How Covid-19 became a fertile ground for the development of National Brand preference

Across countries, one of the effects of the Covid-19 crisis was to reinforce protectionism and nationalist sentiment. That was the case in China too, probably even more than anywhere else, but in a slightly different way, as the government played a significant role.

 

To help local brands through these trying times, the Chinese government has taken measures in various fields. One of these measures was the new features of China Brand Day (中国品牌日), rolled out online on May 10th 2020. China Brand Day was designed to encourage domestic brands’ “brand building” in all sectors, with a view to accelerate the transition from ‘Made in China’ to ‘Created in China’, from ‘China speed’ to ‘China Quality’, and from ‘Chinese product’ to ‘Chinese Brand’.

 

How did it translate into concrete actions?

  • Massive promotion of Chinese brands’ stories on mainstream media. Over 1,300 national brands participated in the China Brand Day Online Expo this year.
  • The launch of Chinese National Brand Expos in several provinces, where brands from sectors ranging from manufacturing and services to culture or technology, gathered to demonstrate their history and innovation power, and present new products and services.
  • The international forum of China Brand Development, where discussions were held about future policies aimed at further accelerating the development of Chinese brands and changing their image.

 

This year, CCTV participated in the Reinvigorating China Through National Brands project (品牌强国工程) via a variety of promotion events.

  • Over 30 national brands went on Yang Shi Ping (a 5g video app, developed by CCTV) to promote the new products of domestic brands such as Lenovo, Hisense, Wanda or Ping An insurance.

 

  • Austin Li (Li Jia Qi) teamed up with famous CCTV host, Zhu Guang Quan, for a livestreaming on the night of Chinese Brand Day (May 10th). They hosted an online sales event for a variety of quality national products and promoted domestic brands. One example of very positive outcome was Mercury home textile’s sales result of 3.3 million yuan following the livestreaming session.

 

These government initiatives definitely play a significant role in influencing Chinese consumers purchase behaviors.

 

The National brand preference trend is present across sectors such as technology (Xiaomi, Huawei), home appliances (Gree, Haier), food & beverages (Yan Qi Sen Lin, Mengniu) or Sport & Outdoor (Li-ning, Anta).

 

It is also accelerating in the beauty sector, especially in the mass and masstige segments.

 

As a result, a great number of C-beauty brands have been soaring and this trend will definitely continue in 2020 & 2021. Consumer patriotism, an aesthetic shift, and a hyper-digitized retail reality — all of which grew during the COVID-19 pandemic — have made conditions favorable for C-beauty brands over the long term.

 

Tmall has launched its spring thunder initiative, starting with the goal of helping 1,000 emerging beauty brands achieve over RMB10 million ($1.41 million) each in annual sales in the coming year.

 

In the last June 18 Shopping Festival, 4 out of top 10 best-selling beauty brands were C-beauty brands, including Perfect Diary, HomeFacial Pro, Winona and Huaxizi (source: Tmall sales data).

 

On China Brand Day, Li Jiaqi, one of the Top KOLs, has named 23 quality C-beauty brands in his livestreaming. Bouncy Red Ginseng Essence Beauty Cream, newly launched by Marie Dalgar, was the only base makeup product in the selection. The ‘bun’-like design of its applicator generated hot discussion on social media.

 

 

Consumers’ interest in C-beauty brands specializing in Chinese herbal ingredients was triggered due to the heavier usage of Chinese herbal formulas during the pandemic. For example, Inoherb recently launched its new premium line “Inoherb Tang”, which brings back the power of an ancient formula through modern technology. The main claim is that the amount of Chinese herb ingredients in the products reaches 60%.

 

 

This is a new challenge for accessible foreign Beauty brands that will have to adapt, and find a way to display a deeper commitment to, and understanding of, Chinese culture.

Livestreaming during the coronavirus crisis accelerated the transformation of many sectors

In the past 10 years, the combination of State policies towards high-tech investment, buoyant startup scene and unique consumer appetite for new technologies has lead China to become a world leader in daily use of digital solutions. The Covid19 crisis further accelerated digitalization in a number of in sectors and it may be indicative of what will happen in Western countries in a next stage too.

 

More specifically, boosted by the lockdown and the need to find new ways of doing business with consumers, a number of sectors turned to livestreaming e-commerce, a new form of retail which was already well developed in the beauty and personal care field and really took-off in other sectors thanks to the specific benefits offered in such a crisis situation.

 

Healthcare is a sector that was obviously under enormous pressure during the pandemic. While online consultations and digital scheduling of appointments were already becoming commonplace in China, the coronavirus outbreak has seen a sharp rise in the use of digital platforms and an explosion of online doctor consultations. JD Health, one of the leading providers of such services, has seen its online daily consultations jump from 10,000 in January to 150,000 in March. Baidu Health, another leading healthcare platform, now has over 100,000 doctors from across China offering online consultations around the clock. The platform was made accessible free of charge to those with pneumonia symptoms during the pandemic and had handled over 55 million enquiries by the end of April. While the virus started to spread across the world after the China wave, several Chinese platforms started offering free online coronavirus consultations in English to people abroad. A good way to develop their client base to prepare a global expansion while also sending a message about China’s willingness to contribute to fighting the consequences of the pandemic abroad.

 

Also during the coronavirus crisis, the city of Shanghai launched 11 internet hospitals affiliated to offline public hospitals. An interesting sign that the handling of patients is on its way to becoming a combination of online and offline approaches.

 

In the field of retail fashion, live-streaming was a way to make up for the closure of stores during the pandemic. Labelhood is a platform for emerging fashion designers in China which has a boutique in Beijing and another one in the Shanghai French concession. While these brick and mortar locations remained closed during several weeks founder Tasha Liu launched a WeChat store so that people could shop through the app, and started offering life-streaming in order to show potential clients new arrivals from designers’ collections. In addition, WeChat video calls were offered as a way to develop a bespoke one-on-one approach with customers, one that is very suitable to the tailored, personal dimension of designer brands’ business. The Covid 19 crisis has been an accelerator in embracing digital, one that has pushed retailers and brands to adopt a new way to talk to customers, created a new type of personalized connection… without the unique “offline” benefit of being able to touch fabrics though. It also provided boutiques with access to consumers well beyond the city, spreading business opportunities across new geographies and population segments, enlarging their client base at a the very time it was threatened to shrink dramatically.

 

 

Live-streaming also helped farmers* across the country survive the pandemic by completely transforming their business model. Last February the nationwide lockdown left growers of flowers, fruits and vegetables with no logistics and therefore no access for their products to stores and markets. A number of these producers, who had traditionally had no contact with end clients, started using live-streaming to reach consumers. With just a mobile phone they could broadcast directly from their farm, tour their facilities, show-off products and answer questions from potential buyers. On the other side of the country, in urban areas, consumers stuck at home were eager to shop online. Live-streaming, combined with the shipping services of e-commerce giants JD.com and Alibaba, helped the two ends meet and completely redesign the market. Consumers could receive at their doors products that were no longer available in stores, and farmers benefited from a new stream of revenue. On Taobao Rural Livestreaming, one of the main platforms for that type of broadcasting, about 2000 rural participants now generate a monthly income of over RMB 10,000 i.e eight times the rural average. By connecting producers directly to consumers, live-streaming has changed the way business is done, created a new bond between producers and consumers, and has been a catalyst for local development.

 

 

pineapple-livestreaming

 

 

Beyond these examples of how digital is changing business in a broad range of sectors, the development of 5G will soon generate new opportunities and changes as it will promote even more interactive content and seamless e-commerce features via a dramatic increase in internet speeds. As China is already more advanced in this field than most Western countries, global brands will have to quickly grasp the new interactive features of the China market to stay relevant in the years to come.

 

*this section is based on an article published by MIT Technology Review on May 6, 2020 “Live-streaming helped China’s farmers survive the pademic. It’s here to stay”.

 

https://www.technologyreview.com/2020/05/06/1001186/china-rural-live-streaming-during-cornavirus-pandemic/

Influence marketing blends the lines of human and digital

Influence marketing has been very developed in China for years and KOLs (Key Opinion Leaders) are an important part of most brand strategies in this market. Famous influencers such as Austin Li or Viya in the field of Beauty draw millions of followers on Weibo, WeChat or XiaoHongShu and generate sales in millions of dollars at every online event they participate. A number of KOLs have developed their own brand, leveraging their awareness and influencial power to their own benefit.

 

Micro-KOLs are lower-tier influencers with smaller followings who also play an important role in the Chinese marketing ecosystem as they are able to create a closer bond with followers, who are in turn more likely to trust and act on their recommendations and endorsements.

 

The Covid crisis and related lockdown period has pushed further consumers’ digital behavior and accelerated the development of new forms of influence:

 

KOCs (Key Opinion Consumers) are real buyers of products who share their opinions and recommendations with their social circles. A growing number of brands try to capitalize on them to develop reputation and sales via “private traffic” i.e private discussions taking place in closed social environments such as WeChat groups (quite similar to Whatsapp groups) or discussions on social e-commerce platform Xiao Hong Shu, 小红书 where consumers exchange tips on buying foreign goods. Beauty brand Perfect Diary has been able to disrupt the China market and rise among its leaders by leveraging KOCs to target older millennials and generation Z consumers and disseminate news and promotions through their own private channels.

 

Examples of consumers posts about Perfect diary :

 

 

Also the recent heath crisis and weeks of closed stores have been an opportunity to blend further the offline and online retail experience and influence. Key Opinion Sales Associates are spreading. These are traditional sales staff working in stores who also sell online, through social networks, products from the brand they work for. They represent a sort of new channel providing brands with swift, continuous, personal communication with clients. Louis Vuitton for example built a fully omnichannel platform which relies on sales associates to communicate with clients on WeChat to amplify and monetize marketing initiatives.

 

Longchamp is another example detailed below:

 

The first 2 pictures below show the personal account of a sales associate from a Longchamp store in Shanghai. Her personal account is created under the Longchamp corporate WeChat account (it shows the brand name, sales associate  name and her position). The sales associate sends clients information about new products and discounts, as well as strengthen connection with customers through greetings on holidays or birthdays. The next 2 pictures show the account of the Longchamp store where the sales associate works for, this store account will introduce the products in the store and the discount information. Customers will place their orders via the sales associate. So the whole sales process is digital and it has a human and very personalized dimension through the intervention of the sales associate.

 

 

 

 

 

Lately VOLs (Virtual Opinion Leaders) have started to emerge. Originally a product of the ACG culture (Anime, Comic and Games) in China there is a trends towards virtual idols now having the very appearance of real persons.

 

These Virtual Opinion Leaders are non-human, digital art characters created through computer generated imagery (CGI) and artificial intelligence. Brands may find it effective to work with a virtual influencer as they can reach and leverage very targeted, connected and engaged audiences. The first Chinese VOL with human features was released in May 2020. She is already very active on Weibo and has been seen wearing Chloé and Vogue.

 

 

 

Also, M.A.C cosmetics launched a “Honor of Kings” (a MOBA game by Tencent) make up line endorsed by the virtual boys band Wu Xian Wang Zhe, 无限王者团 composed of  5 characters in the game. The new collection includes lipsticks, eyeshadow palettes and pro-palettes presented in colors associated to individual members of this virtual band.

 

 

 

 

All in all, the current period accelerates the blending of digital and human, personalized influence. It provides brands with new opportunities and challenges to embark consumers on a new journey to discover and interact with their latest offers. This is well illustrated in the latest Dior ad which blurs the lines between human, virtual and anime worlds: in this video, anime KOL Xue Fei Nova morphs successively into different forms of identities to tell a story about the brand and connect with young consumers.

 

 

Safe & Clean: a Key Driver In Consumer Goods

Consumer always trade-off between several criteria when choosing a product. Beyond habits, brand or product availability, several dimensions are taken into account, consciously or unconsciously. In food for instance, taste, format, meal destination, origin, ingredients, price or value for money matter. In cosmetics, efficacy, sensoriality/pleasure, convenience and value for money will all play a role in choosing a product. And across all consumer goods categories, safety plays a significant role.

 

The quest for safe products has been on the rise worldwide for a couple of years and, even more so in China, due to safety issues that occurred in the past years in several industries (e.g., the milk formula scandal, concerns around fresh food quality, fake personal & skin care products, etc.)

 

The Covid19 crisis definitely accelerates the need for reassurance on safety across categories. However, for consumer goods, safety (安全) that literally translates as harmless (“no harm to health & wellbeing”) is a broad concept. It can be associated in consumers’ minds to a wide range of aspects, such as product composition (clean ingredients, no/limited number of additives such as preservatives or artificial flavoring, but also naturalness, with or without organic certification), product origin, manufacturing practices, packaging (basic hygiene and safety, of course, but also more sophisticated expressions of safety such as the trend for touchless products), certifications or seals, shelf-life. To name but a few.

 

Giants in different sectors have already laid out plans in response to growing safety concerns.  2 examples in the food & cosmetics industries:

 

 

  • Consumers’ interest in “plant-based” meat is predicted to increase in China. In China, the Covid-19 has been associated with ‘animal mismanagement’ and concerns about meat safety have increased during this period. Veggie products have developed quickly since the beginning of the year.

 

 

HeyTea partners with startup Starfield to launch Veggie burger

 

 

 

  • In cosmetics, clean beauty brands are developing quickly. Drunk Elephant (acquired by Shiseido at the end of 2019), though still an emerging brand in China, has recently gained awareness. The communication of Drunk Elephant by KOLs & KOCs on social media like Red or Weibo focuses on ‘clean’ skincare formulae without the so-called ‘Suspicious 6’ (essential oils, silicones, chemical sunscreens, SLS, fragrance and dyes, and drying alcohols), which may cause harm to the skin.

 

 

Even though safety is confirmed to be a key purchase driver for many products, today and tomorrow, reassuring on safety will not be enough to convince and build loyalty among Chinese consumers, who are looking for a mix of safety reassurance and positive inside benefit.

 

Brands will have to be both rational & pragmatic on this dimension, while at the same time creative, daring and emotional, to stand out in an atomized market.

The multiple facets of Wellness & Wellbeing in China

The Covid19 pandemic has definitely reinforced the conscious need for Wellness & Wellbeing all around the world, and even more so in China.  The recent events have modified the Wellness concept both in its nature and in its range of applications. Lifestyle, beauty, sport, food, home furniture, technical appliances – all are concerned by these changes.

 

  1. Wellness through the quest of a new home atmosphere, or the evolution of the ‘Zhai’ culture

Chinese people are clearly eager to invest more time, money and efforts in building a comfortable, happy, pampering & smart home. The pandemic has further accelerated the quest and usage of intelligent appliances, new cozy home furniture, smart health products, interior design pieces, ambiance fragrances, etc.

 

 

 

The TMall Live Chic campaign, “The chic-ability of your home” encouraged young people to share their chic interior design to showcase their taste and imagination, as well as the lifestyle they pursue.

 

 

  1. Physical & Mental Wellness Through Fitness

The Covid-19 pandemic has boosted the fitness trend in many major cities. The use of fitness apps has soared during confinement and is projected to continue doing so in the mid-term.

 

 

 

The number of users of the ‘Keep’ training app has significantly increased in the past 6 months. It now registers over 200 million users and 3.6 billion user exercise data entries.

 

 

 

 

During the lockdown, NIKE has launched a breakthrough channel dedicated to “Exercising without leaving your home”. By collaborating with Tencent Kandian Live Streaming, Nike launched weekly live training courses via Kandian Live Streaming mimi program on WeChat. Users can enjoy the interactive experience of a professional fitness guidance at home, turning their living room into a gym.

 

 

 

 

  1. Wellness through Pampering and Taking Care of Oneself

Although still quite new to China, the self-care concept is certain to evolve further post-Covid. The anxiety triggered by the pandemic remains high 3 months after the end of lockdown and has fostered the need for self-pampering and little treats, in order to escape from a troubled daily life.

 

Social isolation caused by quarantine created loneliness and stress. Caring for one’s skin became a physically and mentally healing moment that made people feel self-love. Consumption of facial cleansing products, facial masks, toners and lotions soared. Among these, the use of facial masks has increased the most, reaching +12%. (Research data by CBNData)

 

“Put down your phone and get to know yourself” is also an emerging trend boosted by lockdown. Creativity has been on the rise, as a potent stress-reliever. 

 

 During self-quarantine I spent quite some time at home mending old things or finding new uses for them. Used clothes became a washing machine cover; glass bottles were turned into wind-bells. I enjoyed the process of “creating things”, because it gave me a pleasure and a sense of accomplishment that I cannot get from the virtual world. I can truly feel myself in this real world.” – male, 32, Shangdong province.

 

  1. Wellness For the Skin, Through Healthier Diet

The pandemic has reinforced the link between nutrition & health, and between skin health and nutrition. What has changed is that ‘food that is good for health’ is getting more integrated in Chinese eating habits.

 

Searches on keywords such as “immunity, nutrition and health, coarse grains” have increased significantly. Healthy and functional snacks is gradually becoming a hot consumption trend among young people.

 

 

 

The newly launched “collagen peptide dry fruit” snack is BESTORE’s (良品铺子,Liang Pin Pu Zi – a well-known high-end snacks brand in China) first attempt to enhance nutritional elements of snack. Collagen peptides, being relatively small molecules, are easier to digest and absorb, and have beauty-enhancing benefits.

 

 

  1. Wellness Through a Better Balance Between Professional Success & Immediate Happiness

In China as elsewhere, quarantine was an opportunity for many to take a step back and really think about the meaning of life and work. More and more people started considering finding meaning and fulfilment elsewhere than in their job. As working ‘like a robot’ became less appealing, many started to wish they could create something different.

 

“Youth Losers’ farm” in Chong Ming Island (part of Shanghai) is a group of young Chinese citizens which left big cities to set up a farm. They learned agricultural methods and live on the product of their crops. Since the end of the lockdown, some of them have decided to live a “half farmer, half X” life, and some of them plan to definitely leave the city behind and stay on the farm for several years.

 

If you are interested in the China market, contact us.

Being vogue in a sustainable way

Studies show that Chinese people are among the most concerned worldwide about the environment. They are particularly worried about pollution and its impact on health. And they want to play a role, have a positive impact through consumption.

 

The covid19 epidemic motivated young Chinese people to further think about the relationship between human and nature, and explore more possibilities of a sustainable life. It brought change to what they use & eat and to how they live. When it comes to fashion, they no longer want to choose between a responsible behavior and a joyful and stylish attitude: more and more young people look to being vogue in a sustainable way.

 

Bottloop (抱朴再生)is a fashion brand from Beijing who addresses these expectations. It combines a modern lifestyle with fashion pieces that are all made of recycled products, using plastic bottles and organic fabrics to manufacture trendy, urban clothes. Beyond materials, the brand blends fashion and sustainability by joint design, art exhibitions and public benefits activities. It has developed collaborations with artists as well as famous brands such as Mercedes and Mars Wringley. In April 2020, Bottloop invited 10 well-known graffiti artists to design eco-friendly, colorful raincoats based on the stories and memories of the epidemic. They were exhibited and launched as a new line of products at K11 Shanghai.

 

A number of other initiatives such as the collaboration between Nike and Reclothing Bank, a Chinese independent designer brand focused on upcycling old garments and “letting fashion be reborn”, are combining a sustainable approach with high creativity.

 

The covid crisis has accelerated this blending of fashion with sustainability. It has pushed consumers to further expect that brands take a stand, express values, and implement concrete actions in real life in addition to demonstrating inspiration. It has also shown that the pandemic period, now a common heritage to all consumers, is a material that brands can leverage if they are willing to give it a positive, creative tone.

 

If you are interested in the China market, contact us.

 

 

Agritourism in Iceland : be inspired!

Although still not extensively promoted in France, agritourism is a source of turnover for producers which provides a real boost to their yearly profits. It tends to attract a more urban population seeking for contact with nature and feeling the need to get back to basics.

In France, agritourism represents one third of tourism. Agricultural marketing is gradually gaining momentum. An example worthy of note are marathon events held for wine enthusiasts: Vignole d’Alsace marathon, Médoc marathon, Blaye marathon… An opportunity for local producers to place themselves in the limelight in a fun setting. The platform Bienvenue à la ferme has provided more than 6,500 farmers with the opportunity to bolster their visibility. Airbnb has also had a part to play in this through the signing of a partnership with the Eure-et-Loir region with the aim of promoting the rental of rooms located on farms, which has in turn contributed to the development of this trend.

To inspire those interested in embarking on similar ventures in France, InCapsule shares a few innovative examples in the agritourism sector picked out during the latest TrendTour in Iceland.

 

  1. A tomato farm which combines an ultra-short production process with the helping hand of geothermal energy

InCapsule came across a unique farm which is a delight for the taste buds: Fridheimar. This farm specialised in tomatoes is a fine example of successful agritourism. The restaurant, set up in a tomato greenhouse where one can consume tomatoes cultivated under one’s very eyes, serves the fruit as a soup, cocktail or alcohol, to be savoured at the farm or to take away. Emphasis is placed on the eco-friendly approach: bees pollinate the tomatoes in a kind of hive and the entire production process functions with geothermal energy with regard to which Iceland is number one worldwide thanks to the volcanoes which keep its soil warm. The farm totals 5000 m3 of greenhouses and 10 employees, with one ton of tomatoes produced per day. It supplies the entire island which thus no longer depends on imports from the Nordic countries. It has to be said though that Iceland gets a helping hand from geothermal energy which enables to farm all year round despite the extreme climate that prevails.

 

  1. A farm and inn run by two young “Innovator Farmers”

Efstidalur was first established in 1750 and has been handed down from generation to generation. This has always been a traditional farm although its scope of activity is what makes it stand out! Indeed, in response to the development of tourism in Iceland, the seventh generation has broadened the scope of its activity by suggesting a range of services: restaurants, boutiques, purchase of fruit and vegetables or even meat produced on the farm. Everything is obviously organic! The promotion of local produce is particularly prevalent in this family which has been doing nothing but this for centuries. Not only is it possible to sleep there but the family also organises horse riding trips during the summer season. Tourists may also taste milk and artisanal ice cream produced on the farm.

They are particularly good at emphasising their added value through a highly refined marketing strategy: in a country like this were the nights are long, it is necessary to be creative to renew oneself and attract the local population as well as tourists.

This farm is self-sufficient and does not lose out on any profit as tourism boosts production and sales. Through this “Innovator Farmers” positioning, farms have become real businesses with a clearly defined marketing strategy to bolster awareness and sales of their produce.

 

  1. The Flatereyfarm: combining nature and digital innovations

This is a farm that succeeded in turning the flourishing tourist trade in their area to their advantage. Iceland is a particularly large producer; on an island like this, profitability is key. As a result of new trends, consumers want to be more enlightened about what ends up on their plate. Indeed, consumers often tend to go straight to the producer rather than to a supermarket. They are thus heading back to the source of the produce, vegetables or meat they are going to consume.

InCapsule discovered an almost totally automated farm that makes full use of artificial intelligence technology! Indeed, only a few people are required to supervise the farm, representing one third of the number of employees in conventional factories. Cows are regrouped depending on their state of health: cows which are pregnant, less fit… and are moved when they need to be milked. The factory is at the cutting edge of technology, thus enabling a faster milking process.

Just like in France, the Fridheimar or Efstidalur farms suggest activities, provide lodging (guesthouses, inns, campsites, rooms…) or even organise events and meals on the farm with their own produce. The use of marketing in Iceland represents an inspiring innovation. Farms are run according to tried and tested business models and thus become enterprises in their own right with concrete marketing objectives. Thanks to this approach, the bond with consumers is modernised while preserving authenticity.

 

After this escapade to Iceland, InCapsule delved into Icelandic culture to gain a better grasp of the innovations… to inspire you!

Do not hesitate to contact us to discover our inspirations gathered worldwide during our TrendTours!

 

Contact us to find out more!