{"id":21381,"date":"2019-10-18T09:54:57","date_gmt":"2019-10-18T08:54:57","guid":{"rendered":"https:\/\/staging.phdmedia.com_\/china\/?p=21381"},"modified":"2019-10-18T09:54:57","modified_gmt":"2019-10-18T08:54:57","slug":"friday-data-snack-11-oct-2019-2","status":"publish","type":"post","link":"https:\/\/www.phdmedia.com\/china\/friday-data-snack-11-oct-2019-2\/","title":{"rendered":"PHD China’s Friday Data Snack!"},"content":{"rendered":"
\"PHD

Start the weekend with a nibble!<\/p><\/div>\r\n

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\u00a0<\/h3>\r\n

Category<\/strong><\/h3>\r\n

\"\"Chinese <\/span><\/b>apparel brand <\/span><\/b>La Chapella <\/span><\/b>reported that <\/span><\/b>the company\u2019s business spiraled to a loss <\/span><\/b>of <\/span><\/b>RMB 565 million <\/span><\/b>in the first <\/span><\/b>half of <\/span><\/b>2019. During the same period,<\/span><\/b>2,400 <\/span><\/b>brick and mortar stores were closed nationwide<\/span><\/b>. Click for more…<\/a><\/strong><\/p>\r\n

INSIGHT & IMPLICATION:<\/strong> After going public in 2014, La Chapella has grown to 9448 stores in 3 years. The revenue peaked in 2018 with 26.17% growth. The brand was expected to become the \u201cZara of China\u201d but failed to maintain its popularity in <\/span>the<\/span> mass market. A lack of an effective online presence is speculated to be one of main reasons for the loss. 42.6% of La Chapella revenue comes from mall counters, 41.6% from flagship stores and only 13.4% from online sales. La <\/span>C<\/span>hapella is now changing its business strategy by investing into its membership program and collaborating with various artists to attract younger consumer groups. Brands need to make sure they remain agile and ensure that digital business opportunities are a part of their overall strategy. This is not only a responsibility of the marketing department, but of the whole company.<\/span><\/p>\r\n

Consumer<\/strong><\/h3>\r\n

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According to global consulting powerhouse McKinsey<\/span><\/b>, <\/span><\/b>63% <\/span><\/b>of <\/span><\/b>Chinese consumers <\/span><\/b>research online <\/span><\/b>then buy<\/span><\/b> offline in 2019<\/span><\/b> \u2013 <\/span><\/b>a significant rise from <\/span><\/b>31% <\/span><\/b>in 2017. The study shows<\/span><\/b> that <\/span><\/b>81% <\/span><\/b>will <\/span><\/b>conduct a purchase after research – either in an offline retail location or via an online store.<\/span><\/b>\u00a0Click for more…<\/a><\/strong><\/p>\r\n

INSIGHT & IMPLICATION: <\/strong>In-store experience, a key part of the consumer journey in traditional retail, has been taken for granted in recent years due to the rise of eCommerce. However, in spite of the strong growth of eCommerce, most retail purchases are still happening offline which is why this experience should not be neglected by brands. When shopping in physical stores, Chinese consumers usually search for information about product and price, read reviews, look at sales volume and alternative purchase methods through mobile. This does not mean that consumers will necessarily choose to conduct a purchase online. This is why brands and retailers should take into consideration New Retail principles that digitize offline retail and provide a seamless omnichannel experience. For example, brands can provide QR codes not only for in-store marketing purposes (e.g. to download a coupon), but also to offer more information about the product, an easy way to learn about other product lines and repeat purchases.<\/p>\r\n

Culture<\/strong><\/h3>\r\n

\"\"A study conducted by TMall and Bain & Co revealed that sales of premium <\/span><\/b>cosmetic brands<\/span><\/b> increased by <\/span><\/b>8.5%<\/span><\/b> among urban <\/span><\/b>white collar workers, <\/span><\/b>7.3%<\/span><\/b>among Gen Z <\/span><\/b>consumers<\/span><\/b> <\/b>and <\/span><\/b>7.1% <\/span><\/b>a<\/span><\/b>mong lower tier youth from <\/span><\/b>2016 to 2018.<\/span><\/b>The number of cosmetic brands used per capita also increased by <\/span><\/b>14.8%<\/span><\/b>,<\/span><\/b> 23.3% <\/span><\/b>\u00a0<\/span><\/b>and <\/span><\/b>20.5% <\/span><\/b>respectively<\/span><\/b>. Click for more…<\/a><\/strong><\/p>\r\n

INSIGHT & IMPLICATION: <\/strong>Appearance (<\/span>\u989c\u503c<\/span>) <\/span>is the new social currency in China. Consumers care about how they look so much that even Alipay\u2019s facial-recognition payment system was compelled to offer an image filter as part of its technology. One of the most popular KOL categories on short video platform Douyin is \u2018Good-looking\u2019 (<\/span>\u989c\u503c\u7c7b<\/span>) and refers to young, <\/span>good-looking teenage girls or boys without any discernible talent, like singing or acting. Their followers like them because of how they look and are willing to pay to engage with them and purchase their merchandise. The importance of appearance ultimately represents a significant business opportunity for brands, but only if they succeed in creating a meaningful, authentic connection with their audience. Beauty aspirations of these consumers should not be seen as superficial, but as an important element of personal and professional success.<\/span><\/p>\r\n

Media<\/strong><\/h3>\r\n

\"\"<\/p>\r\n

Since <\/span><\/b>the Pinduoduo <\/span><\/b>in-app game<\/span><\/b> <\/b>\u2018Fruit Garden\u2019 was launched in 2018, the number <\/span><\/b>of daily active users (DAUs)<\/span><\/b> <\/b>playing the game has increased <\/span><\/b>to <\/span><\/b>50 million <\/span><\/b><\/b>as of Q1 2019. <\/span><\/b>The platform is rewarding <\/span><\/b>500 tons<\/span><\/b> of fruit every day to those who have completed in-game tasks<\/span><\/b>. Click for more…<\/a><\/strong><\/p>\r\n

INSIGHT & IMPLICATION: <\/strong>Pinduoduo has cleverly increased user retention and Gross Merchandise Volume (GMV) by leveraging an in-app game to engage with users and improve platform operations. From a consumer perspective, this gamifies the online shopping experience, helps contribute to society (the platform buys fruit from farmers and gives it away to platform users) and offers rewards. For the platform itself, the benefit is an enhancement in the overall shopping experience and the perception of Pinduoduo\u2019s brand image. Alipay\u2019s \u2018Chicken Farm\u2019 and \u2018Ant Forest\u2019 are similar features to the \u2018Fruit Garden\u2019 and brands should understand what their role can be in enhancing this experience even further, while ensuring they achieve their business, marketing and CSR goals. \u00a0<\/p>\r\n

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Have a great weekend!<\/strong><\/p>\r\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":84,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[503,498],"tags":[897,528,898],"class_list":["post-21381","post","type-post","status-publish","format-standard","hentry","category-industry-insights-global","category-our-views","tag-data-snack","tag-phd-china","tag-phd-insights"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/posts\/21381","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/users\/84"}],"replies":[{"embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/comments?post=21381"}],"version-history":[{"count":0,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/posts\/21381\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/media?parent=21381"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/categories?post=21381"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.phdmedia.com\/china\/wp-json\/wp\/v2\/tags?post=21381"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}