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3 Things You Need To Know About Douyin e-Commerce

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China’s popular short video apps, Douyin and Kuaishou, are significant marketing channels and are rapidly gaining scale as e-commerce players. Brands are not only directing their content marketing budgets towards these apps, but also using them to create multi-million-dollar sales channels. For instance, L’Oréal Group recently became the first major international brand to open a Douyin flagship store, which it’s reported raked in more than CNY 22 million (USD $3.42 million) in Gross Merchandising Volume (GMV) between April 30 and May 6.

Against that backdrop, here are the three things you need to know about e-commerce on Douyin.

If you haven’t seen China’s see-now, shop-now livestream e-commerce format, check out this video before reading on.

Douyin e-Commerce Isn’t The Biggest Player in Town

While there might be plenty of media talk of Douyin’s e-commerce ambitions, Douyin is still a small player in China’s e-commerce scene. By GMV, last year Douyin transacted around $28 billion. Douyin’s rival, Kuaishou, transacted $56 billion in the same period. These figures pale in comparison to established e-commerce players, such as Alibaba ($1.2 trillion of GMV in 2020), JD ($398 billion of GMV in 2020) and Pinduoduo ($255 billion of GMV in 2020).

However, Douyin’s potential as an e-commerce player lies in its current scale. Douyin is reported to have 600 million Daily Active Users. That places it as one of China’s largest apps. Further, Douyin’s parent company, Bytedance, has ambitions to triple e-commerce GMV this year. As such, excitement around Douyin’s burgeoning e-commerce business comes from its future potential, rather than its current scale.

Douyin e-Commerce Isn’t Just Livestream e-Commerce

Douyin e-commerce started as livestreaming e-commerce. However, it would be a misconception to think that all Douyin e-commerce is livestream e-commerce. In March, Douyin expanded its e-commerce services with the launch of flagship stores for brand accounts. That takes Douyin a step closer to a mobile e-commerce marketplace. Other e-commerce marketplaces started from product listing and moved to recommendation feeds, flash sales, livestream e-commerce and other formats. Douyin, however, has evolved the other way.

Douyin anticipates flagship stores will increase brand exposure. A spokesperson for Douyin predicts the ratio of product views to total page views from the account’s homepage should jump from 17 percent to 80 percent, and click-through rates will also rise.

Douyin flagship store for fashion brand Peacebird
Source: Douyin

Whatever Direction Douyin e-Commerce Goes In, TikTok Will Go Next

Bytedance is the parent company of Douyin and TikTok. In both apps development, a good rule of thumb is that whatever happens on Douyin, TikTok will follow soon thereafter. Take livestream e-commerce as an example. This was Douyin’s foothold in e-commerce. Now, TikTok is doing the same in select markets, like Indonesia. Like Douyin, TikTok has very clear e-commerce ambitions. Per this article, TikTok has briefed advertisers on three new eCommerce integrations coming soon to the app:

  • A tool that lets its most popular users share links to products and automatically earn commission on any sales
  • The ability for brands to showcase catalogs of their products on the platform
  • “Livestreamed” shopping, a mobile phone version of television shopping channels, where users can buy goods with a few taps after seeing them showcased by TikTok stars

Sound familiar? That’s right, this is a carbon copy of Douyin’s e-commerce playbook. Accordingly, if you’re in China and have operations overseas, you can give your overseas colleagues a big head-start by sharing knowledge of local practices. Alternatively, you get in touch with one of our experts to give you a download on what’s happening in China e-commerce.

5 Export Opportunities to China in 2021

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China’s economic planners have set a 6% GDP growth target for 2021. China, it appears, has shrugged off the worst of COVID-19. This has many brands asking:

Where are the export opportunities to China in 2021?   

We sat down with AgencyChina’s Research & Strategy Manager, Michael Norris, who relayed what he and his team of Chinese market research professionals had found on a few recent projects.

Below is an edited transcript. If you like what you hear, you can sign up to arrange a free expert call with Michael Norris, now available till May 31. A unique chance to get some great first-hand China knowledge!

Top Export Product Opportunities in China

Editor: What product categories do you think have the best prospects in China this year?

Michael Norris: I think the pillars for imported brands in China will remain largely unchanged this year – skincare, haircare, pet care and nutrition continue to have strong tailwinds. Principally, the purchasing power of China’s middle-class continues to increase and there’s a universal desire among the type of middle-class consumers we work with to look and feel their best.

However, what we continue to advise new market entrants is China is now a level playing field. That is to say, the ‘halo effect’ imported brands once enjoyed has faded away. As such, brands need to do their homework before they enter.

Top Export Product Niches in China

Editor: Drilling down, what niches do you expect to have strong growth this year?

Michael Norris: There are five niches I really like this year. The first is toothpaste, which is seeing ingredient and format innovation. This driven by a focus on dental beautification – straight teeth and a bright smile.

The next is cat food. Cat ownership is growing faster than dog ownership, and, if current trends continue, cats will become China’s most preferred pet in a year or two.

A further changing preference is perfumes and fragrances. Fragrances are increasingly signifier for style and taste among China’s younger white-collar types, both male and female. Recognizing this demand, Tmall has even opened up a direct air route to carry over niche perfumes by air freight.

When it comes to personal style, we can’t go past hair. I like the prospects of a number of hair care niches, especially anti-breakage and strengthening shampoos. The China Association of Health Promotion and Education reckons that China’s premature hair loss population stands at a whopping 250 million, most of them between 20 and 40 years old. Any help brands can give here is undoubtedly welcome.

I know it’s bigger than a niche, but I do have to say it as it’s one of my favorites: male skincare and cosmetics. We expect the average number of skincare products male consumers to rise from 1.5 to 3.5 over the next five years, which will drive significant category growth.

Advice For Brands Entering China

Editor: What can brands do to keep up with changes in China’s consumer preferences?

Michael Norris: Top performing brands tend to have a strong sense of what they already know and what they want to find out about the consumer. They then craft a research agenda around those things to make sure they keep up to date. There’s a quick mental quicklist anyone can use to start their own research agenda.

  1. What are the three things you’d most like to know about your Chinese consumers current habits? How are these things important to your business？
  2. What are the three things you’d most need to learn about to prepare your business for the future?
  3. What evidence do you have about these things already? How would you rate the quality of that evidence?
  4.  What plans do you have to update existing evidence or gather new evidence?

AgencyChina is a full-service agency, covering market research, marketing and e-commerce operations. That means we’re in a great place to help new and established brands at any point in their journey.

We can help size up an opportunity and build a business case, use consumer interviews to understand changing needs, create a distinctive brand in-market, or identify which parts of a brand’s e-commerce operations need some fine-tuning.

I always encourage folks to have an open dialogue with us. Let us know where you’re at, and we can see whether we’re a good fit.   

3 Brands To Help You Understand Healthy Snacking In China

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It’s no secret that China’s Post 90 and Post 95 consumers are turning towards healthier snacking. Healthy snacking in China represents a desire to treat oneself, minus the guilt of becoming a couch potato.

So, which brands deliver best on China’s healthy snack trend? We asked our e-commerce data insights manager, Teddy Wang, to give his top three picks. If you’d like to get more insights, book a free consultation with one of our experts here.

Trending Healthy Snack in China #1: Sugar-Free Yoghurt

The first trending healthy snack is sugar-free yoghurt. Last year, amid the pandemic, dairy products rose to prominence after local dairy lobbies put dairy products’ immunity benefits up in headlights.

Simple Love, a diary brand hailing from Guangzhou-based Honest Dairy, is a beneficiary of this trend. It produces a high-protein spoonable yoghurt, a classic plain spoonable yohgurt and a drinking yogurt. The name – Simple Love – comes from the fact the brands ingredient profile is exceptionally simple. The dairy range contains only high-quality milk and probiotics from Finland-based dairy company Valio.

Trending Healthy Snack in China #2: Cereal and Muesli

The next trending healthy snack is cereal and muesli. China’s consumers have been warming to cereals and muesli for a little while now, with names like Quaker, Calbee and Wangbaobao making their way into kitchen cupboards across China.

While cereals and muesli may seem old hat to overseas readers, for Chinese consumers the appeal lies in versatility – cereal can be eaten dry, combined with yoghurt, combined with fruit, added to warm milk or even used as part of DIY desserts.

If you’re thinking about bringing a cereal or muesli into China, you’ll need to understand and cater to what consumers appreciate – low sugar, baked oats with chunky pieces of dried fruit.

Trending Healthy Snack in China #3: Fortified Gummies

Fortified gummies, as typified by BUFFX, are Teddy’s third pick for trending healthy snack.

You might have noticed that we’ve previously written about BUFFX, as a challenger in the fortified foods and health supplements category.

By way of back story, BUFFX recognized that Chinese consumers are daunted by imported vitamin and supplement pill sizes. If you compare pills and caplets in China to overseas, you’ll find there is a demonstrable size difference. BUFFX understood this and designed a gummy supplement – the type that you might typically find for children.

These gummies have a taste and texture profile which is far more palatable to local consumers, and far closer to a snack than a supplement. Indeed, most consumers we’ve come across treat them as a snack – which is why they make this list.

What can you take away from this?

The biggest takeaway here is Chinese consumers want it all – the indulgence of snacking, high-quality ingredients, great taste, and low-calorific content. That sounds like a high bar, and it is.

The good news?

Chinese consumers are happy to pay a premium for brands that can deliver against their high expectations.

Speak to one of our experts to understand whether your brand meets the bar.

Local Challenger Takes On Foreign Brands In China’s Supplement Market

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In April, we wrote a popular post on how China’s Saturnbird Coffee is taking on Nestle in China’s instant coffee market. Given we love innovative products that unlock new growth, here’s a new example in China’s Supplement Market: BUFFX.

BUFFX is a vitamin and supplement start-up that launched in April this year, not long after China returned to work after a pandemic-induced lockdown. BUFFX attracted two sets of seed investment before its products launched online in September. In its first two weeks, BUFFX accrued CNY 1 million in sales. To us, this is a signal that the brand is doing something right. We think they’ve got plenty of success ahead of them.

Below, we outline what BUFFX did to secure early success in the China Supplement Market:

  • Solve a consumer pain point
  • Go where others are reluctant to go
  • Be bold and distinctive
  • Get investors to support launch

Let’s look at each of these in turn. If you work in FMCG, you’ll find the learnings practical and relevant.

BUFFX Solves A Consumer Pain Point In Vitamins And Supplements

Vitamins and supplements are a fast-growing category, posting a CAGR of 10% between 2013 and 2019 – much faster than the FMCG category average.

Vitamins and supplements are traditionally an area where imported brands, such as Swisse and Blackmores, have performed well. Given concerns around the quality and efficacy of domestic vitamins and supplements, the category is highly conducive to cross-border e-commerce.

However, there’s a consumer pain point which has long been overlooked by imported brands – consumers are daunted by imported vitamin and supplement pill sizes. If you compare pills and caplets in China to overseas, you’ll find there is a demonstrable size difference. Through in-home interviews, our research team has found that difficulty swallowing a supplement is one of the top reasons Chinese consumers stop taking supplements.

China Supplement Market - old style packaging

BUFFX understood this and designed a gummy supplement – the type that you might typically find for children. This has a taste and texture profile which is far more palatable to local consumers, which increases the chance consumers will make purchasing BUFFX a consistent habit, rather than a once-off.

BUFFX Goes Where Others Are Reluctant To Go

Common supplements in China include Vitamin C and E.

BUFFX wasn’t content with making a gummy version of Vitamin C and E supplements. Instead, it looked at specific niches. Skin, sleep, eye care and digestion are commonly-reported ailments among young Chinese consumers. That’s exactly where BUFFX went. Its initial SKUs include formulations for sleep, eye care, digestion and virility. In the category, eye care and virility had been overlooked in recent years and hadn’t seen much new product development.

We can’t stress how important this type of research is – looking for mismatches between consumer needs, existing propositions and new product development.

BUFFX Is Bold And Distinctive

A quick look at BUFFX’s packaging shows how bold and distinctive they want to be.

China Supplement Market - Buffx packaging

BUFFX have a clear ambition to be the most distinctive vitamin and supplement brand in-market. This marks a break from the minimalist design features which have defined consumer goods in recent years.

We also think the name BUFFX is important. First, it’s easily searched online. Second, it’s memorable. Third, the term ‘BUFF’ is understood by China’s gamer generation as a term which means an enhancement. That flips traditional impressions of supplements on their head – instead of fixing a deficiency, BUFFX augments and empowers.

This sort of branding and positioning work is essential if you’re looking to build a lasting brand in-market.

BUFFX Used Investor Support To Launch

Launching and succeeding in China isn’t for the faint of heart. You need to play to win. One of the first questions we ask brand partners is what resources they can commit to their expansion in China. That’s because we know that China is a commitment. Even n iterative, test-and-learn approach needs to be adequately supported.

As a start-up, BUFFX didn’t have the resources of category leaders like Swisse or GNC. So, it went to investors and pitched the idea – gummy supplements with distinctive packaging, targeting graduates who want to work and play hard. These investors are no doubt pleased with BUFFX’s launch in September – expertly timed for traction and a pop over this year’s Single’s Day.

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Now’s your chance!

Alibaba wants to bring 1,000 overseas brands to China. Last year, Tmall Global piloted the incubation program with brands like Fenty Beauty, DPC and Brandfree. However, to get backed by Alibaba, brands need to put in the work. We think BUFFX is a good example.

If you like the sound of BUFFX’s approach to market, our team has the requisite skills across research, marketing and commerce to launch a product from scratch, or adjust your product and business model to the needs of China’s consumers. Get in touch to find out more.

3 Misconceptions About Lower Tier Cities in China

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China’s not a unified, single market. Rapid urbanisation has led to 113 cities with more than one million inhabitants. You may already know a few of China’s mega-cities. However, less than 10% of China’s population live in those massive metropolises. By contrast, over two-thirds of China’s population live in lower tier cities.

Unfortunately, even after a number of years touting the promise of lower-tier cities, we still find that China’s lower-tier opportunity is misunderstood. There are three main misconceptions, which this article tries to dispel.

Read on to help bust some myths about China’s lower-tier cities. 

Myth #1: Lower Tier Cities Means Rural

The first misconception is that “lower-tier” means “rural”. That’s not true. China’s 252 third-tier cities are prefecture-level cities. What’s a prefecture-level city, I hear you ask? Well, that’s a city with the following characteristics:

  • An urban centre with a non-rural population over 250,000
  • Gross output of value of industry of 200,000,000 RMB (US$32 million)
  • Output of the tertiary sector supersedes that of the primary sector, contributing over 35% of GDP

To give you a sense of what that looks like, here’s a couple of snaps from Putian (Fujian Province), Maoming (Guangdong Province) and Nantong (Jiangsu Province). You’ll quickly appreciate that these cities have a similar retail environment to most European cities you’ve been to, minus some of the cosmopolitanism. 

Image result for maoming shopping
A shopping precinct in Maoming, Guangdong Province
A shopping precinct in Nantong, Jiangsu Province

Myth #2: Consumers In Lower Tier Cities Are Conservative Spenders

Now that we’ve clarified that lower-tier doesn’t mean rural, let’s have a look at some of lower tier consumers’ spending habits. Morgan Stanley estimates that private consumption in smaller cities may triple between 2017 and 2030, reaching 45 trillion yuan ($6.73 trillion). Part of this consumption boost is driven by consumers growing disposable income, helped by lower cost of living in lower-tier cities. One interesting direction for disposable income is luxury goods. A joint report from Deloitte and luxury e-commerce platform SEECO evidences third tier cities swept their annual rankings in annual purchase frequency, the percentage of customers with repeat purchases, and the percentage of customers with three purchases.          

Myth #3: Consumers in Lower Tier Cities Want Low Prices

The estimated tripling in private consumption will be driven by the same consumption upgrade that Tier 1 and Tier 2 cities experienced, where quality becomes the key purchase driver, rather than price. For instance, during Pinduoduo’s 618 e-commerce festival last year, the company observed that home appliances bought on its platform by consumers in smaller cities were getting more sophisticated – 4K and HD TVs, quiet and large-capacity washing machines, as well as double-door refrigerators. This shift will take time, and it won’t happen evenly. We expect satellite cities around major metropolitan areas to narrow their consumption gap first, with younger consumers and families leading the way.

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So, there you go. Hopefully, this has gone some way to dispel some of the myths around China’s lower-tier cities. Speak with us if you’d like to know more.

China Market Entry Checklist For Foreign Brands

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So, you’ve read our market updates and would like to see if your brand has any potential in China. But where to start? No worries! We are here to help.

We’ve come up with a short checklist to help you put together the most relevant details to decide if the Chinese market is right for your brand.

TIP: Have this guide ready as you navigate your first consultation with one of our experts. 

China Market Entry Checklist

China market entry checklist

(click here to download the Chinese market entry checklist as pdf)

Next Step in your China Market Entry

Once you’ve tried to answers the questions on the Chinese market entry checklist, you’re in a better position to take up your free consultation with us. But if you are not able to answer all of the questions yet, don’t worry! Our China Experts are ready to help you complete the list during your first session.

At this point you may wonder what the first stages of a route to market would entail. To give you an idea of a typical China market entry engagement with AgencyChina we made the overview below:

china market entry process

We hope this gives you a little more clarity about what you can expect from us, and what we hope we can expect from you as a potential partner. If you’re looking for services other than market entry, then you’re still in the right place – we do everything from consumer surveys, to social media audits, to marketing & e-commerce operations.

The future of e-commerce on Douyin and 5 tips how to prepare

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Douyin is TikTok’s namesake in China. It’s a wildly popular short video app with over 600 million active daily users. That’s half of China’s population.

Unlike TikTok, Douyin has clear e-commerce integration. Douyin users can click links within each short video and complete purchases inside the app. This makes Douyin a potential sales channel, well suited to impulse purchases.

e-commerce on douyin - how it works

Source: Walk The Chat.

This feature is also complemented by livestream e-commerce, which we’ve covered extensively here.

Douyin’s owner, Bytedance, has formed an e-commerce business unit to oversee its e-commerce businesses unit. This is perhaps the sign of some important changes to e-commerce on Douyin.

So, what might be in store for e-commerce on Douyin? What should you do now to capitalize on the opportunity? Read on to find out!

Douyin Future E-commerce Moves

We predict Douyin’s future e-commerce direction looks something like this:

  • A virtual mall built housed within a Douyin mini-program. Mini-programs allow users to access various services without leaving the app. As we imagine it, a virtual mall Douyin would contain various lists and product recommendations. Think of it as a miniature Tmall, housed within Douyin.
  • Brand Zones that appear in Douyin’s search results, similar to WeChat and Tmall. Brand zones give brands the opportunity to directly display products and services to consumers that have searched for the brand.
  • Official account pages that have “Must Buy” or “Hot Recommendation” lists. This has important implications for branded accounts, as well as Douyin KOL accounts. We think brands and influencers will be able to display “hot products” on their home page well after they post a video containing the product.
  • Advanced video-based product recommendations, which were trialed late last year. We expect to see these back with more accurate recommendations and more appealing presentation. This will be complemented by powerful video-based search, another feature trialed last year.
e-commerce on douyin - video based search

Should you take your brand online on Douyin?

If you’re not on Douyin now, use our below framework to work out whether it’s the right think for your brand at this point in time. You can even get in touch for us to walk you through everything.

What do you do when you are already on Douyin?

If you are on Douyin now, then assess your Douyin game:

  • How is your content performing?
  • Have you run sales campaigns through the platforms?
  • What type of influencers are you working with?
  • How do your efforts compare with dairy brands Yili and Mengniu, beverage giants Pepsi and Wang Lao Ji, brewers like Snow and Harbin, conglomerates like Nestle and convenience food brand Kang Shifu?
  • Can you learn anything from the efforts of these brands?

The best way to prepare for future of e-commerce on Douyin’s e-commerce future:

  1. Experiment with livestream e-commerce: Increase livestream frequency with brand-owned accounts or influencers, to test how many fans you can attract to watch your livestream and get a better sense of conversion rates.
  2. Try e-commerce integrations: Get a sense of whether your short video game is good enough to entice immediate purchase by setting up e-commerce integration on Douyin.
  3. Increase content output: Douyin’s recommendation algorithm values viral hits, and brands need to balance quality with quantity.
  4. Learn to partner with small and medium KOLs: instead of aiming for partnering with megastars, brands can work with many small influencers, giving you broader access to fan bases across the country.  
  5. And last but not least… Subscribe to AgencyChina’s newsletter, to learn about the latest developments in Douyin e-commerce.

Uncover China Consumer Trends with AgencyChina’s China Market Research

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Use China Market Research To Understand New China Trends

AgencyChina offers market research, marketing and e-commerce to help brands play to win with China’s consumers online. Today, we’d like to spend some time introducing our market research services.

China Market Research

AgencyChina’s China market research service uses consumer interviews, focus groups and consumer survey data to understand what’s going on and what’s happening next in China.

Our market research team covers 30 cities in China, including cosmopolitan cities like Shanghai, fast-growing regional population centres like Zhengzhou and Chongqing, and emerging engines of consumption like Guiyang. We’re fortunate to works with big brands (like Nestle, Budweiser, Johnson & Johnson and LEGO) as well as challenger brands from Europe, North America and Australasia.

It’s not just brands that value our research and opinions. We’re also featured in newspapers and media outlets like Bloomberg, the Wall Street Journal, CNBC, South China Morning Post and Le Monde.  

China market research can help you understand what Chinese consumers want now and in the future

Typical China Market Research Questions

AgencyChina’s market research team has the experience and commercial nous to identity opportunities in China. Our market research team provides Chinese consumer interviews and Chinese consumer surveys to answer these types of China market research questions:

China Market Sizing

Typical questions:

  • Is there a market for “X” in China?
  • How big is the market for “X” in China?

This is where a new market entrant wants to know whether a gap exists in the market that they can fill and the commercial potential for that gap. Our team has conducted market sizing for a whole range of product categories, from wooden toys, to foot creams, to exercise bikes.

Chinese Consumer Attitudes and Preferences

Typical questions:

  • What do Chinese consumers think of “X”?
  • What will Chinese consumers want in the future?

This is where a new market entrant or established brand wants to understand trends in and outside product categories which may shape future consumer preferences. AgencyChina uses consumer interviews and consumer surveys to understand what Chinese consumers want today, and what they’ll look for tomorrow. We have the flexibility and resources to understand any consumer segments you may be interested in.

China Market Entry

Typical questions:

  • Can we start selling online in China?
  • What does it take to enter the China market?

This is where a new market entrant wants to know what it takes to play and win in China. AgencyChina provides market entry strategies that consider market size, competitive dynamics, the requisite resources and implementation. Each market entry option is informed by robust category data, survey data and supported by financial model.

In combination with our e-commerce team, AgencyChina’s market researchers can also offer a product-market fit test, which combines category e-commerce data and a trial run on one of our existing online stores in China.

China Consumer and Tech Trends, Applied Outside China

Typical questions:

  • What can we learn from what’s happening in China?
  • What can we learn from China e-commerce?
  • What can we learn from China’s fintech innovation?

This is where companies outside China have identified relevant trends or developments in China they’d like to learn from, particularly across social media, e-commerce and mobile payments. AgencyChina’s team is adept at auditing audit current trends and enablers, to diagnose which local developments are applicable overseas and the different ways they may present themselves.

Next Step In Your China Market Research Journey

If you’e interested in China market research, you can get in touch with a senior member of our research team here. We’re always happy to speak about your China market research questions, as well as any potential projects or opportunities to collaborate. You can also request a credential deck, which outlines our China market research services in greater detail.

3 Key Opportunities in China’s Haircare Market

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China’s haircare market is significant, and there’s plenty of headroom to grow. Mintel, a market research firm, estimates China’s haircare market will grow to RMB 53.6 billion (USD 7.6 billion) by 2021.

The market’s increasing growth is driven by premiumization and specific haircare issues affecting the Chinese population. 

In terms of premiumization, sales of premium hair care products are increasing in all geographies. China’s wealthier coastal provinces – Shanghai, Zhejiang and Guangdong – lead the way. Premiumization is taking consumers from shampoos and conditioners priced between RMB 50 and 100 to products well over 100 RMB. This trend works in imported brands’ favor.

Alongside premiumization, China’s consumers are struggling with premature baldness. The China Association of Health Promotion and Education reveals that China’s premature hair loss population stands at a whopping 250 million, most of them between 20 and 40 years old. The desire to stave off premature baldness drives additional consumption and increased sophistication when looking at hair care formulations. 

hair loss china's haircare market

Image source: VCG Photo

With that context in mind, let’s have a look at the three key opportunities in China’s haircare market for imported brands.

1. Anti-Breakage Shampoo in China’s Haircare Market

One of the first courses of action for young consumers suffering with early onset hair loss is strengthening or anti-breakage shampoo. There are over 50,000 product reviews of anti-breakage shampoos on Little Red Book. From these reviews, we can see consumers are looking for formulations result in less shedding after showering and during sleep. However, brands should be aware that most consumers are anxious for solutions to work quickly – they’re looking for some small signs of progress after a few washes!

From our analysis of product reviews, and previous projects in the category, imported anti-breakage shampoos that hit the mark with consumers include:

  • Furterer
  • Alpecin
  • Shisheido
  • Living Proof
  • Amino Mason

2. Volumizing Shampoo in China’s Haircare Market

Outside anti-breakage shampoo, consumers are also looking at volumizing shampoos to deal with thinning hair and receding hairlines. More volume and texture gives consumers confidence that issues with thinning hair can be masked or disguised. Relative to anti-breakage shampoos, volumizing shampoos have lower levels of awareness but higher levels of spend per item. This suggests that those who are in the know are prepared to spend on solutions that work.

There are over 10,000 product reviews of volumizing shampoos on Little Red Book. From our analysis of product reviews, the brands that consistently hit the mark with consumers in this sub-category include:

  • Pola
  • Kerastase
  • Living Proof
  • Philip B
  • John Masters Organics
  • Kiehls

If you’d like to know more about why these brands resonate, get in touch with our team for a free consultation.

3. Color and Style Products in China’s Haircare Market

While premature hair loss is an issue for China’s millennials, it certainly isn’t the only opportunity in China’s growing haircare market. Indeed, CBNData’s “High-End Hair Care Industry Consumer Insight Report” (2019) showed that hair dye had some of the fastest growth on China’s e-commerce platforms. COVID-19, which forced lockdowns across China, has accelerated this trend.

Post 95s, who make up 30% of the DIY hair dye sales, are looking for new ways to express themselves, and turn their hair into a canvas for self-expression.

Compared to the previous two opportunities, many of the most popular brands in this sub-category come from Japan and South Korea. They include:

  • Kao
  • EZN
  • MISE EN SCENE
  • Rishiri Kombu
  • Aderans

Image source: Tmall EZN product page

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Each of the above sub-categories are rich with opportunities. Consumers are still discovering the best solutions that work, and they’re open to trying niche imported brands. If you’re looking at this market, talk with our research and e-commerce teams to work out the best approach for you to gain traction with hair-obsessed millennials. 

3 Invaluable Lessons About Gen Z Consumers in China from Bilibili’s CEO

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Chinese “Gen Z” shoppers in their early 20s are emerging as an increasingly powerful force in China’s consumption landscape. They are the recipients of generous allowances from their parents. Our internal research estimates that, close to three-quarters of Gen Z consumers in China who are currently studying or looking for work receive an allowance higher than the minimum wage. This facilitates a lifestyle of exploration, instant gratification and experimentation.

A great window to begin to understand Gen Z consumers in China is Bilibili. Bilibili is an ACG (anime, comics, and games) entertainment platform. It currently has over 100 million users, who spend an average of 80 minutes per day entertaining themselves. A great primer on Bilibili has been published by our friends at Jing Daily.

Below, we’ve gone deeper by translating and synthesizing previous media interviews from Chen Rui, Bilibili’s CEO. We hope this can give you an insight into China’s Gen Z consumers that isn’t readily available from other sources.

Without further ado, here are three things Bilibili’s CEO tells us about China’s Gen Z.

1. Gen Z consumers in China have internal contradictions

Chen Rui believes that one of the keys to understanding China’s Gen Z is their internal contradictions. They are simultaneously picky and tolerant. Here’s what he means:

  • Gen Z are picky about cultural content. They have high expectations for anime, comics and games they enjoy. They also have high expectations for objects or art forms that take inspiration from anime, comics, games, novels, movies and Chinese culture. When it comes to products, services and content, if the details aren’t right, then Gen Z will struggle to appreciate it.
  • Gen Z are respectful of makers and creators. This respect extends to tolerance of mistakes – they don’t mind if a new game has a few glitches, or their favorite vlogger forgets what they’re trying to say. For brands that make their products with a strong sense of design, they key is to find ways to take Gen Z ‘behind the scenes’ and further appreciate what goes into making or creating the products Gen Z enjoys today.

First thought provoking question:
How can brand use co-creation to involve China’s Gen Z consumers in the creative process?

2. Gen Z Consumers in China ‘Go All In’ on the things they’re interested in

By now, you’re probably familiar with hobbyists and enthusiasts who spend time, effort and hard-earned cash on their passions. Consider our favorite enthusiast, Yan Shaoting, who won a Red Dot Design Award at 16 years old. He makes Iron Man Suits in his spare time.

Yan shaoting - Gen z consumers in China

Yan Shaoting poses with armor he designed and produced. Image source: Sina Weibo

But, to Bilibili’s CEO Chen Rui, what makes China’s Gen Z different is they hope their commitment to hobbies and passions can propel their life forward and open new possibilities. That is to say, a creative outlet isn’t just a thing that’s done on the weekend. Maybe it leads to new friends. Maybe it leads to fifteen seconds of (internet) fame. Maybe it leads to a side hustle. Whatever the outcome, the passion should be a force for momentum and progress.

Second thought provoking question:
How can brands facilitate pathways for enthusiasts to ‘level up’ their hobby?

3. China’s Gen Z Consumers Want To Have ‘Cozy’ Feelings Wherever They Go

Chen Rui believes Gen Z have grown up in a period of relative stability and harmony. Born into single-child families, China’s Gen Z have grown up with their parents (and even grandparents) attention and monetary support. This makes Gen Z highly accustomed to a level of comfort, and heightened sensitivity to things that make them feel uncomfortable. We call this feeling ‘cozy’.

What this translates into is earlier forays into luxury goods, greater affinity with products that match their needs, greater spending to refresh wardrobes and higher willingness to use consumer credit to fund impulse buys. What each of these instances tell us Gen Z consumers aren’t afraid to spend to extend how and when they feel comfortable and at ease.

For brands to resonate with Gen Z, they will need to have a strong appreciation of what type of comforts this young generation expects and what types of discomfort they seek to avoid. Consumer research can help brands understand these need states with greater clarity and precision.

Third thought provoking question:
What new levels of customer care and attention will Gen Z inspire?

Gen z consumers in China

Image source: luxe.digital @Thehautepursuit

That’s a wrap of the three things Bilibili CEO Chen Rui has taught us about China’s Gen Z consumers. It certainly leaves us with a lot to think about. We hope you learned a few invaluable things about this crucial generation of Chinese consumers.

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