When social and commerce merge

In March, the China Connect conference dedicated to Chinese digital trends was holding its 7th edition in Paris. The motto of this edition was « Crack the codes » i.e how to uncover the dynamics of a specific, fast moving market which is in many ways leading the West when it comes to digital habits and models.

The explosion of Live Streaming

A key trend this year is the growth of mobile live streaming… maybe later than in Western countries but much faster and stronger! This new form of entertainment has found a place in people’s daily life, especially among the younger generation, and in the strategies of brands of all sectors. Its development is different from what can be seen in Europe and the US thanks to..

  • its scale: 200+ mobile applications such as Ingkee, Huajiao or Douyu which have been downloaded over 50 million times each, and a total of over 350 million regular users of live streaming platforms to date
  • its interactive dimension: live streams are not simple videos that one watches, most of the times they consist in interactive cessions during which fans formulate questions, express demands, interact with the person in the video and offer virtual gifts
  • its monetization: via paid virtual gifts – from a few cents for a hug or flowers to a few hundred dollars for a sports car or a yacht – thousands of streamers earn a very decent revenue while platforms such as Huajiao collect 30% over each transaction

Check out this demo by WSJ

KOLs: a whole new media

The KOL phenomenon – key opinion leaders – already very strong in China has amplified with the development of live streaming. Made of famous or less known celebrities (such as Melilim Fu who participated in the conference with her orange hair and outfit) as well as average individuals with a small audience of loyal followers, the crowd of KOLs is now considered as a media of itself and an essential touchpoint for brands wishing to develop their visibility and engagement with consumers, especially in industries with a strong affinity dimension such as luxury, cosmetics and automotive.

Brands’ campaigns play on the various levels of the KOL pyramid (a few celebrities on top, many influencers on the base) to develop strategies that mix prestige or impact actions with proximity.

The specificity of the KOL media resides in the fact that it appropriates the discourse of brands. Some refer to it as UGC 2.0: creating brand contents for which celebrities and influencers become the main channel.

The convergence of social and commerce

As previously mentioned on this blog site, WeChat, the social network and service platform used by over 700 million Chinese, has taken the world leadership in terms of social commerce e.g integrating purchase opportunities within conversations.

By combining online payment solutions like AliPay and WeChat payment with live streaming platform, China is amplifying the convergence between commerce and social. With the « click to buy » function, the subscriber to a live stream can in a single click purchase the garment worn by the person (KOL) in a video or the product or service he/she is talking about. In a country where 9 out of 10 people online access internet on mobile this generates a lot of spontaneous purchases. For brands, developing affinity, federating communities generates naturally sales. And they cash in!

Once more, China demonstrates its strong ability to innovate and take the lead, not exactly in the development of new technologies but rather in their usage and monetization.

Article written by Christophe Jourdain initially published in Siècle Digital


The « Made in China » takes revenge

For a long time Chinese-made products were associated with low-cost and poor quality. The toxic chairs” sold by French distributor, Conforama, gave stinging allergic rashes to some 400 customers. The harmful dyes t-shirt” which sent a little girl in hospital stuck the knife deeper.

Fed up with the scandals, the world’s second-largest economic power has decided to shed its cheap image.

Inspired by countries such as Japan which used to have a connotation of low-end during the 50’s, China is working on changing its reputation. Manufacturers are seeking to move upmarket by offering qualitative and innovative products whilst maintaining competitive prices.

This initiative is supported by the Government, setting measures for quality control in order to reassure importing countries. It has implemented norms and regulations in its domestic market and created two entities, the AQSIQ and CNAS to supervise the procedure.

Investing in the future is part of the plan. The Government has allocated a more prominent budget for its universities to retain Chinese talents and attract foreign students. R&D is at the very heart of the new Chinese strategy.

The path from imitator to innovator, China conquers the world

China was viewed as the world’s “workbench” rather than as a global innovator. Now it can be proud of its technology sector. The Middle Kingdom has developed its own brands. It no longer plagiarizes or produces for others, it creates added-value items appealing to foreign consumers.

Lenovo is the perfect example of the Chinese success story. In 2013, the brand beat its American competitor, Hewlett-Packard, becoming the world’s leading PC maker operating in 160 countries. Lenovo wants to position as premium by offering top quality and advanced products yet produced with the soul of craftsmanship.

Huawei is another good example. When Samsung and Apple avoid to communicate on product origin, Huawei proudly spells it out at the back of its packaging.

In 2015, the brand announced earnings up 33 per cent from previous year, reaching 5.4 billion €. Still far behind Samsung and Apple, Huawei is however catching up very quickly.

To climb up the value chain and boost sales, Huawei and Leica partnered to set up a new R&D center to be situated at Leica’s headquarters in Germany.

The rise in unexpected fields

Not content to succeed in China, some brands dream of taking on the world.

Chinese brand Herborist is one of the few premium cosmetic brands with international ambitions. The brand reworked its positioning, combining Chinese identity with international design codes. In 2015, Herborist opened its first French store in Paris on the famous “avenue de l’Opera”. The store features a spa, offers a tea ceremony and Thai Chi classes. The brands flashes the Chinese chic in Paris.

The national preference

There was a time when one needed to purchase French to be elegant, American to be cool and German to be strong. This time is over for the Chinese. Buying local is seen as a patriotic deed.

The study “Future of China” conducted by Ifop for OMD showed that 40% of the Chinese prefer local brands and 25% always purchase them, mostly for the quality. Only 9% declare to favor international brands because of their superior quality.

That is all the more true in lower tiers (Tier 3, 4 and 5) where international brands are not always available.

Local brands have the advantage to better understand the population’s needs and they also benefit from a larger distribution channel allowing to meet demand faster than international competitors.

The emergence of emotional-value brands

The emotional drivers play a more and more important role in the purchasing process of Chinese consumers.

The economic boom over the past 3 decades, the access to new products and the growing internationalization transform the Chinese population. They are increasingly sophisticated and tangible product benefits (price, quality etc.) are no longer sufficient to trigger purchase.

Chinese brands know now how to engage and convert consumers. “Lifestyle” brands such as Icicle, Zuczug and JNBY use their proximity to appeal to the Chinese.

Icicle is a clothing brand inspired by Chinese traditional values, endeavored to bring harmony between human and nature. Zuczug is worn by Chinese celebrities and JNBY, inspired from Chinese modern art, opened several concept stores in big cities including Paris.

A unique case: the Chinese footwear brand, Feiyue, was copied by… the French!

The “Made in China” Feiyue by Shanghai Shenglong Shoes are sold 39 rmb (5€) in the country. The French copy is sold 80€ by Feiyue Shoes Holding and was seen in magazines worn by Orlando Bloom and Poppy Delevingne.

To conclude, the “Made in China” is more and more associated with quality.

The Chinese manufacturers have realized that fast and low-cost production no longer generates growth. Chinese brands are able to build innovative yet still cheaper smartphones, tablets and PC. Leaders in the technology sector have fierce challengers!

The reputation of “Made in China” is slowly improving but actions must be taken by the Government to fight the scourge of counterfeiting, detrimental to the development of Chinese companies abroad.


Article written by Thi My Nguyen, Market Research Manager at Ifop Asia.

Ingkee montage

Hot trend in China: Live-streaming apps turn Nobodies into Internet Celebrities and offer unique money-making opportunities.


A pretty woman casually dressed, eating noodles and talking about the makeup she is planning to buy. A handsome man gazing at the webcam in silence. A lady singing a cappella in her living room. What do they have in common? Hundreds of thousand followers.

The Live-Streaming craze is sweeping across China. Millions of regular people are now sharing bits of their lives with the world seeking for fame and expecting to gain cash.

Yizhibo, Xiandanjia, Douyu and Ingkee are some popular apps among the 80 apps for live streaming available in China, and the number is growing all the time.

Why these videos which seem meaningless have so much success?

These apps allow people to peek into the lives of strangers and interact with them to an unprecedented extent. The viewers can send pop-up messages to the streamer and “tip” them with virtual presents they buy from the apps. The streamers can then exchange their presents for cash.

On Ingkee, one yuan (0,10€) buys 10 “diamonds”. Tipping a beer will cost you 1 diamond, a Ferrari 1200 diamonds and a yacht 13140 diamonds.

Competition between streamers is fierce, a raking based on the number of followers and the number of “diamonds” is accessible. Some accounts have reached many millions of diamonds.

It is necessary for brands to conquer the Live-streaming world.

These Internet celebrities are highly influential leaders among the young generation and they receive money from brands for broadcasting their products.

The apps are already used for commercial purposes. Individuals and companies use them for selling makeup and skincare products.

Celebrities also broadcast to interact directly with fans.

L’Oréal has a live-streaming account and offers sessions of live show with the brand’s muses.

Ingkee, is only one year old but has been ranked No. 1 on Apple’s China app store multiple times. Ingkee says over 50 million users have downloaded its app. Douyu claims 120 million active monthly users.

Live-streaming apps are a great opportunity for brands to reach customers beyond geographical limitations and at low costs.

Article written by Thi My Nguyen, Market Research Manager at Ifop Asia.

Wenzhou jpeg

Capitalizing on opportunities offered by lower tier cities in china

China is not only the world’s second largest economy but also its dominant engine of growth. However in recent years this economic growth has come under pressure because of multiple reasons, both internal as well as external. This decline in growth rate is having a consequent impact on the way the Chinese government sees as its best way forward. It is striving to increase domestic consumption, encourage services sector and keep a check on inflation.

Adding more complexity to this business context is the more crowded and fragmented market, maturing Chinese consumers, impact of digitalization and smart phone and not to mention declining consumer enthusiasm.

Until recently business opportunity in China was limited to big 3 cities and handful of tier 2 for most multinational companies. The above dynamics means the attractiveness of this opportunity is increasingly fading and multinational brands are being forced to look deeper in to the Chinese landscape for new emerging and hitherto untapped markets in lower tiers.

Are the Lower Tier Cities Next Eldorado?

So this begs the question, do lower tier cities offer the same opportunity as that of their higher tier counterparts? In fact, the opportunity that lower tier cities offer is humungous compared to what their higher tier counterpart’s offer and moreover it remains untapped to a large extent.

Over the last decade or so, Chinese government has embarked on a mission to increase domestic consumption and thereby lower China’s reliance on exports. In the process, they have increased their investments in lower tier cities even in the central and western parts of the country and emphasized urbanization by providing housing and civic amenities.

These efforts have paid dividends. According to one estimate, tier 1 and tier 2 combined only accounts for 17% of the national GDP i.e. to say lower tiers combined account for a whopping 83% of the GDP.  However, given the higher tier fixation of most multinationals, it means the focus has been too long and too much on higher tier cities.

Although Tier 3 and 4 have a disposable income half of Tier 1 but given a population approximately 10 times over, it means the potential is not only huge but waiting to be tapped into.

However Opportunity Doesn’t Directly Translates Into Profits

The big question is how to capitalize on this huge opportunity. The challenges are numerous and not very obvious. To begin with, the sheer number of such cities in lower tiers with a million or more is in excess of 200. So which all cities can a brand focus on?

Are these consumers like their higher tier counterparts or do they shop differently with different motivations and preferences? From my experience I can do say that they are definitely different given the context and circumstances that differ across tiers.

So is there a better way to target these consumers? The answer is yes and it’s everywhere around to see.

The Internet Can Make It Possible

Huge proportions of the Chinese population are not only online but are willing to go the extra mile by engaging in it. Lately social media and e-commerce boom has engulfed the country, fueled in part by the high smart phone penetration and also with the more prominence of big players in the market like Wechat, Taobao and Jingdong.

The lower tier cities are not lagging behind on this bandwagon. In fact they are taking to it like a duck takes to water. According to one estimate, the proportion of lower tier city households with internet access is in excess of 50%. This figure is only like to go up and go up fast considering around 85% also have access to a smart phone. These consumers are using internet not just to communicate, exchange or explore but also to buy products and services.

All of the above means, the lower tier cities have opened up for business and are not inaccessible the way they were a few years ago. With a right business strategy and fresh mindset, it is indeed possible to capitalize on this opportunity offered by lower tier cities.

There are as many ways to do it the right way as there are ways to do it wrong. The success depends on the way a brand will understand these consumers, customize its offering and then make itself available through relevant channels.


Article written by Manohar Balivada, Vice President, Ifop, Shanghai  


The rising attractiveness of local brands

The new aspirations of China’s middle class (part 4 out of 4)


Faced with the rising position of China on the world stage and the success of high profile local companies such as Tencent, Alibaba or Xiaomi, the Chinese middle class expresses growing pride and trust in the leadership capabilities of its country in terms of economics and lifestyle, which translates into an increased interest for local brands. These are perceived as much more price competitive and often better distributed across the country than their Western counterparts, faster at taking positions (launching new products, opening points of sales in new places), efficient at adopting communication codes that appeal to the locals and also more and more often innovating. This is what makes the success of Herborist or Inoherb in the field of cosmetics, Haier or Midea in household equipment, BYD in automotive.

As a matter of fact, the middle class emerging in peripheral cities has been less exposed to foreign brands, usually concentrated in Tier 1 and Tier 2 cities, than the previous waves of rising middle class. It turns more naturally to local brands in its daily life, even in categories traditionally dominated by foreign players such as beauty products or sports goods.

This growing competition from local brands has become a major issue for international brands in China. Its impact is probably stronger than the slowing growth of GDP on which Western media tend to focus but which does not yet impact the propensity of consumers to get richer. Local brands eat up foreign brands market shares and develop an intimate relationship with consumers, a factor of lasting success. In front of this, the reaction of large international groups sometimes consists in acquiring these new competitors, like when L’Oréal purchased the Chinese leader of beauty masks Magic Holdings, or to develop alliances like Danone with Mengniu in the field of dairy products. But the key trend is there: local brands are progressively developing the attributes of genuine brands, Chinese consumers aspire to consume them and this is changing the rule of the game in the China market.


Article written by Christophe Jourdain, Ifop International Director.


How “Made in…” impacts the attractiveness of products amongst Chinese consumers?

Ifop recently conducted a survey among the Chinese middle-class* in five main cities (Shanghai, Beijing, Guangzhou, Wuhan and Shenyang) to understand perceptions towards products made in different countries around the world. This study reveals the strengths and weaknesses associated to “Made in…” China, France, Germany, Italy, Japan, South Korea, UK and USA.


“Made in”: a key purchase driver

The country of origin is an essential information to Chinese consumers: 44% claim to “Always or most of the time” pay attention to it when making a purchase, 30% “Sometimes”. Also 70% consider it as “Very or somewhat” important when it comes to choosing a product or a service.


France is strongly associated with Luxury and the values attached to this sector

From the eight countries evaluated, France is the most associated with one particular field: Luxury. This strength in the field of luxury contributes to associating France to dimensions of know-how, creativity and ability to make one dream which are of high value. However, the association with this sector conceals other good things France has to offer to Chinese consumers and paradoxically this country is not much associated to automotive, energy or aeronautic sectors despite major assets in these fields.

French companies and brands obviously lack visibility there and need to better “educate” local consumers to raise their profile. Automotive maker Citroën shows the way with the success of its DS model positioned as a premium product playing with the codes of luxury: brand heritage, high scale service, extreme personalization, etc.


China is developing legitimacy in technology

Germany is strongly associated in Chinese people’s mind with automotive and technology, Italy with Luxury (but to a lesser extent than France), the USA with technology, aeronautics and Internet. In the field of fast moving consumer goods cultural proximity plays a major role as Korea and Japan are the most associated with Cosmetics while China and Japan are seen as leading countries when it comes to food.

In technological fields the USA and to a lesser extent Germany are perceived to be leaders, but China stands closely behind in its citizens’ view. Obviously China is becoming more and more confident about its own capabilities in the field of technologies, most probably thanks to the success stories of Alibaba, Huawei, Xiaomi and the likes.

One should notice that none of the investigated countries is clearly associated to sustainable development nor to high quality of service, two areas highly encouraged by the Chinese authorities and offering obvious opportunities to companies in today’s China.


This is an abstract from an article written by Christophe Jourdain and published in the Connexions magazine by the French Chamber of Commerce in China.

(*) With at least 5000 RMB monthly household income