with Taobao because they have an agreement on Taobao and Tmall, but it doesn’t work with every store, the store need to have at least 4 stars and certain experience, so it works like this. If it is with a Douyin store, it would be more joint and won’t have this middle page, so we would be directly linked to the influencers or the page where people can directly buy it. So today they are making the first step and after or later they will make it more direct by deleting one step, Taobao store or Tmall store or any links that are in the middle.

Interviewer: Does it mean that Douyin is not sending traffic to JD and WeChat shop?

Oliver Verot: For JD, I never see that, I don’t think they have an agreement. They are selling traffic not to WeChat, but to Youzheng store which is a WeChat store but on an external link. Why are they selling to that? Because on Youzheng store, you can basically set up a program and link this to API together, but I don’t think Douyin and WeChat’s API are connected together.

Daxue Talks is a show powered by daxue consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China.

This article Daxue Talks transcript #27: China social media marketing on Douyin is the first one to appear on Daxue Consulting - Market Research China.

Questions:

• Would you mind telling us more about CPS (cost per sales) on Douyin?
• Is the level of commission standard or is it determined during the negotiations?
• Do you have negotiations directly with KOLs or with Douyin?
• Do you have anything else to share that may be new on Douyin or interesting to learn?

Daxue Talks is a show powered by daxue consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China

This article Daxue Talks 28: How to collaborate with Douyin on the Chinese market is the first one to appear on Daxue Consulting - Market Research China.

Questions:

• What is the new system known as affiliate marketing for Douyin
• Technically speaking, how does Douyin integrate the connection with Taobao, Tmall, JD or WeChat?
• Does it mean that Douyin is not sending traffic to JD and WeChat shop?

Daxue Talks is a show powered by daxue consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China

This article Daxue Talks 27: Quick Guide on affiliate marketing for Douyin in China is the first one to appear on Daxue Consulting - Market Research China.

AI in the video games industry in China: usages and opportunities

Of course, the first application of artificial intelligence in China’s video games aims at improving the gaming experience. For example, Tencent, NetEase, and Changyou, who are the leaders in the Chinese video game industry in 2019, have all used a speech recognition system to improve gaming immersion. This allows players to convert their voices into texts or instructions in the game and keep their hands free. 

As far as mobile games are concerned, the advances in artificial intelligence are rather the same, and fortunately given the size of the mobile game market in China. According to the iResearch Institute, the size of the Chinese mobile gaming market was more than 100 billion RMB in 2018. 

Recently a small AI mobile game went viral on Wechat. The game called Caihua Xiaoge (猜画小歌)is based on image recognition. The challenge for players is drawing pictures accurately so the games image recognition algorythm can recognize what the picture is. If the computer can correctly identify your drawing, then you move onto the next stage. A little game experience that many Chinese people have enjoyed, and that would not have been possible without the image recognition technology.

Finally, intelligent recognition can be used in another way. Not to improve the experience for gamers, but to improve the standards of the video game industry in China in general.

Tencent announced last year that it would use facial recognition to manage the hours players spent in front of the screens, especially the youngest ones. This artificial intelligence system aims to limit the playing time of children under 12 to two hours per day. Tencent thus records the players’ faces and thanks to national data, blurs the game screen or blocks the connection. This system has been implemented on the multiplayer online battle game Honor of Kings, also known as 王者荣耀 (Wángzhě Róngyào) in China, one of the most popular video games in China.

After several trial phases where Tencent realized that thousands of Chinese children were trying by all means to divert the limit, the company decided to apply this age restriction system to 10 of its most popular games. 

AI in esports in China

Artificial intelligence is also used in the esports industry in China.

In 2018, China’s eSports industry was worth more than $13.8 billion, an 18% increase over the previous year. According to the Chinese Gamma Data Institute, the total number of players has also exceeded 400 million.

Indeed, AI in esports in China can help to improve the playing tactics of professionals gamers. This is the case of the artificial intelligence designed by Tencent’s AI team to beat the professional players of  Starcraft II.

Starcraft is a very popular game in China (星际争霸) and has four teams of well-known professional players who participate in international tournaments representing the country. Thus, the defeat of the professional players TLO and MaNa (German and Polish) against artificial intelligence shocked the gaming community in China.

But it also means that today, artificial intelligence in China’s video games has advantages for the professional industry: it is a new way to train players.

AI in video games creation

In China, artificial intelligence is also used to accelerate or improve the video game creation process. First, when it comes to working on NPCs (nonplayer characters). Artificial intelligence in China’s video games, therefore, makes it possible to make the behavior of these fake characters more natural and reactive to the players actions.

NPCs can either have simple reactions based on a predefined sequence by the computer or react differently to each player’s action.

However, we know that today’s great adventure video games, even with a large budget, do not always use this type of AI. The risk is that artificial intelligence makes NPCs too unpredictable and that it ruins the game’s history written by creators. Thus, until creators have found a middle ground for the use of artificial intelligence in China’s video games, NPCs that are smarter than players are yet in store for  tomorrow.

For the moment, artificial intelligence is mainly used to make the graphics and movements of characters as realistic as possible, like in the Tencent video game, Ring of Elysium, known and loved for its very high-quality graphics.

In addition, the use of AI in video games can reduce some production or testing costs.

Evaluating artificial intelligence with video games

Finally, and even more interestingly, artificial intelligence in China’s video games is not only used to improve the game or its creation. It can be used to test the power of AI because video games are a good reality test.

Researchers around the world are working with video games to help machines develop. The aim is to use the virtual schematics of video games to test the skills of intelligence systems when it comes to, reacting to the environment and learning from their mistakes. Some examples where algorithms for other real-world practices, such as using a virtual driving game to test an AI for autonomous cars, are used.

Tournaments between gamers and artificial intelligence are also organized to test the power of an artificial brain against a real human brain. In China, in 2016, Google’s AlphaGo algorithm faced one of the best players in the world’s Go game, Ke Jie.

The victory of this artificial intelligence is proof that games and video games are an excellent way to test, because they provide structure, repetition, and reinforcement.

Therefore, video games have ,been used for decades in China as a means of testing and evaluating the power and performance of artificial intelligence systems in situations that mimic reality.

The success of VR games in China

A large market expected to reach 45.09 billion USD

Of course, artificial intelligence is at the heart of the latest success of the video game industry in China: VR games.

According to Grand View Research, the virtual reality game market size in China is expected to reach USD 45.09 billion by 2025. An  ‘immersive’ game experience where players put on a VR headset and use controllers to maneiver around the virtual world. Horror, adventure, strategy, dance, and even flight or travel simulations are available.

Recently, a VR game in China went viral on Weibo. A game that allows Shanghai residents to practice sorting waste just before the new law on waste sorting is implemented in July 2019.

The principle of the game is probably one of the simplest in the world. However, it was a great success; some people even made long queues to play.

VR facilities on the rise

Despite the success of VR games in China, the purchase of personal headsets is too expensive for most Chinese people who are not big gamers. People who want to try VR games in China must find places where it is possible to play at a lower cost. This can be in shopping malls where more and more activities are offered in VR, in cafés or even in cinemas.

Amusement parks are also an excellent place to test VR activities, as highlighted in the HTC Vive report, which showed that 70% of respondents were interested in attractions with VR in amusement parks.

This success has also resulted in the opening of VR facilities, spaces dedicated to VR activities and VR games in China. According to a recent report by the iFanr Institute, in 2018 there were 50,000 VR arcades in China.

Among them, there are two big names which have made their fortune thanks to this VR arcade concept: Seekers VR, which is based in Wenzhou and owns a franchised chain of 200 arcades in more than 70 cities across the country and Xigua which has nearly 100 “Player No. 1” VR arcades across China.

In Shanghai, players have many options of VR facilities, so competition is becoming more and more tense, and the criteria are often price-oriented. Here is a list of the best competitors, with an idea of the price for each:

• MacHouse: A sizeable bright space which looks like an old bowling alley from the 1980s, equipped with the HTC Vive. Price: 388RMB for two people for an hour

• Mofamen: Friendly atmosphere, equipped with the HTC Vive Pro, in bonus the green background to record yourself in the game. Price: 119RMB per person for an hour

• Joy’s VR: Large choice of VR games and VR headsets, HTC Vive Pro, Oculus and PlayStation VR. Price: 170RMB per person for an hour

• VR+: An arcade with rooms adapted to the game you want to play (example playing a horror game in a bloody fake prison). Equipped with the Oculus Rift. Price: 48RMB for a 20-minute game

• Star Trek: A VR facility around the StarTrek theme. Price: 98RMB for an hour

• Chuangyi Zhigu VR: An arcade built in a large apartment with a wide choice of VR systems. Price: between 98RMB and 128 RMB for an hour

• VR Better: A VR facility on the theme of science fiction in an apartment where you can also drink and eat. Price: between 100RMB and 128RMB for an hour

• Qingxing Mengjing VR: A place at the forefront of the latest VR innovations in a more natural environment. Price: between 87RMB and 138RMB for an hour.

Top VR headsets in the video games industry in China in 2019

However, the VR headsets market is still growing and unfolding many opportunities. In its Global Entertainment and Media Outlook 2017-2021, PwC found that China’s demand for VR headsets will reach 85.9 million within five years, overtaking the US’s projected 68 million.

When asking Chinese gamers what criteria they consider when choosing a VR headset, comfort comes in first place with 46%, then following screen resolution with 44%, convenience 40%, good content 40% and precise control 40%.

Thus many international players are fighting to win the hearts of Chinese consumers, including  HTC, Oculus, and Sony.

For example, the best-selling headset in China is the HTC brand, which alone takes 33.1% of the market share of the Chinese VR headsets market. However, major international brands such as Oculus and Sony are finding it more difficult to penetrate the Chinese market. Oculus only launched its VR headset in China in January 2018. Aafter HTC, the market is dominated by domestic players.

The second and third most popular VR headset providers in China are Pico and DPVR with 28.5% and 13.3% of VR market share, respectively.

More recently, the Chinese video platform iQiyi also released a new VR headset called Qiyu 2S.

How to partner with an AI company in China in the gaming field?

AI partners in China for gear

• ANTVR

ANTVR is a Chinese company dedicated to VR and AR systems. After a round of investment, thanks to Sequoia Capital, the company founded in 2014 has sold more than 1 million VR products worldwide. Several collaborations with brands such as Lenovo, One Plus, and Motorola make it an excellent AI partner in China. One of its flagship products is its technology made for VR game in China called ANTVR Cyclop, which features the latest technological innovations and is compatible with Steam.

In addition, ANTVR open sources its hardware for developers to create games for the kit.

• DPVR

DPVR is today considered the world-leading VR technology company. Based in Shanghai, its products have been sold across more than 100 countries. Since its foundation, the company has received investments from many listed companies and investment institutions such as Xun Lei technology, Kai Ying technology, and Ao Fei which prooves its potential as an AI partner in China.

Through research and innovation, DPVR aims to build user-friendly VR Products and solutions for everybody to easily enjoy the VR gaming experience.

The company develops headsets for video games, movies, and music but also complete kits dedicated to playing VR games in China such as the E3 Polaris:

According to the research institute Canalys, with 24% market share, DPVR accounted for the largest market share among the mainland China VR brands. So it is also a very good choice if you want to partner with an AI company in China.

• Pico

Pico develops innovative VR products which enable users to experience VR easily.

Founded in 2015, Pico is now huge all over the world (US, Europe, China, Japan) with over 300 team members. The company has developed its own platform called the Pico Digital Platform, which features games, apps, and videos from a variety of developers and publishers. They have around 150 apps and games available and can work directly with developers who want to create a game or app for Pico devices, convenient for an AI partner in China.

One of their best products is the Pico, which is an all-in-one VR headset which offers real freedom in the gaming experience. It enables movements in all directions, which is perfect for games with total immersive VR experience without wires or phones.

AI partners in China for technical savoir-faire

• Dgene

Dgene, founded in May 2016, is a VR solution provider based in Shanghai. The company has worked in different industries such as real estate, education, tourism, healthcare, and of course, digital entertainment.

Dgene develops VR solutions with light-field technology to provide 360 3D reconstructions. It’s an imaging technology which would be very useful as an AI partner in China to work on ultra-realistic reproduction of real-world for video games.

The company won 100 million RMB funds from IDG Capital in 2018 and also received 1 billion-dollar fund, from Alibaba (co-investors: Safran Fund; GSR Ventures Venture) and angel funds of 45 million RMB from Shanghai United Investment. It means that today Dgene has a lot of plans to develop and invest: they plan to expand the 3D reconstruction technology into our mobile phones via the camera.

• Realis

​Realis offers an optical camera tracking system for virtual reality. It works like a target tracking software which can be based on multiple cameras to obtain the right two-dimensional data and real-time calculation. Their system uses cameras to capture the data to identify the trajectory of tracking objects. They can be a beneficial AI partner in China because their cases include gaming, and they offer installation as well as packaged equipment rental program.

With years of research and development overseas, their team is able to develop independently low-latency and high-accuracy VR solutions.

As a potential AI partner in China, Realis has previously worked in the video games industry in China producing PVP games with multiple players at the same scene. They are now working on the future of VR games in China: offsite online VR gaming. Players in different cities will be able to play together in the same VR battle.

The use of artificial intelligence in China’s video games is expanding rapidly. Its interest is that it can be used for many different things, whether to improve the gaming experience and game creation or to help machines learn and grow. Gamers in China still see AI in video games as something very innovative and therefore attractive. Additionally, the recent wide-scale adoption of 5G networks is expected to further boost the VR development.

This promises to be a great time for VR video games and AI applications in China’s video games industry.

Author: Steffi Noël

See our report on AI in China:

This article Artificial intelligence in China’s video games: opportunities for international businesses? | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

Bilibili (referred as哔哩哔哩 in Chinese, also known as B Site) is one of the most popular video sharing platform in China, themed around animation, comics, and gaming (ACG) based in China, where users can submit, view, and add commentary subtitles on videos. The monthly active users (MAU) in 2019 Q1 reached 101.3mm, while the Mobile MAU in 2019 Q1 was 88.6mm and avg. daily time spent reached 81min. The popularity of this platform represents a ‘couch-potato’ type of Gen Z lifestyle in China, which originally was just a subculture but became dominant because of the rise of Bilibili.

On March 26th, a mini-program named “势能种草机-potential energy grass planter” was launched on the Bilibili platform. The main products in the mini-program are cosmetics sold by famous Bilibili celebrities. Bilibili uses Mini Programs after they have been executed by Alibaba, Baidu, Tencent, and Toutiao. Recently, the Bilibili platform responded that the function is an upgraded version of the Bilibili e-commerce function, which is currently in the stage of internal testing. Without a doubt, Bilibili business collaboration in e-commerce is accelerating.

The new Bilibili E-commerce function

What is Bilibili’s E-commerce business？

On April 3, new Bilibili e-commerce mini-programs appeared on the platform. The personal dynamics of uploaders in the Bilibili platform can be realized by using the mini-program to sell goods.

The launch of the mini e-commerce program is a re-exploration of B-station in diversification, especially in commercial liquidity. Before that, the Bilibili platform has made many attempts in e-commerce, including premium membership. After Alibaba invested in Bilibili, it has made changes to its online marketing strategies. Its main focus shifts from user acquisition to E-commerce business, which becomes a more lucrative business in recent years because of the changing Gen-Z lifestyle that takes online shopping as one of their most popular pastimes.

Regarding the trial of Bilibili e-commerce mini program, the relevant Internet platform said:

“The main purpose of launching a mini E-commerce program is to guide Bilibili’s E-commerce business, but whether the ultimate effect can reach the expectation of Bilibili is not good enough to assert, at present, it can only be used as a supplement to Bilibili’s E-commerce business channel.”

One of the major reasons that Bilibili has lagged behind the E-commerce business industry than its competitors is closely related to its unique user groups. Bilibili platform has retained many loyal users and KOLs attached to its platform through its own influence. However, these users strongly oppose to the commercialization of Bilibili, but the acceptance of paid content is higher than other platforms.

How does the new Bilibili e-commerce function work？

In addition to scanning through App, users can enter mini-programs through active links of some uploaders release. Bilibili platform does not design a special entrance for mini-programs on the Bilibili platform.

The previous Bilibili E-commerce business startegies

Before the trial implementation of the mini-programs, Bilibili had taken several testings at E-commerce business. Back in 2018, Bilibili announced that it would encourage the uploaders to open their own E-commerce businesses. Contributors of Bilibili can open stores by clicking on the “commodities” column on the homepage to see the goods on sale. Most of the products sold are cosmetics and skin care products.

The purchase can be completed directly in the Bilibili platform without jumping to third-party sites like Taobao and will transform the fan economy into actual purchasing. Secondly, under the videos, there will be advertisements recommending the products of uploaders, which can also be purchased directly by clicking on the link. At the same time, there is a review area on the purchase page, on which users can post and comment freely.

Business Collaboration in E-commerce

Other than exploring on its own, Bilibili has been collaborating with other big players in the E-commerce business in order to lay the foundation for its further development.

In December 2018, Bilibili platform cooperated with Taobao, which promoted the high-quality native uploaders with millions of fans to accelerate their entries into Taobao and explore the realization form of “content + e-commerce.” In the future, on Taobao platform, uploaders will realize liquidity through joint product name, related peripheral derivatives development, and other ways that match their characteristics.

Before that, the Bilibili platform and Alibaba also have a brief history of cooperation. On Alibaba’s side, uploaders sign up to establish certified Taobao accounts, provide various e-commerce services support for Bilibili platforms.

Massive Bilibili user demand meets robust supply

Gen Z lifestyle represents the future trend of online entertainment in China

Bilibili is the leading subculture community in China with more than 7000 vertical interest circles. More than 80% of users are labeled as Gen Z, the generation born between 1990 and 2009. The average age of current users on Bilibili is 21 years old and the average age of newly registered users is 19.8 years old, which is sinking to the people below the second-tier cities.

Gen Z is contributing a lot to the future entertainment market, and ACG (animation, comics, games) are an essential part of it. Bilibili began to deepen the layout of the Gen Z industrial chain and continues to explore in the fields of animation, cartoons, electronic competition, and so on.

Content consumption promotes community construction. Bilibili platform will also bet its commercialized future on the consumption capacity of Gen Z.

Bilibili users: Highly engaged communities 

Engaged and connected Bilibili users

In the fourth quarter of 2018, UGV (high-quality video) created by uploaders accounted for 89% of the total broadcasting volume of Bilibili Platform, while the number of active uploaders and upload numbers increased by 143% and 148% respectively. The high quality of the content is the core part of Bilibili users loyalty, which is the biggest competitiveness of the Bilibili Platform.

How to make uploaders obtain stable and sustainable income is an important assurance to maintain the richness of UGC (User Generated Content) in the community. Starting from 2018, Bilibili has launched projects such as “Creative Incentive Plan,” “Creative Incentive Rookie Award” and “New Star Plan,” which provide official incentive bonuses to those high-quality uploaders and continue to support outstanding new uploaders.

More loyal Bilibili official members

The data shows that in the fourth quarter of 2018, the average monthly active users of Bilibili Platform reached 92.8 million, 79.5 million of whom were mobile users, increased by 29% and 37% respectively over the same period of last year. Among them, the average daily use of users increased by 5 minutes as much as 78 minutes over the same period of the previous year. In terms of the retention rate of users, according to the prospectus issued by Bilibili Platform in March 2018, the retention rate of official members in the twelfth month exceeded 79%.

It can be concluded that this is a very “surprising” data for a Chinese video-sharing website. This is the core competitiveness and barriers of Bilibili Platform, and also the embodiment of the long-term value of its community. The overall users volume of Bilibili Platform is not as significant as other video-sharing platforms in China, but it is far ahead of its many competitors in terms of user quality.

Currently, the Bilibili Platform is the only large-scale video-sharing platform in China with strict access standards. If new users want to register as an official member, they need to complete a 100-question quiz based on quadratic ACG content.

Although such a strict access system limits the growth of the overall user volume, it largely guarantees the quality of Bilibili users. Most importantly, it protects the overall community environment of the Bilibili Platform. From the comprehensive performance of Bilibili user groups, these high-end users have improved the dynamics of the Bilibili-Platform community culture, which is reflected incisively and vividly in the use time and retention rate of Bilibili users.

Business & Live broadcasting: Core competitiveness of Bilibili

Bilibili games are the 3rd most popular video genre on the platform, while game-themed live broadcasting is also popular. The majority of gamers are directly converted from the game on the Bilibili platform, with which the users can pick and operate games they jointly developed and produced.

Bilibili live broadcasting: An extension of Bilibili’s diversified content platform.

Bilibili offers a wide array of content to satisfy Bilibili users’ growing demands in games and entertainment, such as Mobile Games, PC Games, Console Games, and E-sports.

In addition, the Bilibili platform gets a massive user base; the live broadcasting valid MAU increased from 7.5 mm in 18Q1 to 11.4 mm in 19Q1. Also, the users on the Bilibili platform demonstrates a high willingness to pay for happiness and appreciation, with live broadcasting quarterly paying users increased from 0.5m of 18Q 1 to 1.2mm of 19Q1.

Commercialization of Bilibili: Opportunities for foreign companies

In order to achieve success in China in a long term, it is crucial to grab the attention of Gen Z, the leading consumer group in China’s future entertainment industry.

For the video-sharing platforms in China, selling advertisements through traffic is the most mainstream way to make revenues at present, but it is also the most non-technical form of realization. Therefore, it is vital for each video platform to build its own ecology and to process the traffic in detail.

The Bilibili, as one of the most popular video-sharing platforms in China, its use of mini-programs, traffic liquidity, and third-party cooperation to explore commercialization are definitely worthy of observing and learning by foreign enterprises.

Author: Zichun LI

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This article The Commercialization of the Bilibili platform with a new E-commerce function | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

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