2018 Single’s Day War Started; Pinduoduo joined as a major player; Dyson wins the crowd; National Holiday Shows Sign of China’s Economy Slowing down

Tingyi Chen New WeChat features

The 30-days countdown to Single’s Day 2018 started! The annual e-commerce war has started earlier than ever. Here are 5 news worth knowing for this week!

Single’s Day e-commerce war starts with fighting for vendor resources: brands are facing a tough choice between Tmall and Pinduoduo

Tmall starts pressuring brands to choose between Tmall and Pinduoduo for their Single’s Day promotion. Some brands are asked to delete their products, or even deleting their Pinduoduo stores.

 

Pinduoduo co-founder accused Tmall of unfair competition for the Single’s Day

 

In previous years, Tmall also pressured brands to leave other e-commerce platforms such as JD.com and VIP.com during Single’s Day.

Such threat is powerful since Tmall is still no-doubt the largest e-commerce platform by traffic. Most brands would choose Tmall over all of the other platforms combined.

Last year Tmall reached 168 billion RMB Gross Merchandise Value (GMV) record, a 39% increase year-over-year.

Such achievement comes at the cost of unfair competition, forcing distributors to undercut listing price, platform-wide coupons, and financial products that support instalments payments. All to encourage people to consume more.

Pinduoduo is added to WeChat Wallet

On October 10th, exactly 1 month before the Single’s Day, WeChat added Pinduoduo to its WeChat Wallet. This is the first time WeChat officially directs traffic to Pinduoduo, after the Tencent-Pinduoduo investment in September 2016.

Other e-commerce platforms that earned their place on the WeChat Wallet including JD.com, Mogujie, and VIP.com: 3 other e-commerce giants that had made strategic alignment with Tencent to fight against the domination of Alibaba.

Earlier in Jan 2018, JD.COM and Mogujie formed a joined venture to focus on social commerce based on the WeChat environment. And Tencent and JD.com invested 853 million RMB in VIP.com in December 2017.

Now joined by Pinduoduo, the master of social commerce, this Tencent e-commerce team is all set to fight the uphill battle against Alibaba.

Dyson’s new hair styler triggers hot debates on Chinese social media

Dyson’s new hair styler, Airwrap, has successfully taken Chinese social media by storm. Both Baidu Index and WeChat Search Index indicate a surge of social mentioning of “戴森” (Dyson’s Chinese brand name).

A couple of things Dyson is doing right:

  • The new product launched in the US first: Chinese consumers trust products from overseas
  • The product is priced at 4,000 RMB, the high price matches Dyson’s user’s expectation of a high-end product
  • Tmall pre-sale event is limited to 200 products per day, the scarcity creates excess demand and lots of social excitement
  • Tmall will start to officially sell the Airwrap on Oct 16th, making consumers wait for 6 days is a classic sales technique to build demand (Apple uses it to sell iPhones)
  • The new product launch date was October 10th, exactly 1 month before the mega e-commerce holiday Single’s Day. A perfect timing to get into the Single’s Day wishlist!

Dyson has a good head start for this year’s Single’s Day. But the biggest e-commerce war is just warming up… China will hopefully have another record-breaking Single’s Day, the question is who will be the biggest winner this year.

Display for WeChat subscription account has changed, again…

WeChat had frequently been updating the look of the WeChat subscription account display in the past several months.

Here is the new look of the WeChat subscription account folder:

Here are some of the consequences for brands with a subscription account:

  • If your WeChat followers did not go out their way to Star your Official Account, the visibility will drop significantly with a much smaller cover picture
  • High-quality Subscription accounts that are Stared by users will stand out more
  • Articles re-shared by many users will also get more attention
  • Make sure to use a dark-color cover picture as the title of the account displays in white text
  • Leave some space for the article title at the top-right when designing cover pictures
  • Make sure to have edited the cover picture to fit with both squared and horizontal format to have the best effects in all display situations (see below)

The new change helped WeChat users to selectively read the messages that are most relevant to them. It also drives a consolidation of traffic to the best and biggest Official Accounts, while pushing users to ignore or even unfollow the accounts with lower quality.

So far nothing has changed for the WeChat Service Accounts: users can get a notification for every push message. WeChat will likely update the display sometime in the future.

As a brand, here are the general rules:

  1. Focus on sending valuable and interesting information (instead of merely promotional information)
  2. Provide services that are valued by your followers. For example e-commerce, quotation tools, problem-solving tools and etc.

China’s National holiday week reveals a surprising decreasing trend of Chinese consumer’s spending

The population to traveling during the Golden Week, China’s National Holiday. shows a warning of the slow down of China’s economic growth. The traveling population is 726 million, only 8% increase compared with last year (vs. 19% growth in 2017).

Tourist industry’s revenue is 599.1 billion RMB, a mere 3% increase from last year.

According to Ctrip, China’s largest online booking website, this year the average spending for overseas traveller during the National Holiday is only 7,300 RMB, a 25.5% decrease from the year 2017.

This could be caused by 2 reasons:

  • Weak Chinese Yuan against the dollar
  •  The restriction of Daigous (3rd party reseller of high-end oversea products) through the customs

Another interesting trend is that only 19% of overseas travelers are within the 20-30 age bracket. And the top destination for this group in Thailand, where the average weekly spending is only 3,000 RMB. The majority of travelers are in the 30-40 age bracket. Japan is the No.1 tourist destination, and the average weekly spending there is 6,500-7,000RMB; Singapore ranked No.2 with an average spending of 10,000RMB.

The younger generation’s overseas travel plans are largely limited by their budget.

Around 91% of overseas traveller comes from Tier 1 and New Tier 1 cities. Such striking concentration on tier 1 cities is a sign of an increasing wealth segregation within China’s cities.

The flight amount within China has an 8% decreased to 82,620 this year. Part of the air travel market is exposed to competition from the advanced high-speed train.

Flight to overseas destinations has seen a 7% decrease to 17,648 flights. Low enthusiasm for overseas traveling is partly caused by the weak foreign exchange rate of CNY.

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