When conducting business in China, it’s crucial to be prepared to navigate the complex external environment, beyond just focusing on your own products. China boasts one of the world’s largest and constantly evolving markets, with industry giants like Alibaba, ByteDance, and Tencent controlling people’s entertainment and consumption habits. These platforms offer diverse functions, audiences, and marketing methods, collectively creating an intricate online ecosystem. Consumers are segmented into various groups based on gender, age, region, and interests, with new content grabbing their attention every day.
To succeed in China’s business landscape, brands must continuously track and analyze trends to gain insights that help reshape their products, services, and overall consumer experiences to cater to the Chinese market. This process of extracting insights that provide value to brands from various perspectives, such as global trends, industry trends, and consumer trends, is known as Trendwatching.
What is Trendwatching？
Trendwatching can be classified into two main types. The first involves constantly monitoring the overall market and industry trends without specific targeting and adjusting macro strategies based on the observation results. In this type of trendwatching, the accuracy of insights is paramount.
The second type involves targeted observation of trends in specific competitors and fields. This type of trendwatching is focused on timeliness and is used to stay updated on the latest and most cutting-edge technology or to avoid potential public relations risks at the earliest opportunity.
So, what exactly can trendwatching bring? Let’s take a look at its two main functions:
Give you information
Every day, an enormous amount of information is generated in the Chinese market. For instance, WeChat Channels saw over a 100% YoY increase in the number of daily active creators and average daily video uploads on the platform in 2022. Specifically, the number increased by 308%, while hot content with more than 1.08 million likes rose by 186%. Similarly, other content platforms like Douyin, Kuaishou, Red, etc. are also churning out new content at a rapid pace every day. Obtaining valuable information is one of the fundamentals of trendwatching. The faster and more efficiently brands can capture significant consumer changes and policy shifts, the more valuable the insights will be. Quickly acquiring trend information not only helps brands seize opportunities but also reasonably avoids risks. The recent BMW marketing incident serves as a prime example.
On April 20th, two staff members at the BMW MINI booth at the Shanghai Auto Show distributed Luneurs ice cream, but they treated Chinese exhibitors differently from their foreign counterparts. This incident caused BMW MINI to trend on social media. Although the ice cream was meant to be distributed for free to all attendees, the staff informed Chinese tourists that all the ice cream had been given away. However, when foreign attendees approached, the staff not only handed out the ice cream but also gave them detailed instructions on how to open the package. This behavior angered the Chinese audience.
After the incident, BMW came under pressure and issued a brief apology statement on Weibo. In an attempt to mitigate the public backlash, BMW also deleted the Weibo hashtag “BMW distributes ice cream at the auto show.” However, this perfunctory response failed to appease Chinese netizens, and the incident caused BMW’s market value to drop by 21.6 billion euros on the same day.
After the incident, another brand involved, Luneurs, quickly published a lengthy article and conducted an investigation. The article emphasized that Luneurs is a Shanghai-born brand and confirmed that the incident had nothing to do with their ice cream brand. This response won the favor of netizens and received 117 times more likes than their average post.
Observing the trend triggered by the incident, car dealers of other brands launched related activities. Xpeng Motors added free ice cream delivery in the afternoon, and Jietu Motors followed suit. Audi dealers went a step further by not only distributing free ice cream at the auto show but also creating a short video with the text “Ice cream is only given to Chinese people,” successfully gaining favor for the brand.
It is evident that highly time-sensitive trendwatching not only helps mitigate risks but also allows brands to leverage rapidly emerging opportunities for excellent marketing. As seen in the case of Xpeng, their Weibo post received over 60,000 likes, far surpassing other content on the account before and after the incident. Obtaining key information in real-time enables brands to stay abreast of the latest technological applications, changes in consumer sentiment, and social events, thereby avoiding risks and seizing marketing opportunities. This is the primary role of trend observation.
Give you insights
In trendwatching, it is crucial to not only gather the most up-to-date and accurate information but also to analyze and interpret this data in a way that can guide a brand’s strategy. For example, as China’s duty-free market has rapidly expanded in recent years and the tourism industry is expected to rebound post-pandemic, it is important to consider how changes in the market environment might impact product prices and consumer trends.
Taking the Hainan duty-free shop as an example, the opening of Haikou International Duty-Free City in October 2022 attracted a staggering 44,000 customers on its first day, with single-day sales exceeding 60 million yuan. During the 2023 Spring Festival, over 270,000 visitors were received. However, unlike in previous years, duty-free cosmetics prices in Hainan are no longer as favorable as during the pandemic. The prices of brands such as Estee Lauder and SK-II have increased, ranging from tens to hundreds of yuan. This is partly due to the global price increase strategy of international brand retailers, as well as the market strategy of Hainan’s duty-free operators. Understanding such trends and making use of the insights can help brands make informed decisions to capitalize on opportunities in a rapidly changing market.
Over the past three years, the tourism industry has been heavily impacted by pandemic restrictions and Chinese consumers’ shopping habits have been influenced by live shopping, leading duty-free shops to compete on prices to capture market share. However, with the return of international tourism and a more stable competitive landscape, several operating entities have become publicly traded companies with performance requirements. As a result, the prices of many products in the Duty-Free Shop channel in Hainan have substantially increased. For example, Estee Lauder’s 1,100 yuan set last year now costs over 1,500 yuan after a discount in 2023.
In addition, gold jewelry has become a popular commodity in the Hainan Duty-Free Shop. Due to the loose tax-free policy in Hainan, the price of gold jewelry on the outlying islands is 50-60 yuan per gram cheaper than that in mainland China. After the Chinese government adjusted its epidemic policy, tourists in Sanya even queued up for more than 3 hours to buy gold.
By continuously monitoring the Chinese market and policies, brands can obtain key information and adjust their pricing strategies promptly. They can also set up more attractive campaigns based on consumers’ enthusiasm for buying gold jewelry.
The ability to filter and extract insights from various key information is the second criterion for determining the value of trendwatching. Excellent trend insights provide strategic suggestions from complex facts, helping you navigate the Chinese commercial market and make correct strategic planning.
What pain points does trendwatching target and how to solve them？
1. R&D: Cater to consumer trends and develop popular products
One of the major challenges in global expansion is the localization of R&D. Brands must conduct research and observe consumer behavior in different markets to adjust product functions and packaging designs. This not only improves revenue but also allows for the incorporation of local cultural innovations and experiences, which resonates with consumers and builds trust and loyalty.
Trendwatching is a valuable tool for facilitating effective localized innovations based on market trends, which can significantly enhance the R&D process. For example, the collaboration between Crocs and Popmart, a local fashion brand in China, demonstrates the benefits of such an approach.
Popmart’s brand slogan is “light up passion and bring joy.” Through extensive cross-branding with popular IPs, the company has established itself as the leading trendy toy brand among young Chinese consumers. Crocs identified the trend of trendy toys and blind boxes, recognizing the shared tonality between these products and its brand. Both are characterized by fashion and creativity, leading to a collaboration to develop Jibbitz shoes in the form of blind boxes featuring the popular IP, Crybaby.
The collaborative product between Crocs and Popmart includes a pair of classic Crocs shoes and 7 corresponding Jibbitz blind boxes. The yellow-striped pattern on the upper part of the shoe was designed by Molly, the artist who created CRYBABY. The Jibbitz blind box also features a full 3D design, breaking away from the conventional flat form of Crocs. Among the 7 blind boxes, 6 are regular blind boxes derived from the CRYBABY “Parade” series, while the 7th is a hidden blind box specially designed for Crocs, which has never been released on the market before.
Since 2022, the blind box market has reached a size of nearly 50 billion yuan, attracting a growing number of young people with its unique collection features and social appeal. This trend is in line with the gameplay of Crocs’ Jibbitz series and has inspired their new product development.
2. Marketing: Grasp hot topics to create an influential campaign
In the vast landscape of brand marketing, campaigns that align with social trends can reach a broader audience, while campaigns that understand consumer trends can establish deeper connections with consumers. By precisely grasping trends, effective marketing can elevate brand value and increase product sales. Xiaomi’s case is a great example of this.
In 2023, the Chinese TV series “The Knockout” broke multiple records and became the most talked-about topic. Xiaomi, being quick-witted, observed this trend and invited Zhang Songwen, the lead actor in the series, to co-produce a promotional video for their Xiaomi 13 Ultra. Many photos in this video were taken by Zhang Songwen himself using Xiaomi’s new mobile phone. Xiaomi’s brand slogan, “Born to fever,” emphasizes enthusiasm and love for life. Zhang’s portrayal of an ordinary person’s perception and love for the details of daily life in the short advertisement not only reinforces the communication of the brand culture but also promotes the new Xiaomi product.
Before its official release in April, the pre-order volume for this product tripled compared to the same period for the previous generation Xiaomi 12SU. Many netizens also mentioned that they purchased this new product because they recognized Zhang Songwen. This shows the effectiveness of following social trends and understanding consumer trends in marketing to upgrade the brand value and increase product sales.
3. Sales: Provide consumers with a more interesting shopping experience
Since 2021, the metaverse has emerged as a global phenomenon, and China is no exception. The metaverse market in China is estimated to have exceeded 52 trillion yuan. Digital collectibles, closely related to the metaverse, have provided a new avenue for brand sales. In 2022, 53.3% of Chinese digital collectible consumers were young people. Consumers were mainly driven by novelty and curiosity (57.7%), future appreciation potential (57.6%), and collection value (52.9%). Women accounted for a slightly higher proportion (62.2%) among young consumers.
Taking advantage of this trend, many platforms and brands have incorporated metaverse technology into their sales strategy to provide consumers with a more engaging shopping experience. L’Oreal and Tmall’s collaboration during Valentine’s Day in 2023 serves as an excellent example of this sales strategy.
During Valentine’s Day, seven L’Oreal brands collaborated with Tmall to offer personalized services such as voice greeting cards, product engraving, and electronic greeting cards. The platform also featured a smart gift box recommendation function that utilized consumer descriptions of gift recipients to match corresponding Valentine’s Day gift boxes, providing a more tailored gift-giving experience.
Gift recipients were able to enjoy a unique “unboxing” experience against the backdrop of a beautiful metaverse featuring romantic castles and fireworks. This innovative shopping experience provided consumers with a fresh and exciting way to receive gifts.
The above cases illustrate how trendwatching can be a powerful tool for brands to transform popular trends into brand power, from product development to marketing design and sales experience. Keeping a close eye on trends allows brands to respond quickly to opportunities and risks and stay ahead of their competitors. In-depth insights and suggestions on trends can help brands filter out the most relevant and impactful information that affects future consumption.
Trendwatching is an essential investment for any brand looking to establish a foothold in the Chinese market. Understanding this is the first step towards building a stronger business.
We have seen the powerful effects of trendwatching in the Chinese market from multiple perspectives and cases. If your brand also needs the service and guidance of China Trend Watching, we can provide customized services through our professional trendwatching products. Please feel free to contact us to discuss how we can meet your specific needs.