Uncovering Opportunities: Exploring Recent Developments in China

1.”Domestic pride”: growing preferences for domestically made products

Among the top 10 most popular movies in 2024 so far, only one is a foreign movie (Godzilla vs. Kong).

The topics related to “intangible cultural heritage” have been trending up on social media platforms, with many netizens discussing China’s traditional craftsmanship, art, and artisan designs.

The growing preferences for domestically made products are influencing the business environment and marketing strategies of merchants. Many historic and cultural institutions, such as the Forbidden City Palace and local museums, are introducing their own creative products.

Various international luxury giants like LVMH are integrating Chinese elements into their product designs to attract Chinese consumers, and “intangible cultural heritage” is just becoming the new localization strategy of these international brands.

Even if a business does not directly sell intangible cultural heritage products, they are leveraging its popularity for its own marketing strategies. For instance, Chinese retail chain MINISO ran a marketing campaign where consumers could experience writing the 江永女书 (Jiangyong Women’s Script) in their offline retail stores. The successful marketing campaign combined two elements that have become very popular in China’s consumer markets in recent years: “women empowerment” and “intangible cultural heritage.”

2. Is luxury missing out on China’s cycling boom?

China is historically known as the “kingdom of bicycles,” with young people carrying on the movement as streetwear infiltrates the space and brands amp up the elegance of their offerings to cater to this new more fashion-conscious demographic.

On Xiaohongshu, the hashtag “my cycling log” (#我的騎乘日誌) takes you to 1.17 billion photos, starring millions of outfit posts by Gen Z cycling fanatics.

While specialized brands thrive, luxury houses should look to the space for collaboration opportunities, whether through ambassador partnerships with established domestic cyclists or clothing capsules to cater to the major trend in China.

For brands looking to enter new markets like China, leveraging existing fanbases, as seen with Rapha’s recent entry, can instill confidence; however, ensuring long-term success requires strategic planning for maintaining engagement and relevance

3. What is the “twenty minutes in the park” theory? Brands are holding outdoor activities to connect with consumers

As more and more young people flock to parks, brands are following suit to find new marketing opportunities.

Young people who are overwhelmed by reality and can’t catch their breath find spiritual healing in the park.

From 22 March to 22 April, Xiaohongshu partnered with Nanjing’s Xuanwu Lake Park to launch the “Hanging out in the park matters a lot” (逛公园才是正经事) campaign, inviting Nanjing residents to spend time in the park.

In addition to sports and camping, mart brand plant b’s “Urban Forest Project” was held in mid-April this year at the Great Lawn of Hangzhou Botanical Garden’s Botanical Area, inviting more than 100 brands to participate.

In many cases, purchases are based on emotional judgement, especially when consumers are feeling relaxed, and a natural product placement is more likely to receive positive feedback.

4. Scratch card effect? Young people find solace in instant lottery as cards sell out

Scratch cards have seen a significant rise in popularity among young people in China, transforming from a pastime of older generations to a social activity embraced by the younger demographic. This surge is fueled by influencers on social media platforms like Weibo and creative uses of scratch cards in livestreams and DIY prize draws.

The appeal of scratch cards lies in their instant nature, providing immediate results and gratification. This aspect has made scratch cards a popular social activity, even being incorporated into venues like coffee shops. High-profile wins, such as a young person winning 1 million RMB, have further amplified interest and engagement on social media.

Despite the skyrocketing demand, the supply of scratch cards is limited due to strict regulation and a slow production turnaround. This has led to widespread shortages, with shop owners struggling to restock. The Ministry of Finance’s data shows a dramatic increase in sales, yet the supply chain is unable to keep pace, leading to empty shelves and a competitive restocking process.

5. Weibo, Douyin, Xiaohongshu remove displays of wealth

Influencers Wang Hongquanxing, Baoyujiejie, and Baigongzi had their accounts banned across all platforms on May 21st.

These influencers were known for showcasing luxury items and boasting about their wealth to attract attention and drive sales through live-streaming e-commerce.

The bans are part of a government campaign to clean up online content that promotes materialism and unhealthy values.

Such displays of wealth can exacerbate social inequality and negatively influence youth.

The situation highlights the need for better content moderation and stricter platform policies to foster a healthier online environment.

From a luxury brand point of view, perceived value on the secondhand market can have direct repercussions on reputation and desirability in the eyes of consumers.