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- No second chances

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China Macro Economy: trade news, currency policy, and economic indicators | South China Morning Post

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The Chinese economy, the world's second largest, has displayed its economic advantages this year in a stronger-than-expected rebound from the coronavirus pandemic. SCMP has the latest updates on Chinese trade news, government policies, currency developments, economic indicators, and domestic challenges such as the rapid ageing of the nation's population.

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by

Stephan Haggard and Marcus Noland

East-West Center Working Papers, Economics Series, No. 129

Publisher:
Honolulu: East-West Center

Publication Date: June 2012

A central hope of engagement with North Korea is that increased cross-border exchange will encourage the strengthening of institutions, and eventually, a moderation of the country's foreign policy. An unprecedented survey of Chinese enterprises operating in North Korea reveals that trade is largely dominated by state entities on the North Korean side, although we cannot rule out de facto privatization of exchange. Little trust is evident beyond the relationships among Chinese and North Korean state-owned enterprises. Formal networks and dispute settlement mechanisms are weak and do not appear to have consequences for relational contracting. Rather, firms rely on personal ties for identifying counterparties and resolving disputes. The weakness of formal institutions implies that the growth in exchange does not conform with the expectations of the engagement model and may prove self-limiting. The results also cast doubt that integration between China and North Korea, at least as it is currently proceeding, will foster reform and opening.

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Networks, Trust, and Trade: The Microeconomics of China-North Korea Integration

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A central hope of engagement with North Korea is that increased cross-border exchange will encourage the strengthening of institutions, and eventually, a moderation of the country's foreign policy. An unprecedented survey of Chinese enterprises operating in North Korea reveals that trade is largely dominated by state entities on the North Korean side, although we cannot rule out de facto privatization of exchange.

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Live streaming grows your audience. The internet is an immeasurably large place. A live streaming event gives access to consumers who wouldn't have otherwise participated in the announcement, forum, question & answer session, or whatever event your business chooses to host.

Live streaming reduces costs. Some companies use live streaming as part of their training programs to train new employees. Everyone receives the same training and product information at the same time, thereby saving the company's money. Also, when hosting a live event, consider the cost of travel, lodging, and security. Opting to live stream an event and downgrade the live event itself can save a lot of money.

Reduced costs mean increased revenues. The time and money saved allows you to spend more time and resources growing your brand and promoting your products.

Audience interaction. Face to face time with consumers allows businesses to humanize themselves and connect with their audience. You can more effectively tell your brand's story. For businesses that engage in live streaming events with question and answer sessions, this allows the viewer from home to participate.

Why Live Stream?

Aside from these benefits, live streaming provides a sense of excitement for your audience. The live stream itself is inherently about community. It makes your customers feel inclusive and exclusive simultaneously. There are many platforms for live streaming including Google+, Ustream, or Livestream.

Aside from the live stream itself, businesses can record the broadcast and upload it onto a platform such as YouTube. This allows people who couldn't tune into the live event to watch it at a later date. Once the recorded stream is uploaded onto YouTube, embed it onto your website and all the social media sites associated with your business.

Live stream also allows businesses the opportunity to interconnect and inter-promote their platforms. For instance, encouraging the audience to tweet questions or "like" you on Facebook is an effective method to quickly grow your social media presence with people who already care about your brand.

After the live stream has been recorded and uploaded, take advantage of the SEO benefits of YouTube. If you announced a new product or performed a tutorial on an existing product, making it accessible for others to find it is a great way to grow your brand's web presence and story. The audience will be pleased with the richer content that a live stream can produce, especially if audience members are allowed to interact and submit questions. Unlike radio, internet streams have unlimited range and even open the possibility for an international audience to participate.

Have you hosted a live stream event before? If so, please share your tips and experience with our readers below!

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4 Live Streaming Benefits for Your Brand - 522 Productions

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In 2013, the dramatic effects of technology on business and the way that business is conducted have become more apparent. Currently, more businesses are experimenting with live streaming and the benefits that it provides for not only the business, but for consumers as well. For instance, Apple recently announced the iPhone 5 at a conference [...]

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- Live Streaming grows your audience
- Live streaming reduces cost
- Increase revenues
-Audience interaction

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From the well-established Periscope to the latest entries of Facebook and Instagram Live, live video has entered the mainstream. If your brand is looking to partner with an influencers in a live stream collaboration, chances are you'll be able to do it on the social platform of your choice.

And if you're looking for inspiration, you've come to the right place.

In this article, we review ten examples of effective influencer live stream promotions and dive into why they worked.

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1. Mashable

Mashable partnered with America's Test Kitchen and chef David Vos to launch a cooking show that was filmed using only a camera phone and streamed live on Periscope.

Touted as the "world's biggest dinner party," the publisher leaned into the popularity of how-to tutorial videos, while applying the excitement of live video to a genre that's traditionally pre-taped. Mashable drummed up interest ahead of time by promoting each episode on other channels, including tweets, Facebook events, and their own website. Once they were live, representatives from both Mashable and America's Test Kitchen were on hand to answer user questions on Twitter and Periscope and help boost the video's discoverability.

Takeaway

What other brands do your influencers work with? Consider whether you can all collaborate together for extra manpower and increased visibility.

2. Make-a-Wish

The Netherlands branch of Make-a-Wish collaborated with gaming vlogger Yarasky for a livestream telethon, proving that influencer marketing works for non-profits, too.

During his 24-hour YouTube Live video, they raised over 10,000 euros, and reached nearly 6 million people, earning tons of publicity in the process. Plus, one lucky kid had his wish granted: to play Call of Duty with Yarasky. This kind of campaign is a win-win: your brand gets rich while the influencer gets to give back.

Takeaway

Find influencers who care about the causes your organization supports, and host a livestream fundraising event together.

3. Best Fiends

This next one's another video gaming example, but the implications apply to any consumer products company who wants to take a creative spin on the unboxing video genre.

As a social gaming app, it made sense for Best Fiends to promote the app's release on the biggest social platform, Facebook, with a popular social influencer like Laura Clery. Laura infused the video with her characteristic humor, by playing the Best Fiends game in the the spirit of one of her more popular characters "Pamela," while her husband also made an appearance to play alongside her. To date, the video has racked up 468K views, 800 shares, and over 9,000 comments.

Takeaway

Live social video makes product unboxing videos even more exciting. Partner with influencers to unpack your latest software updates or newest products via livestream.

4. Kohl's

Kohl's partnered with vlogger ItsJudyTime to promote their Black Friday sales on Facebook Live.

Judy took her mother on a Black Friday haul, during which they discussed how easy it was to get everything in one store. Then, Judy posted it to her page to drive additional traffic throughout the holiday sales weekend. In the description, she included links to all of the products they purchased and reiterated the amazing Cyber Monday deals her viewers could score at Kohl's. The video has earned nearly 200,000 views to date.

Takeaway

Sales are exciting for your customers: they're available for a limited time only, so they have to rush if they want to enjoy the savings. Up the ante by showing influencers taking your hottest items off the shelves in real-time.

5. Nestle

With their Drumstick Periscope campaign, Nestle did a lot of things right.

First, they took advantage of an already trending topic: #FirstDayOfSummer. The day before, they heavily promoted that they would be going live on Twitter. Then, they filmed their own Periscopes throughout the day featuring the Drumstick alongside classic summer activities like playing frisbee in the park. Finally, they partnered with influencers (like entrepreneur Olga Kay) across the country to film their own favorite summer activities while enjoying a Drumstick. It's easy to see how the campaign went viral.

Takeaway

Collaborate with multiple influencers on a single campaign to boost your video's chances of getting discovered.

6. Cosmopolitan

Sometimes it's as easy as hosting an AMA with a popular influencer. Cosmopolitan magazine took this approach with reality-star-turned-designer Lauren Conrad.

Lauren was promoting her latest book, so she was happy to announce it to Cosmopolitan's huge fan base. Meanwhile, Cosmopolitan's Facebook fans got another reason to keep subscribing to the brand: exclusive interviews with their favorite influencers.

Takeaway

If you don't have the budget for a huge celebrity like Lauren, you can still enjoy the success of this technique. Look to the people who are famous within your niche: the bloggers, [local celebrities](https://dealspotr.com/article/local-influencers), and industry movers and shakers.

7. Royal Caribbean

Royal Caribbean ran a weeklong Periscope campaign, following travel influencer Dan Moore as he broadcasted live from five destination islands. Then Royal Caribbean streamed the live streams across port city New York billboards, encouraging more Periscope users to turn in, while increasing their view counts and brand awareness among non-users.

Royal Caribbean's goal was to reintroduce themselves to millennial consumers and show that they weren't your average cruise line. Mission accomplished.

Takeaway

Influencers introduce your brand to a whole new world of fans. Consider how influencers can help you break into new demographics, regions, or industries.

8. Fashion Week

With its visual focus, Instagram has always been a hub for anyone who loves fashion. Over 200 million people follow fashion accounts on Instagram.

During New York Fashion Week, fashion designers film behind-the-scenes footage, livestream the runway, and interview their top models. The smart ones also work with influencers to amplify their reach. Fashion influencer Chiara Ferragni partnered with Moschino, Instagramming ahead of time to encourage her followers to watch her attend their runway show live on Snapchat.

Takeaway

Does your brand attend tradeshows and conferences? Don't get lost in the fray. Have influencers livestream from your booth to drive traffic your way.

9. IMPACT

Marketing agency IMPACT hosts a monthly " Website Throwdown " series on YouTube Live. The company's CEO and Chief Strategy Officer are joined by an industry influencer to analyze websites live on YouTube.

The series presents IMPACT as subject-matter experts: not only do they know their stuff, but they've earned a stamp of approval from others in the industry who do, too. Fans ask questions about their own websites, and get answers from the experts and other viewers, driving discussion and boosting discoverability. The predictability of hosting it every month encourages fans to stay connected and tune in regularly. Once the livestream is done, IMPACT posts the videos to their YouTube and their website for long-term SEO benefits.

Takeaway

Create another customer touchpoint with a regular livestream series. Collaborate with various influencers to drive attendance.

10. MTV

Influencer takeovers are popular.
MTV figured they'd be a good fit for livestream, too, which is why they invited actress Vanessa Hudgens to take over their Periscope channel live from the red carpet at the VMAs. These livestreams drive viewership on the big screen and discussion on the small screen, which leads to more viewership back on the big screen.

Takeaway

Livestream is all about being genuine. Behind-the-scenes footage at your company can feel promotional when you're the one driving the camera. Let your influencer take your customers backstage on livestream, and it will feel more real.

Conclusion

From fundraising to product launches to events coverage, live streams offer brands another avenue for influencer marketing. Use the unique advantages of live video - immediacy and authenticity - and your customers will have fun, while your brand enjoys success.

Michael Quoc is the founder and CEO of Dealspotr - an open social network helping trend-seeking shoppers find today's best deals & allowing new and established brands to run sponsored campaigns with micro-influencers in their niche. Previously, Michael spearheaded the launch of several innovative live video and mobile social networking services as the Director of Product Management for Yahoo's media lab. He has been awarded nine patents in both mobile and social network apps and technology fields. Follow Michael on Twitter at @michaelquoc.
About the Author:

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10 Brands that Mastered Influencer Live Streams and Why they Worked

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From the well-established Periscope to the latest entries of Facebook and Instagram Live, live video has entered the mainstream. If your brand is looking to partner with an influencers in a live stream collaboration, chances are you'll be able to do it on the social platform of your choice.

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In 2010, only those with a 'celebrity' status were considered to be influencers. Fast forward 10 years, and even though celebrities still have a role to play, an 'influencer' can now refer to anyone who has an established social media following and is considered to have 'influence' over their followers. A post from a celebrity may reach a large group of people, but these may not necessarily be engaged with your brand. Influencers who share your values and embody your brand can be more beneficial to work with as it is better to reach a smaller group that are likely to buy your product or engage with your brand, as opposed to thousands of people who don't match your target audience.

To understand why influencer marketing is so important for brands, it is vital to understand what it actually is. In it's simplest form, influencer marketing is when a social media influencer shares content with their followers about a certain brand - this could be a product, a service or a campaign. The purpose of this is to work with an influencer who aligns with brand and who's audience are likely to relate and be interested in your product/offering. Influencers recommendations are often highly regarded by their followers and the purpose of partnering with them is to gain traction for your brand. Incorporating influencer marketing into your social media strategy can be really beneficial as it allows you to reach a niche, engaged audience and expand your brand presence. Here's seven reasons why influencer marketing should become part of your strategy:

1) Influencer marketing can help to amplify your brand awareness

Brand awareness is one of the main reasons why marketers use influencer marketing. Due to influencers high followers, they have great power to increase brand exposure by reaching a large amount of people in one post. If their followers are legitimate and they have a high engagement rate, it is likely that recommendations and products they post about will be noticed and taken into consideration by their followers. When brands collaborate with influencers, it can help them stand out and attract new followers for themselves, giving them increased visibility and the opportunity to gain more traction. Brands do influencer marketing for different reasons and really their should be a different objective for each influencer campaign you do. According to a recent study by Influencer Marketing Hub, 37% of respondents use influencer marketing to increase brand awareness, making it the most common objective. Increasing your customer database with a new demographic, expanding your audience or just using influencers to talk about your brand, are all perfect reasons to introduce influencer marketing into your strategy.

2) You can reach your target audience by using influencers

Identifying and reaching your target audience is essential in every marketing strategy. Influencer marketing is a great way to reach your potential customers, just make sure you do your research. Check that they are relevant to your brand, have 'real' followers who are of your target audience and that they align with your brands image. Choosing an influencer who's followers are of your target audience allows your campaign/message or product to be seen by people who are likely to be interested in what you can offer and engage with you - which is of course, the ultimate goal of using influencer marketing.

3) Influencer partnerships help to improve your credibility and trust

Consumers tend to trust content and recommendations from influencers, as they are seen as a third party, unbiased source and this can have an impact on people buying your products or services. That is the biggest power of influencers - the trust their followers have in their opinion. Collaborating with trustworthy and relevant influencers will strengthen your brand reputation and support your credibility. So when they share their opinion about your brand, it will be seen as a genuine testimonial and will help you build a following of loyal brand advocates.

4) Influencer marketing helps to revamp your content strategy

It's of real importance that interesting, varied and different content is featured on any brands social media platforms to ensure that they stay relevant and continue to establish an engaged audience. Creating content for followers, about followers (user-generated content) is a growing trend and should be taken advantage of if you're working with influencers. According to a study by Influencer Marketing Hub, this type of content is the reason that 31% of marketers engage in influencer marketing. The perceived value of UGC is growing over time and utilising the content produced by an influencer onto your feed can be really beneficial as they provide the perfect testimonial that you can share on your own platforms.

5) Working with influencers will help increase your engagement

Increasing the number of likes, comments and shares you receive on social media posts can sometimes be a struggle, especially if your brand is new to the market. Working with influencers can help you create some really engaging and unique content, which will lead to increased engagement on your channels. When influencers share content about your brand on their profiles, their audience will engage with it and may in turn begin engaging with you if they believe an influencer they like also likes your products. If you wish to host a giveaway, partnering with influencers is a great way to expand your reach and encourage engagement from a wider audience. A 2017 survey of more than 100,000 influencers revealed that engagement rates actually fall the more followers you have, which is why micro-influencers are on the rise and shouldn't be overlooked by brands. Influencers with fewer than 1,000 followers have an average engagement rate of 7.2% on Instagram and influencers with over 100,000 followers have just a 1.1% engagement rate on Instagram. This is something to consider when choosing influencers to work with and the benefits of partnering with them.

6) You can enhance your search engine rankings by working with influencers

Collaborating with influencers can also be beneficial to your search engine rankings as it helps to boost your reach. If an influencer shares a direct link to your website on their blog, this is likely to drive traffic to your site and in turn, boost your rankings online.

7) Influencer partnerships can help boost your conversions

Sometimes it can be difficult to persuade consumers to try your product or service and to gain repeat customers who trust and value you, especially if you're a new brand. A 2018 report, The ROBO Economy , showed that 82% of smartphone users consult their phones on purchases they are about to make in-store and 45% read reviews before making a purchase. Influencers have the ability to help drive more people to your products and services, as they have already gained the trust of their followers. If they are seen promoting your product, their audience is likely to try it out too. According to new data from consumer intelligence research platform CivicScience, 22% of respondents said they had purchased something because an influencer recommended it on social media. Influencer marketing keeps growing in popularity and this certainly isn't going to stop anytime soon. In 2018, Google received 61,000 search queries for the term "influencer marketing" and it was revealed that influencer marketing was considered effective by 92% of people. Collaborating with influencers can bring you brand recognition, enhance your reputation, audience engagement and increase conversions. We've worked with many brands on their social media marketing strategies that has helped them expand their audience and reach the goals of their business. If you'd like to find out how we can help you, email us on: hello@prohibitionpr.co.uk or give us a bell on: 0113 430 4160.

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Seven reasons why influencer marketing is important - Prohibition PR

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In 2010, only those with a 'celebrity' status were considered to be influencers. Fast forward 10 years, and even though celebrities still have a role to play, an 'influencer' can now refer to anyone who has an established social media following and is considered to have 'influence' over their followers....

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Article's on why using influencers is a good marketing strategy

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Articles on 'Weibo'

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Social media research in the global north is primarily focused on western social media platforms, notably Twitter and Facebook. In this post Shulin Hu describes how researchers have used data from Weibo, China's second most popular social media platform, to undertake a variety of research projects and provides resources for researchers looking to use Weibo as a tool for social research.
Zoufan posted her last words on Weibo on 18, March, 2012. She was suffering from a major depressive disorder, and shortly after - committed suicide.

Weibo is a microblogging application, launched by Sina Corporation in 2009, based on user relationships to share, disseminate and get information. As of Q4 2019, it has over 516 million monthly active users (compared to Twitter's 300 million), making it only the second largest social media platform in China after WeChat.

A sign of the social media platforms importance, in April 2019, the National Library of China announced that it will archive all public posts on Weibo for non-commercial uses. This move will have a profound influence on digital-heritage retention and it is estimated that more than 200 billion textual posts and 50 billion pictures will be stored, as well as data relating to the sentiments underlying these posts.

Since Zoufan's last post, other Weibo users found her account and began to share their stories of depression as comments. There are now more than 1 million comments. This caught the attention of Tingshao Zhu and his colleagues from the Chinese Institute of Psychology, who started investigating this case and devising a strategy for how they could use the Weibo data to connect with patients and prevent other suicides. In a similar study about emotional states on Weibo, Sinan Yang & Jian Xu used BDP (A free online tool to help users deal with databases) to visualise the flow in polarity over time and quickly detect the location of peaks and wanes in the general population's emotional state.

As of Q4 2019, it has over 516 million monthly active users (compared to Twitter's 300 million), making it only the second largest social media platform in China

Another tool for data visualisation, WeiboEvents, allows users to study the spread of information and how accounts gain their popularity on Weibo. Feng Xian used it to study @Yutu, the Weibo account for the rover that reached the Moon in December 2013. Yutu literally means "jade rabbit", which refers to the pet rabbit of the Moon goddess in Chinese mythology. On Weibo, @Yutu has over 730,000 followers and posts updates and news of its discoveries, as well as cute cartoons about its history and generally about the universe, explaining complex concepts in a visual way.

In February 2014, it briefly went quiet during the lunar night, but after recovering from some mechanical difficulties (which were actually happening to the real rover on the moon), it posted the message: "Hi, anybody there?", "I'm the rabbit that has seen the most stars!" This post attracted more than 840,00 reviews and 151,000 likes and also a fascinating dataset.

Feng Xian collated the data from the reviews and reposts and extracted the characters relating to emotional expressions as well as the emojis. He found that 60% of the users post compliments about its joyful 'personality' and 19% of users were encouraging the rabbit/rover to keep going (as if it were a real person) when the rover itself was facing technical problems on the Moon.

The reposting level also indicates a high penetration of Weibo content, from its targeted audience to potential audiences. The researcher classified the reposting on the microblog to six layers: the direct reposting number is 2231 (40%), the secondary reposting number is 1780 (32%), and the next four are 735 (13%), 231 (4%), 111 (2%), 490 (9%), indicating that after original reposts by some users, their friends will keep forwarding it based on social relationship circle.

The researchers also investigated the interaction model between the rover account and social media users, to find out how to balance the personified mood with scientific knowledge about the exploration of the universe. Specifically, instead of exhibiting the attitude of imparting professional knowledge as an emotionless machine, this account established an equal relationship with the audience during the virtual interaction process, which helped mobilize their enthusiasm to participate.

In a different study, a group of researchers from Hong Kong used Sina Weibo data to analyse misinformation. They collected both Twitter and Weibo data to understand the levels and spread of Ebola misinformation in 2013-2014. The researchers had to write a script to scrape Weibo data, as an API was not available at the time. They found that only 2% of their sample contained misinformed treatment options, compared to perhaps 50%+ reported in other studies looking at the misinformation spread of Ebola treatments in Guinea, Liberia, and Nigeria during the same year. In the current context of Covid-19, lifelogs preset an enormous opportunity to develop an online history, which can then be used in similar ways to understand the spread of virus and its social effects.

Weibo has a powerful ability, due to its large sample size, to study and track sentiment, affective states, online behaviours, and communications within the Chinese socio-cultural context

In 2014 Weibo released an official and free API for its raw data, a practical (and English) step-by-step guide to using the API is available here. One application of the API, was undertaken by a team of researchers from Wuhan University, who used the API to extract information about hot spots and movements across the city to help with urban planning. Although the API made their data collection easier, they were faced with the challenge of having to request permission from users for this type of data.

There are many more studies and research teams using Sina Weibo data, analysing behaviours, trends and the spread of information through the network. Another difference from studies of Twitter and Facebook is the emoji feature on Weibo and the ease of using this response, along with 'likes' to understand people's tendencies and trends in expressing emotions in response to events or posts.

Ultimately, Tingshao Zhu and his colleagues from the Chinese Institute of Psychology wanted to prevent suicides, currently more than 300k Chinese ending their lives every year. So they built an algorithm, trained with manually tagged data from the responses to the Zoufan posts, to recognize people at high risk of suicide among numerable updates on Weibo and classify the severity automatically. His team aims to use this algorithm, combined with their training in psychology to identify people at high risk of suicide and reach out to provide the support they need.
Data collection tools/applications for Weibo: Datasets of Weibo (mainly for academic use):
It should be noted that using this kind of highly sensitive data runs the very real risk of invading peoples privacy. In 2014, a British project used a similar tool,Samaritans radar, to guard against potential mental illness. If it recognised negative content published by a user, then it informed the user's friends in Twitter automatically. This application was strongly opposed and ultimately only ran for ten days. In the Weibo case, it was decided to limit the level of contact between the project's AI and potential sufferers. To date they have found 4222 users with depressive disorders and provided further advice for them.

The above cases make clear that compared to other social media platforms, Weibo has a powerful ability, due to its large sample size, to study and track sentiment, affective states, online behaviours, and communications within the Chinese socio-cultural context. However, in so doing, it also highlights risks and controversies surrounding online privacy and safety, which surround such research. As social media research on the social network gathers pace, how these issues will be addressed and resolved remains an open question.

https://github.com/Lab41/sunny-side-up/wiki/Chinese-Datasets(Chinese language corpora for sentiment analysis, including 226 million posts on weibo)

http://networkrepository.com/soc_sinaweibo.php(Characterizing Tweeting behaviors of weibo users via public data streaming)

http://coai.cs.tsinghua.edu.cn/hml/dataset/(About emotional conversation)

https://archive.ics.uci.edu/ml/datasets/microblogPCU(Can be used to study machine learning methods)

https://aminer.org/data-sna#Weibo-Net-Tweet (Helpful for analysing weibo users' relationships, including 300,000 original microblogs and 23 million retweets)

https://hub.hku.hk/cris/dataset/dataset107483(Sampling timelines of more than 350,000 Chinese microbloggers who have more than 1k followers)

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Weibo - How is China's second largest social media platform being used for social research?

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Social media research in the global north is primarily focused on western social media platforms, notably Twitter and Facebook. In this post Shulin Hu describes how researchers have used data from Weibo, China's second most popular social media platform, to undertake a variety of research projects and provides resources for researchers looking to use Weibo as a tool for social research.

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Articles on 'WeChat'

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Articles on 'Little Red Book'

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境外时尚达人买手购物晒货社区

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小红书，带你找到全世界的好东西！国外品牌官方直采，100%正品保证，跨境保税区海关监管/海外直邮！同样5折，我要国外的！

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Three main review platforms for Chinese consumers

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China's e-commerce industry is predicted to be worth $1.8 trillion Yuan by 2022, and a large chunk of this growth is expected to come from the fashion and luxury goods market.
Enter Xiaohongshu ("Little Red Book"), China's most trusted social shopping platform.
Based in Shanghai, this innovative app helps over 100 million users - mostly younger women - to discover and review beauty and health products that can be hard to find in China.

This represents an amazing opportunity for global brands to build their market presence in China. It's why big players like Chanel and Dior are paying so much attention to the platform.

In this post, we'll give you the low-down on this amazing site. In particular, we'll show you how global brands are jumping on Little Red Book in a big way, using it to help drive their growing presence within the Chinese market.
And now, the tricky part: Little Red Book (Xiaohongshu) isn't really a shopping platform at all.
Let's start with the basics.

What is Little Red Book (Xiaohongshu), and how does it work?
In contrast with other e-commerce platforms, Little Red Book focuses on a unique blend of trusted user-generated content, word of mouth advertising, and online community-building.
Created in 2014, Xiaohongshu, also known as Little Red Book, or simply Redbook, has grown to become China's foremost fashion and luxury shopping platform.

Rather, it's first and foremost a content sharing site, where users can post product photos with reviews and tips for other users to read, comment, and save to their boards - like Pinterest.

In fact, some have described the platform as being a product search engine, or " like Instagram and Pinterest sprinkled with a dose of Taobao ".
Source: TheNextWeb Little Red Book focuses heavily on building trust and reliability between the platform and consumers, rewarding users for posting suggestions and advice to followers.
However you describe it, this curious mix has proven to be a huge hit with young urban Chinese women, who often struggle to find trusted sources of product information.
Source: The popularity of these kinds of posts shows the value of authenticity on the platform, with users rewarding influencers for realism, accessibility, and being relatable. WalkTheChat Source: TheNextWeb All of this adds up to a unique value proposition for the platform, in that users can share content, review products, and purchase items all from the same place.
But how does the site work, exactly?

Well, Little Red Book has two sections: the user community, and the e-commerce platform.

Little Red Book users can engage with platform content in three ways:
Co-founder and CEO Mao Wenchao has said that 70 to 80% of Little Red Book's users are women.

1. Liking the content - similar to Facebook's "like" feature.

2. Collecting the content - saving it under a bookmark for future reference.

3. Commenting on the content - interacting with the post and the user.

By posting regular, quality content, users can quickly attract significant followings, and can even earn commission by becoming influencers - more on this below.

In fact, the most popular posts on Little Red Book tend to be author-tagged lists of convenient, economical, or easy-to-use products.

For an example, let's turn to the following post - a user discussing the trials of finding products suitable for sensitive skin:

Interestingly, Little Red Book avoids many typical e-commerce practices. It doesn't allow anonymous reviews or one-click ratings, for example, instead encouraging detailed, immersive product reviews known as "notes".

The site also includes a high focus on security, with qualified brands and retailers having to submit an application before being accepted on the platform.
A makeup listing on Little Red Book. Source: Creative Union Helpfully, Little Red Book also features an "explore" section, letting viewers explore other users' content on topics like fashion, food, and travel.
Combine this with a strong focus on trusted communities of like-minded shoppers, and it's not hard to see why Little Red Book has resonated so strongly with users.
Tourism posts on Little Red Book. Source: Jing Travel
Now, let's take a look at who exactly is using the platform.
Currently, there are around 8,000 verified brands featuring products on Little Red Book, including many major global brands.
Who is using Little Red Book (Xiaohongshu)?
In late 2018, Little Red Book also opened a "brand partner platform", a feature aimed at connecting brands with influencers and KOLs to arrange for sponsored content. Little Red Book's brand partner platform. Source: Marketing To China
Little Red Book had attracted 100 million users by late 2018.
Little Red Book's strong focus on content integrity has made it a lot easier for users to know when they're viewing a paid ad, and when they're viewing authentic content.
Crucially, 90% of these users are middle or upper-class women with higher degrees of disposable income. This is an incredibly lucrative market for global fashion and cosmetics brands.

Since its launch, Little Red Book has hit some amazing stats. For example, on June 6 2017, Little Red Book held a shopping festival to celebrate the anniversary of its founding, with sales revenue exceeding 100 million RMB in just two hours.

Other estimates have put this number even higher, with one source suggesting it could be as high as 95%. What's more, over 50% of these users are between the ages of 18-35, and are living in Tier 1 and 2 cities in China.

And it isn't just online users who get to benefit from Little Red Book - the platform also launched a brick-and-mortar store in Shanghai in June 2018.

So, that's a quick overview of the 100 million people using Little Red Book.

But which industries have the best chance of succeeding on the platform?

Which industries are Little Red Book (Xiaohongshu) best suited for?

With its strong focus on the beauty and fashion markets, Little Red Book has set itself aside from other Chinese social media and e-commerce platforms such as WeChat and Weibo.

This content focus, plus the unique demographics of Little Red Book's user base, make it a great fit for luxury beauty brands like Dior and Chanel, as well as high-end cosmetic brands like Fenty and Lancôme.

The strength of this market focus has also helped Little Red Book to secure $300 million USD in series D funding from investors, including e-commerce titan Alibaba.

However, Little Red Book also features a lot of content about lifestyle products such as nutritional supplements. Posts concerning tourism and overseas destinations are also popular, with a lot of travel bloggers getting in on the action.

There's also a "nearby" section to alert users to shopping experiences in their physical environment.
Once you're ready, you can jump right in by establishing an official account, making your products available, and engaging with your community of fans and consumers.
These features help show the versatility of the platform, with huge opportunities for global brands throughout the lifestyle and beauty industries, including cosmetics, clothing, and travel products.

Next, we'll take a look at how global brands are using Little Red Book to drive sales.

How are global brands using Little Red Book (Xiaohongshu)?

Even Kim Kardashian is getting in on the action, creating an official account in late 2018 to help promote her makeup line, KKW.

In an effort to appeal to the local audience, a lot of global brands are translating their packaging into Mandarin, and are partnering with Chinese key opinion leaders (KOLs). This includes Chanel, Gucci and Dior, all of whom have all enlisted Chinese celebrities for their ads.

This kind of engagement can take a lot of effort at the local level, and potentially requires input from translators and production agencies.

Using this service, companies on the platform can be connected with any of its 4,800 influencers by searching content tags. Companies can also view key metrics such as an influencer's number of likes, average hits and comments per post, and fan counts.

Since the unveiling of this service, many global luxury brands (including YSL, Shiseido, and Fendi) have entered into official collaborations with KOLs, helping to drive additional interest in their products.

The platform has also invited actresses from popular television drama series to join Little Red Book as beauty bloggers, sharing their makeup routines to their audience of followers.

For example, influencers must register any paid promotional links with brands, and users failing to disclose paid posts can be reprimanded.

So, what can we expect to see from Little Red Book in 2019?

What you can expect to see from Little Red Book (Xiaohongshu) in 2019

Given the amazing growth we've seen from Little Red Book over the last five years, we can expect significant additional growth in 2019. However, as the platform continues to grow and evolve, it also has to face a number of problems.

One thing the platform is looking to address is the number of "window shoppers": users finding products on Little Red Book, then purchasing them on Taobao or other apps instead.

To combat this, Little Red Book has stopped companies from inserting links within content encouraging users to visit other e-commerce sites. This helps to keep shoppers on the app. However, if users still want to shop elsewhere, they can.

Another problem is the complaint from some users that the site has become too commercial and no longer encourages the same originality from users. Given the variety of content that sets Little Red Book apart from other platforms, this will be important for the company to address.

Whatever 2019 has in store, global brands will want to make sure they don't miss out on what Little Red Book has to offer!

Don't miss out on this innovative platform

Little Red Book has seen amazing growth over the past five years.

What's more, it's commitment to meaningful community interaction and user integrity means it's likely to attract a lot more users in 2019.

If you're a global luxury or lifestyle brand looking to boost your presence in the Chinese market, it pays to take the time and effort to build your familiarity with this unique platform.

When you're done here, be sure to check out our update on the 2019 Chinese social media landscape.

Need more help on marketing to a global audience? Join our exclusive webinar with Global Marketing Strategist, Joel Backaler:

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What is Little Red Book (Xiaohongshu) and Why are Global Brands Jumping on it?

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China's e-commerce industry is predicted to be worth $1.8 trillion Yuan by 2022, and a large chunk of this growth is expected to come from the fashion and luxury goods market. Enter Xiaohongshu (" Little Red Book"), China's most trusted social shopping platform.

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Becky Li, one of China's first bloggers, is the next highlight in Jing Daily's community of individuals who have helped to build China's booming luxury industry. This section profiles industry leaders who are contributing to the national and global fashion communities through their business practices, from designers and creatives to business executives and influencers.
During the first days of the COVID-19 outbreak in Wuhan, all of China was in panic-mode, facing an unknown future. That's when Becky Li received a photo from a young nurse wearing head-to-toe protective gear, taken just before she entered a medical ward. "I'm fighting COVID-19 on the front line," her message said, "and I hope this war will end soon!"

Li said she burst into tears when she saw the image. It was just one of the many messages that flooded into her WeChat blog over the next few months, including many cries for help from readers needing medical resources. To her 20 million readers across different online platforms, Li's blog, Becky's Fantasy, has long been more than just a voice in fashion and lifestyle.

But it's never been just a blog to Li. Formerly a journalist at a well-known newspaper who started her first WeChat account in 2014, Li now employs over 100 employees to operate five WeChat accounts, two apparel brands, an e-commerce platform, and a new self-improvement online workshop. Her evolving business model and the brands she chooses to promote ( Bally, Saint Laurent, and Qeelin were featured over the last two weeks) serve only one audience: her followers.

Jing Daily recently caught up with Li on a WeChat call to discuss how her work and personal life were affected by the pandemic, her thoughts on livestreaming and anti-consumerist rhetoric, and her latest venture: a paid online workshop.
You are known as a personal shopper to your friends and followers. Who has influenced your taste the most?
My grandma was my earliest influence. She used to be a tailor, and she altered all the skirts and clothes in all of my childhood photos. At school, we had to wear standard school uniforms, and my grandma would change mine into something different. My mom wasn't working in fashion either, but she and my grandma would insist on having a vase of flowers at home. I think that by osmosis, I become someone like them, who essentially loves life.
You used to be a journalist. What was your motivation for switching careers?
I didn't think much of it when I jumped in. I didn't aim to be a top blogger or plan to monetize my content. When you look at the first group of people who started blogging on WeChat, a lot of us had jobs in communications. So, I believe that everyone was just really excited to find another platform for self-expression.
How has the COVID-19 pandemic affected your work and personal life?
I used to go on a lot of business trips, but I haven't gone on many in the first half of this year. During the outbreak, my main account returned to posting daily updates at the end of the Spring Festival despite not having any sponsorship during that time. With the general social atmosphere so down, I lost sleep almost every night and began writing as an escape for myself, but I also hoped that my content brought comfort for my readers.

My team and I officially returned to our office at the end of March [when the national lockdown was lifted]. That's when I felt like my [personal] life had somehow gone back to normal, but I can't say the same with my work schedule, especially given the international travel restrictions.
We know that you oversee five WeChat accounts, two brands, and have recently ventured into making videos. Can you describe a day in your life?
I've been very, very busy. My day is more or less equally divided into three chunks: writing, meetings, and video shoots (the last one is newly-added post-COVID-19.)

We started dipping our feet in video-making at the end of last year, and since I had more time due to not going on business trips, I was able to make more videos. In addition to these, I also put aside time for management, branding, and content strategy.
Have you made any changes to your content both during and after COVID-19? What's your vision for content in the future?
Although I carry the tag of a fashion blogger, I feel like I've always been writing about lifestyle, and I've shared thoughts about the workplace and furniture before. My team had been asking me to try videos for a long time, but I was resistant. But now I believe that when you use a medium that is primarily text, you hit a bottleneck after a while. At that point, a new medium might open new doors for you.

Including me, my video team is only three people. We make one or two videos a week, and the results have been excellent, although there's a lot of room for improvement in terms of content and post-production. Video is no longer a buzzword, but I believe that with the right content and topics, you can still find your place in this competitive space.
What are your thoughts on livestream commerce?
Livestreaming is a very important opportunity, and I've been hit with many requests asking me to do it. I haven't tried it, though, because I don't have the time or energy. After starting to work with video, I feel as if I've returned to the most exhausting time of my life when I first started my account. I don't think I can do livestreaming well with my current capacity for writing and video.

I'm not against the medium, especially as someone who has worked in media. People are good at different things, and you don't have to chase every trend. So I might try it at some point, but I don't see myself giving up writing to become a livestream host.
There has been a growing amount of anti-consumerist content online in blogging and vlogging forms. Why do you think it has appeared and does it affect you?
I haven't come across comments like that lately. In fact, this kind of voice has been around me since day one. If it's grown louder, it could be because of the wavering economy or the rise of livestream e-commerce.

I haven't got this feedback from the readers because they know that I'm not someone who would simply ask them to make purchases. My readers are independent thinkers who don't follow the herd. They follow my recommendations because they think our lifestyles or tastes align. So I do the homework for them, and they can spend less time on decision-making.
Do you have any exciting news or projects to share with us?
We are going to launch a paid workshop on female self-improvement that includes topics such as beauty, personal finance, and time management. That is our first step into the paid content arena and is a new experiment in building a female lifestyle platform.

We've looked at a lot of paid online workshops, and a lot of them are taught in a very traditional manner, which lacks creativity and interactivity. Students may find those hard to absorb. We hope to break the stereotype of old-fashioned paid workshops and make something that's interesting and high-quality.

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China's Top Blogger Becky Li Is Expanding In Unexpected Ways | Jing Daily

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Becky Li, one of China's first bloggers, is the next highlight in Jing Daily's community of individuals who have helped to build China's booming luxury industry. This section profiles industry leaders who are contributing to the national and global fashion communities through their business practices, from designers and creatives to business executives and influencers.

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Expanding to China by using their live streaming platform Taobao. The live stream will be on their platform or through the influencer (KOL) being used Becky Li

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From the well-established Periscope to the latest entries of Facebook and Instagram Live, live video has entered the mainstream. If your brand is looking to partner with an influencers in a live stream collaboration, chances are you'll be able to do it on the social platform of your choice.

And if you're looking for inspiration, you've come to the right place.

In this article, we review ten examples of effective influencer live stream promotions and dive into why they worked.

Adding video to your next marketing campaign?

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1. Mashable

Mashable partnered with America's Test Kitchen and chef David Vos to launch a cooking show that was filmed using only a camera phone and streamed live on Periscope.

Touted as the "world's biggest dinner party," the publisher leaned into the popularity of how-to tutorial videos, while applying the excitement of live video to a genre that's traditionally pre-taped. Mashable drummed up interest ahead of time by promoting each episode on other channels, including tweets, Facebook events, and their own website. Once they were live, representatives from both Mashable and America's Test Kitchen were on hand to answer user questions on Twitter and Periscope and help boost the video's discoverability.

Takeaway

What other brands do your influencers work with? Consider whether you can all collaborate together for extra manpower and increased visibility.

2. Make-a-Wish

The Netherlands branch of Make-a-Wish collaborated with gaming vlogger Yarasky for a livestream telethon, proving that influencer marketing works for non-profits, too.

During his 24-hour YouTube Live video, they raised over 10,000 euros, and reached nearly 6 million people, earning tons of publicity in the process. Plus, one lucky kid had his wish granted: to play Call of Duty with Yarasky. This kind of campaign is a win-win: your brand gets rich while the influencer gets to give back.

Takeaway

Find influencers who care about the causes your organization supports, and host a livestream fundraising event together.

3. Best Fiends

This next one's another video gaming example, but the implications apply to any consumer products company who wants to take a creative spin on the unboxing video genre.

As a social gaming app, it made sense for Best Fiends to promote the app's release on the biggest social platform, Facebook, with a popular social influencer like Laura Clery. Laura infused the video with her characteristic humor, by playing the Best Fiends game in the the spirit of one of her more popular characters "Pamela," while her husband also made an appearance to play alongside her. To date, the video has racked up 468K views, 800 shares, and over 9,000 comments.

Takeaway

Live social video makes product unboxing videos even more exciting. Partner with influencers to unpack your latest software updates or newest products via livestream.

4. Kohl's

Kohl's partnered with vlogger ItsJudyTime to promote their Black Friday sales on Facebook Live.

Judy took her mother on a Black Friday haul, during which they discussed how easy it was to get everything in one store. Then, Judy posted it to her page to drive additional traffic throughout the holiday sales weekend. In the description, she included links to all of the products they purchased and reiterated the amazing Cyber Monday deals her viewers could score at Kohl's. The video has earned nearly 200,000 views to date.

Takeaway

Sales are exciting for your customers: they're available for a limited time only, so they have to rush if they want to enjoy the savings. Up the ante by showing influencers taking your hottest items off the shelves in real-time.

5. Nestle

With their Drumstick Periscope campaign, Nestle did a lot of things right.

First, they took advantage of an already trending topic: #FirstDayOfSummer. The day before, they heavily promoted that they would be going live on Twitter. Then, they filmed their own Periscopes throughout the day featuring the Drumstick alongside classic summer activities like playing frisbee in the park. Finally, they partnered with influencers (like entrepreneur Olga Kay) across the country to film their own favorite summer activities while enjoying a Drumstick. It's easy to see how the campaign went viral.

Takeaway

Collaborate with multiple influencers on a single campaign to boost your video's chances of getting discovered.

6. Cosmopolitan

Sometimes it's as easy as hosting an AMA with a popular influencer. Cosmopolitan magazine took this approach with reality-star-turned-designer Lauren Conrad.

Lauren was promoting her latest book, so she was happy to announce it to Cosmopolitan's huge fan base. Meanwhile, Cosmopolitan's Facebook fans got another reason to keep subscribing to the brand: exclusive interviews with their favorite influencers.

Takeaway

If you don't have the budget for a huge celebrity like Lauren, you can still enjoy the success of this technique. Look to the people who are famous within your niche: the bloggers, [local celebrities](https://dealspotr.com/article/local-influencers), and industry movers and shakers.

7. Royal Caribbean

Royal Caribbean ran a weeklong Periscope campaign, following travel influencer Dan Moore as he broadcasted live from five destination islands. Then Royal Caribbean streamed the live streams across port city New York billboards, encouraging more Periscope users to turn in, while increasing their view counts and brand awareness among non-users.

Royal Caribbean's goal was to reintroduce themselves to millennial consumers and show that they weren't your average cruise line. Mission accomplished.

Takeaway

Influencers introduce your brand to a whole new world of fans. Consider how influencers can help you break into new demographics, regions, or industries.

8. Fashion Week

With its visual focus, Instagram has always been a hub for anyone who loves fashion. Over 200 million people follow fashion accounts on Instagram.

During New York Fashion Week, fashion designers film behind-the-scenes footage, livestream the runway, and interview their top models. The smart ones also work with influencers to amplify their reach. Fashion influencer Chiara Ferragni partnered with Moschino, Instagramming ahead of time to encourage her followers to watch her attend their runway show live on Snapchat.

Takeaway

Does your brand attend tradeshows and conferences? Don't get lost in the fray. Have influencers livestream from your booth to drive traffic your way.

9. IMPACT

Marketing agency IMPACT hosts a monthly " Website Throwdown " series on YouTube Live. The company's CEO and Chief Strategy Officer are joined by an industry influencer to analyze websites live on YouTube.

The series presents IMPACT as subject-matter experts: not only do they know their stuff, but they've earned a stamp of approval from others in the industry who do, too. Fans ask questions about their own websites, and get answers from the experts and other viewers, driving discussion and boosting discoverability. The predictability of hosting it every month encourages fans to stay connected and tune in regularly. Once the livestream is done, IMPACT posts the videos to their YouTube and their website for long-term SEO benefits.

Takeaway

Create another customer touchpoint with a regular livestream series. Collaborate with various influencers to drive attendance.

10. MTV

Influencer takeovers are popular.
MTV figured they'd be a good fit for livestream, too, which is why they invited actress Vanessa Hudgens to take over their Periscope channel live from the red carpet at the VMAs. These livestreams drive viewership on the big screen and discussion on the small screen, which leads to more viewership back on the big screen.

Takeaway

Livestream is all about being genuine. Behind-the-scenes footage at your company can feel promotional when you're the one driving the camera. Let your influencer take your customers backstage on livestream, and it will feel more real.

Conclusion

From fundraising to product launches to events coverage, live streams offer brands another avenue for influencer marketing. Use the unique advantages of live video - immediacy and authenticity - and your customers will have fun, while your brand enjoys success.

Michael Quoc is the founder and CEO of Dealspotr - an open social network helping trend-seeking shoppers find today's best deals & allowing new and established brands to run sponsored campaigns with micro-influencers in their niche. Previously, Michael spearheaded the launch of several innovative live video and mobile social networking services as the Director of Product Management for Yahoo's media lab. He has been awarded nine patents in both mobile and social network apps and technology fields. Follow Michael on Twitter at @michaelquoc.
About the Author:

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10 Brands that Mastered Influencer Live Streams and Why they Worked

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From the well-established Periscope to the latest entries of Facebook and Instagram Live, live video has entered the mainstream. If your brand is looking to partner with an influencers in a live stream collaboration, chances are you'll be able to do it on the social platform of your choice.

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Articles on why China like luxury goods

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Although China's appetite for luxury brands is well documented, misconceptions and stereotypes involving the Chinese consumer are still being widely disseminated. Every so often, young Chinese shoppers are presented as " label-obsessed" buyers who are addicted to luxury shopping, but the reality is far more complex.

While Western-style consumerism interprets luxury consumption as a "way of life" in China, the love of luxury has a Confucian essence. According to Pierre Xiao Lu, the civil servants in ancient China had an appetite for the finer things: enjoying cultural activities and elevated hobbies that exalted their artisanal skills. Craftsmanship and artistry were widely associated with the upper class.

During the following centuries, China experienced various political and socio-economic changes via imperial dynasties, destructive wars, and eventually, Mao's Communism. These periods left marks not only on the country but also on the consumer. The aspirations and necessities of one generation were not identical to the following one, but what remained within all ideas about luxury consumption was what we find in Confucianism.

The Confucian doctrine emphasis six virtues - xi (the virtue of learning and assimilating ethics), zhi (the virtue of character and knowledge), li (the virtue of community, fairness and politeness), yi (the virtue of morality and righteousness), wen (the virtue of self- development), and ren (the highest virtue and the equivalent of benevolence and charity). As mentioned, these values dictate not only personal interactions but also consumer behavior.

Tom Doctoroff, Chief Cultural Insight Officer at the brand and marketing consultancy Prophet, told eMarketer that "Confucian culture is a combination of rules and regimentation, and [the idea] that the individual does not exist independent of his obligations and responsibilities to others. Therefore, there is a need to obey certain standards; in this case, a demonstration of success." Doctoroff goes on to say that under this doctrine "not by rebelling but by mastering the rules, you are able to climb up the hierarchy."

Evidently, culture plays a significant role when analyzing China's appetite for luxury. While Western societies are largely individualistic, usually emphasizing the need for distinctiveness, China is ruled by collectivism. As a result, it has become a society where individuals respect social norms and aspire to achieve conformity while being assimilated into strong, cohesive social groups. Therefore, in China, luxury goods are more than the peripheral status symbols they are in the West; they've become badges of success. For affluent buyers, the fastest and easiest way to convey their role as a winner in society is through luxury consumption.

However, the younger generations don't play by the same rules. As explained above, consumption patterns change with generations, and while Baby Boomers adhere to the idea of collectivism (the political theory associated with communism), millennials and Gen-Zers (the shoppers known by marketers as "young emperors") grew up in a world similar to the West. For this reason, the shopping habits of younger consumers are relatable to those of Westerners. Millennials see luxury purchases as the source of immediate gratification and a way of expressing their personalities.

China's period of rapid economic growth is relatively new, and with it came consumerism and the huge growth in luxury spending. As the middle - or "aspirational" - class progresses, luxury brands are finding new opportunities to expand. According to Bain and Co., China's luxury goods market is growing at a rate of 20 percent, and that growth accelerates as the middle class expands.

McKinsey predicts that the "upper middle class will account for 54 percent of urban households and 56 percent of urban private consumption" in China. Furthermore, McKinsey estimates an eventual doubling of the average urban household income for the middle class. Given these details, it's safe to say that the luxury sector is not in danger of losing the Chinese market because a new cohort of consumers is already on its way. But this doesn't mean that limitations and political restrictions won't curb growth.

If established luxury retailers don't want to lose momentum, they should focus on the human dimension by building engaged communities around their consumer base. Good examples of culturally competent heritage brands are Dior and Burberry, who won big in China because of their customer-centric business strategies, bold business models, and astute marketing campaigns.

Above all, it's worth mentioning that China is going through the same stages of luxury consumption that the rest of the world has, but there are various cultural components in China that require a personalized approach to marketing. Luxury brands that put a premium on nurturing innovation and dialogue with their consumers will thrive in this competitive and demanding market.

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Why Chinese Consumers Love Luxury Products | Jing Daily

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Although China's appetite for luxury brands is well documented, misconceptions and stereotypes involving the Chinese consumer are still being widely disseminated. Every so often, young Chinese shoppers are presented as " label-obsessed" buyers who are addicted to luxury shopping, but the reality is far more complex.

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Livestream ecommerce is a business model in which retailers, influencers, or celebrities sell products and services via online video streaming where the presenter demonstrates and discusses the offering and answers audience questions in real-time. A livestream session could take place on an ecommerce website or on a social media platform. It can be store or brand-specific; influencers can also host livestream events promoting items from various vendors.

Livestream ecommerce has been surging dramatically in China. According to Forbes, this industry is estimated to earn $60 billion annually. In 2019, about 37% of the online shoppers in China (265 million people) made livestream purchases. On Taobao's 2020 annual Single-Day Global Shopping Festival (November 11th), livestreams accounted for $6 billion in sales (twice the amount from the prior year).

This trend is spreading beyond China, to the United States and other countries. TikTok teamed up with Walmart and presented its first livestream selling event in December 2020. Ten influencers promoted Walmart products with some try-on demonstrations during the one-hour event. People could browse the list of featured items and even place an order directly within the TikTok app during the event.

Amazon has also launched its live platform, where influencers promote items and chat with potential customers. And Facebook and Instagram are exploring the integration between ecommerce and social media. For instance, the new Shop feature on Instagram allows users to browse products and place orders directly within Instagram - a form of social commerce. (We compare social commerce and livestream ecommerce later in this article.)

This article analyzes how livestream ecommerce works, as well as what traditional ecommerce sites can learn from it to better serve customers.

Since the livestream ecommerce in the United States is still in a preliminary phase, many of the examples we provide in this article are from our user studies in China.

The Anatomy of a Livestream Session

Basic Livestream Interface Components

To better understand what a livestream-ecommerce session involves, let's look at its components first, using an example from Amazon Live.

A typical livestream session has the following basic components:

The video stream, where the host shows the products, talks about them, and answers questions from the audience.

In the Amazon Live case, the stream occupies the most of the screen space.

The list of products being promoted, with the product currently being shown highlighted

This list appears at the bottom of the Amazon video stream.

A chat area, where viewers can type questions and comments to interact with the host and other viewers

The chat area is at the right of the live stream on Amazon Live.

A reaction button, that users can use to send reactions, displayed as animated emojis

The reaction button shows up as a little star icon at the bottom right of the video stream on Amazon.

More Livestream Features in Chinese Apps

Besides these basic features, the livestream interface in Chinese apps often includes additional features such as:

Picture-in-picture view of the livestream on the current product's detail page

Customers can go to the product-detail page of a promoted product without missing the livestream demonstrations - they can view the video stream in a picture-in-picture style.

The ability to watch the presentation of those products they are interested in

Viewers can watch recorded demonstrations of previously shown products; if the products are on the featured-product list without any demonstrations, they can request the host to show that product. Thus, the livestream has an on-demand component - if viewers are interested in particular products, those get priority in the presentation.

Viewers are prompted to check out available coupons before purchasing. Some coupons are available immediately after users enter the session; others require more engagement, such as watching the session for 10 minutes or sharing the session with 3 friends. The host can decide details (such as the discount amount) for each coupon.

Each viewer has a loyalty level that represents their past participation in that host's livestreams. Watching, commenting, and making purchases can increase the level (as a form of gamification). The loyalty level shows next to the username when the viewer makes comments. Some hosts reserve high-value coupons only for loyal viewers.

(You may notice that American livestream sessions can typically be accessed on desktop or mobile devices, but in China, livestream ecommerce is heavily focused on smartphones. The major reason is that most Chinese online shoppers place their orders on their smartphones - according to iresearch.cn, mobile transactions made up about 85% of all online purchases in 2019.)

Key Characteristics of Livestream Ecommerce

Livestream ecommerce has several unique features:

Integrated into various platforms: Most livestream sessions don't rely on new platforms, apps, or services, but take advantage of current popular platforms.

Mimics in-store shopping experiences by showing products in context: Customers can see the host showcase how products look like from different angles and even request that a specific model put on a specific outfit.

Highly interactive, social, and playful with gamification: Users can interact with the host and other people watching the same session, getting their questions and concerns answered. Reinforcements like coupons and giveaways are used occasionally to increase engagement, and the host may tell jokes. One of our participants saw it as "a new form of entertainment."

Often reliant on scarcity and urgency: Users feel that they will lose the deal if they don't place an order during the livestream, because it offers good discounts and limited stock.

Integrated into Platforms

Brands and individuals have two ways to promote products through livestreaming: on social media or ecommerce platforms. No matter which platform they use, the livestream channel is naturally integrated into the platform's basic features.

In traditional ecommerce apps such as Taobao, when users search for an item, the product list will include those featured in livestream sessions, with a special animated icon indicating that an ongoing livestream is available for that product.

On social media platforms such as Douyin (the Chinese name of TikTok), a specialized Livestream channel is featured on the homepage. It works in the same way as other content on Douyin. Within the Livestream feature, viewers can swipe up to see a different (possibly related) livestream session. (People use the same gesture to browse through short videos: they swipe up to discover a new short video, either posted by someone they've followed or a random video recommended by the algorithm.)

During our usability-testing study in China, a user shopped for a cabinet organizer on the Pinduoduo mobile app. She typed her query and got a list of results. Attracted by a livestream session which stood out from other products, she visited its detail view. She tapped the livestream video and watched for half a minute. "The ones with livestreaming can show you the real products, so they are more trustworthy," she said. "It'll show you the size, shape, and material. It's more intuitive than the descriptions."

Show the Product Dynamically and in Context

Livestream sessions show users what products look like, how to use and style them, and even how they're made.

The participant who shopped for the cabinet organizer praised the livestream for helping her get an immediate impression of the product's material and size. She said, "If it says PPC as its material, I may not understand what it is. But during livestreaming, they'll put the product very close to the camera, so you have a direct view of what it is. Also, 40x50 cm is hard for me to imagine, but when I see the female host holding those organizers, I have a better understanding of their sizes."

Livestreaming can introduce a new brand and bolster its credibility. For example, some influencers selling local products may host livestream sessions explaining where the products are from and how the locals consume the products before they even start to sell the products. This approach helps city dwellers build trust with small businesses and products from rural areas.

Highly Interactive and Social

Livestream sessions are similar to product videos in that they show product details up close. Some retailers may even feature livestream clips as product videos on product-detail pages. However, there is a big difference: livestreams are interactive. As one participant pointed out, "I prefer livestreaming [over product videos] because I can ask questions and get answered immediately."

The interactivity makes livestreaming a highly efficient way to learn about products and get questions answered at the same time. It's just like walking into a physical store: the host may greet you, ask which products you want to see, and even provide recommendations. Though users can't talk with the host directly, they can send text messages, which show up in the chat history for everyone in the session. If multiple models show the clothes, users can ask a specific model to wear a particular outfit to mimic their in-store try-on experience.

This aspect of livestream ecommerce is particularly appealing right now, as many countries and regions are still locked down in the COVID-19 pandemic. Even in places where visiting stores is possible, many customers are still hesitant to do it and see it as a health risk.

Personal, specific questions that may not be anticipated or covered on the product-detail page can get answered quickly. For instance, a participant watched a livestream session featuring hoses for car washing. "My faucet is on the second floor, so I want to make sure that the hose is long enough. The host answered my question quickly, so I placed the order immediately."

The answers to one customer may benefit others, as well. A participant stated, "People may ask questions that I didn't think of before. Seeing how the host responds to their questions also helps me make purchase decisions."

Often, an ad-hoc community arises around a series of livestream sessions: The followers of the brand or of the influencers become a loyal audience for their livestream events. They help the busy host by typing answers to new users' questions and sharing their own experience. Their words add to the credibility of the brand or product: they are real users who give their opinions live; they may even have a badge next to their username, indicating how long they've been in the session and the volume of purchases that they made. Returning users get rewarded with extra coupons and incentives.

The live comments also enable sellers to gauge which items are popular and replenish supplies.

Create a Sense of Scarcity and Urgency

Some livestream events utilize psychological techniques to create a sense of urgency: they make the customers believe that they will lose the deal if they don't place the order right away.

Greater discounts and more gifts: The products may be available all year round, but discounts and gifts are available exclusively for people attending the livestream session. To distinguish the loyal livestream viewers from ordinary users who just run into a discounted product accidentally, some companies may require livestream viewers to enter a unique 'promo code' when placing the order to get even more gifts and cashback. The promo code would only be announced randomly during the livestream; thus, it allures users to stay longer. This practice also helps users form the mental modelthat livestreaming equals special discounts and gifts.

Limited Stock: Discounted products usually have limited stock. The hosts might emphasize, "There're only 10,000 sets available at this crazy price."

Time-sensitive coupons: Many livestream sessions give out ¥10-20 coupons that expire in a few hours. This tactic pressures users to make quick, impulsive purchases.

Incentives and giveaways for users who made a purchase during the livestream: During the livestream, the session host will sometimes announce surprise giveaways available only to those audience members who have bought something. These bonus prizes make the users even more motivated to commit to a purchase.

Differences Between Livestream Ecommerce and Similar Concepts

Livestream ecommerce bears some resemblance with other, perhaps more common, ways to shop:

Social commerce

TV shopping channels

Influencer reviews

Social Commerce vs. Livestream

Social commerce refers to the ability to make a purchase on a social-media platform like Facebook or Instagram, without switching to another dedicated ecommerce channel (such as a website or app). As we discussed earlier, Instagram and Facebook Shop features allow users to place an order directly within the platform.

Livestream ecommerce can be a form of social-media commerce if the livestream is embedded in a social-media platform (like in the above-mentioned example of the Walmart livestream event on TikTok). The live video format is different from the more common formats used for social ecommerce (that is, picture and text), but it's still one that can be easily accommodated by a social-media platform.

Like social commerce, livestream ecommerce supports in-channel purchases (i.e., users can place an order without going to a different site or application) and lowers the interaction cost. Unlike social commerce, livestreams can create a sense of urgency by offering a time-sensitive discount for the livestream audience.

However, not all livestream ecommerce is social-media commerce, since, like we saw in the case of Amazon Live, livestreams can be embedded on ecommerce sites and apps. But even on those channels, livestream ecommerce usually includes social features such customer comments or other reactions. And often such livestreams are advertised on social media.

Taobao, an ecommerce app in China, goes further by allowing brands and influencers to post news, like their Taobao livestream schedule, on their own Taobao pages (similar to business pages on Facebook). Users can comment and even suggest products they want for future sessions without leaving the Taobao app. Stores and influencers may give out coupons to followers who leave comments on the post to increase engagement. This practice makes the ecommerce app work as a social media platform because it facilitates communication between businesses and customers. This integration of ecommerce and social media apps hasn't shown up in the US yet; in China, it may be due to a culture of using one app for many different functionalities (like was the case with WeChat).

TV Shopping Channels

Livestream ecommerce may remind us also of TV shopping channels. Before the internet era, TV shopping allowed customers to see products up close and buy items without heading to a store.

Modern TV shopping channels have adopted web-related technologies to improve appeal and ease of buying. For instance, on QVC's website or mobile app, people can "watch and shop:" live broadcasts of the TV program are available, and viewers can purchase the products presented right away.

Modern TV shopping channels are similar to livestream ecommerce in the following ways:

They are a form of entertainment: People shop to kill time.

They create a sense of urgency and conformity:Discounts are time-sensitive, products are advertised as in scarce supply.

They show the products in a lively way, with additional details and instructions

However, livestream ecommerce isn't just the online version of TV shopping. Its social features and the diversity of products make it unique and attract a larger audience.

Livestream ecommerce is more interactive than TV shopping. During a livestream session, people can comment, ask questions, see reviews from returning users in real-time. Gamification design is used to encourage users to stay in the channel longer. In contrast, the interaction between customers and a TV host is minimal and could be irrelevant to the current product: the host may read a tweet occasionally but will not be able to answer customers' questions immediately. The customer-host interaction is not part of the program.

Livestream sessions present a wider variety of products and services. Since the cost of starting a livestream session is meager (theoretically, the only requirement is a phone), individuals and brands can sell any type of product, from books to baby clothes, from fish to furniture. Services such as Botox, massages, and healthy meal plans can also be featured. TV shopping is more cost-intensive, and companies may have to weigh whether they could make profits from promoting certain items. Thus, one may be able to find almost any type of product on a livestream, whereas the selection will be a lot more limited on a shopping channel. (This is the difference between broadcasting which excels at reaching a mass audience with broad tastes and narrowcasting which exploits the Internet's ability to reach a niche audience with specialized tastes.)

Livestream sessions are less polished than TV shopping channels and feel more authentic. Livestream hosts' presentations feel more improvised and ad-hoc, as the hosts may respond to viewers' requests. Sometimes, the product's drawbacks would also been shown. As a result, livestreams feel more trustworthy, as the hosts are not just showcasing perfect products.

Livestream sessions feel intimate and personal because of the high interactivity. For some users, livestream sessions are like a favorite TV show - they return to them again and again. Hosts know their loyal followers, greet them every time, and ask them for suggestions for future events. Users feel they have a say on what it's shown and build social connections with the hosts.

Some celebrities, like actors, actresses, and even CEOs, will promote specific brands, thusincreasing the brand's reach (through the halo effect) to their fans (usually Millennials or Generation Z), who will be eager watch them live.

When the livestream host is less well-known, users feel unsure about the trustworthiness of the promoted products. TV shopping channels are typically owned by big companies, but livestreams can be created by small businesses and random individuals. Users have to trust the host. One middle-aged study participant pointed out, "Days ago, I bought an air-conditioner during a livestream event presented by the CEO of Gree Electric. I know the quality of products is guaranteed by her. If it was a random influencer that I don't know and she has no relations with the products, I would be more cautious. There isn't any third-party guarantee for livestreaming on TikTok, unlike on Taobao." [The latter has a dedicated customer-service team and there is a money-back guarantee when people pay with AliPay.]

Influencer Reviews vs. Livestream Ecommerce

Another similar concept, more familiar to Western audiences, is the (video or text-based) review posted by an influencer on social media or blogs. Like livestreams, reviews contain detailed and subjective explanations not included on official websites, offer a fresh third-party perspective for customers, and ultimately promote the brand. They also can generate trust-related concerns: does the influencer favor a particular brand or product because she received an incentive for her recommendation? Customers have to follow their instincts and conduct their own research.

However, in-depth video reviews (such as those produced by professional YouTube tech reviewer Marques Brownlee) differ from livestream ecommerce because they are typically longer, more thorough, and informational. Additionally, in video reviews, the interaction between the promoter and the audience is unidirectional, and the communication is asynchronous - the influencer may choose to answer certain questions posted as comments by the audience after publishing the content, but they don't have an obligation to do so. Also, since the recommendations don't happen in real-time, any offers or discounts will not be time-sensitive.

People may refer to these reviews as resources when they research a purchase but won't necessarily buy right away. Thus, compared with livestreams, it can be more difficult to track back revenue and estimate the ROI of creating such reviews.

Takeaways

Livestream ecommerce allows brands to showcase their products in detail, answer users' questions in real-time, maintain user engagement, and encourage impulse purchases. What can designers and service providers learn from this new interaction channel?

Is Livestream Ecommerce Right for Your Brand?

Follow these steps to determine the priority of this potential channel:

Investigate the need for livestreams and whether your audience is likely to engage with it. Do you have a regular presence or a solid group of followers on social platforms such as TikTok, Facebook, or Instagram? What do your customers think about livestreaming? Do product videos, expert reviews, or webinars affect their purchase decisions? Use these metrics together with behavioral and attitudinal data to estimate the need for livestreams. Experiment with a few pilot livestream events and see how it goes.

Estimate the short- and long-term cost of livestreaming. If you have little presence on social media and most of your sales come from your website, think twice before creating a new channel from scratch. Building a channel is one thing; maintaining a channel in the long run and eventually making the channel profitable is another. Do you need to build a separate team for this channel? Can you alter an existing team's focus to try it out?

Look at your competitors. Have they started to explore this area? How are their experiments going? Keeping an eye on your competitors doesn't mean that you need to copy their actions directly. Watching users' reactions to their livestream events can help your decision-making process.

Create a High-Quality Livestream-Ecommerce Experience

If you decide to start a livestream channel, follow these high-level tips to maximize effectiveness.

Interact with your followers and establish social attachment. Livestream ecommerce is a highly interactive channel. A livestream session isn't only about promoting your products but also about fostering and maintaining long-term relationships with your customers. They can later advocate for your business. (And since building a loyal base takes time, you can't just experiment with livestreaming for a few weeks and then abandon it.)

Use time-sensitive offers and giveaways to increase engagement.When users come to a new channel, they are uncertain about what to expect. Immediate rewards such as coupons or other time-sensitive offers give them reasons to stay there longer, explore what you have to offer, and even place orders.

Ensure a seamless omnichannel experience. Ease of purchase is crucial for the success of a livestream session. Viewers should be able to effortlessly make purchases directly from the live streams. Linking the products to their product-detail pages and offering one-click payment options can reduce the number of steps at checkout.

Adhere to your brand image but be nimble and accommodate your viewers' profiles. The livestream audience may be slightly different than the bulk of your audience; make sure you speak the right language as you interact with it.

Listen to the feedback and iterate. New channels are new adventures for businesses; setbacks and mistakes are inevitable during the preliminary stage. Actively ask for feedback from followers attending the livestream sessions. Learn what they want and iterate on your livestream structure and content.

Learn from Livestream Ecommerce Without Adopting It

If you decide not to follow the trend and wait to see how it goes, there are still plenty of lessons to be learned from livestreaming,

Users appreciate livestreaming because products are shown in various angles and usage scenarios. Even traditional ecommerce sites can consider richer ways of presenting products and services. Use videos that include closer and farther looks of the same product. Showcase the products in different contexts or worn by different people. For example, on Nordstrom's website, some product-detailed pages have short videos in which sales representatives show the product up close or pinpoint certain details.

Offer convenient, real-time communication channels, such as live chats and store specialist appointments. During livestream sessions, personalized questions get answered by the host immediately; users don't need to spend time investigating the specs and sizing information. Live chats help answer immediate personal questions, saving users' time and effort.

Consider your customers' social needs. The social aspects of livestream sessions manifest in two different ways: (1) the returning users offer social proof on the quality of the products, and (2) the host interactively answers questions and responds to requests from viewers. Businesses could cater to their customers' social needs by showing customer reviews and answering the right questions on the product pages. Furthermore, they can investigate the social-media channels frequented by their loyal customers and foster a brand-centered community on those channels.

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Livestream Ecommerce: What We Can Learn from China

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Livestream ecommerce is a business model in which retailers, influencers, or celebrities sell products and services via online video streaming where the presenter demonstrates and discusses the offering and answers audience questions in real-time. A livestream session could take place on an ecommerce website or on a social media platform.

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It's not new news that e-commerce in China is highly developed and COVID lockdowns propelled it even further. Chinese e-commerce is projected to be $1 trillion dollars in 2020, up from $862 billion in 2019. In 2020 over 700 million Chinese are expected to shop online vs. 600 million in 2018. According to eMarketer, China has the highest rate of e-commerce of any country as a percent of total retail sales (over 35% in 2019), the highest absolute sales level (more than 3 times the U.S. total, the second largest country), and one of the fastest growth rates of any country, off an already high base.
China's Livestreaming E-Commerce Is Experiencing Explosive Growth
Livestreaming E-Commerce is promoting and selling goods through influencer streams on their own social media channels, most often housed on China's online shopping malls. It's like Home Shopping Network, but with charismatic, trendy anchors. It's also been described as part infomercial, part variety show.

Alibaba's Taobao Live, has the lion's share of live-streaming at around 80%. Other large Chinese tech and e-commerce players, like Baidu and JD.com, have jumped in. Douyin, the Chinese version of Tik Tok and its competitor Kuaishou in partnership with JD.com, have shoppable livestreams within the apps, as does the leading fashion platform, MOGU. Products featured are primarily cosmetics and beauty aids, fashion, and food. Livestreaming is another way for brands to gain awareness, move excess inventory, and for small local businesses from craft artisans to independent farmers, to reach customers: all the more important in light of this year's COVID lockdown restrictions. Taobao Live is a virtual shopping mall where customers can shop and be entertained at the same time.

Livestreaming e-commerce is growing rapidly. It's estimated to already be $60 billion annually. Last year over 430 million people, about 30% of China's population, viewed livestreams, and in 2020, it's projected to reach 560 million, or around 39%. Sales from live streams are expected to grow more than 100% in 2020 vs. 2019 to almost 9% of all online retail sales. In 2019 approximately 37% of China's online shoppers made livestream purchases. While it has been driven by Gen-Z and Millennials, middle-aged Chinese and seniors are jumping on the trend.
Top Chinese Livestream Influencers Have Become Mega Celebrities
Top influencers have their own shows and appear each each night for 4 hours at a stretch, from roughly 8 pm to mid-night, selling highly curated products, often at deep discounts. Approximately 12 products are presented each hour: 48 per night, and items can sell out in seconds. Manufacturers pitch the influencers and only an estimated 1 in 10 products is selected. Aside from choosing which products to feature that their followers will want, show hosts negotiate with manufacturers to get the lowest prices possible and estimate how much to buy. The right balance of supply and demand is critical to maintain viewer excitement and action. Hosts demonstrate and critique the products, explain features, sporadically answer call-in questions, and at times sing and talk to celebrity guests. There's exciting music with beating gongs and drums when coupons and product links are revealed, and anchors urge viewers on with calls to action like "just buy it" and "grab it now."

Hosts are known as KOL's (key opinion leaders) and livestream e-commerce has made them huge, well-paid celebrities. They're compensated differently than in the U.S., where influencers are typically paid a flat fee for each post. In China, KOLs typically receive an appearance fee plus a hefty commission on products sold.

One of the most popular livestreamers is Jiaqi (Austin) Li, also known as the "Lipstick King." He's a former L'Oreal, physical retail salesman who is now worth a reported $5 million. Jiaqi is known for demo'ing lipstick brands on his own lips. He has 6.5 million followers for his livestream on Taobao Live, and a nightly audience of 2 million viewers. He's also become a Tik Tok celebrity with over 30 million viewers. Jiaqi occasionally brings his dog, Never, on the set, and Never is now too a celebrity. Sharing different aspects of his life, like his dog, increases Jiaqi's appeal to fans. The more fans, the more bargaining power he has with brands to get the lowest price.

Wei Ya (also known as Viya), another super popular livestreamer, has her own fashion line and factory. In addition, she promotes products from foreign brands like Tesla and Proctor and Gamble, and local products ranging from instant noodles and cosmetics, to the right to send a small payload into space for the Chinese company Casi Rocket Technology at a reported cost of $6.1 million. Recent monthly view figures are off the charts with over 839 million for Viya and 824 million for Jiaqi Li.
More Brands Are Jumping In With Their Own Shows
Now if consumers click into the official online Tmall store of any major brand (from clothing to cosmetics), they're likely to see a banner for the brand's livestreaming on the front page. People who sell the brands in physical store are encouraged to do livestreaming, trying on products themselves for viewers. Highlights of the livestreams are then made into video clips and added to the product introduction page on its website. These livestreams don't necessarily have professional lighting or great resolution, and the livestreamers are not celebrities or models, but customers enjoy their authenticity. When customers click the link on the product or estore, they can browse pictures, watch try-on videos, or catch livestreams, so they now have more ways to interact with brands and are engaged for longer periods of time.
Livestreaming E-commerce is Growing Among Smaller Chinese Brands & Other Sectors
Like the U.S. shift from mega influencers to micro-influencers, the era of mega KOLs is evolving. Livestreaming is moving beyond special shows controlled by a small group of celebrity influencers. Alibaba's vision is to broaden livestreaming so it can be adopted directly by more brands of different sizes across more different industries. Taobao and JD.com are helping live streamers across sectors set up their own stores, design show content, and manage product warehousing and distribution.

While for years, the U.S. was global king of media and entertainment, cross-global trend setters are now emerging from Asia, notably Korea's K-Pop and K-Fashion, and now China, with the wild global success of Tik Tok. Livestream e-commerce could be the next big thing in the U.S., with content adaptations. While historically, Chinese revered Western brands, over the past few years, the market share of Chinese brands is gaining ground in categories like cosmetics, skin creams, baby food, bottled water and sportswear. It's due to a combination of improved product quality and styling, a more active embrace of digital marketing by Chinese brands vs. Western competitors, and the price value of home grown brands being better.

The popular cosmetics brand Perfect Diary is a perfect example. On November 11, Singles Day, China's largest shopping day of the year, Perfect Diary's livestream KOL's pitched animal-themed eye makeup, co-branded with the Discovery channel with colors and packaging inspired by rabbits, deer and fish. Estée Lauder's livestream sold an estimated $300 million of products on Singles Day with a 2 for 1 discount. While consumer tastes in entertainment and products differ in the U.S., the livestream e-commerce format is one we're likely to see more and more U.S. brands experiment with.

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Live Streaming E-Commerce Is The Rage In China. Is The U.S. Next?

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It's not new news that e-commerce in China is highly developed and COVID lockdowns propelled it even further. Chinese e-commerce is projected to be $1 trillion dollars in 2020, up from $862 billion in 2019. In 2020 over 700 million Chinese are expected to shop online vs. 600 million in 2018.

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China is now the strongest economic power in BRICS and the most influential in its economic and financial agenda

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BRICS is the acronym coined to associate five major emerging economies: Brazil, Russia, India, China, and South Africa.

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Articles on their relationship

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This is a comparison of the UK and China from the Hofstede cultural dimension

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The Chinese clothing industry has been hit hard by the corona crisis - not only in terms of production, where China remains an important global player, the internal market, too, has also been impacted by store closures and curfews. How is the Chinese clothing industry doing today? Which developments are emerging and how are Chinese consumers behaving? FashionUnited spoke to Chen Dapeng, president of the China National Garment Association and president of the fashion fair Chic. He maintains a confident outlook and launched Chic Shenzhen this week, the first "offline" trade fair to take place in China following the pandemic.

What is the current situation in the Chinese clothing industry? Is it already operating at the same capacity as before the crisis?

Chen Dapeng: The sudden outbreak of the coronavirus has disrupted the usual pace and order of the clothing industry. Problems such as weak consumption, closed physical stores and logistics have created immense pressure and challenged the development of the industry.

With the effective control of the epidemic in China, the market is gradually recovering. More than 90 percent of garment enterprises have maintained the level of their production and the supply chains have generally recovered. However, foreign trade is severely affected due to the contraction of international markets and especially export-oriented enterprises are facing difficult times.

How strongly is the Chinese garment industry affected by cancellations, order cutbacks, and non-payments from its foreign customers?

Due to the outbreak of the novel coronavirus, major apparel export markets such as the US, the European Union and other markets had to shut down, and consumer demand has fallen sharply internationally. This has led to a sudden increase in the cancellation or delay of orders by European and American clients since mid-March. Apparel export orders and the number of new orders dropped significantly, leading to an unprecedented impact on Chinese exporters. According to the statistics by China's customs office, from January to May 2020, exports of clothing and accessories totaled 38.21 billion US dollars, down 22.8 percent year-on-year. With the sharp reduction of international orders, most of China's garment export enterprises ran into a significant decline in workload, and some enterprises had to compensate with breaks and rotation; some smaller export enterprises are facing tremendous pressure to survive.

In recent years, the Chinese garment industry has shifted from mass production to highly specialized production. Is this an advantage in the current situation?

Facing an entirely new environment, the Chinese apparel industry has increasingly turned its focus to the product in recent years. Efforts have been made to improve the adaptability of products according to changes in consumer demand - from various aspects such as technological, design, management and service innovation. The companies are actively taking fashion aesthetics, functionality, and ecological and environmental protection into consideration to meet consumer demand.

While continuously optimizing the product, they're also paying particular attention to a new generation of information technology. In this process, companies are adopting mass customization models and smart manufacturing factories, and the level of lean, flexible and service-oriented manufacturing in the supply chain is constantly improving. The industry isn't only overcoming current difficulties, it is also laying a solid foundation for the next transformation and upgrade.

How do you think the current crisis will affect global sourcing?

The current crisis has a far-reaching impact on global procurement. More importance will be given to geographical proximity, diversification and flexibility, which will certainly accelerate the pace of structural reconstruction of the production chain and even boost global relocation and transfer of some production capacity. However, the change will not be that radical and the scope will not be very wide in the short term. The global supply chain follows the logic of industrial development and business, and its evolution under market conditions will also take time. It is not as simple for some countries to relocate enterprises from China. The advantages of China's overall apparel industry are still obvious, and its position will not change in the short term.

Will geographical proximity play a more important role again in the future? With regard to China: Will Chinese producers shift their focus to the domestic market in the future?

In the era of the Internet, consumers are playing a more active role in consumption. They don't only pursue more diversification and personalization, but also have higher demands for the flexibility and agility of products and services. Therefore, geographic proximity is a natural advantage and the importance of trade regionalization is rising. I think this is an important feature and direction of development in the new era of globalization.

China has a huge clothing market, and Chinese garment companies have always been focusing on the domestic market. Two-thirds of total production capacity is used to meet domestic demand. The advance of China's economy and society, especially the consumption upgrade (note: a term for rising consumption of higher quality goods in China) - stimulated by a new generation, has brought broad room for development and business opportunities for the clothing brands and enterprises all over the world.

In the retail sector, the crisis has accelerated digitalization. Can we now expect the same in terms of sourcing and production?

During the epidemic outbreak, new marketing models like live streaming and community marketing effectively made up for the gap caused by offline channel loss. This is the power of continuous innovation of China's fashion e-commerce sector. In fact, with the advancement of technology and the new requirements for industrial development, the digital development of China's clothing industry is moving from consumer internet to industrial internet. The new era of the digitalization of the clothing industry has begun: with smart equipment and industrial internet as the core, from R&D to design, textile dyeing and processing to final product manufacturing, all parts in the supply chain are shifting towards digitalization, networks and artificial intelligence.

What is the current consumer sentiment in China? Are consumers buying the same amount of clothing as before?

Like other markets in the world, the epidemic impacted China's clothing market massively. With the improvement of domestic epidemic prevention and control, clothing consumption started to recover in the second quarter. We believe that as long as the epidemic could be effectively controlled, the recovery of clothing consumption will accelerate in the third quarter, and even more in the fourth quarter.

In Europe, nearly all trade shows have been postponed to the next year. How have the reactions to your upcoming Chic edition in Shenzhen in July been?

Many exhibitions have been postponed in China as well. This year's Chic spring edition also had to take place online in April, but fortunately, it received quite a good response. We are going to hold Chic Shenzhen in July, which is the first offline exhibition in China this year. We hope it could help enterprises with their business development and collaboration within the supply chain. We received positive feedback from the industry, and for most people it will be a very good opportunity, helping them to solve problems and overcome difficulties. The industry needs a platform to meet and exchange.

Picture: Chic Shanghai / China National Garment Association

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How China's clothing industry is emerging from the pandemic

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The Chinese clothing industry has been hit hard by the corona crisis - not only in terms of production, where China remains an important global player, the internal market, too, has also been impacted by store closures and curfews. How is the Chinese clothing industry doing today?

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As January comes to an end, it's only been little over half a month since the Chinese government warned its citizens - and the world - about the coronavirus. On January 31st, as the outbreak continues to spread, with more than 8,000 reported infections worldwide, citizens up to the news that WHO officially listed the coronavirus as a global emergency, elevating the situation from a China-only crisis to a global one.

In the past 17 years since the outbreak of the deadly SARS virus, China has become deeply integrated into the world economy, which has helped spread the coronavirus beyond the mainland, effecting a host of global industries, including travel, tourism, and retail. Additionally, economists have warned that the timing of the virus could send China's already fragile economy into further turmoil, compounding the newly announced US-China phase one trade deal and China's venture into a consumption-driven growth model.

As for the global luxury fashion industries, which rely heavily on China's vast production and consumption power, things were already slowing down before the advent of the virus. And now, it's only projected to get worst. Given this, Jing Daily has talked with various affected stakeholders, from luxury brands to small fashion business owners to lawyers and consumers in order to better understand how the luxury fashion industries are coping with the latest ongoing crisis.
Supply chain disruptions
"Many industry trade shows are now canceled," said Vincent Djen, the director of Cheng Kung Garments and the Chief Strategy Officer of REmakeHub, a company that provides circular solutions for plastic waste, explaining how the coronavirus has already disrupted many fashion industries' plans for 2020. To name a few, Spinexpo, the industry sourcing exhibition dedicated to innovation in yarns, fibers, and knitwear, and the China (Shanghai) International Optics Fair, which are held in Shanghai in February, have both been postponed.

Moreover, two Chinese staff members, one from a luxury brand and another from beauty company disclosed that they are now working offsite to revise their first half of the year planning and projections. Many industry insiders have also shared their concerns about whether upcoming major fashion shows, like Milan Fashion Week in late February and especially Shanghai Fashion Week in late March, will be postponed to prevent the potential of further spreading the virus.

The postponing of trade shows and fashion shows may slow down new business from happening, but a more immediate concern is the disruption of the supply chain. Even though most factories are still closed due to the Chinese New Year break, many factories are now delaying the start of production because of the fear of inappropriate health procedures for their workers, which will have a ripple effect throughout the global fashion production cycle.

According to Djen, usually, most of the Fall 2020 collection orders from Europe arrive in February, with manufacturing in March to meet the major delivery month of April, which now could be delayed until May or June. Furthermore, as a result of the ongoing crisis, the production of Autumn and Winter collections may also be delayed if the situation gets worst, directly effecting the businesses of most European companies that rely heavily on Chinese manufacturers.

"If brands have not diversified their productions outside of China, then there isn't much they can do to minimize the losses," suggested Xi Yang, an attorney at the Seattle-based international law firm Harris Bricken that specializes in investment with China. "Factories are closed now and will not resume production anytime soon. Even when they resume production, it does not guarantee they will have enough manpower to complete orders placed, or they will make products that meet the buyer's standard."
Retail slump
Many cities in China are following a governmental order to remain on a soft lockdown mode. And consumers that normally hit the stores around the Chinese New Year holiday have opted to stay home to minimize their outdoor exposure, which has added to a sharply declined foot traffic in shopping malls this January. Many malls have chosen either to significantly shorten their business hours or shut down completely. The loss is hard to quantify. On January 28, Dalian Wanda Commercial Management Group, the landlord of many high-end retail malls in China, waived rent for all Wanda Plaza's tenants across the country from January 24 to February 25, with estimated costs between $429 to $572 million (3 to 4 billion RMB).

Going digital, however, seems to be the only bright spot for many vendors. Riding on the current supply and demand trend, one livestreamer said that they shifted their product selection from skincare and makeup to cleaning supplies. The Shanghai-based beauty brand, BrighterBeauty, pivoted as well. On January 30, it announced to its customers via WeChat, Weibo, and SMS that they can now make orders for facial sprays, collagen shots, probiotics, and protein powder via their WeChat Mini Program and enjoy fast home delivery. Industry veterans, too, are positive about the development of online retail. "The SARS in 2003 escalated a number of e-commerce companies' growth, such as Taobao and JD.com, brands should treat the crisis as an opportunity to develop omnichannel." suggested Gu Guojian, a retail expert to Chinese media linkshop.

On the other hand, the virus has simply dampened the desire to shop. "Not in the mood," "Who am I showing off to," "Health comes first now," are a few common sentiments that we've read so far. In some cases, the fear of the coronavirus latching itself on the outside of a package has stopped people from shopping except for necessities like groceries and cleaning supplies. In fact, it seems that only grocery or convenience stores are weathering this crisis well.
What's Next?
Starting February 2, as many companies welcome back their employees to work, the biggest question on every business owners' mind is how to ensure the safety of their employees? Most noteworthy, is the issuing of a few new employment rules from the government, ensuring companies to better protect and benefit employees during epidemics.

"Some cities have been issuing new rules almost every day, be sure to check and follow all of them," advised Yang. "In addition to being law-abiding though, at the end of the day, the employees are human beings who want to stay safe and healthy, and do not want to be punished for the virus outbreak, so be mindful of the human side of all this when making employment decisions." Many companies have since adopted new safety measures for staff and customers.

Behind every disaster, however, there is a silver lining. "Asia has room for monetary and fiscal policy responses, and these virus shocks tend to be short-lived and cause a V-shaped trajectory in economic activity, as there is a lot of pent-up activity once the virus peaks," said Rob Subbaraman, the Head of Global Macro Research and Co-Head of GM Research, to Bloomberg News. A key Chinese figure in the fight against the virus, Zhong Nanshan, the Director of the State Key Laboratory of Respiratory Disease in China, said previously that the wave of infections will slow in early February and will not increase in large scale.

It's possible, and as the post-SARS period showed, that there will be an increase in consumption once the virus is controlled, and consumers are once again willing to spend some of their disposable income on upmarket goods. "This (situation) can take up to six months, so it's possible that this is a two-quarter rather than a one-quarter thing," suggested Arend Kapteyn, Chief Economist at UBS global, to Bloomberg on January 28. "But it's way too early to knock down your China forecast sharply."

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How the Fashion Industry is Coping with the Coronavirus Crisis | Jing Daily

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As January comes to an end, it's only been little over half a month since the Chinese government warned its citizens - and the world - about the coronavirus. On January 31st, as the outbreak continues to spread, with more than 8,000 reported infections worldwide, citizens up to the news that WHO officially listed the coronavirus as a global emergency, elevating the situation from a China-only crisis to a global one.

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Article on how China coped with COVID

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We've made our coronavirus coverage free for all readers. To get all of HBR's content delivered to your inbox, sign up for the Daily Alert newsletter.

As the Covid-19 crisis spreads to new epicenters in Europe and the U.S., companies are scrambling to mobilize responses. There are no easy answers, due to the unpredictability of disease dynamics, a lack of relevant prior experience, and the absence of plug-and-play instructions from government or international authorities.

Clearly each local situation is different, but we believe there are opportunities for companies to learn from others in regions that are weeks ahead in responding to the epidemic. China appears to be in the early stages of an economic rebound, according to our analysis of high-frequency data on proxies for the movement of people and goods, production, and confidence. While this recovery could be vulnerable if a new wave of local infections were to emerge, many Chinese companies have already moved beyond crisis response to recovery and post-recovery planning.

Based on our experience supporting Chinese enterprises with their recovery plans, we have extracted 12 early lessons for leaders elsewhere. To be sure, China has its own distinct political and administrative systems, as well as social customs, but many of the lessons here seem broadly applicable.

1. Look ahead and constantly reframe your efforts.

By definition, crises have a highly dynamic trajectory, which requires a constant reframing of mental models and plans. Initial ignorance gives way to discovery and sense-making, then crisis planning and response, recovery strategy, post-recovery strategy, and finally, reflection and learning. This process must be fast - and therefore CEO-led - to avoid getting stuck in complex internal coordination processes and being slow to react to changing circumstances.

In China, some of the fastest-recovering companies proactively looked ahead and anticipated such shifts. For example, in the early stages of the outbreak, Master Kong, a leading instant noodle and beverage producer, reviewed dynamics on a daily basis and reprioritized efforts regularly. It anticipated hoarding and stock-outs, and it tilted its focus away from offline, large retail channels to O2O (online-to-offline), e-commerce, and smaller stores. By continuously tracking retail outlets' re-opening plans it was also able to adapt its supply chain in a highly flexible manner. As a result, its supply chain had recovered by more than 50% just a few weeks after the outbreak, and it was able to supply 60% of the stores that were reopened during this period - three times as many as some competitors.

2. Use an adaptive, bottom-up approach to complement top-down efforts.

Rapid, coordinated responses require top-down leadership. But adapting to unpredictable change, with distinct dynamics in different communities, also requires decentralized initiative-taking. Some Chinese companies effectively balanced the two approaches, setting a top-down framework within which employees innovated.

For example, Huazhu, which operates 6,000 hotels in 400 cities across China, set up a crisis task force that met daily to review procedures and issued top-down guidance for the whole chain. In addition, it leveraged its internal information platform, an app called Huatong, to make sure employees and franchisees were armed with timely information. This allowed franchisees to adapt central guidance to their own local situations, in terms of disease conditions and local public health measures.

3. Proactively create clarity and security for employees.

In a crisis, it's hard to find clarity, when the situation and the available information are constantly changing, driven by the exponential logic of contagion. Official advice may be absent, contradictory, out of date, or not granular enough for practical purposes. Furthermore, confusion is compounded by a plethora of media reports with differing perspectives and advice. Employees will need to adopt new ways of working, but they won't be able to do so unless they have clear, consistent information and overall direction.

Some Chinese companies created very proactive guidance and support for employees. For example, China's largest kitchenware manufacturer Supor instituted very specific operational guidelines and procedures for its employees, such as instructions for limiting exposure while dining in canteens and emergency plans for abnormal situations. In addition, the company instituted health checks for employees and their families from the early stages of the outbreak and procured preventative equipment. It was well prepared for a timely resumption of work, reopening some production lines in the second week of February.

4. Reallocate labor flexibly to different activities.

In hard-hit businesses, such as restaurants, employees were unable to carry on their regular activities. Rather than furloughs or layoffs, some creative Chinese enterprises actively reallocated employees to new and valuable activities, like recovery planning, or even loaned them to other companies.

For example, in response to a severe decline in revenue, more than 40 restaurants, hotels, and cinema chains optimized their staffing to free up a large share of their workforces. They then shared those employees with Hema, a "new retail" supermarket chain owned by Alibaba, which was in urgent need of labor for delivery services due to the sudden increase in online purchases. O2O players, including Ele, Meituan, and JD's 7Fresh followed this lead by also borrowing labor from restaurants.

5. Shift your sales channel mix.

Person-to-person and bricks-and-mortar retail were severely restricted in affected regions. Agile Chinese enterprises rapidly redeployed sales efforts to new channels both in B2C and B2B enterprises.

For example, cosmetics company Lin Qingxuan was forced to close 40% of its stores during the crisis, including all of its locations in Wuhan. However, the company redeployed its 100+ beauty advisors from those stores to become online influencers who leveraged digital tools, such as WeChat, to engage customers virtually and drive online sales. As a result, its sales in Wuhan achieved 200% growth compared to the prior year's sales.

6. Use social media to coordinate employees and partners.

With remote working and a new set of complex coordination challenges, many Chinese companies took to social media platforms, such as WeChat, to coordinate employees and partners.

For example, Cosmo Lady, the largest underwear and lingerie company in China, initiated a program aimed at increasing its sales through WeChat, enlisting employees to promote to their social circles. The company created a sales ranking among all employees (including both the chairman and CEO), helping motivate the rest of the staff to participate in the initiative.

7. Prepare for a faster recovery than you expect.

Only six weeks after the initial outbreak, China appears to be in the early stages of recovery. Congestion delays currently stand at 73% of 2019 levels, up from 62% at the worst part of the epidemic, indicating that the movement of people and goods is resuming. Similarly, coal consumption appears to be recovering from a trough of 43% to currently 75% of 2019 levels, indicating that some production is resuming. And confidence appears to be coming back as seen in real estate transactions, which had fallen to 1% of 2019 levels but have since bounced back to 47%.

While the depth and duration of the economic impact in other countries is impossible to forecast, China's experience points to a scenario that companies should prepare for. Considering the time it takes to formulate, disseminate, and apply new policies in large companies, recovery planning needs to start while you're still reacting to the crisis.

For example, a premium Chinese travel agency, facing a collapse in its short-term business, refocused around longer-term preparations. Instead of reducing headcount, it encouraged employees to use their time to upgrade internal systems, improve skills, and design new products and services to be better prepared for the eventual recovery.

8. Expect different recovery speeds for different sectors.

Unsurprisingly, sectors and product groups recover at different speeds, thus requiring distinct approaches. Stock prices fell across all sectors in the first two weeks that China's epidemic accelerated, but leading sectors, such as software and services, and healthcare equipment and services, recovered within a few days and have since increased by an average of 12%. The bulk of sectors recovered more slowly but reached prior levels within a few weeks. And the hardest-hit sectors - such as transportation, retail and energy, representing 28% of market capitalization for China's largest stocks - are still down by at least 5% and showing only minimal signs of recovery.

This means companies need to calibrate their approach by business - and large companies need to calibrate their approach by division. For example, a large global food & beverage conglomerate used the crisis to accelerate the long-term shifts in its product mix in China (the company's second largest market worldwide), including increasing its focus on health-relevant products, imported products, and on online sales channels.

9. Look for opportunity amid adversity.

While the crisis in China impacted all sectors to some extent, at a more granular level, demand increased in many specific areas. These include B2C e-commerce (especially door-to-door models), B2B e-commerce, remote meeting services, social media, hygiene products, health insurance, and other product groups. Some Chinese players mobilized rapidly to address these needs.

For example, Kuaishou, a social video platform valued at $28 billion, promoted online education offerings to compensate for school and university closures. The company and other video platforms partnered with the Ministry of Education to open a national online cloud classroom to serve students. And a major restaurant chain leveraged down-time to plan a new offering of semi-finished dishes, capturing the increased need and occasion for home cooking during the crisis.

10. Adapt your recovery strategy by location.

Regional public health policies, disease dynamics, and administrative guidance will create recovery dynamics that vary by location - likely not following the geographical structure of companies. This requires a flexible approach.

For example, a leading Chinese dairy company (a $10bn business with a wide production base and deep national distribution in China) developed a segmented approach based on regional and city recovery dynamics, as well as on its own supply chain infrastructure, and salesforce density. The planned supply from factories in severely impacted areas was allocated to factories in other regions in a phased approach. Marketing activities, messaging, and budget allocation were also adjusted continually to reflect regional differences in expected recovery speed, consumer sentiment and needs.

11. Rapidly innovate around new needs.

Beyond rebalancing your product portfolio, new customer needs also create opportunities for innovation. When threatened by crisis, many companies will be focused on defensive moves, but some Chinese companies boldly innovated around emerging opportunities.

The insurance industry is notoriously conservative, but in response to the crisis, Ant Financial added free coronavirus-related coverage to its products. The action served a customer need, while promoting awareness of the company's online offerings and improving customer loyalty. It expects a 30% increase in health insurance income in February, as compared to the previous month.

12. Spot new consumption habits being formed.

Some shifts will likely persist beyond the crisis, and many sectors will reemerge to new market realities in China and elsewhere. Indeed, the SARS crisis is often credited with accelerating the adoption of e-commerce in China. It is too early to say for sure which new habits will stick in the long run, but some strong possibilities include a leap from offline to online education, a transformation in health care delivery, and an increase in B2B digital channels.

Some Chinese companies are already planning around these shifts in the post-crisis world. For example, the Chinese business of a global confectionary manufacturer accelerated its existing digital transformation efforts. The company canceled offline campaigns for Valentine's Day and other promotional activities, reinvesting resources instead into digital marketing, WeChat programs, and partnerships with O2O platforms to take advantage of new consumer behaviors during the outbreak and beyond.

***

Undoubtedly more new lessons will emerge from China, Korea, Italy, and eventually the U.S. Companies that adopt a high-frequency approach to learning, codifying and applying lessons from other regions will be better able to protect their employees and business. Indeed, in a fast changing, volatile world, such an adaptive approach should be applied more broadly beyond crisis management.

If our free content helps you to contend with these challenges, please consider subscribing to HBR. A subscription purchase is the best way to support the creation of these resources.

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How Chinese Companies Have Responded to Coronavirus

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We've made our coronavirus coverage free for all readers. To get all of HBR's content delivered to your inbox, sign up for the Daily Alert newsletter. As the Covid-19 crisis spreads to new epicenters in Europe and the U.S., companies are scrambling to mobilize responses.

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Businessman looking through window in menswear shop
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It is hard to believe, but 2020 begins the third decade of the new millennium. Since then, the personal luxury goods market has more than doubled, growing from €128 billion to €281 billion ($142 billion to $313 billion at today's conversion rate), a 4.1% CAGR.

Over the last twenty years, the personal luxury goods market comprising apparel, fashion accessories, beauty, jewelry and watches advanced through five stages of growth: Democratization (2001-2007); Crisis (2008-2009); Chinese Shopping Frenzy (2010-2013); Reboot (2015-2016); and now the New Normal (2017 onward), according to Bain & Company and Altagamma's analysis.

The current New Normal period is expected to continue into 2020, characterized by moderate growth in the 3-5% range, with Asian markets driving most of the industry's growth.

However, the luxury market faces many unpredictable challenges that may change the prospects for 2020 from the predicted New Normal period into something quite abnormal.

These challenges are likely to hit individual markets differently depending upon their exposure in the luxury market, but the net result may be massive disruption on a global scale.

The global rise of populism with its push back against the moneyed elite has resulted in Brexit coming in January and populist uprisings that show no signs of abating in Hong Kong, Yellow Vests in France, and the new Sardine uprising in Italy.

But perhaps the biggest disrupter of all coming in 2020 is the likely re-election of the now impeached Donald Trump, a most unlikely populist hero.

At the macro-economic level, Euromonitor foresees a risk for a global downturn. It put a global downturn at the top of its latest global risks index.

Nonetheless, Euromonitor predicts 3.1% global GDP growth in 2020, but maybe under the present circumstances, those expectations should be taken with a grain of salt. Britain's withdrawal from the European Union, the fifth largest global economy and the second largest in the EU, is unprecedented and political uprisings, not to mention Donald Trump, leader of the world's largest economy, are unpredictable.

To assess what's ahead for the luxury market in 2020, my firm, Unity Marketing, in association with Luxury Daily and The Home Trust International, just completed the fourth annual survey among luxury insiders, including those working in the luxury goods and luxury services/experiences sides of the business and those who support luxury goods and services/experiential companies in advertising, marketing, and advisatory capacities.

Here are the key challenges and opportunities for luxury brands in 2020 uncovered in my analysis of the survey results drawn from some 900 luxury industry insiders:

Challenge: Slowing growth, rising turmoil

As Deloitte found in its optimistic assessment of consumer sentiment going into the 2019 holiday shopping season - "Consumers want to keep the good times rolling" - the same feeling is expressed by executives working in the luxury market.

While industry insiders remain optimistic about their own companies' prospects for next year, they are much less optimistic about prospects for the luxury industry as a whole. More (32%) expect business conditions in the luxury market to erode in 2020, as compared with 21% who expect conditions to improve.

More tellingly, their optimism has declined dramatically from their expectations last year when more than half of the insiders surveyed expected the luxury market's business conditions to improve in 2019. Now only one-fifth remain optimistic for 2020.

Growing uncertainty about how the economic forces at play will impact the affluent and high-earning consumers is causing their cautious mood. The conventional wisdom that the affluent were immune to the ups and downs of the economy was shown to be false back in the 2008-2009 recession and luxury insiders are wary that another global downturn is headed their way.

"Instability in global markets and political upheaval threatens an impending recession. Even rich people hold back when things are unsettled," commented on insider. "Luxuries are postponable purchases. The chaos around them only makes them hunker down and wait," said another.

Opportunity: Silver lining in the threatened China trade war

Many insiders see an escalation of a trade war with China as a threat to their companies' growth: "We are seeing a slow down among Chinese consumers, including tourists, which could hurt many luxury brands that rely on the Chinese as a growth engine."

But more see it as a potential boon to the luxury market and their niche in the it. "The lower-end 'pre-luxury' market is hurt by higher prices, but the true luxury buyers are not affected," said an insider. If Chinese-made goods no longer have a price advantage, it will give luxury brands made in the U.S., France, Italy, U.K., Germany and other countries known for quality an advantage.

"It will level the playing field for companies not producing in China," was said, as was, "It helps us since people are more conscious about the value of what they buy and are realizing some things are worth paying more for."

With the public's attention drawn to the sometimes unethical business practices of Chinese companies, it gives luxury brands made to higher standards an opportunity to talk about what authentic luxury is. "This is an opportunity for luxury providers to think about and define what luxury is," an insider said.

Challenge: Consumers trading down, not up

Many luxury brands are feeling the pain from competition arising from lower-priced premium brands that may offer comparable quality without the high price tag. "The proliferation of low-end retail has hurt the high-end. Even consumers with the budget to afford better have traded down," an insider expressed.

Partly this trend is driven by younger consumers who are described as "scaling back to reduce waste and minimize what they consume."

Younger consumers, even as their incomes and their ability to afford luxury rises, are embracing the values of conscientious consumption. The luxury resale market is mentioned repeatedly as a business model perfectly attuned to their values, but even those who can afford to pay full price for first-hand brands are attracted to the second-hand model. "The resale market has become very cool, even with the wealthy. They want to be part of it," said an insider.

The old conspicuous consumption model that previous generations embraced has been replaced by a conscientious one. "Brands that don't have something really unique won't succeed," one insider commented.

Opportunity: Get back to what made luxury great

A widely shared concern among luxury insiders is that luxury has lost its meaning: "There are too many companies peddling so-called 'luxury goods.' The market has been watered down by accessibility because companies slap together a product, label it as luxury, and off they go."

With the meaning of luxury not well understood by many consumers, or even among luxury companies, the opportunity is to return to the key pillars of luxury - quality, craftsmanship, design, attention to detail, uniqueness, and authenticity.

"We need to reinterpret luxury from labels and conspicuous consumption to a quest for goods and services that are personal, authentic and unique. Many successful companies are returning to this definition," expressed an insider.

The challenge for luxury brands is how to communicate their true luxury values.

Challenge: Digital marketing may drive sales, but it threatens luxury brand integrity

While digital, social media, mobile, and internet advertising are at the top of the list for luxury brand advertising in 2020, the luxury companies surveyed are backing off their overall advertising investment. Whereas in 2018, nearly 60% of insiders surveyed said they planned to increase their advertising spending in the coming year, in this year's survey only 40% reported advertising spending would increase.

Companies' investment in advertising and marketing is a bellwether of confidence in the market. This year they are voting little or no confidence that an increased investment in advertising will deliver a return.

Many have been burned when it comes to social media. With Instagram and Facebook the most widely used social channels - 84% and 83% respectively - only 25% of Instagram and 14% of Facebook users rate these channels as very effective.

Admittedly there are no widely shared metrics about how to accurately measure social media's effectiveness. But it is noteworthy that so few insiders feel these channels are really delivering results, as is the fact that luxury insiders' ratings of Instagram's and Facebook's effectiveness has declined from 2019, when 33% rated Instagram and 17% rated Facebook as very effective.

"Social media and the advent of celebrity culture and paid influencers have created brands that dilute the world of true luxury," one insider shared. "Influencers pull down the perception of what luxury is. They don't embody exclusivity, rareness, or craftsmanship," said another.

Opportunity: Elevate luxury brands' status in print

Digital advertising may be efficient, but its effectiveness in communicating a brand's true luxury value is in question. That may be why the data reveals early signs that luxury companies may be turning back to print advertising as a more appropriate medium to elevate their brand messaging and reach deeper into the affluent market.

About one-fifth (19%) of the insiders surveyed said their companies planned to increase spending in print, compared with 17% last year, a small but meaningful shift. More significantly the share that plan to decrease spending on print is way down, from 48% last year to 33% this year, as the number of companies that will maintain spending in print at current levels has risen, 49% as compared with 35% last year.

This is not to say they are abandoning digital, rather they are rethinking how print can enhance their reach and messaging, especially to the mature affluents, who a study by the U.S. Postal Service found receive twice as many print magazines as lower-income households. Also, older households, especially those over 55 years - where the real money is for true luxury brands - are more active subscribers to print publications than those under 35 years.

Besides print being more tactile, it also gives luxury brands better control of imagery, message, and thus its potential impact on target consumers than the varied digital screen presentations. Print readers also tend to be more engaged when reading a magazine, rather than multitasking which is common when they are consuming messages digitally.

And most importantly, consumers trust print ads more than those delivered digitally. A study by MarketingSherpa found that 82% of consumers trust print ads, compared to only 25% who trust digital ads.

While digital will continue to garner the lion's share of luxury companies' advertising spend, they are increasingly challenged to reach the right target - the truly affluent - and communicate in way that elevates, not threatens the integrity of the brands' value.

As luxury brands return to what made them great, they are also finding the need to return to the advertising media that helped elevate them to luxury status in the first place, like print.

Challenge: Delivering an experience in the omni-channel world of luxury

In their classic book, The Luxury Strategy, J.N. Kapferer and V. Bastien wrote, "For luxury products to flourish on the internet, two conditions must be fulfilled: correct, personalized identification and multisensory experience. Today's internet world is a sensually reductive world: it is not experiential enough."

At the time of publication in 2009, the authors believed that the internet was for showing, not selling luxury. But that ship has sailed, as a vast majority of luxury goods companies already sell online and some two-thirds of experiential luxury companies sell some products there as well.

Navigating successfully in the virtual, non-tactile and depersonalized digital world and the experiential physical world is a challenge that luxury brands face, as this insider said:

"How to create a luxury experience online? Do luxury consumers actually want to buy an expensive luxury item online without any physical experience? How can we ensure that we still feel exclusive and special online?"

Opportunity: It's wide open for brands that lean into the future

Luxury brand management professor Maria Eugenia Girón said, "In the luxury universe, the constant challenge is to transform creativity into profitability."

Creativity is a hallmark of all great luxury brands and that creativity comes from the people behind the brand. "It is always people who make a brand," wrote Kapferer and Bastien.

As luxury companies struggle with the often conflicting demands of the virtual digital and the experiential physical luxury worlds, the entire organization needs to be dedicated to the brands' true luxury values. Companies need to hire right, train right, and create a culture of excellence needed to build and maintain a luxury brand. "Too many CEOs think luxury brands grow magically just because they are theoretically 'luxury,'" commented an insider.

For 2020 the opportunities look bright for brands that lean into the many challenges they will face this year, rather than try to run and hide from them.

With the China market for luxury threatening to stall, all eyes are returning to the U.S. market where the number of millionaires far outnumber those in China, 18.6 million as compared with 4.4 million.

The still strong U.S. economy offers opportunity for entrepreneurs and dreamers to create new expressions of luxury in both goods and services and explore new business models that will turn their creativity into profits.

The opportunity keywords for 2020 include:

Collaborations - Some 50% of insiders identify this as a growing trend in 2020 and it doesn't just apply to streetwear brands, but to true luxury collaborations, like Armani and Ferarri.

Sustainability - The luxury resale and rental markets, as well as lab-grown diamonds, illustrate opportunities for companies to create sustainable new business models that address the growing concern for sustainability among consumers.

Personalized Experience - Every luxury consumer is an individual who deserves to be treated in a way that acknowledges their specialness. Bespoke and made-to-order, as well hands-on customized design, travel and other services, are the highest expression of it. "Consumers have a quest for experience and luxury that delivers a story. They find it in handmade, artisanal products and personalized services," said an insider.

Craftsmanship and Quality - The future for luxury is to return to its roots of craftsmanship and quality, after too long letting those slide in the search for sales growth. The idea of craftsmanship doesn't just apply to luxury goods either, because the best luxury service and experience brands take a craftsman approach to the professional services they provide, whether in the home or on the road. That craftsmanship guarantees the quality.

This luxury insider sums up the opportunities for 2020 and beyond: "Broad cultural/societal diversity will challenge brands to attract and provide voice to diverse creative audiences. The ones that get it will stand out and create more interesting and differentiated products and services. This is a great opportunity for new, emerging brands."

... Read More

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4 Major Challenges Facing The Luxury Market In 2020, And Opportunities For Brands That Lean Into Them

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It is hard to believe, but 2020 begins the third decade of the new millennium. Since then, the personal luxury goods market has more than doubled, growing from €128 billion to €281 billion ($142 billion to $313 billion at today's conversion rate), a 4.1% CAGR.

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These are articles on the challenges that luxury brands are facing

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It's no secret that former Spice Girls star Victoria Beckham shares an incredibly close bond with her four children, Brooklyn, Romeo, Cruz and Harper. Particularly special is the relationship she has with her and David's only daughter, who often makes an appearance on the couple's social media pages.
READ: Victoria Beckham reveals the lipstick she can't live without in sun-kissed selfie
Taking to Instagram to share an adorable photo of herself and Harper Seven, the glamorous mother-of-four sported her signature Posh pout as her nine-year-old beamed at the camera.
WATCH: Victoria Beckham shares adorable video of Harper tap dancing
The 47-year-old donned a slinky black bodycon dress as she lounged poolside, looking elegant as ever as she posed next to Harper, who also wore a dreamy black dress.

"Girls night out," penned Victoria, who then tagged in Strawberry Moon at The Goodtime Hotel where she was spotted spending some quality time with her youngest.

The luxe hotel, owned by Pharrell and David Grutman is a bougie pink paradise situated in the heart of a star-studded Miami where the Beckham family are believed to be vacationing.

The mother-daughter duo enjoyed a girls night at Strawberry Moon
Victoria will no doubt be thrilled to be back on US land, where her eldest son Brooklyn Beckham has remained with his fiancée Nicola Peltz since the first lockdown.

It is believed the 22-year-old just purchased a £10 million home in the Hollywood hills with his wife-to-be, taking after his parents' footsteps who also own several transatlantic properties.
PHOTOS: Victoria and David Beckham's megamansion costs 45x average London home
It's not the first time this week that Victoria has shared a glimpse into the family's luxe summer holiday retreats. On Friday, the star shared a sweet photo of her husband with Harper, who was wearing one of her mum's dresses.

David and Harper share an adorably close bond
"Harper and daddy (with a major tan going on!!) x kisses @davidbeckham x," she captioned the Instagram post from Italy.

Many reacted to Harper's chic outfit, which looked like a purple dress with a black lace overlay - and appears to be a mini-me version of one of Victoria's own gowns.
READ: Victoria Beckham reveals the fashion trend that's going to go wild
Victoria confirmed it on her Instagram Story later, resharing a post from Joseph Larkowsky which read: "Harper Seven's custom SS2021 lilac @victoriabeckham dress is the cuteness I need in my life today."
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Victoria Beckham enjoys luxurious 'girls night' with daughter Harper Seven in Miami

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It's no secret that former Spice Girls star Victoria Beckham shares an incredibly close bond with her four children, Brooklyn , Romeo, Cruz and Harper. Particularly special is the relationship she has with her and David 's only daughter, who often makes an appearance on the couple's social media pages.

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These are article on her personal life

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These are articles on the brand itself

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·      Adapting to Diverse Geographies through innovation

·      Product Innovation: unique global products, same design, same apparel sold through similar store formats across globe

·      Process Innovation; delayed dyeing, garment dyeing, postponement strategy to reduce lead times and costs

·      Organizational Innovation; Divisional structure, Unique Agents model for managing retail franchise, Dual Supply Chain structure.' Quas'i Franchising system for retailers (License approach instead of Franchise – resulting lesser legal complications, quicker operations and better control)

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·      Clothing (core business area)- Menswear, Womenswear, Childrenswear Underwear

·      Others- Cosmetics, Perfumes, Toiletries, Merchandise, Watches

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·      Incorporated: 1965 (started in1955 as a small brand) as Maglificio di Ponzano Veneto dei Fratelli Benetton, global brand

·      Owned by Benetton family – 67% stake through Edizione Srl (holding company)

·      Based in Treviso, Italy

·      Total turnover of € 2.33 billion

·       150 million garments sold every year, 6949 employees, 6000 stores, 120 countries (2012)

·      Brands – 012 (kidswear) Playlife (extincted) , Sisley & United Colors of Benetton

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·      A fast fashion brand with large US stores

·      4 billion sales at its peak

·      Opened 200 stores globally 2005-2015

·      Canada China Brazil first international markets

·      Expanded to 40 countries.

·      But not successful internationally

·      Sept 19 – filed for bankruptcy with 785 stores

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·      Big stores were a burden - dynamics changed with ecommerce  - don’t need to offer full range in every store.

·      Stores felt cluttered

·      Perception of cheap clothing

·      Supply chain issues and complicated range strategies

·      Failed to develop local supply chains

·      Speed to market slowed

·      Management team distracted

·      Didn't research or listen to the customer!

·      Fell behind the competition – Zara – H&M

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·      Fast fashion was becoming the norm and competition was growing

·      Failed to localise and understand fashion taste in other countries.

·      Sizing was wrong

·      Didn't research shopping habits of international consumers

·      Didn't understand local labour laws – didn't realise stores don’t open on Sunday in Germany

·      Timing of merchandise launch was wrong – Europe shops earlier for AW  product

·      Legal constraints of moving goods in and out of countries.

·      Majority of international  stores unprofitable due to high labour costs.

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These are tasks that we done in seminars/lectures for research

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These are the statistics used in the case study

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JD.com delivering the future of shopping

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Made to work with the body, ensuring individuals look and feel their best, Drop Five reimagines the traditionally masculine to create feminine everyday sportswear for the modern woman.

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Made to work with the body, ensuring individuals look and feel their best, Drop Five reimagines the traditionally masculine to create feminine everyday sportswear for the modern woman.

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Her main collaboration which she has done is with Rebook