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COVID-19 // China POV Vol.11

Vol.11: An update from Havas Group China on media behavior and consumption during the COVID-19 global pandemic.

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COVID-19 // China POV Vol.11

  1. 1. 1 Havas Group China November 30th, 2020 EDITION 2020 #11
  2. 2. Havas Media China is again nominated in two categories for Agency of the year by Campaign Asia 2 Nomination for • China Media Agency of the Year • Greater China Event Marketing Agency of the Year
  3. 3. 3 In this edition Key market developments • Economic outlook • Consumer behavior developments • Key category outlooks • Havas POV China advertising market • Advertising market development • Media consumption update • EC developments • Media market news • Havas POV
  4. 4. 4 Economic outlook Key market developments
  5. 5. In October retail market shows a higher growth driven by a climbing consumer confidence 5Source: National Bureau of statistics of China 2020; Eastmoney 2020 Retail market recover further, 4.3% growth in Oct. 9.6%8.9% 9.0% 8.3% 8.4% 8.5% 7.6% 7.8% -20.5% -15.8% -7.5% -2.8% -1.8% -1.1% 0.5% 3.3% 4.3% China Retail market YOY Growth Rate 124.3 124.6 126.6 126.4 118.9 122.2 116.4 115.8 112.6 117.2 116.4 120.5 117.8 118 120.7 120 115.4 117.8 112.3 111.3 108.9 111.9 110.8 115 128.5 128.9 130.6 130.7 121.2 125.2 119.3 118.8 115.1 120.6 120.1 124.2 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 consumers confidence index Consumer satisfaction index Consumer expectation index
  6. 6. 1. Overall Economy China's economic and technological strength, and composite national strength will increase significantly. A new stride will be made in the growth of the economy and the per capita income of urban and rural residents. Making major breakthroughs in core technologies in key areas, China will become a global leader in innovation 2. Industry Development New industrialization, IT application, urbanization, and agricultural modernization will be basically achieved. China will finish building a modernized economy 3. Country System The modernization of China's system and capacity for governance will be basically achieved. The people's rights to participate and to develop as equals will be adequately protected. The rule of law for the country, the government, and society will be basically in place 4. Culture China will become a strong country in culture, education, talent, sports and health. The well-rounded development of all people and social etiquette and civility will be significantly enhanced. China's cultural soft power will grow much stronger 5. Environment Eco-friendly ways of work and life will be advanced to cover all areas of society. Carbon emission will steadily decline after reaching a peak, and there will be a fundamental improvement in the environment with the goal of building a Beautiful China basically reached 6. Inter-country The opening-up will reach a new stage with substantial growth of the country's strengths for participating in international economic cooperation and competition 7. People’s income The per capita GDP will reach the level of moderately developed countries. The size of the middle-income group will be significantly expanded. Equitable access to basic public services will be ensured. Disparities in urban-rural development, in development between regions, and in living standards will be significantly reduced 8. Country Safety The implementation of the Peaceful China initiative will be promoted to a higher level. The modernization of national defense and the military will be basically achieved 9. People’s Life People will lead a better life, and more notable and substantial progress will be achieved in promoting well- rounded human development and achieving common prosperity for everyone According to China’s newly published long-term goal towards 2035, the dual economy will be developed around 9 aspects 6 Fifth plenum long-term goal towards 2035
  7. 7. The RCEP trade deal was signed with 15 countries, to further spur recovery from Covid-19 7Source: Ashley Talk The RCEP is expected to eliminate a range of tariffs on imports within 20 years. It also includes provisions on intellectual property, telecommunications, financial services, e- commerce and professional services. Is it important for China? For China, RCEP aligns with it “dual circulation” vision — refocusing on domestic demand while taking advantage of trade and foreign investment. This marks the first time China enters a nonbilateral free trade agreement of this scale. 15 countries includes: China Japan South Korea Australia New Zealand Indonesia Thailand Singapore Malaysia Philippines Vietnam Brunei Cambodia Myanmar and Laos
  8. 8. China has started the 7th national population census. Audience gifts show a strong dedication to keep China Corona safe 8 • China on Nov 1 started its seventh national population count which conducted every 10 years, with about 7 million census takers going door to door to document demographic changes in the world's most populous country. • The census collects data including name, ID number, gender, marital status, education, and profession of Chinese citizens. • Residents are encouraged to use mobile terminals to report personal and family information. • Residents will get small gifts after the census Source: Xinhua news
  9. 9. 9 Consumer behavior developments Key market developments Can we find a picture without mask?
  10. 10. Double 11 dilemma – topline sales growth while brand profit and likely consumer sentiment show a downward trend Source: Tmall; Qiluwanbaowang 52 million 498.2 billion Y2009 (1st year of double 11) Y2020 27 brands participated 250,000 brands participated Sales of Double 11 on Tmall Consumer sentiment Brands profit Consumers highly postpone purchase for necessary products until double 11, rather than create new purchases With bigger discount and longer timeframes, higher bidding against competitive brands, profits go down substantially Consumer sentiment & brands profit on Double 11 10
  11. 11. Declining consumer sentiment for Double 11, consumer fatigue on EC festivals increases more than in previous years Source: Pedaily.cn “I didn’t buy too much on this year’s double 11, only spend 1000 rmb. Previous years I would store serum and cream, usually would spend 3000 rmb. 今年双11我没买什么东西,只花了1000多元。往 年都要囤精华、水乳,可能会花个3000元左右“ “ I will have something left that I bought from last year double 11, so there’s no need to refill. The purchase rules are too complicated, I am not that interested as before. 去年囤积的产品没有用完,所以暂时不需要购买;平 台规则太复杂,自己的热情也大不如前了” “It isn’t seen too much difference on price between double 11 and daily live streaming, 现在的双11和平常直播(价格)没有太大差别。” 2. Less price advantage due to frequent EC festival and live streaming 3. Complicated rules push consumers away 1. Rational consumption 11
  12. 12. The rising conscience of anti-consumption importance restrain consumers to spend more on unnecessities Source: JingDaily During this Double 11, NetEase Strictly Select released a short film parodying luxury ads like Gucci Perfume, Patek Philippe, Rimowa, and Adidas to encourage netizens to buy the brand’s label-less products. When questioned about the concept behind this video, a spokesperson for the company said, “We are simply trying to say that we have eliminated high premiums for consumers so that they can enjoy pragmatic products.” The film was then redistributed by Chinese state media Xinhua News Agency and other local media on Weibo in an attempt to cool off luxury shopping at the festival. By November 11, two hashtags #ConceptOfConsumptionOfModernYoungsters (#当代青年人的消费观#) and #ConsumeNotConsumerism (#要消费不要消费主义#) have collectively been viewed 164 million times. Consumers, especially the young ones, are becoming more prudent 60% of young consumers intend to plan more of their consumption and reduce their impulse spending. 42% of young consumers intend to save more as a result of the Covid-19 Conscious spending attitude is on the rise 12
  13. 13. Longer time period Live streaming Mini games Hence, more and more Double 11 mechanisms are created to stimulate consumption 13 The total number of Tmall cat game users exceeded 500 million Oct 20th, Austin Li sold 3.3 billion and Viya sold 3.2 billion The cumulative time of Taobao live streaming lasted for 1660 years Mini games keep shoppers coming back for more Source: Tmall Short decision time when shopping at live streaming Longer period, more opportunities to shop more
  14. 14. From content to sales - social media apps are pushing integration of sales function/EC process 14 Most Chinese social media apps have already integrated the sales process. Here are a few prominent ones: • Douyin has had its in-app store since 2018, where users can instantly buy products • Kuaishou employs the same concept while serving lower tier cities. • RED and Mogujie focus on beautiful pictures and are teaming with influencers to drive traffic. • Pingduoduo now has 568 million monthly active users as of Q2. Group-buying is also social commerce. The platforms offer prices that get increasingly discounted the more items a group purchases.
  15. 15. China’s KOL industry maintains a momentum of evolution, higher influence through micro KOLs and authenticity 15Source: PARKLU Brands cancelled around 30% of the content collaborations they had booked with the agency’s influencers in the month of April alone. Brands have switched their attention to micro-KOLs and micro- influencers. The mechanics of working with micro-influencers are like any KOL campaign. The brand uses the power of endorsements to tap into the influencer’s fan base. Many brands have also opted to forge their own path without any help from influencers large or small. The economic and social fallout from the pandemic prompted a surge in the number of brands that decided to launch their own live streams. Seeking out micro-KOLs and brands’ own Livestream Consumers still want to learn about and gain recommendations on products and services, but they may have grown disillusioned with putting faith in KOLs as trusted messengers. That’s a double opportunity for brands. Firstly, brands can lean into developing their own content to try to present an authentic face to the consumer While consumers will form their own communities with people, they are close to, brands can also create spaces where like-minded consumers can forge, if not friendships, then at least a sense of community. Authenticity matters KOL marketing in China is indispensable for brands, particularly in the post-Covid world. By their nature, these initiatives are difficult to scale. Brand-owned communities are supposed to be exclusive to a tightly defined group of consumers, and therefore, there’s a natural upper to the number of consumers a brand will be able to reach via its own community. There’s no doubt that China’s KOL industry after COVID- 19 will continue to evolve in China and in the West. However, KOL collaborations will remain an indispensable part of how brands will market to Chinese consumers. KOL marketing in China is indispensable for brands
  16. 16. 16 Key categories outlook Key market developments
  17. 17. 17 Travel & Tourism
  18. 18. As domestic travel demand recover over the summer domestic airlines starts to report profit Source: China travel news • China Southern Airlines, which has the largest domestic network among the country’s state-owned carriers, reported the first quarterly profit (Q3 2020) since the pandemic hit. • The airline, now the world’s largest as others have pared back capacity, recorded a net profit of RMB 711 million following an RMB 2.9 billion loss in the second quarter. Its nine-month net loss amounted to RMB 7.5 billion. • Rivals China Eastern Airlines and Air China both reported narrower losses in the third quarter versus the second, though most international flights remain grounded. • Shanghai-based China Eastern, which has been rolling out various “all you can fly” package deals, said its net loss narrowed to RMB 563 million in the third quarter from RMB 4.6 billion in the second. • Beijing-based Air China, the country’s flag carrier, said its net loss shrank to RMB 671 million from RMB 4.6 billion to take its nine-month loss to RMB 10.1 billion. Chinese airlines plan to operate 84,634 domestic passenger flights per week from late October through March next year, up 19.8% from a year earlier 18
  19. 19. Promotions like JD × Airlines lottery travel continue to be used to stimulate demand for travel products 19 • Due to the precarious state of the epidemic situation, airlines has associates with JD travel launched a new type of travel product – lottery box travel recently to increase flexibility in user travel planning. • Lottery box travel product allows people choose destination in a list that airline provides arbitrarily , therefore minimize the impact of the epidemic on traveling.
  20. 20. Foreign tourism boards increasingly make use of Livestreaming to keep awareness and promote their destinations 20 • Though global travel restrictions and quarantine- periods still hamper movement in and out of China foreign tourism boads have found a way to keep pivoting to connect with China’s consumers at home via Livestreaming. • Tahiti and Switzerland tourism cooperated with MFW and Taobao respectively to boost exposure and tell stories online during single’s day shopping festival.
  21. 21. Airlines and OTA platforms also jumped on the Double 11 train with attractive deals 21 • The famous Singles’ Day Sale held annually on 11th Nov. is not only about fashion, gadgets and other consumer products. In the past years, travel companies have taken advantage of the events to offer amazing travel deals and discounts to consumers. • The strong rebound of China's domestic travel during the 2020 annual Golden Week holiday has brought hope to international destinations. Though global travel restrictions and quarantine-periods still hamper movement in and out of China, but foreign airlines like Qatar Airways seize this chance to promote their international routes. Data source: https://mp.weixin.qq.com/s/7iSeVTkoKZh2rniqDULi5A; Chinadaily.com
  22. 22. 22 Automotive
  23. 23. Car sales keeps on showing as in September the category gained 12% in YoY sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2,809 1,718 2,656 2,319 2,288 2,274 1,889 2,103 2,394 2,380 2,548 2,661 2019 2,367 1,482 2,520 1,980 1,848 2,056 1,808 1,958 2,271 2,284 2,457 2,658 2020 1,927 310 1,430 2,070 2,194 2,300 2,112 2,186 2,565 0 500 1,000 1,500 2,000 2,500 3,000 Monthly car sales in China 23 • The auto market continues to recover and increased by 17.4% regarding MoM sales in September, and the YoY sales also increased by 12.8%. The sales have maintained a growth rate of more than 10% for five consecutive months. • PV YoY sales also continue the growth momentum, as sales increased by 8% YoY in September. The sales of three types of PV: SUV, minibus and car all maintained growth, while the sales of MPV decreased compared with 2019 Sep. • The NEV sales in September also kept growing, growth rate(+67.7% vs. last year), while the sales in Jan-Sep Y20 declined 17.7% compared with Jan-Sep Y19. Source: China Association of Automobile Manufacturers (CAAM),China Passenger Car Association (CPCA) Unit: Thousand
  24. 24. BMW Q3 profit rebounds thanks to China market 24 • FRANKFURT -- BMW's third-quarter profit rose almost 10 percent, boosted by rebounding Chinese demand for luxury cars. BMW's quarterly pretax profit increased 9.6 percent to 2.46 billion euros ($2.87 billion), lifted by an 8.6 percent rise in vehicle deliveries. • BMW-branded vehicles saw a jump of 9.8 percent in deliveries, mainly thanks to a 31 percent increase in China, which accounts for almost a third of the automaker's vehicle sales. China helped to offset a 16 percent drop in demand in the U.S., where sales were hit by the coronavirus pandemic. • BMW reiterated it expected to achieve an EBIT margin of between 0 percent and 3 percent for the automotive segment in 2020. Despite a recovery in demand in some markets, it expects overall deliveries as well as group pretax profit to be significantly lower than last year after the pandemic shut down factories and dealerships. Source: Automotive News China
  25. 25. Chang’an to develop high-end EVs with CATL and Huawei 25 • Chang’an Automobile Co. is working with China’s largest electric vehicle battery supplier, CATL, and leading communication equipment maker Huawei Technologies to develop high-end EVs. The project was disclosed by Chang’an Chairman Zhu Huarong during a program aired last week by state-operated China Central Television. • Chang’an, based in the southwest China municipality of Chongqing, builds minibuses, sedans and crossovers under the Chang’an brand. The move makes Chang’an the second state-owned automaker aiming to move upscale with new EV products. • With an expanded product lineup, Chang’an sales surged 20 percent to top 660,000 in the first three quarters of the year, according to the China Passenger Car Alliance, the data unit of the China Automobile Dealers Association. Source: Automotive News China Changan's headquarters in the south China municipality of Chongqing.
  26. 26. 26 Luxury and Lifestyle
  27. 27. Luxury brands continue elevating experiential marketing. Cartier launched their [SUR]NATUREL fine jewelry even with an exhibition 27 On Oct 13th, Cartier presented its new high jewelry collection, [SUR]NATUREL, recently in Shanghai, revealing a "nature that is more than nature" . It is the first time the brand has released its latest global high jewelry series in China. On Oct 24th, Cartier invited many local celebrities( 宋佳 Jia Song, 李现 Xian Li, 宋茜 Victoria Song, 王景 春 Jingchun Wang, 王千源 Qianyuan Wang, 张亚东 Yadong Zhang, 刘天池 Tianchi Liu, 聂远 Yuan Nie, 高伟光 Vengo Gao, 窦骁Shawn Dou, 张雪迎 Sophie Zhang, 黄龄 Yellow Zero) for this offline exhibition in Shanghai to drive social buzz. It also take live streaming on TMALL to warm up for the Singles’ Day promotion. The exhibition is open to public on Oct 25th/26th to enhance the brand image to public.
  28. 28. 28 Fendi combined offline and livestream in O2O activation to celebrate Double 11 • Platform: WeChat, Weibo • Medium: Livestream, short video, image, mini- program • Featured celebrity: Zhao Wei (85M Weibo Followers) | Zhang Han (36M) | Xu Weizhou (13M) | Zeng Keni (4M) | Zhang Zhehan (11M) | Liu Lingzi (4M) | Tan Zhuo (8M) | Jia Fan (1M) | Wu Yuheng (815K) | Fanguangjing Band (451K) • Fendi celebrated the Double 11 shopping festival with an offline party at the Shanghai TX Huaihai shopping mall and a livestreaming event on Weibo on November 11. The Fendi Pack Collection, launched online on November 10, was introduced via the livestream. The livestream invited over ten celebrities such as brand ambassador Zhao Wei and Xu Weizhou, as well as fashion KOLs like Mr. Jiliang. Campaign Summary Result • Campaign hashtag “FendiRomaParty”: over 72.54 million views in one day • Livestream: over 11.2 million viewers in three hours • Online traffic was predominantly driven by the celebrities: Xu Weizhou, Zeng Keni, and Zhang Han. • The moderators included Linda and Fu Peng, who was top livestreamer Li Jiaqi’s assistant, also contributed to the online and offline engagement throughout the event.
  29. 29. 少年之名 x Pandora 直播 少年之名 x Pandora 七夕“链”爱专场直播 Pandora leveraged local celebrity and livestreaming to promote new products Pandora 少年之名 live streaming are promotion-driven for new products on on Yizhibo 29
  30. 30. 30 Havas POV Key market developments
  31. 31. Collective consumerism; falling Double 11 sentiment as a first glance of a changing consumer attitudes 31 • As the domestic retail market further recovers with a 4.3% growth and Double 11 again showing a double-digit growth, Chinese consumers seem to get back to their path of consumerism. • To what extend does the conscience of the need for a better of environment and society, the level of attained development and the effect of Covid-19, change Chinese consumer’s mind set and buying hunger? And what about the resonance into buying behavior of governmental policies that are ramping up, which started with garbage sorting, the clean plates propaganda and most lately its instrumental importance for collective and sustainable environment care in its newly published 5-year plan? • Already in Havas Groups Meaningful Brands China research in 2017 and 2019, we saw while buying products being still one of the main drivers for “happiness” and “life satisfaction”, higher tier consumers are shifting more towards less is more, buying less but better quality. Also we noticed that collective good causes facilitated by brands more easily have gotten support by consumer spending, especially in a social media environment. • The falling Double 11 sentiment might be a further sign consumer fatigue on EC festivals. In the last few years and especially this year EC festivals got ramped up and every Chinese cultural festival was turned into an EC shopping event. Consumer’s mindset is clear that there is always on something on “sale”, which doesn’t urge them to buy extra but rather buying at a lower price. • The “enough is enough” sentiment has become visible. We see (higher tier) consumers caring more about longer lasting, higher quality, more environmentally friendly, local economy supporting products, while more enticed to buy when they need it, less because it is 11.11. again.
  32. 32. 32 Advertising market development China advertising market
  33. 33. Month by month comparison 52,022 46,087 42,704 10,000 20,000 30,000 40,000 50,000 60,000 2018 Sep 2019 Sep 2020 Sep -7% YTD vs YTD comparison 461,775 420,358 333,379 100,000 200,000 300,000 400,000 500,000 YTD 2018 YTD 2019 YTD 2020 -20% Source: ADP (TV, Radio, Newspaper, Magazine, Cinema), CODC (OOH), Iresearch (Digital – PC & Mobile) 2018-2020 Note: excluding media spending on social and search; discounts are estimated based on Havas methodology - 10,000 20,000 30,000 40,000 50,000 60,000 1 2 3 4 5 6 7 8 9 2020 2019 2018 Monthly spending Monthly ad spend continues to recover and activity gap caused by COVID continues to decrease as market activities intensify • In September 2020, the total actual* Ad market in China achieved RMB 43 billion; minus 7% compared with last September. • YTD September 2020, the total actual* Ad market in China achieved RMB 333 billion; minus 20% compared with same period last year. • YTD comparison in August was -22% while in September the gap was reduced to -20% only 33
  34. 34. Digital media remains the main battlefield, more and more the primary media choice for most advertisers 2019 YTD Ad Spend Market Media Mix Digital, 41.3% TV, 29.1% Outdoor, 23.4% Cinema, 2.9% Radio, 2.1% Newspaper, 0.7% Magazine, 0.5% 34 • YTD September 2020, 70% of overall media investment through Digital and TV, which is similar to the same period last year. • Outdoor spending share has increased significantly, while other media spending share continues to drop further • In specific industries such as TLA and IT Product & Service category, the share of digital raised up to over 70% of total media investment. Source: ADP (TV, Radio, Newspaper, Magazine, Cinema), CODC (OOH), Iresearch (Digital – PC & Mobile) 2018-2020 Note: excluding media spending on social and search; discounts are estimated based on Havas methodology 2020 YTD Ad Spend Market Media Mix Digital, 40.1% TV, 28.6% Outdoor, 28.2% Cinema, 0.5% Radio, 1.7% Newspaper, 0.6% Magazine, 0.4%
  35. 35. 6.8% 10.5% -6.5% 23.1% -2.4% 6.2% 6.1% -25.1% -33.1% 16.2% -12.1% -5.7% -4.7% 3.2% -15.2% - 5,000 10,000 15,000 20,000 FOODSTUFF & BEVERAGES PHARMACEUTICALS BUSINESS & SERVICES IT PRODUCT & SERVICE ALCOHOL PERSONAL ITEMS HOME ELECTRICAL APPLIANCES LEISURE COSMETICS & TOILETRIES FINANCE INDUSTRY POST & COMMUNICATION HOUSEHOLD TRANSPORTATION,LOGISTIC & AUTO REAL ESTATE & CONSTRUCTION CLOTHING Source: ADP (TV, Radio, Newspaper, Magazine, Cinema), CODC (OOH), Iresearch (Digital – PC & Mobile) 2018-2020 Note: excluding media spending on social and search; discounts are estimated based on Havas methodology 35 2020 Sep Media spending & YOY growth rate by category versus 2019 Sep • Compared with September 2019, Finance, IT ,Pharma and Food & Beverages categories have increased their spending. • The Food & Beverages category reported RMB 11 billion ad spend and was ranked 1st among all the categories. More and more categories accelerate their investments
  36. 36. 36 Media consumption update China advertising market
  37. 37. In October TV rating show seasonal decline, but also drop below 2019 levels across all markets 5.9 6.4 5.5 5.4 5.4 5.3 5.5 5.7 5.6 5.6 6.9 9.5 7.2 6 5.7 5.4 5.4 5.6 5.3 5.2 0 5 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2019 2020 Tier 2 37Source: Infosys, Target:P18-45, Period:2020/01/01 – 2020/10/31, Timeslot: All Day Tier1 including(BJ、SH、GZ、 SZ),Tier2 including almost Provincial capital 6.2 6.8 5.2 5 5 5.1 5.3 5.2 5.4 5.3 7.2 10.2 7.2 6.5 5.4 5.1 5.3 5.4 4.9 5 0 5 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2019 2020 Tier 1 4.9 5.8 4.9 4.7 4.6 4.5 4.8 4.9 4.7 4.7 6.5 9.2 6.5 5 5.1 4.9 4.9 4.9 4.3 4.3 0 5 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2019 2020 Others
  38. 38. TV dramas in HN STV achieved extraordinary performance. Regarding variety shows, top 4 satellite TV shows their talents 38 Drama Hunan STV dramas won the first and second place in October Variety In early Q4, new variety shows of top 4 satellite TV face fierce competitions. Jiangsu STV 在一起 Ave Rtg 1.09 Dragon STV 瞄准 Ave Rtg 1.12 Hunan STV 向阳而生 Ave Rtg 1.93 Hunan STV 亲爱的自己 Ave Rtg 1.99 Jiangsu STV 越过山丘 Ave Rtg 1.05 Dragon STV- 我们的歌 Ave Rtg 1.53 Zhejiang STV- 美好奇妙夜 Ave Rtg 1.80 Hunan STV- 中餐厅Ave Rtg 1.40 Hunan STV- 姐姐的爱乐之程 Ave Rtg 1.30 Jiangsu STV- 一千零一夜 Ave Rtg 1.70 Source: Infosys, Target:P18-45, Period: 2020/10/01-2020/10/31, Timeslot: All Day Market: 57 Markets
  39. 39. Triggered by Double 11, EC apps usage increased, also travel and navigation app usage rose in October due to national holidays 39 Source: iResearch, period: 2020.01-2020.10 21 23 87 171 291 384 418 410 792 1,260 22 23 78 192 275 383 426 447 847 1,247 Health & medicare Food delivery & Recipes Education Travel & Navi Gaming services General news Financial service EC Video services Social networking 2020 Oct DAU 2020 Oct 2020 H1 Unit: Mil 2010 H1 VS. 2020 Oct growth rate -1 % +7% +9% +2% 0% -6% +12% -10% +3% +1%
  40. 40. Social app usage remains on a high stable level, WeChat continues its positive momentum while other apps remain stable 40 896 344 182 13 16 916 323 214 15 14 928 314 193 15 14 928 314 192 15 14 WeChat QQ Weibo LRB Baidu Tieba 2020 Top 5 Social Apps by DAU 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) Unit: Mil 1220 1,260 1,247 1,239 92.5 93.5 88.9 89.5 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 0 200 400 600 800 1000 1200 1400 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) 2020 Social Networking Apps User Behavior Average DAU Average time spent Unit: Mil Unit: mins Sources: iResearch, period: 2019-2020.11.08
  41. 41. Compared to H1, OTV apps usage dropped while time spent has increased significantly. Bilibili continues its positive momentum 41 167 153 78 32 22 181 164 92 44 26 163 143 70 41 31 161 145 70 41 31 iQIYI Tencent Video Youku Mango TV Bilibili 2020 Top 5 Online Video Apps by DAU 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) Unit: Mil Sources: iResearch, period: 2019-2020.11.08 365 422 383 382 112.1 121.2 130.3 134.4 0 20 40 60 80 100 120 0 100 200 300 400 500 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) 2020 Online Video Apps User Behavior Average DAU Average time spent Unit: Mil Unit: mins
  42. 42. Short video continues its stable usage trend driven by Douyin & Kwai who have more than doubled their user base since last year 42 430 609 591 610 40.3 112.8 118 115.6 0.0 20.0 40.0 60.0 80.0 100.0 120.0 0 100 200 300 400 500 600 700 800 900 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) 2020 Short Video Apps User Behavior Average DAU Average time spent Unit: Mil Unit: mins 211 123 52 46 3 391 251 47 38 24 404 257 44 33 24 401 259 44 33 23 Douyin Kwai Watermelon Video Douyin Volcano Edition WeSee 2020 Top 5 Short Video Apps by DAU 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) Unit: Mil Sources: iResearch, period: 2019-2020.11.08
  43. 43. Compared to H1, News apps show stable usage while daily usage of gaming apps has dropped 344 384 383 391 46.9 54.2 50.5 52.3 0.0 10.0 20.0 30.0 40.0 50.0 60.0 0 100 200 300 400 500 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) 2020 General News Apps User Behavior Average DAU Average time spent Unit: Mil Unit: mins 249 292 275 271 70.2 75.9 78.5 78.3 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 0 50 100 150 200 250 300 350 400 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) 2020 Gaming Apps User Behavior Average DAU Average time spent Unit: Mil Unit: mins 43 Sources: iResearch, period: 2019-2020.11.08 43
  44. 44. 279 73 37 16 10 286 86 40 18 11 325 88 39 19 12 373 105 51 19 13 Taobao Pinduoduo JD.com Xiaomi Mall Tmall 2020 Top 5 EC Apps by DAU 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) Unit: Mil Triggered by Double 11 EC usage jumped, Taobao, Pinduoduo and JD benefit the most 363 410 447 507 17.9 16.9 17.3 19.0 0.0 5.0 10.0 15.0 20.0 0 100 200 300 400 500 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) 2020 E-commerce Apps User Behavior Average DAU Average time spent Unit: Mil Unit: mins 44 Sources: iResearch, period: 2019-2020.11.08
  45. 45. 45 E-Commerce update
  46. 46. This years Double 11 hit new sales records 46 Total Double 11 Sales: Nov 1, 00:00 - Nov 11, 24:00 Tmall: 2020 Double 11 attracted 800 millions of consumers, 250,000 brands and 5 million merchants to participate, which has the broadest coverage and engagement. 342 brands achieved total sales over ¥100M during D11. JD.com: fresh products, supermarkets, home appliances, electronic products, books, luxury are top growing categories. Suning: GMV boosted to ¥50M just in 19 minutes after 00:00 of Nov 11. Total number of D11 online orders increased by 72% YoY. Home appliances, electronics, personal care products, clothes and FMCG are top growing categories. Pinduoduo: PDD launched iphone 12 officially on Nov 11 and broadcast on Hunan TV, providing huge coupons to consumers. Tmall sales JD.com sales ¥498,200,000,000 ¥271,500,000,000 Data Source: 亿邦动力 0 100,000,000,000 200,000,000,000 300,000,000,000 400,000,000,000 500,000,000,000 600,000,000,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Tmall YoY Double 11 Total Sales
  47. 47. In terms of sales and reach Double 11 is getting bigger every year and is no longer just a discount focused shopping festival 47 Participating digital giants are now leveraging livestreams, new product launches, and novel technologies to enhance customer engagement and the buying experience. Exclusive Launches: While deals and savings are still top of mind for consumers when it comes to Double 11, new product launches are also driving many to the shopping event this year. For example, Taylor Swift’s product launch on Tmall, Jordan Brand releases new Air Jordan 6 WMNS “Singles Day” sneaker on this event. In the past, Alibaba invited celebrities, including Nicole Kidman, Mariah Carey, and Pharrell Williams, to show up on 11/11. This year, “retailtainment” remains at the heart of the festival with livestreaming fashion shows and pre-event galas. Alibaba, as well as other major players like JD.com, Pinduoduo, and Suning have leveraged partnerships for their shows to be broadcasted on TV and online streaming. Double 11 is a must-see for tech watchers, as many of China’s digital giants have used events to highlight retail tech, including virtual reality (VR) shopping, QR code payments, and livestreaming commerce. According to AlixPartners data, 96% of adults surveyed plan to participate in 11/11 this year, vs. 92% in 2019. Data Source: eMarketer Exclusive launches Entertainment All Eyes on Tech
  48. 48. This year livestreaming was fully integrated 48 Merchant KOL & Celebrities Tmall Official Merchant 300 Celebrities 500 CEOs JD Official Celebrity KOL Merchant+KOC 2 Live Shows 2000 themed live streams 3000 brand live streams 50000 Rural Live streams 13 super buyer live streams Activated official livestreaming and expanded scale Dedicated to supply chain efficiency and accelerate cross-border cooperation Leveraging hundreds of CEOs in livestreaming Deep dive live streamer resource and activate potential Activated official livestreaming and expanded scale Dedicated to supply chain efficiency and accelerate cross-border cooperation Data Source: Havas Study
  49. 49. And the shopping festival period was extended 49 Preparation Presale PeakCategory Extend Preparation 1st Presale 2nd Presale 1st Blast Final Blast 2nd Blast 2nd Warm-up Peak Long tail 1st Blast Merchant training – Fans Day – Tasks for lucky draw Super Category Carnival – Super Fans Benefit – All category blast 10.1-10.20 10.21-10.31 11.1-3 11.4-11.10 11.11 11.12-14 Data Source: Havas Study
  50. 50. Main EC platforms cooperated with TV stations for content & entertainment 50 On Nov 10, four main ecommerce platforms launched Double 11 live event leveraging television partnerships: Tmall: in cooperation with Zhejiang TV, Dragon TV and Youku JD.com: in cooperation with Jiangsu TV and iQiyi Suning: in cooperation with Beijing TV Pinduoduo: in cooperation with Hunan TV and Mango TV Data Source: iresearch, China Economy Newspaper D11 Live Event TV Audience Rating (Nov 10. 19:30 - 24:00) Tmall JD.com Pinduoduo Suning Data Source: CSM Real Time Rating
  51. 51. And used live shows for a new shopping experience 51 Tmall, Suning, JD and Pinduoduo upgraded entertaining content and celebrity interaction with consumers in Double 11 live show, launching a new shopping experience: buying while watching TV and engaging with celebrities & KOLs. Crossing-screen live stream, Combining shopping with entertainment Leverage multiple TV and online streaming media partners, communicating Double 11 Show. Tmall Double 11 Live Show Lifestyle IP, talk show and celebrity performance bringing innovative Double 11 experience. Tmall Double 11 Opening Live Show Suning Double 11 Super Show JD Double 11 Super Night
  52. 52. Key trends: New news, content & entertainment to drive engagement and sales 52 Content: seeding and look aroundGamification: combination of retail and entertainment A discount campaign is not enough to create a sense of urgency. As Double 11 attracts more and more attention, many brands release new products to bring unexpected growth. In 2020 Double 11, Huawei and Apple both announced new phone launches. Gamification is one Double 11 marketing strategy pushing consumers to make quicker purchase decisions, especially for Gen Z audiences. During Double 11, Tmall’s Cat-feeding game became trending social e-commerce game and helped in driving traffic and consumer engagement. In 2020, more e-commerce platforms (Tmall, JD, Suning, Pinduoduo) leveraged TV partnerships and launched live shows with innovative ideas. Tmall, for example, moved 17 top KOLs and their livestreaming rooms to the central stage and initiated screen-crossing feeling as fresh-new shopping experience with high consumer engagement. Livestreaming is considered as the most important battlefield on each Chinese e-commerce platform. Merchants leverage KOL, brand employees and CEOs for livestreaming. Taobao provided VR technology like online property viewing and virtual vehicle test drives. JD.com worked with popular Chinese standup comedians to host a relaxing and funny live stream. Taobao APP changed to new design before Double 11, putting more emphasis on content and “look around” concept. The homepage central banner ad has shrunk to a smaller version, allowing soft ads such as short video content seeding and feeds have become more important. Diversified content seeding will encourage consumers to convert while just “looking around” on Taobao. Double 11 live shows Livestream continues to be central stageNew, instead of super discount
  53. 53. 53 Media market news China advertising market
  54. 54. Toutiao launched a new integrated opening ad format in Nov 54 Toutiao launched a new opening ad format in Nov. Huawei, the famous Chinese mobile brand was invited as key client to test the new format. • New opening ad format integrated opening ad with pop up ad and feeds ad, showed rich brand information by an eye- catching effect. • Furthermore, this new format can display over 10 seconds, and obtain better CTR compared to traditional opening ad. • However, the new format need better creative and production capability of ad materials, which should be taken into consideration in media planning. OPENING VIDEO + POP UP VIDEO + FEEDS Ad New format is in testing period
  55. 55. Data source: Mango TV New Format on MangoTV: Super Show At first glance, it attracts the eyes and grabs the viewer's mind and achieves an unforgettable effect. Power on for 5 seconds + first focus 15 seconds (up to 30 seconds), which can bring a complete display of creativity. Full screen display Extend exposure time Open video 5s plus 1st focus 15s video 55
  56. 56. Q4 drama trends of PSTVs and OTVs 56Data source: https://www.thepaper.cn/newsDetail_forward_9569753 PSTVs are stable, and focus on urban, suspense, and mainstream dramas. Judging from the current PSTVs Q4 on-air, to-be-broadcast, and ready-to- broadcast dramas, innovative works of large genres are relatively rare, and works of urban and theme genres are favored by PSTVs. For casting the focus lies on actors with certain national recognition. OTVs multi-type layout, more vertical and more diverse OTV boutique short episodes drama such as "Goodbye, My Love" and "The Long Night" ended with high popularity and high reputation, making the Q3 suspense short series battlefield fierce. Now the OTVs are shifting to urban love story, sweet love story. Reach the audience with more relaxed themes.
  57. 57. OTV – New program hot Drama 57 棋魂 – Hikaru no go Period: 2020 Oct 27th Episodes: 36 Cast: 胡先煦、张超、郝富申、韩沐泊、翟冠华、纪李 Media: IQIYI Introduction The play is adapted from the classic Japanese comic "Hikaru no go" drawn by Yumi Horita and Takeru Obata. Shi Guang discovered an ancient chessboard by chance and got acquainted with Chu Ying, the first Nanliang Go player who has been on the chessboard for thousands of years. Shi Guang gradually became interested in Go under his influence and inspired to become a professional Go player.
  58. 58. TV/OTV – New program hot Drama 58 瞄准– Sniper Period: 2020 Oct 9th Episodes: 57 Cast: 黄轩、陈赫、杨采钰、李溪芮、张洪睿、林栋甫、姚安濂、迟志强、付枚、 王砚辉 Media: IQIYI、Tencent、Youku、MangoTV 、东方卫视、浙江卫视 Introduction The play tells the story of Su Wenqian and Chi Tiecheng, two ace sniper partners who once fought side by side and cooperated perfectly. Because of the differences in beliefs, they changed to the opposite sides. In a life and death duel they ended up with different destinies. The suspenseful plot and the film-like time-space narrative style break the audience's stereotype of "period drama", which is very in line with the current audience's demand for drama pursuit.
  59. 59. TV/OTV – New program hot Variety 59 嗨唱转起来2– Sing or Spin 2 Period: 2020 Oct 2nd Episodes:12 Cast: 谢娜、潘玮柏、大张伟 Media: MangoTV、湖南卫视 Introduction "Sing or Spin 2" convenes music experts from all fields to sing classic songs with contemporary significance. The iconic round turntable stage has become the core gameplay: the singer needs to sing for 60 seconds to impress the program guests to get the opportunity to "turn out" the stage and stand in the C position; After the second round of singing, the audience will vote to decide whether the challenge is successful. When the music variety show became a new window for the people to decompress, "Sing or Spin 2" was given a warmer spiritual mission-to give the current negative pressure group a temporary release in music.
  60. 60. TV/OTV – New program hot Variety 60 我们的歌 第二季 – Our Song 2 Period: 2020 Oct 11th Episodes: 12 Cast: 林海、谭咏麟、钟镇涛、容祖儿、张信哲、李健、希林娜依·高、冯提莫、 太一、李玟、孙楠、陈小春、常石磊、邓紫棋、王源、郑云龙、GAI Media: IQIYI、Tencent、Youku、BesTV+、东方卫视 Introduction This variety show pairs up new Chinese singers with popular and well-established Chinese singers to bring you a new version of classic award-winning songs. At the same time, they will compete with their performances.
  61. 61. 61 Many movies launches announced for Christmas and New Year Data source : Focusfilm
  62. 62. 62 Havas POV China advertising market
  63. 63. Fierce battle as brands and platforms are fighting for audiences, attention and sales during Double 11 • E-commerce is at an all time high, with Double 11 dominating the last few weeks not just online but also via mass broad casting on TV including shopping shows and large presence in OOH. • Very high clutter during the extended festival period of Double 11 led to a fierce competition for audiences, attention and sales • TV rating showed seasonal decline and remained also in October below 2019 levels • While OTV usage has increased significantly since last year, October and early November data show a decrease compared to the first half of 2020. iQiyi and Tencent Video active remain the top platforms, but their active user base declined significantly and dropped even below 2019 levels. At the same time Bilibili managed to continue its positive momentum and is growing its userbase further. • Social media remains on its stable high level, while short form video has now been well established. Since last year Douyin and Kwai more than doubled their user base and continuously manage to sustain it. While the growth rate of short video apps has slowed down, it became clear that it is not just a short-lived trend, but here to stay. For advertiser, its important to select the right platform and customize assets by channel to ensure message and format match platform purpose to catch audience attention. • This year Double 11 broke sales and traffic records again, but the festival continuous to evolve. This year the festival had an extended period and more focus on entertainment, content, live show, etc. Double 11 continues to change rules and trends every year, but the only evergreen keyword is NEW. Content has become the main traffic and conversion driver in ecommerce platforms. Brands must create innovative short video and shareable content for engagement and traffic. • Livestreaming remains the key battlefield and continues to evolve and diversify. Brands need to build their own Celebrity x KOL x KOC “matrix” for broader communication and higher engagement. • Many blockbuster are scheduled for release for the holiday period at the end of the year. As consumer interest is high cinema provides an excellent platform for high impact branding. • New and innovative formats can help you to break through the intensifying clutter. Your Havas team can help you tailor your overall marcom strategy to drive brand and sales, including adjusting your EC strategy based on the latest developments. 63
  64. 64. 64 While Shopping festivals like D11 drive short term sales brand profitability declines, hence for 2021 “profitable growth” will be key • In 2020 brands continue to focus on activations, EC festivals and other activities to drive sales and recoup business. While sales activations produce short-term sales uplift, they also reduce profitability due to high cost with fees, commissions, higher media spend and higher internal cost. • For sustainable growth brands must balance short-term sales efforts with longer-term brand building to create efficiency, as they can not survive by pure sales activations like EC festivals, live streaming and special editions due to the high cost of acquisition. • To ensure profitability brand pull effect, that creates longer lifetime consumer value (LTV) and lower cost of consumer acquisition (CAG), needs to get higher priority. • Brands will need to find the right balance between branding and activations. Also brand consistency in activations will be key combined with a full EC ecosystem beyond 3rd party platforms.
  65. 65. Our Havas Village can help you drive your business through every touchpoint 65 E-COMMERCE MOBILE DATA STRATEGY VIDEO & AUDIO NATIONAL/LOCAL PUBLISHING NATIONAL/LOCAL OUTDOOR SPONSORSHIPS SPORTS MARKETING BRANDED CONTENT EXPERIENTIAL MARKETING SOCIAL MEDIA CREATIVE STRATEGY CRM SEARCH INNOVATION GEO- LOCATION PERFORMANCE MEDIA MUSIC GAMING ENTERTAINMENT INTEGRATIONS SHOPPER MARKETING
  66. 66. SHANGHAI 11/F Novel Building 887 Huaihai Zhong Road Shanghai 200020 +86 21 3397 8666 GUANGZHOU Room 07, 16/F CTF Finance Centre, No 6 Zhujiang Road East, Tianhe District Guangzhou 510130 +86 20 3877 3282 BEIJING 1006, 10th Floor, China Youth Plaza, 19 Dongsanhuan North Road, Chaoyang District, Beijing 100020 +86 10 5923 2791
  • manccheung9

    Dec. 22, 2020

Vol.11: An update from Havas Group China on media behavior and consumption during the COVID-19 global pandemic.

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