EDITION 2020 #11
Havas Group China 1 November 30th, 2020 Havas Media China is again nominated in two categories for Agency of the year by Campaign Asia
Nomination for • China Media Agency of the Year • Greater China Event Marketing Agency of the Year
2 In this edition
Key market developments • Economic outlook • Consumer behavior developments • Key category outlooks • Havas POV
China advertising market • Advertising market development • Media consumption update • EC developments • Media market news • Havas POV
3 Key market developments
Economic outlook
4 In October retail market shows a higher growth driven by a climbing consumer confidence
Retail market recover further, 4.3% growth in Oct. consumers confidence index Consumer satisfaction index
Consumer expectation index China Retail market YOY Growth Rate 130.6 130.7 128.5 128.9 126.6 126.4 125.2 124.3 124.6 124.2 122.2 9.6%8.9% 9.0% 121.2 8.4% 8.5% 7.8% 120.6 120.1 120.5 3.3% 4.3% 119.3 8.3% 7.6% 0.5% 118.9 118.8 120.7 117.2 120 116.4 116.4 115.8 115.1 -1.1% 117.8 118 117.8 -1.8% 112.6 -2.8% 115.4 115 -7.5% -15.8% 112.3 111.9 111.3 110.8 -20.5% 108.9
Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20
Source: National Bureau of statistics of China 2020; Eastmoney 2020 5 According to China’s newly published long-term goal towards 2035, the dual economy will be developed around 9 aspects
Fifth plenum long-term goal towards 2035
1. Overall Economy 2. Industry Development 3. Country System China's economic and technological strength, and composite New industrialization, IT application, urbanization, and The modernization of China's system and capacity for national strength will increase significantly. A new stride will agricultural modernization will be basically achieved. China governance will be basically achieved. The people's rights to be made in the growth of the economy and the per capita will finish building a modernized economy participate and to develop as equals will be adequately income of urban and rural residents. Making major protected. The rule of law for the country, the government, breakthroughs in core technologies in key areas, China will and society will be basically in place become a global leader in innovation
4. Culture 5. Environment 6. Inter-country China will become a strong country in culture, education, Eco-friendly ways of work and life will be advanced to cover The opening-up will reach a new stage with substantial talent, sports and health. The well-rounded development of all areas of society. Carbon emission will steadily decline growth of the country's strengths for participating in all people and social etiquette and civility will be significantly after reaching a peak, and there will be a fundamental international economic cooperation and competition enhanced. China's cultural soft power will grow much improvement in the environment with the goal of building a stronger Beautiful China basically reached
7. People’s income 8. Country Safety 9. People’s Life The per capita GDP will reach the level of moderately The implementation of the Peaceful China initiative will be People will lead a better life, and more notable and developed countries. The size of the middle-income group promoted to a higher level. The modernization of national substantial progress will be achieved in promoting well- will be significantly expanded. Equitable access to basic defense and the military will be basically achieved rounded human development and achieving common public services will be ensured. Disparities in urban-rural prosperity for everyone development, in development between regions, and in living standards will be significantly reduced
6 The RCEP trade deal was signed with 15 countries, to further spur recovery from Covid-19
15 countries includes: The RCEP is expected to eliminate a range of China tariffs on imports within 20 years. It also Japan includes provisions on intellectual property, South Korea telecommunications, financial services, e- Australia commerce and professional services. New Zealand Indonesia Is it important for China? Thailand Singapore For China, RCEP aligns with it “dual circulation” Malaysia vision — refocusing on domestic demand Philippines while taking advantage of trade and foreign Vietnam investment. Brunei Cambodia This marks the first time China enters a Myanmar and nonbilateral free trade agreement of this scale. Laos
Source: Ashley Talk 7 China has started the 7th national population census. Audience gifts show a strong dedication to keep China Corona safe
• China on Nov 1 started its seventh national population count which conducted every 10 years, with about 7 million census takers going door to door to document demographic changes in the world's most populous country. • The census collects data including name, ID number, gender, marital status, education, and profession of Chinese citizens. • Residents are encouraged to use mobile terminals to report personal and family information. • Residents will get small gifts after the census
Source: Xinhua news 8 Key market developments
Can we find a picture without mask?
Consumer behavior developments
9 Double 11 dilemma – topline sales growth while brand profit and likely consumer sentiment show a downward trend
Sales of Double 11 on Tmall Consumer sentiment & brands profit on Double 11
Y2009 Y2020 (1st year of double 11)
Brands Consumer profit sentiment 52 498.2 million billion
With bigger discount and longer Consumers highly postpone timeframes, higher bidding against purchase for necessary products competitive brands, profits go down until double 11, rather than 27 brands participated 250,000 brands participated substantially create new purchases
Source: Tmall; Qiluwanbaowang 10 Declining consumer sentiment for Double 11, consumer fatigue on EC festivals increases more than in previous years
1. Rational consumption
“I didn’t buy too much on this year’s double 11, only spend 1000 rmb. Previous years I would store serum 2. Less price advantage due to frequent EC and cream, usually would spend 3000 rmb. festival and live streaming 今年双11我没买什么东西，只花了1000多元。往 年都要囤精华、水乳，可能会花个3000元左右“ “It isn’t seen too much difference on price between double 11 and daily live streaming, 现在的双11和平常直播（价格）没有太大差别。”
3. Complicated rules push consumers away “ I will have something left that I bought from last year double 11, so there’s no need to refill. The purchase rules are too complicated, I am not that interested as before. 去年囤积的产品没有用完，所以暂时不需要购买；平 台规则太复杂，自己的热情也大不如前了”
Source: Pedaily.cn 11 The rising conscience of anti-consumption importance restrain consumers to spend more on unnecessities
During this Double 11, NetEase Strictly Select released a short film parodying luxury ads like Gucci Perfume, Patek Philippe, Rimowa, and Adidas to Conscious spending attitude is on the rise encourage netizens to buy the brand’s label-less products. When questioned about the concept behind this video, a spokesperson for the company said, “We are simply trying to say that we have eliminated high premiums for Consumers, especially the young ones, are becoming consumers so that they can enjoy pragmatic products.” more prudent The film was then redistributed by Chinese state media Xinhua News Agency and other local media on Weibo in an attempt to cool off luxury shopping at the festival. By November 11, two hashtags of young consumers intend to plan more of their #ConceptOfConsumptionOfModernYoungsters (#当代青年人的消费观#) and 60% #ConsumeNotConsumerism (#要消费不要消费主义#) have collectively been consumption and reduce their impulse spending. viewed 164 million times.
42% of young consumers intend to save more as a result of the Covid-19
Source: JingDaily 12 Hence, more and more Double 11 mechanisms are created to stimulate consumption
Longer time period Live streaming Mini games
Longer period, more Short decision time when Mini games keep shoppers opportunities to shop more shopping at live streaming coming back for more Oct 20th, Austin Li sold 3.3 billion and Viya sold 3.2 billion The total number The cumulative of Tmall cat game time of Taobao live users exceeded streaming lasted for 1660 years 500 million
Source: Tmall 13 From content to sales - social media apps are pushing integration of sales function/EC process
Most Chinese social media apps have already integrated the sales process. Here are a few prominent ones:
• Douyin has had its in-app store since 2018, where users can instantly buy products • Kuaishou employs the same concept while serving lower tier cities. • RED and Mogujie focus on beautiful pictures and are teaming with influencers to drive traffic. • Pingduoduo now has 568 million monthly active users as of Q2. Group-buying is also social commerce. The platforms offer prices that get increasingly discounted the more items a group purchases.
14 China’s KOL industry maintains a momentum of evolution, higher influence through micro KOLs and authenticity
Seeking out micro-KOLs and brands’ own Authenticity matters KOL marketing in China is indispensable Livestream for brands
Brands cancelled around 30% of the content collaborations they Consumers still want to learn about and gain KOL marketing in China is indispensable for brands, had booked with the agency’s influencers in the month of April recommendations on products and services, but they may particularly in the post-Covid world. By their nature, alone. have grown disillusioned with putting faith in KOLs as these initiatives are difficult to scale. Brand-owned trusted messengers. communities are supposed to be exclusive to a tightly Brands have switched their attention to micro-KOLs and micro- defined group of consumers, and therefore, there’s a influencers. The mechanics of working with micro-influencers are That’s a double opportunity for brands. Firstly, brands can natural upper to the number of consumers a brand will like any KOL campaign. The brand uses the power of lean into developing their own content to try to present an be able to reach via its own community. endorsements to tap into the influencer’s fan base. authentic face to the consumer There’s no doubt that China’s KOL industry after COVID- Many brands have also opted to forge their own path without While consumers will form their own communities with 19 will continue to evolve in China and in the West. any help from influencers large or small. The economic and social people, they are close to, brands can also create spaces However, KOL collaborations will remain an fallout from the pandemic prompted a surge in the number of where like-minded consumers can forge, if not friendships, indispensable part of how brands will market to Chinese brands that decided to launch their own live streams. then at least a sense of community. consumers.
Source: PARKLU 15 Key market developments
Key categories outlook
16 Travel & Tourism
17 As domestic travel demand recover over the summer domestic airlines starts to report profit
• China Southern Airlines, which has the largest domestic network among the country’s state-owned carriers, reported the first quarterly profit (Q3 2020) since the pandemic hit. • The airline, now the world’s largest as others have pared back capacity, recorded a net profit of RMB 711 million following an RMB 2.9 billion loss in the second quarter. Its nine-month net Chinese airlines plan to operate loss amounted to RMB 7.5 billion. 84,634 domestic passenger • Rivals China Eastern Airlines and Air China both reported flights per week from late narrower losses in the third quarter versus the second, though October through March next year, most international flights remain grounded. up 19.8% from a year earlier • Shanghai-based China Eastern, which has been rolling out various “all you can fly” package deals, said its net loss narrowed to RMB 563 million in the third quarter from RMB 4.6 billion in the second. • Beijing-based Air China, the country’s flag carrier, said its net loss shrank to RMB 671 million from RMB 4.6 billion to take its nine-month loss to RMB 10.1 billion.
Source: China travel news 18 Promotions like JD × Airlines lottery travel continue to be used to stimulate demand for travel products
• Due to the precarious state of the epidemic situation, airlines has associates with JD travel launched a new type of travel product – lottery box travel recently to increase flexibility in user travel planning.
• Lottery box travel product allows people choose destination in a list that airline provides arbitrarily , therefore minimize the impact of the epidemic on traveling.
19 Foreign tourism boards increasingly make use of Livestreaming to keep awareness and promote their destinations
• Though global travel restrictions and quarantine- periods still hamper movement in and out of China foreign tourism boads have found a way to keep pivoting to connect with China’s consumers at home via Livestreaming.
• Tahiti and Switzerland tourism cooperated with MFW and Taobao respectively to boost exposure and tell stories online during single’s day shopping festival.
20 Airlines and OTA platforms also jumped on the Double 11 train with attractive deals
• The famous Singles’ Day Sale held annually on 11th Nov. is not only about fashion, gadgets and other consumer products. In the past years, travel companies have taken advantage of the events to offer amazing travel deals and discounts to consumers.
• The strong rebound of China's domestic travel during the 2020 annual Golden Week holiday has brought hope to international destinations. Though global travel restrictions and quarantine-periods still hamper movement in and out of China, but foreign airlines like Qatar Airways seize this chance to promote their international routes.
Data source: https://mp.weixin.qq.com/s/7iSeVTkoKZh2rniqDULi5A; Chinadaily.com 21 Automotive
22 Car sales keeps on showing as in September the category gained 12% in YoY sales
Unit: Thousand Monthly car sales in China 3,000 2,500 2,000 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2,809 1,718 2,656 2,319 2,288 2,274 1,889 2,103 2,394 2,380 2,548 2,661 2019 2,367 1,482 2,520 1,980 1,848 2,056 1,808 1,958 2,271 2,284 2,457 2,658 2020 1,927 310 1,430 2,070 2,194 2,300 2,112 2,186 2,565
• The auto market continues to recover and increased by 17.4% regarding MoM sales in September, and the YoY sales also increased by 12.8%. The sales have maintained a growth rate of more than 10% for five consecutive months. • PV YoY sales also continue the growth momentum, as sales increased by 8% YoY in September. The sales of three types of PV: SUV, minibus and car all maintained growth, while the sales of MPV decreased compared with 2019 Sep. • The NEV sales in September also kept growing, growth rate(+67.7% vs. last year), while the sales in Jan-Sep Y20 declined 17.7% compared with Jan-Sep Y19.
Source: China Association of Automobile Manufacturers (CAAM),China Passenger Car Association (CPCA) 23 BMW Q3 profit rebounds thanks to China market
• FRANKFURT -- BMW's third-quarter profit rose almost 10 percent, boosted by rebounding Chinese demand for luxury cars. BMW's quarterly pretax profit increased 9.6 percent to 2.46 billion euros ($2.87 billion), lifted by an 8.6 percent rise in vehicle deliveries. • BMW-branded vehicles saw a jump of 9.8 percent in deliveries, mainly thanks to a 31 percent increase in China, which accounts for almost a third of the automaker's vehicle sales. China helped to offset a 16 percent drop in demand in the U.S., where sales were hit by the coronavirus pandemic. • BMW reiterated it expected to achieve an EBIT margin of between 0 percent and 3 percent for the automotive segment in 2020. Despite a recovery in demand in some markets, it expects overall deliveries as well as group pretax profit to be significantly lower than last year after the pandemic shut down factories and dealerships.
Source: Automotive News China 24 Chang’an to develop high-end EVs with CATL and Huawei
• Chang’an Automobile Co. is working with China’s largest electric vehicle battery supplier, CATL, and leading communication equipment maker Huawei Technologies to develop high-end EVs. The project was disclosed by Chang’an Chairman Zhu Huarong during a program aired last week by state-operated China Central Television. • Chang’an, based in the southwest China municipality of Chongqing, builds minibuses, sedans and crossovers under the Chang’an brand. The move makes Chang’an the second state-owned automaker aiming to move upscale with new EV products. • With an expanded product lineup, Chang’an sales surged 20 percent to top 660,000 in the first three quarters of the year, according to the China Passenger Car Alliance, the data unit of the China Automobile Dealers Association. Changan's headquarters in the south China municipality of Chongqing.
Source: Automotive News China 25 Luxury and Lifestyle
26 Luxury brands continue elevating experiential marketing. Cartier launched their [SUR]NATUREL fine jewelry even with an exhibition On Oct 13th, Cartier presented its new high jewelry collection, [SUR]NATUREL, recently in Shanghai, revealing a "nature that is more than nature" . It is the first time the brand has released its latest global high jewelry series in China.
On Oct 24th, Cartier invited many local celebrities( 宋佳 Jia Song, 李现 Xian Li, 宋茜 Victoria Song, 王景 春 Jingchun Wang, 王千源 Qianyuan Wang, 张亚东 Yadong Zhang, 刘天池 Tianchi Liu, 聂远 Yuan Nie, 高伟光 Vengo Gao, 窦骁Shawn Dou, 张雪迎 Sophie Zhang, 黄龄 Yellow Zero) for this offline exhibition in Shanghai to drive social buzz. It also take live streaming on TMALL to warm up for the Singles’ Day promotion.
The exhibition is open to public on Oct 25th/26th to enhance the brand image to public.
27 Fendi combined offline and livestream in O2O activation to celebrate Double 11 Campaign Summary • Platform: WeChat, Weibo • Medium: Livestream, short video, image, mini- program • Featured celebrity: Zhao Wei (85M Weibo Followers) | Zhang Han (36M) | Xu Weizhou (13M) | Zeng Keni (4M) | Zhang Zhehan (11M) | Liu Lingzi (4M) | Tan Zhuo (8M) | Jia Fan (1M) | Wu Yuheng (815K) | Fanguangjing Band (451K) • Fendi celebrated the Double 11 shopping festival with an offline party at the Shanghai TX Huaihai shopping mall and a livestreaming event on Weibo on November 11. The Fendi Pack Collection, launched online on November 10, was introduced via the livestream. The livestream invited over ten celebrities such as brand ambassador Zhao Wei and Xu Weizhou, as well as fashion KOLs like Mr. Jiliang. Result • Campaign hashtag “FendiRomaParty”: over 72.54 million views in one day • Livestream: over 11.2 million viewers in three hours • Online traffic was predominantly driven by the celebrities: Xu Weizhou, Zeng Keni, and Zhang Han. • The moderators included Linda and Fu Peng, who was top livestreamer Li Jiaqi’s assistant, also contributed to the online and offline engagement throughout the event.
28 Pandora leveraged local celebrity and livestreaming to promote new products Pandora 少年之名 live streaming are promotion-driven for new products on on Yizhibo
少年之名 x Pandora 直播 少年之名 x Pandora 七夕“链”爱专场直播
29 Key market developments
Havas POV
30 Collective consumerism; falling Double 11 sentiment as a first glance of a changing consumer attitudes
• As the domestic retail market further recovers with a 4.3% growth and Double 11 again showing a double-digit growth, Chinese consumers seem to get back to their path of consumerism. • To what extend does the conscience of the need for a better of environment and society, the level of attained development and the effect of Covid-19, change Chinese consumer’s mind set and buying hunger? And what about the resonance into buying behavior of governmental policies that are ramping up, which started with garbage sorting, the clean plates propaganda and most lately its instrumental importance for collective and sustainable environment care in its newly published 5-year plan? • Already in Havas Groups Meaningful Brands China research in 2017 and 2019, we saw while buying products being still one of the main drivers for “happiness” and “life satisfaction”, higher tier consumers are shifting more towards less is more, buying less but better quality. Also we noticed that collective good causes facilitated by brands more easily have gotten support by consumer spending, especially in a social media environment. • The falling Double 11 sentiment might be a further sign consumer fatigue on EC festivals. In the last few years and especially this year EC festivals got ramped up and every Chinese cultural festival was turned into an EC shopping event. Consumer’s mindset is clear that there is always on something on “sale”, which doesn’t urge them to buy extra but rather buying at a lower price. • The “enough is enough” sentiment has become visible. We see (higher tier) consumers caring more about longer lasting, higher quality, more environmentally friendly, local economy supporting products, while more enticed to buy when they need it, less because it is 11.11. again.
31 China advertising market
Advertising market development
32 Monthly ad spend continues to recover and activity gap caused by COVID continues to decrease as market activities intensify • In September 2020, the total actual* Ad market in China achieved RMB 43 billion; minus 7% compared with last September. • YTD September 2020, the total actual* Ad market in China achieved RMB 333 billion; minus 20% compared with same period last year. • YTD comparison in August was -22% while in September the gap was reduced to -20% only
Month by month comparison YTD vs YTD comparison Monthly spending
60,000 500,000 2020 2019 2018 461,775 52,022 -7% 60,000 420,358 -20% 50,000 46,087 400,000 50,000 42,704 333,379 40,000 40,000 300,000 30,000 30,000
20,000 200,000 20,000 10,000
10,000 100,000 - 2018 Sep 2019 Sep 2020 Sep YTD 2018 YTD 2019 YTD 2020 1 2 3 4 5 6 7 8 9
Source: ADP (TV, Radio, Newspaper, Magazine, Cinema), CODC (OOH), Iresearch (Digital – PC & Mobile) 2018-2020 33 Note: excluding media spending on social and search; discounts are estimated based on Havas methodology Digital media remains the main battlefield, more and more the primary media choice for most advertisers
• YTD September 2020, 70% of overall media investment through Digital and TV, which is similar to the same period last year. • Outdoor spending share has increased significantly, while other media spending share continues to drop further • In specific industries such as TLA and IT Product & Service category, the share of digital raised up to over 70% of total media investment. 2019 YTD Ad Spend Market Media Mix 2020 YTD Ad Spend Market Media Mix
Radio, 2.1% Newspaper, Magazine, Radio, 1.7% Newspaper, Magazine, Cinema, 2.9% 0.7% 0.5% Cinema, 0.5% 0.6% 0.4%
Outdoor, Digital, 41.3% Outdoor, Digital, 40.1% 23.4% 28.2%
TV, 29.1% TV, 28.6%
Source: ADP (TV, Radio, Newspaper, Magazine, Cinema), CODC (OOH), Iresearch (Digital – PC & Mobile) 2018-2020 Note: excluding media spending on social and search; discounts are estimated based on Havas methodology 34 More and more categories accelerate their investments
2020 Sep Media spending & YOY growth rate by category versus 2019 Sep CLOTHING -15.2% • Compared with September 2019, Finance, REAL ESTATE & CONSTRUCTION 3.2% IT ,Pharma and Food & Beverages categories TRANSPORTATION,LOGISTIC & AUTO -4.7% have increased their spending. HOUSEHOLD -5.7% • The Food & Beverages category reported POST & COMMUNICATION -12.1% RMB 11 billion ad spend and was ranked 1st FINANCE INDUSTRY among all the categories. 16.2% COSMETICS & TOILETRIES -33.1% LEISURE -25.1% HOME ELECTRICAL APPLIANCES 6.1% PERSONAL ITEMS 6.2% ALCOHOL -2.4% IT PRODUCT & SERVICE 23.1% BUSINESS & SERVICES -6.5% PHARMACEUTICALS 10.5% FOODSTUFF & BEVERAGES 6.8% - 5,000 10,000 15,000 20,000
Source: ADP (TV, Radio, Newspaper, Magazine, Cinema), CODC (OOH), Iresearch (Digital – PC & Mobile) 2018-2020 35 Note: excluding media spending on social and search; discounts are estimated based on Havas methodology China advertising market
Media consumption update
36 In October TV rating show seasonal decline, but also drop below 2019 levels across all markets
9.5 Tier 1 10 6.9 7.2 6 5.7 5.4 5.4 5.6 5.3 5.2 5 5.9 6.4 5.5 5.4 5.4 5.3 5.5 5.7 5.6 5.6 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2019 2020 Tier 2 10.2 10 7.2 7.2 6.5 5.4 5.1 5.3 5.4 4.9 5 5 6.2 6.8 5.2 5 5 5.1 5.3 5.2 5.4 5.3 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2019 2020 9.2 Others 10 6.5 6.5 5 5.1 4.9 4.9 4.9 4.3 4.3 5 5.8 4.9 4.9 4.7 4.6 4.5 4.8 4.9 4.7 4.7 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2019 2020
Source: Infosys, Target:P18-45, Period:2020/01/01 – 2020/10/31, Timeslot: All Day Tier1 including（BJ、SH、GZ、 SZ）,Tier2 including almost Provincial capital 37 TV dramas in HN STV achieved extraordinary performance. Regarding variety shows, top 4 satellite TV shows their talents
Drama Hunan STV dramas won the first and second place in October
Hunan STV Hunan STV Dragon STV Jiangsu STV Jiangsu STV 亲爱的自己 向阳而生 瞄准 在一起 越过山丘 Ave Rtg 1.99 Ave Rtg 1.93 Ave Rtg 1.12 Ave Rtg 1.09 Ave Rtg 1.05
Variety In early Q4, new variety shows of top 4 satellite TV face fierce competitions.
Zhejiang STV- Jiangsu STV- Dragon STV- Hunan STV- Hunan STV- 美好奇妙夜 一千零一夜 我们的歌 中餐厅Ave Rtg 姐姐的爱乐之程 Ave Rtg 1.80 Ave Rtg 1.70 Ave Rtg 1.53 1.40 Ave Rtg 1.30
Source: Infosys, Target:P18-45, Period: 2020/10/01-2020/10/31, Timeslot: All Day Market: 57 Markets 38 Triggered by Double 11, EC apps usage increased, also travel and navigation app usage rose in October due to national holidays
2010 H1 VS. 2020 Oct Unit: Mil 2020 Oct DAU growth rate 1,247 Social networking 1,260 -1 % 847 Video services 792 +7% 447 EC 410 +9% 426 Financial service 418 +2% 383 2020 Oct General news 384 0% 2020 H1 275 Gaming services 291 -6% 192 Travel & Navi 171 +12% 78 Education 87 -10% 23 Food delivery & Recipes 23 +1% 22 Health & medicare 21 +3%
Source: iResearch, period: 2020.01-2020.10 39 Social app usage remains on a high stable level, WeChat continues its positive momentum while other apps remain stable
2020 Social Networking Apps User Behavior 2020 Top 5 Social Apps by DAU Unit: Unit: Unit: Mil Mil mins 2019 avg. 92.5 93.5 100.0 928 1400 88.9 89.5 896 916928 90.0 1220 1,260 1,247 1,239 2020 H1 1200 80.0 2020 Oct 70.0 1000 2020 Nov(till 8th) 60.0 800 50.0 600 40.0 344 30.0 323 314 400 314 20.0 214 182 193 192 200 10.0 0 0.0 13 15 15 15 16 14 14 14 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) WeChat QQ Weibo LRB Baidu Tieba
Average DAU Average time spent
Sources: iResearch, period: 2019-2020.11.08 40 Compared to H1, OTV apps usage dropped while time spent has increased significantly. Bilibili continues its positive momentum
2020 Top 5 Online Video Apps by DAU 2020 Online Video Apps User Behavior Unit: Mil
Unit: 2019 avg. Unit: 181 Mil 130.3 134.4 mins 167 164 163161 2020 H1 121.2 153 500 112.1 120 143145 2020 Oct 422 383 400 365 382 100 2020 Nov(till 8th)
80 92 300 78 60 70 70 200 40 44 41 41 32 100 26 31 31 20 22
0 0 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) iQIYI Tencent Video Youku Mango TV Bilibili
Average DAU Average time spent
Sources: iResearch, period: 2019-2020.11.08 41 Short video continues its stable usage trend driven by Douyin & Kwai who have more than doubled their user base since last year 2020 Short Video Apps User Behavior 2020 Top 5 Short Video Apps by DAU Unit: Mil Unit: Unit: Mil mins 404 2019 avg. 118 115.6 401 900 112.8 120.0 391 2020 H1 800 100.0 2020 Oct 700 609 610 591 251 600 80.0 257259 2020 Nov(till 8th) 211 500 430 60.0 400 40.3 300 40.0 123 200 20.0 52 47 44 44 46 38 100 33 33 24 24 23 3 0 0.0 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) Douyin Kwai Watermelon Douyin Volcano WeSee Video Edition
Average DAU Average time spent
Sources: iResearch, period: 2019-2020.11.08 42 Compared to H1, News apps show stable usage while daily usage of gaming apps has dropped
2020 General News Apps User Behavior 2020 Gaming Apps User Behavior Unit: Unit: mins Unit: Mil mins Unit: Mil 78.5 78.3 400 75.9 80.0 54.2 60.0 70.2 500 50.5 52.3 350 70.0 46.9 50.0 292 391 300 275 60.0 400 384 383 271 344 249 40.0 250 50.0
300 200 40.0 30.0 200 150 30.0 20.0 100 20.0 100 10.0 50 10.0
0 0.0 0 0.0 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) 8th)
Average DAU Average time spent Average DAU Average time spent
Sources: iResearch, period: 2019-2020.11.08 43 Triggered by Double 11 EC usage jumped, Taobao, Pinduoduo and JD benefit the most
2020 E-commerce Apps User Behavior Unit: 2020 Top 5 EC Apps by DAU Mil
2019 avg. Unit: Mil Unit: 373 mins 2020 H1 286325 19.0 2020 Oct 500 20.0 17.9 16.9 17.3 279 2020 Nov(till 8th) 400 15.0 300 507 10.0 447 200 410 363 105 5.0 86 88 100 73 51 37 40 39 0 0.0 16 18 19 19 10 11 12 13 2019 avg. 2020 H1 2020 Oct 2020 Nov(till 8th) Taobao Pinduoduo JD.com Xiaomi Mall Tmall Average DAU Average time spent
Sources: iResearch, period: 2019-2020.11.08 44 E-Commerce update
45 This years Double 11 hit new sales records
Tmall YoY Double 11 Total Sales
600,000,000,000 Total Double 11 Sales: Nov 1, 00:00 - Nov 11, 24:00 500,000,000,000 Tmall sales JD.com sales 400,000,000,000 ￥498,200,000,000 ￥271,500,000,000 300,000,000,000
200,000,000,000 Tmall: 2020 Double 11 attracted 800 millions of consumers, 250,000
100,000,000,000 brands and 5 million merchants to participate, which has the broadest coverage and engagement. 342 brands achieved total sales over 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ￥100M during D11.
JD.com: fresh products, supermarkets, home appliances, electronic products, books, luxury are top growing categories.
Suning: GMV boosted to ￥50M just in 19 minutes after 00:00 of Nov 11. Total number of D11 online orders increased by 72% YoY. Home appliances, electronics, personal care products, clothes and FMCG are top growing categories.
Pinduoduo: PDD launched iphone 12 officially on Nov 11 and broadcast on Hunan TV, providing huge coupons to consumers.
Data Source: 亿邦动力 46 In terms of sales and reach Double 11 is getting bigger every year and is no longer just a discount focused shopping festival
Participating digital giants are now leveraging livestreams, new product launches, and novel technologies to enhance customer engagement and the buying experience.
ExclusiveExclusive Launches: launches While deals and savings are still top of mind for consumers when it comes to Double 11, new product launches are also driving many to the shopping event this year. For example, Taylor Swift’s product launch on Tmall, Jordan Brand releases new Air Jordan 6 WMNS “Singles Day” sneaker on this event. Entertainment In the past, Alibaba invited celebrities, including Nicole Kidman, Mariah Carey, and Pharrell Williams, to show up on 11/11. This year, “retailtainment” remains at the heart of the festival with livestreaming fashion shows and pre-event galas. Alibaba, as well as other major players like JD.com, Pinduoduo, and Suning have leveraged partnerships for their shows to be broadcasted on TV and online streaming.
All Eyes on Tech Double 11 is a must-see for tech watchers, as many of China’s digital giants have used events to highlight retail tech, including virtual reality (VR) shopping, QR code payments, and livestreaming commerce.
According to AlixPartners data, 96% of adults surveyed plan to participate in 11/11 this year, vs. 92% in 2019.
Data Source: eMarketer 47 This year livestreaming was fully integrated
DedicatedDedicated toto supplysupply chainchain efficiencyefficiency andand accelerateaccelerate Activated official livestreaming and expanded scale Activated official livestreaming and expanded scale crosscross--borderborder cooperationcooperation
2 Live Shows Merchant KOL & Tmall Official Celebrities 13 super buyer live streams
2000 themed live streams
3000 brand live streams
50000 Rural Live streams
Leveraging hundreds of CEOs in livestreaming Deep dive live streamer resource and activate potential
Merchant 300 Celebrities JD Official
Celebrity
500 CEOs KOL
Merchant+KOC
Data Source: Havas Study 48 And the shopping festival period was extended
10.1-10.20 10.21-10.31 11.1-3 11.4-11.10 11.11 11.12-14
1st Final Preparation st 2nd Presale 1 Presale Blast Blast
Preparation Presale Category Peak Extend
1st 2nd 2nd Warm-up Peak Long tail Blast Blast
Super Category Carnival – Super Fans Benefit Merchant training – Fans Day – Tasks for lucky draw – All category blast
Data Source: Havas Study 49 Main EC platforms cooperated with TV stations for content & entertainment
On Nov 10, four main ecommerce platforms launched Double 11 live event leveraging television partnerships: Tmall: in cooperation with Zhejiang TV, Dragon TV and Youku JD.com: in cooperation with Jiangsu TV and iQiyi Suning: in cooperation with Beijing TV Pinduoduo: in cooperation with Hunan TV and Mango TV
D11 Live Event TV Audience Rating (Nov 10. 19:30 - 24:00)
Tmall JD.com
Pinduoduo Suning
Data Source: iresearch, China Economy Newspaper Data Source: CSM Real Time Rating 50 And used live shows for a new shopping experience Tmall, Suning, JD and Pinduoduo upgraded entertaining content and celebrity interaction with consumers in Double 11 live show, launching a new shopping experience: buying while watching TV and engaging with celebrities & KOLs.
Tmall Double 11 Opening Live Show Suning Double 11 Super Show JD Double 11 Super Night
Tmall Double 11 Live Show
Crossing-screen live stream, Leverage multiple TV and online Lifestyle IP, talk show and celebrity Combining shopping with streaming media partners, performance bringing innovative entertainment communicating Double 11 Show. Double 11 experience.
51 Key trends: New news, content & entertainment to drive engagement and sales New, instead of super discount Double 11 live shows Livestream continues to be central stage A discount campaign is not In 2020, more e-commerce Livestreaming is considered as the enough to create a sense of platforms (Tmall, JD, Suning, most important battlefield on urgency. As Double 11 attracts Pinduoduo) leveraged TV each Chinese e-commerce more and more attention, many partnerships and launched live platform. Merchants leverage brands release new products to shows with innovative ideas. KOL, brand employees and CEOs bring unexpected growth. Tmall, for example, moved 17 for livestreaming. Taobao top KOLs and their livestreaming provided VR technology like online In 2020 Double 11, Huawei and rooms to the central stage and property viewing and virtual Apple both announced new initiated screen-crossing feeling vehicle test drives. JD.com worked phone launches. as fresh-new shopping with popular Chinese standup experience with high consumer comedians to host a relaxing and engagement. funny live stream.
Gamification: combination of retail and entertainment Content: seeding and look around Gamification is one Double 11 marketing strategy Taobao APP changed to new design before pushing consumers to make quicker purchase Double 11, putting more emphasis on decisions, especially for Gen Z audiences. During content and “look around” concept. The Double 11, Tmall’s Cat-feeding game became homepage central banner ad has shrunk trending social e-commerce game and helped in to a smaller version, allowing soft ads such driving traffic and consumer engagement. as short video content seeding and feeds have become more important. Diversified content seeding will encourage consumers to convert while just “looking around” on Taobao.
52 China advertising market
Media market news
53 Toutiao launched a new integrated opening ad format in Nov
Toutiao launched a new opening ad format in Nov. Huawei, the famous Chinese mobile brand was invited as key client to test the new format.
• New opening ad format integrated opening ad with pop up ad and feeds ad, showed rich brand information by an eye- catching effect. • Furthermore, this new format can display over 10 seconds, and obtain better CTR compared to traditional opening ad. • However, the new format need better creative and production capability of ad materials, which should be taken into consideration in media planning.
OPENING VIDEO + POP UP VIDEO + FEEDS Ad New format is in testing period
54 New Format on MangoTV: Super Show
Full screen display
At first glance, it attracts the eyes and grabs the viewer's mind and achieves an unforgettable effect.
Extend exposure time
Power on for 5 seconds + first focus 15 seconds (up to 30 seconds), which can bring a complete display of creativity.
Open video 5s plus 1st focus 15s video
Data source: Mango TV 55 Q4 drama trends of PSTVs and OTVs
PSTVs are stable, and focus on urban, suspense, and mainstream dramas. OTVs multi-type layout, more vertical and more diverse Judging from the current PSTVs Q4 on-air, to-be-broadcast, and ready-to- OTV boutique short episodes drama such as "Goodbye, My Love" and broadcast dramas, innovative works of large genres are relatively rare, and "The Long Night" ended with high popularity and high reputation, making works of urban and theme genres are favored by PSTVs. For casting the the Q3 suspense short series battlefield fierce. Now the OTVs are shifting focus lies on actors with certain national recognition. to urban love story, sweet love story. Reach the audience with more relaxed themes.
Data source: https://www.thepaper.cn/newsDetail_forward_9569753 56 OTV – New program hot Drama
棋魂 – Hikaru no go Period: 2020 Oct 27th Episodes: 36 Cast: 胡先煦、张超、郝富申、韩沐泊、翟冠华、纪李 Media: IQIYI Introduction
The play is adapted from the classic Japanese comic "Hikaru no go" drawn by Yumi Horita and Takeru Obata. Shi Guang discovered an ancient chessboard by chance and got acquainted with Chu Ying, the first Nanliang Go player who has been on the chessboard for thousands of years. Shi Guang gradually became interested in Go under his influence and inspired to become a professional Go player.
57 TV/OTV – New program hot Drama
瞄准– Sniper Period: 2020 Oct 9th Episodes: 57 Cast: 黄轩、陈赫、杨采钰、李溪芮、张洪睿、林栋甫、姚安濂、迟志强、付枚、 王砚辉 Media: IQIYI、Tencent、Youku、MangoTV 、东方卫视、浙江卫视 Introduction
The play tells the story of Su Wenqian and Chi Tiecheng, two ace sniper partners who once fought side by side and cooperated perfectly. Because of the differences in beliefs, they changed to the opposite sides. In a life and death duel they ended up with different destinies. The suspenseful plot and the film-like time-space narrative style break the audience's stereotype of "period drama", which is very in line with the current audience's demand for drama pursuit.
58 TV/OTV – New program hot Variety 嗨唱转起来2– Sing or Spin 2 Period: 2020 Oct 2nd Episodes: 12 Cast: 谢娜、潘玮柏、大张伟 Media: MangoTV、湖南卫视 Introduction "Sing or Spin 2" convenes music experts from all fields to sing classic songs with contemporary significance. The iconic round turntable stage has become the core gameplay: the singer needs to sing for 60 seconds to impress the program guests to get the opportunity to "turn out" the stage and stand in the C position; After the second round of singing, the audience will vote to decide whether the challenge is successful. When the music variety show became a new window for the people to decompress, "Sing or Spin 2" was given a warmer spiritual mission-to give the current negative pressure group a temporary release in music.
59 TV/OTV – New program hot Variety
我们的歌 第二季 – Our Song 2 Period: 2020 Oct 11th Episodes: 12 Cast: 林海、谭咏麟、钟镇涛、容祖儿、张信哲、李健、希林娜依·高、冯提莫、 太一、李玟、孙楠、陈小春、常石磊、邓紫棋、王源、郑云龙、GAI Media: IQIYI、Tencent、Youku、BesTV+、东方卫视 Introduction This variety show pairs up new Chinese singers with popular and well-established Chinese singers to bring you a new version of classic award-winning songs. At the same time, they will compete with their performances.
60 Many movies launches announced for Christmas and New Year
Data source : Focusfilm 61 China advertising market
Havas POV
62 Fierce battle as brands and platforms are fighting for audiences, attention and sales during Double 11
• E-commerce is at an all time high, with Double 11 dominating the last few weeks not just online but also via mass broad casting on TV including shopping shows and large presence in OOH. • Very high clutter during the extended festival period of Double 11 led to a fierce competition for audiences, attention and sales • TV rating showed seasonal decline and remained also in October below 2019 levels • While OTV usage has increased significantly since last year, October and early November data show a decrease compared to the first half of 2020. iQiyi and Tencent Video active remain the top platforms, but their active user base declined significantly and dropped even below 2019 levels. At the same time Bilibili managed to continue its positive momentum and is growing its userbase further. • Social media remains on its stable high level, while short form video has now been well established. Since last year Douyin and Kwai more than doubled their user base and continuously manage to sustain it. While the growth rate of short video apps has slowed down, it became clear that it is not just a short-lived trend, but here to stay. For advertiser, its important to select the right platform and customize assets by channel to ensure message and format match platform purpose to catch audience attention. • This year Double 11 broke sales and traffic records again, but the festival continuous to evolve. This year the festival had an extended period and more focus on entertainment, content, live show, etc. Double 11 continues to change rules and trends every year, but the only evergreen keyword is NEW. Content has become the main traffic and conversion driver in ecommerce platforms. Brands must create innovative short video and shareable content for engagement and traffic. • Livestreaming remains the key battlefield and continues to evolve and diversify. Brands need to build their own Celebrity x KOL x KOC “matrix” for broader communication and higher engagement. • Many blockbuster are scheduled for release for the holiday period at the end of the year. As consumer interest is high cinema provides an excellent platform for high impact branding. • New and innovative formats can help you to break through the intensifying clutter. Your Havas team can help you tailor your overall marcom strategy to drive brand and sales, including adjusting your EC strategy based on the latest developments.
63 While Shopping festivals like D11 drive short term sales brand profitability declines, hence for 2021 “profitable growth” will be key
• In 2020 brands continue to focus on activations, EC festivals and other activities to drive sales and recoup business. While sales activations produce short-term sales uplift, they also reduce profitability due to high cost with fees, commissions, higher media spend and higher internal cost. • For sustainable growth brands must balance short-term sales efforts with longer-term brand building to create efficiency, as they can not survive by pure sales activations like EC festivals, live streaming and special editions due to the high cost of acquisition. • To ensure profitability brand pull effect, that creates longer lifetime consumer value (LTV) and lower cost of consumer acquisition (CAG), needs to get higher priority. • Brands will need to find the right balance between branding and activations. Also brand consistency in activations will be key combined with a full EC ecosystem beyond 3rd party platforms.
64 PUBLISHING CREATIVE SEARCH NATIONAL/LOCAL MOBILE STRATEGY
MUSIC OUTDOOR
VIDEO & AUDIO Our Havas Village can help GEO- NATIONAL/LOCAL E-COMMERCE LOCATION you drive your business SHOPPER through every touchpoint MARKETING GAMING CRM ENTERTAINMENT INTEGRATIONS SOCIAL MEDIA DATA STRATEGY INNOVATION PERFORMANCE MEDIA SPONSORSHIPS EXPERIENTIAL SPORTS MARKETING MARKETING BRANDED CONTENT
65 SHANGHAI 11/F Novel Building 887 Huaihai Zhong Road Shanghai 200020 +86 21 3397 8666
BEIJING 1006, 10th Floor, China Youth Plaza, 19 Dongsanhuan North Road, Chaoyang District, Beijing 100020 +86 10 5923 2791
GUANGZHOU Room 07, 16/F CTF Finance Centre, No 6 Zhujiang Road East, Tianhe District Guangzhou 510130 +86 20 3877 3282